EXHIBIT  10.08




                           ABACAN RESOURCE CORPORATION

                                       and

                          DAHOMEY RESOURCE CORPORATION

                                       and

                       LIBERTY TECHNICAL SERVICES LIMITED
                               (as the Borrowers)


                        THE GUARANTORS herein referred to


                           CREDIT SUISSE FIRST BOSTON
                                   (as Agent)


                           CREDIT SUISSE FIRST BOSTON
                              (as Security Trustee)

                                       and

                         THE LENDERS herein referred to


                                   $30,702,500
                            CREDIT FACILITY AGREEMENT

<PAGE>

FACILITY AGREEMENT (the "AGREEMENT") made on 2 July 1998

BETWEEN

ABACAN  RESOURCE  CORPORATION,  an Alberta, Canada corporation, whose registered
office  is  at  Suite  1600,  407  Second  Street S.W., Calgary, Alberta, Canada
(sometimes  referred  to  individually  herein  as  "ARC")  and DAHOMEY RESOURCE
CORPORATION,  a Bahamas limited company, whose registered office is at Chambers,
Suite  304,  Beaumont  House, Bay Street, P.O. Box CB 11986, Nassau, The Bahamas
(sometimes  referred to individually herein as "DAHOMEY"), and LIBERTY TECHNICAL
SERVICES  LIMITED,  a  Bahamas  limited  company,  whose registered office is at
Chambers,  Suite 304, Beaumont House, Bay Street, P.O. Box CB 11986, Nassau, The
Bahamas  (sometimes  referred  to  individually  herein  as "LIBERTY") (in their
capacities  as  borrowers  and  guarantors  together  the  BORROWERS  and each a
BORROWER);

EACH  OF  THE  COMPANIES  LISTED  IN  SCHEDULE  6 HERETO, (together the ORIGINAL
GUARANTORS  and  each  an  ORIGINAL  GUARANTOR),

CREDIT  SUISSE  FIRST  BOSTON  (as  AGENT);

CREDIT  SUISSE  FIRST  BOSTON  (as  SECURITY  TRUSTEE);

THE  LENDERS  listed  on  the  execution  pages  of  this  Agreement.

IT  IS  AGREED
        ------

DEFINITIONS  AND  INTERPRETATION

1.1     DEFINITIONS:  In  this  Agreement,  except  where  the context otherwise
requires:

     ADVANCE  means  the principal amount of the Dollar amount made available to
the  Borrowers  hereunder  by  way  of  loan  or  (as  the context requires) the
principal  amount  thereof  for  the  time  being  outstanding;

     ADDITIONAL  GUARANTOR  means  any  Subsidiary  which  shall  accede to this
Agreement  pursuant  to  clause  12.2(j), in each case, so long as it remains an
Additional  Guarantor;

     AGENT'S  SPOT RATE OF EXCHANGE means the spot rate of exchange of the Agent
for  the purchase with one currency of any other relevant currency in the London
foreign  exchange  market  at  or  about  10.00 a.m. (London time) on the day in
question  for  delivery  two  Business Days later, the Agent's certificate as to
such  rate  being  conclusive  in  the  absence  of  manifest  error;


                                      - 1 -
<PAGE>
     AMNI  GUARANTEE means the agreement executed or to be executed in favour of
the  Security  Trustee  and  issued  by Amni International Petroleum Development
Company  Limited  pursuant  to  clause  4.1(i);

APPLICABLE  LAWS means, in relation to any member of the Consolidated Group, all
and any laws, statutes, regulations and judgments relating to its business as in
force  from  time  to  time;

AVAILABILITY  PERIOD  means  the  period  commencing on the Closing Date of this
Agreement  and  ending  seven  (7)  days  thereafter;

BORROWER  means  each  of  ARC,  Dahomey and Liberty and as the context requires
together  the  BORROWERS;

BORROWERS'  AGENT  means ARC or any other person for the time being nominated as
such  by  the  then  current  Borrowers'  Agent  and  agreed  by the Agent (such
agreement  not  to  be  unreasonably  withheld  or  delayed);

BUSINESS DAY means a day on which banks are open in New York, London, and Z rich
for  the transaction of business of the nature required by this Agreement and in
relation  to  a  day  on  which  a  payment  is  to be made, in the place of the
principal  domestic  market  of  the  currency  of  such  payment;

CLOSING  DATE  means  the  date  that the Agent has given to the Lenders and the
Borrowers'  Agent  the  notice  referred  to  in  clause  4.2;

COMMITMENT  means,  in  relation to a Lender, the aggregate principal amount set
opposite  its  name  in  Schedule  1  or  as applicable, the amount set out in a
Transfer  Certificate  for  a  Lender  duly  completed and accepted for transfer
pursuant  to  the  terms  of  this  Agreement,  in  any  case  to the extent not
transferred,  canceled  or  reduced  in  accordance  with the provisions hereof;

CONSOLIDATED  GROUP  means  at  any  particular  date  the  Borrowers  and  the
Guarantors;

DEBENTURES  mean  the  agreements  executed  or  to  be  executed by each of the
Obligors  pursuant  to  clause  4.1(f)  and  12.2(k)  in  favour of the Security
Trustee  creating  a  first  ranking  Security  Interest  over  the  assets  and
undertakings  required  to be covered by the Security Trustee in accordance with
the  terms  hereof;

DOLLARS  AND  $  means  the  lawful  currency  of  the United States of America;

DRAWING  DATE  means  a Business Day upon which the Advance is to be made as set
forth  in  the  Drawing  Notice relating thereto or is made on or before July 2,
1998;

DRAWING  NOTICE  means  a notice of drawing substantially in the form set out in
Schedule  2 duly completed and signed by the Borrowers and the Borrowers' Agent;

                                      - 2 -
<PAGE>
ENVIRONMENT  means:

     (i)  any land including,  without limitation,  surface land and sub-surface
          strata,  sea bed or river bed under any water (as defined in paragraph
          (ii) below) and any natural or man-made structures;

     (ii) water  including,  without  limitation,  coastal  and  inland  waters,
          surface waters, ground waters and water in drains and sewers; and

     (iii)air  including,  without  limitation,  air within  buildings and other
          natural or man-made structures above or below ground;

ENVIRONMENTAL CLAIM means any claim from any third party, governmental authority
or  agency  or  any  regulatory  body, notice of violation, prosecution, demand,
action,  abatement  or  other  order,  relating to Environmental Matters and any
notification  or  order requiring compliance with the terms of any Environmental
Licence  or  Environmental  Law;

ENVIRONMENTAL LAW includes, in relation to any member of the Consolidated Group,
all  or  any  laws,  statutes,  regulations,  treaties,  and  judgments  of  any
governmental  authority  or agency or any regulatory body in any jurisdiction in
which  that  member  of  the Consolidated Group is formed or carries on business
relating  to  Environmental Matters applicable to it and/or any other activities
from  time to time carried on by it and/or the occupation or use of any property
owned,  leased  or  occupied  by  it  as  in  force  from  time  to  time;

ENVIRONMENTAL  LICENCE  means,  in  relation  to  any member of the Consolidated
Group, any permit, licence, authorisation, consent or other approval required at
any  time by any Environmental Law for the business from time to time carried on
by  it  as  in  force  from  time  to  time;

ENVIRONMENTAL  MATTERS  means (i) any release or threatened release, generation,
deposit, disposal, keeping, treatment, transportation, transmission, handling or
manufacture  of  any  waste  or  any  Substance; (ii) nuisance, noise, defective
premises,  health  and  safety  at  work  or elsewhere; and (iii) the pollution,
conservation  or  protection  of  the  Environment  or  of  man or of any living
organisms  supported  by  the  Environment;

EVENT  OF  DEFAULT  means  any  of  the events mentioned in clause 13.1 upon the
expiration  of  any  applicable  cure  or  grace  period  set  forth  therein;

FACILITY  means  the  advance facility the terms and conditions of which are set
out  in  this  Agreement;

FACILITY  MARGIN  means  4.0  percent  per  annum.


                                      - 3 -
<PAGE>
FACILITY  OFFICE means, in relation to any Lender, the office listed in Schedule
1,  or  such  replacement  office as any Lender nominates in accordance with the
terms  of  this  Agreement;

FINAL  MATURITY  DATE  in  respect  of  the  Total Outstandings in the amount of
$20,702,500  plus  all capitalised interest hereunder means the date falling 364
calendar  days after the date of this Agreement (unless extended as set forth in
this  definition) or if such day is not a Business Day the immediately preceding
Business Day. At any time after the date falling ten months after this Agreement
the Borrowers' Agent, by giving the Agent not less than thirty Business Days nor
more  than  60  days notice thereof, may request the Lenders to extend the Final
Maturity  Date  by 180 days or less (the FIRST EXTENSION DATE) commencing on the
date  of  such  request to the Agent. If the Final Maturity Date is so extended,
the  Borrowers'  Agent may request further extensions of the Final Maturity Date
of  up  to  180  days  each  by giving notice to the Agent thereof not less than
thirty  Business  Days  nor  more  than 60 days following the expiration of each
three-month  interval  following  the  First  Extension  Date  and  during  the
then-current  Availability Period. No extension of the Final Maturity Date shall
be  binding  unless and until notified in writing to the Borrowers' Agent by the
Agent, and shall not be binding on any Lender unless accepted by such Lender, in
its  sole  discretion,  by  written  notice  thereof  to the Agent. The Obligors
acknowledge  that  any  extension  of the Final Maturity Date may be conditioned
upon the acceptance by the Obligors of certain financial covenants then required
by  the  Lenders;

FINAL MATURITY DATE in respect of the Total Outstandings in excess of the amount
of  $20,702,500  plus  all capitalised interest hereunder means the date falling
544  days  after  the Closing Date or such earlier date as may be agreed between
the  Agent  and  the  Borrowers'  Agent;

FINANCING  DOCUMENTS means this Agreement, the Share Pledges, the Security Trust
Deed,  the  Guarantor  Accession  Deeds, the Debentures, the Amni Guarantee, the
Warrant  and any other agreement or document executed pursuant to this Agreement
which  is  expressed  therein  to  be  a  Financing  Document;

GUARANTOR  means  each  of the Borrowers, any of the Original Guarantors and any
Additional  Guarantor  as  shall  accede  to  this  Agreement pursuant to clause
12.2(j)  in  each  case,  so  long  as they remain Guarantors and as the context
requires,  together  the  Guarantors;

GUARANTOR  ACCESSION  DEED  means  in  respect of an Additional Guarantor a deed
substantially  in  the  form  set  out in Schedule 5 with such amendments as the
Agent  may approve or reasonably require duly executed on behalf of the proposed
Additional  Guarantor,  the  Borrowers'  Agent  and  the  Agent;

INTELLECTUAL  PROPERTY  means  all  letters  patent, trade marks, service marks,
designs,  utility  models,  copyrights,  design  rights,  applications  for
registration of any of the foregoing and rights to apply for them in any part of
the  world,  moral  rights,  inventions,  confidential information, know-how and
rights of like nature arising or subsisting anywhere in the world in relation to
any  of the foregoing, whether registered or unregistered and the benefit of all
licences  and  other  rights to use any of the same now or hereafter owned by or
otherwise  belonging  to  any  Obligor;

                                      - 4 -
<PAGE>
INTEREST  ADJUSTMENT  means the amount of interest plus Facility Margin equal to
the  difference  between  the  interest and Margin calculated in accordance with
clause  6.2  (a)  and (b) less the interest and Facility Margin which would have
been  payable  hereunder  if  the Total Outstandings hereunder were $20,702,500.

INTEREST  PAYMENT  DATE  means,  for  any  Advance,  the last day of an Interest
Period;

INTEREST PERIOD means, for any Advance, the period determined in accordance with
clause  6.1;
JOINT  VENTURE  DOCUMENTS  means  the Joint Venture Agreement dated November 27,
1996  between Optimum Petroleum Development Limited and Agbara Resources Limited
(Nigerian  Oil Prospecting License 310); the Purchase and Sale Agreement between
Addax  Petroleum  Benin Limited and Abacan Resources (Benin) Ltd. dated July 21,
1997;  Contrat  pour  l'Exploration et l'Exploitation P troli res, Bloc Offshore
Profond  No.  4  dated  February  1,  1997 between Addax Petroleum Benin, Abacan
Resource  Limited  (Benin),  and  the  Government  of  Benin;  Contrat  pour
l'Exploration  et  l'Exploitation P troli res, Bloc Offshore No. 1 et SEME dated
February 2, 1997 between Addax Petroleum Benin, Abacan Resource Limited (Benin),
and  the  Government  of  Benin; and Joint Venture Agreement dated March 8, 1998
(Nigerian  Oil Prospecting License (OPL) 309) between Liberty Technical Services
Limited  and  Yinka  Folawiyo  Petroleum  Company Limited; and the Joint Venture
Agreement  dated  June  30,  1998 between Liberty Technical Services Limited and
Amni  International  Petroleum  Development  Company  Limited,  in  each case as
amended,  modified,  extended  or  renewed;

LENDERS  means  those  of  the  banks  listed in Schedule 1 and their respective
successors and any permitted transferees or assigns which are for the time being
participating  in  the  Facility;

LICENCES  means, in relation to any member of the Consolidated Group, any public
law  permits for the carrying out of its business together with any other public
law  or administrative law consents, concessions, licences or public law permits
required  for the carrying out of any such business (including planning consents
and  licences);

MAJORITY LENDERS means Lenders whose Outstandings then aggregate more than 66.66
per  cent.  of  the  Total  Outstandings;

MATERIAL  ADVERSE  EFFECT  has  the meaning asc
ribed thereto in clause 11.1 (c);

MATERIAL  ENVIRONMENT  CLAIM  means  any  Environmental  Claim  which  would, if
adversely  decided,  entitle  any  person  to  shut  down  or suspend all or any
material part of the business of any member of the Consolidated Group, or result
in  any cost, claim, liability, expense or damages in excess of $1,000,000 to be
suffered or incurred by any member of the Consolidated Group or otherwise have a
Material  Adverse Effect upon the business, properties, results of operations or
financial  condition  of  any  member  of  the  Consolidated  Group;

                                      - 5 -
<PAGE>
MOPU AGREEMENT means the agreement executed or to be executed pursuant to Clause
4.1(i)  between  Sedco  Forex,  Inc.  and the Security Trustee in respect of the
Mobile Offshore Production Unit referred to therein in substantially the form of
Schedule  7;

OBLIGOR means the Borrowers and the Guarantors or as the context requires any of
them;

OIL  AND  GAS means any and all liquid and gaseous hydrocarbons and each of them
produced  and  to  be  produced  from  the  Oil  Properties;

OIL  AND  GAS  DEVELOPMENT  AGREEMENT  means  any  agreement (other than a Joint
Venture  Document) now or hereafter entered into between any of the Borrowers or
Guarantors  or any Subsidiary of any of them pursuant to the terms of which such
person  directly or indirectly participates with any other person in any capital
investment  or  joint  ownership or profit sharing arrangement in respect of any
Oil  or  Gas  Property  or  any  related pipeline or other transport facility or
equipment,  power  generating  plant,  Oil and Gas Sale agreement, or power sale
agreement  and  such  agreement  may  reasonably  be expected to have a material
benefit for or impose any material obligation upon such Borrower or Guarantor or
Subsidiary;

OIL AND GAS PARTNER means each party (other than an Obligor) which is a party to
any  Joint  Venture  Agreement  or  Oil  and  Gas  Development  Agreement;

OIL  AND  GAS  PROPERTIES means each of the concessions, operating licenses, oil
mining  leases  and  other  interests  referred  to  in any of the Joint Venture
Documents  or  Oil  and  Gas  Development  Agreements  and any other concession,
operating license, oil mining license, or similar agreement or interest in which
any  Obligor  or  Subsidiary  of  any Obligor has direct or indirect interest or
participation and which interest could reasonably be expected to have a material
benefit  to  such  Person;

OUTSTANDINGS  means, in relation to a Lender, its aggregate participation in the
Advance  then  outstanding;

PERMISSIONS  means,  in  relation  to  any member of the Consolidated Group, any
consents, concessions, contractual licences or permits required for the carrying
out  of  any  of  its  business;

PERMITTED PURPOSE means any purpose for which the proceeds of the Advance may be
used  in  accordance  with  and  subject  to  the  terms  of  this  Agreement;

PERMITTED  SECURITY  INTEREST  means:

(a)  a lien or right of set-off  arising  in the normal  course of trading or by
     operation of law securing obligations not more than thirty days overdue and
     liens for taxes not yet due and payable;

(b)  any conditional  sale or title  retention  arising under or pursuant to any
     contract  for the  purchase  or leasing  of goods in the  normal  course of
     trading;

                                      - 6 -
<PAGE>
(c)  the Security Interests existing as at the date of this Agreement details of
     which have been disclosed in writing to the Agent;

(d)  Security  Interests  incurred or deposits  made in the  ordinary  course of
     trading to secure the performance of tenders, statutory obligations,  bids,
     leases,   government   contracts,   performance   bonds,  fee  and  expense
     arrangements with trustees and fiscal agents and other similar  obligations
     (exclusive of obligations incurred in connection with Borrowings);

(e)  any  Security  Interest  created or  permitted  to  subsist  with the prior
     written  consent  of  the  Majority   Lenders,   such  consent  not  to  be
     unreasonably withheld in circumstances where in the opinion of the Majority
     Lenders the interests of the Lenders are reasonably  protected after taking
     into account the reasonable  requirements  of the Obligors to develop their
     assets,;

(f)  any  Security  Interest  over  any  asset  acquired  by any  member  of the
     Consolidated  Group, if such acquisition is not prohibited  pursuant to the
     terms hereof,  as security for any Borrowings  which are incurred solely to
     finance all or part of the acquisition cost of that asset;

(g)  any Security  Interest  securing  Borrowings  incurred to  refinance  other
     Borrowings permitted to be secured pursuant to any of the paragraphs (a) to
     (f) above provided that the  replacement  Security  Interest does not cover
     any assets other than the original assets subject to the original  Security
     Interest and that the aggregate  principal  amount  secured  thereby is not
     increased;

(h)  any Security  Interest  created  after the date hereof (other than Security
     Interests  permitted  under  paragraphs  (a) to  (g)  above)  and  securing
     indebtedness in aggregate for the Consolidated Group not exceeding $250,000
     (or its equivalent at the Agent's Spot Rate of Exchange); and

(i)  any Security  Interest  now or hereafter  created in favour of the Security
     Trustee under or subject to the Security Trust Deed;

(j)  any  Security  Interest  granted  for the  benefit  of  Amni  International
     Petroleum  Development Company Limited in the interest acquired pursuant to
     a Joint Venture Agreement with Liberty dated June 30, 1998 with the written
     consent of the Agent securing the  reimbursement  obligations of Liberty to
     Amni  International  Petroleum  Development  Company  Limited in respect of
     amount paid by Amni International  Petroleum Development Company Limited to
     the Security Trustee under the Amni Guarantee;

(k)  any Security Interest in respect of taxes payable by any Obligor in respect
     of its  interest  in OPL 237 and OML 112 (other than in respect of the Deep
     Rights as defined in the Joint Venture  Agreement  referred to in paragraph
     (j) above); and

                                      - 7 -
<PAGE>
(l)  any Security  Interest in favour of the Security  Trustee created under any
     Financing Document.

