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                                                                    EXHIBIT 10.3
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                             SHAREHOLDERS' AGREEMENT




                                      AMONG

                            CANADIAN 88 ENERGY CORP.,

                        DUKE ENERGY HYDROCARBONS, L.L.C.

                                       AND

                                  GREG S. NOVAL




                              DATED MARCH 24, 2000


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                                TABLE OF CONTENTS


<TABLE>
<S>     <C>                                                                                                     <C>
ARTICLE 1
         INTERPRETATION...........................................................................................4
         1.1      Definitions.....................................................................................4
         1.2      Rules of Construction...........................................................................5
         1.3      Recitals and Headings...........................................................................5

ARTICLE 2
         BOARD OF DIRECTORS AND OFFICERS..........................................................................5
         2.1      Nominees for Election to the Board of Directors.................................................5
         2.2      Resident Canadian Requirements..................................................................6
         2.3      Transitional Provisions re Directors............................................................6
         2.4      Future Changes to the Board of Directors........................................................7
         2.5      Size of the Board of Directors..................................................................7
         2.6      Committees of the Board of Directors............................................................8
         2.7      Qualification as a Director or Committee Member.................................................8
         2.8      Chairman, President and Chief Executive Officer.................................................8
         2.9      Carrying Out Agreement..........................................................................9

ARTICLE 3
         BUSINESS COMBINATION TRANSACTIONS AND SOLICITATIONS......................................................9
         3.1      Limitation on Business Combination Transactions.................................................9
         3.2      Limitation on Solicitations, Etc................................................................9
         3.3      Share Price Performance Exception..............................................................10

ARTICLE 4
         DEH ACQUISITION RIGHTS..................................................................................12
         4.1      Limitation on Acquisition of Additional Shares by DEH..........................................12
         4.2      Right to Make Market Purchases.................................................................12
         4.3      Right to Participate in Private Placements.....................................................12
         4.4      Right to Participate in Public Offerings.......................................................13
         4.5      Acquisition of Additional Shares Due to Share Compensation Arrangement.........................13
         4.6      Right to Participate in Other Distributions....................................................14
         4.7      Acquisition of Additional Shares if Take-over Bid Commenced....................................14
         4.8      Consequential Canadian 88 Restrictions.........................................................14

ARTICLE 5
         NOVAL ACQUISITION RIGHTS................................................................................15
         5.1      Limitation on Acquisition of Additional Shares by Noval........................................15
         5.2      Right to Make Market Purchases.................................................................15
         5.3      Right to Participate in Issues.................................................................15

ARTICLE 6
         DEH TRANSFER RIGHTS.....................................................................................15
         6.1      Permitted Transfers of Shares by DEH...........................................................15
         6.2      Right of First Refusal.........................................................................16
</TABLE>



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                                        3

<TABLE>
<S>     <C>                                                                                                     <C>
ARTICLE 7
         VOTING MATTERS..........................................................................................17
         7.1      Voting With Respect to Directors...............................................................17

ARTICLE 8
         REPRESENTATIONS, WARRANTIES AND COVENANTS...............................................................17
         8.1      Representations and Warranties.................................................................17
         8.2      Cooperation Regarding Filings, Etc.............................................................19

ARTICLE 9
         TERMINATION.............................................................................................19
         9.1      Termination....................................................................................19

ARTICLE 10
         GENERAL PROVISIONS......................................................................................19
         10.1     Notices........................................................................................19
         10.2     Amendment and Waiver...........................................................................21
         10.3     Injunctive Relief..............................................................................21
         10.4     Governing Law..................................................................................21
         10.5     Further Assurances.............................................................................21
         10.6     Severability...................................................................................21
         10.7     Entire Agreement...............................................................................22
         10.8     Assignment.....................................................................................22
         10.9     Benefit of Agreement...........................................................................22
         10.10    Counterparts...................................................................................22
         10.11    Fax Delivery...................................................................................22
</TABLE>




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                             SHAREHOLDERS' AGREEMENT


                  Made as of March 24, 2000,

AMONG:

                  CANADIAN 88 ENERGY CORP., a corporation incorporated under the
                  laws of Canada ("CANADIAN 88"),

                                     - and -

                  DUKE ENERGY HYDROCARBONS, L.L.C., a limited liability company
                  incorporated under the laws of Delaware ("DEH"),

                                     - and -

                  GREG S. NOVAL, an individual resident in Turner Valley,
                  Alberta ("NOVAL").


         WHEREAS Canadian 88 has offered DEH the opportunity to act as a
strategic equity investor so as to allow Canadian 88 to continue to actively
develop its inventory of exploration and development prospects in Western
Canada;

         WHEREAS DEH has, pursuant to the Subscription Agreement, acquired
24,412,500 Common Shares of Canadian 88, which when combined with 1,380,200
Common Shares previously acquired by DEH constitutes 19.6% of the outstanding
number of Common Shares; and

         WHEREAS Noval is the Beneficial Owner of 7,273,410 Common Shares of
Canadian 88, being 5.5% of the outstanding number of Common Shares, and also
holds options to acquire a further 1,250,000 Common Shares.

         NOW THEREFORE the parties agree as follows:


                                    ARTICLE 1
                                 INTERPRETATION

1.1      DEFINITIONS

         For purposes of this Agreement, the following terms have the meanings
indicated:

         (a)      "ADDITIONAL DIRECTORS" has the meaning set forth in Section
                  2.1(c);

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

         (c)      "BENEFICIAL OWNERSHIP" means direct or indirect beneficial
                  ownership of, or control or direction over, and "BENEFICIALLY
                  OWN" and "BENEFICIAL OWNER" have corresponding meanings;

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                                        2

         (d)      "BUSINESS COMBINATION TRANSACTION" means:

                  (i)      an amalgamation, arrangement, merger, share exchange,
                           reorganization or similar transaction (a
                           "Transaction") involving Canadian 88;

                  (ii)     a sale, lease, exchange, transfer or other
                           disposition of 50% or more of the assets of Canadian
                           88 and its Subsidiaries, taken as a whole, in a
                           single transaction or series of transactions; or

                  (iii)    the acquisition by a person or entity, or any persons
                           or entities acting jointly or in concert, of
                           Beneficial Ownership or the right to acquire
                           Beneficial Ownership of 50% or more of the
                           outstanding Voting Shares, by Take-over Bid or
                           otherwise;

                  provided that a Transaction in which the Beneficial Ownership
                  of the share capital of Canadian 88 or other resulting entity
                  of the Transaction immediately after the consummation of the
                  Transaction is substantially the same as the Beneficial
                  Ownership of the share capital of Canadian 88 immediately
                  prior to the consummation of the Transaction shall be deemed
                  not to be a Business Combination Transaction;

         (e)      "BOARD OF DIRECTORS" means the board of directors of
                  Canadian 88;

         (f)      "BUSINESS DAY" means any day excluding Saturdays, Sundays and
                  statutory holidays in Alberta or Texas;

         (g)      "CANADA BUSINESS CORPORATIONS ACT" means the Canada Business
                  Corporations Act, as amended, or any successor statute, as in
                  effect from time to time;

         (h)      "COMMON SHARES" means the common shares of Canadian 88 as
                  constituted on the date hereof;

         (i)      "CONVERTIBLE SECURITIES" means any securities convertible
                  into, exchangeable for or exercisable for Voting Shares,
                  including convertible debentures, convertible preferred
                  shares, warrants and rights but excluding employee stock
                  options and other convertible securities of Canadian 88 issued
                  pursuant to a Share Compensation Arrangement;

