<PAGE>
 
                                                                    Exhibit 10.5



                             AMENDED AND RESTATED
                            INTERCREDITOR AGREEMENT

                                     among

                              Ocean Energy, Inc.,
                            a Delaware corporation,

                              Ocean Energy, Inc.,
                           a Louisiana corporation,

                     Ocean Energy Resources Canada, Ltd.,

                  Chase Bank of Texas, National Association,
                   as Administrative Agent and Paying Agent,

                  Morgan Guaranty Trust Company of New York,
                             as Syndication Agent,

                              Barclays Bank PLC,
                            as Documentation Agent,

                             ABN Amro Bank, N.V.,
                       Bank Of America National Trust &
                             Savings Association,
                                   Paribas,
                              NationsBank, N.A.,
                      Societe Generale, Southwest Agency,
                                      and
                        Wells Fargo Bank (Texas), N.A.,
                                 as Co-Agents,

                      The Chase Manhattan Bank Of Canada,
                              as Canadian Agent,

                                      and

                  The Lenders Now Or Hereafter Parties Hereto

                                 July 8, 1998
<PAGE>
 
                               TABLE OF CONTENTS
 
ARTICLE I DEFINITIONS..............................................   2
  Section 1.01  Definitions........................................   2
  Section 1.02  Incorporation of U.S. Credit Agreement Definitions.   3

ARTICLE II APPLICATION OF PROCEEDS.................................   3
  Section 2.01  Election to Pursue Remedies........................   3
  Section 2.02  Duty of the Paying Agent...........................   4
  Section 2.03  Application of Proceeds............................   5
  Section 2.04  Payments by Paying Agent...........................   5
  Section 2.05  Notices under Related Documents....................   5
  Section 2.06  Amendments.........................................   6
  Section 2.07  Pro Rata Treatment.................................   6
  Section 2.08  Voting Procedure...................................   6
  Section 2.09  Triggering Event...................................   6
  Section 2.10  Bankruptcy Preferences.............................   7
  Section 2.11  Property of Obligors...............................   7
  Section 2.12  Marshalling........................................   7
  Section 2.13  Lender Dealings; Good Faith........................   7

ARTICLE III CALCULATION OF INDEBTEDNESS............................   8
  Section 3.01  Notice of Amount of Indebtedness...................   8
  Section 3.02  Escrow Account.....................................   8
  Section 3.03  Handling of Escrow Account.........................   8
  Section 3.04  Currency Conversion................................   9

ARTICLE IV THE PAYING AGENT........................................   9
  Section 4.01  Appointment of Paying Agent........................   9
  Section 4.02  Nature of Duties of Paying Agent...................   9
  Section 4.03  Lack of Reliance on the Paying Agent...............  10
  Section 4.04  Certain Rights of the Paying Agent.................  10
  Section 4.05  Reliance by Paying Agent...........................  11
  Section 4.06  PAYING AGENT'S REIMBURSEMENTS AND INDEMNIFICATION..  11
  Section 4.07  The Paying Agent in its Individual Capacity........  11
  Section 4.08  Creditors as Owners................................  11
  Section 4.09  Successor Paying Agent.............................  12
  Section 4.10  Employment of Paying Agent and Counsel.............  12
  Section 4.11  Independent Action.................................  12

ARTICLE V MISCELLANEOUS............................................  13
  Section 5.01  Authority..........................................  13
  Section 5.02  Termination........................................  13
  Section 5.03  Notices, etc.......................................  13
  Section 5.04  PAYMENT OF EXPENSES, INDEMNITIES, ETC..............  13

                                       i
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  Section 5.05  Applicable Law.....................................  13
  Section 5.06  Entire Agreement...................................  13
  Section 5.07  Execution in Counterparts..........................  14
  Section 5.08  Amendment of Defined Instruments...................  14
  Section 5.09  References and Titles..............................  14
  Section 5.10  Severability.......................................  14
  Section 5.11  Conflict with Loan Documents.......................  14
  Section 5.12  Limitation by Law..................................  14
  Section 5.13  Benefit of Agreement; Limitation on Assignment.....  14

                                      ii
<PAGE>
 
                              AMENDED AND RESTATED
                            INTERCREDITOR AGREEMENT

     THIS AMENDED AND RESTATED INTERCREDITOR AGREEMENT dated as of July 8, 1998
(this "Intercreditor Agreement"), is among:  OCEAN ENERGY, INC., a corporation
duly organized and validly existing under the laws of the state of Delaware (the
"Company"); OCEAN ENERGY, INC., a corporation duly organized and validly
existing under the laws of the state of Louisiana ("OEI-Louisiana"); OCEAN
ENERGY RESOURCES CANADA, LTD., a company continued under the laws of the
Province of British Columbia ("Ocean Canada"); each of the other Persons now or
hereafter parties hereto as an Obligor; each of the financial institutions that
is now or hereafter a party hereto (individually, a "U.S. Lender" and,
collectively, the "U.S. Lenders"); CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, AS
ADMINISTRATIVE AGENT for the U.S. Lenders (in such capacity, the "Administrative
Agent") and as Paying Agent for the Lender Group, MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, AS SYNDICATION AGENT for the U.S. Lenders (in such capacity, the
"Syndication Agent"), BARCLAYS BANK PLC, AS DOCUMENTATION AGENT for the Lenders
(in such capacity, the "Documentation Agent"), and ABN AMRO BANK, N.V., BANK OF
AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION, PARIBAS, NATIONSBANK, N.A.,
SOCIETE GENERALE, SOUTHWEST AGENCY AND WELLS FARGO BANK (TEXAS), N.A., AS CO-
AGENTS for the Lenders (in such capacity, the "Co-Agents"), THE CHASE MANHATTAN
BANK OF CANADA ("Chase Canada"), as administrative agent for the Canadian
Lenders (in such capacity, the "Canadian Agent"), each of the lenders now or
hereafter parties to the Canadian Credit Agreement (collectively, the "Canadian
Lenders").

