<PAGE>   1
                                                                    EXHIBIT 10.1



                             SUBSCRIPTION AGREEMENT


                                     BETWEEN


                        DUKE ENERGY HYDROCARBONS, L.L.C.


                                    - AND -


                            CANADIAN 88 ENERGY CORP.








                                 MARCH 17, 2000

<PAGE>   2

                             SUBSCRIPTION AGREEMENT

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                          PAGE
ARTICLE 1 INTERPRETATION
<S>                                                                       <C>
   1.1   DEFINITIONS..........................................................1
   1.2   GENDER AND NUMBER....................................................3
   1.3   HEADINGS.............................................................4
   1.4   CALCULATION OF TIME PERIODS..........................................4
   1.5   APPLICABLE LAW.......................................................4
   1.6   SEVERABILITY.........................................................4
   1.7   ENTIRE AGREEMENT.....................................................4
   1.8   AMENDMENTS...........................................................4
   1.9   WAIVER...............................................................5
   1.10   TIME OF ESSENCE.....................................................5
   1.11   SUCCESSORS AND ASSIGNS..............................................5
   1.12   COUNTERPARTS........................................................5
   1.13   FURTHER ACTS........................................................5
   1.14   NO DEALER REPRESENTATIONS...........................................5

ARTICLE 2 SUBSCRIPTION

   2.1   SUBSCRIPTION.........................................................5
   2.2   U.S. $ SUBSCRIPTION..................................................6

ARTICLE 3 CLOSING

   3.1   CLOSING..............................................................6

ARTICLE 4 REPRESENTATIONS AND WARRANTIES

   4.1   REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................6
   4.2   REPRESENTATIONS AND WARRANTIES OF INVESTOR..........................15

ARTICLE 5 CONDITIONS TO CLOSING

   5.1   CONDITIONS TO THE OBLIGATIONS OF EACH PARTY.........................17
   5.2   CONDITIONS TO THE OBLIGATIONS OF INVESTOR...........................18
   5.3   CONDITIONS TO THE OBLIGATIONS OF THE COMPANY........................19
   5.4   WAIVER OF CONDITIONS................................................20

ARTICLE 6 COMPANY'S COVENANTS

   6.1   CONDUCT OF BUSINESS.................................................20
   6.2   COOPERATION.........................................................20
   6.3   CERTAIN ACTS........................................................21
   6.4   ACCESS AND INFORMATION..............................................21
   6.5   NO SHOPPING.........................................................21

ARTICLE 7 INVESTOR'S COVENANTS

   7.1   COOPERATION.........................................................22
   7.2   CERTAIN ACTS........................................................22

ARTICLE 8 DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

   8.1   DIRECTORS' AND OFFICERS' LIABILITY INSURANCE........................22
</TABLE>


<PAGE>   3

<TABLE>
<S>                                                                         <C>
ARTICLE 9 MISCELLANEOUS

   9.1   PUBLICITY...........................................................23
   9.2   NOTICES.............................................................23
   9.3   ASSIGNMENT BY INVESTOR..............................................24
   9.4   TERMINATION OF LETTER OF INTENT.....................................24
   9.5   SURVIVAL OF REPRESENTATIONS AND WARRANTIES..........................24
   9.6   SOLICITATIONS.......................................................24
   9.7   EXPENSES............................................................25
   9.8   EXHIBITS AND SCHEDULES..............................................25
</TABLE>

Exhibit A - Preferential Rights Agreement
Exhibit B - Registration Rights Agreement
Exhibit C - Shareholder Agreement
Schedule 4.1(o)
Schedule 4.1(r)
Schedule 4.1(jj)
Schedule 4.1(kk)

<PAGE>   4

          THIS SUBSCRIPTION AGREEMENT made the 17th day of March, 2000,

BETWEEN:

               DUKE ENERGY HYDROCARBONS, L.L.C. a corporation incorporated
               pursuant to the laws of Delaware (hereinafter referred to as
               "INVESTOR")

                                                             OF THE FIRST PART

                                     - and -

               CANADIAN 88 ENERGY CORP., a corporation incorporated pursuant to
               the laws of Canada (hereinafter referred to as the "COMPANY")

                                                             OF THE SECOND PART

         WHEREAS the Company believes that it is in the best interests of its
shareholders to enter into an equity transaction with a strategic investor to
provide additional capital for the Company to allow it to continue to actively
develop its inventory of exploration and development prospects in western
Canada;

         AND WHEREAS the parties hereto have executed a letter of intent dated
February 7, 2000 (the "LETTER OF INTENT") that contains certain of the terms
upon which Investor is prepared to subscribe for and purchase certain securities
of the Company from the treasury of the Company;

         NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants and conditions herein contained, and other good and valuable
consideration (the receipt and sufficiency whereof is hereby acknowledged by
each party hereto), the parties hereto agree as follows:

                                   ARTICLE 1
                                 INTERPRETATION

1.1      DEFINITIONS

          As used in this Agreement, the following terms have the following
          meanings:

         "AFFILIATE" has the meaning set forth in the Securities Act (Alberta).

         "AGREEMENT", "THIS AGREEMENT", "HERETO", "HEREIN", "HEREBY",
         "HEREUNDER", "HEREOF" and similar expressions refer to this Agreement
         in its entirety and not to any particular Article, Section, Subsection,
         Clause, Subdivision or other portion hereof and include any and every
         amending agreement and agreement supplemental hereto.

         "APPLICABLE LAWS" means all applicable securities, corporate,
         environmental and other laws, rules, regulations, notices and policies.

         "BUSINESS DAY" means a day other than a Saturday or Sunday or a day
         when banks in the City of Calgary are not generally open for business.

         "CDN $" means Canadian Dollars.

         "CLOSING" means the completion of the sale and purchase of the
         Purchased Securities contemplated by this Agreement.

<PAGE>   5

                                      -2-


         "CLOSING DATE" means Friday, March 24, 2000.

         "COMMON SHARES" means the shares designated as "common shares" in the
         Company's articles.

         "CONFIDENTIALITY AGREEMENT" means the confidentiality agreement dated
         July 7, 1999 between Investor and the Company.

         CORPORATE GOVERNANCE AND TRANSITION ARRANGEMENTS LETTER AGREEMENT"
         means the letter agreement of even date herewith between the Company
         and Investor, which letter agreement relates to certain corporate
         governance and transition arrangements.

         "EXCHANGES" means The Toronto Stock Exchange and the American Stock
         Exchange.

         "ENVIRONMENTAL LAWS" has the meaning set forth in Section 4.1(aa).

         "FINANCIAL STATEMENTS" has the meaning set forth in Section 4.1(s).

         "GAAP" means generally accepted accounting principles as recognized
         from time to time by the Canadian Institute of Chartered Accountants or
         any applicable successor institute.

         "GOVERNMENTAL AUTHORITY" means any government, any political
         subdivision, any agency and any entity or person exercising executive,
         legislative, judicial, regulatory or administrative functions of
         government.

         "INDEBTEDNESS" means: (a) obligations for borrowed money or
         representing reimbursement obligations in respect of any letter of
         credit (whether secured or unsecured); (b) the principal amount of
         obligations representing the deferred purchase price of property other
         than accounts payable arising in connection with purchases in the
         ordinary course of business; (c) the present value of obligations in
         respect of operating or capital leases, whether or not such obligations
         would be required to be shown as a liability on a balance sheet under
         GAAP; and (d) any guarantee, grant of security or contingent liability
         in respect of any obligations of the type referred to in items (a), (b)
         or (c) above or any agreement to purchase or repurchase any
         indebtedness of another Person or any agreement contingently to supply
         or advance funds.

         "LIEN" means any mortgage, lien, security interest, lease or other
         claim, charge or encumbrance.

         "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means any change
         (or any condition, event or development involving a prospective change)
         in, or effect on, the business, operations, results of operations,
         assets, capitalization, financial condition, licences, permits,
         concessions, rights, liabilities, prospects or privileges, whether
         contractual or otherwise, of the Company or its Subsidiaries which is
         materially adverse to the business of the Company and its Subsidiaries,
         taken as a whole, or which would have a material adverse effect on the
         ability of the Company to consummate the transactions contemplated
         hereby.

         "NOVAL" means Gregory S. Noval, an individual residing in Turner
         Valley, Alberta.

         "NOVAL REPRESENTATION AGREEMENT" means the agreement dated of even date
         herewith among the Company, Investor and Noval relating to certain
         representations of Noval being provided in connection with the
         transactions contemplated hereby.

         "PERSON" includes an individual, partnership, corporation (including a
         business trust), joint stock company, trust, unincorporated
         association, joint venture or other entity, or a stock exchange,
         trustee in bankruptcy, receiver or any Governmental Authority.

<PAGE>   6

                                      -3-


         "PREFERENTIAL RIGHTS AGREEMENT" means the preferential rights agreement
         among the Company, Canadian 88 Resources Corp. and Canadian 88 Energy
         (U.S.A.) Inc. and Investor, in the form of Exhibit A hereto.

         "PUBLIC RECORD" means all information filed with the securities
         commissions, or similar regulatory authorities in Canada and the United
         States, including without limitation, annual information forms,
         information circulars, proxy statements, financial statements,
         management's discussion and analysis of results of operations, periodic
         reports, current and other reports, prospectuses, offering memoranda
         and registration statements and any other information filed with any
         securities commission or similar regulatory authorities in Canada and
         the United States in compliance, or intended compliance, with any
         Applicable Laws.