         (j)      "CURRENT MARKET PRICE" means, in respect of a Common Share or
                  other securities valued hereunder (for the purposes of this
                  definition, the "shares") at any date, the weighted average
                  price per share for the ten consecutive trading days ending on
                  the trading day prior to such date on The Toronto Stock
                  Exchange (or on any other Canadian or United States stock
                  exchange on which the shares are then listed and designated by
                  the directors of Canadian 88 for such purpose if the shares
                  are not then listed on The Toronto Stock Exchange). The
                  weighted average price shall be determined by dividing the
                  aggregate of the sale prices of all such shares sold on the
                  said exchange during the said ten consecutive trading days by
                  the total number of such shares so sold. If (i) the shares are
                  not listed on a stock exchange in Canada or the United States
                  or (ii) within such ten consecutive trading days there have
                  not been at least five days in which at least 100 shares have
                  traded, the Current Market Price in respect of a share shall
                  be determined, subject to regulatory approval, by agreement
                  between Canadian 88, DEH and Noval or, failing such agreement,
                  by an investment banking firm of national reputation selected
                  by a majority of the

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                                        3

                  Additional Directors, with the consent of DEH and Noval, which
                  consent shall not be unreasonably withheld. Any determination
                  of the Current Market Price of the shares shall be made within
                  three Business Days of the date of selection and notification
                  of the investment banking firm. The costs and expenses of any
                  such investment banking firm shall be borne as to one half by
                  Canadian 88 and as to the remaining one half by DEH and Noval
                  in proportion to their respective interest in the transaction
                  for which the determination of Current Market Price is made;

         (k)      "DEH NOMINEES" has the meaning set forth in Section 2.1(a);

         (l)      "DEH OWNERSHIP PERCENTAGE" means the percentage of the Voting
                  Shares Beneficially Owned by DEH at the time of determination,
                  including for the purposes hereof any unissued Common Shares
                  which may be issued under any Convertible Securities held by
                  DEH;

         (m)      "EXCHANGEABLE SECURITY" means a security of any type,
                  including but not limited to debt, equity, warrants or other
                  rights, issued by DEH and which includes or represents the
                  right to acquire Voting Shares from DEH upon exchange,
                  conversion or exercise thereof;

         (n)      "FUNDAMENTAL CHANGE" means the approval by the holders of
                  Voting Shares of any of the matters referred to in Sections
                  173, 183, 188, 189 or 192 of the Canada Business Corporations
                  Act;

         (o)      "NOVAL NOMINEES" has the meaning set forth in Section 2.1(b);

         (p)      "NOVAL OWNERSHIP PERCENTAGE" means the percentage of the
                  Voting Shares Beneficially Owned by Noval at the time of
                  determination, including for the purposes hereof any unissued
                  Common Shares which may be issued under any Convertible
                  Securities held by Noval;

         (q)      "PERSON" has the meaning assigned to such term in the
                  Securities Act (Alberta);

         (r)      "PRIVATE PLACEMENT" means a distribution for cash (other than
                  pursuant to a Share Compensation Arrangement) under an
                  exemption from the requirement to file and obtain a receipt
                  for a prospectus from, or file and have declared effective a
                  registration statement by, the securities regulatory authority
                  of a jurisdiction under the securities legislation of that
                  jurisdiction;

         (s)      "PUBLIC OFFERING" means a "best efforts" agency offering, a
                  firm commitment underwritten offering or a "bought deal" for
                  cash pursuant to a prospectus for which a final receipt has
                  been issued, or in respect of which a registration statement
                  has been declared effective, by the securities regulatory
                  authority of a jurisdiction under the securities legislation
                  of that jurisdiction;

         (t)      "QUALIFIED BID" means a Take-over Bid for Voting Shares that:

                  (i)      is made to all holders of Voting Shares, Convertible
                           Securities and employee stock options or other
                           convertible securities of Canadian 88 issued pursuant
                           to a Share Compensation Arrangement, as registered on
                           the books of Canadian 88, other than the offeror;


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                                        4

                  (ii)     is for a price per Voting Share at least 10% greater
                           than the Current Market Price of the Voting Shares
                           calculated on the date of the public announcement of
                           such Take-over Bid or the date of public announcement
                           of any previously announced Take-over Bid that has
                           not been withdrawn;

                  (iii)    contains, and the take-up and payment for Voting
                           Shares tendered or deposited is subject to, an
                           irrevocable and unqualified provision that no Voting
                           Shares will be taken up or paid for pursuant to the
                           Take-over Bid unless more than 50% of the Voting
                           Shares held by holders of Voting Shares other than
                           the offeror, its Affiliates or any person acting
                           jointly or in concert with the offeror shall have
                           been deposited or tendered pursuant to the Take-over
                           Bid and not withdrawn;

                  (iv)     contains an irrevocable and unqualified provision
                           that if the deposit condition set forth in (iii)
                           above is satisfied the offeror will make a public
                           announcement of that fact and the Take-over Bid will
                           remain open for deposits and tenders of Voting Shares
                           for not less than ten Business Days from the date of
                           such public announcement; and

                  (v)      is subject to no conditions other than customary
                           conditions;

         (u)      "RELATED PARTY TRANSACTION" has the meaning assigned to such
                  term in Ontario Securities Commission Policy 9.1 (until April
                  30, 2000) or Rule 61-501 (from May 1, 2000);

         (v)      "RESIDENT CANADIAN" has the meaning set forth in the Canada
                  Business Corporations Act;

         (w)      "SECURITIES ACT (ALBERTA)" means the Securities Act (Alberta),
                  as amended, or any successor statute, as in effect from time
                  to time;

         (x)      "SHARE COMPENSATION ARRANGEMENT" has the meaning assigned to
                  such term in Section 627 of The Toronto Stock Exchange Company
                  Manual;

         (y)      "SUBSIDIARY" means, with respect to any Person, any other
                  Person of which at least a majority of the voting power of the
                  voting equity securities or voting equity interest is
                  Beneficially Owned by such Person;

         (z)      "SUBSCRIPTION AGREEMENT" means the subscription agreement
                  dated March 17, 2000 between DEH and Canadian 88;

         (aa)     "TAKE-OVER BID" has the meaning assigned to such term in the
                  Securities Act (Alberta);

         (bb)     "TRANSFER" has the meaning set forth in Section 6.1; and

         (cc)     "VOTING SHARES" means the Common Shares and any other
                  securities of Canadian 88 having voting power under ordinary
                  circumstances with respect to the election of directors of
                  Canadian 88.


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                                        5

1.2      RULES OF CONSTRUCTION

         Unless the context otherwise requires, as used in this Agreement:
         (a) a term has the meaning ascribed to it; (b) an accounting term not
         otherwise defined has the meaning ascribed to it in accordance with
         generally accepted accounting principles as in effect in Canada from
         time to time; (c) "ACTING JOINTLY AND IN CONCERT" shall be interpreted
         in accordance with the provisions of the Securities Act (Alberta); (d)
         "INCLUDING" means "INCLUDING, WITHOUT LIMITATION"; and (e) words in the
         singular include the plural and words in the plural include the
         singular.

1.3      RECITALS AND HEADINGS

         The recitals and descriptive headings contained in this Agreement are
         included for convenience of reference only and shall not affect in any
         way the meaning or interpretation of this Agreement.