                                    Recitals

     A. On the date of this Intercreditor Agreement, the Company, the
Administrative Agent, the Syndication Agent, the Documentation Agent, the Co-
Agents (the Administrative Agent, the Documentation Agent and the Co-Agents
collectively being the "U.S. Agents"), and the U.S. Lenders are entering into
that certain Amended and Restated Global Credit Agreement (as the same is from
time to time supplemented, amended, restated, extended, or increased herein
called the "U.S. Credit Agreement").

     B. On the date of this Intercreditor Agreement, Ocean Canada, the Canadian
Agent, and the Canadian Lenders are entering into that certain Amended and
Restated Credit Agreement (as the same is from time to time supplemented,
amended, restated, extended, or increased herein called the "Canadian Credit
Agreement").

    C. To support, inter alia, the U.S. Indebtedness of the Company under the
U.S. Credit Agreement and the Canadian Indebtedness of Ocean Canada under the
Canadian Credit Agreement (collectively, the "Credit Agreements") and the other
obligations of the Obligors under the Loan Documents, the Obligors will execute
and deliver the Loan Documents.

     D. The U.S. Lenders and the Canadian Lenders (collectively, the "Lenders")
and the U.S. Agents and the Canadian Agent (collectively, the "Agents"; and the
Paying Agent, the 
<PAGE>
 
Lenders and the Agents collectively being the "Lender Group") are entering into
this Intercreditor Agreement to establish their relative rights with respect to
payment of their respective Indebtedness owed by the Obligors, to agree as to
the exercise of certain remedies and to appoint Chase Bank of Texas, National
Association as Paying Agent for the purposes of dealing with the Loan Documents
and apportioning payments among the Lenders and for other purposes as set forth
herein.

     E. The execution and delivery of this Intercreditor Agreement is a
condition to the performance by each Lender of its obligations under the Credit
Agreement to which it is a party.

     F. NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and to induce the U.S. Agents and
the U.S. Lenders to enter into the U.S. Credit Agreement and the Canadian Agent
and the Canadian Lenders to enter into the Canadian Credit Agreement, the
parties hereto hereby agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

     Section 1.01 Definitions. The terms defined in the recitals shall have the
meanings assigned to those terms in such recitals, and the following terms shall
have the meanings assigned as follows:

     "Acceptance Exposure" means, at any time, the aggregate face amount of all
Bankers Acceptances outstanding at such time for which Ocean Canada has not yet
reimbursed the Canadian Lenders which have accepted such Bankers Acceptance
pursuant to the terms of the Canadian Credit Agreement.

     "Balance" shall have the meaning assigned such term in Section 3.03.

     "Business Day" shall mean any day excluding Saturday, Sunday and any other
day on which banks are required or authorized to close in Houston, Texas or
Toronto.

     "Canadian Indebtedness" shall mean the Indebtedness (as defined in the
Canadian Credit Agreement) and shall include the aggregate Acceptance Exposure.

     "Canadian Lender Notes" shall mean the Notes issued to the Canadian Lenders
under the Canadian Credit Agreement.

     "Commitments" shall mean the sum of the Aggregate Commitments of the U.S.
Lenders under the U.S. Credit Agreement and the Aggregate Commitments of the
Canadian Lenders under the Canadian Credit Agreement.

     "Contingent Indebtedness" shall have the meaning assigned such term in
Section 3.03.

     "Conversion Ratio" shall have the meaning assigned such term in Section
3.04.

     "Escrow Account" shall have the meaning assigned such term in Section 3.02.

                                       2
<PAGE>
 
     "Group" shall mean the U.S. Lenders, as a group of Lenders, or the Canadian
Lenders, as a group of Lenders, as the case may be.

     "Indebtedness" shall mean all U.S. Indebtedness and Canadian Indebtedness,
including, but not limited to, all other sums of money which may be hereafter
paid or advanced by the Agents or the Lenders under the terms and provisions of
this Intercreditor Agreement or the other Loan Documents as such sums of money
relate either to the administration, protection and exercise of remedies in
connection with this Intercreditor Agreement or the Loan Documents, or to any
reimbursement and indemnity provisions contained in this Intercreditor Agreement
and the Loan Documents.

     "Issuing Bank" shall mean, for each of the Letters of Credit, the issuer of
such Letter of Credit.

     "Notes" shall mean the U.S. Lender Notes and the Canadian Lender Notes.

     "Obligors" shall mean the Company, OEI-Louisiana and Ocean Canada.

     "Paying Agent" shall mean Chase Bank of Texas, National Association in such
capacity, together with all successors in such capacity under the terms of this
Intercreditor Agreement.

     "Pro Rata Share" shall mean as to each holder of any of the Indebtedness
the percentage that the Indebtedness held by such holder represents of all
Indebtedness.

     "Proceeds" shall mean all cash proceeds and other Property received by the
Paying Agent or any of the Lenders from or for the account of any Obligor, from
whatever source.

     "Triggering Event" shall have the meaning assigned such term in Section
2.09.

     "U.S. $ Amount" shall have the meaning assigned such term in Section 3.04.

     "U.S. Indebtedness" shall mean the Indebtedness, including but not limited
to, the amount of the LC Exposure which is not at such time a part of the fixed
Indebtedness.

     "U.S. Lender Notes" shall mean the Notes issued to the U.S. Lenders under
the U.S. Credit Agreement.

     Section 1.02 Incorporation of U.S. Credit Agreement Definitions.
Capitalized terms not defined herein shall have the meaning assigned such terms
in the U.S. Credit Agreement.

                                  ARTICLE II
                            APPLICATION OF PROCEEDS

     Section 2.01  Election to Pursue Remedies.

     (a) Upon the occurrence and during the continuance of any Triggering Event,
the Paying Agent shall, subject to Section 2.02 and Article IV, take or, as
appropriate, direct the appropriate trustee or agent to take any and all actions
provided for in the Loan Documents 

                                       3
<PAGE>
 
relating to the pursuit of remedies, including the foreclosure or disposition of
collateral, if any, only if such actions are authorized as provided in this
Section 2.01.