         "PURCHASED SECURITIES" has the meaning set forth in Section 2.1 hereof.

         "REGISTRATION RIGHTS AGREEMENT" means the registration rights agreement
         between the Company and Investor, substantially in the form of Exhibit
         B hereto.

         "RETURNS" has the meaning set forth in Section 4.1(dd)(i)(B).

         "SHAREHOLDER AGREEMENT" means the shareholder agreement among the
         Company, Investor and Noval, in the form of Exhibit C hereto.

         "SHAREHOLDER RIGHTS PLAN" means the shareholder rights plan of the
         Company governed by the Shareholder Rights Plan Agreement dated
         December 22, 1994 between the Company and Montreal Trust Company of
         Canada.

         "STOCK OPTION PLAN" means the stock option plan of the Company which
         provides for the grant of options to purchase up to an aggregate of
         10,606,611 Common Shares of the Company pursuant to which options to
         purchase 8,248,340 Common Shares have been granted and remain
         outstanding.

         "SUBSIDIARY" has the meaning set forth in the Securities Act (Alberta),
         and in the case of the Company, also includes The Canadian 88 1990 Oil
         & Gas Exploration and Development Partnership, The Canadian 88 1990
         Hydrocarbon Processing Gas Plant Joint Venture, Canadian 88 Diversified
         Energy Fund 1991 Limited Partnership and Longview Resource Management
         Corporation.

         "TAXES" has the meaning set forth in Section 4.1(dd)(i).

         "TRANSACTION DOCUMENTS" means, collectively, this Agreement, the
         Registration Rights Agreement, the Shareholder Agreement, the
         Preferential Rights Agreement, the Noval Representation Agreement and
         the Corporate Governance and Transition Arrangements Letter Agreement
         and the agreements referred to in the latter agreement.

         "YEAR 2000 COMPLIANT" and "YEAR 2000 COMPLIANCE" has the meaning set
         forth in Section 4.1(ff).

1.2      GENDER AND NUMBER

         Words importing the singular number only shall include the plural, and
vice-versa and words importing the masculine gender shall include the feminine
gender and neuter gender.



<PAGE>   7
                                      -4-


1.3      HEADINGS

         The division of this Agreement into Articles and Sections and the
Article and Section headings are for convenience of reference only and shall not
affect the interpretation or construction of this Agreement.

1.4      CALCULATION OF TIME PERIODS

         Unless otherwise specified herein, the period of time within which or
following which any act is to be done or step taken pursuant to this Agreement
shall be calculated by excluding the day on which the period commences and
including the day on which the period ends. If the last day of such period is
not a Business Day, the period in question shall end on the next Business Day.

1.5      APPLICABLE LAW

         This Agreement shall be interpreted and governed in accordance with the
laws of the Province of Alberta (being the forum conveniens) and the parties
hereby submit to the jurisdiction of the courts of Alberta in connection with
any dispute concerning this Agreement or the subject matter thereof. Service of
any documents on the parties hereto in connection with any legal proceedings
shall be effective if the same are delivered by courier: (i) in the case of
Investor, to Duke Energy Hydrocarbons, L.L.C., Suite 650, 10777 Westheimer,
Houston, Texas, 77042, Attention: President; and (ii) in the case of the
Company, to Canadian 88 Energy Corp., 700, 400 Third Avenue S.W., Calgary,
Alberta, T2P 4H2, Attention: Chief Financial Officer.

1.6      SEVERABILITY

         If any provision of this Agreement or any application thereof shall be
declared or held to be invalid, illegal or unenforceable in whole or in part
whether generally or in any particular jurisdiction, such provision shall be
deemed to be amended to the extent necessary to cure such invalidity, illegality
or unenforceability, and the validity, legality or enforceability of the
remaining provisions of this Agreement, both generally and in every other
jurisdiction, shall not in any way be affected or impaired thereby.

1.7      ENTIRE AGREEMENT

         (a)      This Agreement, the other Transaction Documents and the other
                  agreements and instruments to be delivered at Closing in
                  connection with the transactions contemplated hereby and
                  thereby represent the entire agreement of the Company and
                  Investor with respect to the subject matter hereof, and there
                  are no promises, agreements, undertakings, representations or
                  warranties by the Company or Investor relative to the subject
                  matter hereof not expressly set forth or referred to herein or
                  therein.

         (b)      The Company agrees to waive the standstill provisions of
                  section C.11 of the Confidentiality Agreement to the extent
                  necessary in order to permit the consummation of the
                  transactions contemplated hereby and upon the Closing such
                  section C.11 shall terminate.

1.8      AMENDMENTS

         No amendment or modification of this Agreement shall be binding unless
in writing and signed by all of the parties hereto.


<PAGE>   8

                                      -5-


1.9      WAIVER

         No waiver by any party hereto of any breach of any of the provisions of
this Agreement shall take effect or be binding upon the party unless in writing
and signed by such party. Unless otherwise provided therein, such waiver shall
not limit or affect the rights of such party with respect to any other breach.

1.10     TIME OF ESSENCE

         Time shall be of the essence of this Agreement.

1.11     SUCCESSORS AND ASSIGNS

         This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.

1.12     COUNTERPARTS

         This Agreement may be executed in several counterparts, each of which
when so executed shall be deemed to be an original, and such counterparts
together shall constitute one and the same agreement.

1.13     FURTHER ACTS

         The parties hereto agree to execute and deliver such further and other
documents and perform and cause to be performed such further and other acts and
things as may be reasonably necessary or desirable in order to give full effect
to this Agreement and every part thereof.

1.14     NO DEALER REPRESENTATIONS

         No dealer or salesman has been authorized by the Company to give any
information or to make any representations in connection with the issue or sale
of the Purchased Securities and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company.

                                   ARTICLE 2
                                  SUBSCRIPTION

2.1      SUBSCRIPTION

         Investor hereby agrees to subscribe for and purchase from the treasury
of the Company such number of Common Shares (the "PURCHASED SECURITIES") not to
exceed the lesser of:

         (a)      25,000,000 Common Shares less the number of Common Shares, not
                  to exceed 2,500,000, which will be purchased, directly or
                  indirectly, by directors, officers and key employees of the
                  Company on a flow-through basis from the treasury of the
                  Company on the Closing Date and in respect of which written
                  notice has been provided to Investor at least two Business
                  Days prior to the Closing Date; and

         (b)      such number of Common Shares which when added to the 1,380,200
                  Common Shares currently owned by Investor and its Affiliates
                  would constitute 20% less one Common Share of the issued and
                  outstanding Common Shares of the Company as of the Closing
                  Date;

and the Company agrees to sell to Investor the Purchased Securities for a
consideration of CDN $2.00 per share, subject to the terms and conditions set
forth herein. Investor shall pay the purchase price for the Purchased Securities
at the Closing by certified cheque or bank draft or such other means that is
acceptable to


<PAGE>   9
                                      -6-


Investor and the Company in U.S. $ or CDN $. The Company hereby accepts the
subscription by Investor, and agrees to issue to Investor the Purchased
Securities in accordance with the provisions of this Agreement.

2.2      U.S. $ SUBSCRIPTION

         For the purposes hereof, the U.S. $ equivalent of the subscription
price in CDN $ shall be determined based upon the spot rate of exchange for such
conversion as quoted by the Bank of Canada at approximately 10:00 a.m. (Calgary
time) one day prior to the Closing Date.

                                    ARTICLE 3
                                     CLOSING

3.1      CLOSING

         The Closing shall take place on the Closing Date at 11:00 a.m. at the
offices of McCarthy Tetrault, or at such other place and at such other time
as the Company and Investor shall mutually agree in writing; PROVIDED HOWEVER,
where a condition to Closing cannot be satisfied on or before March 24, 2000,
the Closing Date may be extended, at the option of the party having the
condition in its favour, to a date no later than April 14, 2000 and during such
extension the other party shall be obliged to use all reasonable commercial
efforts to satisfy such condition to the extent the circumstances giving rise to
the unsatisfied condition are capable of being remedied or are within the
control of such party in order to satisfy the condition.

                                   ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

4.1      REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to Investor as follows:

         (a) each of the Company and its Subsidiaries:

                  (i)      has been duly incorporated (or formed in the case of
                           Subsidiaries that are not corporations) and organized
                           and is validly subsisting under the laws of its
                           jurisdiction of incorporation;

                  (ii)     is current with all filings required to be made under
                           the laws of Canada, the provinces of Canada, the
                           United States and all other jurisdictions in which it
                           is incorporated or carries on any business, except
                           where failure to do so would not in the aggregate
                           have a Material Adverse Effect on the Company and its
                           Subsidiaries, taken as a whole;

                  (iii)    has all requisite power and authority, and except
                           where failure to be so qualified would not in the
                           aggregate have a Material Adverse Effect on the
                           Company and its Subsidiaries, taken as a whole, is
                           duly qualified, to carry on its business as it is now
                           conducted and as currently proposed to be conducted,
                           and to own, lease and operate its properties and
                           assets in each of the jurisdictions in which it
                           carries on its business or owns, leases or operates
                           its properties or assets;

         (b)      each of the Company and its Subsidiaries has conducted and is
                  conducting its business in compliance in all respects with all
                  Applicable Laws of each jurisdiction in which its business is
                  carried on and holds and maintains in good standing all
                  necessary licences, leases, permits, authorizations and other
                  approvals necessary to permit it to conduct its respective
                  business or


