Document:

<PAGE>

                                                                 EXHIBIT 10.7(a)

                            CANAAN ENERGY CORPORATION
                          211 N. Robinson, Suite 1000N
                          Oklahoma City, Oklahoma 73102

                                 March 14, 2002

Mr. Anthony Lasuzzo
Oklahoma City, Oklahoma

Dear Skeeter:

     By execution of this letter, you tender your resignation as an officer and
director of Canaan Energy Corporation ("Company") effective as of March 12,
2002, and you and the Company agree that your employment is terminated without
cause as of the date hereof (the "Effective Date"). You expressly acknowledge
that you have been on paid administrative leave since February 1, 2002.

     1. Your employment will be terminated as of the Effective Date hereof
without cause; provided, however, the provisions of Section 6 of your Employment
Agreement dated November 1, 2000 ("Employment Agreement") relating to
confidential information and trade secrets will remain in effect and the Company
will provide the payments contemplated by Section 9.1.1 of the Employment
Agreement for a termination without cause.

     2. You shall retain any vested rights you may have under your existing
stock option agreements (to the extent vested) and all other existing Company
employee benefit plans available to employees generally in accordance with the
terms of such plans including, but not limited to, COBRA rights; provided,
however, the Company will no longer make any contributions to such plans or
program after the Effective Date. The Company will additionally pay you for 5
weeks of accrued vacation upon your execution and delivery to it of this
Agreement on the Effective Date. Any proper exercise by you of your vested stock
options will be promptly processed by the Company.

     3. The Shareholders Agreement dated October 23, 2000 to which you are a
party will remain in effect.

     4. If you have not done so already, you shall promptly deliver to the
Company all manuals, letters, memoranda, notes, notebooks, reports and all other
material records of any kind and all copies thereof that may be in your
possession or under your control which in any way pertain to the business of the
Company or its employees. If you have not done so already, you shall promptly
deliver to the Company any other Company property you have in your possession
including all keys or other access devices. If you have not done so already, you
shall be permitted to remove your personal property from the Company's offices
with supervision by a Company designated person.

<PAGE>

Anthony Lasuzzo
March 14, 2002
Page 2

     5. Neither you nor the Company will make any public announcement about your
termination of employment without cause or resignation as an officer and a
director without the prior approval of the other.

     6. The Company releases and discharges you from any and all liability,
actions, claims, demands and suits of any kind whatsoever which the Company may
have arising from any action or omission by you in your capacity as an officer
and employee of the Company or any of its affiliates occurring prior to the
Effective Date. You release and discharge the Company and its affiliated
entities and their respective officers, directors, agents and employees from any
and all liability, actions, claims, demands or suits of any kind whatsoever
which you may have, in your capacity as a director, officer or employee or
shareholder of the Company or any affiliated entity arising from any actions or
omissions by any of them occurring prior to the Effective Date of this
Agreement, with the express exception of any and all indemnification rights that
you have immediately before the Effective Date as an officer, director or
employee of the Company under its current Certificate of Incorporation or
By-Laws with regard to your actions as such officer, director or employee of the
Company. Your release includes, but is not limited to, any claims or demands you
may have based on your employment with the Company or the termination of that
employment. This includes a release of any rights or claims you may have under
the Age Discrimination in Employment Act and the Older Workers Benefit
Protection Act; the Americans with Disabilities Act; the Employment Retirement
Income Security Act; or any other federal, state or local laws or regulations
prohibiting employment discrimination. This also includes a release by you of
any claims for breach of contract, impairment of economic opportunities,
intentional infliction of emotional distress, wrongful discharge, discharge in
violation of public policy, or that the Company has dealt with you unfairly or
in bad faith or any other common law contract or tort claim. This Agreement does
not waive any rights or claims that you may have: (i) with regard to any
indemnification rights accorded to you as an officer, director or employee of
the Company under its current Certificate of Incorporation or By-Laws, (ii)
under this Agreement, (iii) under your Employment Agreement with respect to the
payments contemplated by Section 9.1.1 thereof, or (iv) which arise after the
date you sign this Agreement, including, without limitation, your right to
enforce your entitlement to all benefits, rights and payments to be made to you
by the Company under this Agreement or your Employment Agreement.

     7. You represent and agree that you are fully aware of your rights to
discuss

                                                                               2

<PAGE>

Anthony Lasuzzo
March 14, 2002
Page 3

any and all aspects of this Agreement with your attorney or other advisor and
that you have been given adequate opportunity to do so, that you have carefully
read and fully understand all of the provisions of this Agreement and that you
are voluntarily entering into this Agreement. You further represent and agree
that you are not relying upon, and have not relied upon, any representation or
statement made by the Company or any of its shareholders, directors, officers,
employees, agents, representatives or attorneys with regard to the subject
matter or effect of this Agreement.

     8. You may revoke this Agreement within seven (7) days of your signing it.
Revocation can be made by delivering a written notice of revocation to Crowe &
Dunlevy, Attn: Michael M. Stewart, 20 North Broadway, Suite 1800, Oklahoma City,
Oklahoma 73102. For such revocation to be effective, notice must be received no
later than 5:00 p.m. on the seventh calendar day after you sign this Agreement.
If you revoke this Agreement, it shall not be effective or enforceable and you
will not receive the benefits described in this Agreement.

     9. This Agreement shall be binding upon and inure to the benefit of our
respective successors, heirs and assigns; provided, however, you may not assign
your rights under this Agreement without the prior written consent of the
Company. This Agreement shall be governed and interpreted in accordance with the
laws of the State of Oklahoma. In the event litigation is instituted between the
parties in connection with any controversy or dispute arising from, under or
related to this Agreement, the prevailing party shall be entitled to recover any
attorneys fees incurred in such litigation

                             [SIGNATURES NEXT PAGE]

                                                                               3

<PAGE>

     If the foregoing correctly sets forth your understanding of our agreement,
please so indicate in the space provided below.

