Document:

EXHIBIT 10.19
 ADVANCE AGREEMENT BETWEEN FEDERAL HOME LOAN BANK OF DES MOINES AND FARM BUREAU
                  LIFE INSURANCE COMPANY DATED AUGUST 17, 1999

                                                           Date: August 17, 1999

                             APPLICATION FOR ADVANCE

     The undersigned member hereby applies for an advance pursuant to and
subject to the terms of the previously executed Agreement for Advances, Pledge
and Security Agreement and the Credit Policy of the Federal Home Loan Bank of
Des Moines ("Bank") in effect at the time of disbursement. This writing
incorporates the terms of all negotiations and is the sole evidence of those
negotiations. It is agreed that if, pursuant to Section 10(c) of the Federal
Home Loan Bank Act, the applicant is required to purchase additional capital
stock because the Bank makes an advance, the Bank may deduct the amount of the
required purchase from the proceeds of the advance and apply it to the purchase
of said stock. The type of advance applied for is as follows:

<TABLE>
<CAPTION>
           ADVANCE                        INTEREST             ADVANCE          MATURITY            ADVANCE
         DESCRIPTION                        RATE                TERM              DATE               AMOUNT
         -----------                        ----                ----              ----               ------
<S>                                <C>                        <C>          <C>                   <C>
1-Month LIBOR - .0475%             1 MO LIBOR - .0475%        49 months    September 17, 2003    $40,000,000.00
See attached schedule for terms    discounted initial rate
and prepayment provision
</TABLE>

     The undersigned officers hereby certify that they are authorized to apply
to the Federal Home Loan Bank of Des Moines for this advance pursuant to a
resolution adopted by the Board of Directors of the undersigned member. The
member agrees that the Bank can accept and rely upon applications executed and
sent via facsimile or electronic transmission. The member shall be legally bound
by the terms of such applications.

NAME OF INSTITUTION:    Farm Bureau Life Insurance Co. (#1156)

LOCATION:               West Des Moines,  IA

BY:____________________________________  BY:____________________________________

   ____________________________________     ____________________________________
          Typed Name of Signer                      Typed Name of Signer

TITLE:_________________________________  TITLE:_________________________________

     NOTE: This transaction is not effective until approved and notice is given
           to you by the Bank. If the member institution subsequently becomes
           ineligible for Bank advances, the member must provide the Bank with
           immediate written notification of its ineligibility.
--------------------------------------------------------------------------------
FOR FHLB USE

Date Approved:     8/17/99            FEDERAL HOME LOAN BANK OF DES MOINES

Notified Via:      telephone          By:_______________________________________

Advance No.        99081701           By:_______________________________________

<PAGE>

                      FEDERAL HOME LOAN BANK OF DES MOINES
                          LIBOR ADVANCE TERMS AGREEMENT

ADVANCE TERMS:      $40,000,000 floating rate LIBOR advance. Farm Bureau Life
                    Insurance Co. shall have the right to prepay in whole or in
                    part in increments of $1,000,000 the advance referenced
                    herein without penalty beginning September 17, 1999, and
                    every month on the repricing date thereafter with 3 days
                    prior notice to the Federal Home Loan Bank of Des Moines.

COUNTERPARTIES:     Farm Bureau Life Insurance Co. (#1156) and Federal Home Loan
                    Bank of Des Moines.

SETTLEMENT DATE:    August 17, 1999
MATURITY DATE:      September 17, 2003

PAYMENTS:           Farm Bureau Life Insurance Co. pays 1 month LIBOR - .0475%
                    rounded to the nearest thousandth of one percent on the 17th
                    day of each calendar month commencing September 17, 1999,
                    and ending on the Maturity Date, subject to adjustment with
                    the Following Business Day convention, with adjustment of
                    Period End Dates.

FLOATING RATE
OPTION:             The LIBOR rate is the 1 month LIBOR rate as posted on the
                    Telerate page 3750 as of 11:00a.m., London time, on the day
                    that is two London and New York Banking Days preceding that
                    reset date. If such rate does not appear on the Telerate
                    Page 3750, the rate for that Reset Date will be determined
                    as if the parties had specified Reference Banks as the
                    applicable Floating Rate Option. Reference Banks means that
                    the rate for a Reset Date will be determined on the basis of
                    the rates at which deposits in U.S. Dollars are offered by
                    the Reference Banks at approximately 11:00a.m., London time,
                    on the day that is two London and New York Banking Days
                    preceding that Reset Date to prime banks in the London
                    interbank market for a period of the Designated Maturity
                    commencing on the Reset Date and in a Representative Amount.
                    The Calculation Agent will request the principal London
                    office of each of the Reference Banks to provide a quotation
                    of its rate. If at least two such quotations are provided,
                    the rate for that Reset Date will be the arithmetic mean of
                    the quotations. If fewer than two quotations are provided as
                    requested, the rate for that Reset Date will be the
                    arithmetic mean of the rates quoted by major banks in New
                    York City, selected by the Calculation Agent, at
                    approximately 11:00a.m., New York City time, on the Reset
                    Date for loans in U.S. Dollars to leading European banks for
                    a period of the Designated Maturity commencing on that Reset
                    Date and in a Representative Amount.

Date_______\________
Initial_____\_______

<PAGE>

                      FEDERAL HOME LOAN BANK OF DES MOINES
                          LIBOR ADVANCE TERMS AGREEMENT

BUSINESS DAY
FOR PAYMENTS:           New York

DAY COUNT FRACTION:     Actual/360

DOCUMENTATION:          FHLB AAPSA agreement

CALCULATION AGENT
ON ADVANCE:             FHLB

As a result of this transaction, Farm Bureau Life Insurance Co. will receive an
all-in funding level of 1 month LIBOR - .0475%

NON-SCHEDULED
PREPAYMENTS:            Farm Bureau Life Insurance Co. shall have the right at
                        any time to prepay all or part in increments of
                        $1,000,000 the advance referenced herein. If at any time
                        after Advance Number 99081701 is made by the Bank to
                        Farm Bureau Life Insurance Co. at a rate of interest
                        based upon LIBOR, Farm Bureau Life Insurance Co. chooses
                        for any reason to repay the Advance in a manner other
                        than provided for in the Advance terms, Farm Bureau Life
                        Insurance Co. shall reimburse the Bank for any actual
                        open market transaction costs the Bank sustains because
                        of the prepayment. In the event Farm Bureau Life
                        Insurance Co. elects to make a non-scheduled prepayment,
                        the Bank shall, promptly upon request by Farm Bureau
                        Life Insurance Co., advise Farm Bureau Life Insurance
                        Co. what its actual open market costs will be in
                        connection with a proposed non-scheduled prepayment. For
                        purposes of this Agreement, actual open market
                        transaction costs shall include any costs the Bank
                        incurs because of any agreement(s) the Bank enters into
                        to facilitate the LIBOR Advance which may include but is
                        not limited to interest rate swaps.

FEDERAL HOME LOAN BANK                    FARM  BUREAU  LIFE  INSURANCE  CO.
OF DES MOINES

on___________________________________     on____________________________________

By:__________________________________     By:___________________________________

Title:_______________________________     Title:________________________________<PAGE>

                                                                    Exhibit 10.1

                        AGREEMENT OF PURCHASE AND SALE
                        ------------------------------

     THIS AGREEMENT made as of the 16th day of February, 2000

BETWEEN:

          NEUTRINO RESOURCES INC., a body corporate, having an office in the
          City of Calgary, in the Province of Alberta ("Vendor")

                                    - and -

          STAR OIL & GAS LTD., a body corporate, having an office in the City of
          Calgary, in the Province of Alberta  ("Purchaser")

WHEREAS Vendor wishes to sell the Assets and Purchaser wishes to purchase the
Assets, subject to and in accordance with the terms and conditions hereof;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the mutual covenants and agreements hereinafter set forth, the Parties hereby
agree as follows:

                                   ARTICLE I
                                 INTERPRETATION
                                 --------------

1.1  Definitions

     In this Agreement, including the recitals and the Schedules, unless the
     context otherwise requires:

     (a)  "Abandonment and Reclamation Obligations" means all obligations to
          abandon the Wells and restore and reclaim the surface sites thereof,
          to decommission and remove the tangible depreciable property and
          assets comprised in the Tangibles, including, without limitation, the
          Facilities, and restore and reclaim the surface sites thereof and to
          reclaim and restore the lands to which the Surface Rights relate, all
          in accordance with applicable law;

     (b)  "AFE" means an authority for expenditure, mail ballot, cash call or
          any other similar approval given by a holder of a working interest in
          the Assets;

     (c)  "this Agreement", "herein", "hereto", "hereof" and similar expressions
          refer to this Agreement of Purchase and Sale, as amended from time to
          time;

     (d)  "ARTC" means credits or rebates, commonly known as Alberta royalty tax
          credits, under the Alberta Corporate Tax Act, in respect of royalties
          payable to the Crown in right of Alberta;

                                                                               1
<PAGE>

     (e)  "Assets" means the Petroleum and Natural Gas Rights, the Tangibles and
          the Miscellaneous Interests;

     (f)  "Base Price" means Thirteen Million, One Hundred Thousand Dollars
          ($13,100,000.00), subject to adjustment pursuant to section 9.2;

     (g)  "Business Day" means any day which is not a Saturday, Sunday or
          statutory holiday in Calgary, Alberta;