<PAGE>   10
                                      -7-


                  to own, lease or operate its properties and assets (including
                  without limitation any rights or registrations relating to any
                  intellectual property rights) except where the failure to
                  conduct its business or to obtain any license, lease, permit,
                  authorization or other approval would not have a Material
                  Adverse Effect on the Company and its Subsidiaries, taken as a
                  whole, and none of the Company or any of its Subsidiaries has
                  received any notice of proceedings relating to the revocation
                  or modification of any such licence, lease, permit,
                  authorization or other approval which may singly or in the
                  aggregate have a Material Adverse Effect on the Company and
                  its Subsidiaries, taken as a whole;

         (c)      the Company has authorized the issuance and sale of the
                  Purchased Securities;

         (d)      subject to receipt by the Company of the consideration
                  referred to in Section 2.1, the Purchased Securities will be,
                  at the time of Closing, duly and validly created and issued
                  and outstanding as fully paid and non-assessable shares;

         (e)      all of the Subsidiaries of the Company are wholly owned,
                  either directly or indirectly, by the Company, except The
                  Canadian 88 1990 Oil & Gas Exploration and Development
                  Partnership, The Canadian 88 1990 Hydrocarbon Processing Gas
                  Plant Joint Venture, Canadian 88 Diversified Energy Fund 1991
                  Limited Partnership, RMX Exploration Ltd. and Longview
                  Resource Management Corporation;

         (f)      each of the Company and its Subsidiaries has the necessary
                  corporate power and authority to execute and deliver, as
                  applicable, this Agreement and the other Transaction Documents
                  to which it is a party, and to perform its obligations
                  hereunder and thereunder and to carry out the transactions
                  contemplated hereby and thereby, including the issuance of the
                  Purchased Securities, and this Agreement has been, and the
                  other Transaction Documents to which each respectively is a
                  party will as at the time of Closing be, duly authorized,
                  executed and delivered by the Company or the relevant
                  Subsidiary of the Company and constitute legal, valid and
                  binding obligations of the Company or the relevant Subsidiary
                  of the Company, enforceable in accordance with their
                  respective terms, subject to applicable bankruptcy,
                  insolvency, moratorium, reorganization and other laws and
                  equitable principles affecting creditors' rights generally,
                  the statutory and equitable powers of the courts to stay
                  proceedings before them and the execution of judgments and the
                  fact that specific performance and injunctive relief are
                  equitable remedies which may be ordered by a court in its
                  discretion and, accordingly, may not be available as a remedy
                  in an action to enforce a covenant;

         (g)      the execution and delivery of this Agreement and the other
                  Transaction Documents to which the Company or the relevant
                  Subsidiary of the Company is a party, the performance by the
                  Company or the relevant Subsidiary of the Company of their
                  respective obligations hereunder and thereunder, including the
                  sale and delivery of the Purchased Securities at the time of
                  Closing:

                  (i)      do not and will not result in a breach of, and do not
                           and will not create a state of facts which, after
                           notice or lapse of time or both, will result in a
                           breach of, and do not and will not create a right of
                           termination or acceleration under, and do not and
                           will not conflict with:

                           (A)      any Applicable Laws applicable to the
                                    Company or the relevant Subsidiary;

                           (B)      any terms, conditions or provisions of the
                                    articles, by-laws, or resolutions of the
                                    directors or shareholders, of the Company or
                                    the relevant Subsidiary;


<PAGE>   11
                                      -8-


                           (C)      any terms, conditions or provisions of any
                                    indenture, agreement or instrument to which
                                    the Company or the relevant Subsidiary is a
                                    party or by which it is contractually bound
                                    as at the date hereof or the Closing Date;
                                    or

                           (D)      any judgment, decree or order of any court
                                    or Governmental Authority having
                                    jurisdiction over or binding any of the
                                    Company or its Subsidiaries or their
                                    properties or assets;

                           except, in the case of Sections 4.1(g)(i)(A), (C) and
                           (D) above, for such breaches, rights or conflicts
                           with that, alone or in the aggregate, would not have
                           a Material Adverse Effect on the Company and its
                           Subsidiaries, taken as a whole; and

                  (ii)     will not result in the creation or imposition of any
                           Lien upon any properties or assets of the Company or
                           any of its Subsidiaries pursuant to any mortgage,
                           note, indenture, contract, agreement, instrument,
                           lease or other document to which the Company or any
                           of its Subsidiaries is a party or by which it is
                           bound or to which any of the property or assets of
                           the Company or any of its Subsidiaries is subject;

         (h)      the issued and outstanding Common Shares at the date hereof
                  are listed and posted for trading on the Exchanges;

         (i)      the authorized share capital of the Company consists of an
                  unlimited number of Common Shares, an unlimited number of
                  Class B non-voting common shares and an unlimited number of
                  six classes of preferred shares designated First through Sixth
                  Preferred Shares, issuable in series, of which only
                  106,706,640 Common Shares and no other shares are currently
                  issued and outstanding, each of which is validly issued, fully
                  paid and non-assessable;

         (j)      except for the approval of the Exchanges on customary
                  conditions (including the absence of any requirement for
                  shareholder approval) and the filing of reports and payment of
                  fees respecting exempt trades under the securities legislation
                  of the Province of Alberta, no consent, approval,
                  authorization or order of or filing, registration or
                  qualification with any court, Governmental Authority or any
                  other Person is required under Applicable Laws for the
                  execution, delivery and performance by the Company or the
                  relevant Subsidiaries of the Company of this Agreement or any
                  of the other Transaction Documents or the consummation by it
                  of the transactions contemplated herein or therein, unless
                  such consents, approvals, authorizations, orders, filings,
                  registrations or qualifications are specifically contemplated
                  by the other Transaction Documents to be sought or to occur
                  after the Closing Date;

         (k)      none of the Company or any of its Subsidiaries has received
                  notice from any court or Governmental Authority of any
                  jurisdiction in which it carries on part of its business or
                  owns or leases any property of any restriction on its ability
                  to or of a requirement for it to qualify (in addition to any
                  qualification already obtained) to, nor is the Company or any
                  of its Subsidiaries otherwise aware of any restriction on its
                  ability to or of a requirement for it to qualify (in addition
                  to any qualification already obtained) to, conduct its
                  business as it is now conducted and as currently proposed to
                  be conducted, and own, lease and operate its properties, other
                  than any such restriction or requirement that would not have a
                  Material Adverse Effect on the Company and its Subsidiaries,
                  taken as a whole;

         (l)      none of the Company or any of its Subsidiaries is in violation
                  of its constating documents or by-laws, and other than in
                  respect of a default that would not have a Material Adverse
                  Effect on the Company or its Subsidiaries, taken as a whole,
                  none of the Company or any of its Subsidiaries is in default
                  in the performance or observance of any obligation, agreement,
                  covenant or condition contained in any contract, indenture,
                  mortgage, loan agreement, note,


<PAGE>   12

                                      -9-


                  lease or other instrument to which it is a party or by which
                  it may be bound or to which any of its property or assets is
                  subject;

         (m)      no person has any agreement, option, right or privilege with
                  or against the Company or any Subsidiary thereof, for the
                  purchase, subscription or issuance of shares, issued or
                  unissued, in the capital of the Company or any Subsidiary
                  thereof, except for the issuance of Common Shares pursuant to
                  this Agreement, the other Transaction Documents, certain
                  Resource Agreements dated December 31, 1999 to issue up to
                  1,363,636 flow-through Common Shares, the Company's Stock
                  Option Plan, the Company's Employee Share Savings Plan and the
                  Company's Shareholder Rights Plan;

         (n)      no event of default under any agreement or instrument pursuant
                  to which Indebtedness of the Company or any of its
                  Subsidiaries has been issued, and no event which with the
                  giving of notice or the passage of time, or both, would
                  constitute an event of default under any such agreement or
                  instrument, has occurred and is continuing, other than any
                  event of default or such other event that would not have a
                  Material Adverse Effect on the Company or its Subsidiaries,
                  taken as a whole;

         (o)      except as set forth in Schedule 4.1(o), there are no actions,
                  suits or proceedings, whether on behalf of or against the
                  Company or its Subsidiaries pending or, to the knowledge of
                  the Company or its Subsidiaries, threatened against or
                  affecting the Company or its Subsidiaries at law or in equity,
                  before or by any court or Governmental Authority, commission,
                  board, bureau, agency or instrumentality, domestic or foreign,
                  and which may in any way have a Material Adverse Effect on the
                  Company and its Subsidiaries, taken as a whole;

         (p)      no order, ruling or determination having the effect of
                  ceasing, suspending or restricting trading in any securities
                  of the Company or the sale of the Purchased Securities has
                  been issued and remains in effect and no proceedings,
                  investigations or inquiry for such purpose are pending or, to
                  the knowledge of the Company, contemplated or threatened;

         (q)      there has been no Material Adverse Change (actual or proposed,
                  whether financial or otherwise) since September 30, 1999 in
                  the business, affairs, operations, assets, liabilities
                  (contingent or actual), capital or ownership of the Company
                  and its Subsidiaries, taken as a whole;

         (r)      except as set forth in Schedule 4.1(r), the Company has not
                  entered into or amended or modified any written or oral
                  contract that is currently in force for the employment or
                  services of any senior manager or officer of the Company or
                  its Subsidiaries, except for such contracts not in excess of
                  $25,000 individually or $100,000 in the aggregate;

