PURCHASE AND SALE AGREEMENT

         THIS PURCHASE AND SALE AGREEMENT (this  "AGREEMENT") is entered into as
of March 23, 1999, by and between PROBE EXPLORATION INC., an Alberta corporation
(the  "SELLER"),   and  Midcoast  Canada  Operating   Corporation,   an  Alberta
corporation (the "BUYER"). The Seller and the Buyer are referred to collectively
herein as the "PARTIES", and individually as a "PARTY".

                              W I T N E S S E T H:

         WHEREAS,  this  Agreement  contemplates  transactions  in which (a) the
Buyer will purchase from the Seller,  and the Seller will sell to the Buyer, the
Assets,  (b) Seller and Buyer will  enter into the Gas  Gathering  and  Treating
Agreement,  (c) Seller and Buyer will enter into the Area of Interest Agreement,
and (d) Seller and Buyer will enter into the Probe  System  Gathering  Agreement
all for the Consideration to be paid by Buyer to Seller;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
promises herein made, and in  consideration of the  representations,  warranties
and covenants herein contained, the Parties agree as follows:

1)       DEFINITIONS.

(1)               "ACID GAS  DISPOSAL  WELL" means the well Mama Santos #1 Leduc
                  100/07-23-049-27W4  into which the  Seller has been  injecting
                  volumes of H2S and CO2 derived as a consequence  of the normal
                  operation of the Calmar Gas Plant and Gas Gathering System.

(2)               "ADVERSE CONSEQUENCES" means: all actions, suits, proceedings,
                  hearings,   investigations,   charges,   complaints,   claims,
                  demands,  injunctions,  judgments,  orders, decrees,  rulings,
                  damages,  dues,  penalties,  fines,  costs,  amounts  paid  in
                  settlement,  liabilities,  obligations,  taxes, liens, losses,
                  expenses and fees, including court costs and fees and expenses
                  on  a  solicitor-client  basis,  but  excluding  consequential
                  damages.

(3)               "AFFILIATES"  means, with respect to the relationship  between
                  corporations,  that one of them is  controlled by the other or
                  that  both  of  them  are   controlled  by  the  same  Person,
                  corporation   or  body   politic;   and  for  this  purpose  a
                  corporation shall be deemed to be controlled by those Persons,
                  corporations or bodies politic who own or effectively control,
                  other than by way of security only,  sufficient  voting shares
                  of the corporation  (whether directly through the ownership of
                  shares of the corporation or indirectly  through the ownership
                  of shares of  another  corporation  which  owns  shares of the
                  corporation) to elect the majority of its board of directors.

(4)               "AREA OF INTEREST AGREEMENT" means the Agreement attached
                  hereto as Exhibit "B".

(5)               "ASSETS" has the meaning set forth in Section 2(a) hereof,
                  giving due effect to the provisions of Section 2(b) hereof.

(6)               "ASSUMED OBLIGATIONS" has the meaning set forth in Section
                  2(c) hereof.

(7)               "BUSINESS DAY" means any day other than a Saturday, Sunday or
                  statutory holiday in Calgary, Alberta. 


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(8)               "BUYER" has the meaning set forth in the preface hereof.

(9)               "CALMAR GAS PLANT AND GAS GATHERING SYSTEM" has the meaning
                  set forth in Section 2(a)(i) hereof.

(10)              "CLOSING" has the meaning set forth in Section 7(e) hereof.

(11)              "CLOSING DATE" has the meaning set forth in Section 7(e)
                  hereof.

(12)              "CONFIDENTIALITY AGREEMENT" means the letter confidentiality
                  agreement dated March 23, 1999 between Probe Exploration Inc.
                  and Midcoast Energy Resources Inc. respecting the subject
                  matter of this Agreement.

(13)              "CONSIDERATION" has the meaning set forth in Section 7(a)
                  hereof.

(14)              "CUSTOMARY POST-CLOSING CONSENTS" means consents and approvals
                  from Governmental Authorities that are customarily obtained
                  after closing in connection with a sale of ownership interests
                  or assets of the nature of the Assets.

(15)              "DEFERRED CONTINGENT CONSIDERATION" means the additional
                  consideration for the Assets which may, if the Escrow
                  Conditions are satisfied in favour of the Seller, become
                  payable to the Seller in whole or in part in accordance with
                  the terms of Section 7(b).

(16)              "DISCLOSURE SCHEDULE" means the schedule attached to this
                  Agreement referenced in Section 8(a) hereof and elsewhere in
                  this Agreement.

(17)              "EFFECTIVE TIME" has the meaning set forth in Section 7(e)
                  hereof.

(18)              "ENCUMBRANCE" means any mortgage, pledge, lien, encumbrance,
                  charge, or other security interest, and any restriction on
                  right of conveyance other than Permitted Encumbrances.

(19)              "ENVIRONMENTAL LAW" or "ENVIRONMENTAL LAWS" has the meaning
                  given to that term in Section 9(i) hereof. 

(20)              "EQUIPMENT" has the meaning set forth in Section 2(a)(ii)
                  hereof.

(21)              "ESCROW AGENT" means the escrow agent appointed pursuant to
                  the Escrow Agreement.

(22)              "ESCROW AGREEMENT" means the agreement attached hereto as
                  Exhibit "D".

(23)              "ESCROW CONDITIONS" means the conditions upon which the Escrow
                  Funds shall be paid to the Seller or the Buyer as set forth
                  in Section 7(c).

(24)              "ESCROW FUNDS" means the monies paid to and held by the Escrow
                  Agent pursuant to the Escrow Agreement, including all accrued
                  interest thereon.

(25)              "EXCLUDED ASSETS" has the meaning set forth in Section 2(b)
                  hereof.

(26)              "EXCLUDED OBLIGATIONS" has the meaning set forth in Section
                  2(d) hereof.

(27)              "GAS CONTRACTS" has the meaning set forth in Section 2(a)(v)
                  hereof.

(28)              "GAS GATHERING AND TREATING AGREEMENT" means the agreement
                  attached hereto as Exhibit "A".

(29)              "GOVERNMENTAL AUTHORITY" or "GOVERNMENTAL AUTHORITIES" means
                  the Commonwealth of Canada and any province, county, city or
                  other political subdivision, agency, court or instrumentality
                  thereof.

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<PAGE>

(30)              "HAZARDOUS SUBSTANCES" means all materials, substances and
                  wastes which are regulated under any Environmental Law or
                  which may form the basis for liability under any Environmental
                  Law.

(31)              "INDEMNIFIED PARTY" has the meaning set forth in Section 13(e)
                  hereof. 

(32)              "INDEMNIFYING PARTY" has the meaning set forth in Section
                  13(e) hereof. 

(33)              "INTERCREDITOR AGREEMENT" means the agreement attached hereto
                  as Exhibit "E".

(34)              "LAWS" means any constitution, statute, code, regulation,
                  rule, injunction, judgment, order, decree, ruling, charge or
                  other restriction of any applicable Governmental Authority.

(35)              "MATERIAL  ADVERSE  EFFECT"  means any change or effect  that,
                  individually  or  in  the  aggregate  with  other  changes  or
                  effects,  is, or is  reasonably  likely to be,  adverse to the
                  business,  operations and properties comprising the Assets, in
                  the  aggregate  amount of ten  thousand  dollars  ($10,000.00)
                  Canadian or more provided that a change in the prices at which
                  petroleum substances may be sold or in the economic conditions
                  affecting the oil and gas industry  generally shall not in any
                  event be found to constitute  or result in a Material  Adverse
                  Effect.

(36)              "ORDINARY  COURSE OF BUSINESS"  means the  ordinary  course of
                  business  consistent with the affected Party's past custom and
                  practice (including with respect to quantity and frequency).

(37)              "PARTNERSHIP INTERESTS" means the collective interests in the
                  Assets owned by Probe 1997 Processing Facility Limited
                  Partnership and PRX 1997 Processing Facility Limited 
                  Partnership.

(38)              "PARTY" and "PARTIES" have the meaning set forth in the
                  preface hereof.

(39)              "PERMITS" shall have the meaning set forth in Section 9(j)
                  hereof.

(40)              "PERMITTED ENCUMBRANCES" means any of the following:

               (1)    any liens for taxes and assessments not yet delinquent;

               (2)    any obligations or duties reserved to or vested in any
                      municipality or other Governmental Authority to regulate
                      any Asset in any manner including all applicable Laws;

               (3)    any Customary Post-Closing Consents with respect to the
                      Assets;

               (4)    any right reserved to or vested in any governmental or
                      other public authority by the terms of any lease, licence,
                      franchise, grant or permit or by a Law to terminate any
                      such lease, licence, franchise, grant or permit or to
                      require periodic payments as a condition of the
                      continuance thereof;

               (5)    easements, rights of way, servitudes or other similar
                      rights in land which do not materially impair the use or
                      exploitation of the Assets or any of them, including,
                      without in any way limiting the generality of the
                      foregoing, rights of way and servitudes for highways,
                      railways, sewers, drains, gas and oil pipelines, gas and
                      water mains, electric light, power, telephone or cable
                      television conduits, poles, wires or cables;


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<PAGE>

               (6)    inchoate mechanics' builders' and materialmans' liens in
                      respect of services rendered or goods supplied for which
                      payment is not yet due;

               (7)    the reservations, limitations, provisos and conditions in
                      any grants or transfers from the Crown of any of the lands
                      comprising any of the Assets or interests therein and
                      statutory exceptions to title;

               (8)    Encumbrances of which discharges or releases in a form
                      satisfactory to Buyer acting reasonably are delivered to
                      Buyer at Closing; and

               (9)    the Renaissance Claim.

(41)              "PERSON" means an individual, a partnership, a corporation, an
                  association,  a joint stock company, a trust, a joint venture,
                  an  unincorporated  organization or a governmental  entity (or
                  any department, agency, or political subdivision thereof).

(42)              "PRE-CLOSING  CONSENTS"  means  consents  and  approvals  from
                  Governmental  Authorities  that are required to be obtained or
                  which are customarily  obtained prior to closing in connection
                  with a sale of ownership  interests or assets of the nature of
                  the Assets.

(43)              "PROBE SYSTEM GATHERING AGREEMENT" means the Agreement
                  attached as Exhibit "C" hereto.

(44)              "RENAISSANCE  CLAIM"  means the claims  heretofor or hereafter
                  advanced by Renaissance  Energy Ltd. or any successor  thereto
                  ("Renaissance")   arising  out  of  the  past   ownership  and
                  operation  of  the  Leduc/Calmar  Original  Plant  and/or  its
                  gathering  lines or a claim of ownership  rights to the Calmar
                  Gas Plant and Gas Gathering  System insofar only as such claim
                  may be made against the Buyer, or the Calmar Gas Plant and Gas
                  Gathering System, or the operation thereof or the right to use
                  a certain  capacity  thereof at a reduced rate both before and
                  after the Effective  Time, or other similar  claim,  including
                  but not limited to those of such  allegations  contained  in a
                  letter dated March 1, 1999 from Renaissance Energy Ltd. to the
                  Seller and a letter  dated March 11, 1999 from Blain & Company
                  to the Seller;

(45)              "RIGHTS-OF-WAY" has the meaning set forth in Section 2(a)(iii)
                  hereof.

(46)              "SELLER" has the meaning set forth in the preface hereof.

(47)              "SURFACE ADJUSTMENTS" means those additions to, deletions from
                  or amendments of certain of the surface rights which formed a
                  portion of the Assets in order to facilitate the sale of the
                  Assets apart from the Leduc/Calmar Original Plant of which the
                  Buyer had knowledge prior to the date hereof.

(48)              "TAX(ES)" means any federal, state, local or foreign income,
                  gross receipts, license, payroll, employment, excise,
                  severance, stamp, occupation, premium, windfall profits,
                  environmental, custom duties, capital stock, franchise
                  profits, withholding, social security (or similar),
                  unemployment, disability, real property, personal property,
                  sales, use, transfer, registration, value added, alternative
                  or add-on minimum, estimated or other tax of any kind
                  whatsoever, including any interest, penalty or addition
                  thereto, whether disputed or not.

(49)              "TAX RETURN" means any return, declaration, report, claim for
                  refund, or information return or statement relating to Taxes,
                  including any schedule or attachment thereto, and including
                  any amendment thereof.

(50)              "THIRD PARTY CLAIM" has the meaning set forth in Section 13(e)
                  hereof. 

(51)              "TRANSACTION DOCUMENTS" means the Confidentiality Agreement,
                  the Gas Gathering and Treating Agreement, the Area of Interest
                  Agreement, the Probe System Gathering Agreement and the Escrow
                  Agreement and the instruments of assignment, conveyance and
                  transfer of the Assets from Seller to Buyer covering the
                  Assets.