     (b) Upon the occurrence and during the continuance of any Triggering Event,
the Lenders shall vote on whether or not to pursue any remedy or remedies
available to them at law or otherwise, including whether or not to foreclose on
or dispose of collateral, if any. If the Required Lenders at such time vote to
pursue any particular remedy or remedies, including foreclosure or disposition
of collateral, instructions specifying the particular action to be taken from
the Required Lenders shall be delivered to the Paying Agent. Upon receipt by the
Paying Agent of such instructions from the Required Lenders, with indemnities
appropriate for such instructions as provided in Section 4.04, the Paying Agent
shall immediately commence to take or direct the instructed actions (and
continue to take such actions) relating such remedies.

     (c) Without regard to the occurrence of a Triggering Event, upon the
written instruction of the Required Lenders, with indemnities appropriate for
such instructions as provided in Section 4.04, the Paying Agent shall (i) take
or direct any action provided for in the Loan Documents (other than foreclosure
or disposition of the collateral) or proceed to enforce, or direct the
enforcement of, consistent with the Loan Documents and applicable law (other
than foreclosure or disposition of the collateral), the rights or powers
provided in the Loan Documents and under applicable law for the benefit of the
Lender Group and shall give such notice or direction or shall take such action
or exercise such right or power hereunder or under any of the Loan Documents
incidental thereto as shall be reasonably specified in such instructions and
consistent with the terms of the Loan Documents and this Intercreditor
Agreement; and/or (ii) execute such instruments or agreements or take such other
action in connection with the Loan Documents as may be deemed reasonably
necessary or appropriate by the Required Lenders and consistent with the terms
of the Loan Documents and this Intercreditor Agreement. Such action may include,
but is not limited to (x) the giving of any notice, approval, consent or waiver
which may be called for under the Loan Documents, (y) the requiring of the
execution and delivery of additional Loan Documents, or (z) employing agents or
directing trustees in order to accomplish the actions requested.

     (d) Nothing in this Section 2.01 shall impair the right of a Lender to
exercise its rights of set-off existing at law or under the Credit Agreements,
but in any event, subject to the terms thereof.

     Section 2.02  Duty of the Paying Agent.

     (a) The Paying Agent shall not be obligated to follow any instructions of
any one or more of the Lenders if: (i) such instructions conflict with the
provisions of this Intercreditor Agreement or any other Loan Document or any
applicable law or (ii) the Paying Agent has not been adequately indemnified to
its satisfaction. Nothing in this Article II shall impair the right of the
Paying Agent in its discretion to take any action, to the extent that the
consent of any of the Lenders is not required or to the extent such action is
not prohibited by the terms hereof, which it deems proper and consistent with
the instructions given by the Lenders as provided for herein. In the absence of
written instructions, containing the appropriate indemnities, from the Lenders
or Required Lenders as appropriate for any particular matter, the Paying Agent
shall have no 

                                       4
<PAGE>
 
duty to take or refrain from taking any action unless such action or inaction is
explicitly required by the terms of this Intercreditor Agreement.

     (b) Beyond its duties expressly provided herein or in any Loan Document and
its duties to account to the Lender Group and/or the Obligors for monies and
other Property received by it hereunder or under any Loan Document, the Paying
Agent shall not have any implied duty to the Lender Group or any Obligor as to
any Property belonging to an Obligor (whether or not the same constitutes
collateral) in its possession or control or in the possession or control of any
of its agents or nominees, or any income thereon or as to the preservation of
rights against prior parties or any other rights pertaining thereto.

     Section 2.03  Application of Proceeds.

     (a) Upon the occurrence and during the continuance of a Triggering Event,
all Proceeds shall be applied as follows and in accordance with Section 3.03:

        (i) First, to the pro rata payment of costs and expenses reasonably
     incurred by the Paying Agent, the Agents or any other Lender in connection
     with any action taken or proceeding brought, including reasonable legal
     expenses and attorneys' fees, and of all Taxes (other than Excluded Taxes)
     or assessments.

        (ii) Second, any Balance remaining shall be applied to repay the
     Indebtedness or held in escrow as specified in Section 3.03.

        (iii) Finally, the payment of surplus proceeds, if any, to any Person
     that may be lawfully entitled to receive the same, including without
     limitation, an Obligor, and in the order of priority specified for by any
     Governmental Requirement.

     (b) At any time other than after the occurrence and during continuance of a
Triggering Event, payments made to the Lenders may be applied as provided in the
Credit Agreements.

     Section 2.04 Payments by Paying Agent. All payments by the Paying Agent
hereunder shall be delivered to the administrative agents under the Credit
Agreements for distribution in the manner set forth therein.

     Section 2.05 Notices under Related Documents. The Paying Agent shall
deliver to each Lender promptly upon receipt thereof, duplicates or copies of
all material notices, requests and other instruments received by the Paying
Agent under or pursuant to this Intercreditor Agreement or any Loan Document, to
the extent that the same shall not have been previously furnished to such Lender
pursuant hereto or thereto. Promptly upon obtaining such knowledge, each Lender
agrees: (a) to deliver to the Paying Agent, at the same time it makes delivery
to the Obligors, a copy of any notice of default, notice of intent to accelerate
or notice of acceleration with respect to the Indebtedness subject to this
Intercreditor Agreement; (b) to deliver to the Paying Agent, at the same time it
makes delivery to any other Person, a copy of any notice of the commencement of
any judicial proceeding and a copy of any other notice with respect to the
exercise of remedies with respect to the Indebtedness subject to this
Intercreditor Agreement. 

                                       5
<PAGE>
 
The Paying Agent agrees to deliver to each Lender any notice or other
communication received by it from any Lender pursuant to clause (a) or (b) of
this Section 2.05.

     Section 2.06  Amendments.  Amendments, modifications, supplements, waivers,
consents and approvals of or in connection with this Intercreditor Agreement or
any other Loan Document (other than the Credit Agreements) may be effectuated
only upon the written consent of the Required Lenders  (and, if the rights or
duties of the Paying Agent and the Agents or any Obligors are affected thereby,
by the Paying Agent and the Agents or the applicable Obligor, as the case may
be).  Amendments, modifications, supplements, waivers, consents and approvals of
or in connection with the Credit Agreements shall be effectuated only in
accordance with the terms contained therein.