         (s)      the Company has furnished to Investor true, complete and
                  accurate copies of the Company's audited consolidated
                  financial statements as of and for the fiscal period ended
                  December 31, 1998, and unaudited consolidated financial
                  statements as of and for the periods ended March 31, 1999,
                  June 30, 1999 and September 30, 1999, which statements
                  include, among other things, consolidated balance sheets of
                  the Company as of December 31, 1997 and 1998 and March 31,
                  1999, June 30, 1999 and September 30, 1999, the related
                  consolidated statements of earnings and retained earnings and
                  of statements of changes in financial position or cash flows
                  for the years or periods ended December 31, 1997 and 1998 and
                  March 31, 1999, June 30, 1999 and September 30, 1999
                  (hereinafter collectively referred to as the "FINANCIAL
                  STATEMENTS"). Each of the Financial Statements was prepared in
                  accordance with the books and records of the Company and the
                  Subsidiaries (other than The Canadian 88 1990 Oil & Gas
                  Exploration and Development Partnership, The Canadian 88 1990
                  Hydrocarbon Processing Gas Plant Joint Venture, Canadian 88
                  Diversified Energy Fund 1991 Limited Partnership, RMX
                  Exploration Ltd. and Longview Resource Management Corporation
                  which in accordance with GAAP, are not consolidated in the
                  statements of Canadian 88), and presents fairly in accordance
                  with GAAP the financial position and results of operations and
                  changes in financial position of the Company and its
                  Subsidiaries (other than The Canadian 88 1990 Oil & Gas
                  Exploration and Development Partnership, The Canadian 88 1990
                  Hydrocarbon Processing Gas Plant Joint Venture, Canadian 88
                  Diversified Energy Fund 1991 Limited Partnership, Canadian 88
                  Diversified Energy Fund 1991 Limited Partnership, RMX
                  Exploration Ltd. and Longview Resource Management Corporation
                  which,



<PAGE>   13

                                      -10-


                  in accordance with GAAP, are not consolidated in the
                  statements of Canadian 88) as of the date thereof or for the
                  period which it purports to cover and includes the liabilities
                  of the Company and all of its Subsidiaries other than RMX
                  Exploration Ltd. and Longview Resource Management Corporation;

         (t)      the Company is a registrant and a "foreign private issuer"
                  under the U.S. Securities Exchange Act of 1934, as amended,
                  and is a "reporting issuer" under the securities laws of each
                  of those provinces of Canada that have the "reporting issuer"
                  concept in their securities legislation. The Company is not in
                  default or violation of any material requirement of any
                  securities laws or related rules, regulations, notices and
                  policies in Canada or the United States. The information and
                  statements set forth in the Public Record, when filed, were
                  true, correct, and complete in all material respects and did
                  not, when filed, contain an untrue statement of a material
                  fact or omit to state a material fact necessary in order to
                  make the statements therein, in light of the circumstances
                  under which they were made, not misleading and the information
                  and statements set forth in the Public Record, when filed,
                  complied in all material respects with all applicable
                  requirements of all Applicable Laws. The Company has complied
                  with all Applicable Laws with respect to making full, true and
                  timely disclosure of all material facts relating to the
                  Company (taken with its Subsidiaries as a whole), and their
                  business and operations, taken as a whole, and the Company has
                  not filed any confidential material change reports which
                  remain confidential. For purposes of this Section 4.1(t),
                  "material fact" shall have the meaning ascribed thereto under
                  applicable securities laws in Canada;

         (u)      since September 30, 1999, each of the Company and its
                  Subsidiaries has conducted its business in the ordinary course
                  consistent with prior practice, and has not changed materially
                  any aspect of their respective current businesses, including
                  without limitation, taking or permitting any action to (i)
                  declare or pay dividends or make distributions on the Common
                  Shares or purchase or issue any Common Shares or other
                  securities of the Company, other than purchasing 27,900 Common
                  Shares pursuant to the Company's normal course issuer bid,
                  agreeing to issue up to 1,363,636 flow-through Common Shares
                  pursuant to certain Resource Agreements dated December 31,
                  1999, distributing those common shares of Prize Energy Inc.
                  held by the Company to the holders of the Company's Common
                  Shares as a dividend in specie and issuances of Common Shares
                  pursuant to existing option agreements under the Company's
                  Stock Option Plan and its Employee Share Savings Plan; (ii)
                  affect or change the capital structure of the Company; (iii)
                  merge, amalgamate, consolidate or enter into any business
                  combination or other similar transaction with any other Person
                  or acquire any stock or equity interest in any other Person or
                  acquire substantially all the assets of any other Person; (iv)
                  amend the Company's charter or bylaws; or (v) agree or commit
                  to do any of the foregoing, except pursuant to this Agreement,
                  the other Transaction Documents or existing stock option
                  agreements and the Company's Employee Share Savings Plan;

         (v)      the data and information in respect of each of the Company and
                  its Subsidiaries and their respective assets, reserves,
                  liabilities, business and operations, taken as a whole,
                  provided by the Company or its advisors to Investor or its
                  advisors was and is accurate and correct in all material
                  respects as at the respective dates thereof and did not and
                  does not omit any data or information necessary to make any
                  data or information provided not misleading as at the
                  respective dates thereof;



<PAGE>   14

                                      -11-


         (w)      except:

                  (i)      as disclosed or reflected in the consolidated
                           unaudited financial statements of the Company as at
                           September 30, 1999, previously delivered to Investor;
                           and

                  (ii)     for liabilities and obligations:

                           (A)      incurred in the ordinary course of business
                                    and consistent with past practice, or

                           (B)      incurred pursuant to the terms of this
                                    Agreement,

                                    the Company and its Subsidiaries, taken as a
                                    whole, have not incurred any material
                                    liabilities of any nature, whether accrued,
                                    contingent or otherwise or which would be
                                    required by generally accepted accounting
                                    principles applicable in Canada to be
                                    reflected on a consolidated balance sheet of
                                    the Company as of the date hereof;

         (x)      the Company has not retained nor will it retain any financial
                  advisor, broker, agent or finder or paid or agreed to pay any
                  financial advisor, broker, agent or finder on account of this
                  Agreement, any transaction contemplated hereby or any
                  transaction presently ongoing or contemplated. (Investor
                  acknowledges that it has been informed of a claim by Griffiths
                  McBurney and Goepel McDermid for possible entitlement to a
                  commission arising from the within transaction, which claim
                  has been denied by the Company. Such claim, even if it is
                  eventually determined to be valid, shall not be considered a
                  breach of the representations contained in this subclause
                  4.1(x));

         (y)      all material assets or properties of the Company and its
                  Subsidiaries, taken as a whole, which generate the revenues of
                  the Company and its Subsidiaries, taken as a whole (other than
                  that share of the revenues attributable to the minority
                  interests in the Company's Subsidiaries, the financial
                  statements of which are not consolidated with the Company),
                  are legally and beneficially owned by the Company or one of
                  its Subsidiaries or are leased or licensed on commercial terms
                  for the benefit of the Company or its Subsidiaries;

         (z)      the corporate records and minute books of the Company and each
                  of its Subsidiaries have been maintained in accordance with
                  all applicable statutory requirements and are complete and
                  accurate in all material respects;

         (aa)     to the best of the knowledge of the Company:

                  (i)      neither the Company nor any of its Subsidiaries is
                           (or knowingly is, in respect of non-operated
                           properties) in material violation of any applicable
                           federal, provincial, municipal or local laws,
                           regulations, orders, government decrees or ordinances
                           with respect to environmental, health or safety
                           matters (collectively, the "ENVIRONMENTAL LAWS");

                  (ii)     the Company and each of its Subsidiaries has operated
                           its business at all times and has received, handled,
                           used, stored, treated, shipped and disposed of all
                           contaminants without material violation of
                           Environmental Laws;

                  (iii)    there have been no material spills, releases,
                           deposits or discharges of hazardous or toxic
                           substances, contaminants or wastes which have not
                           been rectified or are in the process of being
                           rectified on any of the real property owned or leased
                           by the Company or any of its Subsidiaries during the
                           period of its ownership or tenure or under its
                           control during the period in which it has had
                           control;
<PAGE>   15
                                      -12-

                  (iv)     there have been no releases, deposits or discharges,
                           in material violation of Environmental Laws, of any
                           hazardous or toxic substances, contaminants or wastes
                           into the earth, air or into any body of water or any
                           municipal or other sewer or drain water systems by
                           the Company or any of its Subsidiaries;

                  (v)      no material orders, directions or notices have been
                           issued and remain outstanding pursuant to any
                           Environmental Laws relating to the business or assets
                           of the Company or any of its Subsidiaries other than
                           abandonment and similar notices issued in connection
                           with the Company's normal course of business taken as
                           a whole; and

                  (vi)     the Company and each of its Subsidiaries holds all
                           material licences, permits and approvals required
                           under any Environmental Laws in connection with the
                           operation of its business and the ownership and use
                           of its assets and all such licences, permits and
                           approvals are in full force and effect;

         (bb)     neither the Company nor any of its Subsidiaries has received
                  notice of any proposed environmental policies or laws which
                  the Company reasonably believes would constitute a Material
                  Adverse Change in respect of any natural gas midstream
                  business or any oil and/or gas exploration, development or
                  production operations of the Company, taken as a whole, other
                  than those that apply to the industry generally;