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<PAGE>

(52)              "TRANSITION PERIOD" has the meaning set forth in Section
                  11(c).

2)       PURCHASE AND SALE OF THE ASSETS.

(1)               ASSETS. Subject to the terms and conditions of this Agreement,
                  the Seller  agrees to sell to the Buyer,  and the Buyer agrees
                  to purchase from the Seller, the following (collectively,  the
                  "ASSETS"):

               (1)  the Calmar gas plant and gas gathering system, compression
                    facilities and dehydration facilities depicted on the maps
                    attached hereto as Schedule 2(a)(i), together with all
                    valves, taps, interconnections, and flow meters attached
                    thereto or used in connection therewith (the "CALMAR GAS
                    PLANT AND GAS GATHERING SYSTEM");

               (2)  all equipment, whether owned or leased, including, but not
                    limited to, the compressor units, scrubbers, dehydration
                    units, tanks, traps, cathodic protection equipment, computer
                    systems, data files, CAD files and other personal property
                    which is used or held for use in connection with and is
                    situate in, on or appurtenant to the Calmar Gas Plant and
                    Gas Gathering System, (collectively, the "EQUIPMENT");

               (3)  all real property interests currently used by the Seller in
                    connection with the Calmar Gas Plant and Gas Gathering
                    System, including, but not limited to those fee interests,
                    surface leases, easements, rights-of-way, surface use
                    agreements and other similar agreements listed on the
                    attached Schedule 2(a)(iii) (collectively, the
                    "RIGHTS-OF-WAY");

               (4)  the vehicles and heavy motorized equipment, trailers and
                    like equipment listed on the attached Schedule 2(a)(iv);

               (5)  the gas service contracts, gas gathering agreements and
                    third party contractor or supplier agreements, together with
                    all amendments thereto and ratifications thereof, listed on
                    the attached Schedule 2(a)(v) (collectively, the "GAS
                    CONTRACTS");

               (6)  any and all other facilities, equipment, tools, office
                    furniture and equipment, operating supplies, gasoline or
                    diesel fuel, spare parts, chemicals and other tangible
                    assets currently located at or attached or appurtenant to
                    the Calmar Gas Plant and Gas Gathering System and used or
                    intended for use in connection therewith, whether in use or
                    non-use, and whether specifically described or not described
                    in the schedules attached to this Agreement;

               (7)  all books, files, maps, records and reports other than those
                    which are owned or licenced by third parties with
                    restrictions on their deliverability or disclosure by the
                    Seller to any assignee which is not an Affiliate of the
                    Seller and the Seller's tax records pertaining primarily to
                    the Calmar Gas Plant and Gas Gathering System and the
                    Equipment, including, but not limited to, all pipeline and
                    plant construction and testing records, vessel and pipe
                    certifications and weld x-rays, and reports and filings to
                    and with the Governmental Authorities; and

               (8)  all permits, licenses, orders, certificates of occupancy and
                    other governmental authorizations obtained by the Seller
                    pertaining or relating to the Calmar Gas Plant and Gas
                    Gathering Systems set forth on Schedule 2(a)(viii) hereto,
                    to the extent legally assignable or transferable.

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<PAGE>

               (2)  EXCLUDED ASSETS. Notwithstanding any provision of Section
                    2(a) hereof, the Assets do not include, and the Seller shall
                    retain all right, title and interest in and to the following
                    assets (the "EXCLUDED ASSETS"):

                    (1)  all cash and cash equivalents of the Seller;

                    (2)  all accounts and notes receivable arising out of,
                         resulting from or relating to the business and
                         operations of the Assets for periods up to and
                         including the Effective Time, and all claims, causes of
                         action and rights relating thereto and proceeds
                         thereof; and

                    (3)  all rights under insurance policies of the Seller and
                         its Affiliates relating to the Assets; and

                    (4)  the original natural gas plant constructed by Seller
                         and located in close proximity to the Calmar Gas Plant
                         and Gas Gathering System (the "Leduc/Calmar Original
                         Plant") as depicted within the red line on the plat
                         attached hereto as Schedule 2(b)(iv), together with all
                         equipment comprising a part thereof and all real
                         property interests used or owned by Seller to the
                         extent comprising a part of the plant site of the
                         Leduc/Calmar Original Plant and not currently used in
                         connection with the Calmar Gas Plant and Gas Gathering
                         System.

               (3)  ASSUMED OBLIGATIONS. Except for the obligations (and the
                    liabilities attendant thereto) described in Section 2(d)
                    below, subject to the terms and conditions of, and the
                    closing of, this Agreement, effective as of the Effective
                    Time, the Buyer shall assume and shall thereafter be
                    responsible for and covenants to pay and discharge when due,
                    all obligations relating to the ownership and operation of
                    the Assets or the business pertaining thereto which accrue
                    at any time after the Effective Time (collectively, the
                    "ASSUMED OBLIGATIONS"). The assumption of the Assumed
                    Obligations by Buyer hereunder shall not be deemed to
                    create, confirm or give rise to any rights of any third
                    party, as third party beneficiary or otherwise, or to waive
                    any defenses available to Seller or Buyer with respect to
                    any such obligations; it being understood that such
                    assumption is for the purpose of allocated responsibility
                    between Seller and Buyer. Further, assumption of the Assumed
                    Obligations by Buyer hereunder shall not be deemed a waiver
                    of any misrepresentation or breach of any warranty,
                    covenant, agreement, or undertaking of Seller under this
                    Agreement even though such misrepresentation or breach gives
                    rise to Assumed Obligations.

               (4)  EXCLUDED OBLIGATIONS. Notwithstanding Section 2(c) hereof or
                    any other provisions of this Agreement, the Buyer is not
                    assuming, and the Seller shall retain and be responsible for
                    and covenants to pay and discharge when due, the following
                    (collectively, the "EXCLUDED OBLIGATIONS"):

                    (1)  all accounts and notes payable arising out of,
                         resulting from or relating to the Assets for periods up
                         to and including the Effective Time;

                    (2)  all indebtedness of the Seller;

                    (3)  all Taxes arising out of, resulting from or relating to
                         the business and operation of Assets for whole or
                         partial taxable periods on or before the Effective
                         Time;

                    (4)  subject always to the provisions of Section 13(d), all
                         obligations (and the liabilities attendant thereto)
                         relating to the ownership or operation of the Assets or
                         the business pertaining thereto which accrue at any
                         time prior to the Effective Time, and those obligations
                         (and the liabilities attendant thereto) which accrue
                         after the Effective Time by reason of contractual
                         breaches, violations of Laws, negligence, fraud,
                         intentional misconduct or other malfeasance of Seller
                         or Seller's predecessors-in-interest prior to the
                         Effective Time;

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<PAGE>
                    (5)  all liabilities and obligations arising out of,
                         resulting from, attributable to or connected with
                         Seller's ownership and/or operation of the Leduc/Calmar
                         Original Plant, including without limitation, the cost
                         of abandoning, decommissioning, disassembling and
                         removing it or any portion of it and the reclamation of
                         all real property interests comprising the plant site
                         and not currently used in connection with the Calmar
                         Gas Plant and Gas Gathering System.

3) GAS GATHERING AND TREATING AGREEMENT.  Subject to the terms and conditions of
this Agreement,  at the Closing, Seller and Buyer shall both execute and deliver
to the other  duplicate  originals of that certain "Gas  Gathering  and Treating
Agreement" attached hereto as Exhibit "A".

4) AREA OF  INTEREST  AGREEMENT.  Subject  to the terms and  conditions  of this
Agreement,  at the  Closing,  Seller and Buyer shall both execute and deliver to
the other a duplicate  original  of that  certain  "Area of Interest  Agreement"
attached hereto as Exhibit "B".

5) PROBE SYSTEM GATHERING AGREEMENT. Subject to the terms and conditions of this
Agreement,  at the  Closing,  Seller and Buyer shall both execute and deliver to
the  other  a  duplicate  original  of  that  certain  "Probe  System  Gathering
Agreement" attached hereto as Exhibit "C".

6)  ESCROW  AGREEMENT  AND  INTERCREDITOR  AGREEMENT.  Subject  to the terms and
conditions  of this  Agreement,  at the  Closing,  Seller  and Buyer  shall both
execute and deliver to the other a duplicate  original of that  certain  "Escrow
Agreement"  attached  hereto as Exhibit "D" as well as a  duplicate  original of
that certain "Intercreditor  Agreement" attached hereto as Exhibit "E", executed
as well by the Bank of Montreal.

7)       CONSIDERATION AND CLOSING.

               (1)  CONSIDERATION. The Buyer agrees to pay to the Seller, at the
                    Closing, the sum of nineteen million three hundred
                    thirty-three thousand three hundred and thirty-four and
                    no/100 dollars ($19,333,334.00) in lawful money of Canada
                    (the "CONSIDERATION"), payable by certified cheque or bank
                    draft or delivery of other immediately available funds in
                    form satisfactory to Seller.

               (2)  DEFERRED CONTINGENT CONSIDERATION The parties acknowledge
                    that the Consideration payable by the Buyer to the Seller
                    for the Assets shall be increased by an amount equal to the
                    sum of six hundred and sixty-six thousand six hundred and
                    sixty-six and no/100 dollars ($666,666.00) plus the amount
                    of any accrued interest thereon to which the Seller becomes
                    entitled in accordance with the provisions of Section 7(c),
                    less the amounts, if any, paid by the Escrow Agent to the
                    Buyer in accordance with Section 7(c) (such net amount being
                    herein referred to as the Deferred Contingent
                    Consideration). The Buyer shall remain the sole beneficial
                    owner of the Deferred Contingent Consideration and accrued
                    interest thereon until such time as the Seller becomes
                    entitled to the payment of all or a portion of the Deferred
                    Contingent Consideration and accrued interest thereon in
                    accordance with Section 7(c) at which time the Seller shall
                    become the beneficial owner of such monies to which it is
                    entitled at that time.

               (3)  ESCROW CONDITIONS. The Parties acknowledge and agree that
                    following payment of the Escrow Funds to the Escrow Agent in
                    accordance with Section 7(f), such monies shall be held by
                    the Escrow Agent in accordance with the terms of the Escrow
                    Agreement and shall be governed by the following conditions:

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<PAGE>

               (1)  In the event that Buyer and Seller have no actual knowledge
                    on March 25, 2001, of the filing of suit against the Buyer
                    or its Affiliates or against the Assets in rem in connection
                    with the Renaissance Claims and at any time on or after
                    March 25, 2001, the Seller has delivered to Buyer record
                    searches from the Court of Queen's Bench of Alberta in each
                    judicial district in the Province of Alberta disclosing that
                    Renaissance Energy Ltd. (or any successor thereof known to
                    the Seller on the date of such searches) has not commenced
                    legal proceedings against the Buyer or any of its Affiliates
                    in connection with the Renaissance Claim and further
                    provided that no arbitration proceedings shall have been
                    commenced by Renaissance Energy Ltd. at any time prior to
                    March 25, 2001 with respect to the Renaissance Claim, the
                    Seller and the Buyer shall jointly advise the Escrow Agent
                    that this Escrow Condition 7(c)(i) has been satisfied in
                    favour of the Seller and shall instruct the Escrow Agent to
                    pay all of the Escrow Funds in his possession or under his
                    control at that time to the Seller.

               (2)  In the event that the Seller, at any time hereafter,
                    delivers to the Buyer a quit claim and release of any claims
                    that Renaissance Energy Ltd. (or any successor thereof known
                    to the Seller as of the date of such quit claim and release)
                    may have against the Buyer and its Affiliates and the Calmar
                    Gas Plant and Gas Gathering System, the operation thereof
                    and the right to utilize a certain capacity thereof at
                    reduced rates, both before and after the Effective Time
                    (other than any rights to capacity at such volumes or at
                    such rates not to exceed $0.55 per MCF which has been made
                    available by the Seller to Renaissance or any such successor
                    thereto being part of the capacity allocated to the Seller
                    in the Gas Gathering and Treating Agreement in settlement of
                    such claims), together with an assignment and conveyance of
                    the entire undivided interest Renaissance Energy Ltd. (or
                    any successor thereof known to the Seller at the time of
                    such assignment and conveyance) may hold in the Calmar Gas
                    Plant and Gas Gathering System, if any, each executed by
                    Renaissance Energy Ltd. or any such successor thereof and in
                    favour of the Buyer, each in a form which would be
                    acceptable to a prudent purchaser of the Assets acting
                    reasonably, the Seller and the Buyer shall, provided that
                    all other disbursements of the Escrow Funds to which the
                    Buyer is otherwise entitled pursuant to Section 7(c)(iv)
                    have been paid, jointly advise the Escrow Agent that this
                    Escrow Condition 7(c)(ii) has been satisfied in favour of
                    the Seller and shall instruct the Escrow Agent to pay all of
                    the Escrow Funds in his possession or under his control at
                    that time to the Seller.