                                          Very truly yours,

                                          CANAAN ENERGY CORPORATION

                                          By:  /s/ Leo E. Woodard
                                             --------------------------------
                                                   Leo E. Woodard, Chairman and
                                                   Chief Executive Officer

     I acknowledge that I received a copy of this letter on March 14, 2002, and
have been given the opportunity to consider it for at least 21 days if I desire.
I hereby accept and agree to the foregoing terms of this Agreement on this 14th
day of March, 2002.

                                          /s/ Anthony Lasuzzo
                                          --------------------------------------
                                          Anthony Lasuzzo<PAGE>

                                                                 EXHIBIT 10.8(a)

                         FIRST AMENDMENT TO OFFICE LEASE
                         -------------------------------

        THIS FIRST AMENDMENT TO OFFICE LEASE ("First Amendment"), by and between
LSQ Investors, L.L.C., an Oklahoma limited liability company ("Landlord"), and
Canaan Energy Corporation, an Oklahoma corporation ("Tenant"), is dated the ____
day of ____________, 2001.

                                R E C I T A L S :

     A. Landlord and Tenant heretofore entered into that certain Office Lease
dated December 4, 2000 ("Original Lease"), whereby Landlord leases to Tenant
approximately sixteen thousand three hundred ninety-two (16,392) square feet of
Rentable Area located on the tenth (10th) floor ("Initial Premises") of One
Leadership Square, Oklahoma City, Oklahoma;

     B. Landlord and Tenant desire to: (i) confirm the Commencement Date and the
Expiration Date; (ii) add the Expansion Space (hereinafter defined) to the
Premises; (iii) modify the Refusal Right; and (iv) increase Tenant's
non-exclusive right to use unreserved parking spaces located inside the Parking
Garage upon the terms and conditions hereinafter set forth; and

     C. The parties therefore desire to modify the Lease by means of this First
Amendment.

        NOW, THEREFORE, for and in consideration of the Premises and the mutual
covenants contained herein and in the Lease, the parties hereto do hereby
covenant and agree as follows:

     1. Defined Terms. Terms defined in the Original Lease and delineated herein
        -------------
by initial capital letters shall have the same meaning ascribed thereto in the
Original Lease, except to the extent that the meaning of such term is
specifically modified by the provisions hereof. In addition, other terms not
defined in the Original Lease but defined herein will, when delineated with
initial capital letters, have the meanings ascribed thereto in this First
Amendment. Terms and phrases which are not delineated by initial capital letters
shall have the meanings commonly ascribed thereto. This First Amendment and the
Original Lease are hereafter collectively referred to as the "Lease."

     2. Commencement Date and Expiration Date. Notwithstanding anything to the
        -------------------------------------
contrary set forth in the Lease, Landlord and Tenant hereby agree and confirm
that any reference in the Lease to the Commencement Date shall mean March 19,
2001, and any reference in the Lease to the Expiration Date shall mean March 31,
2011, subject to Tenant's exercise of the renewal options set forth in Exhibit
                                                                       -------
"G" of the Original Lease.
---

     3. Expansion Space Commencement Date. As used herein, the term "Expansion
        ---------------------------------
Space Commencement Date" shall mean the earlier of the date Tenant occupies the
Expansion Space or October 1, 2001. If, however, Landlord cannot deliver
possession of the Expansion Space prior to October 1, 2001, due to default on
the part of Landlord, then, as Tenant's sole remedy for the delay in Tenant's
occupancy of the Expansion Space, the Expansion Space Commencement Date shall be
delayed and the Rent herein provided to be paid for the Expansion Space shall
not commence until the earlier to occur of the date of actual occupancy by
Tenant or the date the Expansion Space is available and Ready for Occupancy.
"Ready for Occupancy" shall mean the completion of the Initial Improvements to
the Expansion Space which shall be provided according to the Work Letter
attached hereto as Exhibit "C," except for minor, insubstantial details of
                   ------------
construction, decoration, or mechanical adjustments which remain to be done.

     4. Expansion Space Term. As used herein, the term "Expansion Space Term"
        --------------------
shall mean the term for the Expansion Space commencing on the Expansion Space
Commencement Date and continuing for approximately one hundred fourteen (114)
full calendar months, but in any event terminating on March 31, 2011, subject to
Tenant's exercise of the renewal options set forth in Exhibit "G" of the
                                                      -----------
Original Lease. Any reference in the Lease to the Term

First Amendment to Office Lease - Page 1
----------------------------------------

<PAGE>

of the Lease shall be deemed to also refer to and include the Expansion Space
Term, except as expressly provided otherwise in the Original Lease or this First
Amendment.

     5. Premises. As used herein, the term "Expansion Space" shall mean the
        --------
space located on the tenth (10th) floor of the Building which is shown on the
floor plan attached hereto as Exhibit "B" and made a part hereof. The Expansion
Space is stipulated to contain approximately 8,260 square feet of Rentable Area
and 7,051 square feet of Usable Area. From and after the Expansion Space
Commencement Date, the term "Premises" (as defined in the Lease) shall include
the Expansion Space for all purposes, including, without limitation, the
determination of Tenant's share of Operating Expenses and Taxes and Tenant's
Rent Adjustment, and thereafter, the Premises shall be comprised of only the
Initial Premises and the Expansion Space, and the Premises are hereby stipulated
for all purposes to contain approximately 24,652 square feet of Rentable Area.