POTENTIAL  EVENT  OF  DEFAULT  means  any event which with the giving of notice,
lapse  of  time  or  making  of  any  determination specified in clause 13.1 may
constitute  (after  the  expiration  of  any applicable grace or cure period set
forth  therein)  an  Event  of  Default;

REFERENCE  BANKS  means,  subject  to clause 6.6, the principal London office of
each  of  The  Chase Manhattan Bank, ABN Amro Bank N.V., and Credit Suisse First
Boston,  and  any  replacement  Lender  nominated  under  that  clause;

SECURITY  INTEREST  means  any mortgage, charge, pledge, lien, right of set-off,
assignment  by  way  of  security,  retention  of title or any security interest
whatsoever or any other agreement or arrangement having the effect of conferring
security,  howsoever  created  or  arising;

SECURITY  TRUST  DEED  means the security trust deed dated of even date herewith
between  the  Borrowers,  the  Guarantors,  Credit Suisse First Boston as Agent,
Credit  Suisse  First  Boston  as Security Trustee and others as the same may be
amended  from  time  to  time;

SHARE  PLEDGES means the pledges executed or to be executed by the Borrowers and
Guarantors  pursuant to clause 4.1(f) in favour of the Security Trustee creating
a first ranking Security Interest over the common stock of each of the Borrowers
(other  than  ARC)  and  each  Guarantor;

SUBSTANCE  means  (i)  any  radioactive  emissions,  (ii)  electricity  and  any
electrical  or  electromagnetic  emissions  and  (iii) any substance whatsoever,
(including but not limited to any "hazardous substances" under the Comprehensive
Environmental  Response,  Compensation  and  Liability Act of 1990 of the United
States  of America, sections 964 - 965 and whether in solid or liquid form or in
the  form of a gas or vapour, and whether alone or in combination with any other
substance)  which  is  generally considered or known to be harmful to man or any
other  living  organism  supported  by  the  Environment  or  damaging  to  the
Environment  or  public  health  or  welfare;

TAX  means  any present or future tax, impost, duty, levy or charge of a similar
nature  payable  to  or  imposed  by  any supra-national, governmental, federal,
state,  provincial,  local  governmental  or municipal taxing authority, body or
official  (together with any related penalties, fines, surcharges and interest);

TIL  means  Total  International  Limited,  a  Bermuda  limited  company;

TOTAL  COMMITMENTS means at any time the aggregate amount of all the Commitments
in  respect  of  all  the  Lenders;

TOTAL OUTSTANDINGS means at any time the aggregate amount of all Outstandings in
respect  of  all  the  Lenders;

                                      - 8 -
<PAGE>
TRANSFER  CERTIFICATE  means  a  certificate in the form of Schedule 4 delivered
pursuant  to  clause  19.1;

TRANSFEREE  has  the  meaning  ascribed  thereto  in  clause  19.1;  and
WARRANT  means  an  agreement  in  the  form of Schedule 8 entered into or to be
entered  into  in  accordance  with  clause  4.1(l).

1.2     FINANCIAL  DEFINITIONS:  In  this  Agreement  except  where  the context
otherwise  requires:

ACCOUNTS  means  the  Reference  Accounts  and  any  other  audited or unaudited
accounts  of the Borrowers whether or not consolidated, delivered or required to
be  delivered  by  the Borrowers to the Agent in accordance with this Agreement;
but  so that if the Reference Accounts and other Accounts prepared in respect of
the  same  period  are  in  conflict  in  any  way, the Reference Accounts shall
prevail;

ACCOUNTING  PRINCIPLES  means  the accounting principles, standards, conventions
and  practices  complying  with  generally accepted accounting principles in the
United  States of America which are generally adopted and practised by companies
in  the  United States of America or otherwise with the prior written consent of
the  Agent;

BORROWINGS  means  and  includes  as  at  any  date:

(a)  all moneys  borrowed  (with or without  security)  or raised by way of debt
     finance by the Borrowers or any other member of the Consolidated Group;

(b)  receivables sold,  assigned or discounted (save to the extent that the same
     are sold, assigned or discounted without recourse);

(c)  the acquisition cost of any asset to the extent payable before or after the
     time of acquisition  and possession by the party liable  therefor where the
     advance or deferred  payment is arranged  primarily  as a method of raising
     finance or financing the acquisition of that asset;

(d)  any obligation  under any lease which is required to be  capitalised  under
     Accounting Principles;

(e)  the net exposure (meaning the amount payable by the party liable thereunder
     on  termination  or closing out  determined on a marked to market basis) of
     any  derivative  transactions  entered  into which have the  commercial  or
     financial effect of any Borrowing set out within this definition;

(f)  the  principal  amount  raised by the  Borrowers or any other member of the
     Consolidated Group by acceptances (not being acceptances in relation to the
     purchase of goods or services in the ordinary  course of trading which have
     been  outstanding  for 180 days or less) or  under  any  acceptance  credit
     opened on its behalf by a bank or accepting house;

                                      - 9 -
<PAGE>
(g)  the principal  amount  (including any fixed or minimum  premium  payable on
     final redemption or repayment) of any notes, bonds, debentures,  loan stock
     or  other   securities  of  the  Borrowers  or  any  other  member  of  the
     Consolidated Group; and

(h)  any guarantee, indemnity or similar assurance against the Borrowings of any
     person;

but  excluding:

(i)  any  Borrowings  by the  Borrowers or any other member of the  Consolidated
     Group which would  otherwise  be taken into  account and are intended to be
     applied in the  repayment  of the whole or part of any other  moneys  taken
     into account as Borrowings pending such application  provided that they are
     so applied within three months of their being so borrowed; or

(k)  amounts which would  otherwise be taken into account which are for the time
     being owing by any member of the Consolidated  Group to any other member of
     the Consolidated Group;

and  so  that:

(l)  no  amount  shall  be  taken  into  account  more  than  once  in the  same
     calculation; and

(m)  when the aggregate  amount of Borrowings  required to be taken into account
     for  the  purpose  of  this  paragraph  on  any  particular  day  is  being
     ascertained,  any such  Borrowings  denominated  or repayable in a currency
     other than dollars  shall be converted for the purpose of  calculating  the
     dollar  equivalent at the Agent's Spot Rate of Exchange on that day for the
     purchase of that currency with dollars;

CURRENT  ASSETS  means,  as  at the date on which it falls to be determined, the
aggregate consolidated amount of all assets of the Consolidated Group realisable
in the ordinary course of business within 12 months of such date as shown in the
Accounts  for the Calculation Period during which such date falls and determined
in  accordance  with  the Accounting Principles (for the avoidance of doubt, all
intercompany  receivables having been eliminated in determining the consolidated
amount  of  all  such  assets);

CURRENT  LIABILITIES  means,  as at the date on which it falls to be determined,
the  aggregate  consolidated amount of all liabilities of the Consolidated Group
payable  within  12  months  of  such  date  as  shown  in  the Accounts for the
Calculation  Period  during  which  such date falls and determined in accordance
with  the  Accounting  Principles;

                                     - 10 -
<PAGE>
INTEREST  CHARGES  means  the  aggregate  interest  paid  or  payable  by  the
Consolidated  Group  (including  guarantee  commission and any other commitment,
arrangement  and  similar  fee  in  respect  thereof,  amounts  in the nature of
interest, discount charges, the interest element of rental under finance leases)
on  Borrowings  less  interest received during the relevant period (excluding in
either case amounts paid or received intra Consolidated Group) and determined in
accordance  with  the  Accounting  Principles;

OIL  AND GAS DEVELOPMENT EXPENSES means the aggregate of all expenses (including
capital expenditures) incurred in respect of any Joint Venture Document, Oil and
Gas  Development  Agreement  or  Oil  and  Gas Property (without duplication) as
stated in the Accounts for the relevant period and determined in accordance with
the  Accounting  Principles;  and

REFERENCE  ACCOUNTS means, at any time, the audited combined consolidated profit
and  loss  account  and  balance  sheet  of the Consolidated Group most recently
delivered  by  the  Borrowers  to  the Agent in accordance with clause 12.1 (b).
1.3     CONSTRUCTION: Except where the context otherwise requires, any reference
in  this  Agreement  to:

the  AGENT,  and  the  SECURITY  TRUSTEE  include  its  successors and permitted
transferees  and  assigns;

an  AGREEMENT  also  includes  a concession, contract, deed, franchise, licence,
treaty  or  undertaking  (in  each  case,  whether  oral  or  written);
the  ASSETS  of any person shall be construed as a reference to the whole or any
part  of its business, undertaking, property, assets and revenues (including any
right  to  receive  revenues);

CONTROL  means the ability, directly or indirectly, to appoint and/or remove all
or  the majority of the board of directors or management committee of the person
or  otherwise  to  direct  its  affairs  in  any  material  respect;

DERIVATIVE  TRANSACTION  includes any rate swap transaction, basis swap, forward
rate  transaction,  commodity swap, commodity option, equity linked swap, equity
or  equity  index  option,  bond  option, interest rate option, foreign exchange
transaction,  cap  transaction,  floor transaction, collar transaction, currency
swap transaction, currency option, spot or spot deferred oil or gas transaction,
forward  oil  or  gas  transaction, oil or gas option, oil or gas lease, loan or
consignment,  EFP  (exchange  for physical), oil or gas swap, oil or gas forward
rate  transaction  or  any  other similar transaction (including any option with
respect to any of these transactions) or any combination of any of the foregoing
transactions;

a  FINANCING  DOCUMENT  or other agreement includes any amendments, novations or
supplements  thereto;

a  GUARANTEE  also includes any other obligation (whatever called) of any person
to  pay,  purchase,  provide  funds (whether by way of the advance of money, the
purchase  of  or  subscription  for  shares or other securities, the purchase of
assets  or  services,  or  otherwise)  for the payment of, indemnify against the
consequences  of default in the payment of, or otherwise be responsible for, any
indebtedness  of  any  other  person;

                                     - 11 -
<PAGE>
INDEBTEDNESS  means  any  obligation  (whether  present  or  future,  actual  or
-contingent,  secured or unsecured, as principal or surety or otherwise) for the
payment  or  repayment  of  money;

a  LAW  includes common or customary law and any constitution, decree, judgment,
legislation,  order, ordinance, regulation, statute, treaty or other legislative
measure  in  any  jurisdiction  or  any present or future directive, regulation,
request  or  requirement  (in  each case, whether or not having the force of law
but,  if not having the force of law, the compliance with which is in accordance
with  the general practice of persons to whom the directive, regulation, request
or  requirement  is  addressed);

a  PERSON includes any corporation, association, partnership or other entity and
includes  its  successors  and  permitted  transferees  and  assigns;

a  provision  of  law is a reference to that provision as amended or re-enacted;
SUBSIDIARY  in  relation  to  any person means (i) any corporate entity of which
more  than  50 per cent of the issued share capital or voting rights in relation
thereto  is  -owned  directly  or  indirectly  by such person and/or one or more
subsidiaries  of such person or (ii) any corporate entity which is controlled by
such  person;

references  to  a  TIME  OF  DAY  are  to London time; headings and the table of
contents  are  for  ease  of  reference  only.

AMOUNT  AND  PURPOSE

2.1     AMOUNT: In accordance with the provisions of this Agreement, the Lenders
shall  make  an Advance to the Borrowers. The maximum aggregate principal amount
of  the  Facility is $30,702,500 (thirty million seven hundred two thousand five
hundred  dollars).

2.2     PURPOSE:  The Facility shall be used only for the purpose of refinancing
certain  obligations  of  the  Borrowers  to  Total  pursuant  to the Prepayment
Agreement between Liberty and TIL dated July 29, 1997, as amended April 6, 1998,
and to secure the release of the guarantees made by ARC and Dahomey to TIL dated
July  20,  1997  in  respect  of  the obligations of Liberty under the aforesaid
Prepayment  Agreement.

SYNDICATE  AND  BORROWERS

3.1     PARTICIPATION:  Subject to the provisions of this Agreement, each of the
Lenders  shall  participate  in the Advance under the Facility in the proportion
which its Commitment bears to the Total Commitments up to an aggregate principal
amount  not  exceeding  its  Commitment.

3.2 OBLIGATIONS  SEVERAL:  In  participating  in  the  Facility:

(a)  the rights  and  obligations  of each of the  Lenders  under the  Financing
     Documents are several. Failure of a Lender to perform its obligations under
     the Financing Documents shall neither:


                                     - 12 -
<PAGE>
     (i)  result in the Agent,  the Security Trustee or any Lender incurring any
          liability whatsoever; nor

     (ii) relieve the Agent,  the  Security  Trustee,  any Obligor or any Lender
          from their respective obligations under the Financing Documents; and

(b)  the  aggregate  of the  amounts  due to each  Lender  under  the  Financing
     Documents  at any time is a separate  and  independent  debt and subject to
     clause  13.2 each  Lender  shall have the right to protect  and enforce its
     rights under the Financing  Documents and it shall not be necessary (except
     as otherwise  provided in the Financing  Documents) for any other Lender or
     the Agent to be joined as an additional  party in any  proceedings  to this
     end.

3.3     LIABILITY  OF  BORROWERS: The obligations of each Borrower hereunder are
joint  and  several.

3.4     BORROWERS'  AGENT: Each Obligor irrevocably authorises and instructs the
Borrowers' Agent to give and receive as agent on its behalf all notices and take
such  other  action  (including, without limitation, the giving of consents, the
signing  of  certificates or the acceptance of any proposal) as may be necessary
or  desirable  under  or in connection with the Financing Documents and confirms
that  it  will  be bound by any action taken by the Borrowers' Agent under or in
connection  with  the  Financing  Documents.

3.5     Actions  of  Borrowers' Agent: The respective liabilities of each of the
Obligors  hereunder  shall  not  be  in  any  way  affected  by:

(a)  any irregularity in any act done by or any failure to act by the Borrowers'
     Agent;

(b)  the Borrowers' Agent acting in any respect outside any authority  conferred
     upon it by any Obligor; and

(c)  the failure by or inability of the  Borrowers'  Agent to inform any Obligor
     of receipt by it of any notification hereunder. CONDITIONS PRECEDENT

4.1     CONDITIONS  TO  THE FACILITY: The Facility shall become available on the
date upon which the Agent has notified the Borrowers' Agent that it received the
following documents dated not more than two days before the Drawing Date or such
earlier  date as the Agent may in its discretion accept and in each case in form
and  content  satisfactory  to  the  Agent:

(a)  a certificate signed by 2 directors of each of the Borrowers  substantially
     in the  form  set out in Part I of  Schedule  3 and the  documents  therein
     referred to;

(b)  a  certificate  in respect of each of the Original  Guarantors  signed by 2
     directors of each of the Original Guarantors  substantially in the form set
     out in Part II of Schedule 3 and the documents therein referred to;

                                     - 13 -
<PAGE>
(c)  opinions of the Obligors' independent legal counsel in each jurisdiction in
     which an Obligor is incorporated opining as to the due execution of each of
     the Financing Documents;

(d)  a letter from  Ogilvie and Company  describing  and listing each of the Oil
     and Gas  Development  Agreements  and each of the Oil and Gas Properties of
     which such firm has any  knowledge  or  information  in form and  substance
     satisfactory to the Agent;

(e)  a certified copy of the Joint Venture Documents and Oil and Gas Development
     Agreements  now in effect  (including  without  limitation  any  agreements
     referred to in the letter  described in paragraph  (d) above),  and in each
     case any agreements ancillary thereto in each case duly executed by all the
     parties thereto, and up to date copies as at the date not more than 10 days
     before the Drawing Date together with all consents, resolutions,  documents
     and  other  matters  necessary  for  the  effectiveness  of  the  same  and
     appropriate   evidence  that  each  has  become  wholly  unconditional  and
     effective  and none of the  conditions  precedent  thereto  has been waived
     without the consent of the Lenders;

(f)  an  executed  copy of each of the Share  Pledges,  together  with the share
     certificates  representing  100 per  cent of the  common  stock  of each of
     Liberty, Dahomey and each Guarantor in the name of the respective Guarantor
     or Borrower which is the pledgor under the respective  Share Pledge and any
     other documents required to be delivered pursuant thereto;

(g)  an  executed  copy  of two  Debentures  issued  by  West  African  Resource
     Corporation  (each in respect of  Concession  309),  an executed  copy of a
     Debenture issued by Agbara Resources Limited in respect of Concession 310),
     and an executed copy of a Debenture issued by Liberty in respect of OPL 237
     and OML 112 (Deep Rights) in form and content satisfactory to the Agent;

(h)  an executed copy of the Security Trust Deed;

(i)  an executed copy of the MOPU Agreement and the Amni Guarantee;

(j)  an  executed  copy of a  Certificate  issued  by Yinka  Folawiyo  Petroleum
     Company Limited in form and content satisfactory to the Agent;

(k)  an executed copy of a  Certificate  signed by each ARC Director in the form
     of Part III of Schedule 3; and

(l)  an executed copy of the Warrant.

4.2     NOTICE:  The  Agent  shall  promptly  notify each of the Lenders and the
Borrowers'  Agent after it has received all documents and confirmations required
pursuant  to  clause  4.1.

                                     - 14 -
<PAGE>
4.3     CONDITIONS  TO  THE  ADVANCE:  The  Advance  is  subject  to the further
conditions  precedent  that  both  on  the date of the Drawing Notice and on the
Drawing  Date  no Event of Default or Potential Event of Default has occurred or
would  occur  as  a  result  of  making  the  Advance.

DRAWDOWN  OF  THE  ADVANCE

5.1     DRAWDOWN:  Subject  to  the provisions of this Agreement, the Borrowers'
Agent  may  on  Business Days during the Availability Period draw the Advance by
delivering  to  the  Agent no later than 10.00 am (London time) a duly completed
Drawing  Notice  in the form set out in Schedule 2, specifying in respect of the
proposed  Advance:

(a)  the proposed Drawing Date, which shall be a Business Day;

(b)  the amount of the Advance, which shall not exceed $30,702,500; and

(c)  the Interest  Period which shall be for successive  periods of three months
     provided  that the final  Interest  Period  shall  coincide  with the Final
     Maturity Date.

5.2     IRREVOCABILITY:  A  Drawing  Notice shall be irrevocable and, subject to
the  provisions  of  this  Agreement,  the Borrower named therein shall draw the
Advance  on  the  Drawing  Date  specified  in  the  Drawing  Notice.

5.3     NOTICE  TO  LENDERS:  Subject  to  clause  4.3,  when the Agent actually
receives  a  Drawing  Notice pursuant to clause 5.1, it shall notify each of the
Lenders  of the amount of the proposed Advance and the proposed Drawing Date and
each  Lender  shall, subject to the provisions of this Agreement, make available
to  the  Agent  on  the  Drawing  Date  its  participation  in  that  Advance.
INTEREST

6.1     DURATION  OF  PERIODS:  The  following  provisions  shall  apply  to the
duration  of  Interest  Periods:

(a)  the  Interest  Period for each Advance  shall  commence on the date of that
     Advance and end on the date  determined in  accordance  with and subject to
     clause 5.1(c); and

(b)  an  Interest  Period  which  would  otherwise  end on a day  which is not a
     Business  Day shall end on the next  succeeding  Business  Day  unless  the
     result of such extension  would be that such Interest Period would end on a
     day in the next  following  calendar  month,  in which event such  Interest
     Period shall end on the last preceding Business Day.

6.2     RATE:  The  rate  of  interest  payable  on an Advance for each Interest
Period  shall  be the rate per annum determined by the Agent to be the aggregate
Of

(a)  the applicable Facility Margin; and

                                     - 15 -
<PAGE>
(b)  (i)  the rate  which  appears  on the  display  designated  as the  British
          Bankers Association's  Interest Settlement Rate as quoted on page 3750
          of the Dow  Jones/Telerate  Monitor for dollars (or such other page or
          service as may  replace  page 3750 on such  system for the  purpose of
          displaying  London  Inter-bank  offered  rates for  dollars of leading
          banks, from time to time) as at 11.00 a.m. (London time) on the second
          Business Day before the commencement of that Interest Period; or

     (ii) if no such display rate is then available for dollars,  the arithmetic
          mean (rounded to four decimal places with the mid-point rounded up) of
          the  rates  notified  to the  Agent  at its  request  by  each  of the
          Reference  Banks as the rate at which  deposits in dollars are offered
          for the same period as that Interest  Period by that Reference  Lender
          to leading  banks in the London  Inter-bank  market at or about  11.00
          a.m.  (London time) on the second Business Day before the commencement
          of that Interest Period; less

(c)  the Interest Adjustment.

