Document:

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                                                                   EXHIBIT 10.21

                            Non-Dilution Agreement
                            ----------------------

     This NON-DILUTION AGREEMENT dated December 13, 1999 (the "Agreement"), is
made and entered into by and between Titan Resources Holdings, Inc., a Delaware
corporation (the "Company"), and Union Oil Company of California, a California
corporation ("Union Oil").

                             W I T N E S S E T H:

     WHEREAS, Union Oil is a holder of shares of Common Stock (as defined) of
the Company;

     WHEREAS, Union Oil, the Company, TRH, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company ("Sub"), and Titan Exploration Inc., a
Delaware corporation ("Titan"), are parties to that certain Agreement and Plan
of Merger dated as of the date hereof (the "Merger Agreement"), pursuant to
which Sub shall be merged with and into Titan, which shall become a wholly-owned
subsidiary of the Company; and

     WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Merger Agreement that the Company and Union Oil enter into
this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein the parties to this Agreement hereby agree as follows:

     1.   Definitions of Certain Agreement Terms.  For purposes of this
          --------------------------------------
Agreement, the terms hereinafter set forth shall have the following definitions
unless otherwise specifically stated:

     "Board" means the Board of Directors of the Company.

     "Capital Stock" means the Common Stock or any other capital stock of the
Company which is convertible or exchangeable into Common Stock.

     "Common Stock" means the common stock, par value $.01 per share, of the
Company.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Excluded Securities" means Common Stock issued to officers, employees or
directors of, or consultants to, the Company or its subsidiaries pursuant to the
terms of any stock option or similar stock incentive plan adopted by the Board.

     "Maximum Ownership Percentage" means 65.4%.

     "Registration Rights Agreement" means the Registration Rights Agreement
dated of even date herewith between the Company and Union Oil.

     "SEC" means the United States Securities and Exchange Commission.
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     "Securities Act" means the Securities Act of 1933, as amended.

     "Union Oil Ownership Percentage" means the percentage, not to exceed the
Maximum Ownership Percentage, obtained by multiplying 100 by an amount equal to
(i) the number of shares of Common Stock and other Voting Stock beneficially
owned by Union Oil divided by (ii) the number of shares of Common Stock and
other Voting Stock issued and outstanding.

     "Voting Stock" means any shares of Capital Stock having the right to vote
generally with respect to the election of directors or convertible into Capital
Stock having the right to vote generally with respect to the election of
directors. For purposes of calculating Union Oil Ownership Percentage, the
voting power of Capital Stock shall be determined on a fully diluted basis, such
that (a) the total number of shares of Voting Stock outstanding shall be deemed
to be the number of votes entitled to be cast by the holders of outstanding
shares with respect to the election of directors or, if greater, the total
number of votes that would be entitled to be cast by the holders of all
outstanding shares upon conversion of all convertible Capital Stock that is
convertible into Capital Stock with greater voting power than the Capital Stock
so converted, and (b) the number of votes attributable to each share of Capital
Stock owned by Union Oil shall be the number of votes attributable to such share
or, if greater, attributable to the shares, if any, into which such share is
convertible.

     The terms "beneficial ownership" and "group" shall be used as defined in
Regulation 13D-G under the Exchange Act. The terms "affiliate" and "associate"
shall be used as defined in Rule 12b-2 under the Exchange Act.

     2.   Term; Termination. This Agreement shall become effective upon
          -----------------
consummation of the transactions contemplated by the Merger Agreement and shall
terminate if the Merger Agreement is terminated in accordance with its terms.
Thereafter, this Agreement shall terminate upon the sale or transfer by Union
Oil or its affiliates of such number of shares of Capital Stock that causes the
Union Oil Ownership Percentage to decline to less than 10%. This Agreement may
also be terminated by the written agreement of all parties hereto. In the event
of the termination of this Agreement pursuant to this Section 2, this Agreement
shall become void and have no effect. Nothing contained in this Section 2 shall
relieve any party from liability for damages actually incurred as a result of
any breach of this Agreement. In addition to the foregoing, Union Oil shall have
the right at any time and from time to time to suspend its rights under this
Agreement for any such period of time as it shall request.

     3.   Issuances for other than Cash.
          -----------------------------

     (a)  If the Company issues any Capital Stock in exchange for property other
than cash or credit, it shall give Union Oil written notice of such issuance not
later than 20 days prior to such issuance, describing the number of shares to be
issued and the terms and conditions upon which the Company proposes to issue the
same. Following any such issuance, Union Oil shall have 30 days from the date of
such issuance to elect to exercise its rights under this Section 3 by giving
written notice to the Company.