         (cc)     policies of insurance in force as of the date hereof naming
                  the Company or any of its Subsidiaries, as the case may be, as
                  an insured adequately cover all risks reasonably and prudently
                  foreseeable in the operation and conduct of the business of
                  the Company, taken as a whole, including, without limitation,
                  directors' and officers' insurance, as would be customary in
                  respect of the businesses carried on by the Company, including
                  indirectly through its Subsidiaries. All such policies of
                  insurance shall remain in force and effect and shall not be
                  cancelled or otherwise terminated as a result of the
                  transactions contemplated hereby;

         (dd)     (i) for purposes of this Agreement, the following definitions
                  shall apply:

                           (A)      the term "TAXES" shall mean all taxes,
                                    however denominated, including any interest,
                                    penalties or other additions that may become
                                    payable in respect thereof, imposed by any
                                    federal, provincial, territorial, state,
                                    municipal, local or foreign government or
                                    any agency or political subdivision of any
                                    such government, which taxes shall include,
                                    without limiting the generality of the
                                    foregoing, all income or profits taxes
                                    (including, but not limited to, federal
                                    income taxes and provincial income taxes),
                                    payroll and employee withholding taxes,
                                    employment insurance, social insurance
                                    taxes, sales and use taxes, ad valorem
                                    taxes, excise taxes, franchise taxes, gross
                                    receipts taxes, business license taxes,
                                    occupation taxes, real and personal property
                                    taxes, stamp taxes, environmental taxes,
                                    transfer taxes, workers' compensation and
                                    other governmental charges, and other
                                    obligations of the same or of a similar
                                    nature to any of the foregoing, which the
                                    Company or any of its Subsidiaries is
                                    required to pay, withhold or collect;

                           (B)      the term "RETURNS" shall mean all reports,
                                    estimates, declarations of estimated tax,
                                    information statements and returns relating
                                    to, or required to be filed in connection
                                    with, any Taxes;

                  (ii)     all Returns required to be filed by or on behalf of
                           the Company or any of its Subsidiaries have been duly
                           filed on a timely basis and such Returns are true,
                           complete and correct in all material respects. All
                           Taxes shown to be payable on the


<PAGE>   16

                                      -13-


                           Returns or on subsequent assessments with respect
                           thereto have been paid in full on a timely basis or
                           have been accrued on the Company's financial
                           statements and no other Taxes are payable by the
                           Company or any of its Subsidiaries with respect to
                           items or periods covered by such Returns;

                  (iii)    the Company and each of its Subsidiaries has paid or
                           provided adequate accruals in its unaudited financial
                           statements for the period ended September 30, 1999
                           for Taxes, including income taxes and related
                           deferred taxes, in conformity with generally accepted
                           accounting principles applicable in Canada;

                  (iv)     for all periods ending on and after December 31,
                           1995, the Company has made available to Investor true
                           and complete copies of:

                           (A)      relevant portions of income tax audit
                                    reports, statements of deficiencies or other
                                    agreements received or entered into by the
                                    Company or any of its Subsidiaries or on
                                    behalf of the Company or any of its
                                    Subsidiaries relating to Taxes; and

                           (B)      all separate federal and provincial income
                                    or franchise tax returns for the Company or
                                    any of its Subsidiaries;

                  (v)      no material deficiencies exist or have been asserted
                           with respect to Taxes of the Company or any of its
                           Subsidiaries. Neither the Company nor any of its
                           Subsidiaries is a party to any action or proceeding
                           for assessment or collection of Taxes, nor has such
                           event been asserted or threatened against the Company
                           or any of its Subsidiaries or any of its assets. No
                           waiver or extension of any statute of limitations is
                           in effect with respect to Taxes or Returns of the
                           Company or any of its Subsidiaries. The Returns of
                           the Company or any of its Subsidiaries have never
                           been materially adversely audited by a government or
                           taxing authority and have not been audited for any
                           tax year after 1995, nor is any such audit in
                           process, pending or to the knowledge of the Company
                           threatened;

         (ee)     the Company and each of its Subsidiaries:

                  (i)      have no defined benefit plans;

                  (ii)     have provided adequate accruals in their audited
                           financial statements for the year ended December 31,
                           1998 and in their unaudited financial statements for
                           the period ended September 30, 1999 (or such amounts
                           are fully funded) for all pension or other employee
                           benefit obligations of the Company and each of its
                           Subsidiaries arising under or relating to each of the
                           pension or retirement income plans or other employee
                           benefit plans or agreements or policies maintained by
                           or binding on the Company and each of its
                           Subsidiaries as well as for any other payment
                           required to be made by the Company or any of its
                           Subsidiaries in connection with the termination of
                           employment or retirement of any employee of the
                           Company or any of its Subsidiaries in respect of the
                           fiscal period ended September 30, 1999; and

                  (iii)    have no stock option or purchase plans or similar
                           arrangements other than the Company's Stock Option
                           Plan and its Employee Share Savings Plan;

         (ff)     the Company has taken as part of its Year 2000 Compliance
                  program all reasonable and prudent steps to ensure that its
                  computer systems and programs are Year 2000 Compliant. The
                  Company is not aware of any material issues relating to the
                  business and operations (including computer applications) of
                  the Company, taken as a whole, that are not Year 2000


<PAGE>   17


                                      -14-


                  Compliant, although no representation is made as to the Year
                  2000 Compliance of the Company's suppliers and customers. As
                  of the date hereof the Company has not experienced any
                  material Year 2000 Compliance problems or incidents. "YEAR
                  2000 COMPLIANT" means that all computer systems and programs
                  of the Company integral to the Company's business operations:

                  (i)      have been designed to be used prior to, during and
                           after the calendar year 2000 A.D. without material
                           error relating to date data;

                  (ii)     are capable of operating without material error
                           relating to the production of date data which
                           represents or refers to different centuries or more
                           than one century; and

                  (iii)    are designed so that all data fields, date-related
                           user interfaces, and other interfaces include the
                           indication of century;

                  and "YEAR 2000 COMPLIANCE" has a similar meaning;

         (gg)     there is no default or breach, threatened pending or
                  otherwise, by the Company of its obligations under the 1996
                  Exploration Program Agreement, as amended, between the Company
                  and RMX Exploration Ltd., except as disclosed in writing on or
                  prior to March 17, 2000;

         (hh)     the Board of Directors of the Company has, upon prior written
                  notice delivered to Montreal Trust Company of Canada,
                  determined to waive the application of the Shareholder Rights
                  Plan to the acquisition by Investor of the Purchased
                  Securities and such waiver remains in full force and effect,
                  neither amended nor withdrawn.

         (ii) the Company and all Persons controlled by the Company

                  (i)      do not hold assets located in the United States
                           having an aggregate book value of U.S. $15 million or
                           more; and

                  (ii)     have not made aggregate sales in or into the United
                           States of U.S. $25 million or more during the year
                           ended December 31, 1999;

         (jj)     Schedule 4.1(jj) represents the full and complete list of all
                  present Affiliates of the Company; and

         (kk)     as of the date of this Agreement and as of the Closing Date,
                  Schedule 4.1(kk) represents the full and complete list of all
                  existing agreements (other than Transaction Documents) between
                  the Company or any of its present Subsidiaries, on the one
                  hand, and Related Parties, on the other hand (whether as
                  direct, indirect or beneficial parties thereto), and any
                  existing agreements between the Company or its present
                  Affiliates and third parties, in any such case pursuant to
                  which Related Parties derive benefits or the Company or any of
                  its Affiliates assumes obligations in favor of such Related
                  Parties (provided that no Related Party shall be considered to
                  derive benefits by reason solely of being a shareholder of a
                  public company holding less than 2% of a class of the
                  outstanding issues of such company).

                  "Related Parties" in this Section 4.1(kk) shall include the
                  Company's present Affiliates, former Affiliates of the Company
                  or of the Company's present Affiliates, former or present
                  directors and officers of the Company or of its former or
                  present Affiliates, all legal Persons (including all legal
                  entities) which currently or formerly have shared office space
                  with the Company or its former or present Affiliates, or have
                  shared directors or officers with the Company or any of its
                  former or present Affiliates, or have had in common owners or


<PAGE>   18


                                      -15-


                  shareholders holding directly, indirectly or beneficially 10%
                  or more of the shares or ownership of such legal Persons as
                  well as 10% or more of the shares of the Company or its former
                  or present Affiliates at the time an existing agreement was
                  entered into;

4.2      REPRESENTATIONS AND WARRANTIES OF INVESTOR

         Investor represents and warrants to the Company as follows:

(a)      Investor is duly incorporated and validly subsisting under the laws of
         its jurisdiction of incorporation;

(b)      Investor has the necessary power and authority to execute and deliver
         this Agreement and the other Transaction Documents to which it is a
         party, and to perform its obligations hereunder and thereunder and to
         carry out the transactions contemplated hereby and thereby and this
         Agreement has been, and the other Transaction Documents to which it is
         a party, will at the time of Closing be, duly authorized, executed and
         delivered by Investor and are or will upon such execution and delivery
         be legal, valid and binding obligations of Investor enforceable in
         accordance with their respective terms, subject to applicable
         bankruptcy, insolvency, moratorium, reorganization and other laws and
         equitable principles affecting creditors' rights generally, the
         statutory and equitable powers of the courts to stay proceedings before
         them and the execution of judgments and the fact that specific
         performance and injunctive relief are equitable remedies which may be
         ordered by a court in its discretion and, accordingly, may not be
         available as a remedy in an action to enforce a covenant;

(c)      the execution and delivery of this Agreement and the other Transaction
         Documents to which it is a party, the performance by Investor of its
         obligations hereunder and thereunder do not and will not result in a
         breach of, and do not and will not create a state of facts which, after
         notice or lapse of time or both, will result in a breach of, and do not
         and will not create a right of termination or acceleration under, and
         do not and will not conflict with:

