<PAGE>
                                                                  EXHIBIT 3.1(c)

                           CERTIFICATE OF DESIGNATION
                                       OF
                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
                                       OF
                            CANAAN ENERGY CORPORATION

                        (Pursuant to Section 1032 of the
                        Oklahoma General Corporation Act)

Canaan Energy Corporation, a corporation organized and existing under the
Oklahoma General Corporation Act (hereinafter called the "Company"), hereby
certifies that the following resolution was duly adopted by the Board of
Directors of the Company as required by Section 1032 of the Oklahoma General
Corporation Act acting by unanimous written consent pursuant to Section 1027.F.1
of the Oklahoma General Corporation Act:

RESOLVED, that pursuant to the authority granted to and vested in the Board of
Directors of the Company (hereinafter called the "Board of Directors" or the
"Board") in accordance with the provisions of the Company's Certificate of
Incorporation, as amended to date (hereinafter called the "Certificate of
Incorporation"), the Board of Directors hereby creates a series of Preferred
Stock, $0.01 par value, of the Company and hereby states the designation and
number of shares, and fixes the relative rights, powers and preferences thereof,
and the limitations thereof, as follows:

          1. Designation and Amount. The shares of such series shall be
     designated as "Series A Junior Participating Preferred Stock" (the "Series
     A Preferred Stock") and the number of shares constituting the Series A
     Preferred Stock shall be 25,000. Such number of shares may be increased or
     decreased by resolution of the Board of Directors; provided, that no
     decrease shall reduce the number of shares of Series A Preferred Stock to a
     number less than the number of shares then outstanding plus the number of
     shares reserved for issuance upon the exercise of outstanding options,
     rights or warrants or upon the conversion of any outstanding securities
     issued by the Company convertible into Series A Preferred Stock.

          2. Dividends and Distributions.

               (A) Subject to the rights of the holders of any shares of any
          series of Preferred Stock of the Company (the "Preferred Stock") (or
          any similar stock) ranking prior and superior to the Series A
          Preferred Stock with respect to dividends, the holders of shares of
          Series A Preferred Stock, in preference to the holders of Common
          Stock, par value $0.01 per share, of the Company (the "Common Stock")
          and of any other stock of the Company ranking junior to the Series A
          Preferred Stock, shall be entitled to receive, when, as and if
          declared by the Board of Directors out of funds legally available for
          the purpose, quarterly cumulative preferential

                                     Page 1

<PAGE>

          dividends payable in cash on the last day of January, April, July, and
          October in each year (each such date being referred to herein as a
          "Dividend Payment Date"), commencing on the first Dividend Payment
          Date after the first issuance of a share of Series A Preferred Stock,
          in a quarterly amount per share (rounded to the nearest cent) equal to
          the greater of (a) $1 per share or (b) subject to the provision for
          adjustment hereinafter set forth, 1,000 times the aggregate per share
          amount of all cash dividends, and 1,000 times the aggregate per share
          amount (payable in kind) of all non-cash dividends or other
          distributions other than a dividend payable in shares of Common Stock,
          declared on the Common Stock since the immediately preceding Dividend
          Payment Date or, with respect to the first Dividend Payment Date,
          since the first issuance of any share or fraction of a share of Series
          A Preferred Stock. In the event the Company shall at any time declare
          or pay any dividend on the Common Stock payable in shares of Common
          Stock, or effect a subdivision or combination or consolidation of the
          outstanding shares of Common Stock (by reclassification or otherwise
          than by payment of a dividend in shares of Common Stock) into a
          greater or lesser number of shares of Common Stock, then in each such
          case the amount to which holders of shares of Series A Preferred Stock
          were entitled immediately prior to such event under clause (b) of the
          preceding sentence shall be adjusted by multiplying such amount by a
          fraction, the numerator of which is the number of shares of Common
          Stock outstanding immediately after such event and the denominator of
          which is the number of shares of Common Stock that were outstanding
          immediately prior to such event.

               (B) The Company shall declare a dividend or distribution on the
          Series A Preferred Stock as provided in paragraph (A) of this Section
          immediately after it declares a dividend or distribution on the Common
          Stock (other than a dividend payable in shares of Common Stock);
          provided that, in the event no dividend or distribution shall have
          been declared on the Common Stock during the period between any
          Dividend Payment Date and the next subsequent Dividend Payment Date, a
          dividend of $1 per share on the Series A Preferred Stock shall
          nevertheless be payable, when, as and if declared, on such subsequent
          Dividend Payment Date.