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     (b)  If Union Oil provides the notice specified in Section 3(a), Union Oil
shall have the right to purchase from the Company, and the Company shall be
obligated to issue and sell to Union Oil, up to such additional number of shares
of such Capital Stock as is necessary to cause the Union Oil Ownership
Percentage immediately following the applicable issuance to equal the Union Oil
Ownership Percentage immediately preceding such issuance, upon the terms and
conditions set forth herein. The closing of such purchase and sale shall take
place at the offices of the Company on such business day and time as Union Oil
shall specify in its notice to the Company; provided, that in no event, unless
otherwise agreed by the parties, shall such closing be earlier than five (5)
business days after such notice or later than thirty (30) days after such
notice.

     (c)  The cash price per share to be paid by Union Oil pursuant to this
Section 3 shall be the Market Value Per Share determined as of the close of
business on the date of the issuance giving rise to Union Oil's purchase right
hereunder. "Market Value Per Share" means, with respect to a share of Common
Stock, the average of the closing price of the Common Stock on all domestic
securities exchanges on which such security may at the time be listed, or, if
there have been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of such
day, or, if on any day such security is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ System as of 4:00 P.M.,
New York time, on such day, or, if on any day such security is not quoted in the
NASDAQ System, the average of the highest bid and lowest asked prices on such
day in the domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or any similar successor organization. With
respect to Capital Stock other than Common Stock, the Market Value Per Share
shall be as determined in good faith by the Board of Directors.

     4.   Issuances for Cash.  If the Company issues Capital Stock (other than
          ------------------
Excluded Securities) for cash or credit (the "Offered Securities"), Union Oil
shall have a preemptive right to purchase or subscribe for the number or amount
of such Offered Securities up to the Union Oil Ownership Percentage (determined
as of the time of the public announcement of such issuance) of the total number
or amount of Offered Securities proposed to be issued. The Company shall provide
Union Oil with notice of an issuance subject to this preemptive right at least
10 days prior to such issuance specifying the number of shares and terms of such
issuance and, if Union Oil elects to exercise the right, it shall do so in such
a way as not to delay pricing and closing of the issuance. If Union Oil
exercises its right, it shall only be required to pay the same cash
consideration per share as being paid by other purchasers for the Offered
Securities. The preemptive right given by the Company shall terminate if
unexercised within 10 days after receipt of the notice of the issuance of such
Capital Stock.

     5.   Certain Limitations.  Notwithstanding anything to the contrary in this
          -------------------
Agreement, the Company shall not be required to offer or sell any Capital Stock
to Union Oil, and Union Oil shall have no preemptive rights, pursuant to this
Agreement (i) to the extent that after a purchase by Union Oil pursuant to this
Agreement the Union Oil Ownership Percentage would be greater than the Maximum
Ownership Percentage or (ii) if such action would cause the Company to be in
violation of applicable federal securities laws by virtue of such offer or sale.
All shares of Capital Stock issued hereunder shall be entitled to the benefits
of the Registration Rights Agreement. The Company will cause any shares of
Capital Stock issued pursuant to this Agreement to be listed for

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trading or quotation on any securities exchanges or quotation systems on which
the securities of that class are then listed for trading or quotation.

     6.   Successors, Assigns and Transferees.  The terms and provisions of this
          -----------------------------------
Agreement shall not bind, inure to the benefit of or be enforceable by or
against the successors, assigns or transferees of each of the parties hereto.
No party hereto may assign its rights under this Agreement; provided that Union
Oil may at any time and from time to time assign any or all of its rights under
this Agreement to an affiliate of Union Oil by giving written notice thereof to
the Company.

     7.   Entire Agreement; Amendments.  This Agreement, and such additional
          ----------------------------
instruments as may be concurrently executed and delivered pursuant to this
Agreement, constitutes the entire understanding of the parties with respect to
its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings other than those
expressly set forth herein or in the documents delivered concurrently herewith.
This Agreement may be amended only by a written instrument duly executed by all
the parties hereto.

     8.   Headings.  The section headings contained in this Agreement are for
          --------
reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.