     6. Expansion Space Base Rent. From and after the Expansion Space
        -------------------------
Commencement Date and continuing through the end of the Expansion Space Term,
Section 1.01(8) of the Lease shall be amended to provide that the Base Rent for
the Expansion Space shall be as set forth below, as adjusted pursuant to Article
4 of the Lease:

                                                                    Rate/SF
            Period             Monthly         Annually        of Rentable Area
            ------             -------         --------        ----------------

     Months 01 - 18 (18)      $9,292.50       $111,510.00           $13.50

     Months 19 - 54 (36)      $9,980.83       $119,769.96           $14.50

     Months 55 - 78 (24)      $10,841.25      $130,095.00           $15.75

     Months 79 - 114 (36)     $11,701.67      $140,420.04           $17.00

     7. Expense Stop. From and after the Expansion Space Commencement Date,
        ------------
Tenant shall pay as an adjustment to the Base Rent for the Expansion Space an
amount (per each square foot of Rentable Area in the Expansion Space) equal to
the Excess from time to time of Operating Expenses and Taxes (as defined in the
Original Lease) per square foot of Rentable Area of the Real Property over the
sum of the Operating Expenses and Taxes (as defined in the Original Lease) per
square foot of Rentable Area of the Real Property for the calendar year 2001.

     8. Leasehold Improvements. Landlord will provide an allowance in an amount
        ----------------------
not to exceed the product of $20.90 times the number of square feet of Rentable
Area in the Expansion Space ("Expansion Allowance") for improvements to the
Expansion Space, as more particularly described in the Work Letter attached
hereto as Exhibit "C."
          ------------

     9. Tenant Identification Sign(s). Subject to the provisions of Section 3 of
        -----------------------------
Exhibit "D" (entitled "Rules and Regulations") and any other applicable
-----------
provision of the Lease, during any period that Tenant leases all of the tenth
(10th) floor of the Building, Tenant, at Tenant's sole risk and expense, will be
permitted to place a Tenant identification sign or signs in the elevator lobby
area located on such tenth (10th) floor.

     10. Exhibits/Schedule. Exhibit "F" (entitled "Right of Refusal") attached
         -----------------  -----------
to the Original Lease is hereby deleted in its entirety and the following
exhibits are attached hereto, incorporated herein, and made a part of this First
Amendment for all purposes:

          Exhibit "B" - Plan of Premises (also shows location of the Initial
                        Premises and the Expansion Space);
          Exhibit "C" - Work Letter;
          Exhibit "E" - Parking (includes Schedule 1 to Exhibit "E" - Parking
                        Garage);
          Exhibit "F" - Right of First Refusal.

     11. Brokerage Fees and Commissions. Tenant represents that it has dealt
         ------------------------------
with no broker, agent, or other person in connection with this First Amendment,
except Price Edwards & Company representing Tenant and Landlord, and that no
other broker, agent, or other

First Amendment to Office Lease - Page 2
----------------------------------------

<PAGE>

person brought about this First Amendment, and Tenant shall indemnify and hold
Landlord harmless from and against any and all claims, losses, costs, or
expenses (including attorney's fees and expenses) by any broker, agent, or other
person claiming a commission or other form of compensation by virtue of having
dealt with Tenant with regard to the transaction contemplated by this First
Amendment, except Price Edwards & Company representing Tenant and Landlord.
Landlord shall be responsible for the payment of all commissions to the
broker(s), if any, specified in this paragraph 11. The provisions of this
paragraph 11 shall survive the expiration of the Expansion Space Term or any
renewal or extension thereof.

     12. Tenant Estoppel. Tenant hereby: (a) confirms and ratifies the Original
         ---------------
Lease, as amended hereby; (b) accepts the Expansion Space in its "As-Is"
condition without benefit of further improvements, subject to the Work Letter
attached hereto as Exhibit "C," and without warranty of suitability or fitness
                   ------------
for a particular purpose; and (c) acknowledges that Landlord is not in default
under the Original Lease as of the date this First Amendment is executed by
Tenant.

     13. Effect of First Amendment. Except as expressly amended by the
         -------------------------
provisions hereof, the terms and provisions contained in the Original Lease
shall continue to govern the rights and obligations of the parties; and all
provisions and covenants in the Original Lease shall remain in full force and
effect as stated therein, except to the extent specifically modified by the
provisions of this First Amendment. This First Amendment and the Original Lease
shall be construed as one instrument.

NOTICE OF INDEMNIFICATION: THE PARTIES TO THIS FIRST AMENDMENT HEREBY
-------------------------
ACKNOWLEDGE AND AGREE THAT THIS FIRST AMENDMENT CONTAINS CERTAIN INDEMNIFICATION
PROVISIONS.

        IN WITNESS WHEREOF, Landlord and Tenant have executed this First
Amendment in multiple counterparts as of the last day and year written below.

                           LSQ Investors, L.L.C., an Oklahoma limited liability
                           company

                           By:
                              --------------------------------------------------
                               Clayton I. Bennett, Manager

                           Date:
                                ------------------------------------------------

                           By:
                              --------------------------------------------------
                               John T. Perri, Manager

                           Date:
                                ------------------------------------------------

                           ("Landlord")

                           Canaan Energy Corporation, an Oklahoma corporation

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

                           Name:
                                ------------------------------------------------

                           Title:
                                 -----------------------------------------------

                           Date:
                                ------------------------------------------------

                           ("Tenant")

First Amendment to Office Lease - Page 3
----------------------------------------

<PAGE>

                                   EXHIBIT "B"
                                   -----------

                                       TO
                         FIRST AMENDMENT TO OFFICE LEASE
                         BETWEEN LSQ INVESTORS, L.L.C.,
                                AS LANDLORD, AND
                           CANAAN ENERGY CORPORATION,
                                    AS TENANT

             PLAN OF PREMISES (INITIAL PREMISES AND EXPANSION SPACE)
             -------------------------------------------------------

Exhibit "B" to First Amendment to Office Lease - Page 1
-------------------------------------------------------

<PAGE>

                                   EXHIBIT "C"
                                   -----------

                                       TO
                         FIRST AMENDMENT TO OFFICE LEASE
                          BETWEEN LSQ INVESTORS L.L.C.,
                                AS LANDLORD, AND
                           CANAAN ENERGY CORPORATION,
                                    AS TENANT

                                   WORK LETTER
                                   -----------

     This Work Letter ("Work Letter") describes and specifies the rights and
obligations of Landlord and Tenant with respect to certain allowances granted to
Tenant hereunder and rights and responsibilities of Landlord and Tenant with
respect to the design, construction, and payment for the completion of the
Initial Improvements within the Expansion Space.