               (3)  In the event that at any time before the Seller becomes
                    entitled to the payment of the whole of the Escrow Funds
                    remaining in the possession or control of the Escrow Agent,
                    legal or arbitration proceedings are commenced against the
                    Buyer or its Affiliates, or in the Assets in rem, by
                    Renaissance Energy Ltd. or any successor thereof in respect
                    of the Renaissance Claim, then the Escrow Funds shall remain
                    subject to the Escrow Agreement until the Escrow Funds have
                    been fully disbursed to the Seller and/or the Buyer in
                    accordance with Section 7(c)(iv) or otherwise agreed between
                    the Parties.

               (4)  In the event that legal or arbitration proceedings are
                    commenced by Renaissance Energy Ltd. or any successor
                    thereof against the Buyer or its Affiliates as contemplated
                    in Section 7(c)(iii):

                    (1)  upon delivery to the Seller, from time to time during
                         the continuance of any legal or arbitration proceedings
                         described in Section 7(c)(iii), of evidence of the
                         reasonable disbursement or the assumption of liability
                         for the reasonable disbursement of any amounts for
                         which the Buyer has been indemnified by the Seller in
                         respect of the Renaissance Claim (including, but not
                         limited to, reasonable legal fees and other
                         out-of-pocket costs and expenses incurred by Buyer in
                         connection with such legal or arbitration proceedings),
                         the Seller and the Buyer shall jointly advise the
                         Escrow Agent that this Escrow Condition 7(c)(iv)(A) has
                         been satisfied in full or in part in favour of the
                         Buyer and shall instruct the Escrow Agent to pay that
                         specified amount of the Escrow Funds in his possession
                         or under his control at that time to the Buyer or as
                         the Buyer may direct in satisfaction of such amounts;

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<PAGE>

                    (2)  upon the delivery to the Seller of evidence of the
                         reasonable disbursement by or the imposition of
                         liability upon the Buyer for any amounts for which the
                         Buyer has been indemnified by the Seller in respect of
                         the Renaissance Claim required to obtain a final
                         settlement of such claim or to satisfy any arbitration
                         award or judgment which cannot be appealed which has
                         been made against the Buyer or adversely affects the
                         Calmar Gas Plant and Gas Gathering System or the
                         operation or capacity thereof after the Effective Time,
                         the Seller and the Buyer shall jointly advise the
                         Escrow Agent that this Escrow Condition 7(c)(iv)(B) has
                         been satisfied and shall jointly instruct the Escrow
                         Agent to pay that amount of the Escrow Funds in his
                         possession or under his control at that time to the
                         Buyer or as the Buyer may direct in satisfaction of
                         such amount, to pay to the Buyer any additional portion
                         of the Escrow Funds to which it is otherwise entitled
                         pursuant to Section 7(c)(iv), and to pay the balance,
                         if any to the Seller;

                    (3)  In the event that any legal or arbitration proceedings
                         described in Section 7(c)(iii) are discontinued insofar
                         as they pertain to the Renaissance Claim, the Seller
                         and the Buyer shall jointly advise the Escrow Agent
                         that such proceedings have been discontinued as
                         aforesaid and shall jointly instruct the Escrow Agent
                         to pay to the Buyer any portion of the Escrow Funds to
                         which it is otherwise entitled pursuant to Section
                         7(c)(iv) and to pay the balance, if any, to the Seller.

               (4)  ARBITRATION. Should a dispute or disagreement arise between
                    the parties in respect of any matters made the subject of
                    Section 7(c), then either Party may refer the settlement of
                    the dispute to arbitration in accordance with Section 16(u).

               (5)  CLOSING AND THE EFFECTIVE TIME. Subject always to the
                    provisions of Section 14 hereof, the closing of the
                    transactions contemplated by this Agreement (the "CLOSING")
                    shall take place at the offices of Blake Cassels & Graydon,
                    counsel to the Seller, commencing at 2:00 p.m. local time on
                    March 23, 1999 or such other date as the Buyer and the
                    Seller may mutually determine (the "CLOSING DATE"). Upon the
                    Closing, the transactions shall be deemed effective for all
                    purposes as of 8:00 a.m. local time on March 1, 1999 (the
                    "EFFECTIVE TIME").

               (6)  DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller
                    will deliver to the Buyer the various certificates,
                    instruments and documents referred to in Section 12(a)
                    below, (ii) the Buyer will deliver to the Seller the various
                    certificates, instruments and documents referred to in
                    Section 12(b) below, (iii) the Seller will deliver to the
                    Buyer such instruments of assignment, conveyance and
                    transfer, in form and content mutually acceptable to Seller
                    and Buyer acting reasonably, as shall be necessary for
                    Seller to convey to the Assets to Buyer provided that such
                    documents shall not require Seller to assume or incur any
                    obligation or to provide any representation or warranty
                    beyond those contained in this Agreement, (iv) the Seller
                    and the Buyer will execute and deliver to the other a
                    duplicate original of the Gas Gathering and Treating
                    Agreement, the Area of Interest Agreement, the Probe System
                    Gathering Agreement, the Intercreditor Agreement and the
                    Escrow Agreement, (v) the Buyer will deliver to the Seller
                    the Consideration specified in Section 9(a) above and any
                    other monies payable by the Buyer to the Seller at Closing
                    hereunder, and (vi) the Buyer will deliver the Deferred
                    Contingent Consideration to the Escrow Agent in accordance
                    with and subject to the terms of the Escrow Agreement. The
                    Buyer acknowledges that a portion of the Consideration will
                    be required by the Seller to pay the purchase price due to
                    be paid to complete the acquisition of the Partnership
                    Interests by the Seller and agrees that so much of the
                    Consideration as is required may be used by the Seller for
                    that purpose provided that escrow arrangements satisfactory
                    to the Buyer acting reasonably are put into place to assure
                    the purchase of the Partnership Interests by the Buyer in
                    accordance with the terms hereof.

                                       9
<PAGE>


(7)      APPORTIONMENTS.

               (1)  All benefits and obligations of any kind and nature
                    accruing, payable, paid, received or receivable with respect
                    to the Assets (including, without limitation, maintenance,
                    development, capital and operating costs and payments with
                    respect to the Permitted Encumbrances, proceeds from the
                    processing of production, accounts receivable and incentives
                    accruing pursuant to the Law) shall be apportioned, as of
                    the Effective Time, between the Seller and the Buyer in
                    accordance with Canadian generally accepted accounting
                    principles, subject to the provisions of this Agreement. All
                    costs of whatever nature pertaining to work performed or
                    goods or services provided with respect to the Assets prior
                    to the Effective Time shall be borne by the Seller,
                    notwithstanding that such costs may be payable in whole or
                    in part after the Effective Time. Subject to the preceding
                    sentence, the Seller shall be entitled to a credit for all
                    cash advances, operating funds and similar advances to third
                    parties in respect of the Assets which stand to the credit
                    of the Seller at the Closing Date and which are hereby
                    assigned to the Buyer upon Closing. For further clarity, all
                    accounts receivable shall be deemed to have accrued when
                    earned (whether or not billed); any accounts payable shall
                    be deemed to have accrued when the events giving rise to
                    such accounts payable occurred (whether or not such accounts
                    payable were invoiced or paid on the Closing Date).

               (2)  Notwithstanding the provisions of Section 7 (g) (i), all
                    rentals and all similar payments required to preserve any of
                    the surface rights forming part of the Assets and all ad
                    valorem and property taxes levied with respect to the Assets
                    shall be apportioned between the Seller and the Buyer on a
                    per diem basis as of the Effective Time.

               (3)  An interim accounting and adjustment shall be conducted for
                    Closing, based on the Seller's and the Buyer's good faith
                    estimate of all adjustments to be made for the transactions
                    herein pursuant to this Article. An estimate of all property
                    taxes which are anticipated to become payable by the Buyer
                    in the calender year in which Closing occurs shall be
                    included in the interim accounting and adjusted in
                    accordance with Section 7 (g) (ii). The Seller shall deliver
                    a written statement to the Buyer of all proposed interim
                    adjustments a reasonable time before Closing and shall
                    provide reasonable assistance to the Buyer as may be
                    required to verify such written statement prior to Closing.
                    The Parties shall endeavor to conduct a final accounting and
                    adjustment in like manner within ninety (90) days following
                    the Closing Date and subject to subsections (iv) and (v) of
                    this Section, the Parties shall not be obligated to make any
                    adjustments after one (1) year following the Closing Date
                    unless such adjustment has been specifically requested, by
                    notice, within such period. All adjustments shall be settled
                    by payment by the Party required to make payment hereunder
                    within fifteen (15) days of being notified of the
                    determination of the amount owing.

               (4)  During the one (1) year period following the Closing Date,
                    the Buyer may audit the books, records and accounts of the
                    Seller respecting the Assets, for the purpose of effecting
                    adjustments pursuant to this Section. Such audit shall be
                    conducted upon reasonable notice to the Seller at the
                    Seller's offices during the Seller's normal business hours,
                    and shall be conducted at the sole expense of the Buyer. Any
                    claims of discrepancies disclosed by such audit shall be
                    made in writing to the Seller within two (2) months
                    following the completion of such audit, and the Seller shall
                    respond in writing to any claims of discrepancies within six
                    (6) months of the receipt of such claims. To the extent that
                    the Parties are unable to resolve any outstanding claims of
                    discrepancies disclosed by such audit within two (2) months
                    of the Seller's response thereto, such audit exceptions
                    shall be resolved pursuant to Section 16(u).

                                       10
<PAGE>

               (5)  Notwithstanding the preceding subsections of this Section
                    and Section 13(a), any adjustments established by a joint
                    venture audit or by an audit conducted pursuant to the Laws
                    shall be made at the time such adjustment is established,
                    with payment being made by the Party required to make
                    payment hereunder within fifteen (15) days of being notified
                    of the determination of the amount owing.

               (6)  Any adjustments made hereunder, except for revenues and
                    operating expenses attributable to the operation of the
                    Plant after the Effective Time, shall constitute an increase
                    or decrease, as the case may be, to the Purchase Price and
                    to the amount allocated to tangibles.

          (8)  ALLOCATION OF CONSIDERATION. Buyer and Seller agree that the
               Consideration shall be allocated among the Assets as follows:

                                             Allocation of
                  ASSET TYPE                 Consideration
                  ----------                  ($CANADIAN)
                                             --------------
         Cash (US Class I )                     $            -0-
         Cash - like (USClass II)               $            -0-
         Tangibles (US Class III)               $  19,333,333.00
         Intangibles (US Class IV)              $           1.00
         Goodwill and going concern
         (US Class V)                           $            -0-
                                                ----------------
                                       TOTAL      $19,333,334.00


In the event that the amount of the  Consideration is increased upon the payment
of all or a portion of the Deferred  Contingent  Consideration  to the Seller in
accordance  with the  provisions  of  Section  7(b),  the  amount  by which  the
Consideration  is increased as a result  thereof shall be allocated to Tangibles
(US Class III).


8)       REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.

(1)               REPRESENTATIONS  AND  WARRANTIES  OF THE  SELLER.  The  Seller
                  represents  and  warrants  to the  Buyer  that the  statements
                  contained  in this Section 8(a) are correct and complete as of
                  the date of this Agreement and will be correct and complete as
                  of the  Closing  Date (as  though  made then and as though the
                  Closing Date were  substituted  for the date of this Agreement
                  throughout this Section 8(a)).

          (1)  ORGANIZATION OF THE SELLER. The Seller is a corporation duly
               organized, validly existing and in good standing under the laws
               of the Province of Alberta.

          (2)  AUTHORIZATION OF TRANSACTIONS. The Seller has full power and
               authority (including full corporate power and authority) to
               execute and deliver this Agreement and to perform its obligations
               hereunder, except that the Seller cannot convey a 100% interest
               in the Assets unless the Partnership Interests are acquired by it
               prior to Closing. This Agreement constitutes the valid and
               legally binding obligation of the Seller, enforceable in
               accordance with its terms and conditions, subject, however, to
               the effects of bankruptcy, insolvency, reorganization, moratorium
               or similar laws affecting creditors' rights generally, and to
               general principles of equity (regardless of whether such
               enforceability is considered in a proceeding in equity or at
               law). The Seller need not give any notice to, make any filing
               with or obtain any authorization, consent or approval of, any
               Governmental Authority in order to consummate the transactions
               contemplated by this Agreement, except for Customary Post-Closing
               Consents and those described in Section 8(a)(ii) of the
               Disclosure Schedule.