     9.   Notices.  All notices, requests, claims, demands and other
          -------
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if so given) by hand delivery, facsimile or by
mail (registered or certified, postage prepaid, return receipt requested) to the
respective parties as follows:

          If to Union Oil:

               Union Oil Company of California
               c/o Mr. Phil Ballard
               Manager, Corporate Development
               Bengal Company of California
               One Sugar Creek Place
               14141 Southwest Freeway
               Sugar Land, TX 77478
               Fax: (281) 287-5170

          And another copy to:

               Union Oil Company of California
               2141 Rosecrans Avenue, Suite 4000
               El Segundo, CA 90245
               Attn: (1) General Counsel, and
                     (2) Vice President, Corporate Development
               Fax: (310) 726-7819

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          If to the Company:

               Titan Resources Holdings, Inc.
               500 West Texas
               Suite 200
               Midland, Texas 79701
               Attention: Mr. Jack D. Hightower
               Fax: (915) 687-3863

          with a copy to:

               Thompson & Knight L.L.P.
               1700 Pacific Avenue
               Suite 3300
               Dallas, Texas 75201
               Attention: Mr. Joe Dannenmaier
               Fax: (214) 969-1751

or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.

     10.  Governing Law.  This Agreement shall be governed by and construed and
          -------------
enforced in accordance with the laws of the State of Delaware, without reference
to the conflict of laws principles thereof.

     11.  Waiver.  Any waiver by any party of a breach of any provision of this
          ------
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.

     12.  Specific Performance.  The parties hereto acknowledge and agree that
          --------------------
Union Oil would not have an adequate remedy at law for money damages in the
event that this Agreement were not performed in accordance with its specific
terms. It is accordingly agreed that Union Oil shall be entitled to enforce
specifically the provisions of this Agreement, in any court of the United States
or any state thereof having jurisdiction, in addition to any other remedy to
which Union Oil may be entitled under this Agreement or at law or in equity.

     13.  Counterparts.  This Agreement may be executed in counterparts, each of
          ------------
which shall be an original, but each of which together shall constitute one and
the same Agreement.

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     IN WITNESS WHEREOF, and intending to be legally bound hereby, each of the
undersigned parties has executed or caused this Agreement to be executed on the
date first above written.

                                        TITAN RESOURCES HOLDINGS, INC.

                                        By: /s/ Phillip Ballard
                                            ------------------------------------
                                            Phillip Ballard
                                            Vice President

                                        UNION OIL COMPANY OF CALIFORNIA

                                        By: /s/ Timothy H. Ling
                                            ------------------------------------
                                            Timothy H. Ling
                                            Executive Vice President, North
                                            American Energy Operations and Chief
                                            Financial Officer

                                       6<PAGE>

                                                                 EXHIBIT 10.22

                       BUSINESS OPPORTUNITIES AGREEMENT

         This BUSINESS OPPORTUNITIES AGREEMENT (this "Agreement"), dated as of
December 13, 1999, is entered into by Union Oil Company of California, a
California corporation ("Union Oil"), Titan Resources Holdings, Inc., a newly
formed Delaware corporation and wholly owned subsidiary of Union Oil (the
"Company"), TRH, Inc., a newly formed Delaware corporation and a wholly owned
subsidiary of the Company ("Sub"), and Titan Exploration, Inc., a Delaware
corporation ("Titan").

         This Agreement is being executed and delivered simultaneously with the
execution and delivery of the Agreement and Plan of Merger dated December 13,
1999 (the "Merger Agreement") among Union Oil, the Company, Sub and Titan.
Pursuant to the Merger Agreement, Sub will be merged with and into Titan, which
will be the Surviving Corporation. All capitalized terms used and not defined
herein (as well as the terms "affiliate" and "person") have the meanings
attributable to them in the Merger Agreement. As a result of the Merger, Union
Oil will own a majority of the outstanding capital stock of the Company, and the
Company will own all of the outstanding capital stock of the Surviving
Corporation.

         Titan believes that it and its stockholders will benefit from the
Merger and that the Merger is in its best interest and in the best interest of
its stockholders. Union Oil, however, is unwilling to enter into the Merger
Agreement unless Titan and the Company enter into this Agreement because Union
Oil engages in the exploration for and the development, production and marketing
of natural gas and crude oil in the United States. The businesses in which Union
Oil engages are similar to those in which Titan and its subsidiaries engage and
in which the Company and its subsidiaries, including the Surviving Corporation,
will engage following the Merger.