     (h)  "Closing" means the transfer of beneficial ownership of the Assets
          from Vendor to Purchaser, the payment by Purchaser to Vendor of all
          amounts contemplated by subsection 5.2(c), hereof and the completion
          of other matters which are contemplated herein to be completed on or
          before the Closing Date;

     (i)  "Closing Date" means the 1st day of March, 2000 or such other date as
          may be agreed upon in writing by Vendor and Purchaser;

     (j)  "Closing Time" means 10:00 a.m. Calgary time on the Closing Date, or
          such other time as may be agreed upon in writing by Vendor and
          Purchaser;

     (k)  "Confidentiality Agreement" means the Confidentiality Agreement dated
          December 17, 1999 between the Vendor and Purchaser;

     (l)  "Data" means all well files, lease files, agreement files, engineering
          files and production records (including, without limitation, the Title
          and Operating Documents), directly relating to the Petroleum and
          Natural Gas Rights or the Tangibles, but specifically excluding
          Proprietary Information;

     (m)  "Defect Value" means the decrease in value (expressed in $) of an
          Asset as a result of an uncured and non-waived Title Defect affecting
          title to such Assets;

     (n)  "Dollar" or "$" means a dollar of the lawful money of Canada;

     (o)  "Effective Time" means 8:00 a.m. Calgary time, on March 1, 2000;

     (p)  "Environmental Liabilities" means all environmental liabilities and
          obligations that relate to the Assets or that arise in connection
          with, or as a result of, the ownership thereof or operations, or lack
          of operations, pertaining thereto, including, without limitation,
          liabilities and obligations relating to or arising from:

          (i)    transportation, storage, use or disposal of toxic or hazardous
                 substances;

          (ii)   release, spill, escape or emission of toxic or hazardous
                 substances; or

          (iii)  pollution or contamination, of or damage to, the environment;

          including, without limitation, liabilities and obligations to
          compensate Third Parties for damages and losses resulting from the
          items described in items (i) and (ii) above (including, without
          limitation, damage to property, personal injury and death) and
          liabilities and obligations to take action to prevent or rectify

                                                                               2
<PAGE>

          damage to or otherwise protect the environment and, for purposes of
          this Agreement, "the environment" includes, without limitation, the
          air, the surface and subsurface of the earth, bodies of water
          (including, without limitation, rivers, streams, lakes and aquifers)
          and plant, human and animal life;

     (q)  "Facilities" means the tangible depreciable property and assets
          described in Part I of Schedule "B" and the Unit Facilities, if any;

     (r)  "GST" means the goods and services tax payable pursuant to the GST
          Legislation;

     (s)  "GST Legislation" means the Excise Tax Act, 1980 RSC, c. E-1 5, as
          amended and the regulations thereunder;

     (t)  "General Conveyance" means the general conveyance in the form of
          Schedule "H";

     (u)  "Interest Amount" means simple interest on the Base Price from and
          including the Effective Time up to but excluding the Closing Date at
          the Prime Rate plus one percent (1%);

     (v)  "Lands" means lands described in the Land Schedule subject to the
          restrictions and exclusions set forth therein as to Petroleum
          Substances and geological formations;

     (w)  "Land Schedule" means Part I of Schedule "A";

     (x)  "Leases" means the leases, licences, permits and similar documents of
          title described in the Land Schedule by virtue of which the holder
          thereof is entitled to drill for, win, take, own or remove Petroleum
          Substances within, upon or under the Lands or lands pooled or unitized
          therewith, and includes, if applicable, all renewals and extensions of
          such documents and all documents issued in substitution therefor;

     (y)  "Losses and Liabilities" means, in relation to a Party, losses, costs,
          damages and expenses which such Party suffers, sustains, pays or
          incurs, including, without limitation, legal fees on a "solicitor and
          his own client" basis;

     (z)  "Miscellaneous Interests" means the interests of Vendor in all
          property, assets, interests and rights (other than the Petroleum and
          Natural Gas Rights and the Tangibles) directly related to the
          Petroleum and Natural Gas Rights or the Tangibles but only to the
          extent such property, assets, interests and rights are directly
          related to Petroleum and Natural Gas Rights or the Tangibles,
          including, without limitation, any and all of the following:

          (i)    contracts and agreements directly related to the Petroleum and
                 Natural Gas Rights or the Tangibles including, without
                 limitation, the Title and Operating Documents;

          (ii)   the Surface Rights;

                                                                               3
<PAGE>

          (iii)  the Data;

          (iv)   the Wells, including well bores and all casing therein; and,

          (v)    the Unit Interest, if applicable,

          but specifically excluding (a) Proprietary Information, (b) Petroleum
          Substances produced prior to the Effective Time, (c) accounts
          receivable accruing prior to the Effective Time, and (d) accounting
          records.

     (aa) "Parties" means the parties to this Agreement and "Party" means any
          one of them;

     (bb) "Permitted Encumbrances" means:

          (i)    liens for taxes, assessments and governmental charges, for
                 which payment is not due;

          (ii)   liens incurred or created in the ordinary course of business as
                 security in favour of the person who is conducting the
                 development or operation of the property to which such liens
                 relate for Vendor's proportionate share of costs and expenses
                 of such development or operation, for which payment is not due;

          (iii)  mechanics', builders' and materialmen's liens in respect of
                 services rendered or goods supplied, for which payment is not
                 due;

          (iv)   easements, rights of way, servitude's and other similar rights
                 in land (including, without limitation, rights of way and
                 servitude's for roads, railways, sewers, drains, gas and oil
                 pipelines, gas and water mains and electric light, power,
                 telephone, telegraph and cable television conduits, poles,
                 wires and cables);

          (v)    the right reserved to or vested in any municipality or
                 government or other public authority by the terms of any lease,
                 licence, franchise, grant or permit or by any statutory
                 provision, to terminate any such lease, licence, franchise,
                 grant or permit or to require annual or other periodic payments
                 as a condition of the continuance thereof;

          (vi)   rights of general application reserved to or vested in any
                 governmental or other public authority to levy taxes on
                 Petroleum Substances or the income or revenue therefrom, and
                 other governmental requirements and limitations of general
                 application;

          (vii)  royalty burdens, liens, adverse claims, penalties, reductions
                 in interests and other encumbrances set out in Schedule "A" or
                 Schedule "B";

          (viii) the reservations, limitations, provisions and conditions in any
                 original grants from the Crown of any of the Lands or interests
                 therein and statutory exceptions to title; and

                                                                               4
<PAGE>

          (ix)   the terms and conditions of the Title and Operating Documents;

     (cc) "Petroleum and Natural Gas Rights" means (i) the interests in the
          Leases to the extent they pertain to the Lands which are attributed to
          Vendor in the Land Schedule and (ii) the interests (if any) in
          royalties, net profits interests and similar interests attributed to
          Vendor in the Land Schedule;

     (dd) "Petroleum Substances" means crude oil, petroleum, natural gas,
          natural gas liquids, and other related hydrocarbons (except coal) and
          any and all other substances (including sulphur), whether liquid,
          solid or gaseous and whether hydrocarbons or not, produced in
          association therewith, the rights to which are granted pursuant to the
          Leases;

     (ee) "Prime Rate" means the rate of interest, expressed as a rate per
          annum, designated by the main branch in Calgary of the National Bank
          of Canada, as the reference rate used by it to determine rates of
          interest charged on Canadian dollar commercial loans made in Canada
          and which is announced by such bank, from time to time, as its prime
          rate, provided that whenever such bank announces a change in such
          reference rate, the "Prime Rate" shall correspondingly change
          effective on the date the change in such reference rate is effective;

     (ff) "Proprietary Information" means Vendor's interest in (i) all Seismic
          Data and interpretations of Seismic Data, (ii) geological maps and
          interpretations, (iii) valuations of the Assets and (iv) all income
          tax and financial information;

     (gg) "Purchase Price" has the meaning ascribed thereto in section 2.2;

     (hh) "Right of First Refusal" means a right of first refusal, pre-emptive
          right of purchase or similar right whereby a Third Party has the right
          to acquire or purchase a portion of the Assets as a consequence of
          Vendor having agreed to sell the Assets to Purchaser in accordance
          herewith;

     (ii) "Sale, Processing and Transportation Agreements" means agreements for
          the sale of Petroleum Substances produced from the Lands or lands
          pooled or unitized therewith and agreements providing for the
          gathering, transportation, compression, processing, treatment or
          storage of Petroleum Substances produced from the Lands or lands
          pooled or unitized therewith, if any;

     (jj) "Schedule" means a schedule to the Agreement;

     (kk) "Seismic Data" means seismic data including surveyors' ground
          elevation records, shot point maps, drillers' logs, shooters' records,
          field records and record sections, including maps and interpretations
          made therefrom;

     (ll) "Specific Conveyances" means all conveyances, assignments, transfers,
          novations and other documents or instruments that are reasonably
          required or desirable, in accordance with normal oil and gas industry
          practices, to convey, assign and transfer the Assets to Purchaser and
          to novate Purchaser into the Title and Operating Documents in the
          place and stead of Vendor with respect to the Assets, effective as of
          the Effective Time;