     Section 2.07 Pro Rata Treatment. The Lenders hereby agree among themselves
that (a) prior to the occurrence and continuance of a Triggering Event, each
Lender shall be entitled to receive and retain for its own account scheduled
payments or voluntary prepayments of principal, interest, fees and premium, if
any, all in compliance with the Credit Agreements, and (b) after the occurrence
and during the continuance of a Triggering Event, all Proceeds shall be applied
by the Paying Agent and shared by Lenders in accordance with the respective Pro
Rata Share held by each of them and in accordance with Section 2.03(a). In the
event that any Lender shall obtain payment after the occurrence and during the
continuance of a Triggering Event, whether in whole or in part, from any source
in respect of its portion of the Indebtedness, including without limitation
payments by reason of the exercise of its right of offset, banker's lien,
general lien or counterclaim, such Lender shall promptly pay to the Paying Agent
such amount for application in accordance with Section 2.03(a).

     Section 2.08 Voting Procedure. Notwithstanding anything to the contrary
herein, in the Credit Agreements or in any other Loan Document, the Lenders
agree that for purposes of any provision hereof or thereof that requires a vote
of the Required Lenders, each Lender shall have the right to vote independently
of the other Lenders in its Group. When this Intercreditor Agreement requires a
vote of the Required Lenders, the Paying Agent shall poll the Lenders in order
to determine the vote of the Required Lenders (and such vote shall be binding
upon the Lenders who are not among the Required Lenders). The Obligors and the
Lender Group may rely on the Paying Agent with regard to any such vote without
any duty of further inquiry.

     Section 2.09 Triggering Event. The occurrence of any of the following shall
constitute a "Triggering Event":

     (a) The occurrence and continuance of an Event of Default specified in
Sections 10.01(f), (g), and (h) of the U.S. Credit Agreement as it relates to
the Company or any Restricted Subsidiary, or

     (b) The Paying Agent shall have received from either the Administrative
Agent, the Canadian Agent or the Required Lenders, as appropriate, written
advice, which advice shall reference this Section 2.09, (i) that an Event of
Default has occurred and is continuing and (ii) that the unpaid principal amount
of the Notes and all interest accrued and unpaid thereon have been declared to
be then due and payable.

                                       6
<PAGE>
 
     Section 2.10 Bankruptcy Preferences. If any payment actually received by
any member of the Lender Group is subsequently invalidated, declared to be
fraudulent or preferential or set aside and is required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state, provincial
or Federal law, common law, or equitable cause, then the Paying Agent shall
distribute to such Person from the Balance, exclusive of any amount in the
Escrow Account in accordance with Section 3.03, an amount equal to such payment.
If, due to previous disbursements to the Lender Group pursuant to Section
2.03(a), the Balance then held by the Paying Agent is insufficient for such
purpose, then each other member of the Lender Group shall pay to such Person
upon demand an amount equal to a ratable portion of such payment according to
the aggregate amounts distributed to each member of the Lender Group by the
Paying Agent.

     Section 2.11 Property of Obligors. The Lenders agree that all the
provisions of this Intercreditor Agreement shall apply to any and all Properties
and rights of the Obligors or any other Obligor in which the Paying Agent (in
its capacity as such), any Agent or any Lender at anytime acquires a right of
set-off or Lien, whether pursuant to the Loan Documents, the Credit Agreements
or a judgment, including, without limitation, real property or rights in, on or
over real property, notwithstanding any provision to the contrary in any
mortgage, leasehold mortgage or other document purporting to grant or perfect
any Lien in favor of any Lender, any Agent, or the Paying Agent.

     Section 2.12 Marshalling. The Paying Agent shall not be required to marshal
any present or future security for (including without limitation any collateral
described in any of the Loan Documents), or guaranties of the Indebtedness or
any part or portion thereof, or to resort to such security or guaranties in any
particular order; and all rights in respect of such securities and guaranties
shall be cumulative and in addition to all other rights, however existing or
arising. To the extent that they lawfully may, each Obligor, Agent and Lender
hereby agrees that it will not invoke any law relating to the marshaling of
collateral which might cause delay or impede the enforcement of the Lender
Group's rights under the Loan Documents or under any other instrument evidencing
any of the Indebtedness or under which any of the Indebtedness is outstanding or
by which any of the Indebtedness is secured or guaranteed.

     Section 2.13 Lender Dealings; Good Faith. Nothing contained in this
Intercreditor Agreement shall prevent either Group of Lenders from dealing
directly or negotiating with the other Group for any purpose, including, but not
limited to, the purpose of attempting to reach agreement as to any vote or
proposed vote relating to the Paying Agent's actions hereunder, whether or not
any Triggering Event or other Default or Event of Default has occurred. Each
U.S. Agent and U.S. Lender covenants and agrees with and for the benefit of the
Canadian Agent and each Canadian Lender, and the Canadian Agent and each
Canadian Lender covenants and agrees with and for the benefit of each U.S. Agent
and U.S. Lender, that it will, in taking any action under this Intercreditor
Agreement or directing the Paying Agent to exercise any remedy hereunder or
under any other Loan Document, take such action or make such direction in good
faith and in a commercially reasonable manner and not for the purpose of
hindering, delaying, obstructing or preventing the exercise by the other of its
rights under the Loan Documents.

                                       7
<PAGE>
 
                                  ARTICLE III
                          CALCULATION OF INDEBTEDNESS

     Section 3.01 Notice of Amount of Indebtedness. Upon receipt of any Proceeds
to be distributed pursuant to Section 2.03(a)(ii), the Paying Agent shall give
the Lenders notice thereof, and each Lender shall within five (5) Business Days
notify the Paying Agent of the amount of Indebtedness owing to such Lender. Such
notification shall state the amount of its Indebtedness, how much is then due
and owing, and how much is Contingent Indebtedness. Each Lender with Contingent
Indebtedness shall describe the status of such Indebtedness. If requested by the
Paying Agent, each Lender shall demonstrate that the amounts set forth in its
notice are actually owing to such Lender to the satisfaction of the Paying
Agent.