         As the owner of a controlling interest in the Company following the
Merger, Union Oil may owe certain duties to the Company. Pursuant to a
Stockholders Agreement entered into simultaneously with the execution and
delivery of this Agreement, Union Oil will have the right to nominate certain
persons ("Designees") to serve on the board of directors of the Company
following the Merger. Certain of the Designees may be directors of or employed
by Union Oil or companies in which Union Oil has an interest, other than the
Company and its subsidiaries. These Designees will have duties to the Company
and duties to Union Oil or such other companies.

         The law relating to duties that Union Oil or its Designees may owe to
the Company is not clear. The application of such law to particular
circumstances is often difficult to predict, and if a court were to hold that
Union Oil or one of its Designees breached any such duty Union Oil or such
Designee could be held liable for damages in a legal action brought on behalf of
the Company.

         In order to induce Union Oil to enter into the Merger Agreement, Titan
and the Company are willing to enter into this Agreement in order to renounce,
effective upon

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consummation of the Merger, any interest or expectancy either of them or their
subsidiaries may have in the classes or categories of business opportunities
specified herein that are presented to or identified by Union Oil or any of its
Designees, as more fully described herein. As a result of this Agreement, Union
Oil may continue to conduct its business and to pursue certain business
opportunities without an obligation to offer such opportunities to the Company
or any of its subsidiaries, and any Designee may continue to discharge his or
her responsibilities as a director or employee of Union Oil or any company in
which Union Oil has an interest.

         In consideration of the foregoing, the mutual covenants, rights, and
obligations set forth in this Agreement, and the benefits to be derived
herefrom, and other good and valuable consideration, the receipt and the
sufficiency of which each of the parties hereto acknowledges and confesses, the
parties hereto agree as follows:

         1.  Scope of Business of the Company and its Subsidiaries Following the
             -------------------------------------------------------------------
Merger. The Company and Titan covenant and agree that, following consummation of
------
the Merger, except with the consent of Union Oil (which it may withhold in its
sole discretion), the Company and its subsidiaries will not engage in any
business other than the E&P Business and will not pursue any business
opportunity that involves any direct or indirect ownership interest in any
properties located outside the areas onshore shown on the map attached hereto
(collectively, the "Designated Areas"). The Company and Titan hereby renounce,
effective upon consummation of the Merger, any interest or expectancy in any
business opportunity that does not consist exclusively of the E&P Business
within the Designated Areas. "E&P Business" means the oil and gas exploration,
exploitation, development and production business and includes without
limitation (a) the ownership of oil and gas property interests (including
working interests, mineral fee interests and royalty and overriding royalty
interests), (b) the ownership and operation of real and personal property used
or useful in connection with exploration for Hydrocarbons, development of
Hydrocarbon reserves upon discovery thereof and production of Hydrocarbons from
wells located on oil and gas properties and (c) debt of or equity interests in
corporations, partnerships or other entities engaged in the exploration for
Hydrocarbons, the development of Hydrocarbon reserves and the production and
sale of Hydrocarbons from wells located on oil and gas properties in which the
entity conducting the E&P Business owns an interest; but such term does not
include the oilfield service business. "Hydrocarbons" means oil, gas or other
liquid or gaseous hydrocarbons or other minerals produced from oil and gas
wells. "Subsidiaries" means all entities controlled, directly or indirectly, by
the Company. Notwithstanding the foregoing, nothing in this Agreement shall
prohibit the Company and its subsidiaries from purchasing securities of any
class registered under Section 12 of the Securities Exchange Act of 1934
(regardless of the types or locations of businesses in which the issuer thereof
engages) if following any such purchase the Company and its subsidiaries own, in
the aggregate, less than 5% of such class.

         2.  Corporate Opportunities. The Company and Titan recognize that Union
             -----------------------
Oil and its Designees (i) participate and will continue to participate in the
E&P Business, directly and through affiliates, (ii) may have interests in,
participate with, and maintain