                                                                               5
<PAGE>

     (mm) "Surface Rights" means all rights to use or occupy the surface of
          lands (including, but not limited to, the Lands) which are used or
          held for use in connection with the Petroleum and Natural Gas Rights
          or the Tangibles, including rights to enter upon and occupy the
          surface of lands on which the Tangibles and the Wells are located and
          rights to use the surface of lands to gain access thereto;

     (nn) "Tangibles" means (i) the interests of Vendor in the Facilities and
          (ii) the interest of Vendor to the extent directly related to the
          Petroleum and Natural Gas Rights in all other tangible depreciable
          property and assets used or intended to be used in producing,
          processing, gathering, transporting, treating, storing, measuring or
          injecting Petroleum Substances or any of them produced from the Lands
          or lands pooled or unitized therewith or in connection with water
          injection or removal operations that pertain to the Petroleum and
          Natural Gas Rights;

     (oo) "Third Party" means any partnership, corporation, trust,
          unincorporated organization, union, government, governmental or public
          department or agency, individual or any heir, executor, administrator
          or other legal representative of an individual other than a Party;

     (pp) "Title Defect" means a defect, deficiency or discrepancy in or
          affecting the title of Vendor in and to any of the Assets which is
          sufficiently material and adverse to the enforcement of title that it
          would not be acceptable to a knowledgeable, prudent purchaser acting
          reasonably, and, without limiting the generality of the foregoing,
          specifically includes:

          (i)    Vendor not being the beneficial owner of the interest
                 attributed to it in the Land Schedule, or holding a lesser
                 beneficial interest than such attributed interest;

          (ii)   Vendor's interests as described in the Land Schedule being
                 subject to a royalty, net profits interest or other similar
                 encumbrance not disclosed therein;

          (iii)  Vendor's interest as described in the Land Schedule being
                 subject to a reduction or conversion not disclosed therein,
                 other than as set forth in subclause (i) below; and

          (iv)   security interests registered against the interests of Vendor
                 in and to the Assets;

          but specifically excludes:

          (i)    Vendor's interests as described in the Land Schedule having
                 converted from a before-payout interest to an after-payout
                 interest as a result of payout having occurred between the
                 Effective Date and the Closing Date, provided such contingent
                 reduction to Vendor's interest is disclosed in the Land
                 Schedule;

          (ii)   any defects or deficiencies in title otherwise disclosed
                 herein;

                                                                               6
<PAGE>

          (iii)  the Permitted Encumbrances;

          (iv)   any missing or unsigned documents in the chain of Vendor's
                 title to the Petroleum and Natural Gas Rights or Tangibles
                 where:

                 (A)  such document is not reasonably required to confirm the
                      creation, establishment or maintenance of such title and
                      the current status of title can otherwise be confirmed
                      with reasonable certainty; or

                 (B)  such document represents a reduction of Vendor's interest
                      therein which is reflected in the Land Schedule;

          (v)    failure to confirm delay rental payments required to maintain
                 freehold Leases as having been paid, where the failure to make
                 such payment or payments by a date specified in the Lease will
                 not automatically result in a termination of the Lease; or

          (vi)   Vendor's or any predecessor's interest being only a beneficial
                 interest rather than a full legal interest;

     (qq) "Title and Operating Documents" means, to the extent directly related
          to the Petroleum and Natural Gas Rights or the Tangibles, (i) the
          Leases, (ii) assignments, trust declarations, operating agreements,
          royalty agreements, overriding royalty agreements, gross overriding
          royalty agreements, participation agreements, farmin agreements, sale
          and purchase agreements, pooling agreements, common stream agreements,
          easements, surface leases and pipeline crossing agreements, (iii)
          Sale, Processing and Transportation Agreements; (iv) agreements for
          the construction, ownership and operation of gas plants, gas gathering
          systems and other facilities, (v) permits, licences and approvals and
          (vi) other agreements which relate to the Petroleum and Natural Gas
          Rights or the Tangibles or the ownership, operation or exploitation
          thereof;

     (rr) "Unit" means the scheme or schemes of unitization for the production
          of Petroleum Substances to which the Petroleum and Natural Gas Rights
          are subject, including those listed in Schedule "C";

     (ss) "Unit Agreement" means the agreement or agreements pursuant to which
          the Unit was formed, as amended, if any;

     (tt) "Unit Facilities" means all facilities, which are operated pursuant to
          the terms of the Unit Operating Agreement, if any;

     (uu) "Unit Interest" means all of Vendor's interests in the Unit, which is
          or are attributable to the Petroleum and Natural Gas Rights, if any;

     (vv) "Unit Operating Agreement" means the operating agreement referred to
          in the Unit Agreement, as amended, if any; and

                                                                               7
<PAGE>

     (ww) "Wells" means those wells set forth in Part II of Schedule "B" and all
          wells (including without limitation, producing, shut-in, suspended,
          capped, injection and disposal wells), located on the Lands or lands
          pooled or unitized therewith.

1.2  Article, Section and Schedule References

     Except as otherwise expressly provided, a reference in this Agreement to an
     "Article", "section", subsection", paragraph" or "Schedule" is a reference
     to an article, section, subsection, paragraph or schedule of or to this
     Agreement.

1.3  Interpretation Not Affected by Headings

     The headings in this Agreement are for convenience only and shall not
     affect the construction or interpretation of this Agreement.

1.4  Included Words

     When the context reasonably permits, words suggesting the singular shall be
     construed as suggesting the plural and vice versa, and words suggesting one
     gender shall be construed as suggesting other genders.

1.5  Schedules

     The following Schedules are attached to and form a part of this Agreement:

     Schedule "A":  Part I  - Land Schedule
                    Part II - Rights of First Refusal

     Schedule "B":  Part I  - Facilities
                    Part II - Wells

     Schedule "C":  Units

     Schedule "D":  Marketing

     Schedule "E":  Authorizations for Expenditures
                    (exceeding $25,000 for single operation)

     Schedule "F":  Lawsuits and Claims

     Schedule "G":  Officer's Certificate

     Schedule "H":  General Conveyance

     Wherever any term or condition of such Schedules conflicts or is at
     variance with any term or condition in the body of this Agreement, such
     term or condition in the body of this Agreement shall prevail.

                                                                               8
<PAGE>

1.6  Knowledge or Awareness

     Where in this Agreement a representation or warranty is limited to the
     knowledge or awareness of Vendor, such knowledge or awareness consists of
     the actual knowledge or awareness, as the case may be, of the current
     officers and managers of Vendor but does not include knowledge or awareness
     of any other person.

                                   ARTICLE 2
                               PURCHASE AND SALE
                               -----------------

2.1  Purchase and Sale

     Vendor hereby agrees to sell the Assets to Purchaser and Purchaser hereby
     agrees to purchase the Assets from Vendor, subject to and in accordance
     with this Agreement.

2.2  Purchase Price

     The purchase price to be paid by Purchaser to Vendor for the Assets (the
     "Purchase Price") will be the Base Price plus the Interest Amount, as
     adjusted pursuant to Article 4.

2.3  Allocation of Purchase Price

     The Purchase Price shall be allocated among the Assets as follows:

     (a)  to Petroleum and Natural Gas Rights   $10,479,999.00 (80%)
     (b)  to Tangibles                          $ 2,620,000.00 (20%)
     (c)  to Miscellaneous Interests            $         1.00
                                                --------------

                                         TOTAL  $13,100,000.00
                                                ==============

     The amount allocated above to the Petroleum and Natural Gas Rights shall be
     adjusted by the Interest Amount and the adjustment amount determined
     pursuant to Article 4.

2.4  Payment of Purchase Price

     (a)  A deposit shall be paid by Purchaser to Vendor as follows:

          (i)    Vendor acknowledges receipt of a certified cheque or bank draft
                 in favour of Vendor in the amount of $ 1,310,000.00, being ten
                 percent (10%) of the Base Price (the "Deposit") to be held as
                 trust monies by the law firm of Burnet, Duckworth, & Palmer
                 ("BDP"), to be distributed in accordance with this Agreement;

          (ii)   if Closing occurs, the Deposit shall be distributed to Vendor
                 by BDP and the Deposit together with interest at the Prime Rate
                 plus one percent (1%) thereon from the date following receipt
                 up to but excluding the Closing Date ("Deposit Interest") shall
                 be applied in partial satisfaction of the Purchase Price
                 payable by the Purchaser hereunder to Vendor at Closing;

                                                                               9
<PAGE>

          (iii)  if Closing does not occur due to a breach of this Agreement by
                 Purchaser, the Deposit together with any interest earned
                 thereon shall be forfeited to and distributed to Vendor by BDP
                 for Vendor's own account absolutely as a genuine pre-estimate
                 by Vendor and Purchaser of the damages, costs, losses and
                 expenses suffered and incurred by Vendor as a consequence of
                 such breach by Purchaser; and

          (iv)   if Closing does not occur for any reason or circumstance other
                 than that described in subsection 2.4(a)(iii), the Deposit
                 together with any interest earned thereon shall be paid to
                 Purchaser by BDP for the account of Purchaser absolutely.

     (b)  At Closing, Purchaser shall pay to Vendor by certified cheque or bank
          draft the Purchase Price less the Deposit and Deposit Interest as
          adjusted by all adjustments contemplated by this Agreement.