                                    ARTICLE 2
                         BOARD OF DIRECTORS AND OFFICERS

2.1      NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS

         In connection with each election of directors of Canadian 88, whether
         at an annual or special meeting, Canadian 88 will nominate for election
         to its Board of Directors, in accordance with its procedures for the
         nomination of directors as provided in its by-laws and applicable law:

         (a)      the number of persons designated by DEH (the "DEH Nominees")
                  that is equal to the greater of:

                  (i)      two; and

                  (ii)     the product (rounded to the nearest whole number, but
                           subject to Section 2.1(b)(i)) of: (A) the total
                           number of directors constituting the entire Board of
                           Directors, multiplied by (B) the DEH Ownership
                           Percentage;

         (b)      the number of persons designated by Noval, one of whom may be
                  Noval (the "Noval Nominees"), that is equal to the greater of:

                  (i)      two; and

                  (ii)     the product (rounded to the nearest whole number, but
                           subject to Section 2.1(a)(i)) of: (A) the total
                           number of directors constituting the entire Board of
                           Directors, multiplied by (B) the Noval Ownership
                           Percentage; and

         (c)      as the remaining nominees for election, persons who are
                  independent of DEH and Noval within the meaning of Ontario
                  Securities Commission Policy 9.1 (until April 30, 2000) or
                  Rule 61-501 (from May 1, 2000) (the "Additional Directors")
                  (provided that the initial Additional Directors appointed on
                  the date of this agreement shall be the persons named in the
                  Corporate Governance and Transition Arrangements letter dated
                  March 17, 2000 from DEH to Canadian 88 and Noval). The
                  Additional Directors shall be chosen in the following manner:


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                                        6

                  (i)      if the number of Additional Directors to be nominated
                           for election is the same as the number of Additional
                           Directors then in office who have indicated a
                           willingness to be nominated for re-election, then the
                           Additional Directors then in office shall be
                           nominated for re-election;

                  (ii)     if the number of Additional Directors to be nominated
                           for election is greater than the number of Additional
                           Directors then in office who have indicated a
                           willingness to be nominated for re-election, then
                           such Additional Directors then in office shall be
                           nominated for re-election and the remaining persons
                           to be nominated for election as Additional Directors
                           shall be chosen by the nominating committee of the
                           Board of Directors; or

                  (iii)    if the number of Additional Directors to be nominated
                           for election is less than the number of Additional
                           Directors then in office who have indicated a
                           willingness to be nominated for re-election, then the
                           persons to be nominated for election as Additional
                           Directors shall be chosen by the nominating committee
                           of the Board of Directors from the Additional
                           Directors then in office.

         (d)      Canadian 88 shall, for so long as DEH is entitled to designate
                  DEH Nominees and Noval is entitled to designate Noval Nominees
                  under this Agreement, solicit proxies for the election of DEH
                  Nominees and Noval Nominees in the same manner and at the same
                  time as it solicits proxies for the election of the Additional
                  Directors to the Board of Directors.

2.2      RESIDENT CANADIAN REQUIREMENTS

         (a)      The DEH Nominees shall be Resident Canadians in the numbers
                  set forth below, unless waived by a majority of the Additional
                  Directors:


                  NUMBER OF DEH NOMINEES    MINIMUM NUMBER OF RESIDENT CANADIANS

                           2                                  0
                           3                                  1
                           4 or 5                             2
                           6 or more                          3

         (b)      Each of the Noval Nominees shall be Resident Canadians.

         (c)      The Additional Directors shall be Resident Canadians in the
                  numbers as will result in the Board of Directors as a whole
                  meeting the Resident Canadian requirements of the Canada
                  Business Corporations Act.

2.3      TRANSITIONAL PROVISIONS RE DIRECTORS

         (a)      DEH shall advise Canadian 88 and Noval on the date of this
                  Agreement (or has previously advised) who the initial DEH
                  Nominees will be. Canadian 88 shall use reasonable efforts to
                  cause two of the current members of the Board of Directors to
                  resign on the date of this Agreement (in a sequential manner,
                  if required) so that the vacancies resulting thereby may be
                  filled by the remaining directors of Canadian 88 with the
                  initial DEH Nominees.

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                                        7

         (b)      Noval shall advise Canadian 88 and DEH on the date of this
                  Agreement (or has previously advised) who the initial Noval
                  Nominees are among the current directors of Canadian 88.

         (c)      DEH and Noval shall advise Canadian 88 on the date of this
                  Agreement (or have previously advised) who the initial
                  Additional Directors will be. To the extent that the initial
                  Additional Directors are not among the current directors of
                  Canadian 88, Canadian 88 shall use reasonable efforts to cause
                  current members of the Board of Directors to resign on the
                  date of this Agreement (in a sequential manner, if required)
                  so that the vacancies resulting thereby may be filled by the
                  remaining directors of Canadian 88 with such initial
                  Additional Directors.

2.4      FUTURE CHANGES TO THE BOARD OF DIRECTORS

         (a)      If any DEH Nominee shall cease to serve or fails to be elected
                  as a director of Canadian 88 for any reason other than as set
                  forth in Section 2.4(d), then the vacancy resulting thereby
                  shall be filled by the remaining directors of Canadian 88 with
                  a new DEH Nominee, and such new DEH Nominee shall thereafter
                  serve until the expiration of the term of the DEH Nominee
                  replaced by such new DEH Nominee.

         (b)      If any Noval Nominee shall cease to serve or fails to be
                  elected as a director of Canadian 88 for any reason other than
                  as set forth in Section 2.4(e), then the vacancy resulting
                  thereby shall be filled by the remaining directors of Canadian
                  88 with a new Noval Nominee, and such new Noval Nominee shall
                  thereafter serve until the expiration of the term of the Noval
                  Nominee replaced by such new Noval Nominee.

         (c)      If any Additional Director shall cease to serve as a director
                  of Canadian 88 for any reason, then the vacancy resulting
                  thereby shall be filled by the remaining directors of Canadian
                  88 with a new Additional Director chosen by the nominating
                  committee of the Board of Directors, and such new Additional
                  Director shall thereafter serve until the expiration of the
                  term of the Additional Director replaced by such new
                  Additional Director.

         (d)      If at any time the DEH Ownership Percentage decreases so that
                  DEH is no longer entitled to designate DEH Nominees to be
                  nominated for election as directors of Canadian 88, then DEH
                  shall, unless a majority of the Additional Directors determine
                  otherwise, use reasonable efforts to cause the DEH Nominees
                  serving as Canadian 88 directors to immediately resign.

         (e)      If at any time the Noval Ownership Percentage decreases so
                  that Noval is no longer entitled to designate Noval Nominees
                  to be nominated for election as directors of Canadian 88, then
                  Noval shall, unless a majority of the Additional Directors
                  determine otherwise, use reasonable efforts to cause the Noval
                  Nominees serving as Canadian 88 directors to immediately
                  resign.

2.5      SIZE OF THE BOARD OF DIRECTORS

         The number of persons to be elected to the Board of Directors at any
         meeting of the shareholders of Canadian 88 will be set at nine and
         shall not be increased without the consent of DEH and Noval.