                                       11

<PAGE>


          (3)  NONCONTRAVENTION. Except for the approvals and filings specified
               in Section 8(a)(ii), neither the execution and delivery of this
               Agreement, nor the consummation of the transactions contemplated
               hereby, will (A) violate any constitution, statute, regulation,
               rule, injunction, judgment, order, decree, ruling, charge or
               other restriction of any Governmental Authority to which the
               Seller is subject or any provision of its charter or bylaws or
               (B) except as set forth in Section 8(a)(iii)(B) of the Disclosure
               Schedule conflict with, result in a breach of, constitute a
               default under, result in the acceleration of, create in any
               Person the right to accelerate, terminate, modify or cancel, or
               require any notice under any agreement, contract, lease, license,
               instrument or other arrangement to which the Seller is a party or
               by which it is bound or to which any of its assets is subject,
               except for such violations, defaults, breaches or other
               occurrences that do not, individually or in the aggregate, have a
               material adverse effect on the ability of the Seller to
               consummate the transactions contemplated by this Agreement.

          (4)  BROKERS' FEES. The Seller has no liability or obligation to pay
               any fees or commissions to any broker, finder or agent with
               respect to the transactions contemplated by this Agreement for
               which the Buyer could become liable or obligated.

          (5)  GST REGISTRATION: The Seller's GST registration No. is 104309364.

          (6)  CANADIAN RESIDENCY: The Seller is not a non-resident of Canada
               within the meaning of the INCOME TAX ACT (Canada).
              



(2)               REPRESENTATIONS   AND  WARRANTIES  OF  THE  BUYER.  The  Buyer
                  represents  and  warrants  to the Seller  that the  statements
                  contained  in this Section 8(b) are correct and complete as of
                  the date of this Agreement and will be correct and complete as
                  of the  Closing  Date (as  though  made then and as though the
                  Closing Date were  substituted  for the date of this Agreement
                  throughout this Section 8(b).

          (1)  ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
               organized, validly existing, and in good standing under the laws
               of Alberta.

          (2)  AUTHORIZATION OF TRANSACTION. The Buyer has full power and
               authority (including full corporate power and authority) to
               execute and deliver this Agreement and to perform its obligations
               hereunder. This Agreement constitutes the valid and legally
               binding obligation of the Buyer, enforceable in accordance with
               its terms and conditions, subject, however, to the effects of
               bankruptcy, insolvency, reorganization, moratorium or similar
               laws affecting creditors' rights generally and to general
               principles of equity (regardless of whether such enforceability
               is considered in a proceeding in equity or at law). The Buyer
               need not give any notice to, make any filing with or obtain any
               authorization, consent or approval of any Governmental Authority
               in order to consummate the transactions contemplated by this
               Agreement, except for the approvals and filings specified in
               Section 8(a)(ii) and Section 8(b)(v).

                                       12
<PAGE>


          (3)  NONCONTRAVENTION. Except for the approvals and filings specified
               in Section 8(a)(ii) and Section 8(b)(v), neither the execution
               and delivery of this Agreement, nor the consummation of the
               transactions contemplated hereby, will (A) violate any
               constitution, statute, regulation, rule, injunction, judgment,
               order, decree, ruling, charge or other restriction of any
               Governmental Authority to which the Buyer is subject or any
               provision of its charter or bylaws or (B) conflict with, result
               in a breach of, constitute a default under, result in the
               acceleration of, create in any Person the right to accelerate,
               terminate, modify or cancel, or require any notice under any
               agreement, contract, lease, license, instrument or other
               arrangement to which the Buyer is a party or by which it is bound
               or to which any of its assets is subject, except for such
               violations, defaults, breaches or other occurrences that do not,
               individually or in the aggregate, have a material adverse effect
               on the ability of the Buyer to consummate the transactions
               contemplated by this Agreement.

          (4)  BROKERS' FEES. Neither the Buyer nor any Affiliate of it has any
               liability or obligation to pay any fees or commissions to any
               broker, finder or agent with respect to the transactions
               contemplated by this Agreement for which the Seller could become
               liable or obligated.

          (5)  INVESTMENT CANADA ACT: The Buyer shall comply with the INVESTMENT
               CANADA ACT to the extent, if any, that it is applicable to the
               transactions herein.

          (6)  GST REGISTRATION: The Buyer's GST registration no. is
               873220222RT.

9) REPRESENTATIONS  AND WARRANTIES  CONCERNING THE ASSETS. The Seller represents
and  warrants to the Buyer that the  statements  contained in this Section 9 are
correct and  complete as of the date of this  Agreement  and will be correct and
complete as of the  Closing  Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 9).

          (1)  NONCONTRAVENTION. Except for the approvals and filings specified
               in Section 8(a)(ii) or as set forth in Section 9(a) of the
               Disclosure Schedule, neither the execution and delivery of this
               Agreement, nor the consummation of the transactions contemplated
               hereby, will (i) violate any constitution, statute, regulation,
               rule, injunction, judgment, order, decree, ruling, charge or
               other restriction of any Governmental Authority to which any
               Asset is subject or (ii) conflict with, result in a breach of,
               constitute a default under, result in the acceleration of, create
               in any party the right to accelerate, terminate, modify or
               cancel, or require any notice or trigger any rights to payment or
               other compensation under any agreement, contract, lease, license,
               instrument or other arrangement to which any Asset is subject (or
               result in the imposition of any Encumbrance upon any of the
               Assets), except where the violation, conflict, breach, default,
               acceleration, termination, modification, cancellation, failure to
               give notice, right to payment or other compensation, or
               Encumbrance would not have a Material Adverse Effect, or
               materially adversely affect the ability of the Seller to
               consummate the transactions contemplated by this Agreement.

          (2)  TITLE TO TANGIBLE ASSETS AND CONDITION. The Seller, subject to
               its acquisition of the Partnerships Interests, owns good and
               marketable title to the tangible assets included in the Assets
               free and clear of any and all liens, mortgages, pledges, claims,
               options, encumbrances, interests or other burdens other than the
               Permitted Encumbrances; The tangible assets included in the
               Assets are, to the knowledge and good faith belief of the Seller,
               in good operating condition and repair, ordinary wear and tear
               excepted and are suitable for the use for which such assets are
               currently used.

          (3)  FINANCIAL STATEMENTS. Section 9(c) of the Disclosure Schedule
               sets forth the unaudited earnings before interest, taxes,
               depreciation and amortization for the Assets for the 12-month
               period ended December 31, 1998 (collectively, the "FINANCIAL
               DATA"). The Financial Data is derived from the books and records
               of the Seller, has been prepared in accordance with generally
               accepted Canadian accounting principles consistently with past
               practices of Seller in reporting the financial results of
               Seller's operation of the Assets, and is true and correct and
               presents fairly the financial results of Seller's operation of
               the Assets at the date specified.

                                       13
<PAGE>

          (4)  MATERIAL CHANGE. Except as set forth in Section 9(d) of the
               Disclosure Schedule, since January 1, 1998:

               (1)  to the Seller's knowledge and good faith belief, there has
                    not been any Material Adverse Effect;

               (2)  the Assets have been operated and maintained in the Ordinary
                    Course of Business;

               (3)  there has not been any physical damage, destruction or loss
                    to any portion of the Assets, whether or not covered by
                    insurance, in the aggregate amount of ten thousand dollars
                    ($10,000.00) Canadian or more;

               (4)  other than with respect to the Partnership Interests in the
                    Assets, there has been no purchase, sale or lease of assets
                    included in the Assets, other than in the Ordinary Course of
                    Business;

               (5)  there has been no actual, or to the knowledge of the Seller,
                    pending or threatened change affecting any of the Assets
                    with any customers, licensors, suppliers, distributors or
                    sales representatives, except such as has not had a Material
                    Adverse Effect;

               (6)  there has been no contract or commitment given or made by
                    the Seller outside the Ordinary Course of Business;

               (7)  there has been no contract which grants to a Person a
                    preferential right to purchase any of the Assets;

               (8)  there has been no contract or commitment for capital
                    expenditures or the acquisition or construction of fixed
                    assets for which Buyer shall or may have responsibility for
                    after the Closing except as set forth in Section 9(g) of the
                    Disclosure Schedule;

               (9)  there has been no commitment of any kind made or given by
                    the Seller, or to the best of the Seller's knowledge and
                    good faith belief, the occurrence of any event, giving rise
                    to any contingent liability for which Buyer shall or may
                    have responsibility for after the Closing; and

               (10) there is no contract, commitment or agreement made, given or
                    entered into by the Seller to do any of the foregoing,
                    except as expressly permitted hereby.

(5)               LEGAL COMPLIANCE.  The Seller (with respect to the Assets) has
                  complied   with  all   applicable   laws   (including   rules,
                  regulations,  codes, plans,  injunctions,  judgments,  orders,
                  decrees,  rulings, and charges thereunder) of all Governmental
                  Authorities  having  jurisdiction (and all agencies  thereof),
                  except  where the failure to comply  would not have a Material
                  Adverse Effect.

(6) TAX MATTERS. Except as set forth in Section 9(f) of the Disclosure Schedule:

               (1)  the Seller (with respect to the Assets) has filed all
                    material Tax Returns due that it was required to file. All
                    Taxes owed by the Seller (with respect to the Assets) shown
                    on any such Tax Return have been paid; and

               (2)  there is no material dispute or claim concerning any Tax
                    liability of the Seller (with respect to the Assets) either
                    (A) claimed or raised by any authority in writing or (B) as
                    to which the Seller has knowledge.

(7)               CONTRACTS  AND  COMMITMENTS.  Section  9(g) of the  Disclosure
                  Schedule  includes  a  list  of  all  material  contracts  and
                  commitments  (including,  without  limitation,  any  contract,
                  lease, agreement or commitment, written or oral, providing for
                  receipt or payment,  contingent or otherwise,  of ten thousand
                  dollars  ($10,000.00)  Canadian  or more or  which  may not be
                  terminated  without  payment or penalty,  or  restricting  the
                  ability  of the  owner of the  Assets to engage in any line of
                  business in any  geographic  area, or containing any indemnity
                  obligation,   or  relating  to   indebtedness   or   guarantee
                  obligations)  which are included in the Assets,  and each such
                  contract is in full force and effect, except where the failure
                  to be in full  force  and  effect  would  not have a  Material
                  Adverse  Effect.  The Seller  has  performed  all  obligations
                  required to be  performed  by it to date under the  contracts,
                  and  is  not in  default  under  any  obligation  of any  such
                  contracts,  except when such default would not have a Material
                  Adverse Affect. To the knowledge of the Seller, no other party
                  to any contract is in default thereunder.

                                       14
<PAGE>
(8)               LITIGATION. Section 9(h) of the Disclosure Schedule sets forth
                  each instance in which any of the Assets (i) is subject to any
                  outstanding injunction,  judgment,  order, decree or ruling or
                  (ii) to the knowledge and good faith belief of the Seller,  is
                  the  subject  of any  action,  suit,  proceeding,  hearing  or
                  investigation  of, in or before any court or quasi-judicial or
                  administrative agency of any federal,  state, local or foreign
                  jurisdiction,  or is to the knowledge and good faith belief of
                  the Seller, subject to any pending or threatened claim, demand
                  or notice of  violation or  liability  from any party,  except
                  where any of the foregoing  would not have a Material  Adverse
                  Effect.