     1. Definitions. Terms which are defined in the Lease shall have the same
        -----------
meaning in this Work Letter. Additionally, as used in this Work Letter, the
following terms (when delineated with initial capital letters) shall have the
respective meaning indicated for each as follows:

          (a) Expansion Allowance shall mean the product of $20.90 times the
              -------------------
     number of square feet of Rentable Area in the Expansion Space (this is the
     same Expansion Allowance as described in paragraph 7 of the First
     Amendment).

          (b) Basic Construction of the Building shall mean the structure of the
              ----------------------------------
     Building as built on the date of this Work Letter, the Shell Improvements,
     and all other improvements, fixtures and facilities constituting a part of
     the Building and/or Property, as these exist on the date of this Work
     Letter if the Building is complete, or as provided for in Landlord's plans
     and specifications for the Building if prior to completion.

          (c) Landlord's Architect shall mean the architect designated by
              --------------------
     Landlord as its architect, from time to time, to perform the functions of
     Landlord's Architect hereunder.

          (d) Plans and Specifications shall mean collectively, the plans,
              ------------------------
     specifications, and other information prepared or to be prepared by
     Tenant's Architect and, where necessary, by Landlord's electrical,
     mechanical, and structural engineers, all at Tenant's expense, which shall
     detail the Work required by Tenant in the Expansion Space and which shall
     be approved in writing by both Tenant and Landlord prior to the
     commencement of such Work. The Plans and Specifications shall comply with
     the minimum requirements established by Landlord.

          (e) Tenant's Architect shall mean Allen Porter Associates, Inc., who
              ------------------
     is an architect licensed to practice in the State of Oklahoma.

          (f) Work shall mean all materials and labor to be added to the Basic
              ----
     Construction of the Building and the Shell Improvements in order to
     complete the installation of the Initial Improvements within the Expansion
     Space for Tenant in accordance with the Plans and Specifications,
     including, without limitation any modification to Basic Construction of the
     Building or to the Shell Improvements, any structural modifications to the
     Building, any electrical or plumbing work required to meet Tenant's
     electrical and plumbing requirements, and any special air conditioning work
     required to be performed in the Expansion Space.

          (g) Cost of the Work shall mean the cost of all materials and labor to
              ----------------
     be added to the Basic Construction of the Building and the Shell
     Improvements in order to complete the installation of the Initial
     Improvements within the Expansion Space in accordance with the Plans and
     Specifications.

          (h) Landlord's Costs shall mean the sum of (i) the cost of the Shell
              ----------------
     Improvements and (ii) that portion of the Cost of the Work up to, but not
     in excess of, the aggregate amount of the Expansion Allowance.

Exhibit "C" to First Amendment to Office Lease - Page 1
-------------------------------------------------------

<PAGE>

          (i) Tenant's Costs shall mean that portion of the Cost of the Work in
              --------------
     excess of Landlord's Costs.

          (j) Contractor shall mean the general contractor selected by Landlord
              ----------
     to perform the Work. Landlord reserves the right to replace the initial
     Contractor and/or to engage other contractors.

          (k) Change Costs shall mean all costs or expenses attributable to any
              ------------
     change in the Plans and Specifications which, when added to other costs and
     expenses incurred in completing the Work, exceed Landlord's Costs,
     including, without limitation, (i) any cost caused by direction of Tenant
     to omit any item of Work contained in the Plans and Specifications, (ii)
     any additional architectural or engineering services, (iii) any changes to
     materials in the process of fabrication, (iv) the cancellation or
     modification of supply or fabricating contracts, (v) the removal or
     alteration of any Work or any plans completed or in process, or (vi) delays
     affecting the schedule of the Work.

          (l) Working Days shall mean all days of the week other than Saturday,
              ------------
     Sunday, and legal holidays.

     2. Procedure and Schedules for the Completion of Plans and Specifications.
        ----------------------------------------------------------------------
The Plans and Specifications shall be completed in accordance with the following
procedure and time schedules:

          (a) Design Drawings. Within ten (10) Working Days from execution of
              ---------------
     the Lease, Tenant shall submit to Landlord four (4) sets of prints of
     design drawings, specifying the intended design, character, and finishing
     of the Initial Improvements within the Expansion Space. Such package shall
     include separate drawings for signs in accordance with Landlord's sign
     criteria. The design drawings shall set forth the requirements of Tenant
     with respect to the installation of the Initial Improvements within the
     Expansion Space, and such drawings shall include, without limiting their
     scope, a Tenant approved space plan, architectural design of the space,
     including office front, plans, elevations, sections, and renderings
     indicating materials, color selections, and finishes.

               (i) After receipt of design drawings, Landlord shall return to
          Tenant one set of prints of design drawings with Landlord's suggested
          modifications and/or approval.