6.3     PAYMENT:  Interest  under  this Agreement shall accrue from the date the
Advance is made and shall be calculated on the basis of actual days elapsed (not
counting  within  an Interest Period the last day of that Interest Period) and a
year  of  360 days and shall be paid on the Advance by the Borrower to the Agent
for  the  account  of  the  Lenders  in arrears on each Interest Payment Date in
dollars.

6.4     AGENT'S  CERTIFICATE:  The  Agent  shall notify the Borrowers' Agent and
each  of  the  Lenders of the rate of interest as soon as it is determined under
this  Agreement. The certificate of the Agent as to a rate of interest shall, in
the  absence  of  manifest  error,  be  conclusive.

6.5     FAILURE OF REFERENCE BANK: If any Reference Bank for any reason fails to
notify to the Agent the rate referred to in clause 6.2(b)(ii), subject to clause
10.3(d),  the  rate  of  interest  shall be determined on the basis of the rates
notified  to  the  Agent  by  the  remaining  Reference  Lenders.

6.6     NEW  REFERENCE  BANK:  If  any Reference Bank ceases to provide rates at
which  deposits  in dollars are offered to leading banks in the London interbank
market:

(a)  it shall cease to be a Reference Bank; and

(b)  the  Agent  shall,  with the  approval  (which  shall  not be  unreasonably
     withheld  or  delayed)  of  the  Borrowers'  Agent,  nominate  as  soon  as
     reasonably practicable another Bank to be a Reference Bank in place of such
     Reference Bank. REPAYMENT

7.1     REPAYMENT  OF  ADVANCES:  The Borrowers shall on the Final Maturity Date
repay the Advance to the Agent for the account of the Lenders in accordance with
clause  9.1.

                                     - 16 -
<PAGE>
7.2     NETTING  OFF:  If  on  the  Drawing  Date:

(a)  a Lender is required to participate in an Advance; and

(b)  a payment is due to that  Lender  pursuant to this clause 7, then the Agent
     shall (without  prejudice to the Borrowers'  obligation to make the payment
     in question pursuant to this clause 7 prior to any application  pursuant to
     this clause and without prejudice to the Borrowers' remaining obligation in
     relation  to such  payment  after any such  application)  apply any  amount
     payable by such Lender to that  Borrower on the Drawing  Date in or towards
     satisfaction  of the amount payable by that Borrower to such Lender on such
     Drawing Date pursuant to this clause 7.

7.3     Fees:  In  order to induce the Lenders to make the Advance hereunder the
Borrowers will pay to the Agent for the account of the Lenders a Facility Fee in
the  amount  of  $500,000  on  June 29, 1999 or such earlier date upon which the
Total  Outstandings  are  repaid  in  full.
PREPAYMENT

8.1     PREPAYMENT:  The Borrowers' Agent may at any time and from time to time,
serve  a notice of prepayment through the Agent in respect of all or any portion
of the Advance provided that the minimum principal amount of the Advance prepaid
shall  be  $1,000,000  and the principal amount of any prepayment shall be in an
integral  multiple  of  $500,000.  On the date falling 5 Business Days after the
date  of  service of the notice, the Borrowers shall prepay the principal amount
designated  in  such  notice.  On  prepaying  the Advance under this clause, the
Borrowers shall pay to the Agent for the account of the Lenders accrued interest
together  with  all  other amounts due to the Lenders in respect of such Advance
(including, without limitation, any sum payable under the indemnity contained in
clause  14.1  (a)).

PAYMENTS

9.1     MECHANICS:  The  following  provisions  shall  apply  to  the  making of
payments:

(a)  all payments by an Obligor or a Lender under this  Agreement  shall be made
     to the Agent to its  account  at such  office or Lender as it may notify in
     writing to the Borrowers' Agent or the Lenders;

(b)  payments  under this  Agreement  to the Agent  shall be made in dollars for
     value on or before 10.00 a.m. (London time) on the due date;

(c)  each payment  received by the Agent under this Agreement for another person
     shall,  subject to paragraph (d) below,  be made  available by the Agent to
     that  person  by  payment  (on the date and in the  currency  and  funds of
     receipt)  to that  person's  account  with  such  office  or  Lender in the
     principal  center of the country of the relevant  currency as it may notify
     to the  Agent  for this  purpose  by no less than 5  Business  Days'  prior
     notice; and

                                     - 17 -
<PAGE>
(d)  the Agent is not obliged to make payment under paragraph (c) above until it
     has actually received the  corresponding  sum. If the Agent makes available
     to a person any amount which has not been made unconditionally available to
     the  Agent  and  that  amount  is not  actually  and  unconditionally  made
     available,  the person  concerned  shall forthwith on notice from the Agent
     repay that amount to the Agent  together  with interest on the amount until
     its  repayment  at a rate  determined  by the Agent to reflect  its cost of
     funds.

9.2     NO  SET-OFF  OR COUNTERCLAIM: All payments made by an Obligor under this
Agreement  shall  be  made  without  set-off  or  counterclaim.

9.3     WITHHOLDINGS:  All  payments by an Obligor under this Agreement, whether
in respect of principal, interest, fees or any other item, shall be made in full
without  any deduction or withholding in respect of Tax or otherwise (other than
a  Tax  imposed  on  the overall net income of a Lender's Facility Office by the
jurisdiction  in  which  such  Lender  is  incorporated or in which the Facility
Office  is  located  (an  EXCLUDED  TAX)) unless the deduction or withholding is
required  by  law,  in  which  event  the  Obligor  shall:

(a)     ensure  that  the  deduction  or withholding does not exceed the minimum
amount  legally  required;

(b)     forthwith  pay  to  the  Agent  for  the  account  of  each  Lender such
additional  amount so that the net amount received by that Lender will equal the
full  amount  which  would  have  been  received  by it had no such deduction or
withholding  in  respect  of  Tax  (other  than  an  Excluded  Tax)  been  made;

(c)     pay  to the relevant taxation or other authorities within the period for
payment  permitted  by  applicable  law  the  full  amount  of  the deduction or
withholding  (including,  but  without  prejudice  to  the  generality  of  the
foregoing,  the  full amount of any deduction or withholding from any additional
amount  paid  pursuant  to  this  sub-clause);  and

(d)     furnish  to  the  Agent  on  behalf  of the Lender concerned, within the
period  for  payment  permitted  by  the  relevant  law,  either:

(i)     an  official  receipt  of  the  relevant  taxation  or other authorities
involved  in  respect  of  all  amounts  so  deducted  or  withheld;  or

(ii)     if  such  receipts  are not issued by the taxation or other authorities
concerned  on  payment to them of amounts so deducted or withheld, a certificate
of  deduction  or  equivalent evidence of the relevant deduction or withholding.

                                     - 18 -
<PAGE>
If any deduction or withholding in respect of Tax or otherwise is required to be
made  by  the  Agent in respect of any payment under this Agreement, the Obligor
concerned shall take the action referred to in paragraph (b), the certificate of
the  Agent  as to the amount required to be paid being conclusive, and the Agent
shall  take  the action referred to in paragraphs (a) and (c) and itself furnish
the  documents  referred  to  in  paragraph  (d).

9.4     TAX  FORMS:  Each  Lender  agrees,  with respect to each Borrower and in
respect  of its Facility Office for lending to such Borrower, in order to assist
such  Borrower  to secure the benefit of any available exemption for (or reduced
rate  in respect of) any deduction or withholding for or on account of Taxes, it
shall,  if  requested  in  writing  to do so by the Borrowers' Agent through the
Agent,  as soon as practicable after receipt of such request, from time to time,
furnish  such  Borrower (at the expense of such Borrower) through the Borrowers'
Agent  or the appropriate governmental or other authority, duly completed copies
of  such  certificates  and  documents  as  are  necessary  for  such  purpose.

9.5     TAX  CREDITS:  If and to the extent that any Obligor pays any additional
amount  under clause 9.3(b) and any Lender receives and retains the benefit of a
refund  of  Tax  or  credit  against  Tax  on  its  overall  net income which is
identified by the Lender in its sole opinion as attributable to the tax that was
withheld  or  deducted  (a  TAX CREDIT), then that Lender shall reimburse to the
Obligor  such  amount  as it shall determine in its absolute discretion so as to
leave that Lender, after that reimbursement, in no better or worse position than
it  would have been in if payment of the relevant additional amount had not been
required.  Each Lender shall have absolute discretion as to whether to claim any
Tax  Credit  and,  if it does so claim, the extent, order and manner in which it
does  so  and  in which reliefs and credits are to be regarded as used for these
purposes.  No  Lender shall be obliged to disclose any information regarding its
tax  affairs or computations to any Obligor and its certificate as to the amount
to  be  reimbursed  shall,  in  the absence of manifest error, be conclusive and
shall  not  be  questioned  by  the  Obligor.

9.6     DATE:  If  any  payment  would  otherwise be due on a day which is not a
Business  Day,  it  shall  be due on the next succeeding Business Day unless the
result  of such an extension would be that such payment would be due on a day in
the  following  calendar  month, in which event such payment shall be due on the
last  preceding  Business  Day.

9.7     DEFAULT  INTEREST:  If  a Borrower fails to pay any amount in accordance
with  this  Agreement:

(a)  the Borrower  shall pay interest on that amount from the time of default up
     to the time of actual  payment  (as well after as before  judgment)  at the
     rate per annum which is the sum of

     (i)  the Facility Margin plus two per cent; and

     (ii) the rate (as  determined  by the Agent) for a deposit in dollars of an
          amount comparable to the defaulted amount, offered to the Agent in the
          London Inter-bank  market,  for such period as the Agent may from time
          to time select,  at or about 10.00 a.m.  (London time) on the Business
          Day  succeeding  that on which the Agent  becomes aware of the default
          for value two Business Days later;

                                     - 19 -
<PAGE>
(b)  if an amount unpaid in accordance  with this  Agreement is of principal due
     on a day  during,  but not the last day of,  an  Interest  Period  relating
     thereto,  the period  selected by the Agent under clause 9.7(a) shall equal
     the unexpired portion of the Interest Period and there shall be substituted
     for the rate specified in clause 9.7(a) the rate of one per cent. above the
     rate  calculated in accordance with clause 6.2 and applicable to the unpaid
     amount immediately before it fell due;

(c)  interest under this clause shall accrue daily on the basis of a year of 360
     days from and  including  the first day to the last day of each  period for
     which a rate of interest is  determined  under this clause and shall be due
     and payable by the Borrower at the end of each such period.  So long as the
     default  continues,  the  rate  referred  to  in  clause  9.7(a)  shall  be
     calculated  on a similar  basis at the end of each  period  selected by the
     Agent  and  notified  to  the  Lenders  and  interest  payable  under  this
     sub-clause  which is unpaid at the end of each such period shall thereafter
     itself bear interest at the rates provided in this sub-clause.

9.8     JUDGMENT  CURRENCY: If, under any applicable law, whether as a result of
a  judgment against an Obligor or the liquidation of an Obligor or for any other
reason,  any  payment  under  or in connection with this Agreement is made or is
recovered  in  a  currency  (the  other currency) other than that in which it is
required  to be paid hereunder (the original currency), then, to the extent that
the payment to any Lender (when converted at the rate of exchange on the date of
payment  or, in the case of a liquidation, the latest date for the determination
of liabilities permitted by the applicable law) falls short of the amount unpaid
under  this  Agreement,  the  Obligor  shall  as  a  separate  and  independent
obligation, fully indemnify that Lender against the amount of the shortfall; and
for the purposes of this sub-clause rate of exchange means the rate at which the
Lender  concerned is able on the relevant date to purchase the original currency
in  London  with  the  other  currency.

9.9     CERTIFICATES:  Any  determination  or  notification  by the Agent or any
Lender  concerning any rate or amount under this Agreement shall, in the absence
of  manifest  error,  be  conclusive  evidence  as  to  that  matter.
CHANGES  IN  CIRCUMSTANCES

10.1     ILLEGALITY:  Where the introduction, imposition or variation of any law
or  any change in the interpretation or application of any law makes it unlawful
or impractical without breaching such law for any Lender to allow all or part of
its  participation in this Facility to remain outstanding or to fund all or part
of  its  participation  in  an  Advance  or to carry out all or any of its other
obligations  under  this  Agreement or to charge or receive interest at the rate
applicable  under  this  Agreement,  upon  that  Lender  notifying  the  Agent:

(a)  the Agent shall notify the  Borrowers'  Agent and that Lender's  Commitment
     shall forthwith be reduced to the extent necessary to cure such illegality;

                                     - 20 -
<PAGE>
(b)  the Borrower  shall,  within 5 Business Days of being so notified (and only
     to the extent necessary to cure such  illegality),  prepay to the Agent for
     the account of that Lender that Lender's  participation  in the Advance and
     any accrued  interest  thereon in accordance  with the provisions of clause
     8.1.

10.2     INCREASED  COSTS:  Where any Lender determines that the introduction or
variation  of  any law or any change in the interpretation or application of any
law or compliance with any request (whether or not having the force of law) from
any  central  bank  or other fiscal, monetary or other authority or agency would
increase  the  cost,  whether  by  loss  of reliefs or other benefits that would
otherwise  have  been  available  or  otherwise,  to that Lender (or the holding
company  of  that  Lender)  of  making  or  maintaining or funding that Lender's
Commitment or reduce the amount of any sum received or receivable by that Lender
in  respect  of its Commitment or oblige it (or its holding company) to make any
payment  or  suffer  any  cost  or  loss  of relief or other benefits (except in
respect of tax on overall net income) or forego any interest or other return on,
or  calculated  by reference to, the amount of any sum received or receivable by
that  Lender from an Obligor under this Agreement or reduce the effective return
to  it  (or  its holding company) under this Agreement or on its (or its holding
company's)  overall capital as a result of its entry into and/or compliance with
this  Agreement,  then:

(a)  that Lender shall  notify the  Borrowers'  Agent  through the Agent of such
     event promptly upon its becoming aware of such event; and

(b)  such Obligor shall on demand pay,  against  evidence of the amount claimed,
     to the Agent for the  account of that Lender or its  holding  company  such
     amounts as that Lender from time to time and at any time notifies the Agent
     to be  necessary  to  compensate  it,  or its  holding  company,  for  such
     increased cost, reduction, payment or foregone interest or return.

10.3     MARKET  DISRUPTION:  If,  in  relation  to  any  Advance:

(a)  the Agent (after consultation with the Reference Banks) determines that, by
     reason of circumstances  affecting the London  Inter-bank market generally,
     reasonable  and  adequate  means do not or will not exist for  ascertaining
     under clause 6.2 a rate of interest applicable to an Advance; or

(b)  the Agent is notified by the Majority  Lenders that deposits in dollars are
     not in the ordinary course of business  available in the London  Inter-bank
     market for a period  equal to the  forthcoming  Interest  Period in amounts
     sufficient to fund their participations in an Advance; or

(c)  the Agent is notified  by Lenders  which are banks (the  AFFECTED  LENDERS)
     whose Commitments aggregate more than 30 per cent. of the Total Commitments
     that the arithmetic mean of the offered  quotations or rates referred to in
     clause  6.2(b) does not  represent  their  effective  cost of funding their
     participations in such Advances during the forthcoming Interest Period; or

(d)  only one Reference  Lender  notifies a rate to the Agent in accordance with
     clause  6.2(b)(ii),  the Agent shall forthwith  notify the Borrowers' Agent
     and each Lender, and:

                                     - 21 -
<PAGE>
(e)  no further  Advances  shall be made while such  circumstances  continue  to
     exist;

(f)  unless within thirty days of the giving of the notice, the Borrowers' Agent
     and the Agent (in consultation with the Lenders or, in the case of (c), the
     Affected  Lenders) arrive,  by negotiation in good faith, at an alternative
     basis acceptable to the Borrowers' Agent and the Lenders for continuing the
     Facility or the participations of the Affected Lenders (and any alternative
     basis agreed in writing  shall be  retroactive  to and  effective  from the
     commencement  of the  relevant  Interest  Period)  the  Commitments  of the
     Lenders or, in the case of (c), the Affected Lenders, shall be canceled and
     the Borrowers  shall prepay to the Agent for the account of the Lenders the
     Total  Outstandings  or,  in the  case of (c),  the  participations  of the
     Affected  Lenders,  within  10  Business  Days  after the end of the 30 day
     period with accrued interest payable to each Lender or Affected Lender,  as
     applicable,  at a rate equal to the Facility  Margin plus the  aggregate of
     the amounts certified by such Lender, and notified through the Agent to the
     Borrowers'  Agent,  as being the cost to that Lender of  continuing to fund
     its Outstandings during the two periods referred to in this paragraph; and

(g)  while any agreed  alternative  basis is in force, the Agent in consultation
     with the  Lenders  or,  in the case of (c),  the  Affected  Lenders,  shall
     periodically  (but at least monthly)  determine  whether  circumstances are
     such that the basis is no longer necessary; and if the Agent so determines,
     it shall  forthwith  notify the  Borrowers'  Agent and each Lender and that
     basis shall cease to be  effective  on a date  specified by the Agent after
     consultation with the Lenders.

10.4     TAX:  If  and  to  the  extent  either:

(a)  an amount  deducted or withheld from any payment,  or an additional  amount
     payable  for  the  account  of any  Lender  by  reason  of a  deduction  or
     withholding, pursuant to clause 9.3; or

(b)  an amount in respect of increased costs payable pursuant to clause 10.2, is
     brought  into account by a Lender as a receipt for the purposes of taxation
     and proves inadequate,  by reason of the absence of a credit,  deduction or
     other relief which is (in any case)  immediately and effectively  received,
     fully and  immediately  to indemnify  the  relevant  Lender on an after-tax
     basis against the cost, payment, deduction or withholding in question; then
     in either case the Obligor will on demand pay such further sum to the Agent
     for the account of the Lender as is necessary to remedy the inadequacy.

                                     - 22 -
<PAGE>
10.5     MITIGATION: If a Lender becomes aware of circumstances that will or are
likely  to  lead to that Lender serving a notice under clause 10.1 or additional
amounts  becoming  payable  under  clause  10.2 or clause 9.3, that Lender shall
promptly  notify  the  Agent  accordingly,  whereupon the Agent shall notify the
Borrowers'  Agent and such Lender shall, without prejudice to the obligations of
any  of  the Borrowers, take such steps as are reasonably open to it to mitigate
the  effects of those circumstances (including, without limitation, the transfer
of  its  rights  and  obligations hereunder to another Facility Office or to any
other  bank  or financial institution willing to assume its participation in the
Facility).  Nothing  in  this clause imposes a legal obligation on any Lender to
take  any steps that might be prejudicial to it or which might conflict with its
general  banking  policies.

10.6     CERTIFICATES  AND  INFORMATION:  The  certificate  of  the Agent or the
relevant Lender as to the amount that is payable under clause 10.2, 10.3 or 10.4
shall,  in  the  absence  of  manifest  error, be conclusive and nothing in this
clause  10  shall  oblige  any  Lender to disclose any information regarding its
affairs  or  business  to  any  Obligor.