(9) ENVIRONMENTAL MATTERS. Except as set forth in Section 9(i) of the Disclosure
Schedule:

               (1)  to the Seller's knowledge and good faith belief, the Seller
                    (with respect to the Assets) is and has been in compliance
                    with all applicable laws (including common law), ordinances,
                    orders, agreements, decisions, orders, rules and regulations
                    of Governmental Authority having jurisdiction relating to
                    protection or enhancement of human health or the environment
                    (collectively, the "ENVIRONMENTAL LAWS" and individually an
                    "ENVIRONMENTAL LAW"), except for such instances of
                    noncompliance that individually or in the aggregate do not
                    have a Material Adverse Effect;

               (2)  the Seller (with respect to the Assets) has obtained all
                    permits, licenses, franchises, authorities, consents and
                    approvals, and has made all filings and maintained all
                    material information, documentation, and records, as
                    necessary under applicable Environmental Laws for operating
                    the business conducted with the Assets as it is presently
                    conducted, and to the Seller's knowledge and good faith
                    belief all such permits, licenses, franchises, authorities,
                    consents, approvals, and filings remain in full force and
                    effect, except for such matters that individually or in the
                    aggregate do not have a Material Adverse Effect;

               (3)  there are to the Seller's knowledge, no pending or
                    threatened claims, demands, actions, administrative
                    proceedings, lawsuits or investigations against the Seller
                    (with respect to the Assets), and the Seller (with respect
                    to the Assets) to the Seller's knowledge is not subject to
                    any injunction, judgment, order, decree or ruling under any
                    Environmental Laws;

               (4)  one of the real property included in the Assets and, to the
                    Seller's knowledge, no off-site location used for the
                    treatment, storage or disposal of waste from any Asset, is:
                    (A) to the knowledge of the Seller, listed by any
                    Governmental Authority as requiring remedial action; (B) to
                    the knowledge of the Seller, being considered for possible
                    inclusion on a list by any Governmental Authority for
                    remedial action; or (C) to the knowledge of the Seller, the
                    subject of any action or investigation that may lead to
                    claims under any Environmental Law;

               (5)  no part of any of the real property included in the Assets
                    is now being used, or has been used, as a landfill, dump or
                    other disposal area for Hazardous Substances other than that
                    portion on which the Acid Gas Disposal Well is located and
                    the wellbore thereof; and

               (6)  the Seller has not received any notice or other
                    communication that it (with respect to the Assets) is or may
                    be a potentially responsible party or otherwise liable under
                    any Environmental Law in connection with any site actually
                    or allegedly containing or used for the treatment, storage
                    or disposal of Hazardous Substances.

                                       15
<PAGE>

               (10) PERMITS. Except as set forth in Section 9(j) of the
                    Disclosure Schedule, the Seller owns or holds all
                    franchises, licenses, permits, consents, approvals and
                    authorizations of all Governmental Authorities necessary for
                    the conduct of the business and operations conducted with
                    the Assets (collectively, the "PERMITS"), except for Permits
                    whose absence would not have a Material Adverse Effect. Each
                    Permit is in full force and effect, and to the Seller's
                    knowledge and good faith belief, the Seller is in compliance
                    with all of its obligations with respect to each Permit,
                    except where the failure to be in full force and effect or
                    to be in compliance would not have a Material Adverse
                    Effect, and (ii) to the knowledge of the Seller, no event
                    has occurred that permits, or upon the giving of notice or
                    the lapse of time or otherwise would permit, revocation or
                    termination of any Permit except such as in the aggregate
                    would not have a Material Adverse Effect.

               (11) NO "TAKE OR PAY". Except as expressly set forth in Section
                    9(k) of the Disclosure Schedule, there are currently no
                    arrangements under any of the Gas Contracts by which Buyer
                    will be obligated by virtue of a prepayment arrangement, a
                    "take-or-pay" arrangement, a production payment, or any
                    other arrangement, to sell, transport or deliver
                    hydrocarbons at some future time without then or thereafter
                    receiving full payment therefor, or to make payment at some
                    future time for hydrocarbons or the transportation or the
                    delivery of hydrocarbons previously purchased or
                    transported.

               (12) PIPELINE RIGHTS-OF-WAY. Other than the Partnership
                    Interests, Seller has not sold or assigned any
                    Rights-of-Way, in whole or in part, or any undivided
                    interest therein, to any Person whatsoever, except as
                    expressly disclosed in Section 9(l) of the Disclosure
                    Schedule. (1)

               (13) GAS IMBALANCES. Except as expressly set forth in Section
                    9(m) of the Disclosure Schedule, there are no gas imbalances
                    for which the Buyer shall have any liability or other
                    obligation after the Effective Time.

               (14) TARIFFS. Except as expressly set forth in Section 9(n) of
                    the Disclosure Schedule, to the extent that the operations
                    with respect to the Assets are subject to a tariff approved
                    by any Governmental Agency, those operations are in
                    compliance with each such tariff, except where such
                    noncompliance would not, individually or in the aggregate,
                    have a Material Adverse Effect. Seller has no knowledge of
                    any refund claim of any customers or any refund obligation
                    imposed by Governmental Authority, by Laws, by contract, or
                    by any other means, and, except as expressly set forth in
                    Section 9(n) of the Disclosure Schedule, has no knowledge of
                    any facts or circumstances which would give rise to any such
                    refund claim or refund obligation. Except as expressly set
                    forth, there are no customer complaints to Seller's
                    knowledge, pending or threatened, which would, either
                    individually or in the aggregate, have a Material Adverse
                    Effect.

               (15) NO PARTNERSHIP. The Assets are not currently subject to any
                    partnership or joint venture except as disclosed in Section
                    9(o) of the Disclosure Schedule.

               (16) NO CURTAILMENTS OR OTHER CHANGES. Except as expressly set
                    forth in Section 9(p) of the Disclosure Schedule, Seller
                    does not have any knowledge of any threatened or planned
                    plant closings of customers served by the Assets or reason
                    to believe that there will likely be curtailment by such
                    customers of future gas purchases by such customers, or any
                    knowledge of or reason to believe that there will be any
                    change in the business pertaining to the Assets or of other
                    Persons that could have a Material Adverse Effect upon the
                    presently existing economics of the business pertaining to
                    the Assets, including without limitation, any change in
                    tariffs or transportation rates with respect to any
                    pipelines of Persons that compete or could reasonably
                    compete with the existing or potential customers served by
                    the Assets.

               (17) REAL PROPERTY. Seller has no knowledge of any threatened
                    termination or reduction of the current access to or from
                    the real property comprising a part of the Assets to
                    existing roads or the sewer or other utility services
                    presently serving such real property other than the Surface
                    Adjustments. Seller has not received any notice that its
                    real property is in violation of any zoning, laws, statutes,
                    ordinances or building or use restrictions applicable to
                    such real property or which prohibit the use of such real
                    property for its current use or uses with respect to the
                    Assets.

                                       16
<PAGE>
               (18) PATENTS, COPYRIGHTS, TRADEMARKS, ETC. Except as expressly
                    set forth in Section 9(r) of the Disclosure Schedule, to the
                    Seller's knowledge, the present conduct of business with
                    respect to the Assets does not conflict with, infringe upon
                    or violate the patents, trademarks, servicemarks, trade
                    names, copyrights or trade secrets or other intangible
                    assets of any other person or entity, and Seller has not
                    received any notice of any infringement thereof, except
                    where such conflicts, infringements and violations would
                    not, either individually or in the aggregate, have a
                    Material Adverse Effect.

               (19) NO LEASES. Except as expressly set forth in Section 9(s) of
                    the Disclosure Schedule, all the equipment and other
                    tangible property which are material to the operations of
                    the Assets is owned by the Seller and not leased or rented.

               (20) MATERIAL MISSTATEMENTS OR OMISSIONS. No statement,
                    representation, warranty or covenant made by the Seller in
                    this Agreement or in any Exhibit or Schedule to this
                    Agreement contains or will contain any untrue statement of
                    material fact or to the Seller's knowledge and good faith
                    belief, omits or will omit to state any material fact
                    necessary in order to make the statements herein or therein,
                    in the light of the circumstances under which they were
                    made, not misleading.

               (21) UNDISCLOSED LIABILITIES. Except as expressly set forth on
                    Section 9(u) of the Disclosure Schedule or otherwise
                    provided herein, Seller has no knowledge of any facts or
                    circumstances with respect to the ownership or operation of
                    the Assets or the businesses conducted with respect thereto
                    as to which there are, or are likely to be, liabilities
                    (fixed or contingent) which have NOT been otherwise
                    disclosed by Seller to Buyer in the Disclosure Schedule.

10)      PRE-CLOSING  COVENANTS.  The Parties  agree as follows with respect to 
the period  between the date of this  Agreement and the
Closing:

               (1)  GENERAL. Each Party will use its reasonable best efforts to
                    take all action and to do all things necessary, proper or
                    advisable in order to consummate and make effective the
                    transactions contemplated by this Agreement (including
                    satisfaction, but not waiver, of the closing conditions set
                    forth in Section 12 hereof).

               (2)  NOTICES AND CONSENTS. The Seller will give any notices to
                    third parties, and will use its reasonable best efforts to
                    obtain the third party consents necessary to effect the
                    assignment of all Gas Contracts, Rights-of-Way and other
                    Assets to Buyer. If Seller is unable to obtain any necessary
                    third party consents to the assignment of any Gas Contracts
                    or Rights-of-Way, then Seller shall hold such Gas Contract
                    or Right-of-Way for the benefit of Buyer after the Closing
                    for its term and Seller shall provide Buyer with the
                    economic benefits thereof until such Gas Contract or
                    Right-of-Way is terminated. Insofar as the Seller holds any
                    Gas Contracts or Rights-of -Way for the benefit of the Buyer
                    after Closing and takes actions with respect thereto on
                    behalf of the Buyer pursuant to this Section, the Seller
                    shall be deemed to have been the agent of the Buyer
                    hereunder. The Buyer ratifies all actions taken by the
                    Seller or refrained to be taken by the Seller pursuant to
                    the terms of this Section in such capacity during such
                    period, with the intention that all such actions shall be
                    deemed to be those of the Buyer. Insofar as the Seller
                    exercises rights or takes any actions as the agent of the
                    Buyer pursuant to this Section, the Seller may require the
                    Buyer to secure the costs to be incurred by the Seller on
                    behalf of the Buyer in such manner as may be reasonably
                    appropriate in the circumstances. The Buyer shall indemnify
                    the Seller and its directors, officers, servants, agents or
                    employees against all liabilities, losses, costs (including
                    legal costs on a solicitor-client basis), claims or damages
                    which the Seller or its directors, officers, servants,
                    agents or employees may suffer or incur as a result of
                    holding any of the Gas Contracts or Rights-of-Way as the
                    agent of the Buyer pursuant to this Section insofar as such
                    liabilities, losses, costs, claims or damages are not a
                    direct result of the gross negligence or wilful misconduct
                    of the Seller or its directors, officers, servants, agents
                    or employees. An action or omission of the Seller or its
                    directors, officers, servants, agents or employees shall not
                    be regarded as gross negligence or wilful misconduct,
                    however, to the extent it was done or omitted to be done in
                    accordance with the instructions of or with the concurrence
                    of the Buyer. Each of the Parties will give any notices to,
                    make any filings with, and use its reasonable best efforts
                    to obtain any authorizations, consents and approvals of
                    Governmental Authorities which are required prior to
                    Closing.


                                       17
<PAGE>

(3)               OPERATION  OF  BUSINESS.  Other  than the  acquisition  of the
                  Partnership Interests or actions taken or transactions entered
                  into in order to effect a settlement of the Renaissance  Claim
                  which may be  undertaken  with the prior  consent of the Buyer
                  which consent shall not be unreasonably  withheld,  the Seller
                  will not,  without  the  consent of the  Buyer,  engage in any
                  practice,  take any action or enter into any transaction  with
                  respect to the Assets outside the Ordinary Course of Business.
                  Without  limiting the generality of the foregoing,  the Seller
                  will not,  without  the  consent of the  Buyer,  do any of the
                  following with respect to the Assets:

               (1)  cause or allow any of the Assets to become subject to an
                    Encumbrance except for Permitted Encumbrances;

               (2)  (A) acquire (including, without limitation, by merger,
                    consolidation or acquisition of stock or assets) any
                    corporation, partnership or other business organization or
                    any division thereof or any material amount of assets other
                    than in the Ordinary Course of Business; (B) sell, lease or
                    otherwise dispose of any property or assets, other than
                    sales of goods or services in the Ordinary Course of
                    Business; or (C) enter into or amend a contract, agreement,
                    commitment or arrangement with respect to any matter set
                    forth in this paragraph (ii); or

               (3)  amend in any respect any contract or agreement relating to
                    the Assets, or terminate any such contract or agreement
                    other than in the Ordinary Course of Business.

                  provided however, the Seller may take any such action or enter
                  into any such  commitments  without  the prior  consent of the
                  Buyer, if the Seller  reasonably  determines that such actions
                  are necessary for the protection of life or property, in which
                  case  the  Seller  shall  promptly  notify  the  Buyer of such
                  intention  or actions and the  Seller's  estimate of the costs
                  and expenses associated therewith.

(4)               FULL ACCESS.  The Seller will,  subject to all  contractual or
                  fiduciary  obligations and limits,  permit  representatives of
                  the Buyer to have full access at all reasonable  times, and in
                  a  manner  so as not to  interfere  with the  normal  business
                  operations  of  the  Seller,  to  all  premises,   properties,
                  personnel,  books, records (including tax records),  contracts
                  and documents of or pertaining to the Assets.