     Section 3.02 Escrow Account. Prior to taking any action to enforce any Lien
or remedy under any Loan Document, or requesting cash collateral for the Letters
of Credit or Bankers Acceptances, the Paying Agent shall open an escrow account
(the "Escrow Account") at its banking quarters in Houston, Texas (or such other
city where any successor may maintain banking quarters) designated the "OEI
Collateral Account."

     Section 3.03 Handling of Escrow Account. Upon each receipt by the Paying
Agent of Proceeds and after payment therefrom of all items referred to in
Section 2.03(a)(i), remaining Proceeds ("Balance") shall be applied as provided
in this Section 3.03. If at such time, there exists any Indebtedness which is
contingent in amount, including, without limitation, contingent amounts of LC
Exposure, but not including the Acceptance Exposure (such Indebtedness being
"Contingent Indebtedness"), the Paying Agent shall (with the information
provided under Section 3.01) determine the amount of all Indebtedness then
outstanding, including, without limitation, Contingent Indebtedness.  The
Balance shall be applied as follows:

     (a) If no Contingent Indebtedness is outstanding, then all such Balance
shall be applied to repay or prepay the amount of the Indebtedness then
outstanding until the Indebtedness shall have been paid in full.

     (b) If there exists Contingent Indebtedness, the Paying Agent shall (i)
deposit in the Escrow Account a portion of such Balance equal to the Contingent
Indebtedness divided by total Indebtedness (until such time as the amount on
deposit in the Escrow Account equals the maximum amount of the Contingent
Indebtedness), and (ii) apply the remaining Balance to repay or prepay the
amount of the Indebtedness then outstanding until the Indebtedness shall have
been paid in full. Thereafter, any further remaining Balance shall be returned
or applied as provided in Section 2.03(a)(iii).

     (c) If at any time Contingent Indebtedness or any part thereof becomes
Indebtedness which is no longer contingent, any funds held in the Escrow Account
up to the amount (or pro rata amount based upon the total amount of remaining
Contingent Indebtedness if the Escrow Amount is less than the amount of the
remaining Contingent Indebtedness) of such Indebtedness which has become fixed
(or pro rata amount based upon the total amount of remaining Contingent
Indebtedness) shall be distributed pro rata to the holders of such previously
Contingent Indebtedness. If all of the fixed Indebtedness has been paid in full
and the Paying Agent determines that the amount of monies held in the Escrow
Account exceeds the sum of the 

                                       8
<PAGE>
 
Contingent Indebtedness outstanding at such time, such excess shall be returned
or applied as provided in Section 2.03(a)(iii).

     Section 3.04 Currency Conversion. To the extent that calculations under
this Intercreditor Agreement involve U.S. and Canadian currency (or any other
currency), the Paying Agent shall, at the time of such calculation, determine
all amounts based on U.S. dollars, using a conversion ratio (the "Conversion
Ratio") determined by it in good faith (the "U.S. $ Amount"). The amount of
distributions of a Lender's Pro Rata Share shall be based upon the U.S. $
Amount, but in the case of a Canadian Lender shall be distributed in and
converted to a Canadian dollar amount calculated by using the Conversion Ratio.

                                  ARTICLE IV
                               THE PAYING AGENT

     Section 4.01 Appointment of Paying Agent. Each Lender hereby designates
Chase Bank of Texas, National Association to act as the Paying Agent for the
Lenders with respect to any collateral pledge under any of the Loan Documents,
the enforcement of any Liens granted thereunder and the collection of Proceeds
following the disposition of any such collateral. Each Lender hereby authorizes
the Paying Agent to designate The Chase Manhattan Bank of Canada to act as the
agent for the Paying Agent on behalf of the Lenders with respect to the Canadian
assets under the Loan Documents. Each Lender hereby authorizes the Paying Agent
to take such action on its behalf under the provisions of this Intercreditor
Agreement and the Loan Documents and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to either Chase
Bank of Texas, National Association, as Administrative Agent, or The Chase
Manhattan Bank of Canada, as Canadian Agent, or required of the Paying Agent by
the terms hereof and such other powers as are reasonably incidental thereto. The
Paying Agent may perform any of its duties hereunder by or through its agents or
employees. The Paying Agent agrees to act as Paying Agent upon the express terms
and conditions contained in this Article IV.

     Section 4.02 Nature of Duties of Paying Agent. The Paying Agent shall have
no duties or responsibilities, except those expressly set forth in this
Intercreditor Agreement or any Loan Document. The Paying Agent shall have and
may exercise such powers hereunder and under the Loan Documents as are
specifically delegated to the Paying Agent by the terms hereof or to either
Chase Bank of Texas, National Association, as Administrative Agent, or The Chase
Manhattan Bank of Canada, as Canadian Agent thereunder, together with such
powers as are reasonably incidental thereto. Neither the Paying Agent nor any of
its directors, officers, employees or agents shall be liable to the Lenders for
any action taken or omitted by it as such hereunder or under the Loan Documents,
unless caused solely by its or their gross negligence or willful misconduct. The
duties of the Paying Agent shall be mechanical and administrative in nature; and
the Paying Agent shall not have by reason of this Intercreditor Agreement a
fiduciary relationship in respect of any Lender. Nothing in this Intercreditor
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Paying Agent any Indebtedness in respect of this Intercreditor
Agreement and the other Loan Documents except as expressly set forth herein.

                                       9
<PAGE>
 
     Section 4.03  Lack of Reliance on the Paying Agent.

     (a) Independently and without reliance upon the Paying Agent or any other
Lender, each Lender, to the extent it deems appropriate, has made (i) its own
independent investigation of the financial condition and affairs of the Obligors
based on such documents and information as it has deemed appropriate in
connection with the taking or not taking of any action in connection herewith,
and (ii) its own appraisal of the credit worthiness of the Obligors. Each Lender
also acknowledges that it will, independently and without reliance upon the
Paying Agent or any other Person and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Intercreditor Agreement, the
Indebtedness or the Loan Documents. Except as expressly provided in this
Intercreditor Agreement and the other Loan Documents, the Paying Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Obligors or any of the Company's
Subsidiaries which may come into the possession of the Paying Agent or any of
its Affiliates whether now in its possession or in its possession at any time or
times hereafter; and the Paying Agent shall not be required to keep itself
informed as to the performance or observance by any Obligor of this
Intercreditor Agreement, any Loan Document or any other document referred to or
provided for herein or to inspect the Properties or books of any Obligor.