REPRESENTATIONS  AND  WARRANTIES

11.1     ON  SIGNING:  Each  Obligor  acknowledges that each of the Lenders, the
Agent  and  the  Security  Trustee has entered into the Financing Documents, and
that  the  Security  Trustee  has  consented  to be Security Trustee in relation
thereto  in each case in full reliance on representations by each Obligor in the
following terms, and each Obligor now represents and warrants to each of them in
respect of itself (and each of the Borrowers warrants and represents in relation
to  the  Consolidated  Group  in  clauses 11.1 (g), (h), (i), (j) and (k)) that:

(a)  Status: it is duly incorporated  with limited  liability,  validly existing
     and in good standing,  under the laws of its place of incorporation (except
     where failure to be so qualified would not reasonably be expected to have a
     Material  Adverse  Effect)  and is  duly  qualified  and  authorised  to do
     business and is in good  standing in each other  jurisdiction  in which the
     conduct  of its  business  requires  it to be so  qualified  or  authorised
     (except where failure to be so qualified  would not  reasonably be expected
     to have a Material Adverse Effect);

(b)  POWERS AND  AUTHORISATIONS:  the  documents  which contain or establish its
     constitution  include  provisions  which  give  power,  and  all  necessary
     corporate  authority has been obtained and action taken,  for it to own its
     assets,  carry  on its  business  and  operations  as they  are  now  being
     conducted,  to sign and deliver, and perform the transactions  contemplated
     in,  the  Financing  Documents  to  which it is a party  and the  Financing
     Documents to which it is a party constitute  valid and binding  obligations
     on it enforceable in accordance with their terms;

(c)  NON-VIOLATION:  neither the signing and delivery of the Financing Documents
     to  which  it is a party  nor the  performance  of any of the  transactions
     contemplated in any of them does or will contravene or constitute a default
     under,  or cause to be exceeded,  any limitation on it or the powers of its
     directors imposed by or contained in:

     (i)  any law, rule,  regulation,  writ,  order,  determination  or award by
          which it or any of its assets is bound or affected;

     (ii) any document which contains or establishes its constitution; or

     (iii)any agreement to which it or any of its  subsidiaries is a party or by
          which any of its or their assets is bound,

                                     - 23 -
<PAGE>
which  default could be reasonably expected to have a material adverse effect on
the  business,  properties,  results of operations or financial condition of the
Consolidated  Group  (a  MATERIAL  ADVERSE  EFFECT);

(d)  Consents:  no  authorisation,   approval,   consent,  licence,   exemption,
     registration, recording, filing or notarisation and no payment of any duty,
     charge or tax and no other action  whatsoever  is necessary or desirable to
     ensure  the  validity,   legality,   enforceability   or  priority  of  the
     liabilities and  obligations of it or the rights of the Lenders,  the Agent
     or the  Security  Trustee  (or any of them) under the  Financing  Documents
     except such authorizations,  etc. as have been obtained or will be obtained
     within 30 days following the Drawing Date;

(e)  NO DEFAULT:  no event has  occurred  which  constitutes,  or which with the
     giving of notice  and/or the lapse of time and/or a relevant  determination
     would  constitute,  a contravention of, or default under, any Joint Venture
     Document or Oil and Gas  Development  Agreement  or any other  agreement or
     instrument  by which it or any of its assets is bound or affected,  being a
     contravention  or default  which  could  reasonably  be  expected to have a
     Material  Adverse Effect or materially and adversely  affect its ability to
     observe or perform its obligations  under the Financing  Documents to which
     it is a party except as disclosed in a  certificate  executed in accordance
     with Clause 4.1(a) or (b);

(f)  LITIGATION:  no  litigation,  arbitration or  administrative  proceeding or
     claim which by itself or together with any other such proceedings or claims
     could  reasonably  be  expected  to  have  a  Material  Adverse  Effect  or
     materially  and  adversely  affect its  ability  to observe or perform  its
     obligations  under  the  Financing  Documents  to which  it is a party,  is
     presently  in  progress  or pending or, to the  knowledge  of any  Obligor,
     threatened  against  it or any of  its  assets  except  as  disclosed  in a
     certificate executed in accordance with Clause 4.1(a) or (b);

(g)  Tax:  no member of the  Consolidated  Group is in default in the payment of
     any taxes which  could  reasonably  be expected to have a Material  Adverse
     Effect, and no material claim is being asserted with respect to taxes which
     is not  disclosed  in the most recent  Accounts  except as  disclosed  in a
     certificate executed in accordance with Clause 4.1(a) or (b);

(h)  ACCOUNTS:

     (i)  the  statement  of the  Consolidated  Group as at  December  31,  1997
          prepared  by   Deloitte  &  Touche  has  been   prepared  on  a  basis
          consistently applied in accordance with the Accounting  Principles and
          gives a true and fair view of the Consolidated Group for that year and
          the state of the affairs of the  Consolidated  Group at that date, and
          in  particular   accurately   disclose  or  reserve  against  all  the
          liabilities  (actual or  contingent)  of the  Consolidated  Group as a
          whole  that are  required  to be  disclosed  or  reserved  against  in
          accordance with the Accounting Principles; and


                                     - 24 -
<PAGE>
     (ii) the  most  recent  financial  statements  of  the  Consolidated  Group
          delivered  to the Agent  pursuant  to clause  12.1(b)  below have been
          prepared  on a basis  consistently  applied  in  accordance  with  the
          Accounting  Principles and give a true and fair view of the results of
          its operations for that year and the state of its affairs at that date
          and in  particular  accurately  disclose  or reserve  against  all the
          liabilities  (actual or contingent)  that are required to be disclosed
          or reserved against in accordance with the Accounting Principles;

(i)  ENVIRONMENT:

     (i)  so far as any  officer  or  director  is  aware,  it has at all  times
          complied with all Environmental Laws and Environmental Licences in all
          material respects and obtained and maintained in full force and effect
          in all  material  respects all  Environment  Licences and there are no
          facts or circumstances entitling any such Environmental Licences to be
          revoked, suspended, amended, varied, withdrawn or not renewed; and

     (ii) so far as any officer or director is aware, no Material  Environmental
          Claim is pending or has been made or threatened  against any member of
          the  Consolidated  Group,  save  to the  extent  that  the  same  is a
          notification  or order  requiring  compliance  with  the  terms of any
          Environmental  Licence or Environmental Law which is in the process of
          being complied with in the time specified therein for compliance;

(j)  MATERIAL  ADVERSE CHANGE:  there has been no material adverse change in the
     consolidated  financial  condition of the Consolidated Group since the date
     referred to in paragraph (h)(i);

(k)  NO SECURITY:  none of the assets of any member of the Consolidated Group is
     affected by any Security Interest,  and no member of the Consolidated Group
     is a  party  to,  nor is it or  any of its  assets  bound  by,  any  order,
     agreement or instrument  under which any member of the  Consolidated  Group
     is, or in certain  events may be,  required to create,  assume or permit to
     arise any Security Interest, other than any Permitted Security Interest;

(l)  CERTIFICATES:  the  information  provided in the  Certificates  executed in
     accordance  with  clause  4.1,  when  prepared  and as of the  date of this
     Agreement:

     (i)  is true and accurate in all material respects and is not misleading in
          any material respect; and

     (ii) does not omit to state any fact necessary to make such information not
          misleading in any material respect;

(m)  INFORMATION:  the information  furnished from time to time by the Borrowers
     in  connection  with the  Facility  is true and  accurate  in all  material
     respects and is not misleading in any material respect when so furnished;

                                     - 25 -
<PAGE>

(n)  SUBSIDIARY GUARANTORS: the Subsidiaries of each Obligor which the Agent has
     requested to the Borrowers'  Agent accede to this Agreement have acceded to
     this Agreement as Additional Guarantors or are the Original Guarantors; and
     each  Subsidiary  of each Obligor has been notified to the Agent within not
     more than ten days  following  the date upon which such Person has become a
     Subsidiary of any Obligor.

11.2     AFTER  SIGNING:  Each  Obligor shall be deemed to represent and warrant
to  each of the Lenders, the Agent and the Security Trustee on each day that the
Advance  or  any portion thereof is outstanding, with reference to the facts and
circumstances  then  subsisting, that each of the representations and warranties
made  by  it  contained in clause 11.1 (other than paragraph (h)(i) and (j)) and
each  certificate  issued  pursuant to clause 12.1(b)(iv) remains true, accurate
and  correct.

UNDERTAKINGS

12.1     ACCOUNTS  AND  INFORMATION:  Each  Borrower undertakes with each of the
Lenders,  the  Agent  and  the  Security  Trustee  that,  from  the date of this
Agreement  until  all  its  liabilities  under the Financing Documents have been
discharged:

(a)  PREPARATION OF ACCOUNTS:  it will prepare the financial statements referred
     to in paragraph (b) on a basis consistently  applied in accordance with the
     Accounting  Principles and those financial statements shall give a true and
     fair  view of the  results  of the  Consolidated  Group  for the  period in
     question and the state of the affairs of the  Consolidated  Group as at the
     date to which the  financial  statements  are made up and shall  accurately
     disclose or reserve against all the  liabilities  (actual or contingent) of
     the  Consolidated  Group  required to be disclosed  or reserved  against in
     accordance with the Accounting Principles;

(b)  INFORMATION: it will deliver to the Agent in sufficient numbers for each of
     the Lenders:

     (i)  as soon as they become  available (and in any event within 105 days of
          31 December in each year) copies of the audited combined  consolidated
          and  consolidating  financial  statements for the twelve-month  period
          then ended of the Consolidated  Group which shall be shown in dollars,
          contain an income statement, a balance sheet and a cash flow statement
          and be audited and certified by a firm of  independent  accountants of
          recognised international standing;

     (ii) as soon as they become  available  (and in any event within 60 days of
          the end of each of its  financial  quarters)  copies of the  unaudited
          consolidated and consolidating financial statements for that financial
          quarter  of the  Consolidated  Group  each of which  shall  contain an
          income statement and a balance sheet;

                                     - 26 -
<PAGE>
     (iii)promptly,  all notices or other documents  despatched by each Borrower
          to its  shareholders  or Oil and Gas Partners (or in either case,  any
          class  thereof) and, in the case of ARC, to the Toronto Stock Exchange
          (including,  without  limitation,  the  Borrowers'  annual  budget and
          business plan for each calendar year) or its creditors generally;

     (iv) within 10 days following the close of each calendar month, an Officers
          Certificate  signed by two Directors of ARC in the form of Part III of
          Schedule 3 describing any changes in the  information set forth in the
          Certificate given since the delivery of the previous certificate; and

     (v)  promptly,  such additional financial or other information as the Agent
          may from time to time reasonably request.

12.2     GENERAL UNDERTAKINGS: Each Obligor undertakes with each of the Lenders,
the  Agent  and the Security Trustee that, from the date of this Agreement until
all  its  liabilities  under  the  Financing  Documents  have  been  discharged:

(a)  CONSENTS:  it will obtain and  promptly  renew from time to time,  and will
     promptly  deliver to the Agent  certified  copies  of,  any  authorisation,
     approval, consent, licence, exemption,  registration,  recording, filing or
     notarisation  as may be  necessary  or  desirable  to ensure the  validity,
     enforceability  or priority of the liabilities and obligations of it or the
     rights of the Lenders,  the Agent and the  Security  Agent (or any of them)
     under the  Financing  Documents  to which it is a party and it shall comply
     with the terms of the same;

(b)  DEFAULT:  if it becomes  aware of the  occurrence of an Event of Default or
     Potential  Event of Default it will forthwith  notify the Agent and provide
     the  Agent  with  full  details  of any  steps  which it is  taking,  or is
     considering  taking, in order to remedy or mitigate the effect of the Event
     of Default or Potential  Event of Default or otherwise in  connection  with
     it;

(c)  LITIGATION: promptly, and in any event within 10 days, after becoming aware
     of  the  same  inform  the  Agent  of  any   litigation,   arbitration   or
     administrative  proceeding  or claim of the kind  described  in clause 11.1
     (f);

(d)  INSURANCE: it will:

     (i)  procure  that it takes  out and  maintains  insurance  cover  over its
          assets  and  undertaking  with  reputable  underwriters  or  insurance
          companies  (including,  without  limitation,   reinsurance  companies)
          reasonably  acceptable to the Agent,  of a type and in an amount which
          is  consistent  with good  business  practice  in the  precious  metal
          industry;

     (ii) punctually  pay all premiums and other sums payable  under each policy
          taken out pursuant to this clause 12.2(d);

                                     - 27 -
<PAGE>
     (iii)upon  receipt  of a written  request  from the  Agent to such  effect,
          deliver to the Agent such  information as to the policies of insurance
          taken out  pursuant to this clause  12.2(d) (or as to any matter which
          may be  relevant  to such  insurances)  as the  Agent  may  reasonably
          request and upon renewal of any such policy,  produce to the Agent, on
          or before its expiry date, evidence of such renewal;

     (iv) promptly  upon  becoming  aware of the same  notify  the  Agent of any
          insurance claim where the amount of such claim exceeds  $5,000,000 (or
          its  equivalent,  on the date on  which  the  claim  is  made,  in the
          currency  in which such  claim is made) or such  other  amount as may,
          from time to time, be specified by the Agent;

     (v)  procure that no material  reductions in limits or coverage  (including
          those resulting from extensions) or material increases in deductibles,
          exclusions  or  exceptions  shall  be made to any  insurance  effected
          pursuant  to this  clause  12.2(d)  without  the prior  consent of the
          Agent;

     (vi) not,  at any time,  do (or omit to do),  anything  whereby  any of the
          insurances  taken out under this clause  12.2(d) may be rendered void,
          voidable, unenforceable,  suspended or impaired in whole or in part or
          which may  otherwise  render  any sum paid out  under any such  policy
          repayable in whole or in part;

     (vii)promptly  upon  becoming  aware  thereof,  inform  the  Agent  of  any
          substantial  change  in  the  insurances  on and  in  relation  to its
          business and assets;

(e)  PARI PASSU RANKING:  its unsecured  obligations under this Agreement do and
     will  rank at least  pari  passu  with all its  other  present  and  future
     unsecured  obligations  other than  obligations  in  respect  of  national,
     provincial  and local taxes and employees'  remuneration  and taxes and for
     certain other statutory exceptions;

(f)  ENVIRONMENT: it will:

     (i)  comply in all material  respects with the terms and  conditions of all
          laws,  regulations,  agreements,  licences and concessions  including,
          without  limitation,  all  Environmental  Laws  and all  Environmental
          Licences, all Applicable Laws and all Licences and Permissions;

     (ii) save as  disclosed  in  writing  to the  Agent on or prior to the date
          hereof,  ensure that no  Substance is at or brought on to any property
          owned,  leased or  occupied  by any member of the  Consolidated  Group
          which may give rise to a Material  Environmental  Claim and shall take
          or procure the taking of all necessary action to deal with,  remedy or
          remove from such property or prevent the incursion of (as the case may
          be) the Substance in order to prevent such Environmental  Claim (or in
          order to comply with any  notification or order  requiring  compliance
          with the  terms of any  Environmental  Licence  or  Environmental  Law
          within the time specified therein for such compliance) and in a manner
          that  complies  in all  material  respects  with all  requirements  of
          Environmental Law;

                                     - 28 -
<PAGE>
(g)  RECORDS ETC: at any reasonable  time and from time to time upon  reasonable
     notice,   it  will  permit  the  Agent  or  any  Lender  or  any  agent  or
     representative thereof to examine and make copies of and abstracts from the
     records and books of account of, and visit the  properties of it to discuss
     its affairs,  finances and accounts with any of their  respective  officers
     and directors and its independent accountants,  at the expense of the Agent
     or Lender,  unless a Potential  Event of Default or Event of Default  shall
     have  occurred  and be  continuing  in  which  case at the  expense  of the
     Borrowers;

(h)  INTELLECTUAL  PROPERTY:  preserve and maintain in all material respects the
     substance  and  the  validity  of  the  Intellectual   Property  and  where
     appropriate,   use  its  best  endeavours  to  protect  and  safeguard  the
     Intellectual  Property  which is  material  from and against  theft,  loss,
     destruction, unauthorised access, copying or use by third parties; and

(i)  TAX  RETURNS:  except with  respect to tax matters  relating to the alleged
     failure of Liberty Technical Services Limited and Abacan Technical Services
     Inc to make past payments to the Nigerian government in connection with the
     operation  of OPL 237 and OML 112,  ensure all  necessary  tax  returns and
     filings are  delivered  by or on behalf of each member of the  Consolidated
     Group in  accordance  with  applicable  laws and  regulations  and promptly
     provide to the Agent a complete and correct copy of each such tax return;

(j)  ADDITIONAL GUARANTORS: promptly (and in all cases within 30 days) following
     the close of each  calendar  month it will  procure  that  each  Subsidiary
     (other than an Original  Guarantor and any  Subsidiary  that has previously
     issued a Guarantor  Accession  Deed) not earlier  notified to the Agent. At
     the request of the Agent the  Borrowers  will cause any  Subsidiary  of any
     Obligor to execute a  Guarantor  Accession  Deed in the form of  Schedule 5
     duly completed and signed by the Borrowers' Agent and such Subsidiary,  and
     deliver  to the  Agent (x) a  certificate  signed  by 2  directors  of such
     Subsidiary  substantially  in the  form  set  out  in  Schedule  3 and  the
     documents referred to therein; and (y) an opinion of an independent firm of
     lawyers acceptable to the Agent;

(k)  FUTURE DEBENTURES: promptly (and in all cases within 30 days) following the
     written  request of the Agent to the  Borrowers'  Agent,  any Obligor as to
     which the Agent has made such request  shall enter into a Debenture in form
     and content and  covering  any  property or  interests  requested as may be
     requested by the Agent (provided that the reasonable  value of the property
     covered by such Debenture is $500,000 or more),  and provided  further that
     all necessary  authorisations,  approvals or consents are or can reasonably
     be obtained.

12.3     NEGATIVE  UNDERTAKINGS:  Each  Obligor  undertakes  with  each  of  the
Lenders,  the  Agent  and  the  Security  Trustee  that,  from  the date of this
Agreement  until  all  its  liabilities  under the Financing Documents have been
discharged:

(a)  SECURITY: it will not and will procure that no Subsidiary will:

                                     - 29 -
<PAGE>
     (i)  create or permit to subsist any Security  Interest on the whole or any
          part of its present or future property, assets or revenues;

     (ii) sell or otherwise  dispose of any of its assets on terms  whereby such
          property or asset is or may be leased to or re-acquired or acquired by
          it (except to the extent that the proceeds of such sale or disposition
          are applied to the repayment of loans made to it);

     (iii)sell or otherwise  dispose of any of its receivables on recourse terms
          except for the discounting of bills or notes in the ordinary course of
          business; except for Permitted Security Interests;

(b)  DISPOSALS: without the prior written consent of the Agent, such consent not
     to be unreasonably  withheld in  circumstances  where in the opinion of the
     Majority  Lenders the  interests  of the Lenders are  reasonably  protected
     after taking into account the  reasonable  requirements  of the Obligors to
     develop  their  assets,  it will not, and will  procure that no  Subsidiary
     will, either in a single transaction or in a series of transactions whether
     related or not and whether  voluntarily or involuntarily,  sell,  transfer,
     lease or otherwise dispose of all or any material part of their property or
     assets except that, without  limitation,  the following disposals shall not
     be taken into account:

     (i)  disposals made with the prior consent of the Majority Lenders;

     (ii) disposals  (other  than  any  disposal  in  respect  of an Oil and Gas
          Property,  any interest under a Joint Venture Document or any Interest
          under an Oil and Gas Development  Agreement)  (including  repayment of
          loans)  made in the  ordinary  course  of  business  of the  disposing
          entity;

     (iii)disposals  of property or assets  (other than any  disposal in respect
          of an Oil and  Gas  Property,  any  interest  under  a  Joint  Venture
          Document or any Interest under an Oil and Gas  Development  Agreement)
          in exchange  for other  property or assets  comparable  as to type and
          value;

     (iv) any other  disposal  (other than any disposal in respect of an Oil and
          Gas  Property,  any  interest  under a Joint  Venture  Document or any
          Interest under an Oil and Gas  Development  Agreement) made for market
          value in  money or  money's  worth  on an  arm's  length  basis in any
          financial  year which,  when  aggregated  with  disposals made in that
          financial year, does not exceed $1,000,000;

(c)  Accounting  Reference  Date: it will not,  without the prior consent of the
     Agent,  change the date of its financial  year end or that of any member of
     its Group from 31 December;

                                     - 30 -
<PAGE>
(d)  DIVIDENDS:  it  will  not  declare,  make  or pay  any  dividend  or  other
     distribution  to its  shareholders  or  vote  or  consent  to do any of the
     foregoing  with  respect to its Oil and Gas  Partners  (except as otherwise
     expressly   required  in  the  Joint  Venture  Documents  or  Oil  and  Gas
     Development Agreements).