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seats on the boards of directors of or serve as officers or employees of other
companies engaged in the E&P Business and (iii) may develop business
opportunities for Union Oil and its affiliates and such other companies. The
Company and Titan recognize that Union Oil, its Designees and such affiliates
and other companies may be engaged in E&P Business in competition with the
Company and/or its subsidiaries. The Company and Titan (a) acknowledge and agree
that neither Union Oil, its affiliates nor its Designees nor any such company
shall be restricted or proscribed by the relationship between Union Oil and the
Company, or otherwise, from engaging in the E&P Business or any other business,
regardless of whether such business activity is in direct or indirect
competition with the business or activities of the Company and its subsidiaries,
on any basis other than that which is inconsistent with the standards set forth
in Section 3 hereof, (b) acknowledge and agree that, as long as their activities
are conducted in accordance with the standards set forth in Section 3 hereof,
neither Union Oil nor any Designee or affiliate of Union Oil nor any such other
company shall have any obligation to offer the Company or any of its
subsidiaries any business opportunity, (c) renounce any interest or expectancy
in any business opportunity pursued by Union Oil, any affiliate of Union Oil,
any Designee or any such company in accordance with the standards set forth in
Section 3 hereof and (d) waive any claim that any business opportunity pursued
by Union Oil, any affiliate of Union Oil, any Designee or any such company
constitutes a corporate opportunity of the Company or any of its subsidiaries
that should have been presented to the Company, unless such business opportunity
was pursued in violation of the standards set forth in Section 3 hereof.

         3.  Standards for Separate Conduct of Business.  Union Oil, any
             ------------------------------------------
affiliate of Union Oil, any Designee or any other company in which Union Oil has
an interest or of which a Designee is a director, officer or employee shall be
deemed to meet the standards set forth in this Section 3 if its businesses are
conducted through the use of its own personnel and assets and not with the use
of any personnel or assets of the Company. Without limiting the foregoing, such
standards will be met with respect to a business opportunity only if (a) it is
identified by or presented to personnel of Union Oil, such affiliate of Union
Oil, such Designee or such other company and developed and pursued solely
through the use of their personnel and assets (and not based on confidential
information disclosed by or on behalf of the Company in or during the course of
such Designee's relationship with the Company), and (b) it did not come to the
attention of such Designee solely in, and as a direct result of, his or her
capacity as a director of the Company; provided that (i) if such opportunity is
separately identified by Union Oil or one of its affiliates or such other
company or separately presented to Union Oil or one of its affiliates or such
other company by a person other than such Designee, Union Oil, such affiliate or
such company shall be free to pursue such opportunity even if it also came to
the Designee's attention solely as a result of and in his or her capacity as a
director of the Company and (ii) if such opportunity is presented to or
identified by a Designee other than solely as a result of and in his or her
capacity as a director of the Company, Union Oil or such affiliate or such other
company shall be free to pursue such opportunity even if it also came to the
Designee's attention as a result of and in his or her capacity as a director of
the Company. Nothing in this Agreement will allow a Designee to usurp a
corporate opportunity solely for his or her personal benefit (as opposed to

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pursuing, for the benefit of Union Oil, an affiliate or Union Oil or any such
other company, an opportunity in accordance with the standards set forth in this
Section 3).

        4.  Termination of Section 1. Section 1 of this Agreement will terminate
            ------------------------
at such time as Union Oil no longer owns, directly or indirectly, capital stock
of the Company representing at least 35% of the ordinary voting power for the
election of directors of the Company.

        5.  Waiver. If the Company seeks a waiver of provisions of this
            ------
Agreement, the Company shall submit to Union Oil a written request, accompanied
with materials that provide a basis for the request and assist Union Oil in
considering the request. Union Oil shall respond to the request within five
business days of its receipt of the request, unless it determines that it
requires additional information before responding, in which case it shall notify
the Company of its request for additional information. Within five business days
of receipt of the Company's response to its request for additional information,
Union Oil shall notify the Company of its decision as to the request for a
waiver. Union Oil may withhold such waiver in its sole discretion or grant a
conditional or limited waiver, and Union Oil shall have no duty, fiduciary or
otherwise, to grant any such waiver.

        4.  Miscellaneous.
            -------------

        This Agreement may be signed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, and such
counterparts together shall constitute one instrument. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware.

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<PAGE>

        IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
of the date set forth above.

                                             TITAN RESOURCES HOLDINGS, INC.

                                               By: /s/ Phillip Ballard
                                                  ------------------------------
                                                  Phillip Ballard
                                                  Vice President

                                             UNION OIL COMPANY OF CALIFORNIA

                                               By: /s/ Timothy H. Ling
                                                  ------------------------------
                                                  Timothy H. Ling
                                                  Executive Vice President,
                                                  North American Energy
                                                  Operations and Chief
                                                  Financial Officer

                                             TRH, INC.

                                               By: /s/ Phillip Ballard
                                                  ------------------------------
                                                  Phillip Ballard
                                                  Vice President

                                             TITAN EXPLORATION, INC.

                                               By: /s/ Jack D. Hightower
                                                  ------------------------------
                                                  Jack D. Hightower
                                                  President and Chief
                                                  Executive Officer

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