         (i)      any Applicable Laws applicable to Investor;

         (ii)     any terms, conditions or provisions of the constating
                  documents, or resolutions of the directors or shareholders, of
                  Investor;

         (iii)    any terms, conditions or provisions of any indenture,
                  agreement or instrument to which Investor is a party or by
                  which it is contractually bound as at the date hereof or the
                  Closing Date; or

         (iv)     any judgment, decree or order of any court or Governmental
                  Authority having jurisdiction over or binding any of Investor
                  or their properties or assets;

         except, in the case of Sections 4.2(c)(i), (iii) and (iv) above, for
         such breaches, rights or conflicts with that, alone or in the
         aggregate, would not have a Material Adverse Effect on Investor;

(d)      Investor is purchasing the Purchased Securities for its own account for
         investment purposes and not with a view to, or for resale in connection
         with, any distribution thereof in violation of the United States
         Securities Act of 1933, as amended (the "1933 ACT"). Investor
         represents that it is experienced in evaluating and making investments
         of the type contemplated by this Agreement and is financially able to
         bear the risks of such investment. Investor acknowledges that the
         Company is issuing and selling the Purchased Securities in reliance
         upon the exemption from registration provided in Section 4(2) of the
         1933 Act and is relying upon these representations, and agrees that the
         Purchased Securities may be transferred only


<PAGE>   19

                                      -16-


         if registered under the 1933 Act or pursuant to an exemption from such
         registration requirements. Investor is an "accredited investor" as
         defined in Regulation D under the 1933 Act. Investor acknowledges that
         it has been provided with a copy of the Financial Statements and has
         had access to such additional information, if any, concerning the
         Company as it has considered necessary in connection with its
         investment decision to acquire the Purchased Securities. Investor also
         acknowledges that it has not purchased the Purchased Securities as a
         result of any form of general solicitation or general advertising, as
         such terms are defined in Rule 502(c) under the 1933 Act. Investor
         understands that Rule 144 promulgated under the 1933 Act is not
         presently available with respect to the Purchased Securities and that
         absent registration of such securities under the 1933 Act, compliance
         with an applicable exemption under the 1933 Act is required for a sale
         or other disposition of such securities. Investor agrees that the
         following legend may be placed on any certificates evidencing its
         Purchased Securities:

                  THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
                  UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
                  (THE "SECURITIES ACT") OR UNDER APPLICABLE STATE SECURITIES
                  LAWS AND MAY NOT BE PLEDGED OR HYPOTHECATED, AND MAY NOT BE
                  RE-OFFERED, RESOLD OR OTHERWISE TRANSFERRED, EXCEPT (A) TO THE
                  COMPANY, (B) IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS
                  OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
                  LAWS, (C) OUTSIDE OF THE UNITED STATES IN ACCORDANCE WITH RULE
                  903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (D)
                  PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE
                  SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE)
                  OR (E) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION AFTER
                  PROVIDING A FAVOURABLE OPINION OF COUNSEL OR EVIDENCE
                  REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
                  OFFER, SALE OR OTHER TRANSFER IS IN COMPLIANCE WITH AN
                  AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
                  AND APPLICABLE STATE SECURITIES LAWS.

                  A NEW CERTIFICATE BEARING NO LEGEND MAY BE OBTAINED FROM THE
                  TRANSFER AGENT UPON DELIVERY OF THIS CERTIFICATE AND A DULY
                  EXECUTED DECLARATION, IN FORM SATISFACTORY TO THE TRANSFER
                  AGENT AND THE COMPANY, TO THE EFFECT THAT THE SALE OF THE
                  SECURITIES REPRESENTED HEREBY IS MADE IN COMPLIANCE WITH RULE
                  904 OF REGULATION S UNDER THE SECURITIES ACT;

         (e)      Investor is not a resident of Alberta;

         (f)      Investor acknowledges that:

                  (i)      no securities commission or similar regulatory
                           authority has reviewed or passed on the merits of the
                           Purchased Securities;

                  (ii)     there is no government or other insurance covering
                           the Purchased Securities;

                  (iii)    there are risks associated with the purchase of the
                           Purchased Securities;


<PAGE>   20

                                      -17-


                  (iv)     there are restrictions on Investor's ability to
                           resell the Purchased Securities and it is Investor's
                           responsibility to find out what these restrictions
                           are and to comply with them before selling the
                           Purchased Securities; and

                  (v)      the Company has advised Investor that the Company is
                           relying on an exemption from the requirements to
                           provide Investor with a prospectus and to sell
                           securities through a person or company registered to
                           sell securities under the Securities Act (Alberta)
                           and, as a consequence of acquiring the Purchased
                           Securities pursuant to such exemption, certain
                           protections, rights and remedies provided by the
                           Securities Act (Alberta), including statutory rights
                           of recission or damages, will not be available to
                           Investor.

                  Investor agrees that the following legend may be placed on any
                  certificates evidencing its Purchased Securities:

                           THE SECURITIES REPRESENTED HEREBY MAY NOT BE
                           RE-OFFERED, RESOLD OR OTHERWISE TRANSFERRED IN
                           ALBERTA ON OR BEFORE MARCH 24, 2001 EXCEPT (A) IN
                           COMPLIANCE WITH THE PROSPECTUS REQUIREMENTS OF THE
                           SECURITIES ACT (ALBERTA), OR (B) PURSUANT TO AN
                           EXEMPTION FROM THE PROSPECTUS REQUIREMENTS PROVIDED
                           BY APPLICABLE SECURITIES LEGISLATION AND PROVIDED
                           THAT (1) NO UNUSUAL EFFORT IS MADE TO PREPARE THE
                           MARKET OR TO CREATE A DEMAND FOR THE SECURITIES BEING
                           TRANSFERRED, (2) NO EXTRAORDINARY COMMISSION OR
                           CONSIDERATION IS PAID TO A PERSON OR COMPANY OTHER
                           THAN THE VENDOR OF THE SECURITIES IN RESPECT OF THE
                           TRADE, AND (3) THE FIRST TRADE IS NOT FROM THE
                           HOLDINGS OF A CONTROL PERSON, AS DEFINED IN THE
                           SECURITIES ACT (ALBERTA) UNLESS THE PROVISIONS OF
                           SECTION 112 OF THE SECURITIES ACT (ALBERTA) HAVE BEEN
                           COMPLIED WITH.

                           A NEW CERTIFICATE BEARING NO LEGEND MAY BE OBTAINED
                           FROM THE TRANSFER AGENT UPON DELIVERY OF THIS
                           CERTIFICATE AND A DULY EXECUTED DECLARATION OF THE
                           HOLDER AND AN OPINION OF COUNSEL, IN FORM
                           SATISFACTORY TO THE TRANSFER AGENT AND THE COMPANY,
                           TO THE EFFECT THAT THE SALE OF THE SECURITIES
                           REPRESENTED HEREBY IS MADE IN COMPLIANCE WITH
                           APPLICABLE SECURITIES LAW.

         (g)      Investor and its Affiliates currently own 1,380,200 Common
                  Shares of the Company.

                                   ARTICLE 5
                              CONDITIONS TO CLOSING

5.1      CONDITIONS TO THE OBLIGATIONS OF EACH PARTY

         The obligations of Investor and the Company to consummate the
transactions contemplated hereby that are to occur at or by Closing are subject
to the satisfaction of the following conditions:

         (a)      no condition or restriction of any court or Governmental
                  Authority shall be in effect, and there shall not be pending
                  or threatened any action or proceeding by or before any court
                  or Governmental Authority, which condition or restriction, or
                  pending or threatened action or proceeding, purports to, or
                  seeks or threatens, to restrain, prohibit or enjoin any of the
                  parties hereto from entering into, or performing any of the
                  transactions contemplated by this


<PAGE>   21

                                      -18-

                  Agreement or any of the Transaction Documents, or alters the
                  terms and conditions of the transactions contemplated herein;
                  and

         (b)      all filings with all Governmental Authorities of Canada and
                  the United States required to be made in connection with the
                  transactions contemplated by this Agreement or any of the
                  other Transaction Documents prior to the Closing Date shall
                  have been made, all waiting periods thereunder shall have
                  expired or terminated and all consents, orders, permits,
                  waivers, authorizations, exemptions, and approvals of such
                  entities required to be in effect on the Closing Date in
                  connection with the transactions contemplated by this
                  Agreement or any of the other Transaction Documents shall have
                  been issued; PROVIDED HOWEVER, that no provision of this
                  Agreement or any of the other Transaction Documents shall be
                  construed as requiring any party hereto to accept, in
                  connection with obtaining any requisite approval, any
                  condition that would alter the terms and conditions of the
                  transactions contemplated herein in a manner which is
                  materially adverse to any such party.