(e)  PROCEEDS OF ADVANCES:  it will not,  and will  procure  that no  Subsidiary
     will, use the proceeds of any Advance other than as permitted  under clause
     2.2.

(f)  SHARE SALES:  without the prior written consent of the Agent,  such consent
     not to be unreasonably  withheld in  circumstances  where in the opinion of
     the Majority Lenders the interests of the Lenders are reasonably  protected
     after taking into account the  reasonable  requirements  of the Obligors to
     develop  their  assets,  it will not, and will  procure that no  Subsidiary
     will, dispose of all or any part of the share capital,  partnership capital
     or capital stock of any other Obligor;

(g)  Derivatives:  it will  not,  and will  procure  that no member of the Group
     will,  enter into any derivative  transaction  which is not entered into in
     the  ordinary  course of business  and for the  purposes of hedging  future
     exposure to  fluctuations in values of assets or liabilities in relation to
     which the net  exposure  thereunder  could  reasonably  be  expected  to be
     greater than $2,000,000 or otherwise to have a major impact on the business
     of such person; and

(h)  RING-FENCING OF OBLIGORS:  it will not, and will procure that no Subsidiary
     will:

     (i)  make  any  loan or  lease  to or  grant  any  credit  to or  make  any
          investment  in any member of the  Consolidated  Group  which is not an
          Obligor;

     (ii) sell,  transfer,  lease or otherwise dispose of all or any part of its
          property  or assets  for less than  market  value to any member of the
          Consolidated Group which is not an Obligor;

     (iii)purchase,  acquire or  otherwise  receive a  transfer  or lease in any
          property  or assets of any member of the  Consolidated  Group which is
          not an Obligor for more than market value;

     (iv) issue any  guarantee in respect of  indebtedness  of any member of the
          Consolidated Group which is not an Obligor; or

     (v)  deal or contract  with, or provide to or receive  services  from,  any
          member of the  Consolidated  Group  which is not an Obligor  except on
          arm's length terms and for full consideration.

12.4     ACCOUNTING  PRINCIPLES:  except as otherwise expressly provided in this
Agreement,  all  accounting  terms  used  herein  shall  be interpreted, and all
matters  required  to  be delivered to the Agent hereunder shall be prepared, in
accordance with the Accounting Principles used in the preparation of the audited
financial statements as at December 31, 1997 referred to under clause 12.1(b)(i)
hereof.

                                     - 31 -
<PAGE>
12.5     JOINT VENTURE DOCUMENTS AND OIL AND GAS DEVELOPMENT AGREEMENTS: Each of
the  Borrowers  agrees  that  it  shall:

(a)  observe  and  perform  all the  obligations  on its part  contained  in and
     assumed by it under the Joint Venture Documents and Oil and Gas Development
     Agreements;

(b)  to the  extent  that,  in the  opinion  of the  Agent,  it is  commercially
     reasonable to do so, take all reasonable  steps to enforce the  performance
     by the Oil and Gas Partners of each of their respective  obligations  under
     the Joint Venture  Documents  and Oil and Gas  Development  Agreements  and
     diligently pursue any remedies  available to it in respect of any breach of
     any of the Joint Venture Documents or Oil and Gas Development Agreements or
     in respect of any claim arising thereunder or in relation thereto;

(c)  to the  extent  that,  in the  opinion  of the  Agent,  it is  commercially
     reasonable to do or not to do so, not give,  withhold or grant any consent,
     waiver,  release,  notice, approval or discharge to any Oil and Gas Partner
     in respect of its rights or obligations  under the Joint Venture  Documents
     which or Oil and Gas Development Agreements;

(d)  forthwith upon becoming aware of the same notify the Agent of any breach by
     it or any  other  party  to the  Joint  Venture  Documents  or Oil  and Gas
     Development  Agreements  of any provision  thereof or any dispute  relating
     thereto;

(e)  not sell,  transfer,  sign or  otherwise  dispose of or create any Security
     Interest over its rights,  title or interest in the Joint Venture Documents
     or Oil and Gas Development Agreements or Oil and Gas Properties; and

(f)  not cause,  suffer or permit any  amendment  or  modification  in any Joint
     Venture Document.

12.6     CERTAIN AGREEMENTS WITH THIRD PARTIES: Each of the Obligors agrees that
it  will not and will not permit any Subsidiary to enter into or commit to enter
into  any  agreement  with any third party in respect of the sale of any Oil and
Gas  or Oil and Gas Property or enter into any Oil and Gas Development Agreement
or  any  interest  therein or enter into or commit to enter into any Oil and Gas
Development  Agreement  without  the  prior  written  consent of the Agent (such
consent not to be withheld in circumstances where in the opinion of the Majority
Lenders  the interests of the Lenders are reasonably protected after taking into
account  the reasonable requirements of the Borrowers to develop the Oil and Gas
Properties).

DEFAULT

13.1     EVENTS:  If  any  of  the  events  set out below occurs, the Agent, the
Security  Trustee  and the Lenders may take any action as is provided for in any
of  the  Financing  Documents:

(a)  NON-PAYMENT:  any Obligor  fails to pay any amount due under any  Financing
     Document on the due date or on demand, if so payable;

                                     - 32 -
<PAGE>
(b)  Breach of principal  obligations:  any Obligor  fails to observe or perform
     any of its  obligations  under  clauses 12.1 (a),  12.2 (b), (c), (e), (j),
     12.3, 12.4, 12.5 or 12.6 of this Agreement;

(c)  BREACH OF OTHER OBLIGATIONS: any Obligor fails to observe or perform any of
     its obligations under the Financing Documents (other than those referred to
     in  clauses  13.1 (a) or (b) above)  and,  if the same is capable of remedy
     within 20 days, the same is not remedied  within 20 days after the relevant
     failure in observation or performance;

(d)  MISREPRESENTATION: any material representation, warranty or statement which
     is made (or deemed or acknowledged to have been made) by any Obligor in the
     Financing  Documents  or which is  contained  in any  certificate,  written
     statement,  legal opinion or written notice provided under or in connection
     with the Financing Documents proves to be incorrect;

(e)  Invalidity:  any provision of any of the Financing Documents is or becomes,
     for any reason, invalid or unenforceable;

(f)  CESSATION  OF BUSINESS:  any member of the  Consolidated  Group  changes or
     threatens  to change  the  nature  or scope of its  business,  suspends  or
     threatens to suspend a substantial part of the present business  operations
     which it now conducts directly or indirectly, or any governmental authority
     expropriates  or threatens to expropriate  all or part of its assets or any
     Joint Venture Partner  cancels or gives written or  constructive  notice of
     intention  to  cancel  and Joint  Venture  Document  or any  Joint  Venture
     Document  expires  and  the  result  of  any of the  foregoing  is,  in the
     determination of the Majority  Lenders,  materially and adversely to affect
     the financial  condition of either of the Groups,  or any Obligor's ability
     to observe or perform its obligations under any Financing Document to which
     it is a party;

(g)  CROSS-DEFAULT: default shall be made with respect to any agreement or other
     evidence of  indebtedness  or liability for borrowed  money, or a guarantee
     for any of the foregoing, in excess of $1,000,000 (or its equivalent in any
     other currency)  (other than  hereunder) of any member of the  Consolidated
     Group if the effect of such default is to  accelerate  the maturity of such
     indebtedness or liability or to require the prepayment thereof or to permit
     the  holder or  holders  thereof  (or a trustee  on behalf of the holder or
     holders  thereof)  to cause  such  indebtedness  to become due prior to the
     stated maturity thereof, or any such indebtedness or liability shall become
     due and shall not be paid prior to the  expiration  of any period of grace,
     provided,  that the aforesaid  --------  provisions  shall not apply to any
     indebtedness outstanding on the date of this Agreement which is referred to
     in any  certificate  delivered  hereunder  and is  identified  as  being in
     default;

                                     - 33 -
<PAGE>
(h)  APPOINTMENT OF RECEIVER,  LEGAL PROCESS:  an encumbrancer  takes possession
     of, or a trustee or  administrative or other receiver or similar officer is
     appointed  in respect of, all or any part of the  business or assets of any
     member of the Consolidated Group, or distress,  judgment,  judgment,  lien,
     execution,  writ, warrant of attachment or other legal process is levied or
     enforced  upon or sued out against  any such  assets and is not  discharged
     within  seven days of being  levied,  enforced or sued out, or any Security
     Interest  which may for the time being  affect  any of its  assets  becomes
     enforceable;

(i)  INSOLVENCY: any member of the Consolidated Group is unable to pay its debts
     or  becomes  unable  to pay its  debts  as they  fall  due or  suspends  or
     threatens  to suspend  making  payments  (whether of principal or interest)
     with respect to all or any class of its debts;

(j)  COMPOSITION: any member of the Consolidated Group convenes a meeting of its
     creditors or proposes or makes any arrangement or composition  with, or any
     assignment for the benefit of, its creditors;

(k)  ADMINISTRATION,  WINDING  UP: a  petition  is  presented  or a  meeting  is
     convened for the purpose of  considering  a  resolution  or other steps are
     taken for making an  administration  order against or for the winding up of
     any  member  of the  Consolidated  Group  or an  administration  order or a
     winding  up order is made  against  any  member of the  Consolidated  Group
     (other than for the purposes of and followed by a reconstruction previously
     approved in writing by the  Majority  Lenders,  unless  during or following
     such  reconstruction  any member of the  Consolidated  Group  becomes or is
     declared to be insolvent);

(l)  ANALOGOUS PROCEEDINGS: anything analogous to any of the events specified in
     paragraphs  (f),  (g),  (h),  (i),  (j) or (k) occurs under the laws of any
     applicable jurisdiction;

(m)  MATERIAL  ADVERSE CHANGE:  any event or series of events whether related or
     not occurs  which would be likely  materially  and  adversely to affect the
     financial  condition of either of the Consolidated  Group or the ability of
     any  Obligor  to  perform  its  obligations  under  any  of  the  Financing
     Documents;

(n)  CHANGE OF CONTROL OR OWNERSHIP:  without the prior  written  consent of the
     Agent, such consent not to be unreasonably  withheld in circumstances where
     in the opinion of the  Majority  Lenders the  interests  of the Lenders are
     reasonably protected after taking into account the reasonable  requirements
     of the  Obligors  to develop  their  assets,  any person  whether  alone or
     together with other persons acting in association with it, acquires control
     of any of the  Obligors  and/or there is a change in ownership of the share
     capital of the Obligors;

                                     - 34 -
<PAGE>
(o)  JOINT VENTURE  DOCUMENTS OR GAS DEVELOPMENT  AGREEMENTS:  without the prior
     written consent of the Agent, such consent not to be unreasonably  withheld
     in circumstances where in the opinion of the Majority Lenders the interests
     of the Lenders  are  reasonably  protected  after  taking into  account the
     reasonable  requirements  of the  Obligors  to develop  their  assets,  any
     amendment,  modification  or variation is made to any of the Joint  Venture
     Documents or material Oil and Gas Development  Agreement (such  materiality
     to be  determined  by the Agent),  any party thereto is in default under or
     commits a breach of any of the Joint Venture  Documents or material Oil and
     Gas Development Agreement (such materiality to be determined by the Agent),
     or any of the Joint Venture  Documents is  terminated  or expires,  and any
     such event  could in the  opinion of the  Majority  Lenders  reasonably  be
     expected to have a Material Adverse Effect;

(p)  ENVIRONMENTAL  MATTERS:  any  Environmental  Claim  in  which  there  is  a
     reasonable likelihood of any adverse decision is brought against any member
     of the Consolidated Group which, if adversely  decided,  would be likely to
     entitle any person to shut down or suspend all or any material  part of the
     business of any member of the  Consolidated  Group,  or result in any cost,
     claim, liability, expense or damages in excess of $5,000,000 to be suffered
     or incurred by any member of the  Consolidated  Group or  otherwise  have a
     Material Adverse Effect upon the business properties, results of operations
     or financial condition of any member of the Consolidated Group.

13.2     ACTION  ON EVENT OF DEFAULT: In the case of any of the events described
in  clause  13.1  shall  have occurred and be continuing then, at once or at any
time  thereafter (so long as any such event shall be continuing), the Agent may,
and  upon the request of the Majority Lenders shall, by notice to the Borrowers'
Agent:

(a)  cancel the Total Commitments; and/or

(b)  declare all or part of the Total  Outstandings  to be  immediately  due and
     payable  whereupon  they  shall  become so due and  payable  together  with
     accrued  interest  thereon and any other  amounts then  payable  under this
     Agreement,  such  payment to be  effected  on a date to be  notified by the
     Agent to the Borrowers' Agent; and/or

(c)  demand  immediate  repayment  of any amounts to which  paragraph  (b) above
     applies; and/or

(d)  place all or part of the Advance on demand,  whereupon it shall immediately
     become repayable on demand and at any time thereafter:

     (i)  make any further  amendment to the repayment  obligations  relating to
          such Advance; and/or

     (ii) demand  repayment  of all or  part of the  Advance  placed  on  demand
          together  with  accrued  interest  and any other  amounts then payable
          under this Agreement.

13.3     NOTICE: If the Agent is notified under this Agreement of the occurrence
of  an  Event  of  Default  it  shall  inform  each  of  the  Lenders.

                                     - 35 -
<PAGE>
13.4     SECURITY:  The  Borrowers  hereby irrevocably agree with the Agent, the
Security  Trustee  and  the  Lenders  that  upon  any  enforcement of the rights
conferred  upon  the  Security  Trustee  pursuant  to  the  Share  Pledges,  the
Debentures,  and  any  other Security Interest created in favour of the Security
Trustee,  the  liabilities  satisfied  as  a result of such enforcement shall be
limited  to  the  net  amount  distributed to the Lenders pursuant to clause 7.1

(Distribution)  of  the Security Trust Deed. The Borrowers further agree that as
security  for the payment of the Borrowers' obligation to pay interest hereunder
the  Borrowers  will  instruct  TIL  to  pay to the Security Agent the amount of
$500,000 payable by TIL to the Borrowers under the Sale/Purchase Agreement dated
July  29, 1997 between Liberty and TIL for deposit by the Security Trustee in an
interest bearing deposit account for application to interest payments payable by
the  Borrowers  hereunder as and when due or, upon the occurrence of an Event of
Default,  as  otherwise  provided  in  clause  7.1  of  the Security Trust Deed.

INDEMNITIES

14.     Each  Obligor  shall  fully indemnify each of the Lenders, the Agent and
the  Security  Trustee  from  and against any expense, loss, damage or liability

(including  without  limitation  "response costs" and "natural resource damages"
with  respect  to  any  Environmental  Claims)  which any of them may incur as a
consequence  of  the  occurrence  of

(a)  GENERAL  INDEMNITY:  any Event of  Default,  or any failure to draw down in
     accordance  with a Drawing Notice (other than as a result of any failure by
     such  indemnified  party) or of any  prepayment  under  this  Agreement  or
     otherwise  in  connection  with this  Agreement.  Without  prejudice to its
     generality,  the foregoing indemnity shall extend to any interest,  fees or
     other sums  whatsoever  paid or payable on account of any funds borrowed in
     order  to carry  any  unpaid  amount  and to any  loss  (including  loss of
     profit),  premium,  penalty or expense which may be incurred in liquidating
     or employing deposits from third parties acquired to make, maintain or fund
     the Total  Outstandings (or any part of them) or any other amount due or to
     become due under this Agreement; and

(b)  ENVIRONMENTAL INDEMNITY: any of the following:

     (i)  the breach of any  representation  or warranty of the Obligors made or
          repeated in  accordance  with the terms of this  Agreement  -regarding
          Substances or applicable Environmental Laws,

     (ii) the failure of any Obligor to perform any obligation  herein  required
          to be performed regarding Substances or applicable Environmental Laws,

     (iii)any  applicable  Environmental  Law in effect  during the term hereof,
          and

     (iv) any  act,  omission,  event  or  circumstance  existing  or  occurring
          (including  without  limitation  the presence on or in any property or
          release  from any  property or the  generation  on any property of any
          Substance  disposed of or otherwise  released),  resulting  from or in
          connection  with the ownership,  construction,  occupancy,  operation,
          manufacture,  sale, storage,  distribution,  use and/or maintenance of
          its  property  regardless  of  whether  the  act,  omission,  event or
          circumstance  constituted a violation of any applicable  Environmental
          Law at the time of its existence or occurrence.

                                     - 36 -
<PAGE>
GUARANTEE

15.1     GUARANTEE:  Each Guarantor as principal debtor and not merely as surety
unconditionally  and  irrevocably  and  jointly  and severally guarantees to the
Agent, the Security Trustee and each of the Lenders payment by the Borrowers and
the  Borrowers' Agent (in that capacity) of the Guaranteed Amounts in accordance
with  the  Financing Documents and unconditionally and irrevocably undertakes to
the  Agent,  the  Security Trustee and each of the Lenders that if and each time
any  Borrower  does  not  make  payment  of  any  of  the  Guaranteed Amounts in
accordance  with  the  Financing Documents, the Guarantors shall pay the amounts
not  so  paid  upon  first  written  demand  by  the  Agent.

In  this  clause  GUARANTEED AMOUNTS means any and all amounts whatsoever- which
the  Financing  Documents  provide  are  to  be  paid  by  the Borrowers and the
Borrowers'  Agent  to the Lenders, the Agent and the Security Trustee (or any of
them) and references to the Guaranteed Amounts include references to any part of
them.

15.2     INDEMNITY:  As  a  separate,  additional,  continuing  and  primary
obligation,  each  Guarantor  unconditionally  and  irrevocably  and jointly and
severally  undertakes  with the Agent, the Security Trustee and the Lenders (and
each  of  them)  that, should the Guaranteed Amounts not be recoverable from the
Guarantor  under  clause  15.1 for any reason whatsoever (including, but without
prejudice  to  the generality of the foregoing, by reason of any other provision
of  the  Financing  Documents being or becoming void, unenforceable or otherwise
invalid  under  any  applicable law) then, notwithstanding that it may have been
known  to  the  Agent, the Security Trustee or any of the Lenders, the Guarantor
shall  upon first written demand by the Agent under clause 15.1, make payment of
the  Guaranteed Amounts by way of a full indemnity in such manner as is provided
for  in  the  Financing  Documents  and  shall indemnify the Agent, the Security
Trustee  and  the  Lenders (and each of them) against all losses, claims, costs,
charges  and expenses to which they may be subject or which they may incur under
or  in  connection  with  the  Financing  Documents.

15.3     CONTINUING  GUARANTEE:  The  above  guarantees  shall be continuing and
shall  extend  to  the ultimate balance of the Guaranteed Amounts, regardless of
any  intermediate  payment or discharge in whole or in part. If any of the above
guarantees ceases to continue in force, the Agent, the Security Trustee and each
Lender  may  open  a  new account with or continue any existing account with the
Borrowers  and  the  liability  of  the  relevant  Guarantor  in  respect of the
Guaranteed  Amounts  at the date of the cessation shall remain regardless of any
payments  in  or  out  of  any  such  account.

15.4     DISCHARGE  AND  RELEASE:  None  of  the  Guarantors  may  terminate its
guarantee  by  notice  to  the  Agent,  the  Security  Trustee  or any Lender or
otherwise.  Subject  to  clause  15.5,  and provided the Guaranteed Amounts have
been paid in full and the agreement has been canceled, terminated or expired and
the  Lenders  have no further Commitment hereunder, the Agent shall on behalf of
itself, the Security Trustee and the Lenders discharge or release the Guarantors
by  written  instrument  signed  by  the  Agent.

