Document:

<PAGE>   1
                                                                   Exhibit 10.26

The following agreement was entered into by the Company with, among others, John
E. Hagale Executive Vice President and Chief Financial Officer and one other
executive officer, on August 5, 1999.

<PAGE>   2

You were a participant in the Burlington Resources Inc. ("BR") Retention Plan
that was adopted effective March 1, 1992 (the "Retention Plan"). The Retention
Plan offered certain benefits, including a pension enhancement, to those
individuals who were employed at BR's Seattle holding company office on January
1, 1992. In connection with your relocation from Seattle to Houston, you were
asked to sign a waiver of your benefits under the Retention Plan. As you may
know, BR has paid a similar pension enhancement to former eligible BR employees
who relocated from Seattle to Houston, even though they had executed such
waivers. Under these circumstances, it would be inequitable not to treat you
similarly.

The purpose of this letter is to confirm that, upon termination of your
employment and execution by you of BR's customary severance agreement, you will
be paid a lump sum pension enhancement that results from the following
modifications to the provisions of BR's Pension Plan (the "Qualified Plan") and
Supplemental Benefits Plan (the "Supplemental Plan") in effect on the date
hereof:

o    The "Lump Sum" calculation assumes you are eligible for and commence early
     retirement benefits, including the early retirement supplement, at age 60;
o    "Final Average Earnings" at age 60 assumes your base salary increases 6%
     per year and you receive your maximum bonus opportunity each year; and
o    "Integration Level" at age 60 assumes the Social Security Wage Base
     increases 5% per year.

The Lump Sum described above will be determined using the actuarial assumptions
being used at the time of such payment with respect to the Qualified Plan (for
example, the discount rate and mortality assumptions) and will be reduced by the
lump sum value of benefits payable from the Qualified Plan and Supplemental Plan
whether or not such benefits are payable in a lump sum.

                                         BURLINGTON RESOURCES INC.

                                         ---------------------------------------
                                         By:  Bobby S. Shackouls
                                         Its:  Chairman of the Board, President
                                                 and Chief Executive Officer<PAGE>   1
                         SUPPLEMENTAL SECURITY AGREEMENT

                              DATED 6TH March, 2000

                                  Relating to a

                               SECURITY AGREEMENT

                            Dated 21ST October, 1999

                                     BETWEEN

                          INDEPENDENT ENERGY UK LIMITED

                                       and

                                BARCLAYS BANK PLC

                                    as Agent

                                  ALLEN & OVERY

                                     London

<PAGE>   2

                                      INDEX

<TABLE>
<CAPTION>
CLAUSE                                                                                                      PAGE

<S>                                                                                                         <C>
1.       Interpretation.....................................................................................   1
2.       Incorporated Provisions............................................................................   2
3.       Acknowledgement....................................................................................   2
4.       Representations and Warranties.....................................................................   2
5.       Supplemental Fixed Charges.........................................................................   2
6.       Supplemental Floating Charges......................................................................   2
7.       Full Force and Effect..............................................................................   3
8.       No Release.........................................................................................   3
9.       Governing Law......................................................................................   3

SIGNATORIES.................................................................................................   4
</TABLE>

<PAGE>   3

THIS Deed is dated 6th March, 2000 between:

(1)      INDEPENDENT ENERGY UK LIMITED (Registered No. 3033406) (the "CHARGOR");

(2)      BARCLAYS BAK PLC of 5 he North Colonnade, Canary Wharf, London E14 4BB
         as agent and trustee for itself and the Finance Parties (as defined in
         the Credit Agreement referred to below) (the "AGENT),

and is supplemental to the Security Agreement (as defined below).

WHEREAS:

(A)      As a condition precedent to a credit agreement (the "CREDIT AGREEMENT")
         dated 8th July, 1999 between, amongst others, the parties to this Deed,
         the Borrower entered into a security agreement (the "SECURITY
         AGREEMENT") dated 21st October, 1999.

(B)      Under the Security Agreement the Chargor charged all of its property,
         assets and rights and assigned certain of its assets in favour of the
         Agent as agent and trustee for itself and the Financial Parties (as
         that term is defined in the Credit Agreement).

(C)      The parties to the Ancillary Facility Letter intend to amend that
         agreement pursuant to an amendment letter of the same date as this Deed
         from the Agent to the Chargor (the "AMENDMENT LETTER") to increase the
         amount of the Ancillary Facility to (pound)102,000,000.

(D)      The Ancillary Bank requires the Chargor to enter into this Deed as a
         condition precedent to the increase referred to above and to the
         continued availability of the Ancillary Facility for the time being
         (and without imposing any liability or commitment on the Ancillary
         Bank).

(E)      The parties to this Deed consider that all obligations and liabilities
         of the Chargor arising under or in connection with the Amended
         Ancillary Facility Letter form part of the Secured Liabilities (as
         defined in the Security Agreement) but, for the avoidance of doubt, the
         Chargor wishes to charge its present and future assets to the Agent for
         the benefit of itself and the Finance Parties as security for payment
         of any such obligations and liabilities, as owed by the Chargor, if and
         to the extent that any of them are not charged by the Security
         Agreement.