               (ii) If design drawings are returned to Tenant with comments, but
          not bearing approval of Landlord, the design drawings shall be
          immediately revised by Tenant and resubmitted to Landlord for approval
          within ten (10) Working Days of their receipt by Tenant. Unless such
          action is taken, Tenant will be deemed to have accepted and approved
          all of Landlord's comments on the design drawings.

          (b) Completion of Plans and Specifications. All Plans and
              --------------------------------------
     Specifications shall be prepared in strict compliance with applicable
     Building standards and requirements as set forth in the Lease, this Work
     Letter and otherwise, and shall also adhere to the design drawings approved
     by Landlord. In order to assure the compatibility of Tenant's electrical
     and mechanical systems and the compatibility of Tenant's structural
     requirements with the existing Building and in order to expedite the
     preparation of Tenant's electrical, mechanical, and structural drawings,
     Tenant or Tenant's Architect shall deliver to Landlord's Architect, not
     later than ten (10) Working Days from the date of Landlord's approval of
     design drawings, a detailed plan setting forth any and all electrical,
     mechanical, and structural requirements, and Landlord's Architect shall
     retain, at Tenant's expense, Landlord's electrical, mechanical, and
     structural engineers to prepare all necessary electrical, mechanical, and
     structural construction drawings which shall be included as a part of the
     Plans and Specifications. All construction documents and calculations
     prepared by Tenant's Architect shall be submitted by Tenant, in the form of
     four (4) sets of blueline prints, to Landlord for approval within ten (10)
     Working Days after the date of receipt by Tenant of Landlord's approval of
     design drawings. If the Plans and Specifications are returned to Tenant
     with comments, but not bearing approval of

Exhibit "C" to First Amendment to Office Lease - Page 2
-------------------------------------------------------

<PAGE>

     Landlord, the Plans and Specifications shall be immediately revised by
     Tenant and resubmitted to Landlord for approval within ten (10) Working
     Days of their receipt by Tenant.

               (i)   The fees for Tenant's Architect and any consultants or
          engineers retained by or on behalf of Tenant or Tenant's Architect
          (including, but not limited to, the electrical, mechanical and
          structural engineers required to be retained under this paragraph)
          shall be paid by Tenant. Tenant shall also pay for any preliminary
          drawings by Landlord's Architect for review of the design drawings,
          the Plans and Specifications, and any revisions to such documents, and
          the fees and expenses of Landlord's Architect for inspection of the
          Work, as required by Landlord.

               (ii)  Tenant shall have the sole responsibility for compliance of
          the Plans and Specifications with all applicable statutes, codes,
          ordinances, and other regulations, and the approval of the Plans and
          Specifications or calculations included therein by Landlord shall not
          constitute an indication, representation, or certification by Landlord
          that such Plans and Specifications or calculations are in compliance
          with said statutes, codes, ordinances, and other regulations. In
          instances where several sets of requirements must be met, the
          requirements of Landlord's insurance underwriter or the strictest
          applicable requirements shall apply where not prohibited by applicable
          codes.

               (iii) Upon completion of the Initial Improvements, if so required
          by Landlord, Tenant shall deliver to Landlord an "as-built" set of
          Plans and Specifications for the Expansion Space, together with such
          other information required by Landlord to place the information from
          the "as-built" Plans and Specifications on to Landlord's data base;
          the cost of providing the "as-built" Plans and Specifications and
          other information, together with Landlord's cost to place the
          information on to Landlord's data base, shall be borne solely by
          Tenant.

     3.   Pricing. On or before the date which is ten (10) Working Days after
          -------
finalization of the Plans and Specifications, as evidenced by Landlord's written
approval thereof, Landlord shall notify Tenant in writing of the Cost of the
Work. The contract for the Work shall obligate the Contractor to purchase from
Landlord all materials and supplies which are held in "stock" by Landlord and
which are required for the Work by the Plans and Specifications. Within ten (10)
Working Days after its receipt of Landlord's written notice identifying the Cost
of the Work, Tenant shall either approve such Cost of the Work in writing or
cause the Plans and Specifications to be revised and resubmitted to Landlord for
Approval. On or before the date which is ten (10) Working Days from Landlord's
receipt of such revised Plans and Specifications, Landlord shall either (i)
notify Tenant that Landlord approves the revised Plans and Specifications and
give to Tenant a revised Cost of the Work or (ii) notify Tenant of Landlord's
comments on such revised Plans and Specifications. If for any reason Landlord
and Tenant have not agreed in writing upon final Plans and Specifications and/or
the Tenant has not approved in writing the Cost of the Work on or before the
date which is ten (10) Working Days from the date of Landlord's notice
referenced in the prior sentence, then Landlord shall have the right to
terminate the Lease and this Work Letter, without further obligation.

     4.   Payments. Tenant may use that part of the Expansion Allowance up to an
          --------
amount equal to Seventy-Five Cents ($0.75) per square foot of Rentable Area of
the Expansion Space for the payment of fees and expenses payable by Tenant under
the terms of Paragraph 2(b)(i) of this Work Letter. Tenant shall pay the
aggregate amount of Tenant's Costs to Landlord upon demand. Landlord shall
determine the percentage of the Cost of the Work which is allocable to Landlord
and the percentage of the Cost of the Work which is allocable to Tenant.
Landlord shall also revise its determination of such percentages based on any
changes in the Cost of the Work due to change orders affecting the Plans and
Specifications. Within ten (10) days after Tenant's receipt of an invoice from
Landlord which identifies that portion of the Cost of the Work to be incurred,
respectively, by Landlord and Tenant, Tenant shall pay to Landlord the
percentage of the Cost of the Work allocable to Tenant, as Tenant's Costs, as
determined by Landlord from time to time. Landlord's obligation for payment with
respect to the Work shall not exceed the aggregate amount of Landlord's Costs;
and after Landlord has paid Landlord's Costs, Tenant shall thereafter pay all
Cost of the Work as and when invoiced to Tenant by Landlord, including, without
limitation, any Change Costs. The amounts payable to Landlord hereunder shall
constitute Rent due pursuant to the Lease, and failure to make any such payment
when due shall constitute a default under the Lease, entitling

Exhibit "C" to First Amendment to Office Lease - Page 3
-------------------------------------------------------

<PAGE>

Landlord to exercise any or all of its remedies hereunder, as well as all
remedies otherwise available to Landlord. Any cost savings achieved after
completion of the Work shall be solely the property of Landlord, not Tenant.