                                     - 37 -
<PAGE>
15.5     CLAWBACK:  Any discharge or release referred to in clause 15.4, and any
composition  or  arrangement  which  any  of  the Guarantors may effect with the
Agent,  the  Security Trustee and any of the Lenders, shall be deemed to be made
subject  to the condition that it will be void, if any payment or security which
the  Agent, the Security Trustee and the Lenders (or any of them) may previously
have  received  or  may  thereafter  receive  from  any person in respect of the
Guaranteed Amounts, is set aside, refunded or reduced, in whole or in part under
any  applicable  law  or  proves  to  have  been for any reason invalid. If such
condition  is  satisfied,  the  Agent  shall  be  entitled  to  recover from the
Guarantor  on  demand  the  value of such payment as if such discharge, release,
compromise  or  arrangement  had  not  occurred.

15.6     WAIVER  OF  DEFENCES:  The  liabilities  and obligations of each of the
Guarantors  under  this Agreement shall remain in force notwithstanding any act,
omission,  neglect,  event  or  matter  whatsoever,  except the proper and valid
payment  of  all the Guaranteed Amounts and without prejudice to its generality,
the  foregoing  shall  apply in relation to anything which would have discharged
the  Guarantors  (wholly or in part) or which would have afforded the Guarantors
any  legal  or  equitable  defence,  and  in  relation  to  any  winding  up,
reconstruction,  reorganisation or dissolution of, or any change in constitution
or  corporate  identity or loss of corporate or partnership (as the case may be)
identity by, any of the Obligors, any partner of an Obligor, or any other person
and  any  incapacity  or  lack  of  corporate  power or authority of any person.
Without  prejudice to the generality of the foregoing none of the liabilities or
obligations  of  the  Guarantors  under  this Agreement shall be impaired by the
Agent,  the  Security  Trustee  or  the  Lenders  (or  any  of  them):

(a)  agreeing with any Obligor any variation or departure (however  substantial)
     of or from any  Financing  Document  and any such  variation  or  departure
     shall,  whatever  its  nature,  be  binding  upon  each  Guarantor  in  all
     circumstances, notwithstanding that it may increase or otherwise affect the
     liability of the  Guarantors  provided  that if any  variation  which would
     increase the liability of any Guarantor is made,  without such  Guarantor's
     prior written consent the amount of such  Guarantor's  liability under this
     clause  shall be limited to the amount for which it would have been  liable
     had such variation not been made;

(b)  releasing or granting any time or any indulgence  whatsoever to any Obligor
     and, in particular, waiving any of the pre-conditions for the Advance under
     this Agreement or any  contravention by any Obligor of any of the Financing
     Documents or entering into any transaction or arrangements  whatsoever with
     or in relation to any Obligor and/or any third party;

(c)  taking,  accepting,  varying,  dealing  with,  enforcing,  abstaining  from
     enforcing,  surrendering  or  releasing  any  security  for the  Guaranteed
     Amounts in such manner as it or they think fit; or

(d)  claiming,  proving for, accepting or transferring any payment in respect of
     the Guaranteed Amounts in any composition by, or winding up of, any Obligor
     and/or any third party or abstaining from so claiming,  proving,  accepting
     or transferring.

                                     - 38 -
<PAGE>
15.7     DEMANDS:  Demands  under this clause may be made from time to time, and
the  liabilities  and  obligations of the Guarantors under this Agreement may be
enforced, irrespective of whether any demands, steps or proceedings are being or
have  been  made  or  taken  against  any of the Obligors and/or any third party
and/or  any  other  Guarantor  and each Guarantor waives diligence, presentment,
protest,  demand  for  repayment  and  notice of default to or upon any Obligor.

15.8     SUSPENSE  ACCOUNT:  Until all amounts which may be or become payable by
the Borrowers hereunder or in connection herewith have been irrevocably paid and
discharged  in  full,  the  Agent,  the  Security  Trustee  and each Lender may:

(a)  refrain from  applying or enforcing  any other  security,  moneys or rights
     held or  received  by the Agent,  the  Security  Trustee or such  Lender in
     respect of such  amounts or apply and  enforce  the same in such manner and
     order as the Agent,  the Security  Trustee or such Lender sees fit (whether
     against  such amounts or  otherwise)  and none of the  Guarantors  shall be
     entitled to the benefit of the same; and

(b)  hold in suspense  account  (subject  to the accrual of interest  thereon at
     market  rates for the  account  of the  relevant  Guarantor(s))  any moneys
     received  from any  Guarantor or on account of that  Guarantor's  liability
     hereunder.

15.9     SUBORDINATION:  So  long  as any Guarantor has any liability under this
Agreement:

(a)  the  Guarantors  shall not take or accept any  Security  Interest  from any
     other  Obligor or, in relation to the  Guaranteed  Amounts,  from any third
     party, without first obtaining the Agent's written consent;

(b)  after the occurrence of an Event of Default,  no Guarantor  shall,  without
     first  obtaining  the Agent's  written  consent,  seek to recover,  whether
     directly or by set-off,  lien,  counterclaim  or otherwise,  nor accept any
     moneys or other  property,  nor exercise any rights,  in respect of any sum
     which may be or become due to the  Guarantor on any account by any Borrower
     or, in relation to the Guaranteed Amounts, from any third party, nor claim,
     prove for or accept any  payment in any  composition  by, or any winding up
     of, any  Borrower  or, in relation  to the  Guaranteed  Amounts,  any third
     party;

(c)  if, notwithstanding the foregoing, any Guarantor holds or receives any such
     security,  moneys or property,  it shall forthwith pay or transfer the same
     to the Agent. THE AGENT

                                     - 39 -
<PAGE>
16.1     APPOINTMENT  AS  AGENT  AND  ACKNOWLEDGEMENT:  Each  Lender irrevocably
authorises  the  Agent,  to  take  such action on its behalf and to exercise and
carry  out  such powers, discretions, authorities and duties as are specifically
delegated  to  it  by  the  Financing  Documents  and  such  powers as the Agent
reasonably  considers  are  incidental  thereto. The Agent shall have only those
powers, discretions, authorities and duties which are expressly specified in the
Financing  Documents.  From  time to time, the Agent shall give such directions,
instructions  or  notices  to  the  Security Trustee as directed by the Majority
Lenders. The Agent shall promptly notify the Security Trustee of any notice sent
to  the  Borrowers  pursuant  to  clause  13.2.

16.2     RELATIONSHIP:  In  connection with its powers, discretions, authorities
and  duties  under  the  Financing  Documents,  the  Agent:

(a)  shall act solely as the agent of each of the Lenders, and shall not assume,
     and shall not be deemed to have assumed,  any  obligations to, or fiduciary
     relationship  with,  the  Lenders  other  than  those  for  which  specific
     provision  is made by the  Financing  Documents or any  obligations  to, or
     fiduciary relationship with, any of the Obligors;

(b)  shall not be liable for any failure of any of the parties to this Agreement
     duly and punctually to observe and perform any of its obligations under the
     Financing Documents;

(c)  shall not be  liable  for any  action  taken or  omitted  by it under or in
     connection with the Financing Documents in good faith;

(d)  may act under the  Financing  Documents  through its  personnel and agents.
     16.3 MAJORITY BANK  DIRECTIONS:  In the exercise of any power or discretion
     given to the Agent under the  Financing  Documents and as to any matter not
     expressly  provided for in the  Financing  Documents or where a decision of
     the Majority  Lenders is provided  for, the Agent shall act or refrain from
     acting and shall give  instructions  to the Security  Trustee in accordance
     with the instructions of the Majority  Lenders.  In the absence of any such
     instructions, the Agent may act or refrain from acting as it shall see fit.
     Any such  instructions of the Majority  Lenders or any such decision of the
     Agent shall be binding on all the Lenders and the Agent shall not be liable
     to the  Obligors,  the Lenders or any of them for the  consequences  of any
     such instructions or decision.

16.4     CREDIT  APPROVAL: In favour of the Agent and the Security Trustee, each
Lender  acknowledges  in  connection  with  the  Financing  Documents:

(a)  that it has made such  enquiries  on its own  behalf and taken such care as
     would have been the case had its  participation  in the Facility  been made
     directly by that Lender to the Borrowers  without the  intervention  of the
     Agent or the  Security  Trustee  and that it has not  relied,  and does not
     rely,  upon any  information  or advice  provided,  or any appraisal of, or
     investigation into the financial  condition,  credit  worthiness,  affairs,
     status or nature of the  Consolidated  Group  effected  by the Agent or the
     Security Trustee in such capacity;

(b)  that, subject to clause 16.8, none of the Agent or the Security Trustee was
     or will be obliged  either  before or at any time after the signing of this
     Agreement to provide that Lender with any  information or advice or to make
     any such investigation or appraisal.

                                     - 40 -
<PAGE>
16.5     DOCUMENTATION:  None  of  the Agent nor the Security Trustee nor any of
their  respective  directors,  officers,  employees  or  agents shall be liable:

(a)  for the execution, validity,  enforceability or effectiveness of any of the
     Financing Documents or any document delivered pursuant thereto or connected
     therewith; or

(b)  for any  statements,  representations  or warranties made or referred to in
     any of the Financing  Documents or any information given in connection with
     any of the Financing Documents.

16.6     RELIANCE:  None  of the Agent nor the Security Trustee shall be liable:

(a)  for the consequences of relying on any  communication or document  believed
     by it to be genuine and correct and to have been  communicated or signed by
     the person by whom it purports to be communicated or signed;

(b)  for the  consequences  of relying on any  statement  made by any  director,
     officer or employee  of any person on any matter  which may  reasonably  be
     assumed to be within his knowledge or within his power to verify; or

(c)  for the consequences of relying on the advice of any professional  advisers
     selected by it in connection with the Financing Documents.

16.7     DEFAULT:  The  Agent  shall  not  be  obliged  to  take:

(a)  any steps to ascertain  whether any Event of Default or Potential  Event of
     Default has occurred and until the Agent has received express notice to the
     contrary  from the  Borrowers'  Agent or a Lender,  it shall be entitled to
     assume that no such event has occurred; or

(b)  any proceedings  against the Obligors for the recovery of any sum due under
     any of the Financing Documents or otherwise in connection  therewith unless
     it has been fully indemnified to its satisfaction by each of the Lenders in
     the proportion which its Outstandings  bear to the Total  Outstandings (or,
     if no  Outstandings,  its Commitment bears to the Total  Commitments).  The
     Agent may not bring any action or  proceedings  in any court in the name of
     any Lender  without the prior  written  consent of such Lender (but for the
     avoidance of doubt without  prejudice to the ability of any other Lender or
     the  Security  Trustee (or the Agent on behalf of any of the same) to bring
     such action or proceeding).

16.8     INFORMATION:  The  Agent  shall:

(a)  send a copy of all  notices  served  by the  Borrowers'  Agent  under  this
     Agreement  and of all other  documents  delivered to it under the Financing
     Documents to each of the Lenders affected by such notice or document;

                                     - 41 -
<PAGE>
(b)  not be  obliged to  transmit  to the  Lenders  any  information  in any way
     relating to any of the parties to the Financing  Documents  which the Agent
     may have acquired  otherwise  than in its capacity as agent for the Lenders
     in connection with this Agreement.

16.9     COMPLIANCE:

(a)  Each of the Agent and the Security  Trustee may refrain from doing anything
     which might,  in its opinion,  constitute a breach of any law or regulation
     or be otherwise  actionable at the suit of any person,  and may do anything
     which, in its opinion,  is necessary or desirable to comply with any law or
     regulation of any jurisdiction; and

(b)  without  limiting  paragraph (a) above,  none of the Agent nor the Security
     Trustee need  disclose any  information  relating to any of the Obligors or
     any of its  related  entities  if the  disclosure  might,  in its  opinion,
     constitute   a   breach   of  any  law  or   regulation   or  any  duty  of
     confidentiality.

16.10     RESIGNATION:  The Agent may at any time tender its resignation without
assigning  any  reason  therefor  and  without  being  responsible for any costs
occasioned  by  such  resignation.  In  that  event, the Majority Lenders shall,
subject  to  the prior written consent of the Borrowers' Agent (such consent not
to  be  unreasonably  withheld  or  delayed),  appoint  a  Lender or any bank or
financial  institution  to act as Agent in its stead or, if no such person is so
appointed  within 30 days of the Agent tendering its resignation, the Agent may,
in  consultation  with  the  Borrowers' Agent, appoint a Lender or any reputable
bank  or  financial  institution  so  to act. Such resignation shall take effect
simultaneously  with  (and  cannot  take  effect  before) the appointment of the
successor  Agent  and  thereupon:

(a)  the retiring Agent shall be discharged  from any further  obligation  under
     the Finance Documents; and

(b)  the successor  Agent and each of the other parties to this Agreement  shall
     have the same rights and obligations  amongst themselves as they would have
     had if the  successor  had been a party to this  Agreement as agent for the
     Lenders.

16.11     AGENCY  DIVISION:  In  acting  as  Agent  for  the Lenders, the agency
division  of  the  Agent shall be treated as a separate entity from any other of
its  divisions  or departments, and, notwithstanding the foregoing provisions of
this  clause  16, in the event that the Agent should act for any of the Obligors
or  any  of  their Subsidiaries in any capacity in relation to any other matter,
any  information  given  by  any such Obligor or Subsidiary to the Agent in such
other  capacity  may  be  treated  as  confidential  by  the  Agent.

                                     - 42 -
<PAGE>
16.12     INDEMNITY:  Each  of  Lenders  shall fully indemnify the Agent and the
Security  Trustee rateably in the proportion which its Outstandings bears to the
Total  Outstandings  (or  if  no Outstandings, its Commitment bears to the Total
Commitments),  from  and  against  any  claims,  proceedings,  expenses, losses,
damages  and  liabilities  of every description (except in respect of any agency
fee due to the Agent) which may be incurred by the Agent or the Security Trustee
in  such  capacity  in good faith and which in any way relate to or arise out of
the  Financing Documents or any related documents or any action taken or omitted
by  the  Agent  or  the  Security  Trustee  in  enforcing  or  preserving, or in
attempting  to  enforce  or preserve, any of the rights of the Lenders under the
Financing  Documents  or  any  related  documents.

16.13     AMENDMENTS:  The  Agent  may  (except  where  any  other  authority is
required  for  the  same  by  the express provisions of the Financing Documents)
grant  waivers  or consents or vary the terms of this Agreement if authorised by
the  Majority  Lenders.  Any such waiver, consent or variation so authorised and
effected by the Agent shall be binding on all the Lenders and the Agent shall be
under  no  liability  whatsoever  in  respect  of  any  such  waiver, consent or
variation.  This clause 16.13 shall not authorise, except with the prior consent
of  all  the  Lenders:

(a)  any change in the rate at which interest or any fees are payable under this
     Agreement;

(b)  any  extension of the date for, or alteration in the amount or currency of,
     any payment of  principal,  interest,  fee,  commission or any other amount
     payable under the Financing Documents;

(c)  any increase in any Lender's Commitment;

(d)  any extension of the Availability Period; or

(e)  any variation of

     (i)  the definition of Majority Lenders;

     (ii) clause 4.3;

     (iii) clause 10.2;

     (iv) clause 18.2; or

     (v)  this  clause  16.13;  or 

     any  release  of all or any  part of the  shares  pledged  to the  Security
     Trustee  pursuant  to the  Share  Pledges  or  the  assets  covered  by the
     Debentures. EXPENSES

17.1     EXPENSES:  The  Borrowers' Agent shall on demand from time to time pay,
in  each  case on the basis of a full indemnity to the Agent (for the account of
the  Arrangers  or  the  Agent):

                                     - 43 -
<PAGE>
(a)  all  costs  and  expenses  (including  legal  and  out-of-pocket  expenses)
     reasonably  incurred in connection  with the  negotiation,  preparation  or
     completion of the Financing Documents and any related documents; and

(b)  at such  daily  and/or  hourly  rates as the Agent  shall from time to time
     reasonably   determine,   all  costs  and  expenses   (including,   without
     limitation,  telephone, fax, copying, travel, legal and personnel costs) in
     connection with the Agent taking such action as it may deem appropriate, in
     complying with any instructions from the Majority Lenders or any request by
     the Borrowers' Agent in connection with:

     (i)  the granting or proposed  granting of any waiver or consent  under any
          of the Financing Documents;

     (ii) any  amendment  or  proposed,   amendment  to  any  of  the  Financing
          Documents;

     (iii)any breach by any Obligor of any of its  obligations  under any of the
          Financing Documents or any investigation as to whether any such breach
          may have occurred;

     (iv) the  occurrence  of any  Potential  Event  of  Default  or an Event of
          Default;

     (v)  the  review,   preservation   and/or   enforcement  or  the  attempted
          presentation  or enforcement  of any of the rights of the Agent,  the.
          Arrangers and the Lenders under the Financing Documents or any related
          documents; and

     (vi) the  transfer  or  possible  transfer  of the role of Agent to another
          person.

17.2     STAMP  DUTY:  The  Obligors  shall pay any stamp, documentary and other
similar  duties  and  taxes  to  which  this  Agreement  or  any other Financing
Documents  may  be subject or give rise and shall fully indemnify the Agent, the
Security  Trustee  and  each  of  the  Lenders  from  and  against any losses or
liabilities  which any of them may incur as a result of any delay or omission by
the  Obligors  to  pay  any  such  duties  or  taxes.

17.3     VALUE  ADDED TAX: The amounts stated in this Agreement to be payable by
the  Obligors  are  exclusive  of  value  added  tax  (VAT)  and  accordingly:

(a)  the Obligors shall pay on demand any VAT properly  chargeable in respect of
     supplies to the Obligors as contemplated  by this Agreement  (including any
     VAT  chargeable  by the Agent and the  Security  Trustee  in respect of its
     supplies to the Obligors under this Agreement); and

                                     - 44 -
<PAGE>
(b)  in the case of goods  or  services  supplied  to or other  costs,  fees and
     expenses  incurred  by the Agent,  the  Security  Trustee or the Lenders in
     connection with this Agreement and which are to be met by the Obligor or in
     respect of which the Obligors are to  indemnify  the Lenders,  the Security
     Trustee or the Agent,  the Obligors  (for the avoidance of doubt) shall pay
     to the Agent  (for  itself or the Lender or  Lenders  in  question)  or the
     Security  Trustee by way of  additional  remuneration  such amount as shall
     represent any associated  VAT (whether  charged by the supplier or suffered
     by reason of the reverse  charge  provisions  contained in Section 7 of the
     Value  Added  Tax Act 1983 or  analogous  provisions  under the laws of any
     applicable jurisdiction).

SET-OFF  AND  PRO  RATA  SHARING

18.1     SET-OFF:  Following  an Event of Default, any Lender may without notice
to the Borrowers' Agent combine, consolidate or merge all or any of an Obligor's
accounts  with,  and liabilities to, that Lender and may set-off or transfer any
sum  standing  to  the credit of any such accounts in or towards satisfaction of
any  of  the Obligor's liabilities to that Lender under the Financing Documents,
and  may  do  so  notwithstanding  that  the  balances  on such accounts and the
liabilities  may not be expressed in the same currency and each Lender is hereby
authorised  to  effect  any  necessary  conversions  at  the  Bank's own rate of
exchange  then  prevailing.