               (C) Dividends shall begin to accrue and be cumulative, whether or
          not earned or declared, on outstanding shares of Series A Preferred
          Stock from the Dividend Payment Date next preceding the date of issue
          of such shares, unless the date of issue of such shares is prior to
          the record date for the first Dividend Payment Date, in which case
          dividends on such shares shall begin to accrue from the date of issue
          of such shares, or unless the date of issue is a Dividend Payment Date
          or is a date after the record date for the determination of holders of
          shares of Series A Preferred Stock entitled to receive a quarterly
          dividend and before such Dividend Payment

                                     Page 2

<PAGE>

          Date, in either of which events such dividends shall begin to accrue
          and be cumulative from such Dividend Payment Date. Accrued but unpaid
          dividends shall not bear interest. Dividends paid on the shares of
          Series A Preferred Stock in an amount less than the total amount of
          such dividends at the time accrued and payable on such shares shall be
          allocated pro rata on a share-by-share basis among all such shares at
          the time outstanding. The Board of Directors may fix a record date for
          the determination of holders of shares of Series A Preferred Stock
          entitled to receive payment of a dividend or distribution declared
          thereon, which record date shall be not more than 60 days prior to the
          date fixed for the payment thereof.

          3. Voting Rights. The holders of shares of Series A Preferred Stock
     shall have the following voting rights:

               (A) Subject to the provision for adjustment hereinafter set forth
          and except as otherwise provided in the Certificate of Incorporation
          or required by law, each share of Series A Preferred Stock shall
          entitle the holder thereof to 1,000 votes on all matters upon which
          the holders of the Common Stock of the Company are entitled to vote.
          In the event the Company shall at any time declare or pay any dividend
          on the Common Stock payable in shares of Common Stock, or effect a
          subdivision or combination or consolidation of the outstanding shares
          of Common Stock (by reclassification or otherwise than by payment of a
          dividend in shares of Common Stock) into a greater or lesser number of
          shares of Common Stock, then in each such case the number of votes per
          share to which holders of shares of Series A Preferred Stock were
          entitled immediately prior to such event shall be adjusted by
          multiplying such number by a fraction, the numerator of which is the
          number of shares of Common Stock outstanding immediately after such
          event and the denominator of which is the number of shares of Common
          Stock that were outstanding immediately prior to such event.

               (B) Except as otherwise provided herein, in any other Certificate
          Designation creating a series of Preferred Stock or any similar stock,
          and except as otherwise required by law, the holders of shares of
          Series A Preferred Stock and the holders of shares of Common Stock and
          any other capital stock of the Company having general voting rights
          shall vote together as one class on all matters submitted to a vote of
          stockholders of the Company.

               (C) Except as set forth herein, or as otherwise provided by law,
          holders of Series A Preferred Stock shall have no special voting
          rights and their consent shall not be required (except to the extent
          they are entitled to vote with holders of Common Stock as set forth
          herein) for taking any corporate action.

                                     Page 3


<PAGE>

          4. Certain Restrictions.

               (A) Whenever quarterly dividends or other dividends or
          distributions payable on the Series A Preferred Stock as provided in
          Section 2 are in arrears, thereafter and until all accrued and unpaid
          dividends and distributions, whether or not earned or declared, on
          shares of Series A Preferred Stock outstanding shall have been paid in
          full, the Company shall not:

                    (i) declare or pay dividends, or make any other
               distributions, on any shares of stock ranking junior (as to
               dividends) to the Series A Preferred Stock;

                    (ii) declare or pay dividends, or make any other
               distributions, on any shares of stock ranking on a parity (as to
               dividends) with the Series A Preferred Stock, except dividends
               paid ratably on the Series A Preferred Stock and all such parity
               stock on which dividends are payable or in arrears in proportion
               to the total amounts to which the holders of all such shares are
               then entitled;

                    (iii) redeem or purchase or otherwise acquire for
               consideration shares of any stock ranking junior (either as to
               dividends or upon liquidation, dissolution or winding up) to the
               Series A Preferred Stock, provided that the Company may at any
               time redeem, purchase or otherwise acquire shares of any such
               junior stock in exchange for shares of any stock of the Company
               ranking junior (as to dividends and upon dissolution, liquidation
               or winding up) to the Series A Preferred Stock or rights,
               warrants or options to acquire such junior stock;

                    (iv) redeem or purchase or otherwise acquire for
               consideration any shares of Series A Preferred Stock, or any
               shares of stock ranking on a parity (either as to dividends or
               upon liquidation, dissolution or winding up) with the Series A
               Preferred Stock, except in accordance with a purchase offer made
               in writing or by publication (as determined by the Board of
               Directors) to all holders of such shares upon such terms as the
               Board of Directors, after consideration of the respective annual
               dividend rates and other relative rights and preferences of the
               respective series and classes, shall determine in good faith will
               result in fair and equitable treatment among the respective
               series or classes.

               (B) The Company shall not permit any subsidiary of the Company to
          purchase or otherwise acquire for consideration any shares of stock of
          the Company unless the Company could, under paragraph (A) of this

                                     Page 4

<PAGE>

          Section 4, purchase or otherwise acquire such shares at such time and
          in such manner.