2.5  GST and Sales Taxes

     (a)  The Purchase Price does not include GST. At Closing, Purchaser shall
          pay to Vendor by certified cheque or bank draft, an amount equal to
          seven percent (7%) of the portion of the Purchase Price allocated to
          Tangibles and Miscellaneous Interests pursuant to section 2.3, or a
          reallocation determined pursuant to subsection 9.2(c)(ii) on account
          of the GST payable by Purchaser in respect of its purchase of the
          Assets pursuant hereto. Vendor shall remit such amount to the
          appropriate taxation authorities in accordance with the GST
          Legislation. Each Party represents that it holds a valid GST
          registration account number at the date of Closing and that its
          registration number for GST purposes is:

                          Vendor         89060 1966RT
                          Purchaser      104997598RT

     (b)  Purchaser shall also be solely liable for any and all sales and
          similar taxes imposed by provincial or federal legislation in respect
          of the purchase of the Assets pursuant hereto. If Vendor as agent of
          the Crown is required to collect such taxes, Purchaser shall pay the
          aggregate amount of such taxes to Vendor at Closing. Vendor shall
          remit such amount to the appropriate authorities in accordance with
          applicable legislation.

     (c)  After Closing, Purchaser will be responsible for, and shall indemnify
          and save Vendor harmless in respect of, any amounts of GST and sales
          and similar taxes (including interest and penalties) in respect of the
          purchase and sale of the Assets pursuant hereto which are in excess of
          the amounts collected by Vendor from Purchaser at Closing.

                                                                              10
<PAGE>

                                   ARTICLE 3
                                    CLOSING
                                    -------

3.1  Place of Closing

     Unless otherwise agreed to in writing by the Parties, Closing shall take
     place at the Closing Time on the Closing Date at the offices of Vendor, at
     1400, 300 - 5/th/ Avenue SW, Calgary, Alberta.

3.2  Effective Time of Transfer

     The transfer and assignment of the Assets from Vendor to Purchaser shall be
     effective as of the Effective Time.  However, possession and title to the
     Assets shall not pass to Purchaser until Closing.

3.3  Deliveries at Closing - Escrow

     (a)  At Closing, Vendor shall table the following:

          (i)    the General Conveyance duly executed by Vendor;

          (ii)   all available Specific Conveyances duly executed by Vendor;

          (iii)  copies of all consents to disposition and waivers of Rights of
                 First Refusal obtained by Vendor prior to Closing with respect
                 to the sale of the Assets to Purchaser;

          (iv)   the certificate described in subsections 5.1(a) and (b); and

          (v)    such other items as may be specifically required hereunder, or
                 as may be reasonably requested by Purchaser upon reasonable
                 notice to Vendor.

     (b)  At Closing, Purchaser shall table the following:

          (i)    the amounts payable at Closing on account of the Purchase Price
                 and GST in accordance with this Agreement;

          (ii)   the certificate described in subsections 5.2(a) and (b); and

          (iii)  such other items as may be specifically required hereunder.

          In addition, Purchaser will duly execute the General Conveyance and
          the Specific Conveyances tabled by Vendor.

     (c)  The items tabled at Closing pursuant to subsections 3.3(a) and (b)
          shall be held in escrow until all of such items have been tabled and
          each of the Parties has acknowledged that it is satisfied therewith,
          whereupon such escrow shall be terminated and the items described in
          subsection 3.3(a) shall be delivered to Purchaser and the items
          described in subsection 3.3(b) shall be delivered to Vendor and the
          Closing shall be deemed to have occurred. If such escrow is not
          released on or before 4:00 p.m. on the Closing Date and the Parties do
          not agree

                                                                              11
<PAGE>

          to an extension of the escrow, the Closing shall be deemed not to have
          occurred, the General Conveyance and the Specific Conveyances shall be
          destroyed and the balance of the documents tabled by a Party pursuant
          to this section 3.3 shall be returned to that Party.

3.4  Delivery of Data

     To the extent that Vendor is reasonably able to deliver the Data to
     Purchaser, Vendor shall, as soon as is practicable after Closing (and in
     any event within 30 days of Closing), deliver to Purchaser the copies of
     the Data which it has in its possession, provided that if Vendor retains
     any interest in any property to which any of the Data relates, Vendor may
     retain the original copy of such Data and provide a photocopy of it to
     Purchaser.

3.5  Access to Records

     Vendor may, at its sole expense, after Closing gain access to, during
     regular business hours, and obtain from Purchaser copies or photocopies of,
     any Title and Operating Documents, correspondence, documents or reports
     which were delivered to Purchaser at Closing and which Vendor requires for
     audits, or claims by Third Parties.

3.6  Specific Conveyances

     It shall not be necessary for assignment and novation agreements to have
     been executed prior to or at Closing by parties thereto other than Vendor
     and Purchaser.  After Closing, Vendor shall cooperate with Purchaser in its
     procurement of the execution of such documents and any substitutions,
     amendments or replacements thereof by the parties thereto other than Vendor
     and Purchaser.  After Closing, Purchaser shall use all reasonable efforts
     to become, as soon as reasonably practicable, the recognized and beneficial
     holder of the Assets in the place and stead of Vendor and shall promptly
     register all Specific Conveyances; provided however, in furtherance thereof
     and without limitation, Vendor may elect to register on behalf of Purchaser
     all transfers of well licences, pipeline permits and similar documents.

     Purchaser shall bear all costs, fees and deposits of every nature and kind
     incurred (whether by Vendor or Purchaser) in registering any Specific
     Conveyances and registering any further assurances required to convey the
     Assets to Purchaser; and Vendor, acting reasonably, may include an amount
     in respect thereof in the interim statement of adjustments contemplated by
     section 4.2.

                                   ARTICLE 4
                                  ADJUSTMENTS
                                  -----------

4.1  Costs and Revenues to be Apportioned

     (a)  Except as otherwise provided in this Agreement, all costs and expenses
          relating to the Assets (including, without limitation, maintenance,
          development, capital and operating costs) and all revenues relating to
          the Assets (including, without limitation, proceeds from the sale of
          production and fees from processing, treating or transporting
          Petroleum Substances on behalf of Third Parties) shall be

                                                                              12
<PAGE>

          apportioned as of the Effective Time between Vendor and Purchaser on
          an accrual basis in accordance with generally accepted accounting
          principles, provided that:

          (i)    advances and cash calls made by Vendor in respect of the costs
                 of operations and capital expenditures relating to the Lands or
                 lands pooled or unitized therewith or facilities interests
                 included in the Assets which do not apply to costs incurred
                 prior to the Effective Time will be transferred to Purchaser
                 and an adjustment will be made in favour of Vendor equal to the
                 amount transferred;

          (ii)   deposits made by Vendor relating to current or future
                 operations on the Lands or on lands pooled or unitized
                 therewith shall be returned to Vendor;

          (iii)  costs and expenses of work done, services provided and goods
                 supplied shall be deemed to accrue for the purposes of this
                 Article when the work is done or the goods or services are
                 provided, regardless of when such costs and expenses become
                 payable;

          (iv)   no adjustments shall be made in respect of ARTC or similar
                 incentives, Vendor's overhead or overhead recovered by Vendor
                 in its capacity as operator; (v) Vendor shall report all net
                 revenue and pay all income tax on the net revenue from the
                 Effective Time to Closing;

          (vi)   revenues from the sale of Petroleum Substances will be deemed
                 to accrue from the time the Petroleum Substances are produced;
                 and

          (vii)  all rentals and similar payments in respect of the Leases or
                 Surface Rights comprised in the Assets and all taxes (other
                 than income taxes) levied with respect to the Assets or
                 operations in respect thereof will be apportioned between
                 Vendor and Purchaser on a per diem basis as of the Effective
                 Time.

     (b)  Vendor shall be entitled to an adjustment equal to the market value
          net of royalties and taxes other than income taxes in respect of
          Petroleum Substances, if any, attributable to the Assets which are in
          tanks or in storage above the pipeline connection, at the Effective
          Time. Purchaser shall be entitled to Petroleum Substances, if any,
          attributable to the Assets and which were placed in tanks or in
          storage at or after the Effective Time and the proceeds of sale in
          respect of such Petroleum Substances sold by Vendor after the
          Effective Time shall be for Purchaser's account. Sales of such
          Petroleum Substances shall be deemed to occur on a "first in, first
          out" basis.

4.2  Adjustments to Account

     (a)  An interim accounting of the adjustments pursuant to section 4.1 shall
          be made at Closing, based on Vendor's good faith estimate of the costs
          and expenses paid by Vendor and the revenues received by Vendor prior
          to Closing. Vendor shall provide a statement setting forth the
          adjustments to be made at Closing not

                                                                              13
<PAGE>

          later than three Business Days prior to Closing and shall assist
          Purchaser in verifying the amounts set forth in such statement. A
          further accounting of the adjustments pursuant to section 4.1 shall be
          conducted within 120 days following the Closing Date. Additional
          adjustments will be made from time to time after such 120 day period
          as and when they are ascertained by the Parties, provided that,
          subject to subsection 4.2(c), the Parties shall not be obligated to
          make an adjustment more than one year after Closing unless such
          adjustment has been specifically requested, by notice, within such
          period. All adjustments after Closing shall be settled by payment by
          the Party required to make payment hereunder within 30 days of being
          notified of the determination of the amount owing.