     (b) The Paying Agent shall not (i) be responsible to any Lender for any
recitals, statements, information, representations or warranties herein, in any
Loan Document, or in any document, certificate or other writing delivered in
connection herewith or therewith or for the execution, effectiveness,
genuineness, validity, enforceability, collectability, priority or sufficiency
of this Intercreditor Agreement, the Indebtedness or the Loan Documents or the
financial condition of the Obligors; or (ii) be required to make any inquiry
concerning the performance or observance of any of the terms, provisions or
conditions of this Intercreditor Agreement, the Indebtedness or the Loan
Documents, the financial condition of the Obligors, or the existence or possible
existence of any Default or Event of Default.

     Section 4.04 Certain Rights of the Paying Agent. If the Paying Agent shall
request instructions from the Lenders with respect to any act or action
(including the failure to act) in connection with this Intercreditor Agreement,
the Indebtedness and the Loan Documents, the Paying Agent shall be entitled to
refrain from such act or taking such action unless and until the Paying Agent
shall have received instructions from the Required Lenders pursuant to the terms
hereof; and the Paying Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Lender shall have any right
of action whatsoever against the Paying Agent as a result of the Paying Agent
acting or refraining from acting under this Intercreditor Agreement or the Loan
Documents in accordance with the written instructions given in accordance with
this Intercreditor Agreement and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all the Lenders. Except for
action expressly required of the Paying Agent pursuant to the terms hereof, the
Paying Agent shall be fully justified in failing or refusing to take any action
hereunder or under the Loan Documents unless it shall first be indemnified to
its satisfaction by the Obligors or the Lenders against any and all liability
and expense which may be incurred by the Paying Agent by reason of taking or
continuing to take any such action. Notwithstanding any other provision of this
Article IV or 

                                       10
<PAGE>
 
any indemnity or instructions provided by any or all of the Lenders, the Paying
Agent shall not be required to take any action which exposes the Paying Agent to
personal liability or which is contrary to this Intercreditor Agreement, the
Loan Documents or applicable law.

     Section 4.05 Reliance by Paying Agent. The Paying Agent shall be entitled
to rely, and shall be fully protected in relying, upon any Note or other
instrument evidencing the Indebtedness, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other documentary, teletransmission or telephone message believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person.
The Paying Agent may consult with independent legal counsel (which shall not be
counsel for the Obligors), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.

     Section 4.06 PAYING AGENT'S REIMBURSEMENTS AND INDEMNIFICATION. TO THE
EXTENT THE PAYING AGENT IS NOT REIMBURSED BY THE COMPANY OR OCEAN CANADA, EACH
LENDER WILL (WITHOUT DUPLICATION IN THE CASE OF A U.S. LENDER AND ITS AFFILIATED
CANADIAN LENDER) REIMBURSE AND INDEMNIFY THE PAYING AGENT, IN PROPORTION TO ITS
GLOBAL COMMITMENT PERCENTAGE, FOR AND AGAINST ANY AND ALL INDEMNITY MATTERS
WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE PAYING AGENT IN
PERFORMING ITS DUTIES HEREUNDER OR UNDER ANY LOAN DOCUMENT OR OTHERWISE IN
CONNECTION HEREWITH OR THEREWITH, INCLUDING LOSSES OCCURRING FROM THE ORDINARY
AND/OR COMPARATIVE NEGLIGENCE OF THE PAYING AGENT, IN ANY WAY RELATING TO OR
ARISING OUT OF THIS INTERCREDITOR AGREEMENT; PROVIDED THAT NO LENDER SHALL BE
LIABLE FOR ANY PORTION OF SUCH LIABILITIES, INDEBTEDNESS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING
SOLELY FROM THE PAYING AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

     Section 4.07 The Paying Agent in its Individual Capacity. With respect to
its Indebtedness under the Credit Agreements and its Indebtedness, the Paying
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties specified
herein; and the terms "Lenders", "Required Lenders", or any similar terms shall,
unless the context clearly otherwise indicates, include Chase Bank of Texas,
National Association (or any successor Paying Agent), in its individual capacity
as and to the extent it is a holder of any Note or is an Issuing Bank and not in
its capacity as an Agent or as the Paying Agent. The Paying Agent may accept
deposits from, lend money to, and generally engage in any kind of banking,
trust, financial advisory or other business with the Obligors or any Affiliate
of the Obligors as if it were not performing the duties specified herein, and
may accept fees and other consideration from the Obligors for services in
connection with this Intercreditor Agreement and otherwise without having to
account for the same to the Lenders.

     Section 4.08 Creditors as Owners. The Paying Agent may deem and treat each
Lender as the owner of such Lender's Indebtedness for all purposes hereof unless
and until the Paying 

                                       11
<PAGE>
 
Agent is notified of a change in Lenders pursuant to the terms of Section 12.06
of the U.S. Credit Agreement or Section 12.03 of the Canadian Credit Agreement,
as applicable.

     Section 4.09  Successor Paying Agent.

     (a) The Paying Agent may resign at any time by giving sixty (60) days prior
written notice thereof to the Lender Group, the Company and Ocean Canada and may
be removed at any time with cause by the Required Lenders, which resignation or
removal shall be effective upon the appointment of a successor to the Paying
Agent. Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Paying Agent. If within thirty (30) days after the
retiring Paying Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Paying Agent, no successor Paying Agent shall have been
so appointed by the Required Lenders and accepted such appointment, then, the
retiring Paying Agent may, on behalf of the Lenders, appoint a successor Paying
Agent, which shall be a bank which maintains an office in the United States of
America, or a commercial bank organized under the laws of the United States of
America or of any State thereof, or any Affiliate of such bank, having a
combined capital and surplus of at least $200,000,000 as of the date of its most
recent financial statements.