(5)               NOTICE OF  DEVELOPMENTS.  Each Party will give prompt  written
                  notice to the other of any Material Adverse Effect of which it
                  has knowledge  causing a breach of any of its  representations
                  and  warranties.  No disclosure by any Party  pursuant to this
                  subsection  8(e),  however,   shall  be  deemed  to  amend  or
                  supplement  any  Schedule  hereto  or to  prevent  or cure any
                  misrepresentation or breach of warranty.

               (6)  CASUALTY LOSS. If, prior to the Closing, any portion of the
                    Assets have been or are damaged or destroyed by fire, flood,
                    storm or other casualty or shall be taken by condemnation or
                    under the right of eminent domain (all of which are herein
                    called "Casualty Loss"), and the Casualty Loss is NOT a
                    Material Adverse Effect, then Buyer shall bear the --- risk
                    of loss, provided, however, Seller shall, at the Closing,
                    pay by means of an adjustment to the Consideration to Buyer,
                    all sums paid to Seller by persons or governmental bodies by
                    reason of the damage, destruction or taking of such assets
                    and shall assign, transfer and set over unto Buyer all of
                    the right, title and interest of Seller in and to any unpaid
                    proceeds or other payments from third parties arising out of
                    such destruction or taking, and all claims and chooses in
                    action with respect to such destruction or taking; further,
                    provided, however, if the Casualty Loss is a Material
                    Adverse Effect and such Assets are not repaired or replaced
                    and the business operation restored to its original state by
                    Seller prior to Closing, then Seller shall bear the risk of
                    loss, and Buyer shall have the right to terminate this
                    Agreement unless Buyer and Seller mutually shall have agreed
                    upon an appropriate adjustment to the Consideration which
                    reflects not only the cost of repair or replacement of the
                    damaged, destroyed or taken assets, but also includes an
                    amount for the economic losses incurred or which will be
                    incurred by Buyer to such business operation. If this
                    Agreement is terminated in accordance with this Section
                    10(f) prior to Closing, then except for the confidentiality
                    provisions contained in the Confidentiality Agreement, the
                    Parties shall be released from all of their obligations
                    under this Agreement. If this Agreement is so terminated,
                    the Buyer shall promptly return to the Seller all materials
                    delivered to the Buyer by the Seller hereunder, together
                    with all copies of them that may have been made by or for
                    the Buyer. Prior to Closing, Seller shall not voluntarily
                    compromise, settle or adjust any amount payable by reason of
                    any Casualty Loss which has been assigned to Buyer pursuant
                    to the foregoing provisions of this Section 10(f).

                                       18
<PAGE>
11)      POST-CLOSING COVENANTS. The Parties agree as follows:


               (1)  GENERAL. In case at any time after the Closing any further
                    action is necessary to carry out the purposes of this
                    Agreement, each of the Parties will take such further action
                    (including the execution and delivery of such further
                    instruments and documents) as the other Party reasonably may
                    request, all at the sole cost and expense of the requesting
                    Party (unless the requesting Party is entitled to
                    indemnification therefor under Section 13 below).

               (2)  LITIGATION SUPPORT. In the event and for so long as any
                    Party actively is contesting or defending against any
                    action, suit, proceeding, hearing, investigation, charge,
                    complaint, claim or demand in connection with (i) any
                    transaction contemplated under this Agreement or (ii) any
                    fact, situation, circumstance, status, condition, activity,
                    practice, plan, occurrence, event, incident, action, failure
                    to act or transaction on or before the Closing Date
                    involving any Asset, the other Party shall cooperate with
                    the contesting or defending Party and its counsel in the
                    defense or contest, make available its personnel, and
                    provide such testimony and access to its books and records
                    as shall be commercially reasonable in connection with the
                    defense or contest, all at the sole cost and expense of the
                    contesting or defending Party (unless the contesting or
                    defending Party is entitled to indemnification therefor
                    under Section 13 below).

               (3)  TRANSITION PERIOD OFFICE SPACE. The Seller shall and does
                    hereby, for a period of not less than one (1) month and not
                    more than three (3) months after the Closing Date (the
                    "TRANSITION PERIOD"), grant to the Buyer a licence to use
                    and occupy office space being comprised of one office during
                    normal business hours of the Seller for the purpose of
                    conducting normal business operations of the Buyer in
                    connection with the Assets.

               (4)  DELIVERY AND RETENTION OF RECORDS. On or promptly after the
                    Closing Date, the Seller will deliver or cause to be
                    delivered to the Buyer all files, records, information and
                    data relating to the Assets (other than Tax Returns, Tax
                    work papers and other Tax records and information) that are
                    in the possession or control of the Seller and its
                    Affiliates (together with all of the Seller's and its
                    Affiliates' contractual rights to request other such files,
                    records, information and data from any third party) (the
                    "Records"). The Buyer agrees to (i) hold the Records and not
                    to destroy or dispose of any thereof for a period of six
                    years from the Closing Date, provided that, if it desires to
                    destroy or dispose of such Records during such period, it
                    will first offer in writing at least 60 days before such
                    destruction or disposition to surrender them to the Seller
                    and if the Seller does not accept such offer within 20 days
                    after receipt of such offer, the Buyer may take such action
                    and (ii) following the Closing Date to afford the Seller,
                    its accountants and counsel, during normal business hours,
                    upon reasonable request, at any time, full access to the
                    Records and to the Buyer's employees to the extent that such
                    access may be requested for any legitimate purpose at no
                    cost to the Seller (other than for reasonable out-of-pocket
                    expenses); provided, however, that such access will not be
                    construed to require the disclosure of Records that would
                    cause the waiver of any attorney-client, work product or
                    like privilege; provided, further, that in the event of any
                    litigation nothing herein shall limit either Party's rights
                    of discovery under applicable law. The Buyer shall have the
                    same rights, and the Seller shall have the same obligations,
                    as are set forth in this Section with respect to any copies
                    of the Records of the Seller pertaining to the Assets that
                    are retained by the Seller, with the exception of Tax
                    Returns, Tax work papers and other Tax records and
                    information retained by the Seller, provided that such
                    access will not be construed to require the disclosure of
                    Records that would cause the waiver of any attorney-client,
                    work product or like privilege.

               (5)  MAIL; PAYMENTS. Each Party hereby authorizes the other from
                    and after the Closing to receive and open all mail and other
                    communications relating to the business conducted with the
                    Assets, and subject to the terms hereof, to act with respect
                    to such communications in such manner as that Party may
                    elect to the extent that such communications relate to the
                    rights and obligations of such Party with respect to the
                    Assets. If any communication does not relate exclusively to
                    the rights and obligations of the recipient with respect to
                    the Assets, the recipient shall forward the original or a
                    copy of such communication promptly to the other Party. Each
                    Party shall promptly deliver to the other any moneys, checks
                    or other instruments of payment received by that Party to
                    which the other Party is entitled hereunder.

                                       19
<PAGE>

12)      CONDITIONS TO OBLIGATION TO CLOSE.

               (1)  CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the
                    Buyer to consummate the transactions to be performed by it
                    in connection with the Closing is subject to satisfaction of
                    the following conditions:

                    (1)  the representations and warranties set forth in Section
                         8(a) and Section 9 above shall be true and correct in
                         all material respects at and as of the Closing Date;

                    (2)  the Seller shall have performed and complied with all
                         of its covenants hereunder in all material respects
                         through the Closing;

                    (3)  there shall not be any injunction, judgment, order,
                         decree or ruling in effect preventing consummation of
                         the transactions contemplated by this Agreement;

                    (4)  the Seller shall have delivered to the Buyer a
                         certificate to the effect that each of the conditions
                         specified above in subsections 12(a)(i)-(iii) is
                         satisfied in all respects;

                    (5)  the Parties shall have received all other
                         authorizations, consents, and approvals of Governmental
                         Authorities referred to in subsection 8(a)(ii) above
                         (other than Customary Post-Closing Consents) and in
                         Section 9(a) of the Disclosure Schedule, if any, and
                         all material consents, approvals and waivers of third
                         parties, if any, required for Seller's assignment of
                         any of the Gas Contracts, Rights-of-Way or other Assets
                         to Buyer other than those that are customarily obtained
                         after Closing in connection with a sale of ownership
                         interests or assets of the nature of the Assets;

                    (6)  all actions to be taken by the Seller in connection
                         with consummation of the transactions contemplated
                         hereby and all certificates, instruments and other
                         documents required to effect the transactions
                         contemplated hereby will be reasonably satisfactory in
                         form and substance to the Buyer; and

                    (7)  the Seller shall have completed the acquisition of the
                         Partnership Interests and the Buyer shall be satisfied
                         that it will be acquiring title and ownership of a 100%
                         interest in the Assets, free and clear of all title
                         defects and Encumbrances other than the Permitted
                         Encumbrances.

                  The Buyer may waive any  condition  specified in this Section 
                  12(a) if it executes a writing so stating at or before the
                  Closing.

(2)               CONDITIONS TO OBLIGATION OF THE SELLER.  The obligation of the
                  Seller to consummate the transactions to be performed by it in
                  connection  with the Closing is subject to satisfaction of the
                  following conditions:

                    (1)  the representations and warranties set forth in Section
                         3(b) above shall be true and correct in all material
                         respects at and as of the Closing Date;

                    (2)  the Buyer shall have performed and complied with all of
                         its covenants hereunder in all material respects
                         through the Closing;

                    (3)  there shall not be any injunction, judgment, order,
                         decree or ruling in effect preventing consummation of
                         the transactions contemplated by this Agreement;

                    (4)  the Buyer shall have delivered to the Seller a
                         certificate to the effect that each of the conditions
                         specified above in subsections 12(b)(i)-(iii) is
                         satisfied in all respects;

                                       20
<PAGE>

                    (5)  the Parties shall have received all other
                         authorizations, consents, and approvals of Governmental
                         Authorities referred to in subsection 8(a)(ii) above
                         (other than Customary Post-Closing Consents) and in
                         Section 9(a) of the Disclosure Schedule, if any and all
                         material consents, approvals and waivers of third
                         parties, if any, required for Seller's assignment of
                         any of the Gas Contracts, Rights-of-Way or other Assets
                         to Buyer other than those that are customarily obtained
                         after closing in connection with a sale of ownership
                         interests or assets of the nature of the Assets;

                    (6)  all actions to be taken by the Buyer in connection with
                         consummation of the transactions contemplated hereby
                         and all certificates, instruments and other documents
                         required to effect the transactions contemplated hereby
                         will be reasonably satisfactory in form and substance
                         to the Seller;

                    (7)  the Seller shall have completed the acquisition of the
                         Partnership Interests on terms and conditions
                         satisfactory to the Seller; and

                    (8)  there shall, prior to the Closing, be no sale, transfer
                         or other disposition of any of the shares of the Seller
                         which has the effect of altering the effective control
                         of the Seller nor shall any Person other than the
                         Seller have made a take-over-bid in respect of shares
                         of the Seller.

                  The Seller may waive any  condition  specified in this Section
                  12(b) if it executes a writing so stating at or before the
                  Closing.

(3)               In the event any of the  conditions in Sections 12(a) or 12(b)
                  has not been  satisfied at or before the Closing Date and such
                  condition  has not been waived by the Party for the benefit of
                  which  such  condition  has been  included,  such Party may by
                  written notice to the other Party,  elect without prejudice to
                  any other  rights or remedies it may have  available to it, to
                  terminate  this  Agreement or to treat this Agreement as being
                  binding and  enforceable.  However,  a Party may not terminate
                  this Agreement in such manner after Closing,  and its remedies
                  thereafter,  if any,  with  respect to the  failure to satisfy
                  such condition shall be limited to damages.

13) REMEDIES FOR BREACHES OF THIS AGREEMENT.

                    (1)  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
                         All of the representations and warranties of the
                         Parties contained in this Agreement shall survive the
                         Closing and continue in full force and effect for a
                         period of twenty-four (24) months, for the benefit of
                         the Party for which such representations and warranties
                         were made. Other than a claim or action based on the
                         fraud of a Party, no claim or action shall be commenced
                         with respect to a breach of any such representation or
                         warranty, unless, within such period, written notice
                         specifying such breach in reasonable detail has been
                         provided to the Party which made such representation or
                         warranty. The covenants contained in this Agreement to
                         be performed after the Closing shall survive the
                         Closing indefinitely.