          5. Reacquired Shares. Any shares of Series A Preferred Stock purchased
     or otherwise acquired by the Company in any manner whatsoever shall be
     retired and cancelled promptly after the acquisition thereof. All such
     shares shall upon their retirement become authorized but unissued shares of
     Preferred Stock and may be reissued as part of a new series of Preferred
     Stock to be created by resolution or resolutions of the Board of Directors,
     subject to any conditions and restrictions on issuance set forth herein.

          6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
     dissolution or winding up of the Company, no distribution shall be made (A)
     to the holders of the Common Stock or of shares of any other stock of the
     Company ranking junior, upon liquidation, dissolution or winding up, to the
     Series A Preferred Stock unless, prior thereto, the holders of shares of
     Series A Preferred Stock shall have received $1,000 per share, plus an
     amount equal to accrued and unpaid dividends and distributions thereon,
     whether or not earned or declared, to the date of such payment, provided
     that the holders of shares of Series A Preferred Stock shall be entitled to
     receive an aggregate amount per share, subject to the provision for
     adjustment hereinafter set forth, equal to 1000 times the aggregate amount
     to be distributed per share to holders of shares of Common Stock, or (B) to
     the holders of shares of stock ranking on a parity upon liquidation,
     dissolution or winding up with the Series A Preferred Stock, except
     distributions made ratably on the Series A Preferred Stock and all such
     parity stock in proportion to the total amounts to which the holders of all
     such shares are entitled upon such liquidation, dissolution or winding up.
     In the event, however, that there are not sufficient assets available to
     permit payment in full of the Series A liquidation preference and the
     liquidation preferences of all other classes and series of stock of the
     Company, if any, that rank on a parity with the Series A Preferred Stock in
     respect thereof, then the assets available for such distribution shall be
     distributed ratably to the holders of the Series A Preferred Stock and the
     holders of such parity shares in the proportion to their respective
     liquidation preferences. In the event the Company shall at any time declare
     or pay any dividend on the Common Stock payable in shares of Common Stock,
     or effect a subdivision or combination or consolidation of the outstanding
     shares of Common Stock (by reclassification or otherwise than by payment of
     a dividend in shares of Common Stock) into a greater or lesser number of
     shares of Common Stock, then in each such case the aggregate amount to
     which holders of shares of Series A Preferred Stock were entitled
     immediately prior to such event under the proviso in clause (A) of the
     preceding sentence shall be adjusted by multiplying such amount by a
     fraction the numerator of which is the number of shares of Common Stock
     outstanding immediately after such event and the denominator of which is
     the number of shares of Common Stock that were outstanding immediately
     prior to such event.

                                     Page 5


<PAGE>

          7. Consolidation, Merger, etc. In case the Company shall enter into
     any consolidation, merger, combination or other transaction in which the
     shares of Common Stock are converted into, exchanged for or changed into
     other stock or securities, cash and/or any other property, then in any such
     case each share of Series A Preferred Stock shall at the same time be
     similarly converted into, exchanged for or changed into an amount per share
     (subject to the provision for adjustment hereinafter set forth) equal to
     1,000 times the aggregate amount of stock, securities, cash and/or any
     other property (payable in kind), as the case may be, into which or for
     which each share of Common Stock is converted, exchanged or converted. In
     the event the Company shall at any time declare or pay any dividend on the
     Common Stock payable in shares of Common Stock, or effect a subdivision or
     combination or consolidation of the outstanding shares of Common Stock (by
     reclassification or otherwise than by payment of a dividend in shares of
     Common Stock) into a greater or lesser number of shares of Common Stock,
     then in each such case the amount set forth in the preceding sentence with
     respect to the conversion, exchange or change of shares of Series A
     Preferred Stock shall be adjusted by multiplying such amount by a fraction,
     the numerator of which is the number of shares of Common Stock outstanding
     immediately after such event and the denominator of which is the number of
     shares of Common Stock that were outstanding immediately prior to such
     event.

          8. No Redemption. The shares of Series A Preferred Stock shall not be
     redeemable from any holder.

          9. Rank. The Series A Preferred Stock shall rank, with respect to the
     payment of dividends and the distribution of assets upon liquidation,
     dissolution or winding up of the Company, junior to all other series of
     Preferred Stock and senior to the Common Stock.

          10. Amendment. If any proposed amendment to the Certificate of
     Incorporation would alter, change or repeal any of the preferences, powers
     or special rights given to the Series A Preferred Stock so as to affect the
     Series A Preferred Stock adversely, then the holders of the Series A
     Preferred Stock shall be entitled to vote separately as a class upon such
     amendment, and the affirmative vote of two-thirds of the outstanding shares
     of the Series A Preferred Stock shall be necessary for the adoption
     thereof.

                                     Page 6


<PAGE>

IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the
Company by its Chairman of the Board of Directors and attested by its Secretary
this 13th day of March, 2002.

                                     ------------------------------------
                                     Leo E. Woodard
                                     Chairman of the Board and
                                     Chief Executive Officer

Attest:



------------------------------
Sue Barnard, Secretary

                                     Page 7