18.2     PRO  RATA  SHARING:  If a Lender receives or recovers any amount (other
than  from the Agent) in respect of sums due from an Obligor under the Financing
Documents  (whether  by set-off or otherwise) it shall promptly notify the Agent
of such amount and the manner of its receipt or recovery and the following shall
apply:

(a)  the  Agent  shall,   as  soon  as   practicable,   having   regard  to  the
     circumstances,  consult with the Lenders to establish the aggregate  amount
     of sums  received  or  recovered  by the  Lenders  and  what  payments  are
     necessary  amongst  the  Lenders  for such  aggregate  amount to be divided
     amongst the Lenders in proportion to their  Outstandings or if there are no
     Outstandings at such time, in proportion to their Commitments;

(b)  the Lenders shall  promptly  make such payments to each other,  through the
     Agent,  as the Agent  shall  direct to effect  the  proportionate  division
     referred to in paragraph (a);

(c)  if a Lender  makes a payment or payments  pursuant to  paragraph  (b),  any
     payment previously received by that Lender shall, subject to paragraph (d),
     be  deemed to have  been  made by the  Obligor,  as the case may be, on the
     understanding  that it was received by that Lender as agent for the Lenders
     and that the  payments  described  in  paragraph  (b) would be made and the
     liabilities  of the Obligor to each of the  Lenders  shall  accordingly  be
     determined on the basis that such payment or payments pursuant to paragraph
     (b) would be made;

(d)  if a  Lender  makes a  payment  or  payments  pursuant  to  paragraph  (b),
     paragraph  (c) shall not apply  if, as a result,  the  indebtedness  of the
     Obligor to the Lender has been extinguished, discharged or satisfied by the
     amount  received or  recovered  (for example  because of set-off).  In this
     event,  for the purpose only of determining  the liabilities of the Obligor
     to the Lenders  (other than the Lender making the said payment or payments)
     and the  liabilities  of the  Lenders to each  other,  the said  payment or
     payments  by the Lender  shall be deemed to have been made on behalf of the
     Obligor in respect of its obligations under the Financing  Documents and to
     the extent the  Facility is thereby  discharged  the  Obligor,  shall fully
     indemnify the Lender for such payment or payments;

                                     - 45 -
<PAGE>
(e)  any moneys  payable by the Obligor under  paragraph (d) by way of indemnity
     shall be payable  from the date the Lender  makes the  payment or  payments
     under  paragraph  (b),  shall  carry  interest  from such date and for such
     purpose and all other  purposes of this  Agreement,  be treated in the same
     way as other  amounts  payable  under this  Agreement as though such moneys
     were  payable in respect of the  Outstandings  of the Lender  which has the
     benefit of the  indemnity  contained in  paragraph  (d) (whether or not the
     indebtedness  attributable  to such  participation  has been  extinguished,
     discharged or satisfied in whole or in part); and

(f)  the parties shall make such payments and take such steps as may be just and
     equitable  to  re-adjust  the  position of the parties if a Lender,  having
     followed  the  procedures  required  above,  is  required to return any sum
     originally  received  or  recovered  by it in  respect  of sums due from an
     Obligor (together with any interest accrued thereon).

ASSIGNMENTS  AND  TRANSFERS

19.1     TRANSFERS:  Any Lender (the TRANSFEROR) may at any time transfer to any
other  person  (the  TRANSFEREE)  the  whole  or  any  part of its rights and/or
obligations  hereunder  by  the  delivery  to  the  Agent  of  a  certificate
substantially  in  the  form  of  Schedule  4 (a TRANSFER CERTIFICATE), with the
approval  of the Borrowers' Agent (such approval not to be unreasonably withheld
or  delayed).  A  Lender which is proposing to transfer the whole or any part of
its  rights  and/or obligations hereunder shall give notice thereof to the Agent
which  shall  give  notice  thereof  to  the Borrowers' Agent in accordance with
clause 20.7.  The Borrowers' Agent shall indicate as soon as possible whether it
approves  (such  approval  not  to  be unreasonably withheld or delayed) of such
Transferee.  If  the  Borrowers'  Agent does not respond to such a notice within
twenty  days  then approval shall be deemed to be given and the Transferor shall
be  entitled  to  deliver  a  Transfer  Certificate to the Agent.  Each Transfer
Certificate  delivered  to  the  Agent  shall  only be valid if it is in writing
signed  by  each  of  the  Transferor and the Transferee and is contained in one
document  or  two  counterparts.  Each  party  to this Agreement (other than the
Transferor  and  the Transferee) irrevocably authorises the Agent to execute any
duly completed Transfer Certificate on its behalf. Any Transferee which is not a
party  hereto  shall  further accede to the Security Trust Deed by delivery of a
supplemental  trust  deed  in  accordance  with clause 2.2 of the Security Trust
Deed.

19.2     TRANSFER  CERTIFICATES:  Following  receipt  by the Agent of a Transfer
Certificate  from each of a Transferor and a Transferee and with effect from the
date  of  the  Transfer  Certificate or any later date specified in the Transfer
Certificate:

(a)  the  Transferor  shall  cease to be  entitled  to the  rights  and shall be
     released from the obligations hereunder which are specified in the Transfer
     Certificate; and

(b)  the Transferee  shall become a party hereto as a Lender  entitled to rights
     and liable to observe  obligations  which differ from those  referred to in
     (a) only  insofar  as the  Transferee  is  entitled  thereto  and liable in
     respect thereof in place of the Transferor.

                                     - 46 -
<PAGE>
19.3     TRANSFEREES:  Each  Transferee  shall,  by  its execution of a Transfer
Certificate,  accept  that  none  of  the  Agent  or  the  Lenders is in any way
responsible  for:

(a)  the  accuracy  and/or  completeness  of  any  information  supplied  to the
     Transferee in connection herewith;

(b)  the financial condition,  creditworthiness,  condition, affairs, status and
     nature of any of the Obligors or the  observance  by any of the Obligors of
     any of its  obligations  under  this  Agreement  or any  document  relating
     hereto; or

(c)  the legality, validity,  effectiveness,  adequacy or enforceability of this
     Agreement or any document relating hereto and, save as otherwise  expressly
     provided herein,  none of such parties shall, or shall be deemed to be, the
     agent or trustee of such Transferee in connection herewith.

19.4     NO  OBLIGATION:  The  Transferor  shall not be obliged by any Financing
Document  to:

(a)  accept  a  re-transfer  from the  Transferee  of any of the  rights  and/or
     obligations assigned or novated under this clause 19; or

(b)  indemnify the  Transferee for any losses arising by reason of any Obligor's
     failure  to  perform  its  obligations  under the  Financing  Documents  or
     otherwise.

19.5     DISCLOSURE  OF INFORMATION: Each of the Agent, the Security Trustee and
each  Lender  agree to keep information obtained by it pursuant to the Financing
Documents  confidential  and  agrees  that  it will only use such information in
connection with the transactions contemplated by the Financing Documents and not
to  disclose  any  of  such  information  other  than  (i) to its affiliates and
advisers,  officers,  employees,  representatives  and  agents of itself and its
affiliates  who  are  or  are  expected to be involved in the evaluation of such
information  in  connection  with the transactions contemplated by the Financing
Documents  or  who  otherwise  have  any  need  to  know all or any part of such
information  and who are advised of the confidential nature of such information,
(ii)  to the extent such information presently is or hereafter becomes available
to  it on a non-confidential basis from a source other than any Obligor or is or
comes  into the public domain, (iii) to the extent used by it in preparation for
or  in  the conduct of any proceeding relating to the Financing Documents or the
transactions  contemplated  hereby and thereby, (iv) to the extent disclosure is
required  by  law,  regulation  or  judicial  order  or requested or required by
regulators,  examiners  or auditors, (v) to any person providing credit to it or
to  any rating agency in connection with the evaluation of its credit-worthiness
and  who  are  advised  of  the  confidential  nature  of,  and  agree  to  keep
confidential  such  information,  or  (vi) to transferees or sub-participants or
potential  transferees  or  sub-participants  who  agree  to  be  bound  by  the
provisions  of  this  clause  19.5.

                                     - 47 -
<PAGE>
19.6     OBLIGORS: To the extent required by applicable law, the Obligors hereby
acknowledge  and  approve  the terms of this clause 19 and any transfer effected
pursuant  to  this  clause  19  and  hereby  beforehand give their permission or
co-operation  to  such transfer. To the extent that applicable law requires that
any Obligor be notified of a transfer effected pursuant to this clause 19, it is
hereby agreed that the relevant Transfer Certificate shall be sufficient for the
purposes  of  giving  such  notification  and  each  Obligor  hereby irrevocably
authorises  and  instructs  the  Agent  to  receive  as agent on its behalf such
notification  for  such  purpose  but  not  otherwise.

19.7     FACILITY  OFFICE:  Any Lender may make its participation in any Advance
available  from, and may receive the benefit of any payment due to it under this
Agreement  at  any  of its Facility Offices. A Lender shall give the Agent prior
written  notice of any change in any of its Facility Offices for the purposes of
this  Agreement.

FURTHER  PROVISIONS

20.1     EVIDENCE  OF  INDEBTEDNESS:  In  any  proceedings  relating  to  this
Agreement:

(a)  a statement as to any amount due to the Lenders under this Agreement  which
     is certified as being correct by an officer of the Agent; and

(b)  a statement as to any amount due to a Lender under this Agreement  which is
     certified  as being  correct  by an officer of the  Lender;  shall,  unless
     otherwise  provided in this  Agreement,  be prima facie  evidence that such
     amount is in fact due and payable.

20.2     APPLICATION  OF  MONEYS: If any sum paid or recovered in respect of the
liabilities of a Borrower under this Agreement is less than the amount then due,
the  Agent  may  apply that sum to principal, interest, fees or any other amount
due  under  this  Agreement  in such proportions and order and generally in such
manner  as  the  Agent  shall  determine.

20.3     RIGHTS  CUMULATIVE, WAIVERS: The respective rights of the Agent and the
Lenders  under  this Agreement are cumulative, may be exercised as often as they
consider  appropriate  and  are in addition to their respective rights under the
applicable  law.  The  respective  rights of the Agent, the Security Trustee and
the Lenders in relation to the Facility (whether arising under this Agreement or
under  the  applicable  law)  shall  not  be  capable  of being waived or varied
otherwise  than  by an express waiver or variation in writing; and in particular
any  failure to exercise or any delay in exercising any of such rights shall not
operate  as a waiver or variation of that or any other such right; any defective
or  partial  exercise  of  any  of  such  rights shall not preclude any other or
further  exercise  of  that  or  any  other  such right; and no act or course of
conduct  or  negotiation  on  their  part  or  on  their behalf shall in any way
preclude  them  from exercising any such right or constitute a suspension or any
variation  of  any  such  right.

20.4     ENGLISH  LANGUAGE: All notices or communications under or in connection
with  this  Agreement  shall  be  in  the  English  language or, if in any other
language,  accompanied  by  a  translation  into  English.  In  the event of any
conflict  between  the  English  text  and  the  text in any other language, the
English  text  shall  prevail.

                                     - 48 -
<PAGE>
20.5     INVALIDITY OF ANY PROVISION: If any of the provisions of this Agreement
becomes  invalid,  illegal  or  unenforceable  in any respect under any law, the
validity,  legality  and enforceability of the remaining provisions shall not in
any  way  be  affected  or  impaired.

20.6     SEVERABILITY:  Any  provision  of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to  the  extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction  shall not invalidate or render unenforceable such provision in any
other  jurisdiction.  To  the  extent  permitted by applicable law, each Obligor
hereby waives any provision of law which renders any provision of this Agreement
prohibited  or  unenforceable  in  any  respect.

20.7     NOTICES:  Any  notice or communication under or in connection with this
Agreement  shall  be  in  writing and shall be delivered personally, or by post,
telex  or  fax to the addresses given in this Agreement or at such other address
as  the  recipient  may  have notified to the other parties in writing or in the
case  only of communications by the Agent to Lenders, may be by SWIFT.  Proof of
posting or despatch of any notice or communication to or by the Borrowers' Agent
shall  be  deemed  to  be  proof  of  receipt:

(a)  in the case of a letter, on the third Business Day after posting;

(b)  in the case of a telex, and provided that the correct  answer-back has been
     received, immediately on actual receipt, or, if the time of such receipt is
     not during normal working hours,  then on the next working day in the place
     of receipt;

(c)  in the case of a fax, when received, or, if the time of such receipt is not
     during normal working  hours,  then on the next working day in the place of
     receipt; or

(d)  in the case of transmission by SWIFT, when an acknowledgement of receipt by
     SWIFT is received.

20.8     CHOICE OF LAW: This Agreement is governed by, and shall be construed in
accordance  with,  the  laws  of  England.

20.9     SUBMISSION  TO JURISDICTION: For the benefit of the Agent, the Security
Trustee  and  each  of  the  Lenders:

(a)  all the parties agree that the courts of England are, subject to paragraphs
     (b) and (c) below,  to have exclusive  jurisdiction  to settle any disputes
     which may arise in connection with the legal  relationships  established by
     this  Agreement  (including,  without  limitation,  claims  for  set-off or
     counterclaim) or otherwise arising in connection with this Agreement;

                                     - 49 -
<PAGE>
(b)  the agreement  contained in paragraph (a) above is included for the benefit
     of the Agent,  the Security  Trustee and each of the Lenders.  Accordingly,
     notwithstanding  the  exclusive  agreement  in (a) above,  the  Agent,  the
     Security  Trustee and each of the Lenders  shall  retain the right to bring
     proceedings  in any other  court  which has  jurisdiction  by virtue of the
     Convention on Jurisdiction  and the  Enforcement of Judgments  signed on 27
     September  1968 (as from time to time amended and extended) or by virtue of
     the Convention on Jurisdiction  and the Enforcement of Judgments  signed on
     16 September 1988 (or from time to time amended and extended);

(c)  the Agent, the Security Trustee and each of the Lenders may in its absolute
     discretion  take  proceedings  in the courts of any other country which may
     have jurisdiction,  to whose jurisdiction each of the Obligors  irrevocably
     submits;

(d)  each Obligor  irrevocably  waives any  objections on the ground of venue or
     forum non conveniens or any similar grounds; and

(e)  each Obligor  irrevocably  consents to service of process by mail or in any
     other manner permitted by the relevant law.

20.10     TRIAL  BY  JURY: Each of the Obligors, the Agent, the Security Trustee
and  the  Lenders  hereby  irrevocably  waives all right to trial by jury in any
action,  proceeding  or  counterclaim  (whether  based  on  contract,  tort  or
otherwise)  arising  out  of  or relating to any of the Financing Documents, the
Advance,  or the actions of the Agent, the Security Trustee or any Lender in the
negotiation,  administration,  performance  or  enforcement  thereof.

20.11     AGENT  FOR SERVICE OF PROCESS: Each of the Obligors shall at all times
maintain  an agent for service of process and any other documents in proceedings
in  England  or  any  other proceedings in connection with this Agreement.  Such
agent shall be Law Debenture Corporate Services Limited, the address of which on
the  date  hereof  is Princes House, 95 Gresham Street, London EC2V 7LY, England
and  any  writ,  judgment or other notice of legal process shall be sufficiently
served  on  the  Obligors if delivered to such agent at its address for the time
being.  The  Obligors  undertake  not to revoke the authority of the above agent
and  if,  for  any  reason, the Agent requests any of the Obligors to do so such
Obligor shall promptly appoint another such agent with an address in England and
advise  the  Agent  thereof.  If  following such a request such Obligor fails to
appoint  another  agent, the Agent shall be entitled to appoint one on behalf of
the  Obligors.

20.12     COUNTERPARTS:  This  Agreement  may  be  executed  in  any  number  of
counterparts  and by the different parties hereto on separate counterparts, each
of  which  when  so  executed  and  delivered  shall  be an original but all the
counterparts  shall  together  constitute  but  one  and  the  same  instrument.
IN  WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first  above  written.

                                     - 50 -
<PAGE>
                                   SCHEDULE 1

LENDER                                             COMMITMENT


CREDIT  SUISSE  FIRST  BOSTON                              US$  30,702,500

Credit  Suisse  First  Boston
Bleicherweg  10
P.O.  Box  900
CH-8070  Z  rich
Switzerland

Address  for  Notices:   As Above
Attention:               Mr. Thomas Patrick
Telephone:               41 1 333 7618
Fax:                     41 1 333 7620

                                     - 51 -
<PAGE>
                                   SCHEDULE 2
                             FORM OF DRAWING NOTICE
                                                               Date: *____ 19*__
Dear  Sirs,

Facility  Agreement  dated  July  2,  1998

1. We refer to clause 5 of the Facility Agreement. Terms defined in the Facility
Agreement have the same meanings in this Drawing Notice.

2.   We wish to borrow the Advances with the following specifications:

(a)  Borrowers:  Abacan Resource  Corporation,  Dahomey Resource Corporation and
     Liberty Technical Services Limited, jointly and severally;

(b)  Drawing Date: July 2, 1998-

(c)  Amount: $30,702,484

(d)  Interest Period: successive interest periods of three-months

(e)  Payment Instructions:  Pay to the account designated by Total International
     Limited  against  written  confirmation  that such  payment is  received in
     satisfaction of all amounts outstanding under the Prepayment  Agreement and
     Guarantees referred to in Clause 2.2 of the Facility Agreement.

3.   We confirm that the matters  represented  and warranted by each Obligor set
     out in clause 11.2 of the Facility  Agreement  are true and accurate on the
     date of this  Drawing  Notice  as if made with  reference  to the facts and
     circumstances  now  prevailing  and that no Event of Default  or  Potential
     Event of Default has  occurred and is  continuing  or would result from the
     Advance. Yours faithfully,

ABACAN  RESOURCE  CORPORATION



                                     - 52 -
<PAGE>
For  and  on  behalf  of
Abacan  Resource  Corporation,     [Seal]
as  Borrower's  Agent



By:  ____________________
Director



By:  ____________________
Director



For  and  on  behalf  of
Abacan  Resource  Corporation,     [Seal]
as  Borrower



By:  ____________________
Director



By:  ____________________
Director




                                     - 53 -
<PAGE>
For  and  on  behalf  of
Dahomey  Resource  Corporation,     [Seal]
as  Borrower



By:  ____________________
     Director



By:  ____________________
     Director




For  and  on  behalf  of
Liberty  Technical  Services  Limited,     [Seal]
as  Borrower




By:  ____________________
     Director




By:  ____________________
     Director


                                     - 54 -
<PAGE>
                                   SCHEDULE 3

                                     PART I

                         FORM OF CERTIFICATE OF BORROWER

                            [Letterhead of Borrower]

To:     Credit  Suisse  First  Boston  as  Agent

We [*name] and [*name], both Directors of [*name of Borrower] of [*address] (the
Company)

HEREBY  CERTIFY  that:

(a)  attached  hereto  marked "A", are true and correct  copies of all documents
     which contain or establish or relate to the constitution of the [Company];

(b)  attached hereto marked "B", is a true and correct copy of resolutions  duly
     passed at a meeting of the  shareholders  of the Company duly  convened and
     held on July ___, 1998 authorising the Company to:

     (i)  borrow at any time up to  $30,702,500  at a variable  rate of interest
          pursuant to the Facility Agreement;

     (ii) guarantee the  performance by all other  Obligors of their  respective
          obligations under the Financing Documents;

     (iii) sign, deliver and perform the Facility Agreement;

(c)  attached hereto marked "C", is a true and correct copy of resolutions  duly
     passed at a meeting of the Board of Directors of the Company duly  convened
     and held on July ___, 1998 approving the Facility Agreement and authorising
     its signature,  delivery and performance and such resolutions have not been
     amended, modified or revoked and are in, full force and effect;

(d)  attached hereto marked "D", is a true and correct copy of the acceptance by
     the agents in England of their  appointment as agent of the Company for the
     purpose of accepting service of process.




     Does  not  apply  to  Abacan  Resource  Corporation

                                     - 55 -
<PAGE>
The  following  signatures  are the true signatures of the persons who have been
authorised  to  sign  the  Facility  Agreement  and  to  give  notices  and
communications,  including  notices  of drawing, under or in connection with the
Facility  Agreement.