(F)      It is intended that this Deed shall take effect as a deed
         notwithstanding the fact that a party may only execute this Deed under
         hand.

                                       1
<PAGE>   4

IT IS AGREED as follows:

1.       INTERPRETATION

1.1      DEFINITIONS

         In this Deed, unless the context otherwise requires "AMENDED ANCILLARY
         FACILITY LETTER" means the Ancillary Facility Letter as supplemented
         and amended by the Amendment Letter.

1.2      INTERPRETATION

(a)      Unless expressly defined in this Deed or the contrary intention
         appears, capitalised terms defined in the Security Agreement and
         capitalised terms defined in the Credit Agreement shall have the same
         meanings in this Deed (including in the clauses incorporated into this
         Deed by Clause 2).

(b)      The provisions of Clause 1.2 (Construction) of the Credit Agreement
         shall also apply to this Deed (including in the clauses incorporated
         into this Deed by Clause 2) with each reference to the Credit Agreement
         being deemed to be a reference to this Deed.

(c)      If the Agent reasonably considers an amount paid by any Obligor or any
         other person to a Finance Party under a Finance Document is capable of
         being avoided or otherwise set aside on the liquidation or
         administration of such Obligor or otherwise, then that amount shall not
         be considered to have been irrevocably paid for the purposes of this
         Deed.

2.       INCORPORATED PROVISIONS

         Clauses 2.2 (Miscellaneous), 3.2 (Conversion) and 4 (Covenants for
         title) to 19 (Release) (both inclusive) of the Security Agreement shall
         be deemed to be incorporated into this Deed, with all necessary changes
         having been made, as though set out in full in this Deed with each
         reference in those clauses to this "Security Agreement" being deemed to
         be a reference to this Deed.

3.       ACKNOWLEDGEMENT

         The parties to this Deed acknowledge and agree that the definition of
         "SECURED LIABILITIES" in the Security Agreement includes all present
         and future obligations an liabilities (whether actual or contingent and
         whether owned jointly or severally or in any other capacity whatsoever)
         of the Chargor to the Finance Parties under each Finance Document to
         which the Chargor is a party, and including, without limitation, the
         Chargor's liabilities under the Amended Ancillary Facility Letter.

                                       2
<PAGE>   5

4.       REPRENTATIONS AND WARRANTIES

         The Chargor represents and warrants on today's date that each of the
         representations and warranties by it set out in Clause 5
         (Representations and warranties) of the Security Agreement which are
         deemed to be incorporated into this Deed pursuant to Clause 2
         (Incorporated provisions) are true and accurate in all respects (with
         reference to the facts and circumstances subsisting on today's date).

5.       SUPPLEMENTAL FIXED CHARGES

         The Chargor, as security for the payment of all the Secured
         Liabilities, mortgages or charges by way of first legal mortgage or
         first fixed charge (as appropriate) in favour of the Agent al its
         present and future property and assets referred to in Clause 2.1
         (Creation of fixed security) of the Security Agreement to the extent
         (if any) not already charged by that Clause 2.1.

6.       SUPPLEMENTAL FLOATING CHARGES

         The Chargor, as security for the payment of all the Secured
         Liabilities, charges in favour of the Agent by way of a first floating
         charge all its undertaking and assets, both present and future, not
         otherwise effectively mortgaged or charged by way of fixed mortgage or
         charge by Clause 2 (Fixed security) of the Security Agreement or Clause
         5 (Supplemental fixed charges) to the extent (if any) not already
         charged by way of floating charge by Clause 3 (Floating charge) of the
         Security Agreement.

7.       FULL FORCE AND EFFECT

(a)      The Security Agreement shall continue in full force and effect save to
         the extent (if any) supplemented and/or varied by this Deed and this
         Deed shall be read and construed as one with the Security Agreement to
         the extent (if any) it supplements or varies either of those documents
         (but not further or otherwise).

(b)      The Agent and the Borrower designate this Deed as a Finance Document.

8.       RELEASE

         For the avoidance of doubt:

         (i)      nothing in this Deed shall constitute a release of the
                  security or guarantees created pursuant to the Security
                  Agreement; and
         (ii)     nothing in this Deed shall prejudice, reduce the effect of or
                  otherwise impose any reduction or restriction on the terms of
                  any release of the security or guarantee given pursuant to the
                  Security Agreement prior to the date of this Deed.

                                       3
<PAGE>   6

9.       GOVERNING LAW

         This Deed is governed by and construed in accordance with English law.

IN WITNESS WHEREOF this Deed has been duly executed as a deed on a date first
above written.

                                       4
<PAGE>   7

                                   SIGNATORIES

THE CHARGOR

SIGNED as a deed by
INDEPENDENT ENERGY UK
LIMITED
Acting by                              -----------------------------------------
                                       (Director)

and                                    -----------------------------------------
                                       (Director/Secretary)

THE AGENT

BARCLAYS BANK PLC

By:
   -----------------------

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