     (b)  During the one year period following the Closing Date, each Party may
          audit the books, records and accounts of the other respecting the
          Assets, for the purpose of effecting adjustments pursuant to this
          Article. Such audit shall be conducted upon reasonable notice to the
          other Party at such Party's offices during normal business hours, and
          shall be conducted at the sole expense of the Party conducting the
          audit.

     (c)  Notwithstanding subsection 4.2(a), the Parties will be required to
          make an adjustment pursuant to this Article 4 more than one year after
          the Closing Date if:

          (i)    the adjustment arises from a Crown royalty audit commenced
                 within four years of the end of the year in which Closing
                 occurred and a written request for the adjustment is given by
                 one Party to the other Party within 120 days of its receipt of
                 the results of the audit; or

          (ii)   the adjustment arises from a joint venture audit commenced
                 within two years of the end of the year in which Closing
                 occurred and a written request for the adjustment is given by
                 one Party to the other Party within 120 days of its receipt of
                 the results of the audit.

     (d)  An adjustment payable by a Party after Closing pursuant to this
          section 4.2 which is not paid within 30 days of a written request for
          payment from the other Party, shall bear interest at the Prime Rate
          plus one percent per annum payable by the paying Party to the other
          Party from the end of such 30 day period until the adjustment is paid.

     (e)  All adjustments provided for in this Article shall be adjustments to
          the Purchase Price.

                                   ARTICLE 5
                             CONDITIONS OF CLOSING
                             ---------------------

5.1  Purchaser's Conditions

     The obligation of Purchaser to purchase the Assets pursuant hereto is
     subject to the satisfaction at or prior to the Closing Date of the
     following conditions precedent, which are for the exclusive benefit of
     Purchaser and may be waived by Purchaser, in whole or in part by written
     notice to Vendor, delivered on or before the Closing Date:

                                                                              14
<PAGE>

     (a)  Representations and Warranties:  the representations and warranties of
          ------------------------------
          Vendor herein contained shall be true in all material respects when
          made and as of the Closing Date and a certificate of an officer of
          Vendor to that effect, in the form of Schedule "G", shall have been
          delivered by Vendor to Purchaser at Closing;

     (b)  Obligations:  all obligations of Vendor contained in this Agreement
          -----------
          contemplated herein to be performed prior to or at Closing shall have
          been timely performed in all material respects and a certificate of an
          officer of Vendor to that effect in the form of Schedule "G" shall
          have been delivered by Vendor to Purchaser at Closing;

     (c)  No Material Damage:  there shall have occurred no physical damage to
          ------------------
          the Assets or any portion thereof between the Effective Time and the
          Closing Date which, in the reasonable opinion of the Purchaser has
          materially and adversely affected the aggregate value of the Assets;
          and

     (d)  Regulatory Approvals:  all regulatory approvals required with
          --------------------
          respect to the transactions contemplated herein (other than for the
          transfer of Well licences and pipeline permits) shall have been
          obtained on terms and conditions satisfactory to Purchaser, acting
          reasonably.

     If any of the foregoing conditions precedent have not been complied with,
     or waived by Purchaser, at or before the Closing Date, Purchaser may, in
     addition to any other remedies which it may have available to it, on that
     date (but not thereafter) terminate its obligations to purchase the Assets
     by written notice to Vendor specifying what conditions precedent have not
     been satisfied and, in such event Purchaser and Vendor shall be released
     and discharged from all obligations hereunder except as provided in section
     5.4 and those contained in the Confidentiality Agreement, and the Deposit
     and any interest earned thereon shall be returned to Purchaser

5.2  Vendor's Conditions

     The obligation of Vendor to sell the Assets pursuant hereto is subject to
     the satisfaction at or prior to the Closing Date of the following
     conditions precedent, which are for the exclusive benefit of Vendor and may
     be waived by Vendor, in whole or in part by written notice to Purchaser,
     delivered on or before the Closing Date:

     (a)  Representations and Warranties:  the representations and warranties of
          ------------------------------
          Purchaser herein contained shall be true in all material respects when
          made and as of the Closing Date and a certificate of an officer of
          Purchaser to that effect, in the form of Schedule "G", shall have been
          delivered by Purchaser to Vendor at Closing;

     (b)  Obligations:  all obligations of Purchaser contained in this
          -----------
          Agreement to be performed prior to or at Closing shall have been
          timely performed in all material respects and a certificate of an
          officer of Purchaser to that effect, in the form of Schedule "G",
          shall have been delivered by Purchaser to Vendor at Closing;

     (c)  Payment:  all amounts to be paid by Purchaser to Vendor at Closing
          -------
          pursuant hereto shall have been paid to Vendor by Purchaser in the
          form stipulated in this Agreement; and

                                                                              15
<PAGE>

     (d)  Regulatory Approvals:  all regulatory approvals required with respect
          --------------------
          to the transactions contemplated herein shall have been obtained on
          terms and conditions satisfactory to Vendor, acting reasonably.

     If any of the foregoing conditions precedent has not been complied with, or
     waived by Vendor at or before the Closing Date, Vendor may, in addition to
     any other remedies which it may have available to it, terminate its
     obligations to sell the Assets to Purchaser by written notice to Purchaser
     specifying what conditions precedents have not been satisfied and, in such
     event, Purchaser and Vendor shall be released and discharged from all
     obligations hereunder except as provided in section 5.4 and those contained
     in the Confidentiality Agreement.

5.3  Efforts to Fulfill Conditions Precedent

     Purchaser and Vendor shall proceed diligently and in good faith and use all
     reasonable efforts to fulfill and assist in the fulfillment of the
     conditions precedent.
5.4  Failure of a Condition Due to a Breach

     If a condition set forth in section 5.1 or 5.2 is not satisfied as a result
     of a breach by a Party of its obligations hereunder, such Party shall be
     liable to the other Party for the other Party's Losses and Liabilities
     resulting from such breach if such other Party elects to terminate its
     obligations to purchase or sell the Assets pursuant hereto. Notwithstanding
     the foregoing, Vendor's measure of damages for a breach by Purchaser of its
     obligations hereunder shall be limited to retention of the Deposit and any
     interest earned thereon.

                                   ARTICLE 6
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

6.1  Representations and Warranties of Vendor

     Vendor represents and warrants to Purchaser that:

     (a)  Standing:  Vendor is a corporation, duly organized and validly
          --------
          existing under the laws of Canada, is authorized to carry on business
          in all jurisdictions in which the Assets are located, and has all the
          requisite corporate power and authority to sell, assign, transfer and
          convey the Assets to Purchaser in accordance with this Agreement;

     (b)  No Conflicts:  the consummation of the transactions contemplated
          ------------
          herein will not violate, nor be in conflict with, any of the
          constating documents, by-laws or governing documents of Vendor or any
          judgment, decree, order, law, statute, rule or regulation applicable
          to Vendor;

     (c)  Execution of Documents:  this Agreement has been duly executed and
          ----------------------
          delivered by Vendor and all other documents (including the General
          Conveyance and the Specific Conveyances) executed and delivered by
          Vendor pursuant hereto will be duly executed and delivered by Vendor,
          and this Agreement does, and such documents will, constitute legal,
          valid and binding obligations of Vendor,

                                                                              16
<PAGE>

          enforceable in accordance with their respective terms, subject to
          bankruptcy, insolvency, preference, reorganization, moratorium and
          other similar laws affecting creditors' rights generally and the
          discretion of courts with respect to equitable or discretionary
          remedies and defences;

     (d)  Residency for Tax Purposes:  Vendor is not a non-resident of Canada
          --------------------------
          within the meaning of the Income Tax Act (Canada);

     (e)  Finders' Fees:  Vendor has not incurred any obligation or liability,
          -------------
          contingent or otherwise, for brokers' or finders' fees in respect of
          this transaction for which Purchaser shall have any obligation or
          liability;

     (f)  No Authorizations:  no authorization or approval or other action by,
          -----------------
          and no notice to or filing with, any governmental authority or
          regulatory body exercising jurisdiction over the Assets or Vendor is
          required for the due execution, delivery and performance by Vendor of
          this Agreement, other than authorizations, approvals or exemptions
          previously obtained and currently in force or those required in
          connection with the transfer of well licences and pipeline permits;

     (g)  Title:  except for the Permitted Encumbrances, the Assets will, at the
          -----
          Closing Date, be free and clear of all liens, mortgages, pledges,
          royalties, encumbrances and adverse claims created by, through or
          under Vendor; and, except as may be expressly set forth elsewhere in
          this Agreement, Vendor does not otherwise make any representation,
          warranty or covenant as to title to or the liens, mortgages,
          royalties, encumbrances or adverse claims affecting the Assets;

     (h)  No Third Party Rights:  except for Permitted Encumbrances, the Assets
          ---------------------
          are not now and at the Closing Time will not be subject to reduction
          or alteration by rights of payout/conversion, rights to purchase,
          farmin rights or any other rights held by a Third Party which were
          created by, through or under Vendor or of which Vendor is aware;

     (i)  Quiet Enjoyment:  subject to the rents, covenants, conditions and
          ---------------
          stipulations in the Leases and Permitted Encumbrances, from and after
          Closing, Purchaser will be entitled to hold and enjoy the interests
          attributed to Vendor in the Schedules hereto for Purchaser's own use
          and benefit without any interruption of or by Vendor or any Third
          Party claiming by, through or under Vendor;