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                                        8

2.6      COMMITTEES OF THE BOARD OF DIRECTORS

         (a)      The Board of Directors shall, on the date of this Agreement,
                  create (if not already created) and appoint the members of the
                  following committees of the Board of Directors, each of which
                  shall have three members:

                  (i)      an audit committee, which shall perform the functions
                           required by applicable law;

                  (ii)     an executive committee, which shall have the powers
                           and authority, consistent with applicable law,
                           determined from time to time by the Board of
                           Directors. Notwithstanding the by-laws of Canadian
                           88, motions made at any meeting of the executive
                           committee shall be carried only by a unanimous vote;
                           and

                  (iii)    a nominating committee, which shall perform the
                           functions described in this Agreement.

         (b)      The Board of Directors shall appoint one director then serving
                  as a DEH Nominee, one director then serving as a Noval Nominee
                  and one director then serving as an Additional Director to
                  each of the audit, executive and nominating committees of the
                  Board of Directors and to each other committee of the Board of
                  Directors as may be appointed from time to time. Each such
                  appointee must meet the individual requirements for committee
                  membership contained in the Canada Business Corporations Act
                  and the respective residency of the members of each committee
                  must meet the Resident Canadian requirements of the Canada
                  Business Corporations Act. DEH shall not be obligated to
                  nominate any Resident Canadians for committee membership.

2.7      QUALIFICATION AS A DIRECTOR OR COMMITTEE MEMBER

         All DEH Nominees and Noval Nominees shall have consented in writing to
         serve as a director of Canadian 88 (unless they have previously done
         so) and shall meet the qualification requirements to serve as a
         director and, if applicable, a committee member under the Canada
         Business Corporations Act, provided that DEH Nominees will be required
         to be Resident Canadians only to the extent required by Section 2.2.

2.8      CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

         (a)      James D. Raymond shall continue as the chairman of the Board
                  of Directors for so long as the Board of Directors determines.

         (b)      On the date of this Agreement:

                  (i)      Noval shall resign as the President and Chief
                           Executive Officer of Canadian 88; and

                  (ii)     Joseph L. Pritchett, III (the current Executive Vice
                           President Exploration and Production of DEH) shall be
                           appointed as the President and Chief Executive
                           Officer of Canadian 88 in place of Noval. Upon such
                           appointment, Canadian 88 shall enter into the
                           executive employment agreement with Mr. Pritchett
                           that is referred to in and attached to Corporate
                           Governance and Transition Arrangements letter dated
                           March 17, 2000 from DEH to Canadian 88 and Noval.


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                                        9

2.9      CARRYING OUT AGREEMENT

         (a)      DEH and Noval will use their respective best efforts to cause
                  the DEH Nominees and the Noval Nominees, if they are elected
                  to the Board of Directors and to the extent permitted by law,
                  to act and vote as directors of Canadian 88 so as to carry out
                  the provisions and intent of this Agreement.

         (b)      Notwithstanding (a) above, Canadian 88, DEH and Noval
                  acknowledge that all members of the Board of Directors have an
                  obligation to act as directors in a manner that is consistent
                  with their statutory and fiduciary duties and that nothing in
                  this Agreement is intended to interfere with the proper
                  discharge by them of those duties.

                                    ARTICLE 3
               BUSINESS COMBINATION TRANSACTIONS AND SOLICITATIONS

3.1      LIMITATION ON BUSINESS COMBINATION TRANSACTIONS

         DEH and Noval shall not engage in any Business Combination Transaction
         or any Related Party Transaction with Canadian 88, except in the
         following cases:

         (a)      where otherwise permitted by this Agreement; or

         (b)      with the prior written consent of a majority of the Additional
                  Directors.

3.2      LIMITATION ON SOLICITATIONS, ETC.

         Except as otherwise permitted by this Agreement or unless a majority of
         the Additional Directors shall have consented in writing to such
         action, DEH and Noval shall not (except through a DEH Nominee or a
         Noval Nominee, as the case may be, acting in his capacity as a director
         of Canadian 88 at a meeting of the Board of Directors):

         (a)      solicit proxies or consents or become a participant in a
                  "solicitation" (as such term is defined in the Securities Act
                  (Alberta)) of proxies or consents with respect to securities
                  of Canadian 88 with regard to:

                  (i)      the election of directors of Canadian 88; or

                  (ii)     any Business Combination Transaction, Fundamental
                           Change or Related Party Transaction involving
                           Canadian 88 or the holders of Voting Shares;

         (b)      do any of the following:

                  (i)      seek to control the Board of Directors, except
                           through the participation of the DEH Nominees and the
                           Noval Nominees as directors of Canadian 88 and the
                           exercise by DEH and Noval of the voting rights
                           attached to the Voting Shares Beneficially Owned by
                           DEH and Noval (subject to compliance with Article 7);

<PAGE>   13


                                       10

                  (ii)     seek to advise, encourage or influence any Person
                           with respect to the voting of any securities of
                           Canadian 88 against:

                           (A)      the nominees for election to the Board of
                                    Directors named in; or

                           (B)      a recommendation with respect to any
                                    proposed Business Combination Transaction,
                                    Fundamental Change or Related Party
                                    Transaction contained in;

                           a management proxy circular of Canadian 88; or

                  (iii)    seek to induce or in any manner to assist any Person
                           to initiate any shareholder proposal in respect of a
                           meeting of shareholders of Canadian 88, requisition a
                           meeting of shareholders of Canadian 88 or initiate
                           any Business Combination Transaction, Fundamental
                           Change, Related Party Transaction, Take-over Bid for
                           securities of Canadian 88 or other extraordinary
                           transaction involving Canadian 88, including the
                           entering into of any "lock-up" or similar agreement
                           for such purpose (except that DEH, any of its
                           Affiliates or Noval may make a confidential proposal
                           to the Board of Directors with respect to any such
                           matter);

         (c)      make any public announcement (except as required by law or
                  stock exchange policy) or make any written or oral proposal
                  relating to any Business Combination Transaction, Fundamental
                  Change, Related Party Transaction, Take-over Bid for
                  securities of Canadian 88 or other extraordinary transaction
                  involving DEH, any of its Affiliates or Noval and Canadian 88
                  (except that DEH, any of its Affiliates or Noval may make a
                  confidential proposal to the Board of Directors with respect
                  to any such transaction);

         (d)      deposit any securities of Canadian 88 in a voting trust or
                  subject any securities of Canadian 88 to any arrangement or
                  agreement with respect to the voting of securities of Canadian
                  88; or

         (e)      form, join or in any way participate in a partnership, limited
                  partnership, syndicate or other group (or otherwise act
                  jointly or in concert with any other Person) for the purpose
                  of acquiring, holding, voting or disposing of securities of
                  Canadian 88 or taking or resulting in any other actions
                  restricted or prohibited under clauses (a) through (d) of this
                  Section 3.2.


3.3      SHARE PRICE PERFORMANCE EXCEPTION

         (a)      If the Current Market Price of the Common Shares is less than:

                  (i)      Cdn. $3.00 as at March 24, 2001 or any time after
                           such date; or

                  (ii)     Cdn. $4.00 as at September 24, 2001 or any time after
                           such date;

                  then DEH and Noval (as the case may be) shall be released from
                  Sections 3.1, 3.2, 4.1, 5.1, 6.1 and 6.2 and DEH or Noval may
                  (i) make to, engage in with or propose to Canadian 88 or the
                  holders of Voting Shares a Business Combination Transaction,
                  Fundamental Change, Related Party Transaction, Take-over Bid
                  or any other transaction involving Canadian 88 or the holders
                  of Voting Shares or (ii) encourage a third party to make or
                  propose any of the

<PAGE>   14


                                       11

                  foregoing; and DEH, Noval or such third party may take all
                  action necessary in respect of the foregoing.