     (b) Upon the acceptance of any appointment as Paying Agent hereunder by a
successor Paying Agent, such successor Paying Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Paying Agent, and the retiring Paying Agent shall be discharged from
its duties and Indebtedness under this Intercreditor Agreement. After any
retiring Paying Agent's resignation or removal hereunder as Paying Agent, the
provisions of this Intercreditor Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Paying Agent under this
Intercreditor Agreement.

     Section 4.10 Employment of Paying Agent and Counsel. The Paying Agent may
execute any of its duties as Paying Agent hereunder or under the Loan Documents
by or through employees, agents, and attorneys-in-fact and shall not be
answerable to the Lenders for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care, provided that the Paying
Agent shall always be obligated to account for moneys or securities received by
it or its authorized agents. The Paying Agent shall be entitled to advice of
independent counsel concerning all matters pertaining to the agency hereby
created and its duties hereunder or under the Loan Documents.

     Section 4.11 Independent Action. Each Lender agrees that no Lender or Agent
other than the Paying Agent shall have any right individually to realize upon
any Liens granted by the Loan Documents or to otherwise enforce or exercise any
remedy in respect of the Loan Documents (other than the right of set-off at law
or specified in the Credit Agreements, but in any event, subject to the terms
thereof), it being understood and agreed that such remedies may be exercised
only by the Paying Agent for the ratable benefit of the Lender Group. Each Agent
and Lender further agrees that it shall not individually institute any judicial
action pertaining to the Loan Documents or exercise any other remedy (other than
the right of set-off at law or specified in the Credit Agreements, but in any
event, subject to the terms thereof), pertaining to the Loan Documents, except
with the consent of the Required Lenders.

                                       12
<PAGE>
 
                                   ARTICLE V
                                 MISCELLANEOUS

     Section 5.01 Authority. The parties hereto represent and warrant that they
have all requisite power to, and have been duly authorized to, enter into this
Intercreditor Agreement.

     Section 5.02 Termination. This Intercreditor Agreement shall terminate upon
receipt by the Paying Agent of evidence satisfactory to it of (a) the payment
(or prepayment) in full of the principal of and the premium, if any, and
interest on all Indebtedness, (b) the termination of the Commitments in the
Credit Agreements, and (c) the termination of the Loan Documents pursuant to the
terms of the Credit Agreements.

     Section 5.03 Notices, etc. All notices and other communications hereunder
shall be given in writing and shall be given to such Person at its address or
telecopy number as set forth on the signature pages of the Credit Agreements or
such other address or telecopy number such Person may hereafter specify by
notice to the Paying Agent (who shall promptly notify the Obligors and the other
Lenders). Each notice or other communication shall be effective (a) if given by
mail, upon receipt, (b) if given by telecopier during regular business hours,
once such telecopy is transmitted to the telecopy number provided in writing to
the Paying Agent by each Lender and by each Obligor, respectively, or (c) if
given by any other means, upon receipt; provided that notices to the Paying
Agent are not effective until received.

     Section 5.04 PAYMENT OF EXPENSES, INDEMNITIES, ETC. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE OBLIGORS SHALL INDEMNIFY THE AGENTS AND THE
LENDERS IN ACCORDANCE WITH THE TERMS OF THE CREDIT AGREEMENTS AND THE OBLIGORS
HEREBY AGREE THAT ALL INDEMNITIES SET FORTH IN THE CREDIT AGREEMENTS SHALL ALSO
RUN IN FAVOR OF THE PAYING AGENT. IF AND TO THE EXTENT THAT THE INDEBTEDNESS OF
THE OBLIGORS UNDER THIS SECTION 5.04 OR UNDER THE RESPECTIVE INDEMNITY
PROVISIONS OF THE CREDIT AGREEMENTS ARE UNENFORCEABLE FOR ANY REASON, THE
OBLIGORS HEREBY AGREE TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND
SATISFACTION OF SUCH INDEBTEDNESS WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. THE
OBLIGORS' INDEBTEDNESS UNDER THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS
INTERCREDITOR AGREEMENT AND THE PAYMENT OF THE INDEBTEDNESS, BUT SHALL TERMINATE
UPON THE TERMINATION OF THE INDEMNITIES CONTAINED IN THE CREDIT AGREEMENTS.

     Section 5.05 Applicable Law. THIS INTERCREDITOR AGREEMENT (INCLUDING, BUT
NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF) SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

     Section 5.06 Entire Agreement. The Notes, this Intercreditor Agreement and
the other Loan Documents embody the entire agreement and understanding between
the Lenders, the Agents and the Obligors and supersede all prior agreements and
understandings between such 

                                       13
<PAGE>
 
parties relating to the subject matter hereof and thereof. There are no
unwritten oral agreements between the parties.

     Section 5.07 Execution in Counterparts. This Intercreditor Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Any signature page of a counterpart may be detached
therefrom without impairing the legal effect of the signatures thereon and
attached to another counterpart identical in form thereto but having attached to
it one or more additional signature pages signed by other parties.

     Section 5.08 Amendment of Defined Instruments. Unless the context otherwise
requires or unless otherwise provided herein, the terms defined in this
Intercreditor Agreement which refer to a particular agreement, instrument or
document also refer to and include all renewals, extensions, increases,
modifications, supplements, amendments, and restatements of such agreement,
instrument or document; provided that nothing contained in this section shall be
construed to authorize any such renewal, extension, increases, modification,
supplement, amendment or restatement.

     Section 5.09 References and Titles. All references in this Intercreditor
Agreement to Schedules, articles, sections, subsections and other subdivisions
refer to the Schedules, articles, sections, subsections and other subdivisions
of this Intercreditor Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions.

     Section 5.10 Severability. If any term or provision of this Intercreditor
Agreement shall be determined to be illegal or unenforceable, all other terms
and provisions of this Intercreditor Agreement shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by applicable
law.