     (j)  No Lawsuits or Claims:  to the best of Vendor's knowledge, there are
          ---------------------
          no judgments and no claims, proceedings, actions or lawsuits in
          existence, contemplated or threatened against or with respect to the
          Assets or the interests of Vendor therein other than as disclosed in
          Schedule "F";

     (k)  Good Standing under Agreements:  to the best of Vendor's knowledge,
          ------------------------------
          Vendor is not in material breach of any term or provision of any Title
          and Operating Document nor does Vendor have any knowledge of receipt
          of any notice of default or alleged default under any Title and
          Operating Document, which default has not been rectified, other than
          as disclosed in Schedule "A";

     (l)  Provision of Documents:  prior to Closing, Vendor will make available
          ----------------------
          to Purchaser all Title and Operating Documents in its possession or to
          which it has access;

                                                                              17
<PAGE>

     (m)  AFEs:  there are no AFEs or other financial commitments pursuant to
          ----
          which Vendor's share of expenditures to be incurred in respect of a
          single operation conducted or to be conducted after the Effective Time
          is estimated to exceed $25,000 other than as described in Schedule "E"
          and as permitted by section 8.2;

     (n)  Royalties and Taxes:  to the best of Vendor's knowledge, all ad
          -------------------
          valorem, property, production, severance and similar taxes and
          assessments based on or measured by the ownership of property or the
          production of Petroleum Substances or the receipt of proceeds
          therefrom and all royalties and rentals in respect of the Assets which
          have become due and payable prior to the Effective Time have been
          properly and fully paid and discharged;

     (o)  Rights of First Refusal:  except as set forth in Part II of Schedule
          -----------------------
          "A", the sale of the Assets pursuant hereto is not subject to any
          Rights of First Refusal created by, through or under Vendor or of
          which Vendor otherwise has knowledge;

     (p)  Sale, Processing and Transportation Agreements:  to the best
          ----------------------------------------------
          of Vendor's knowledge, Vendor is not a party to or bound by any Sale,
          Processing and Transportation Agreements which cannot be terminated
          without penalty or notice from Vendor of 30 days or less except as set
          forth in Schedule "D";

     (q)  Operations: to the extent the same are operated by Vendor, the Assets
          ----------
          have been drilled, completed, constructed, maintained and operated in
          accordance with good oilfield practice and in material compliance with
          applicable law and if operated by Vendor, the Tangibles are in good
          and operable condition, reasonable wear and tear excepted; and

     (r)  Environmental Matters: Vendor is not aware of any environmental matter
          ---------------------
          materially and adversely affecting the Assets nor has Vendor received
          notice of:

          (i)    any material non-compliance in relation to the Assets with any
                 law intended to protect health, safety or the environment which
                 has not been remedied in all material respects; or

          (ii)   any claim in relation to the Assets by any Third Party of
                 material environmental damage (including pollution).

     (s)  Environmental Liabilities: to the best of Vendor's knowledge, there
          -------------------------
          has been no material increase in the Environmental Liabilities during
          the period commencing May 1, 1999, and ending on the Closing Date.

6.2  Negation of Other Representations and Warranties

     (a)  Vendor makes no representations or warranties except as expressly set
          forth in section 6.1 and, in particular, and without limitation,
          Vendor hereby expressly negates any representations or warranties by
          it, whether contained in any information memorandum or otherwise, with
          respect to:

          (i)    any data or information supplied by Vendor to Purchaser or its
                 representatives;

                                                                              18
<PAGE>

          (ii)   the quality, quantity or recoverability of Petroleum Substances
                 within or under the Lands or any lands pooled or unitized
                 therewith;

          (iii)  the value of the Assets or the future cashflow therefrom;

          (iv)   the quality, condition, fitness or merchantability of any
                 tangible depreciable equipment or property, interests in which
                 are comprised in the Assets; and

          (v)    Vendor's title in and to the Assets.

          Purchaser acknowledges and confirms that it has not relied on any
          data, information or advice from Vendor with respect to any or all of
          the matters specifically enumerated in this paragraph in connection
          with the purchase of the Assets pursuant hereto and that, except for
          the representations and warranties contained in section 6.1, Purchaser
          is purchasing the Assets pursuant hereto on an "as is, where is"
          basis.  Purchaser confirms that it has not relied on any covenants,
          representations or warranties outside this Agreement (whether in
          contract or in tort).  Purchaser acknowledges and confirms that it has
          performed its own due diligence and will continue to rely upon its own
          due diligence, evaluations and projections as the same relate to the
          Assets, including without limitation, environmental due diligence.

     (b)  Except with respect to the representations and warranties in section
          6.1, Purchaser forever releases and discharges Vendor and its
          directors, officers, agents and employees from any claims by, and all
          liability (whether in contract or in tort) to, Purchaser or
          Purchaser's representatives, assigns and successors, as a result of
          the use or reliance upon advice, information, statements, opinions or
          materials pertaining to the Assets which was or were delivered or made
          available to Purchaser or its representatives by Vendor or any of its
          directors, officers, agents or employees.

6.3  Representations and Warranties of Purchaser

     Purchaser represents and warrants to Vendor, that:

     (a)  Standing:  Purchaser is a corporation, duly organized and validly
          --------
          existing under the laws of the Province of Alberta, is authorized to
          carry on business in all jurisdictions in which the Assets are
          located, and has the requisite corporate power and authority to
          purchase and pay for the Assets in accordance with this Agreement;

     (b)  No Conflicts:  the consummation of the transactions contemplated
          ------------
          herein will not violate, nor be in conflict with, the constating
          documents, by-laws or governing documents of Purchaser or any
          judgment, decree, order, law, statute, rule or regulation applicable
          to Purchaser;

     (c)  Execution of Documents:  this Agreement has been duly executed and
          ----------------------
          delivered by Purchaser and all other documents (including the General
          Conveyance and the Specific Conveyances) executed and delivered by
          Purchaser pursuant hereto will be duly executed and delivered by
          Purchaser, and this Agreement does, and such documents will,
          constitute legal, valid and binding obligations of Purchaser,

                                                                              19
<PAGE>

          enforceable in accordance with their respective terms, subject to
          bankruptcy, insolvency, preference, reorganization, moratorium and
          other similar laws affecting creditors' rights generally and the
          discretion of the courts with respect to equitable or discretionary
          remedies and defenses;

     (d)  Finders' Fees:  Purchaser has not incurred any obligation or
          -------------
          liability, contingent or otherwise, for brokers' or finders' fees in
          respect of this transaction for which Vendor shall have any obligation
          or liability;

     (e)  Purchase Price:  Purchaser either now has or will have at Closing all
          ---------------
          money that Purchaser will need to pay to Vendor upon Closing or
          alternatively Purchaser now has a binding contractual right to receive
          all money that Purchaser will need to pay to Vendor and such money
          will be available to Purchaser for payment to Vendor at Closing;

     (f)  No Authorizations:  No authorization or approval or other action by,
          -----------------
          and no notice to or filing with, any governmental authority or
          regulatory body exercising jurisdiction over the Assets or Purchaser
          is required for the due execution, delivery and performance by
          Purchaser of this Agreement, other than authorizations, approvals or
          exemptions previously obtained and currently in force or those
          required in connection with the transfer of well licences and pipeline
          permits;

     (g)  Investment Canada Act: Purchaser shall comply with the provisions of
          ---------------------
          the Investment Canada Act, to the extent that the purchase of the
          Assets by Purchaser is reviewable pursuant to the Investment Canada
          Act (Canada); and

     (h)  Qualification:  Purchaser meets all qualification requirements of
          -------------
          Third Parties (including without limitation, governmental agencies) to
          purchase and to take a transfer of the Assets, including without
          limitation, the well licences and pipeline permits and shall accede
          to, comply with and perform the requirements of such Third Parties,
          acting reasonably.

6.4  Time Limitation

     No claim under this Article 6 for breach of a representation or warranty,
     or both shall be made or be enforceable by a Party unless written notice of
     such claim, with reasonable particulars, is given by such Party to the
     Party against whom the claim is made within a period of 12 months from the
     Closing Date.  No claim shall be made by a Party in respect of the
     representations and warranties made by the other Party in this Agreement
     except pursuant to this Article 6 for breach of a representation or
     warranty, or both.

6.5  Limitation

     The maximum cumulative liability of Vendor to Purchaser as a result of any
     breach of a representation, warranty or covenant, together with the value
     of indemnities provided by Vendor under this Agreement, shall not, in the
     aggregate, exceed the Purchase Price.  The representations and warranties
     of Vendor and Purchaser made herein or pursuant

                                                                              20
<PAGE>

     hereto are made for the exclusive benefit of Purchaser and Vendor, as the
     case may be, and are not transferable and may not be made the subject of
     any assignment or right of subrogation in favour of any other person.

                                   ARTICLE 7
                                  INDEMNITIES
                                  -----------

7.1  General Indemnity

     (a)  Except as otherwise provided in this Article 7 or in Article 4, and
          subject to section 6.5, Vendor shall, from and after Closing:

          (i)    be liable for; and

          (ii)   indemnify Purchaser from and against all of Purchaser's Losses
                 and Liabilities in respect of

          any claim (whether valid or invalid) made by a Third Party against
          Purchaser as a consequence of acts or omissions in respect of the
          Assets or operations in respect thereof which occurred or are alleged
          by the Third Party to have occurred prior to the Effective Time,
          provided that written notice of a claim pursuant to this subsection
          7.1(a) must be provided by Purchaser to Vendor within 12 months of the
          Closing Date.