Name                    Position                    Signature
*                    *
*                    *
*                    *

Signed:

Director               Director

Date:  *________  19*_____

1,  [*name],  the  Secretary of [*name of Borrower] (the Company) hereby certify
that  [*names  of  two  Directors]  giving above certificate] are duly appointed
Directors  of  the  Company  and that the signature of each of them above is his
signature.

Signed:

     Secretary

Date:  *______  19*_____

                                     - 56 -
<PAGE>
                                     PART II

                        FORM OF CERTIFICATE OF GUARANTOR

                            [Letterhead of Guarantor]
To:     Credit  Suisse  First  Boston

We  [*name]  and  [*name],  both Directors of [*name of Guarantor] of [*address]
(the  COMPANY)

HEREBY  CERTIFY  that:

(a)  attached  hereto  marked "A", are true and correct  copies of all documents
     which contain or establish or relate to the constitution of the Company;

(b)  attached hereto marked "B", is a true and correct copy of resolutions  duly
     passed at a meeting of the  shareholders  of the Company duly  convened and
     held on July ___, 1998 authorising the Company to:

     (i)  guarantee the  performance by all other  obligors of their  respective
          obligations under the Financing Documents; and

     (ii) sign, deliver and perform the Facility Agreement; and

(c)  attached hereto marked "C", is a true and correct copy of resolutions  duly
     passed at a meeting of the Board of Directors of the Company duly  convened
     and held on July ___, 1998 approving the Facility Agreement and authorising
     its signature,  delivery and performance and such resolutions have not been
     amended, modified or revoked and are in full force and effect;

(d)  attached  hereto marked "D", are true and correct  copies of the acceptance
     by the agent in England of their  appointments  as agent of the Company for
     the purpose of accepting service of process.

The  following  signatures  are the true signatures of the persons who have been
authorised  to  sign  the  Facility  Agreement  and  to  give  any  notices  and
communications  under  or  in  connection  with  the  Facility  Agreement.


                                     - 57 -
<PAGE>
Name                    Position                    Signature
*                    *
*                    *
*                    *

Signed:
     Director     Director

Date:  *______  _____  19*__

1,  [*name],  the  Secretary of [*name of Borrower] (the Company) hereby certify
that  [*names  of  two  Directors  giving  above certificate] are duly appointed
Directors  of  the  Company  and that the signature of each of them above is his
signature.

Signed:
          Secretary

Date:  *_____  _____  19*-__

                                     - 58 -
<PAGE>
                                    PART III

                          CERTIFICATE OF ARC DIRECTORS

To:     Credit Suisse First Boston, as Agent under the Credit Facility Agreement
dated  ________,  1998.

Date:


The  undersigned  directors  hereby  certify  as  follows  according to our best
knowledge,  information and belief (having made due enquiry) that as of the date
of  this  certificate.

1.     All  Subsidiaries of any Obligor (as such terms are defined in the Credit
Facility  Agreement)  are Guarantors under the Credit Facility Agreement (except
such  Subsidiaries as have been notified to the Agent in writing and as to which
the Agent has not requested that they accede to the Credit Facility Agreement as
Guarantors).

2.     No  Obligor is a party to any Oil and Gas Agreement except the agreements
listed  on  the  schedule  attached  hereto.

3.     The attached schedule includes a complete and correct list of all Current
Liabilities  and  Current  Assets  of  each  Obligor.

4.     No  Obligor  has  any  legal  or  beneficial  interest in any Oil and Gas
Property  other than the properties described in the Joint Venture Documents and
the  Oil  and  Gas  Properties  described  in  the  attached  Schedule.

5.     No  Obligor  has filed or has had filed against it any petition under any
bankruptcy  or  other  proceeding  under  any  analogous  law.

6.     No  Obligor  is  a party to any legal action or litigation other than the
matters  described  on the attached schedule, and no judgement or attachment has
been  made  or  granted against any Obligor or its assets except as shown on the
attached  schedule.

7.     Except  as described in the attached schedule no Obligor has received any
notice  of default and is not in default under any Joint Venture Document or Oil
and  Gas  Agreement.

8.     No  Obligor  has  granted or has committed to grant any Security Interest
(as  such  term  is  defined  in  the  Credit  Facility  Agreement) other than a
Permitted  Security  Interest.

_____________________               _____________________


                                     - 59 -
<PAGE>
                                   SCHEDULE 4

                          FORM OF TRANSFER CERTIFICATE

To:     Credit  Suisse  First  Boston

                              TRANSFER CERTIFICATE

relating  to  a  Credit Facility Agreement (the FACILITY AGREEMENT) dated ______
1998  and made between the Borrowers and Guarantors named therein, Credit Suisse
First  Boston  as  Agent,  Credit  Suisse  First Boston as Security Trustee, and
certain  Lenders named therein. Terms defined in the Facility Agreement have the
same  meanings  herein.

1.     [Transferor]  (the  LENDER):

(a)  confirms  that to the extent that  details  appear in the  Schedule  hereto
     against,  as the  case  may be,  the  heading  LENDER'S  COMMITMENT  and/or
     LENDER'S PARTICIPATION,  such details accurately summarise, as the case may
     be,  its  participation  in  the  Facility  (as  defined  in  the  Facility
     Agreement); and

(b)  requests  [Transferee  Lender] (the  TRANSFEREE)  to accept and procure the
     transfer to the Transferee of the portion  specified in the Schedule of, as
     the case may be, its participation in the Facility by  counter-signing  and
     delivering  this Transfer  Certificate  to the Agent at its address for the
     service of notices specified in the Facility Agreement.

2.     The  Transferee  hereby  requests  the  Agent  to  accept  this  Transfer
Certificate  as being delivered to the Agent pursuant to and for the purposes of
clause  19 of the Facility Agreement so as to take effect in accordance with the
terms  thereof  on  [date  of  transfer].

3.     The  Transferee  confirms  that  it  has  received a copy of the Facility
Agreement  together with such other documents and information as it has required
in  connection  with  this  transaction  and that it has not relied and will not
hereafter  rely  on  the  Lender  to  check  or  enquire  on its behalf into the
execution,  validity,  enforceability,  effectiveness,  adequacy,  accuracy  or
completeness of any such documents or information and further agrees that it has
not relied and will not rely on the Lender to assess or keep under review on its
behalf  the financial condition, creditworthiness, condition, affairs, status or
nature  of  any  of  the  Obligors or of any other party to any of the Financing
Documents.

4.     The  Transferee  hereby  undertakes with the Lender and each of the other
parties  to the Facility Agreement that it will perform in accordance with their
terms all those obligations which by the terms of the Facility Agreement will be
assumed  by  it  after  delivery  of  this Transfer Certificate to the Agent and
satisfaction  of  the  conditions  (if  any)  subject  to  which  this  Transfer
Certificate  is  expressed  to  take  effect.

                                     - 60 -
<PAGE>
5.     The  Lender  makes  no  representation  or  warranty  and  assumes  no
responsibility  with  respect to the legality, validity, effectiveness, adequacy
or enforceability of the Facility Agreement or any document relating thereto and
assumes  no responsibility for the financial condition of any of the Obligors or
any other party to the Financing Documents or for the performance and observance
by  any  of the Obligors or any other such party of any of its obligations under
the  Financing  Documents  or any document relating thereto and any and all such
conditions  and  warranties, whether express or implied by law or otherwise, are
hereby  excluded.

6.     This  Transfer  Certificate and the rights and obligations of the parties
hereunder  shall  be  governed  by and construed in accordance with English law.

                                  THE SCHEDULE
LENDER'S  COMMITMENT
*______  ______  _______
LENDER'S  PARTICIPATION
*_____  ______  _______
AMOUNT
*_____  _____  ________
TERM
*____  _____  ________
PORTION  TRANSFERRED
*______  _____  ______


*Transferor                                   [*Transferee]
                                   Address:  *
                                   Telex:  *
                                   Fax:  *
Signed                             Signed

Credit  Suisse  First  Boston,
as  Agent:

Signed  .
Dated  *______  ___19*___

                                     - 61 -
<PAGE>
                                   SCHEDULE 5
                        FORM OF GUARANTOR ACCESSION DEED

To:     Credit  Suisse  First  Boston,  as  Agent

From:     [*Proposed  additional  Guarantor].

                                                        Date: *____ _____ 19*___
1.     We  refer  to an agreement (the Facility Agreement) dated ______ 1998 and
made  between  the  Borrowers  and Guarantors named therein, Credit Suisse First
Boston  as Agent, Credit Suisse First Boston as Security Trustee and the Lenders
as  referred  to therein. Terms defined in the Facility Agreement shall bear the
same  meanings  herein.

2.     We  [name  of  the  company] of [Registered Office] (Registered no. *____
____)  agree  to become a Guarantor under the Facility Agreement and to be bound
by  the  terms  of  the  Facility  Agreement  as  Guarantor.

3.     Our  address  for  notices  is:
     *  ______  ________  _________

4.     This  Deed  is  governed  by  English  law.

EXECUTED  as  a  DEED  by                       )
[PROPOSED  GUARANTOR]                           )
[acting  by  two  directors/a  director         )
and  the  secretary]                            )

Director

Director/Secretary

SIGNED  by                                      )
for  and  on  behalf  of  [Borrowers'  Agent]   )
in  the  presence  of:                          )

                                     - 62 -
<PAGE>
                                   SCHEDULE 6
                             THE ORIGINAL GUARANTORS

ABACAN  RESOURCES  (BENIN)  LIMITED,  whose  registered  office  is  at:



WEST  AFRICA  RESOURCE  CORPORATION,  whose  registered  office  is  at:


AGBARA  RESOURCES  LIMITED,  whose  registered  office  is  at:


ABACAN  POWER  (BENIN)  LIMITED,  whose  registered  office  is  at:


ABACAN-ADDAX  BENIN  CONSORTIUM  S.A.,  whose  registered  office  is  at:


ANGUS  INTERNATIONAL  RESOURCES  LTD.,  whose  registered  office  is  at:


PROFILE  INTERNATIONAL  LTD.,  whose  registered  office  is  at:


                                     - 63 -
<PAGE>
                                   SCHEDULE 7

                            [FORM OF MOPU AGREEMENT]

          [Intentionally excluded as Mopu Agreement is not an Agreement

                        to which the Company is a party]

                                     - 64 -
<PAGE>
                                   SCHEDULE 8

The  purpose  of  this  document is to set forth the terms and conditions of the
transaction  entered  into  between

                 CREDIT SUISSE FIRST BOSTON, ZURICH ("Party A")

                                       And

                   ABACAN RESOURCES CORP, TORONTO ("Party B")

                          (collectively, the "Parties")

on  the  Trade  Date  specified  below  (the  "Transaction").

The definitions and provisions contained in the 1991 ISDA Definitions (the "1991
Definitions")  and  the  1996  ISDA  Equity  Derivatives  Definitions (the "1996
Definitions")  both  as  published  by  the  International  Swap and Derivatives
Association,  Inc.  are incorporated by reference into this Confirmation. In the
event  of  any inconsistency between the Definitions and this Confirmation, this
Confirmation  will  govern.

The  Parties hereby agree to enter into the Transaction as a condition precedent
to  the  on-going restructuring of an existing loan facility between CSFB Zurich
and  a  subsidiary  of  Party  B.

1.     The  terms  of  the  particular  Transaction  to  which this Confirmation
relates  are  as  follows:


GENERAL  TERMS:

Trade  Date:                   26  July  1998

Option  Style:                 European

Option  Type:                  Call

Seller:                        Party  B

Buyer:                         Party  A

Shares:                        ABACAN  RESOURCE  CORP  REGISTERED  SHARES
                               ISIN  CODE:  CA  002  919  108  1
                               SECURITY  NO:  346  665

                                     - 65 -
<PAGE>
Number  of  Options:           500,000

Option  Entitlement:           1  Share  per  Option

Strike  Price:                 CAD     0.91

Premium:                       ZERO

Seller Business Day:           Any day on which  commercial  banks  are open for
                               Business (including  dealings in foreign exchange
                               and foreign currency deposits) in Toronto.

Currency Business Day:         Any day on which  commercial  banks  are open for
                               Business (including dealings in foreign  exchange
                               and foreign currency deposits) in  the  principal
                               financial centre for the relevant currency.

Exchange:                      Toronto Stock Exchange, or any successor to such
                               exchange or quotation system.  If  the  exchange
                               ceases  to  list  or  otherwise  to  include the
                               Shares the parties will  negotiate in good faith
                               to  agree  on  another  exchange  or  quotation
                               system.

Clearance System:              Cedel, or any successor to or transferee of such
                               Clearance System. If the Clearance System ceases
                               to clear the Shares,  the parties will negotiate
                               in  good  faith  to agree on another  manner  of
                               delivery.

PROCEDURE  FOR  EXERCISE:

Expiration  Time:              Close  of  business  on  the  Exchange  on  the
                               Expiration Date

Expiration  Date:              26 July 2000 or, if that date is not an  Exchange
                               Business Day, the first following  day that is an
                               Exchange  Business  Day.

Automatic  Exercise:           Applicable

Seller's  Contact  Details
for Purpose of Giving Notice:  Mr.
Telephone  Number:
Fax  Number:

                                     - 66 -
<PAGE>

VALUATION:

Valuation  Time:               At  the  Close  of  trading  on  the  Exchange

Valuation Dates:               The  last  15  Exchange  Business Days before and
                               including the Expiration  Date

Averaging Dates:               Each Valuation Date

Averaging Market Disruption:   Modified Postponement


SETTLEMENT  TERMS:

Cash  Settlement:              Applicable

Relevant  Price:               Bid / Offer / Mid-Market / Last traded  price per
                               share as quoted  by  the  Exchange

Cash Settlement Payment Date:  Two / Three Currency Business Days after the last
                               Valuation  Date


ADJUSTMENTS:

Method  of  Adjustment:        Calculation  Agent  Adjustment


EXTRAORDINARY  EVENTS:

Consequences of Merger Events:

a.  Share-for-Share:           Alternative  Obligation
b.  Share-for-Other:           Cancellation  and  Payment
c.  Share-for-Combined:        Cancellation  and  Payment


NATIONALIZATION OR INSOLVENCY: Cancellation  and  Payment



                                     - 67 -
<PAGE>
3.   Calculation  Agent:       Party A  whose  determinations  and  calculations
                               will be binding and conclusive in the  absence of
                               manifest error.  The  Calculation Agent will have
                               no  responsibility  for  good  faith  errors  or
                               omissions in making any determination as provided
                               herein.


4.   Account  Details:         CREDIT SUISSE FIRST BOSTON,  TORONTO in favour of
                               CREDIT  SUISSE  FIRST  BOSTON,  ZURICH,  a/c
                               T1000000.01.CAD.

5.   Governing  Law:           English  Law



Please  confirm  that  the  foregoing  correctly  sets  forth  the  terms of our
agreement  by  executing the copy of this Confirmation enclosed for that purpose
and  returning  it  to  us  marked  for  the  attention  of:

                                       CREDIT  SUISSE  FIRST  BOSTON
                                       Attn.  Mr.  Walter  Bachmann  /  FMLS  32
                                       P.O.  Box  900
                                       8070  Zurich
                                       Switzerland

In  the  case  of  any  queries
-  regarding the transaction, please contact Mr Thomas Patrick phone: 01- 333 76
18,
- regarding settlement, please contact Mr Heiko Zimmermann phone: 01 - 333 64 95
or
-  regarding documentation, please contact Mr Walter Bachmann phone: 01 - 333 87
77.



It  has  been  a  pleasure  being  of  service  to you and we thank you for your
co-operation.




CREDIT  SUISSE  FIRST  BOSTON



NAME                                      THOMAS  PATRICK
Title                                     Title



                                     - 68 -
<PAGE>

Confirmed  as  of  the  date  first  above  written:


For  and  on  behalf  of

ABACAN  RESOURCES  CORP,  TORONTO



     YYYYYYYYY

                                     - 69 -
<PAGE>
                                SIGNING SCHEDULE

BORROWERS:

ABACAN  RESOURCE  CORPORATION,
as  a  Deed
By:     [J.  Harvie              ]             Signature:  /s/  James  Harvie
                                                           ---------------------

By     [W.G.Cherwayko            ]             Signature:  /s/Wade  Cherwayko
                                                           ---------------------

DAHOMEY  RESOURCE  CORPORATION
As  a  Deed
By:     [W.G.  Cherwayko         ]             Signature:  /s/ Wade Cherwayko
                                                           ---------------------

By:     [T.B.  Folawayo          ]             Signature:  /s/  Tunde Folawiyo
                                                           ---------------------

LIBERTY  TECHNICAL  SERVICES  LIMITED
As  a  Deed
By:     [W.G.  Cherwayko         ]             Signature:  /s/ Wade Cherwayko
                                                           ---------------------

By:     [T.B.  Folawayo          ]             Signature:  /s/  Tunde Folawiyo
                                                           ---------------------


                                     - 70 -
<PAGE>
ORIGINAL  GUARANTORS:

ABACAN  RESOURCES  (BENIN)  LIMITED

By:     [W.G.  Cherwayko         ]             Signature:  /s/ Wade Cherwayko
                                                           ---------------------

By:     [T.B.  Folawayo          ]             Signature:  /s/  Tunde Folawiyo
                                                           ---------------------
WEST  AFRICAN  RESOURCE  CORPORATION

By:     [W.G.  Cherwayko         ]             Signature:  /s/ Wade Cherwayko
                                                           ---------------------

By:     [T.B.  Folawayo          ]             Signature:  /s/  Tunde Folawiyo
                                                           ---------------------

AGBARA  RESOURCES  LIMITED

By:     [W.G.  Cherwayko         ]             Signature:  /s/ Wade Cherwayko
                                                           ---------------------

By:     [T.B.  Folawayo          ]             Signature:  /s/  Tunde Folawiyo
                                                           ---------------------

ABACAN  POWER  (BENIN)  LIMITED

By:     [W.G.  Cherwayko         ]             Signature:  /s/ Wade Cherwayko
                                                           ---------------------

By:     [T.B.  Folawayo          ]             Signature:  /s/  Tunde Folawiyo
                                                           ---------------------

                                     - 71 -
<PAGE>
ABACAN-ADDAX  BENIN  CONSORTIUM  S.A.

By:     [W.G.  Cherwayko         ]             Signature:  /s/ Wade Cherwayko
                                                           ---------------------

By:     [T.B.  Folawayo          ]             Signature:  /s/  Tunde Folawiyo
                                                           ---------------------


ANGUS  INTERNATIONAL  RESOURCES  LTD.

By:     [W.G.  Cherwayko         ]             Signature:  /s/ Wade Cherwayko
                                                           ---------------------

By:     [T.B.  Folawayo          ]             Signature:  /s/  Tunde Folawiyo
                                                           ---------------------

PROFILE  INTERNATIONAL  LTD.

By:     [W.G.  Cherwayko         ]             Signature:  /s/ Wade Cherwayko
                                                           ---------------------

By:     [T.B.  Folawayo          ]             Signature:  /s/  Tunde Folawiyo
                                                           ---------------------

                                     - 72 -
<PAGE>
LENDERS:

CREDIT  SUISSE  FIRST  BOSTON
As  Lender

By:     [T.  Patrick            ]              Signature:  /s/  Tom  Patrick
                                                           ---------------------

By:     [Alex  Gantner          ]              Signature:  /s/  Alex  Gantner
                                                           ---------------------

AGENT  AND  SECURITY  TRUSTEE:

CREDIT  SUISSE  FIRST  BOSTON,
As  Agent  and  Security  Trustee

By:     [Tom  Patrick           ]              Signature:  /s/  Tom  Patrick
                                                           ---------------------

By:     [Alex  Gantner          ]              Signature:/s/  Alex  Gantner
                                                           ---------------------

                                     - 72 -
<PAGE>