     5. Performance of Work and Delays. Landlord shall cause the Contractor to
        ------------------------------
perform the Work in substantial accordance with the Plans and Specifications. If
a delay shall occur in the completion of the Work by Landlord as the probable
result of (i) any failure to furnish when due Tenant's design drawings, Tenant's
electrical, mechanical, and/or structural requirements, Tenant's Plans and
Specifications or any revision to any such documents, (ii) any change by Tenant
in any of the Plans and Specifications, (iii) any state of facts which gives
rise to a change referred to in the definition of Change Costs or any changes
resulting in a Change Cost, (iv) the fact that materials to be incorporated into
the Work which are non-Building Grade require a lead time (not due to Landlord
default or error) to obtain or construction time to perform, in excess of that
required for Work which is Building Grade, as determined by Landlord, or (v) any
other act or omission of Tenant, its agents or employees, including any
violation of the provisions of the Lease or any delay in giving authorizations
or approvals pursuant to this Work Letter, then any such delay shall not justify
any extension of the Expansion Space Commencement Date.

     6. Change Orders. All changes and modifications in the Work from that
        -------------
contemplated in the Plans and Specifications, whether or not such change or
modification gives rise to a Change Cost, must be evidenced by a written Change
Order executed by both Landlord and Tenant. In that regard, Tenant shall submit
to Landlord such information as Landlord shall require with respect to any
Change Order requested by Tenant. After receipt of requested Change Order,
together with such information as Landlord shall require with respect thereto,
Landlord shall return to Tenant either the executed Change Order, which will
evidence Landlord's approval thereof, or the Plans and Specifications with
respect thereto with Landlord's suggested modification.

     7. Punchlist. Within thirty (30) days after the Expansion Space
        ---------
Commencement Date, Tenant shall give Landlord written notice specifying any
details of construction, decoration, or mechanical adjustment which remain to be
performed by Landlord with respect to any Work; and except for the details
contained in such written notice from Tenant, all obligations of Landlord in
regard to the Work shall be deemed to have been satisfied. Landlord shall have
the right to enter the Expansion Space to complete any such unfinished details,
and entry by Landlord, its agents, servants, employees, or contractors for such
purpose shall not relieve Tenant of any of its obligations under the Lease or
impose any liability on Landlord or its agents, servants, employees, or
contractors.

     8. Whole Agreement; No Oral Modification. This Work Letter embodies all
        -------------------------------------
representations, arranties and agreements of Landlord and Tenant with respect to
the matter described herein, and this Work Letter may not be altered or modified
except by an agreement in writing signed by the parties.

     9. Paragraph Headings. The paragraph headings contained in this Work Letter
        ------------------
are for convenient eference only and shall not in any way affect the meaning or
interpretation of such paragraphs.

     10. Notices. All notices required or contemplated hereunder shall be given
         -------
to the parties in the anner specified for giving notices under the Lease.

     11. Binding Effect. This Work Letter shall be construed under the laws of
         --------------
the State of Oklahoma nd shall be binding upon and shall inure to the benefit of
the parties hereto and their respective permitted successors and assigns.

     12. Conflict. In the event of conflict between this Work Letter and any
         --------
other exhibits or addenda to this Lease, this Work Letter shall prevail.

Exhibit "C" to First Amendment to Office Lease - Page 4
-------------------------------------------------------

<PAGE>

                                   EXHIBIT "E"
                                   -----------

                                       TO
                         FIRST AMENDMENT TO OFFICE LEASE
                         BETWEEN LSQ INVESTORS, L.L.C.,
                                AS LANDLORD, AND
                           CANAAN ENERGY CORPORATION,
                                    AS TENANT

                                     PARKING
                                     -------

     This Exhibit "E" ("Parking Exhibit") describes and specifies Tenant's
          -----------
non-exclusive right to use three (3) [in addition to the six (6) permitted
pursuant to the Exhibit "E" attached to the Original Lease] unreserved parking
                -----------
spaces ("Spaces") located on such levels inside the Real Property's parking
garage ("Parking Garage") as set forth on Schedule 1 attached to this Parking
Exhibit and incorporated herein by reference, all upon the terms and conditions
set forth below.

     1. Definitions. The terms which are defined in the Lease shall have the
        -----------
same meaning in this Parking Exhibit.

     2. Grant and Rental Fee. Provided no event of default has occurred and is
        --------------------
continuing under the Lease, Tenant shall be permitted the use of the Spaces
during the Expansion Space Term at such monthly rates, but not less than $95.00
per space per month, (together with any applicable tax thereon) as may be
charged by Landlord from time to time, and subject to such terms, conditions,
and regulations as are, from time to time, promulgated by Landlord or the
manager of the Parking Garage, and charged or applicable to patrons of the
Parking Garage for spaces similarly situated therein.

     3. Tenant's Failure to Use Spaces. In the event that Tenant (after the
        ------------------------------
Expansion Space Commencement Date and at any time during the Expansion Space
Term) fails to utilize all or any of the Spaces, Landlord shall have no further
obligation to make available to Tenant the Spaces not utilized. The failure, for
any reason, of Landlord to provide or make available such Spaces to Tenant or
the inability of Tenant to utilize all or any portion of the Spaces shall under
no circumstances be deemed a default by Landlord under the Lease so as to permit
Tenant to terminate the Lease, in whole or in part.