     (b)  Except as otherwise provided in this Article 7 or in Article 4,
          Purchaser shall, from and after Closing:

          (i)  be liable for; and

          (ii) indemnify Vendor from and against all of Vendor's Losses and
               Liabilities in respect of

          any claim (whether valid or invalid) made by a Third Party against
          Vendor as a consequence of acts or omissions in respect of the Assets
          or operations in respect thereof which occurred or are alleged by the
          Third Party to have occurred after the Effective Time.

7.2  Environmental and Related Obligations

     Purchaser acknowledges that it is purchasing the Assets on an "as is, where
     is" basis and that it has taken into account its assumption of
     responsibility for Environmental Liabilities and Abandonment and
     Reclamation Obligations and the release of Vendor from responsibility
     therefor when Purchaser evaluated the Assets and determined the Base Price.
     Except as provided in section 7.3, Purchaser shall:

     (a)  be liable for; and

     (a)  shall indemnify Vendor from and against all Losses and Liabilities of
          Vendor in respect of

     all Environmental Liabilities howsoever and by whomsoever caused and
     whether they occur or arise in whole or in part prior to, on or subsequent
     to the Effective Time and all

                                                                              21
<PAGE>

     Abandonment and Reclamation Obligations. Purchaser shall not be entitled to
     exercise and hereby waives any rights or remedies Purchaser may now or in
     the future have against Vendor in respect of such Environmental Liabilities
     and Abandonment and Reclamation Obligations, whether such rights and
     remedies are pursuant to the common law or statute or otherwise, including
     without limitation, the right to name Vendor as a third party to any action
     commenced by any Third Party against Purchaser.

7.3  Limitation

     The indemnities provided for in this Article 7 apply only if Closing
     occurs.  Purchaser's obligations to indemnify Vendor pursuant to section
     7.2 are subject to, and shall not limit or reduce Purchaser's right, in
     respect of a breach of any representation and warranty contained in
     subsections 6.1(r) or 6.1(s), provided that written notice of such breach
     is provided by Purchaser to Vendor within 12 months of the Closing Date.

                                   ARTICLE 8
                             MAINTENANCE OF ASSETS
                             ---------------------

8.1  Maintenance of Assets Prior to Closing

     From the date hereof until the Closing Date, Vendor, shall, to the extent
     that the nature of its interest permits, and subject to the Title and
     Operating Documents and any other agreements and documents to which the
     Assets are subject:

     (a)  maintain the Assets in a proper and prudent manner in accordance with
          good oil and gas industry practices and in material compliance with
          all applicable laws, rules, regulations, orders and directions of
          governmental and other competent authorities;

     (b)  pay or cause to be paid all costs and expenses relating to the Assets
          which become due from the date hereof to the Closing Date; and

     (c)  perform and comply with all covenants and conditions contained in the
          Title and Operating Documents and any other agreements and documents
          to which the Assets are subject.

8.2  Consent of Purchaser

     Notwithstanding section 8.1, from the date hereof until the Closing Date,
     Vendor shall not, without the written consent of Purchaser, which consent
     shall not be unreasonably withheld by Purchaser and which, if provided,
     will be provided in a timely manner:

     (a)  make any commitment or propose, initiate or authorize any capital
          expenditure with respect to the Assets of which Vendor's share is in
          excess of $25,000 except in case of an emergency or in respect of
          amounts which Vendor is committed to expend or is deemed to authorize
          without its specific authorization or approval;

     (b)  surrender or abandon any of the Assets;

     (c)  amend in any material respect or terminate any Title and Operating
          Documents or enter into any new agreement or commitment relating to
          the Assets; or

                                                                              22
<PAGE>

     (d)  sell, encumber or otherwise dispose of any of the Assets or any part
          or portion thereof except sales of Petroleum Substances in the normal
          course of business.

8.3  Following Closing

     (a)  Following Closing, Vendor shall hold its title to the Assets in trust
          for Purchaser until all necessary notifications, registrations and
          other steps required to transfer such title to Purchaser have been
          completed.

     (b)  Following Closing, Vendor shall represent Purchaser in all matters
          arising under a Title and Operating Document until Purchaser is
          substituted as a party thereto in the place of Vendor and Vendor is
          released therefrom, whether by novation, notice of assignment or
          otherwise and, in furtherance thereof;

          (i)    all payments relating to the Assets received by Vendor pursuant
                 to such Title and Operating Document, other than those to which
                 Vendor is entitled under Article 4, shall be received and held
                 by Vendor as a trustee for Purchaser and Vendor shall promptly
                 remit such amounts to Purchaser;

          (ii)   Vendor shall forward all statements, notices, AFE's and other
                 information received by it pursuant to such Title and Operating
                 Document that pertain to the Assets to Purchaser promptly
                 following their receipt by Vendor; and

          (iii)  Vendor shall forward to other parties to the Title and
                 Operating Document such notices and elections pursuant to such
                 Title and Operating Document pertaining to the Assets as
                 Purchaser may reasonably request, provided that Vendor may
                 refuse to follow instructions which it reasonably believes to
                 be unlawful, unethical, or in conflict with an applicable
                 contract.

     (c)  Purchaser shall indemnify and save harmless Vendor from and against
          all of Vendor's Losses and Liabilities arising as a consequence of the
          provisions of subsections 8.3(a) and (b) hereof, except to the extent
          caused by the gross negligence or willful misconduct of Vendor or its
          servants, agents or employees. Vendor shall indemnify and save
          harmless Purchaser from all of Purchaser's Losses and Liabilities
          arising as a result of the gross negligence or willful misconduct of
          Vendor for purposes of this subsection.

                                   ARTICLE 9
                        THIRD PARTY RIGHTS AND CONSENTS
                        -------------------------------

9.1  Consents

     Where an assignment of any of the Assets requires the consent of Third
     Parties, Vendor shall use all reasonable efforts to obtain such consents
     prior to closing.  After Closing, Vendor shall cooperate with Purchaser in
     Purchaser's attempts to secure such consents.

9.2  Rights of First Refusal

                                                                              23
<PAGE>

     (a)  If all or any portion of the Assets is subject to a Right of First
          Refusal, then Vendor shall promptly serve all notices as are required
          thereunder and shall otherwise comply with the provisions thereof.
          Purchaser, acting reasonably, shall allocate the Base Price to those
          Assets which are subject to such Rights of First Refusal and within
          three (3) Business Days of the execution of this Agreement shall
          advise Vendor in writing of the same and such allocations shall be
          used for the purposes of Right of First Refusal notices except where
          such allocations are, in Vendor's opinion, unreasonable.

     (b)  Purchaser may not waive the existence or operation of any Right of
          First Refusal. If a Right of First Refusal is exercised, the Assets
          which are subject thereto shall not be sold to Purchaser pursuant
          hereto and shall cease to be subject to this Agreement. Purchaser
          shall nevertheless purchase the Assets which are not subject to the
          exercised Rights of First Refusal.

     (c)  If any of the Assets cease to be subject to this Agreement pursuant to
          subsection 9.2(b):

          (i)    the term "Assets", "Lands", "Leases", "Miscellaneous
                 Interests", "Petroleum and Natural Gas Rights" and "Tangibles"
                 shall be deemed amended to reflect the exercise of the Right of
                 First Refusal and Purchaser shall purchase all of the remaining
                 Assets; and

          (ii)   the Base Price shall be reduced by the aggregate amount
                 allocated pursuant to subsection 9.2(a) to the Assets subject
                 to the exercised Rights of First Refusal and the allocation of
                 the Purchase Price pursuant to section 2.3 shall be adjusted
                 accordingly.

                                   ARTICLE 10
                           TITLE, REVIEW AND DEFECTS
                           -------------------------

10.1 Title Review

     Between the execution of this Agreement and the Closing, Vendor shall make
     available to Purchaser and its representatives, at Vendor's offices during
     normal business hours, all title documents (including contracts,
     correspondence and files) in its possession pertaining to the Assets for
     purposes of permitting Purchaser to review Vendor's title to the Assets.
     Purchaser shall conduct its review of Vendor's title to the Assets with
     diligence.  From time to time, as soon as reasonably practicable after
     determination, and in any event, no later than the fifth Business Day
     before the Closing Date, Purchaser shall notify the Vendor in writing of
     any Title Defects.  Such notice shall include a description of each Title
     Defect, the remedy sought by Purchaser, the Assets directly affected by the
     Title Defects and Purchaser's good faith estimate of the decrease in value
     attributed by Purchaser to such interests by reason of the existence of the
     Title Defect(s).  Vendor shall use all reasonable efforts to cure or
     rectify, by no later than two Business Days before Closing Date, the Title
     Defects described in Purchaser's notice to Vendor.

