Document:

<PAGE>   1
                                                                   EXHIBIT 10.12

                     [CANPET ENERGY GROUP INC. LETTERHEAD]

December 17, 1999

Geocan Energy Inc.
800, 717 - 7th Avenue S.W.
Calgary, Alberta
T2P 0Z3

ATTENTION: MR. BRAD J.S. FARRIS

Dear Brad:

Re: CRUDE OIL PURCHASE AGREEMENT - C99-0059

GEOCAN ENERGY INC., ("Seller") agrees to sell and deliver to CANPET ENERGY
GROUP INC., ("Buyer") and Buyer agrees to purchase and accept CRUDE OIL on the
following terms and conditions:

1. PRODUCT:            Marketable Crude Oil

2. VOLUME:             As set out in Exhibit "A"

3. DELIVERY POINT:     As set out in Exhibit "A"

4. TERM:               To begin November 1, 1999 and continuing thereafter on a
                       monthly basis subject to the issuance by either party of
                       one (1) full calendar month written notice of
                       cancellation.

5. PRICE:              CANPET's price at the delivery point.

The General Provisions attached hereto are made a part of this agreement.

Sincerely,
CANPET ENERGY GROUP INC.

/s/ GREG WARNOCK

GREG WARNOCK
PRODUCER SERVICES REPRESENTATIVE

ACCEPTED & AGREED TO WITH EFFECT FROM
THE FIRST DAY OF THE TERM, DATED THIS
31 DAY OF DEC., 1999.

GEOCAN ENERGY INC.

PER: /s/ [ILLEGIBLE]
     --------------------------------
     GST:

<PAGE>   2
[CANPET ENERGY GROUP INC. LOGO]

                               GEOCAN ENERGY INC.

                        CRUDE PURCHASE CONTRACT C99-0059

                                  EXHIBIT "A"

                  AMENDED EXHIBIT A EFFECTIVE DECEMBER 1, 1999

<TABLE>
<CAPTION>
                                                                 APPROXIMATE
LOCATION                        DELIVERY POINT               VOLUME (M(3)/MONTH)
<S>                                 <C>                             <C>
ENBRIDGE (SASK) MEDIUM
11-12-007-09W2                Pipeline Connected                    250

                              PRODUCER TOTAL                        250
                                                                    ===

</TABLE>

Sincerely
CANPET ENERGY GROUP INC.

/s/ GREG WARNOCK

GREG WARNOCK
PRODUCER SERVICES REPRESENTATIVE

ACCEPTED 7 AGREED TO WITH EFFECT FROM
THE FIRST DAY OF THE TERM, DATED THIS
7TH DAY OF JANUARY, 2000.

GEOCAN ENERGY INC.

PER;  [ILLEGIBLE)
    ---------------------<PAGE>   1
                                                                   EXHIBIT 10.13

                        ASSIGNMENT AND NOVATION AGREEMENT

THIS AGREEMENT made as of the 11th day of November, 1998 between:

                       TIMBERWOLF RESOURCES LTD.,
                       a corporation having an office in
                       Calgary, Alberta (the "Assignor")

                                     -and -

                       GEOCAN ENERGY INC.,
                       a corporation having an office in
                       Calgary, Alberta (the "Assignee")

                                     -and -

                       PROGAS LIMITED,
                       a corporation having an office in
                       Calgary, Alberta ("ProGas")

BACKGROUND:

         The Assignor and ProGas are parties to, or successors in interest to
         the parties to a gas purchase contract, as amended;

         The Assignor conveyed to the Assignee, all of the Assignor's right,
         title, and interest in the petroleum and natural gas rights and related
         interests which are the subject of the gas purchase contract;

         The Assignee has agreed to assume all of the obligations of the
         Assignor under the gas purchase contract and secure all of the benefits
         under that contract.

<PAGE>   2
                                      -2-

THEREFORE, in consideration of the mutually beneficial terms and conditions
contained here, the parties agree:

         1.       The Assignor and ProGas are parties to, or successors in
                  interest to the parties to, a gas purchase contract, as
                  amended, described in Schedule "A" (the "Gas Purchase
                  Contract").

         2.       All terms not specifically defined in this Agreement shall
                  have the same meaning as defined in the Gas Purchase Contract.
                  For the purpose of this Agreement, the following words and
                  terms will have the following meaning:

                  (a)      "Assigned Interest" means all of the Assignor's
                           right, title and interest in the Gas Purchase
                           Contract;

                  (b)      "Execution Date" means the date by which this
                           Agreement has been executed by the Assignor, the
                           Assignee and ProGas; and

                  (c)      "Transfer Date" means July 1, 1998, the date upon
                           which the Assignor assigned and transferred the
                           Assigned Interest to the Assignee.

         3.       The Assignor, Assignee and ProGas agree that:

                  (a)      Subject to section 3(d), Assignor and Assignee
                           acknowledge and represent that the Assignor has
                           assigned and transferred the Assigned

<PAGE>   3
                                      -3-

                           Interest to Assignee for their sole use and benefit
                           as of the Transfer Date.

                  (b)      Subject to section 3(d), Assignee shall replace
                           Assignor as a party to the Gas Purchase Contract with
                           respect to the Assigned Interest from the Transfer
                           Date.

                  (c)      Only insofar as ProGas is concerned:

                           (i)      Subject to section 3(d), Assignee shall be
                                    required to perform all terms, covenants and
                                    obligations in the Gas Purchase Contract
                                    with regard to the Assigned Interest after
                                    the Transfer Date; and

                           (ii)     Assignor shall retain and be entitled to
                                    hold and enforce all rights, benefits and
                                    privileges under the Gas Purchase Contract
                                    with respect to the Assigned Interest prior
                                    to the Transfer Date; and

<PAGE>   4
                                      -4-

                           (iii)    Subject to section 3(d), Assignee shall be
                                    entitled to hold and enforce all of the
                                    rights, benefits and privileges under the
                                    Gas Purchase Contract with respect to the
                                    Assigned Interest after the Transfer Date.