         (b)      Canadian 88 shall, in connection with any transaction referred
                  to in (a) above:

                  (i)      provide DEH, Noval or any third party identified by
                           DEH or Noval with access to confidential information
                           concerning Canadian 88 and its operations, upon the
                           entering into of a customary form of confidentiality
                           agreement (but which agreement does not obligate DEH,
                           Noval or such third party to obtain the consent of
                           the Board of Directors to make a proposal to Canadian
                           88 or the holders of Voting Shares for a transaction
                           referred to in (a) above if all holders of Voting
                           Shares are treated equally under such transaction);

                  (ii)     supervise the preparation of any formal valuation
                           required by applicable law;

                  (iii)    if shareholder approval is required by applicable
                           law, place such transaction before the holders of
                           Voting Shares at a meeting of such holders;

                  (iv)     expeditiously convene any meeting of holders of
                           Voting Shares requisitioned by DEH or Noval; and

                  (v)      refrain from acting in a manner which prevents
                           holders of Voting Shares from voting in respect of or
                           accepting a transaction referred to in (a) above.

         (c)      Without derogating from the specific obligations of Canadian
                  88 described therein, nothing in (b) above shall:

                  (i)      obligate Canadian 88 or the Board of Directors to
                           enter into any agreement (other than the
                           confidentiality agreement referred to in (b)(i)
                           above), recommend any transaction or take any other
                           action unless to do so would be in the best interests
                           of Canadian 88 and consistent with the discharge by
                           the Board of Directors of its fiduciary duties; or

                  (ii)     prevent Canadian 88 or the Board of Directors from:

                           (A)      obtaining advice from financial and legal
                                    advisers to assist Canadian 88 or the Board
                                    of Directors in considering a proposed
                                    transaction and any alternatives to such
                                    transaction; or

                           (B)      taking any other action that would be in the
                                    best interests of Canadian 88 and consistent
                                    with the discharge by the Board of Directors
                                    of its fiduciary duties.

<PAGE>   15


                                       12

                                    ARTICLE 4
                             DEH ACQUISITION RIGHTS

4.1      LIMITATION ON ACQUISITION OF ADDITIONAL SHARES BY DEH

         DEH shall not acquire Beneficial Ownership of any Voting Shares or
         Convertible Securities in addition to the Voting Shares Beneficially
         Owned by DEH as of the date hereof, except in the following cases:

         (a)      where otherwise permitted by this Agreement; or

         (b)      with the prior written consent of a majority of the Additional
                  Directors; or

         (c)      pursuant to the exercise of rights under Section 6.2.

4.2      RIGHT TO MAKE MARKET PURCHASES

         DEH shall have the right, notwithstanding any other provision of this
         Agreement, to purchase at any time, subject to compliance with
         applicable securities laws and stock exchange rules, in market, private
         or other transactions, Beneficial Ownership of previously issued Voting
         Shares so as to increase its Beneficial Ownership of Voting Shares to
         25%, less one Voting Share.

4.3      RIGHT TO PARTICIPATE IN PRIVATE PLACEMENTS

         (a)      If Canadian 88 determines to issue any Voting Shares,
                  Convertible Securities or combination thereof in a Private
                  Placement, then Canadian 88 shall provide written notice of
                  such determination to DEH, which notice shall include the
                  proposed size and other terms of the Private Placement and
                  shall offer to DEH the right to purchase, at the same price
                  and on the same terms (or as otherwise required by applicable
                  stock exchange rules), Beneficial Ownership of up to the DEH
                  Ownership Percentage of the Voting Shares or Convertible
                  Securities (or both in the case of a combined offering) to be
                  included in the Private Placement (for the purposes of this
                  Section 4.3, the "Offer Notice").

         (b)      If DEH determines to accept the offer contained in the Offer
                  Notice, DEH shall deliver a written notice to Canadian 88
                  indicating its acceptance within five Business Days after its
                  receipt of the Offer Notice, which notice shall indicate
                  whether DEH has accepted such offer and specifying the number
                  or amount of Voting Shares or Convertible Securities (or both
                  in the case of a combined offering) that DEH is willing to
                  purchase (for the purposes of this Section 4.3, an "Acceptance
                  Notice").

         (c)      Any acceptance of the offer contained in an Offer Notice by
                  delivery of an Acceptance Notice shall be irrevocable and
                  shall constitute a commitment by DEH to purchase from Canadian
                  88, upon the terms contained in the Offer Notice, the number
                  or amount of Voting Shares or Convertible Securities (or both
                  in the case of a combined offering) covered by such Acceptance
                  Notice, limited to the DEH Ownership Percentage of the total
                  number or amount of Voting Shares or Convertible Securities
                  (or both) actually issued in the Private Placement.

<PAGE>   16


                                       13

4.4      RIGHT TO PARTICIPATE IN PUBLIC OFFERINGS

         (a)      If Canadian 88 determines to issue any Voting Shares,
                  Convertible Securities or combination thereof by way of a
                  Public Offering, then Canadian 88 shall provide written notice
                  of such determination to DEH, which notice shall include the
                  proposed size and other terms of the Public Offering and may
                  include a minimum and maximum size and price range, to the
                  extent then known, the name of the managing underwriter for
                  the Public Offering and the date when it is proposed that such
                  Public Offering will be made (for the purposes of this Section
                  4.4, the "Offer Notice").

         (b)      If DEH determines to participate in the Public Offering, DEH
                  shall deliver a written notice to Canadian 88, within five
                  Business Days after its receipt of the Offer Notice in the
                  case of a marketed transaction or within one Business Day
                  after its receipt of the Offer Notice in the case of a "bought
                  deal", indicating its desire to participate and specifying the
                  number or amount of Voting Shares or Convertible Securities
                  (or both in the case of a combined offering) that DEH is
                  willing to purchase, up to the DEH Ownership Percentage of the
                  Voting Shares or Convertible Securities (or both in the case
                  of a combined offering) to be included in the Public Offering
                  (for the purposes of this Section 4.4, the "Acceptance
                  Notice").

         (c)      Any Acceptance Notice shall be irrevocable if the terms of the
                  Public Offering are within the parameters contained in the
                  Offer Notice and Canadian 88 shall cause the underwriters of
                  the Public Offering to offer to DEH the right to purchase from
                  the underwriters of the Public Offering, at the public
                  offering price set forth on the cover page of the prospectus
                  or prospectus supplement for the Public Offering, the number
                  or amount of Voting Shares or Convertible Securities (or both
                  in the case of a combined offering) specified by DEH in the
                  Acceptance Notice, limited to the DEH Ownership Percentage of
                  the total number or amount of Voting Shares or Convertible
                  Securities (or both) actually issued in the Public Offering,
                  and DEH shall accept such offer.

4.5      ACQUISITION OF ADDITIONAL SHARES DUE TO SHARE COMPENSATION ARRANGEMENT

         (a)      If Canadian 88 issues any Voting Shares pursuant to a Share
                  Compensation Arrangement, then Canadian 88 shall provide
                  written notice of such issuance to DEH, which notice may be in
                  the form of a copy sent to DEH of the periodic reporting
                  notice of such issuance required to be sent by Canadian 88 to
                  any stock exchange on which its securities are listed for
                  trading (the "Issue Notice").