10.2 Title Defects

                                                                              24
<PAGE>

     (a)  No later than two Business Days before Closing Date, Purchaser shall
          confirm to Vendor its good faith estimate ("Purchaser's Estimate") of
          the aggregate Defect Values. If Purchaser's Estimate is less than five
          percent (5%) of the Base Price, Vendor and Purchaser shall complete
          the purchase and sale of the Assets, without any adjustment of the
          Purchase Price on account of Title Defects. If Purchaser's Estimate is
          five percent (5%) of the Base Price or greater, Purchaser shall
          immediately meet with Vendor and provide Vendor access to all
          information, analysis and calculations used by Purchaser to arrive at
          Purchaser's Estimate. If, after meeting with Purchaser, Vendor does
          not agree with Purchaser's Estimate, the issue shall be resolved
          pursuant to the provisions of the Arbitration Act (Alberta). Each
          Party shall promptly prepare and submit to the arbitrator its good
          faith estimate of all disputed Defect Values. Once the arbitrator has
          received both submissions, the arbitrator shall provide a copy of each
          Party's submission to the other Party. The arbitrator will be
          instructed to select either Vendor's good faith estimate or
          Purchaser's good faith estimate of the Defect Values and shall have no
          power whatsoever to reach any other result. The arbitrator will be
          instructed to select the estimate, which more closely reflects the
          actual aggregate Defect Values.

     (b)  If the aggregate Defect Values as agreed upon by the Parties or as
          determined by the arbitrator is less than five percent (5%) of the
          Base Price, Purchaser shall be deemed to have waived the uncured Title
          Defects and shall be obligated to complete the purchase and sale of
          the Assets, without any adjustment of the Purchase Price on account of
          Title Defects.

     (c)  If the aggregate Defect Values as agreed upon by the Parties or as
          determined by the arbitrator is five percent (5%) of the Base Price or
          greater, either Vendor or Purchaser may terminate this Agreement upon
          written notice given to the other Party within five Business Days of
          such agreement or determination, as the case may be. If neither Party
          gives such notice, then Purchaser will be deemed to have waived the
          uncured Title Defects and shall be obligated to complete the purchase
          and sale of the Assets, without any adjustment of the Purchase Price
          on account of Title Defects; in which event, the Closing shall have
          taken place on the fifth Business Day following the expiry of the
          period in which a notice of termination could have been given by
          either Party.

     (d)  If a Party gives notice of termination pursuant to this section,
          neither Vendor nor Purchaser shall have any further obligation or
          liability to the other as a result of such termination, and the
          Deposit and any interest earned thereon shall be returned to
          Purchaser.

                                  ARTICLE 11
                                  ARBITRATION
                                  -----------

11.1 General Arbitration Provisions

     If any matter upon which the Parties do not agree is required to be
     referred to arbitration pursuant to the terms hereof or if the Parties
     agree to refer any matter arising hereunder to arbitration, the arbitration
     shall be before a single arbitrator.  Any such arbitration, including the
     selection of the arbitrator, shall be governed by the Arbitration Act

                                                                              25
<PAGE>

     (Alberta).  The decision of any such arbitrator shall be final and binding
     on the Parties and the costs and fees relating thereto shall be borne and
     paid in the manner the arbitrator determines to be fair and equitable.

                                   ARTICLE 12
                                  OPERATORSHIP
                                  ------------

12.1 Transfer of Operatorship

     Purchaser acknowledges that Vendor will not be able to transfer
     operatorship of some or all of the Assets to Purchaser at or after Closing.
     Vendor covenants with Purchaser that Vendor shall do those things as
     Purchaser may reasonably request in order to obtain the appropriate
     consents and approvals for the transfer to Purchaser of operatorship of
     those of the Assets which Vendor currently operates.

12.2  Removal of Signs

     At and after Closing, Vendor may remove any signs which indicate its
     ownership or operation of the Assets.  Purchaser will be responsible to
     erect or install signs required by governmental agencies to indicate that
     Purchaser is the operator of the Assets, if applicable and to notify other
     working interest owners, gas purchasers, suppliers, contractors,
     governmental agencies and other Third Parties of Purchaser's interest in
     the Assets on and after Closing.

                                   ARTICLE 13
                                    GENERAL
                                    -------

13.1  Further Assurances

     Each Party will, from time to time and at all times after Closing, without
     further consideration, do such further acts and deliver all such further
     assurances, deeds and documents as shall be reasonably required in order to
     fully perform and carry out the terms of this Agreement.

13.2 No Merger

     Subject to the limitations set forth herein, the covenants,
     representations, warranties and indemnities contained in this Agreement
     shall survive Closing and shall not merge in any assignments, conveyances,
     transfers or other documents executed and delivered at or after Closing,
     notwithstanding any rule of law, equity or statute to the contrary and such
     rules are hereby waived.

13.3  Entire Agreement

     The provisions contained in any and all documents and agreements collateral
     hereto shall at all times be read subject to the provisions of this
     Agreement, and in the event of conflict the provisions of this Agreement
     shall prevail. This Agreement supersedes all other agreements, documents,
     writings and verbal understanding between the Parties relating to the
     subject matter hereof except the Confidentiality Agreement which shall

                                                                              26
<PAGE>

     remain in full force and effect in accordance with its terms with respect
     to any assets of Vendor that are not the subject of this Agreement.

13.4 Governing Law

     This Agreement shall be subject to and interpreted, construed and enforced
     in accordance with the laws of the Province of Alberta and the laws of
     Canada applicable therein and shall be treated as a contract made in the
     Province of Alberta.  The Parties irrevocably attorn and submit to the
     jurisdiction of the courts of the Province of Alberta and courts of appeal
     therefrom in respect of all matters arising out of this Agreement.

13.5 Enurement

     This Agreement may not be assigned by a Party without the prior written
     consent of the other Party, which consent may be arbitrarily withheld.
     This Agreement shall be binding upon and shall enure to the benefit of the
     Parties and their respective administrators, trustees, receivers,
     successors and permitted assigns.

13.6 Time of Essence

     Time shall be of the essence in this Agreement.

13.7 Notices

     The addresses and fax number of each Party for notices shall be as follows:

     Vendor:     NEUTRINO RESOURCES INC.
                 1400, 300 - 5th Avenue SW
                 CALGARY, ALBERTA T2P 3C4

   Attention:    Land Manager

                 Fax No.:  (403) 215-3501

     Purchaser:  STAR OIL & GAS LTD.
                 3500, 150 - 6TH Avenue SW
                 CALGARY, ALBERTA T2P 3Y7

                 Attention:  Vice President Land

                 Fax No.:    (403) 232-3397

     Any notice, communication or statement (a "notice") required, permitted or
     contemplated hereunder shall be in writing and shall be delivered as
     follows:

     (a)  by delivery to a Party between 8:00 a.m. and 4:00 p.m. on a Business
          Day at the address of such Party for notices, in which case the notice
          shall be deemed to have been received by that Party when it is
          delivered; or

     (b)  by telecopier to a Party to the telecopier number of such Party for
          notices, in which case, if the notice was telecopied prior to 4:00
          p.m. on a Business Day the notice shall be deemed to have been
          received by that Party when it was

                                                                              27
<PAGE>

          telecopied and if it was telecopied on a day which is not a Business
          Day or is telecopied after 4:00 p.m. on a Business Day, it shall be
          deemed to have been received on the next following Business Day.

       A Party may from time to time change its address for service or its
       telecopier number for service by giving written notice of such change to
       the other Party.

13.8   Invalidity of Provisions

       In case any of the provisions (or portion thereof) of this Agreement
       should be determined to be invalid, illegal or unenforceable in any
       respect, the validity, legality or enforceability of the remaining
       provisions (or portion thereof) contained herein shall not in any way be
       affected or impaired thereby.

13.9   Waiver

       No waiver by any Party of any breach (whether actual or anticipated) of
       any of the terms, conditions, representations or warranties contained
       herein shall take effect or be binding upon that Party unless the waiver
       is expressed in writing under the authority of that Party. Any waiver so
       given shall extend only to the particular breach so waived and shall not
       limit or affect any rights with respect to any other or future breach.

13.10  Remedies Generally

       No failure on the part of any Party in exercising any right or remedy
       hereunder shall operate as a waiver thereof, nor shall any single or
       partial exercise of any such right or remedy preclude any other or
       further exercise thereof or the exercise of any other right or remedy in
       law or in equity or by statute or otherwise conferred.

13.11  Amendment

       This Agreement shall not be varied in its terms or amended by oral
       agreement or by representations or otherwise other than by an instrument
       in writing dated subsequent to the date hereof, executed by a duly
       authorized representative of each Party.

13.12  Public Announcements

       Until Closing has occurred, no Party shall release any information
       concerning this Agreement and the transactions herein provided for
       without the prior written consent of the other Party, which consent shall
       not be unreasonably withheld. Nothing contained herein shall prevent a
       Party at any time from furnishing information, (i) to any governmental
       agency or regulatory authority or to the public if required by applicable
       law, provided that the Parties shall advise each other in advance of any
       public statement which they propose to make; or (ii) in connection with
       obtaining consents or complying with Rights of First Refusal.

13.13  Counterpart Execution

       This Agreement may be executed in counterpart and all executed
       counterparts together shall constitute one agreement.

                                                                              28
<PAGE>

       IN WITNESS WHEREOF the Parties have executed this Agreement as of the day
and year first above written.

NEUTRINO RESOURCES INC.                      STAR OIL & GAS LTD.

Per:  _________________________              Per:  _____________________________

Per:  _________________________              Per:  _____________________________

  This is the execution page attached to and forming part of an Agreement of
                          Purchase and Sale dated the
16TH day of February, 2000, between Neutrino Resources Inc., as Vendor, and Star
                          Oil & Gas Ltd. as Purchaser

                                                                              29

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