5.2      CONDITIONS TO THE OBLIGATIONS OF INVESTOR

         The obligations of Investor under this Agreement are subject to the
satisfaction at or prior to the Closing of the following conditions, but
compliance with any such conditions may be waived in whole or in part by
Investor in writing:

         (a)      on the Closing Date, the representations and warranties of the
                  Company set forth in this Agreement shall be true and correct
                  with the same effect as though such representations and
                  warranties had been made at and as of such time except for
                  such changes or transactions as are contemplated herein;

         (b)      the Company shall have performed and complied with all
                  agreements, covenants, and conditions contained herein
                  required to be performed or complied with by it prior to or at
                  the Closing;

         (c)      Investor shall have received from McCarthy Tetrault and
                  Carscallen Lockwood, counsel for the Company, one or more
                  written opinions satisfactory to Investor;

         (d)      the Company shall have delivered to Investor a certificate or
                  certificates representing the Purchased Securities registered
                  in the name of Investor containing the legends contemplated by
                  Sections 4.2(d) and 4.2(f);

         (e)      all consents, approvals or waivers from Persons, including
                  Governmental Authorities, if any, required prior to the
                  Closing Date in connection with the consummation of the
                  transactions contemplated hereby or by the other Transaction
                  Documents shall have been obtained upon terms and conditions
                  which are not materially adverse to Investor;

         (f)      contemporaneously with the execution hereof, Noval shall have
                  executed the Noval Representation Agreement, the Company shall
                  have executed and delivered the Corporate Governance and
                  Transition Arrangements Letter Agreement and the Company and
                  the other Persons referred to in the Corporate Governance and
                  Transition Arrangements Letter Agreement shall have executed
                  and delivered the agreements referred to therein;

         (g)      on the Closing Date, the Company and Noval shall have executed
                  and delivered the Shareholder Agreement, the Company shall
                  have executed and delivered the Registration Rights Agreement
                  and the Company and the relevant Subsidiaries shall have
                  executed the Preferential Rights Agreement;

<PAGE>   22

                                      -19-


         (h)      on the Closing Date all of the obligations of the parties set
                  out in the Corporate Governance and Transition Arrangements
                  Letter Agreement and the agreements referred to therein shall
                  have been fulfilled and all of the arrangements contemplated
                  therein shall have been implemented except for such
                  obligations or arrangements expressly contemplated therein to
                  be performed or implemented after Closing;

         (i)      the Company shall have delivered to Investor all of the
                  following:

                  (i) copies (certified by the Corporate Secretary of the
         Company) of the resolutions duly adopted by the Board of Directors of
         the Company authorizing the execution, delivery and performance of this
         Agreement and the other Transaction Documents and all other agreements
         referred to herein or therein as being executed at or prior to the
         Closing;

                  (ii) evidence reasonably satisfactory to Investor that the
         Company has obtained all necessary approvals or consents or satisfied
         all applicable requirements of Governmental Authorities or other
         Persons required to be obtained or satisfied at or prior to the Closing
         for the transactions entered into, or to be entered into, by the
         Company as contemplated in this Agreement and the other Transaction
         Documents; and

                  (iii) evidence reasonably satisfactory to Investor that the
         Company has obtained all required approvals of the Exchanges for the
         transactions described in this Agreement and the other Transaction
         Documents and that the Purchased Securities are, at the time of
         Closing, listed and posted for trading on the Exchanges;

         (j)      all corporate and other proceedings taken or to be taken in
                  connection with the transactions contemplated by this
                  Agreement and the other Transaction Documents (including,
                  without limitation, those matters set forth in the Corporate
                  Governance and Transition Arrangements Letter Agreement) to be
                  consummated at the Closing shall have been consummated and all
                  documents incidental thereto shall be reasonably satisfactory
                  in form and substance to Investor.

5.3      CONDITIONS TO THE OBLIGATIONS OF THE COMPANY

         The obligations of the Company under this Agreement are subject to the
satisfaction at or prior to the Closing of the following conditions, but
compliance with any such conditions may be waived in whole or in part by the
Company in writing:

         (a)      on the Closing Date, the representations and warranties of
                  Investor set forth in this Agreement shall be true and correct
                  with the same effect as though such representations and
                  warranties were made at and as of such time;

         (b)      Investor shall have performed and complied with all
                  agreements, covenants and conditions contained herein required
                  to be performed by or complied with by it prior to or at the
                  Closing;

         (c)      the Company shall have received a written opinion or opinions
                  from Canadian or U.S. counsel for Investor satisfactory to the
                  Company;

         (d)      Investor shall have delivered to the Company the aggregate
                  purchase price for the Purchased Securities being purchased
                  hereunder;

         (e)      all consents, approvals or waivers from Persons, including
                  Governmental Authorities, if any, required prior to the
                  Closing Date in connection with the consummation of the
                  transactions

<PAGE>   23

                                      -20-


                  contemplated hereby or by the other Transaction Documents
                  shall have been obtained upon terms and conditions which are
                  not materially adverse to the Company; and

         (f)      contemporaneously with the execution hereof, Investor shall
                  have executed and delivered the Corporate Governance and
                  Transition Arrangements Letter Agreement and on the Closing
                  Date, Investor shall have executed the Shareholder Agreement,
                  the Registration Rights Agreement, and the Preferential Rights
                  Agreement.

5.4      WAIVER OF CONDITIONS

         Any condition set forth herein in favour of a party may be waived in
whole or in part by that party.

                                   ARTICLE 6
                               COMPANY'S COVENANTS

         The Company covenants and agrees (the fulfillment of which covenants
and agreements shall be conditions to Investor's obligations hereunder) that,
between the date hereof and the Closing:

6.1      CONDUCT OF BUSINESS

         Each of the Company and its Subsidiaries shall conduct its business in
the ordinary course consistent with prior practice, and shall promptly notify
Investor of any event or occurrence or emergency material to, or not in the
ordinary course consistent with prior practice of, the Company and its
Subsidiaries, taken as a whole; and shall not change materially any aspect of
their respective current businesses, including without limitation, taking or
permitting any action to:

         (a)      declare or pay dividends or make distributions on the Common
                  Shares or purchase or issue any Common Shares or other
                  securities of the Company, other than agreeing to issue up to
                  1,363,636 flow-through Common Shares pursuant to certain
                  Resource Agreements dated December 31, 1999 and issuances of
                  Common Shares pursuant to options presently outstanding under
                  the Company's Stock Option Plan and its Employee Share Savings
                  Plan;

         (b)      affect or change the capital structure of the Company or its
                  Subsidiaries;

         (c)      merge, amalgamate, consolidate or enter into any business
                  combination or other similar transaction with any other Person
                  or acquire any stock or equity interest in any other Person or
                  acquire substantially all the assets of any other Person;

         (d)      amend the Company's charter or bylaws;

         (e)      incur Indebtedness not in the ordinary course of business
                  consistent with past practice in excess of $2,000,000;

         (f)      enter into any material contracts outside of the ordinary
                  course of business; or

         (g)      agree or commit to do any of the foregoing.

6.2      COOPERATION

         Without the prior written consent of Investor, the Company shall not
take any action that would cause the conditions to the obligations of the
parties to effect the transactions contemplated hereby not to be fulfilled
including, without limitation, taking or causing to be taken any action that
would cause the representations and warranties made by the Company herein not to
be true, correct and accurate as of the Closing Date; PROVIDED

<PAGE>   24

                                      -21-


HOWEVER that, notwithstanding the foregoing, the Company shall be entitled to
exercise any right or remedy available to it under those of the Transaction
Documents entered into prior to the Closing Date, including, without limitation,
not consummating the transactions contemplated under the Transaction Documents
as a result of the failure by the Company to waive a condition in the Company's
favour in such agreements. The Company will use its reasonable efforts to
vigorously defend any lawsuits or other legal proceedings brought against the
Company, whether judicial or administrative, challenging this Agreement, the
other Transaction Documents or the consummation of the transactions contemplated
hereby or thereby, including seeking to have any stay or temporary restraining
order entered by any court or Governmental Authority vacated or reviewed.

6.3      CERTAIN ACTS

         The Company shall use its reasonable efforts to cause to be fulfilled
the conditions precedent to Investor's obligations to consummate the
transactions contemplated hereby that are dependent upon the actions of the
Company or its Affiliates, including without limitation, diligently prosecuting
all requests to Governmental Authorities, the Exchanges or others for required
approvals, consents or waivers. Furthermore, the Company covenants and agrees to
execute or cause the execution of the Transaction Documents to which it or its
Affiliates is a party and perform its obligations thereunder and cause the
performance of the other parties' obligations thereunder and the Company agrees
not to waive any compliance therewith or its rights thereunder or consent to any
amendment thereto without the prior written consent of Investor; PROVIDED
HOWEVER that, notwithstanding the foregoing, the Company shall be entitled to
exercise any right or remedy under the Transaction Documents entered into prior
to the Closing Date, including, without limitation, not consummating the
transactions contemplated under the Transaction Documents as a result of the
failure to waive a condition in the Company's favour in such agreements.

6.4      ACCESS AND INFORMATION

         Subject to the terms of the Confidentiality Agreement, prior to the
Closing the Company shall permit the authorized representatives of Investor to
have reasonable access to all facilities, equipment, employees, agents,
properties, books, records and documents related to the Company and its
Subsidiaries and shall furnish to Investor such information, financial records
and other documents with respect to the Company's and its Subsidiaries'
operations and businesses as Investor shall reasonably request in connection
with the transactions contemplated herein.