                    (2)  INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER.
                         Subject to Sections 13 (a), (c) and 13 (d) and provided
                         that Closing has occurred, the Seller shall:

                         1.   be liable to the Buyer for all Adverse
                              Consequences whatsoever which the Buyer may
                              suffer, sustain, pay or incur; and

                         2.   indemnify and save the Buyer and its directors,
                              officers, servants, agents and employees harmless
                              from and against all Adverse Consequences
                              whatsoever which may be brought against or
                              suffered by the Buyer, its directors, officers,
                              servants, agents or employees or which they may
                              sustain, pay or incur;

                                       21
<PAGE>

                              (1)  as a direct result of any matter or thing
                                   arising out of, resulting from or
                                   attributable to a representation or warranty
                                   contained in Section 8 (a) or Section 9 being
                                   inaccurate or untruthful or Seller's breach
                                   of a covenant to Buyer under this Agreement
                                   or the Transaction Documents;

                              (2)  as a direct result of any matter or thing
                                   arising out of, resulting from or
                                   attributable to or connected with the
                                   ownership and/or operation of the Assets
                                   (whether by Seller or Seller's predecessors
                                   in interest) prior to the Effective Time; or

                              (i)  as a direct result of the Renaissance Claim;

                           except any  Adverse  Consequences  to the extent that
                           the same are caused by the gross negligence or wilful
                           misconduct  of the Buyer,  its  directors,  officers,
                           servants, agents, employees or assigns. The indemnity
                           granted by the Seller herein, however, is not a title
                           warranty and does not provide  either an extension of
                           any  representation  or  warranty  contained  in this
                           Agreement or an additional remedy with respect to the
                           Seller's breach of such a representation or warranty.

(3) INDEMNIFICATION  PROVISIONS FOR BENEFIT OF THE SELLER. Provided that Closing
    has occurred, the Buyer shall:

          1.   be liable to the Seller for all Adverse Consequences that the
               Seller may suffer, sustain, pay or incur; and

          2.   indemnify and save the Seller and its directors, officers,
               servants, agents and employees harmless from and against all
               Adverse Consequences which may be brought against or suffered by
               the Seller, its directors, officers, servants, agents or
               employees or which they may sustain, pay or incur;

                    (i)  as a direct result of any matter or thing arising out
                         of, resulting from or attributable to a representation
                         or warranty contained in Section 8(b) being inaccurate
                         or untruthful or Buyer's breach of a covenant to Seller
                         under this Agreement or the Transaction Documents; or

                    (ii) as a direct result of any matter or thing arising out
                         of, resulting from or attributable to or connected with
                         the ownership and/or operation of the Assets whether by
                         Buyer or Buyer's successors in interest and occurring
                         or accruing after the Effective Date;

                  except any  Adverse  Consequences  to the extent that the same
                  are caused by the gross negligence or wilful misconduct of the
                  Seller, its directors,  officers,  servants, agents, employees
                  or assigns.  The  responsibility  prescribed  by this  Section
                  however,   does  not  provide   either  an  extension  of  any
                  representation  or warranty  contained in this Agreement or an
                  additional   remedy   for  the   Buyer's   breach  of  such  a
                  representation or warranty.

(4)      ASSETS ACQUIRED ON "AS IS" BASIS

         Notwithstanding  the foregoing  provisions of Section 13(b),  the Buyer
         acknowledges that it is acquiring the Assets on an "as is" basis, as of
         the Effective Time. The Buyer acknowledges that it is familiar with the
         present condition of the Assets, that the Seller has provided the Buyer
         with a reasonable  opportunity  to inspect the Assets at the sole cost,
         risk and expense of the Buyer  (insofar as the Seller could  reasonably
         provide  such  access)  and that  the  Buyer  is not  relying  upon any
         representation   or  warranty  of  the  Seller  as  to  the  condition,
         environmental  or otherwise,  of the Assets,  except as is specifically
         made pursuant to Section 8(a) or Section 9.


                                       22

<PAGE>

(5)      MATTERS INVOLVING THIRD PARTIES.

               (1)  If any third party shall notify any Party (the "INDEMNIFIED
                    PARTY") with respect to any matter (a "THIRD PARTY CLAIM")
                    that may give rise to a claim for indemnification against
                    any other Party (the "INDEMNIFYING PARTY") under this
                    Section 13, then the Indemnified Party shall promptly (and
                    in any event within five (5) Business Days after receiving
                    notice of the Third Party Claim) notify the Indemnifying
                    Party thereof in writing.

               (2)  The Indemnifying Party will have the right to assume and
                    thereafter conduct the defense of the Third Party Claim with
                    counsel of its choice reasonably satisfactory to the
                    Indemnified Party; provided, however, that the Indemnifying
                    Party will not consent to the entry of any judgment or enter
                    into any settlement with respect to the Third Party Claim
                    without the prior written consent of the Indemnified Party
                    (not to be withheld unreasonably) unless the judgment or
                    proposed settlement involves only the payment of money
                    damages and does not impose an injunction or other equitable
                    relief upon the Indemnified Party.

               (3)  Unless and until the Indemnifying Party assumes the defense
                    of the Third Party Claim as provided in subsection 13(e)(ii)
                    above, however, the Indemnified Party may defend against the
                    Third Party Claim in any manner it reasonably may deem
                    appropriate.

               (4)  In no event will the Indemnified Party consent to the entry
                    of any judgment or enter into any settlement with respect to
                    the Third Party Claim without the prior written consent of
                    the Indemnifying Party which consent shall not be withheld
                    unreasonably.

14)      TERMINATION.

(1)  TERMINATION  OF  AGREEMENT.  The Parties may  terminate  this  Agreement as
provided below:

               (1)  the Buyer and the Seller may terminate this Agreement by
                    mutual written consent at any time before the Closing;

               (2)  the Buyer may terminate this Agreement by giving written
                    notice to the Seller at any time before Closing (A) in the
                    event the Seller has breached any representation, warranty
                    or covenant contained in this Agreement in any material
                    respect, the Buyer has notified the Seller of the breach,
                    and the breach has continued without cure for a period of
                    ten (10) days after the notice of breach, or (B) if the
                    Buyer has elected to terminate this Agreement in accordance
                    with Section 12 (c), and

               (3)  the Seller may terminate this Agreement by giving written
                    notice to the Buyer at any time before the Closing (A) in
                    the event the Buyer has breached any representation,
                    warranty or covenant contained in this Agreement in any
                    material respect, the Seller has notified the Buyer of the
                    breach, and the breach has continued without cure for a
                    period of 10 days after the notice of breach, or (B) if the
                    Seller has elected to terminate this Agreement in accordance
                    with Section 12(c).

(2)               EFFECT OF TERMINATION.  If any Party terminates this Agreement
                  pursuant to Section 16(a) above, all rights and obligations of
                  the Parties hereunder shall terminate without any liability of
                  either Party to the other Party  (except for any  liability of
                  any  Party  then  in  breach);  provided,  however,  that  the
                  confidentiality  provisions  contained in the  Confidentiality
                  Agreement shall survive termination.

15)  PROHIBITED  ACTIVITIES  OF SELLER.  In order to protect  the  goodwill  and
business interests of the Buyer as to its utilization of the Assets for a period
of twenty (20) years following the Closing,  Seller covenants and agrees that it
and its Affiliates, now or hereafter existing will not:

                                       23
<PAGE>

     (1)  directly or indirectly, request or advise any party to any Gas
          Contract pursuant to which Seller is or Buyer or its Affiliates will
          after Closing be, gathering or treating any natural gas owned or
          controlled by a Person other than the Seller or its Affiliates at or
          through the Calmar Gas Plant and Gas Gathering System, now or
          hereafter existing, to withdraw, curtail or cancel any service to or
          from the Buyer or its Affiliates under the terms of such contract;

     (2)  aid, abet or otherwise assist any person, firm or corporation seeking
          to interfere with the Buyer's or its Affiliates' relationship with the
          parties to, or the term of, any Gas Contract pursuant to which Seller
          is or Buyer will after Closing be, gathering or treating any natural
          gas owned or controlled by a Person other the Seller or its Affiliates
          at or through the Calmar Gas Plant and Gas Gathering System, now or
          hereafter; or

     (3)  acting alone or in conjunction with others, directly or indirectly,
          engage in competition with the Buyer or its Affiliates with respect to
          any Persons to and in respect of the present Gas Contracts pursuant to
          which Seller is or Buyer will after Closing be, gathering or treating
          any natural gas owned or controlled by a Person other the Seller or
          its Affiliates at or through the Calmar Gas Plant and Gas Gathering
          System, or their successors-in-interest, whether for its own account
          or for others.

16)      MISCELLANEOUS.

     (1)  PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. The Parties may issue press
          releases upon the execution of this Agreement, provided that each
          Party shall submit to the other Party a copy of its intended press
          release not less than twenty-four (24) hours prior to the time of
          release and the other party shall have provided written approval of
          such press release which approval shall not be unreasonably withheld.
          No Party shall issue any press release or make any public announcement
          relating to the subject matter of this Agreement during the period
          after the press release hereinbefore mentioned and before the Closing
          without the prior written approval of the other Party which approval
          shall not be unreasonably withheld; provided, however, that any Party
          may make any public disclosure it believes in good faith is required
          by applicable law or any listing or trading agreement concerning its
          publicly traded securities or in order to enable a Party to fulfill
          its obligations in respect of any consents or approvals required
          hereunder (in which case the disclosing Party will use its reasonable
          best efforts to advise the other Party before making the disclosure).

     (2)  NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer any
          rights or remedies upon any Person other than the Parties and their
          respective successors and permitted assigns.

     (3)  SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
          inure to the benefit of the Parties named herein and their respective
          successors and permitted assigns. No Party may assign either this
          Agreement or any of its rights, interests or obligations hereunder
          without the prior written approval of the other Party, except that the
          Buyer may assign its rights hereunder to any wholly owned subsidiary
          of the Buyer, provided that no such assignment shall relieve the Buyer
          of any of its liabilities or obligations hereunder.

     (4)  COUNTERPARTS. This Agreement may be executed in counterparts, each of
          which shall be deemed an original but which together will constitute
          one and the same instrument.

     (5)  HEADINGS. The section headings contained in this Agreement are
          inserted for convenience only and shall not affect in any way the
          meaning or interpretation of this Agreement.

     (6)  NOTICES. All notices, requests, demands, claims, and other
          communications hereunder will be in writing. Any notice, request,
          demand, claim, or other communication hereunder shall be deemed duly
          given two business days after it is sent by registered or certified
          mail, return receipt requested, postage prepaid, and addressed to the
          intended recipient as set forth below:

                                       24
<PAGE>

                         IF TO THE BUYER: Midcoast Canada Operating Corporation

                         c/o Midcoast Energy Resources, Inc.
                         1100 Louisiana Street,
                         Suite 2950
                         Houston, Texas  77002
                         Attn: General Counsel
                         Fax: (713) 653-6710

                         IF TO THE SELLER:Probe Exploration Inc.

                         2400, 530-8th Avenue
                         Calgary, Alberta T2P 3S8
                         Attn:  President
                         Fax: (403) 233-2486

                  Any Party may send any notice, request, demand, claim or other
                  communication  hereunder  to  the  intended  recipient  at the
                  addresses  set forth above  using any other  means  (including
                  personal  delivery,   expedited  courier,  messenger  service,
                  telecopy,  ordinary  mail,  or electronic  mail),  but no such
                  notice, request, demand, claim or other communication shall be
                  deemed to have been duly given unless and until it actually is
                  received by the intended  recipient.  Any Party may change the
                  address to which notices, requests, demands, claims, and other
                  communications  hereunder  are to be  delivered  by giving the
                  other Party notice in the manner herein set forth.

(7)               GOVERNING  LAW.  This  Agreement  shall  be  governed  by  and
                  construed  in  accordance   with  the  domestic  laws  of  the
                  Commonwealth  of Canada without giving effect to any choice or
                  conflict of law provision or rule (whether of the Commonwealth
                  of Canada  or any other  jurisdiction)  that  would  cause the
                  application  of the laws of any  jurisdiction  other  than the
                  Commonwealth of Canada. Each party accepts the jurisdiction of
                  the courts of the Province of Alberta and all courts of appeal
                  in therefrom.

(8)               AMENDMENTS AND WAIVERS.  No amendment of any provision of this
                  Agreement  shall be valid  unless the same shall be in writing
                  and signed by the Buyer and the Seller. No waiver by any Party
                  of any  default,  misrepresentation  or breach of  warranty or
                  covenant  hereunder,  whether  intentional  or not,  shall  be
                  deemed  to  extend  to  any  prior  or   subsequent   default,
                  misrepresentation  or breach of warranty or covenant hereunder
                  or affect in any way any rights arising by virtue of any prior
                  or subsequent such occurrence.