         (b)      DEH shall have the right, exercisable until the end of the
                  calendar quarter following the calendar quarter in which the
                  Issue Notice is dated, to purchase Beneficial Ownership of up

                  to the DEH Ownership Percentage of the total number of Voting
                  Shares indicated in the Issue Notice as having been issued,
                  plus those issued to DEH pursuant to this Section 4.5, in the
                  following manner:

                  (i)      if the Current Market Price of the Voting Shares to
                           be purchased by DEH is less than Cdn. $500,000, then
                           DEH may purchase Voting Shares in market, private or
                           other transactions; and

<PAGE>   17


                                       14

                  (ii)     if the Current Market Price of the Voting Shares to
                           be purchased by DEH is Cdn. $500,000 or more or if
                           DEH is prevented by applicable securities laws from
                           purchasing Voting Shares in market, private or other
                           transactions, then DEH shall have the right to
                           require Canadian 88 to issue the Voting Shares to
                           DEH, at the greater of the Current Market Price and
                           the price required by applicable stock exchange
                           rules.

4.6      RIGHT TO PARTICIPATE IN OTHER DISTRIBUTIONS

         (a)      If Canadian 88 determines to issue any Voting Shares,
                  Convertible Securities or combination thereof in a transaction
                  other than a Private Placement, Public Offering or Share
                  Compensation Arrangement (an "Issue"), then Canadian 88 shall
                  provide written notice of such determination to DEH, which
                  notice shall include the proposed size and other terms of the
                  Issue and shall offer to DEH the right to purchase, at the
                  greater of the Current Market Price and the price required by
                  applicable stock exchange rules, Beneficial Ownership of up to
                  the DEH Ownership Percentage of the total number or amount of
                  the Voting Shares or Convertible Securities (or both in the
                  case of a combined offering) to be included in the Issue, plus
                  those issued to DEH pursuant to this Section 4.6 (for the
                  purposes of this Section 4.6, the "Offer Notice").

         (b)      If DEH determines to accept the offer contained in the Offer
                  Notice, DEH shall deliver a written notice to Canadian 88
                  indicating its acceptance within five Business Days after its
                  receipt of the Offer Notice, which notice shall indicate
                  whether DEH has accepted such offer and specifying the number
                  or amount of Voting Shares or Convertible Securities (or both
                  in the case of a combined offering) that DEH is willing to
                  purchase (for the purposes of this Section 4.6, an "Acceptance
                  Notice").

         (c)      Any acceptance of the offer contained in an Offer Notice by
                  delivery of an Acceptance Notice shall be irrevocable and
                  shall constitute a commitment by DEH to purchase from Canadian
                  88, upon the terms contained in the Offer Notice, the number
                  or amount of Voting Shares or Convertible Securities (or both
                  in the case of a combined offering) covered by such Acceptance
                  Notice, limited to the DEH Ownership Percentage of the total
                  number or amount of Voting Shares or Convertible Securities
                  (or both) actually issued in the Issue, plus those issued to
                  DEH pursuant to this Section 4.6.


4.7      ACQUISITION OF ADDITIONAL SHARES IF TAKE-OVER BID COMMENCED

         DEH may acquire, by a Qualified Bid, Beneficial Ownership of previously
         issued Voting Shares and Convertible Securities if any Person (other
         than DEH or any Affiliate of DEH) has commenced a Take-over Bid for
         Voting Shares.

4.8      CONSEQUENTIAL CANADIAN 88 RESTRICTIONS

         Canadian 88 shall not repurchase any of its Voting Shares for
         cancellation:

         (a)      if the result of doing so would be to increase the DEH
                  Ownership Percentage to 20% or more in the first instance or
                  25% or more in the second instance, except with (in each such
                  instance) the prior written consent of DEH; or

<PAGE>   18


                                       15

         (b)      pursuant to a normal course issuer bid or a substantial issuer
                  bid, except with the prior written consent of DEH.

                                    ARTICLE 5
                            NOVAL ACQUISITION RIGHTS

5.1      LIMITATION ON ACQUISITION OF ADDITIONAL SHARES BY NOVAL

         Noval shall not acquire Beneficial Ownership of any Voting Shares or
         Convertible Securities in addition to the Voting Shares Beneficially
         Owned by Noval as of the date hereof, except in the following cases:

         (a)      where otherwise permitted by this Agreement; or

         (b)      with the prior written consent of a majority of the Additional
                  Directors; or

         (c)      pursuant to the exercise of rights under Section 6.2.

5.2      RIGHT TO MAKE MARKET PURCHASES

         Noval shall have the right, notwithstanding any other provision of this
         Agreement, to purchase at any time, subject to compliance with
         applicable securities laws and stock exchange rules, in market, private
         or other transactions, Beneficial Ownership of previously issued Voting
         Shares so as to increase his Beneficial Ownership of Voting Shares to
         15%, less one Voting Share.

5.3      RIGHT TO PARTICIPATE IN ISSUES

         If Canadian 88 determines to issue any Voting Shares, Convertible
         Securities or combination thereof, then Noval shall have the right to
         purchase up to the Noval Ownership Percentage of the Voting Shares or
         Convertible Securities (or both in the case of a combined offering) to
         be included in such issue, in the same manner as described in Sections
         4.3, 4.4, 4.5 and 4.6, with the necessary changes.

                                    ARTICLE 6
                               DEH TRANSFER RIGHTS

6.1      PERMITTED TRANSFERS OF SHARES BY DEH

         DEH may sell, transfer or otherwise convey ("Transfer") Beneficial
         Ownership of any Voting Shares or Convertible Securities (including
         Voting Shares or Convertible Securities subject to Exchangeable
         Securities) only in the following cases:

         (a)      a Transfer to an Affiliate of DEH if the Affiliate agrees to
                  be bound by all of the terms of this Agreement otherwise
                  applicable to DEH;

         (b)      a Transfer pursuant to an unsolicited broker's transaction or
                  transactions of Voting Shares in the open market (including
                  pre-arranged or "cross" trades), limited in each calendar
                  quarter to 10% of the number of Voting Shares that DEH
                  Beneficially Owns on the date of this Agreement;

<PAGE>   19


                                       16

         (c)      a Transfer to Noval pursuant to exercise of the right of first
                  refusal described in Section 6.2;

         (d)      in respect of any Voting Shares or Convertible Securities for
                  which Noval does not exercise the right of first refusal
                  described in Section 6.2:

                  (i)      a Transfer pursuant to:

                           (A)      a Public Offering;

                           (B)      a Private Placement, including for this
                                    purpose a distribution for other than cash;
                                    or

                           (C)      the procedures for a distribution from the
                                    holdings of a control person contained in
                                    Section 112 of the Securities Act (Alberta)
                                    (and/or the corresponding provisions of
                                    other applicable securities laws) and the
                                    rules of The Toronto Stock Exchange;

                           if DEH can evidence to the satisfaction of Canadian
                           88 that no Person will be or become the Beneficial
                           Owner of 10% or more of the then outstanding Voting
                           Shares as a consequence of the Transfer; or

                  (ii)     a Transfer to any Person (other than DEH or any
                           Affiliate of DEH) who has commenced a Take-over Bid
                           for Voting Shares.