6.5      NO SHOPPING

         The Company hereby agrees that, without the consent of Investor, it
shall not, nor shall it permit any of its officers, directors, employees,
Affiliates, agents, investment bankers, consultants, advisors or representatives
to, prior to the Closing, solicit, initiate, encourage, entertain or consider
any discussions, negotiations, inquiries or proposals (including by way of
furnishing information) with any third party concerning: (a) any sale of any
material portion of the business or assets of the Company or its Affiliates; (b)
any acquisition, disposition or issuance of shares or other securities of the
Company or its Affiliates; (c) any merger, amalgamation, consolidation, business
combination or other similar transaction involving the Company or its
Affiliates; or (d) any transaction inconsistent with the consummation of the
Transaction Documents; PROVIDED HOWEVER that, notwithstanding this Section 6.5,
the Company and its Board of Directors shall be entitled to comply with their
statutory duties in response to a take-over bid not arising as a result of a
breach of this Agreement and shall be entitled to respond as necessary in order
to properly discharge their fiduciary duties in respect of a bona fide written
proposal with respect to any of the transactions referred to in paragraphs (a) -
(d) of this Section 6.5. Nothing in this Section 6.5 shall permit the Company to
terminate or fail to perform its obligations hereunder or under the Transaction
Documents.

<PAGE>   25

                                      -22-


                                   ARTICLE 7
                              INVESTOR'S COVENANTS

         Investor covenants and agrees (the fulfillment of which covenants and
agreements shall be conditions to the Company's obligations hereunder) that,
between the date hereof and the Closing:

7.1      COOPERATION

         Without the prior written consent of the Company, Investor shall not
take any action that would cause the conditions to the obligations of such
parties to effect the transactions contemplated hereby not to be fulfilled
including, without limitation, taking or causing to be taken any action that
would cause the representations and warranties made by Investor herein not to be
true, correct and accurate as of the Closing Date; PROVIDED HOWEVER that,
notwithstanding the foregoing, Investor shall be entitled to exercise any right
or remedy under the Transaction Documents, including, without limitation, not
consummating the transactions contemplated under those of the Transaction
Documents entered into prior to the Closing Date as a result of the failure by
Investor to waive a condition in Investor's favour in such agreements. Investor
will use its reasonable efforts to vigorously defend any lawsuits or other legal
proceedings, whether judicial or administrative brought against Investor,
challenging this Agreement, the other Transaction Documents or the consummation
of the transactions contemplated hereby or thereby, including seeking to have
any stay or temporary restraining order entered by any court or Governmental
Authority vacated or reviewed.

7.2      CERTAIN ACTS

         Investor shall use its reasonable efforts to cause to be fulfilled the
conditions precedent to the Company's obligations to consummate the transactions
contemplated hereby that are dependant upon the actions of Investor, including
without limitation, diligently prosecuting all requests to Governmental
Authorities or others for required approvals, consents or waivers. Furthermore,
Investor covenants and agrees to execute the Transaction Documents to which it
is a party; PROVIDED HOWEVER that, notwithstanding the foregoing, Investor shall
be entitled to exercise any right or remedy under those of the Transaction
Documents entered into prior to the Closing Date, including, without limitation,
not consummating the transactions contemplated under the Transaction Documents
as a result of the failure to waive a condition in Investor's favour in such
agreements.

                                   ARTICLE 8
                  DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

8.1      DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

         Upon expiration of the officers' and directors' liability insurance
currently in place under the Company's insurance program for the directors and
officers of the Company and its Subsidiaries and until six years after the
Closing, the Company shall, provide or arrange for the provision of directors'
and officers' liability insurance covering the directors and officers of the
Company and its Subsidiaries who are now covered by directors' and officers'
liability insurance or will be so covered at the Closing with respect to actions
and omissions occurring prior to or on the Closing on terms no less favourable,
to the extent permitted by law, to such persons than such insurance currently
maintained in effect by the Company for the directors and officers of the
Company and its Subsidiaries on the date hereof in terms of coverage and amount.
The Company shall, indemnify to the extent currently provided for in the by-laws
of the Company such persons who are now or will be entitled on the Closing to
indemnification thereunder with respect to actions or omissions occurring prior
to or on the Closing. Notwithstanding the foregoing, the Company may, at its
option, purchase a run-off directors' and officers' liability insurance policy
on or prior to the Closing.

<PAGE>   26

                                      -23-


                                   ARTICLE 9
                                  MISCELLANEOUS

9.1      PUBLICITY

         The Company and Investor agree that neither they nor any of their
respective officers, directors, employees, Affiliates, agents, investment
bankers, consultants, advisors or representatives will disclose the existence of
this Agreement or the other Transaction Documents or any of the terms hereof or
thereof to any person, except as otherwise permitted hereunder or thereunder or
required by applicable Canadian or United States law, regulatory policies or
stock exchange requirements or policies. The Company and Investor shall be
entitled to make disclosure of this Agreement and the other Transaction
Documents to their respective financial advisors, lawyers and other professional
advisors and, in the case of Investor, to Affiliates of Investor. The Company
and Investor shall cooperate with each other in the development of all news
releases and other public disclosures relating to the transactions contemplated
by this Agreement and the other Transaction Documents. Each of the Company and
Investor shall not issue or make, or cause to have issued or made, any press
release or announcement concerning the transactions contemplated by this
Agreement and the other Transaction Documents without making reasonable efforts
to obtain the prior approval of the form and substance thereof by the other
party, acting reasonably, unless otherwise required by applicable Canadian or
United States law, regulatory policies or stock exchange requirements or
policies. The parties acknowledge that the Company must make public disclosure
of the transactions resulting from its execution of this Agreement.

9.2      NOTICES

         All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopier) and, unless
otherwise expressly provided herein, shall be delivered during normal business
hours by hand, by Federal Express, United Parcel Service or other reputable
overnight commercial delivery service, or by telecopier notice, confirmation of
receipt received, addressed as follows, or to such other address as may be
hereafter notified by the respective parties hereto:

         COMPANY:

         Canadian 88 Energy Corp.
         700, 400 Third Avenue S.W.
         Calgary, Alberta
         T2P 4H2

         Attention:   Donald R. Gardner, Chief Financial Officer
         Fax No.:     (403) 216-2358

                  with a copy to:                         and:

<TABLE>
<S>                                                                <C>
                      McCarthy Tetrault                            Carscallen Lockwood
                      Barristers & Solicitors                      Barristers and Solicitors
                      Suite 3300                                   Suite 1500
                      421 - 7th Avenue SW                          407 - 2nd Street S.W.
                      Calgary, Alberta                             Calgary, Alberta
                      T2P 4K9                                      T2P 2Y3
                      Attention:  Mr. David F. Phillips            Attention:  Stan Carscallen
                      Fax No.:    (403) 260-3501                   Fax No.:    (403) 262-2952
</TABLE>


<PAGE>   27

                                      -24-


         INVESTOR:

         Duke Energy Hydrocarbons, L.L.C.
         10777 Westheimer
         Suite 650
         Houston, Texas 77042

         Attention:   President
         Fax No.:     (713) 260-8601

                  with a copy to:

                      Bennett Jones
                      Barristers & Solicitors
                      4500 Bankers Hall East
                      855 - 2nd Street SW
                      Calgary, Alberta
                      T2P 4K7

                      Attention:  John D. MacNeil and Margaret G. Lemay
                      Fax No.:    (403) 265-7219

Any notice, request or demand delivered personally or by telecopier shall be
deemed to have been given and received on the day it is so delivered if that day
is a Business Day or the next Business Day, as the case may be.

9.3      ASSIGNMENT BY INVESTOR

         Investor may assign all or any part of its benefits under this
Agreement or under any agreement contemplated hereby, only to an Affiliate
unless consent to a third party assignment is obtained from the other parties
hereto.

9.4      TERMINATION OF LETTER OF INTENT

         It is acknowledged that the Letter of Intent has expired and has no
further force and effect.

9.5      SURVIVAL OF REPRESENTATIONS AND WARRANTIES

         The representations and warranties contained herein shall survive the
Closing until the date that is eighteen months after the Closing Date.

9.6      SOLICITATIONS

         The Company represents and warrants to Investor that neither it, any
Affiliate nor any person acting on its or their behalf:

         (a)      will solicit offers to buy any securities under circumstances
                  that would require registration of the Purchased Securities
                  under the 1933 Act, except as otherwise required pursuant to
                  the Registration Rights Agreement;

         (b)      has engaged or will engage in any form of general solicitation
                  or general advertising (as those terms are defined in Rule
                  502(c) under the 1933 Act in connection with any offer or sale
                  of Purchased Securities; or

<PAGE>   28

                                      -25-


         (c)      directly or indirectly, has sold or offered for sale any of
                  the Purchased Securities to, or solicited any offers to buy
                  any Purchased Securities from, or otherwise approached or
                  negotiated in respect of the Purchased Securities with, any
                  person or entity other than Investor.

9.7      EXPENSES

         Each of the parties hereto shall, whether or not the transactions
contemplated hereby are consummated, bear its own solicitors', attorneys',
accountants' or other fees, costs and expenses incurred in connection with the
negotiation, execution and performance of this Agreement or any of the
transactions contemplated hereunder.

9.8      EXHIBITS AND SCHEDULES

         All Exhibits and Schedules to this Agreement are incorporated herein
and made a part hereof for all purposes.


         IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
as of the date first written above.

                                        DUKE ENERGY HYDROCARBONS, L.L.C.

                                        Per: /s/ JOSEPH L. PRITCHETT, III
                                            ------------------------------------
                                            Joseph L. Pritchett, III
                                            Executive Vice President,
                                            Exploration and Production

                                        CANADIAN 88 ENERGY CORP.

                                        Per: /s/ JAMES D. RAYMOND
                                            ------------------------------------
                                            James D. Raymond
                                            Chairman

                                        Per: /s/ DONALD R. GARDNER
                                            ------------------------------------
                                            Donald R. Gardner
                                            Chief Financial Officer