(9)               SEVERABILITY.  Any term or provision of this Agreement that is
                  invalid or  unenforceable in any situation in any jurisdiction
                  shall  not  affect  the  validity  or  enforceability  of  the
                  remaining  terms  and  provisions  hereof or the  validity  or
                  enforceability of the offending term or provision in any other
                  situation or in any other jurisdiction.

(10)              TRANSACTION  EXPENSES.  Each of the Buyer and the Seller  will
                  bear its own  costs and  expenses  (including  legal  fees and
                  expenses)  incurred in connection  with this Agreement and the
                  transactions   contemplated  hereby,  except  as  provided  in
                  paragraph (k) below.

(11)              CERTAIN TAXES. Notwithstanding anything in this Agreement to
                  the contrary, the Seller and/or the Buyer will prepare and
                  file all necessary Tax Returns, elections and other
                  documentation with respect to all transfer, documentary,
                  sales, use, stamp, registration and other Taxes and fees
                  required under Canadian Laws in connection with this Agreement
                  and the consummation of the transactions contemplated hereby,
                  and, the Buyer and/or the Seller will prepare and file the
                  same, if any, required under United States Laws. If required
                  by applicable Laws, each Party will join in the execution of
                  such Tax Returns or other documentation to be prepared by the
                  other Party under this Section 16(k). For clarity and
                  notwithstanding anything to the contrary herein, the Seller
                  and the Buyer shall jointly elect in the prescribed form,
                  pursuant to Section 167(1.1) of the EXCISE TAX ACT (Canada) to
                  have such provisions apply to the transactions contemplated
                  herein and the Buyer shall file such election with Revenue
                  Canada in a timely fashion. Provided that Closing has
                  occurred, the Buyer shall:

                                       25
<PAGE>


               (1)  be liable to the Seller for all Adverse Consequences that
                    the Seller may suffer, sustain, pay or incur; and

               (2)  indemnify and save the Seller and its directors, officers,
                    servants, agents and employees harmless from and against all
                    Adverse Consequences which may be brought against or
                    suffered by the Seller, its directors, officers, servants,
                    agents or employees or which they may sustain, pay or incur
                    as a direct result of any matter or thing arising out of,
                    resulting from or attributable to the election prepared,
                    executed and filed pursuant to Section 167(1.1) of the
                    EXCISE TAX ACT (Canada) pursuant to this Section.

               (3)  in the event that the amount of the Consideration is
                    increased upon the release of all or a portion of the
                    Deferred Contingent Consideration in accordance with the
                    provisions of Section 7(b), any tax returns, elections and
                    other documents filed pursuant to this Section, including
                    without limitation, any elections pursuant to Section
                    167(1.1) of the Excise Tax Act (Canada), shall be amended by
                    the Buyer and/or the Seller accordingly and in a consistent
                    manner between them.

(12)              CONSTRUCTION.  The Parties  have  participated  jointly in the
                  negotiation  and drafting of this  Agreement.  In the event an
                  ambiguity or question of intent or interpretation arises, this
                  Agreement  shall be  construed  as if  drafted  jointly by the
                  Parties  and no  presumption  or burden of proof  shall  arise
                  favoring or disfavoring  any Party by virtue of the authorship
                  of any of the provisions of this  Agreement.  Any reference to
                  any federal,  state,  local or foreign statute or law shall be
                  deemed also to refer to all rules and regulations  promulgated
                  thereunder,  unless the context requires  otherwise.  The word
                  "including" shall mean including without limitation.

(13)              INCORPORATION  OF EXHIBITS  AND  SCHEDULES.  The  Exhibits and
                  Schedules  (including the Disclosure  Schedule)  identified in
                  this Agreement are incorporated herein by reference and made a
                  part hereof.

(14)              BULK  TRANSFERS.   The  Parties  waive   compliance  with  the
                  requirements  of the bulk  sales  law of any  jurisdiction  in
                  connection with the sale of the Assets to the Buyer hereunder.
                  The Seller shall indemnify and hold harmless the Buyer against
                  all Adverse Consequences which may be incurred by the Buyer as
                  a result of noncompliance with any such bulk sales laws.

(15)              ENTIRE  AGREEMENT.  THIS AGREEMENT  (INCLUDING THE TRANSACTION
                  DOCUMENTS REFERRED TO HEREIN) CONSTITUTES THE ENTIRE AGREEMENT
                  AMONG THE PARTIES  AND  SUPERSEDES  ANY PRIOR  UNDERSTANDINGS,
                  AGREEMENTS OR REPRESENTATIONS BY OR AMONG THE PARTIES, WRITTEN
                  OR ORAL,  TO THE  EXTENT  THEY HAVE  RELATED IN ANY WAY TO THE
                  SUBJECT MATTER HEREOF.

(16)              KNOWLEDGE  AND   AWARENESS.   Where  in  this   Agreement,   a
                  representation  and  warranty  is  made  on the  basis  of the
                  knowledge,  belief or  awareness of a Party,  such  knowledge,
                  belief or  awareness  consists  only of the actual  knowledge,
                  belief or  awareness,  as the case may be, of the officers and
                  employees  of such Party and does not include  the  knowledge,
                  belief or awareness of any other Person.

(17)              CONFLICTS. If there is any conflict or inconsistency between a
                  provision of the body of this Agreement and that of a schedule
                  attached hereto or another Transaction Document, the provision
                  of the body of this Agreement  shall  prevail.  If any term or
                  condition of this Agreement conflicts with a term or condition
                  of a Law, the term or condition of such Law shall prevail, and
                  this  Agreement  shall be deemed to be  amended  to the extent
                  required to eliminate any such conflict.


                                       26
<PAGE>

(18)              NO ADDITIONAL REPRESENTATIONS AND WARRANTIES BY SELLER. The
                  Seller makes no representations or warranties to the Buyer in
                  addition to those expressly enumerated in Section 8 (a) and
                  Section 9. Except and to the extent provided in Section 8(a)
                  and 9 the Seller does not make representations or warranties
                  with respect to: (i) the quantity, quality or recoverability
                  of petroleum substances subject to the Gas Contracts; (ii) any
                  estimates of the value of the Assets or the revenues
                  applicable to future operations thereof; (iii) any engineering
                  or other interpretations or economic evaluations respecting
                  the Assets; (iv) the rates of production of petroleum
                  substances subject to the Gas Contracts; (v) the quality,
                  condition or serviceability of the Assets; (vi) the
                  suitability of their use for any purpose; or (vii) the degree
                  to which computer firmware, hardware, software or process
                  control systems included in the Assets, including without
                  limitation, micro codes, application programs, electronic data
                  files and databases, may be impacted or adversely affected by
                  the transition from the year 1999 to 2000 or the leap year in
                  the year 2000. Without restricting the generality of the
                  foregoing, but subject always to Section 8(a) and Section 9,
                  the Buyer acknowledges that it has made its own independent
                  investigation, analysis, evaluation and inspection of the
                  Assets and the state and condition thereof and that it has
                  relied solely on such investigation, analysis, evaluation and
                  inspection and the representations and warranties of the
                  Seller contained in Sections 8(a) and 9 hereof as to its
                  assessment of the condition, quantum and value of the Assets.

(19)              NO LIABILITY FOR COLLATERAL INFORMATION. Except with respect
                  to the representations and warranties in Section 8(a) and
                  Section 9, or in the event of fraud or gross negligence of
                  Seller or its directors, officers, servants, agents or
                  employees, the Buyer forever releases and discharges the
                  Seller and its directors, officers, servants, agents and
                  employees from any claims and all liability to the Buyer or
                  the Buyer's assigns and successors, as a result of the use or
                  reliance upon advice, information or materials pertaining to
                  the Assets which was delivered or made available to the Buyer
                  by the Seller or its directors, officers, servants, agents or
                  employees prior to or pursuant to this Agreement, including,
                  without limitation, any evaluations, projections, reports and
                  interpretive or non-factual materials prepared by or for the
                  Seller, or otherwise in the Seller's possession.

(20)              TIME OF THE ESSENCE. Time shall be of the essence in this
                  Agreement.

(21)              ARBITRATION. Insofar as the Parties are unable to agree on any
                  matter which expressly may be referred to arbitration
                  hereunder, either Party may serve the other Party written
                  notice that it wishes such matter be referred to arbitration.

                  The Parties shall meet within seven (7) days of the receipt of
                  a notice issued  pursuant to this Subsection 14 (u) to attempt
                  to agree  on a  single  arbitrator  qualified  by  experience,
                  education  and  training,  to determine  such  matter.  If the
                  Parties  are  unable  to  agree  on  the   selection   of  the
                  arbitrator, the Party which issued such notice shall forthwith
                  make  application  to a judge of the Court of Queen's Bench of
                  the  Province  of  Alberta  pursuant  to the  ARBITRATION  ACT
                  (Alberta) as amended from time to time,  hereinafter  referred
                  to as the  "ARBITRATION  ACT") for the appointment of a single
                  arbitrator,  and failing  such action on the part of the Party
                  which  issued  such  notice,  the  other  Party  may make such
                  application.

                  The arbitrator  selected  pursuant to shall proceed as soon as
                  is  practicable  to hear and  determine the matter in dispute,
                  and shall be directed to provide a written decision respecting
                  such matter within  forty-five (45) days of  appointment.  The
                  Parties shall provide such  assistance and  information as may
                  be reasonably  necessary to enable the arbitrator to determine
                  such matter.

                  Except  to  the  extent  modified  in  this  Subsection,   the
                  arbitrator shall conduct any arbitration hereunder pursuant to
                  the provisions of the ARBITRATION ACT.


                                       27
<PAGE>
         IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement as
of the date first above written.

                                    SELLER:

                                    PROBE EXPLORATION INC.


                                    Per:______________________________
                                    President


                                    Per:______________________________


                                    BUYER:

                                    MIDCOAST CANADA OPERATING CORPORATION


                                    Per:______________________________    
                                    Vice President


                                    Per:______________________________

                                       28
<PAGE>

                                   Exhibit "A"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                      Gas Gathering and Treating Agreement

                                       29
<PAGE>

                                   Exhibit "B"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                           Area of Interest Agreement

                                       30
<PAGE>


                                   Exhibit "C"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                        Probe System Gathering Agreement

                                       31
<PAGE>

                                   Exhibit "D"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                                Escrow Agreement

                                       32
<PAGE>



                                   Exhibit "E"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                             Intercreditor Agreement

                                       33
<PAGE>



                                  Schedule "1"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                               Disclosure Schedule

                                       34
<PAGE>


                               Schedule "2(a)(i)"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                  Calmar Plant and Gas Gathering System - Maps

                                       35
<PAGE>


                              Schedule "2(a)(iii)"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                              Listed Surface Rights

                                       36
<PAGE>

                               Schedule "2(a)(iv)"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                              Listed Motor Vehicles


                                       NIL

                                       37
<PAGE>

                               Schedule "2(a)(v)"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                              Listed Gas Contracts

                                       NIL

                                       38
<PAGE>


                              Schedule "2(a)(viii)"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                           Listed Permits and Licences

Alberta Energy and Utilities Board Approval No. 7017
Alberta Energy and Utilities Board Approval No. 1997-833
Alberta Energy and Utilities Board Approval No.8239
Alberta Energy and Utilities Board Approval No.30800
Alberta Energy and Utilities Board Approval No.30164
Alberta Energy and Utilities Board Approval No.31174
Alberta Environmental Protection Approval No.11344-01-00
Alberta Environmental Protection Approval No.47779-00-00
County of Leduc No. 25 Development Permit No. D98-027
County of Leduc No. 25 Development Permit No. D98-114
Alberta Environmental Protection Permit No. 97-28-PKL
Alberta Boilers Safety Association Vessel Registration Nos:
0437000; 0438883; 0438908; 0442338; 0442333; 0438616; 0438614; 0439613; 
0436994; 0439612; 0438882; 0438907; 0442339; 0442334;
0430615; 0438613; 0436993; 0439627;
0428501; 0438881; 0438906; 0442340; 0442335; 0438617; 0438612; 0439612; 0436897;
0428929; 0438880; 0438905; 0442341; 0438817; 0438620; 0438611; 0439601; 2732343;
0403529; 0438879; 0438904; 0442331; 0428501; 0438619; 0438609; 0436999; 0436999;
0428929; 0438878; 0438903; 0442332; 0438618; 0438610; 0437000; 0439602; 0439601
0436994; 0436993; 0439613


                                       39
<PAGE>


                               Schedule "2(b)(iv)"
                        to a Purchase and Sale Agreement
                       dated as of March 23, 1999 between
        Probe Exploration Inc. and Midcoast Canada Operating Corporation
                           Leduc/Calmar Original Plant

                                       40