                  (d)      Assignor acts as trustee for and duly authorized
                           agent of Assignee, after the Transfer Date and prior
                           to the Execution Date, in all matters relating to the
                           Assigned Interest under the Gas Purchase Contract
                           (including, without limitation, all accounting and
                           conduct of operations, ProGas' requests or
                           nominations for gas, the disposition of production,
                           and the receipt and giving of all invoices and
                           payments required or permitted under the Gas Purchase
                           Contract). Assignee, for the benefit of ProGas,
                           ratifies, adopts and confirms all acts or omissions
                           of the Assignor in their capacity as trustee and
                           agent after the Transfer Date and prior to the
                           Execution Date. The Assignee waives any claim they
                           may have against ProGas by reason of any payment by
                           ProGas to Assignor, as Seller under the Gas Purchase
                           Contract, after the Transfer Date and prior to the
                           Execution Date. ProGas agrees to recognize and accept
                           Assignor as trustee and agent for Assignee for this
                           period.

                  (e)      As of the Transfer Date, ProGas:

                           (i)      consents to the assignment of the Assigned
                                    Interest from the Assignor to the Assignee;

<PAGE>   5
                                      -5-

                           (ii)     subject to section 3(d), releases and
                                    discharges Assignor from the observance and
                                    performance of all terms and covenants of
                                    the Gas Purchase Contract and all
                                    obligations and liabilities which accrue
                                    after the Transfer Date under the Gas
                                    Purchase Contract with respect to the
                                    Assigned Interest; and

                           (iii)    does not release and discharge Assignor from
                                    any obligation or liability which had
                                    accrued prior to the Transfer Date or which
                                    does not relate to the Assigned Interest.

                  (f)      As of the Transfer Date, Assignee:

                           (i)      subject to section 3(d), releases and
                                    discharges Assignor from the observance and
                                    performance of all terms and covenants of
                                    the Gas Purchase Contract and all
                                    obligations and liabilities which accrue
                                    after the Transfer Date under the Gas
                                    Purchase Contract with respect to the
                                    Assigned Interest; and

                           (ii)     does not release and discharge Assignor from
                                    any obligation or liability which had
                                    accrued prior to the Transfer Date or which
                                    does not relate to the Assigned Interest.

                  (g)      The Gas Purchase Contract shall continue in full
                           force and effect from the Transfer Date with Assignee
                           made a party to the Gas Purchase Contract to the
                           extent of the Assigned Interest, subject to section
                           3(d).

<PAGE>   6
                                      -6-

         4.       Assignor and Assignee shall be solely responsible for any
                  adjustment between themselves with respect to the Assigned
                  Interest as to revenues, benefits, costs, obligations or
                  indemnities which accrue prior to Execution Date.

         5.       The parties to the Gas Purchase Contract acknowledge and agree
                  that gas delivered under the Gas Purchase Contract will be
                  delivered to ProGas in a common stream with other gas.

         6.       The address of the Assignee for notices and other
                  communications under the Gas Purchase Contract shall be:

                                   GEOCAN Energy Inc.
                                   Suite 800, 717 - 7th Avenue S.W.
                                   Calgary, Alberta
                                   T2P 0Z3

         7.       The Assignor and the Assignee shall, from time to time,
                  without further consideration, do and perform all further acts
                  and execute and deliver all further assignments, notices,
                  releases and other documents and instruments as may reasonably
                  be required to fully effect or maintain this Agreement.

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

         9.       The Gas Purchase Contract, as modified or amended, is ratified
                  and confirmed.

<PAGE>   7
                                      -7-

         10.      This Agreement may be executed in counterpart, no one copy of
                  which need be executed by all parties. When a counterpart has
                  been executed by each of the parties, all copies together
                  shall constitute one agreement and shall be a valid and
                  binding agreement between the parties.

THEREFORE, the parties have executed this Agreement, effective as of the date by
which this Agreement has been executed by all parties.

TIMBERWOLF RESOURCES LTD.              GEOCAN ENERGY INC.

Per: /s/ WAYNE WADLEY                  Per: [ILLEGIBLE]
    ------------------------------         -------------------------------
         WAYNE WADLEY

Title: PRESIDENT                       Title: CFO
      ----------------------------           -----------------------------

Per:                                   Per: [ILLEGIBLE]
    ------------------------------         -------------------------------

Title:                                 Title: VP
      ----------------------------           -----------------------------

Date Executed: November 22, 1998       Date Executed: November 20, 1998
              --------------------                   ---------------------

Per: /s/ M-J BUCKLEY
    ------------------------------
         M-J BUCKLEY

Title: MANAGER, GAS SUPPLY
      ----------------------------

Per: /s/ J.A. VAN EGTEREN
    ------------------------------
         J.A. VAN EGTEREN

Title: VICE PRESIDENT,
       SUPPLY AND PLANNING
      ----------------------------

Date Executed: December 12, 2002
              --------------------

This is the execution page to that Assignment and Novation Agreement between
Timberwolf Resources Ltd., GEOCAN Energy Inc., and ProGas Limited dated as of
November 11, 1998.

<PAGE>   8

                                  SCHEDULE "A"

This is Schedule "A" attached to and made part of that Assignment and Novation
Agreement dated as of November 11, 1998, between Timberwolf Resources Ltd. (as
"Assignor"), GEOCAN Energy Inc. (as "Assignee"), and ProGas Limited:

         Gas Purchase Contract dated November 1, 1997, as amended, between
         Timberwolf Resources Ltd. and ProGas Limited.

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