6.2      RIGHT OF FIRST REFUSAL

         (a)      If either DEH or Noval (the "Offeror") desires to sell all or
                  any of its or his Beneficial Ownership in Voting Shares, the
                  Offeror shall give notice of such proposed sale (the "Offer
                  Notice") to Canadian 88 and the other party to this Agreement
                  and shall set out in the Offer Notice:

                  (i)      the number of its or his Voting Shares proposed to be
                           sold (the "Offered Shares");

                  (ii)     the "Purchase Price", being (as the case may be):

                           (A)      the price at which it or he desires to sell
                                    the Offered Shares;

                           (B)      a range of prices (with the "high" price not
                                    more than 20% greater than the "low" price)
                                    in the case of a Transfer by DEH pursuant to
                                    a Public Offering described in Section
                                    6.1(d)(i)(A) or a control person
                                    distribution described in Section
                                    6.1(d)(i)(C); or

                           (C)      the Take-over Bid offer price in the case of
                                    a Transfer to any Person (other than DEH,
                                    any Affiliate of DEH or Noval) who has
                                    commenced a Takeover Bid for Voting
                                    Shares; and

                  (iii)    any other material terms of the proposed sale.

<PAGE>   20


                                       17

         (b)      Upon the Offer Notice being given, DEH or Noval, as the case
                  may be (the "Offeree"), shall have the right to purchase all,
                  but not less than all, of the Offered Shares for the Purchase
                  Price.

         (c)      If the Offeree desires to purchase the Offered Shares, it or
                  he shall give notice to the Offeror and to Canadian 88 within
                  10 days days of having been given the Offer Notice and the
                  transaction of purchase and sale shall be completed in
                  accordance with the terms set out in the Offer Notice.

         (d)      If the Offeree does not give notice in accordance with the
                  provisions of Section 6.2(c) that it or he is willing to
                  purchase all of the Offered Shares, the rights of the Offeree,
                  subject as hereinafter provided, to purchase the Offered
                  Shares shall cease and the Offeror may sell the Offered Shares
                  to any Person within 30 days after the expiry of the 10 period
                  referred to in Section 6.2(c), for a price not less than the
                  Purchase Price, on other terms no more favourable to such
                  person than those set forth in the Offer Notice and in
                  compliance with Section 6.1. If the Offered Shares are not
                  sold within such 30 day period on such terms, the rights of
                  the Offeree pursuant to this Section 6.2 shall again take
                  effect and so on from time to time.

         (e)      Each of DEH and Noval may sell in each calendar quarter,
                  exempt from the procedures set forth in Sections 6.2(a) to (d)
                  above, up to 10% of the number of Voting Shares that DEH or
                  Noval (as the case may be) owns at the date of this Agreement,
                  pursuant to an unsolicited broker's transaction or
                  transactions of Voting Shares in the open market (including
                  prearranged or "cross" trades).

                                    ARTICLE 7
                                 VOTING MATTERS

7.1      VOTING WITH RESPECT TO DIRECTORS

         (a)      DEH agrees that, at any meeting of holders of Voting Shares at
                  which an item of business is the election of members of the
                  Board of Directors, it will not withhold from voting any of
                  its Voting Shares in respect of, or vote any of its Voting
                  Shares against, the election of the Noval Nominees or the
                  Independent Directors.

         (b)      Noval agrees that, at any meeting of holders of Voting Shares
                  at which an item of business is the election of members of the
                  Board of Directors, he will not withhold from voting any of
                  his Voting Shares in respect of, or vote any of his Voting
                  Shares against, the election of the DEH Nominees or the
                  Independent Directors.

                                    ARTICLE 8
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

8.1      REPRESENTATIONS AND WARRANTIES

         (a)      Canadian 88 represents and warrants to DEH and Noval that:

<PAGE>   21


                                       18

                  (i)      Canadian 88 is a corporation duly organized, validly
                           existing and in good standing under the Canada
                           Business Corporations Act and has the corporate power
                           and authority to enter into this Agreement and to
                           carry out its obligations hereunder;

                  (ii)     the execution and delivery of this Agreement by
                           Canadian 88 and the consummation by Canadian 88 of
                           the transactions contemplated hereby have been duly
                           authorized by all necessary corporate action on the
                           part of Canadian 88 and no other corporate
                           proceedings on the part of Canadian 88 are necessary
                           to authorize this Agreement or any of the
                           transactions contemplated hereby; and

                  (iii)    this Agreement has been duly executed and delivered
                           by Canadian 88 and constitutes a valid and binding
                           obligation of Canadian 88, and, assuming this
                           Agreement constitutes a valid and binding obligation
                           of DEH and Noval, is enforceable against Canadian 88
                           in accordance with its terms, subject to applicable
                           bankruptcy, reorganization, insolvency, moratorium,
                           fraudulent conveyance and similar laws affecting
                           creditors' rights generally from time to time and to
                           general principles of equity.

         (b)      DEH represents and warrants to Canadian 88 and Noval that:

                  (i)      DEH is a limited liability company duly organized,
                           validly existing and in good standing under the
                           Limited Liability Company Act (Delaware) and has the
                           corporate power and authority to enter into this
                           Agreement and to carry out its obligations hereunder;

                  (ii)     the execution and delivery of this Agreement by DEH
                           and the consummation by DEH of the transactions
                           contemplated hereby have been duly authorized by all
                           necessary corporate action on the part of DEH and no
                           other corporate proceedings on the part of DEH are
                           necessary to authorize this Agreement or any of the
                           transactions contemplated hereby; and

                  (iii)    this Agreement has been duly executed and delivered
                           by DEH and constitutes a valid and binding obligation
                           of DEH, and, assuming this Agreement constitutes a
                           valid and binding obligation of Canadian 88 and
                           Noval, is enforceable against DEH in accordance with
                           its terms, subject to applicable bankruptcy,
                           reorganization, insolvency, moratorium, fraudulent
                           conveyance and similar laws affecting creditors'
                           rights generally from time to time and to general
                           principles of equity.

         (c)      Noval represents and warrants to Canadian 88 and DEH that:

                  (i)      Noval has the capacity to enter into this Agreement
                           and to carry out his obligations hereunder; and

                  (ii)     this Agreement has been duly executed and delivered
                           by Noval and constitutes a valid and binding
                           obligation of Noval and, assuming this Agreement
                           constitutes a valid and binding obligation of
                           Canadian 88 and DEH, is enforceable against Noval in
                           accordance with its terms, subject to applicable
                           bankruptcy, fraudulent conveyance and similar laws
                           affecting creditors' rights generally from time to
                           time and to general principles of equity.

<PAGE>   22


                                       19

8.2      COOPERATION REGARDING FILINGS, ETC.

         DEH, Noval and Canadian 88 will cooperate with each other in connection
         with the making of any filings with securities commissions, stock
         exchanges or other regulatory authorities as may be required as a
         result of the entering into or performance of this Agreement and DEH
         and Noval (as the case may be) will promptly advise the other parties
         hereto of any changes in their Beneficial Ownership of Voting Shares.

                                    ARTICLE 9
                                   TERMINATION

9.1      TERMINATION

         (a)      This Agreement may be terminated in its entirety by the mutual
                  written consent of the parties hereto.

         (b)      This Agreement shall terminate on March 24, 2003.

         (c)      This Agreement shall terminate before March 24, 2003:

                  (i)      with respect to DEH if the DEH Ownership Percentage
                           decreases to less than 5%;

                  (ii)     with respect to Noval if the Noval Ownership
                           Percentage decreases to less than 2%; or

                  (iii)    in its entirety if the DEH Ownership Percentage
                           decreases to less than 5% and the Noval Ownership
                           Percentage decreases to less than 2%.