     4. Risk. All motor vehicles (including all contents thereof) shall be
        ----
parked in the Spaces at the sole risk of Tenant, its employees, agents, invitees
and licensees, it being expressly agreed and understood that Landlord has no
duty to insure any of said motor vehicles (including the contents thereof), and
that Landlord is not responsible for the protection and security of such
vehicles. Landlord shall have no liability whatsoever for any property damage
and/or personal injury which might occur as a result of or in connection with
the parking of said motor vehicles in any of the Spaces, and Tenant hereby
agrees to indemnify and hold Landlord harmless from and against any and all
costs, claims, expenses, and/or causes of action which Landlord may incur in
connection with or arising out of Tenant's use of the Spaces pursuant to this
Agreement.

     5. No Bailment. It is further agreed that this Parking Exhibit shall not be
        -----------
deemed to create a bailment between the parties hereto, it being expressly
agreed and understood that the only relationship created between Landlord and
Tenant hereby is that of licensor and licensee, respectively.

     6. Rules and Regulations. In its use of the Spaces, Tenant shall follow all
        ---------------------
of the Rules and Regulations of the Property (attached to the Original Lease as
Exhibit "D") applicable thereto, any rules and regulations promulgated by
-----------
Landlord or the manager of the Parking Garage, as the same may be amended from
time to time. Upon the occurrence of any breach of such rules, failure to make
parking rental payments due hereunder or default by Tenant under the Lease,
Landlord shall be entitled to terminate this Parking Exhibit, in which event
Tenant's right to utilize the Spaces shall thereupon automatically cease.

Exhibit "E" to First Amendment to Office Lease - Page 1
-------------------------------------------------------

<PAGE>

     7. Access. Landlord shall be entitled to utilize whatever access device
        ------
Landlord deems necessary (including but not limited to the issuance of parking
stickers or access cards), to assure that only those persons who have contracted
to use spaces in the Parking Garage are using the parking spaces therein.
Landlord currently limits access to the Parking Garage through the use of a
parking entry card system, the cards for which shall be provided by Landlord.
These cards may be different from and may not, without a specific request from
Tenant, entitle the holder thereof to an after-hours entry card to the Building
(pursuant to the terms of Section 7.04). Landlord agrees to provide to Tenant
three (3) parking entry cards for a non-refundable deposit of $10.00 per card.
Tenant further agrees to surrender all parking entry cards in its possession
upon the expiration or earlier termination of this Lease. Landlord shall be
entitled to cancel any lost or stolen cards of which it becomes aware. Tenant
shall promptly notify Landlord of any lost or stolen cards. Tenant shall pay
Landlord for each additional card(s) or for each replacement card(s) for any
card(s) lost by or stolen from Tenant, in such amount as Landlord shall, from
time to time determine, the present charge for such lost or stolen cards being
$100.00 per card. Tenant acknowledges that the parking entry card may also be
the same as the master entry card used for access to the Building during other
than normal business hours, and to the extent the cards are the same, agrees
that the provisions of Section 7.04 of the Lease shall also be applicable and in
the event of a conflict with the provisions of this Parking Exhibit, the
provisions of Section 7.04 shall control. In the event Tenant, its agents or
employees wrongfully park in any of the Parking Garage's spaces, Landlord shall
be entitled and is hereby authorized to have any such vehicle towed away, at
Tenant's sole risk and expense, and Landlord is further authorized to impose
upon Tenant a penalty of $25.00 for each such occurrence. Tenant hereby agrees
to pay all amounts falling due hereunder upon demand therefor, and the failure
to pay any such amount shall additionally be deemed an event of default
hereunder and under the Lease, entitling Landlord to all of its rights and
remedies hereunder and thereunder.

Exhibit "E" to First Amendment to Office Lease - Page 2
-------------------------------------------------------

<PAGE>

                                   SCHEDULE 1
                                   ----------

                                       TO
                                   EXHIBIT "E"
                                   -----------
                                       TO
                         FIRST AMENDMENT TO OFFICE LEASE
                         BETWEEN LSQ INVESTORS, L.L.C.,
                                AS LANDLORD, AND
                           CANAAN ENERGY CORPORATION,
                                    AS TENANT

                                 PARKING GARAGE
                                 --------------

                                                                 Current Monthly
  Level                          No. of Spaces                   Price per Space
  -----                          -------------                   ---------------
  1 or 2                               3                              $95.00

Exhibit "E" to First Amendment to Office Lease - Page 3
-------------------------------------------------------

<PAGE>

                                   EXHIBIT "F"
                                   -----------

                                       TO
                         FIRST AMENDMENT TO OFFICE LEASE
                         BETWEEN LSQ INVESTORS, L.L.C.,
                                AS LANDLORD, AND
                           CANAAN ENERGY CORPORATION,
                                    AS TENANT

                             RIGHT OF FIRST REFUSAL
                             ----------------------

         This Exhibit "F" ("Refusal Exhibit") describes and specifies the right
              -----------
of first refusal hereby granted by Landlord to Tenant with respect to the space
within the Building described below, which right of first refusal is being
granted upon the following terms and conditions:

     1. Defined Terms. For purposes of this Refusal Exhibit, all terms defined
        -------------
in the Lease will be utilized herein without further definition. Terms
specifically applicable to this Refusal Exhibit shall have the meanings
specified in the Refusal Exhibit and shall be delineated by initial capital
letters.