     Section 5.11 Conflict with Loan Documents. If there is a conflict between
the terms and provisions contained in the Credit Agreements, the Notes, any
instrument evidencing the Indebtedness or any Loan Document with the terms and
provisions contained herein, the terms and provisions contained in this
Intercreditor Agreement shall control.

     Section 5.12 Limitation by Law. All rights, remedies and powers provided
herein may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law; and all the provisions hereof are
intended (a) to be subject to all applicable mandatory provisions of law which
may be controlling and (b) to be limited to the extent necessary so that they
will not render this Intercreditor Agreement or any Loan Document invalid under
the provisions of any applicable law.

     Section 5.13 Benefit of Agreement; Limitation on Assignment. The terms and
provisions of this Intercreditor Agreement shall be binding upon and inure to
the benefit of the Agents and each Lender and their respective successors and
assigns. Except as stated in the last sentence of Section 2.08 hereof, the terms
and provisions of this Intercreditor Agreement shall not inure to the benefit
of, nor be relied upon by, the Obligors or their successors or assigns. No

                                       14
<PAGE>
 
Lender shall assign, transfer or sell any part of its portion of the
Indebtedness, unless in connection with such assignment, transfer or sale, such
assignee, transferee or purchaser shall first become a party to this
Intercreditor Agreement.

                                       15
<PAGE>
 
     IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Intercreditor Agreement as of the date first
above written.

LENDERS AND AGENTS:

                         Chase Bank of Texas, National Association, individually
                         and as Administrative Agent

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                         Morgan Guaranty Trust Company of New York, individually
                         and as Syndication Agent

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                         Barclays Bank PLC, individually and as Documentation
                         Agent

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                                       16
<PAGE>
 
                         ABN AMRO BANK, N.V., individually and as Co-Agent

                         By:____________________________________________________
                            Charles W. Randall
                            Senior Vice President

                         By:____________________________________________________
                            Cheryl Lipshutz
                            Senior Vice President

                         BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
                         individually and as Co-Agent

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                         Paribas, individually and as Co-Agent

                         By:____________________________________________________
                            Doug Liftman
                            Vice President

                         By:____________________________________________________
                            Barton D. Schouest
                            Managing Director

                         NATIONSBANK, N.A., individually and as Co-Agent

                         By:____________________________________________________
                            Paul Squires
                            Senior Vice President

                                       17
<PAGE>
 
                         SOCIETE GENERALE, SOUTHWEST AGENCY, individually and as
                         Co-Agent

                         By:____________________________________________________
                            Richard Erbert
                            Vice President

                         WELLS FARGO BANK (TEXAS), N.A., individually and as Co-
                         Agent

                         By:____________________________________________________
                            Alan Alexander
                            Vice President - Energy Department

                         THE CHASE MANHATTAN BANK OF CANADA, individually and as
                         Canadian Agent

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                         Toronto Dominion Bank

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                                       18
<PAGE>
 
                         Chase Bank of Texas, National Association, as Paying
                         Agent

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                         Hibernia National Bank

                         By:____________________________________________________
                            Colleen McEvoy
                            Vice President

                         TORONTO DOMINION (TEXAS) INC.

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                         U.S. Bank National Association

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                         Bank One, Texas, N.A.

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                                       19
<PAGE>
 
                         Credit Suisse First Boston

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                         First National Bank of Commerce

                         By:____________________________________________________
                            David R. Reid
                            Senior Vice President

                         BANK OF NEW YORK

                         By:____________________________________________________
                         Name:__________________________________________________
                         Title:_________________________________________________

                         Southwest Bank of Texas, N.A.

                         By:____________________________________________________
                            A. Stephen Kennedy
                            Vice President/Manager Energy Lending

                                       20
<PAGE>
 
The Obligors hereby execute this Intercreditor Agreement to evidence their
agreement that:

     1. The Obligors shall be bound by all of the terms and provisions of this
Intercreditor Agreement.

     2. The Obligors acknowledge and agree that the terms of this Intercreditor
Agreement shall control over the terms of the Credit Agreements, the Notes, the
instruments evidencing the Indebtedness and the Loan Documents to the extent of
any conflict relating to the relative rights of the Agents and the Lenders.

     3. THE INDEMNITY AND REIMBURSEMENT PROVISIONS CONTAINED IN SECTION 5.04
SHALL APPLY TO ALL MATTERS UNDER THIS INTERCREDITOR AGREEMENT AND THE OBLIGORS
AGREE TO INDEMNIFY AND REIMBURSE THE PAYING AGENT IN ACCORDANCE WITH THE TERMS
THEREOF.

     4. Except as stated in the last sentence of Section 2.08 hereof, the terms
and provisions of this Intercreditor Agreement shall inure solely to the benefit
of the Agents, each Lender and their respective successors and assigns and the
terms and provisions of this Intercreditor Agreement shall not inure to the
benefit of nor be enforceable by the Obligors or their successors or assigns.
This Intercreditor Agreement may be amended as provided herein without the
necessity of the Obligors joining in any such amendment, provided, that the
Obligors shall not be bound by any amendment which would have the effect of
increasing their Indebtedness and indemnities hereunder or materially affecting
their rights or duties under the Loan Documents unless they shall have consented
to such amendment.

     5. Each Obligor at its expense will execute, acknowledge and deliver all
such agreements and instruments and take all such action as the Paying Agent or
the Required Lenders from time to time may reasonably request in order further
to effectuate the purposes of this Intercreditor Agreement and to carry out the
terms hereof.

OBLIGORS:                OCEAN ENERGY, INC., a Delaware corporation

                         By:____________________________________________________
                            Jonathan M. Clarkson
                            Executive Vice President
                            Chief Financial Officer

                                       21
<PAGE>
 
                         OCEAN ENERGY RESOURCES CANADA, LTD.

                         By:____________________________________________________
                            Jonathan M. Clarkson
                            Executive Vice President
                            Chief Financial Officer

                         OCEAN ENERGY, INC., a Louisiana corporation

                         By:____________________________________________________
                            Jonathan M. Clarkson
                            Executive Vice President
                            Chief Financial Officer

                                       22