         (d)      If this Agreement is terminated with respect to DEH or Noval
                  pursuant to Sections 9.1(c)(i) or 9.1(c)(ii), then the rights
                  and obligations of DEH or Noval, as the case may be, under
                  this Agreement will be terminated but this Agreement will
                  continue in force with respect to the rights and obligations
                  of Canadian 88 and the other remaining party.

         (e)      No termination shall relieve any party from liability for any
                  breach of this Agreement that occurred prior to its
                  termination.

                                   ARTICLE 10
                               GENERAL PROVISIONS

10.1     NOTICES

         (a)      The addresses and fax number of each party for notices shall
                  be as follows:

                  (i)      to Canadian 88:

<PAGE>   23


                                       20

<TABLE>
<S>                      <C>                                         <C>
                         Canadian 88 Energy Corp.                    with a copy to:
                         Suite 700                                   McCarthy Tetrault
                         400 - 3rd Avenue S.W.                       Suite 3300, 421 - 7th Avenue S.W.
                         Calgary, AB T2P 4H2                         Calgary, AB T2P 4K9

                         Attn:    Donald R. Gardner                  Attn:    David F. Phillips
                         Fax:     (403) 216-2359                     Fax:     (403) 260-3501

                                                                     and:
                                                                     Carscallen Lockwood
                                                                     #1500, 407 - 2nd Street S.W.
                                                                     Calgary, AB T2P 2Y3

                                                                     Attn: Stan Carscallen
                                                                     Fax:     (403) 262-2952
</TABLE>

                  (ii)   to DEH:

<TABLE>
<S>                      <C>                                         <C>
                         Duke Energy Hydrocarbons, L.L.C.            with a copy to:
                         10777 Westheimer                            Bennett Jones
                         Suite 650                                   4500, 855 - 2nd Street S.W.
                         Houston, TX 77042                           Calgary, AB T2P 4K7

                         Attn:    President                          Attn:    John MacNeil/Margaret Lemay
                         Fax:     (713) 260-8601                     Fax:     (403) 265-7219
</TABLE>

                  (iii)  to Noval:

<TABLE>
<S>                      <C>                                         <C>
                         Greg S. Noval                               with a copy to:
                         c/o Canadian 88 Energy Corp.                Fraser Milner
                         700, 400 - 3rd Avenue S.W.                  3000, 234 - 4th Avenue S.W.
                         Calgary, AB T2P 4H2                         Calgary, AB T2P 4X7

                         Attn:    Greg S. Noval                      Attn:    William K. Jenkins
                         Fax:     (403) 974-8868                     Fax:     (403) 268-3100
</TABLE>

         (b)      Any notice, communication or statement (a "notice") required,
                  permitted or contemplated hereunder shall be in writing and
                  shall be delivered as follows:

                  (i)      by delivery to a party between 8:00 a.m. and 4:00
                           p.m. on a Business Day at the address of such party
                           for notices, in which case the notice shall be deemed
                           to have been received by that party when it is
                           delivered; or

                  (ii)     by fax to a party to the fax number of such party for
                           notices, in which case, if the notice was faxed prior
                           to 4:00 p.m. on a Business Day the notice shall be
                           deemed to have been received by that party when it
                           was faxed and if it is faxed on a day which is not a
                           Business Day or is faxed after 4:00 p.m. on a
                           Business Day, it shall be deemed to have been
                           received on the next following Business Day.

<PAGE>   24


                                       21

         (c)      A party may from time to time change its address for service
                  or its fax number for service by giving written notice of such
                  change to the other party.

10.2     AMENDMENT AND WAIVER

         No amendment to this Agreement shall be valid or binding unless set
         forth in writing and duly executed by all of the parties hereto. No
         waiver of any breach of any provision of this Agreement shall be
         effective or binding unless made in writing and signed by the party
         purporting to give the same and, unless otherwise provided in the
         written waiver, shall be limited to the specific breach waived.

10.3     INJUNCTIVE RELIEF

         Each of the parties hereto hereby acknowledges that, in the event of a
         breach by any of them of any material provision of this Agreement, the
         aggrieved party may be without an adequate remedy of law. Each of the
         parties therefore agrees that in the event of a breach of any material
         provision of this Agreement the aggrieved party may elect to institute
         and prosecute proceedings in any court of competent jurisdiction to
         enforce specific performance or to enjoin the continuing breach of such
         provision, as well as to obtain damages for breach of this Agreement.
         By seeking or obtaining any such relief, the aggrieved party will not
         be precluded from seeking or obtaining any other relief to which it may
         be entitled in equity or at law.

10.4     GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
         the laws of Alberta and the laws of Canada applicable therein. Each
         party attorns to the jurisdiction of the courts of Alberta.

10.5     FURTHER ASSURANCES

         Each party to this Agreement shall, from time to time, at the request
         of either of the other parties, and without further consideration, do
         all such acts and execute and deliver all such further documents as are
         reasonably required to fully perform the terms of this Agreement.

10.6     SEVERABILITY

         If any term or other provision of this Agreement is invalid, illegal or
         incapable of being enforced by any rule of law, or public policy, all
         other conditions and provisions of this Agreement shall nevertheless
         remain in full force and effect so long as the economic or legal
         substance of the transactions contemplated hereby is not affected in
         any manner adverse to any party. Upon such determination that any term
         or other provision is invalid, illegal or incapable of being enforced,
         the parties hereto shall negotiate in good faith to modify this
         Agreement so as to effect the original intent of the parties as closely
         as possible in an acceptable manner to the end that the transactions
         contemplated hereby are fulfilled to the fullest extent possible.

<PAGE>   25


                                       22

10.7     ENTIRE AGREEMENT

         This Agreement and the Corporate Governance and Transition Arrangements
         letter dated March 17, 2000 from DEH to Canadian 88 and Noval
         constitutes the entire agreement among the parties with respect to the
         subject matter hereof and supersedes all prior agreements and
         undertakings, both written and oral, among the parties, or any of them,
         with respect to the subject matter hereof.

10.8     ASSIGNMENT

         Except as may be expressly provided in this Agreement (including, in
         particular, in Section 6.1(a)), none of the parties hereto may assign
         it or his rights or obligations under this Agreement without the prior
         written consent of all of the other parties hereto, which consent may
         be arbitrarily withheld.

10.9     BENEFIT OF AGREEMENT

         This Agreement shall be binding upon and inure solely to the benefit of
         each party hereto, and nothing in this Agreement, express or implied,
         is intended to or shall confer upon any other person any rights,
         benefits or remedies of any nature whatsoever under or by reason of
         this Agreement.

10.10    COUNTERPARTS

         This Agreement may be executed in one or more counterparts, each of
         which when executed shall be deemed to be an original but all of which
         taken together shall constitute one and the same agreement.

10.11    FAX DELIVERY

         This Agreement may be executed in one place and delivered to another by
         fax and, when received, shall be deemed to be the delivery of an
         originally executed signature.



<PAGE>   26


                                       23

         IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first written above.



CANADIAN 88 ENERGY CORP.


By:
   ------------------------------------
   James D. Raymond,
   Chairman


By:
   ------------------------------------
   Donald R. Gardner,
   Chief Financial Officer



DUKE ENERGY HYDROCARBONS, L.L.C.


By:
   ------------------------------------
   Name:
   Title:





SIGNED by Greg S. Noval in the presence of:                    )
                                                               )
                                                               )
                                                               )
                                                               )
                                                               )
WITNESS as to the signature of                                 )   GREG S. NOVAL
Greg S. Noval                                                  )
                                                               )