     2. Grant of Right of First Refusal. Landlord hereby grants to Tenant during
        -------------------------------
the initial Lease Term a one time right of refusal ("Refusal Right") with
respect to any unleased space located on (a) the ninth (9th) floor, or (b) the
eleventh (11th) floor of the Building (collectively, "Refusal Space").
Notwithstanding the foregoing, the Refusal Right shall not be applicable: (i)
during any time when there is an uncured event of default under the Lease; or
(ii) in the event, during the first twelve (12) months of the initial Lease
Term, Landlord receives and desires to accept a bona fide offer to lease all or
any part of the Refusal Space located on the eleventh (11th) floor of the
Building from: (x) Hilb, Rogal & Hamilton Company of Oklahoma [one of Landlord's
tenants presently leasing space located on such eleventh (11th) floor]; or (y)
Grant Thornton [one of Landlord's tenants presently occupying space located on
the twelfth (12th) floor of the Building], in any such event, Landlord shall
have the unrestricted right to enter into a lease agreement with Hilb, Rogal &
Hamilton of Oklahoma, or Grant Thornton, whichever is applicable, with respect
to such subject Refusal Space. Moreover, notwithstanding anything set forth
herein to the contrary, the Refusal Right shall be subject to the preexisting
rights of any tenants presently occupying space in the Property.

     3. Exercise of Refusal Right. Subject to the terms of Paragraph 2 of this
        -------------------------
Exhibit "F," in the event that Refusal Space in the Building becomes available,
------------
availability, for purposes hereof, to be at the sole determination of Landlord,
and Landlord receives a bona fide offer from a third party to lease all or any
part of the Refusal Space for a term greater than month-to-month which Landlord
desires to accept, Landlord shall so notify Tenant and shall include in such
notice the rental rate for the subject Refusal Space, term of the proposed
lease, expense stop, and any lease concessions to be granted. Tenant shall have
ten (10) calendar days from the receipt of such notice to notify Landlord in
writing of the exercise by Tenant of Tenant's Refusal Right with respect to the
subject Refusal Space, which exercise shall be on the same terms and with
respect to the entire space specified in Landlord's notice. In the event that
Tenant fails to so notify Landlord within such ten (10) calendar day period,
Tenant shall be deemed to have irrevocably waived its Refusal Right with respect
to the subject Refusal Space; and Landlord shall have the right to enter into a
lease with any party with respect to such subject Refusal Space. In the event
that Tenant elects to exercise its Refusal Right with respect to the subject
Refusal Space and does in fact exercise such Refusal Right in the manner and
within the time period specified herein, Landlord and Tenant shall, within
thirty (30) days after Tenant delivers to Landlord notice of its election, enter
into a written amendment modifying and supplementing the Lease and containing
such other terms and provisions as Landlord may deem appropriate. In the event
that Tenant fails to enter into said amendment within such thirty (30) day
period, Tenant shall be deemed to have irrevocably waived its Refusal Right with
respect to the subject Refusal Space; and Landlord shall have the right to enter
into a lease with any party with respect to such subject Refusal Space. Except
as may be specifically modified in such amendment and except with respect to

Exhibit "F" to First Amendment to Office Lease - Page 1
-------------------------------------------------------

<PAGE>

the rental rate for the subject Refusal Space, term of the proposed lease,
expense stop, and Lease concessions applicable to the subject Refusal Space, as
herein specified, the terms and provisions of the Lease shall, on the day of
delivery of the subject Refusal Space to Tenant, automatically apply and become
applicable to the subject Refusal Space; and the subject Refusal Space, as of
the date of such delivery, shall automatically and without the necessity of
further documentation, become and be deemed to be a part of the Premises.
Effective as of the date of delivery of any subject Refusal Space to Tenant, the
Rentable Area within the subject Refusal Space shall be included within the
Premises for the purpose of adjusting Base Rent, as provided in Article Four of
the Lease.

     4. Delivery of Refusal Space. Any Refusal Space shall be delivered to
        -------------------------
Tenant vacant and unoccupied and "As-Is" without benefit of improvements (except
Shell Improvements, if any) unless the refusal notice specifies that an
allowance is to be granted for the improvements or refurbishment of the subject
Refusal Space, in which event Tenant will receive the allowance specified in
Landlord's notice. In the event that any improvements or restoration work are to
be incorporated in the subject Refusal Space and the Premises, the amendment
shall contain provisions reflecting the agreement of Landlord and Tenant with
respect thereto. Landlord shall use reasonable diligence to deliver the subject
Refusal Space on the date specified in Landlord's notice of its availability,
but in no event shall Landlord have any liability for the failure to deliver the
subject Refusal Space to Tenant on such date, nor shall any such failure impair
the validity of the Lease, extend the Term (except with respect to the subject
Refusal Space, which shall be the term specified in Landlord's notice
irrespective of the Term specified in Article 1 of the Lease or Paragraph 3 of
the First Amendment), or impair any obligations of Tenant under the Lease, it
being understood that the Rent applicable to the subject Refusal Space shall be
abated until possession is delivered to Tenant in full settlement of all claims
that Tenant might otherwise have against Landlord by reason of the failure to
timely deliver possession of the subject Refusal Space to Tenant.

     5. Termination of Refusal Right. The Refusal Right shall automatically
        ----------------------------
terminate upon (a) the termination of the Term, whether by Landlord upon the
occurrence of an Event of Default or otherwise, (b) the expiration of the time
period specified in Paragraph 2 above, (c) the failure of Tenant to exercise the
Refusal Right with respect to any Refusal Space as and within the time period
specified in Paragraph 3 above, but only with respect to the subject Refusal
Space, and (d) upon the assignment, subletting, or other transfer by Tenant,
whether or not with the approval of Landlord.

Exhibit "F" to First Amendment to Office Lease - Page 2
-------------------------------------------------------

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