Document:

<PAGE>   1
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

                                     DECIDES

ARTICLE FIRST-. Granting GHK COMPANY COLOMBIA, an Environmental License for
Exploitation, or for Developing the Guaduas Field, formed by the Dindal and Rio
Seco blocks, located in the West of the department of Cundinamarca, in the
jurisdiction of the municipalities of Guaduas, Chaguani,Viani, Villeta, Quebrada
Negra, Utica, and Caparrapi, whereas within the following coordinate vertex:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Vertexes               Flat Coordinates             Geographic Coordinates
Dindal Block           North                East    North                             East
<S>                    <C>                  <C>     <C>                               <C>

-----------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Vertexes               Flat Coordinates             Geographic Coordinates
Dindal Block           North                East    North                             East
<S>                    <C>                  <C>     <C>                               <C>

-----------------------------------------------------------------------------------------------------------
</TABLE>

PARAGRAPH FIRST: The total project area is 43.620 hectares, whereby 26.155
hectares correspond to Dindal Block and 17.465 hectares correspond to Rio Seco
Block.

The activities whereby this Environmental License is granted are as follows:

1.   120 development development wells, whereby 67 shall be located in the Rio
     Seco Block and 53 in the Dindal Block.

2.   Drilling 13 injection wells, and construction and operation of their gas
     injection lines.

3.   Use of water and oil-based muds for the well drilling.

4.   Access Road improvement and construction to each of the wellsite
     development areas.

5.   Improvement and Construction of 21 platforms for development drilling (7 in
     Rio Seco and 14 in Dindal), and 13 injection well locations.

6.   Production of 12 drilled wells in the exploration phase, and the
     construction and operation of their flow lines.

7.   Construction and Operation of a second Production Facilities phase PF-1 to
     expand the production capacity up to 50000 BFPD and 15 MMSPCD.

8.   Construction and Operation of a third Production Facilities phase PF-2 to
     expand the production capacity up to 100000 BFPD and 20 MMSPCD.

9.   Construction of the Exploration Area Logistic Center (CLEX) whereby the
     containers, dining rooms, cafeteria, pipe supply yards, chemical product
     storage warehouse, machinery maintenance and repairing areas.

10.  Seismic Prospective Programs
<PAGE>   2
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

PARAGRAPH SECOND: Flow line Construction and Operation from each of the drilled
wells to the production facilities and main multiphases.

a)   GHK COMPANY COLOMBIA is authorized to construct and operate the flow lines
     from ES-4 to TP-1 as follows:

GHK COMPANY COLOMBIA is authorized to initially install two provisional threaded
3 1/2" flow lines, surface along the edge of the road, as indicated in the
drawing No. 54113 as required by for the production tests, at which time the
company shall remove the threaded piping.

b)       The activities for the flow lines of ES-4 to TP-1authorized herein are
         as follows:

o    Location and stacking

o    Equipment mobilization and piping transportation

o    Right of way, preparation, and layout

o    Local transportation and pipe placement

o    Bending, alignment, and welding

o    x-ray control

o    Valve installation

o    Joint Coating and pipe protection

o    Ditch opening

o    Pipe Lowering and burying

o    Special crossings

o    Final cleaning

o    Acceptance tests and drills

o    Hydrostatic tests

o    Filling and operation

o    Operation

c)       The Company GHK COMPANY COLOMBIA, shall follow the following standards
         for constructing and operating the Flow lines for ES-4 to TP-1 wells:

o    For the hydrostatic tests, the Company GHK COMPANY COLOMBIA shall only take
     the required volume (310m(3)) of the El Hoyon aquifer located in TP-1.
     (TP-1 has the corresponding environmental licenses)

o    The used water discharge shall be done by re-injection in the well ES-1,
     upon treatment in accordance with the provisions set forth in Decree 475/98
     and pursuant to the Environmental Management Plan.

o    No discharge of any of these waters in superficial or irrigation flows is
     authorized.

o    The Company GHK COMPANY COLOMBIA, shall to all possible extent reutilize
     the test water for different portions of the pipeline, thus decreasing the
     amount of water to be collected and thus reducing the use of reactants for
     its further treatment.

o    The Company GHK COMPANY COLOMBIA, shall bury the pipe where there are
     dwellings close to the right of way.

o    In the event that they may be cutting wastes during the construction, such
     wastes must be transported to the ZODMES authorized in the field of Guaduas
     for its proper disposal.

o    The Company GHK COMPANY COLOMBIA, shall revegetate 880 m(2), in the
     involved areas as follows:

--------------------------------------------------------------------------------
         STRETCH                     ABSCISSA                      AREA
--------------------------------------------------------------------------------
<PAGE>   3
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

o    The Company GHK COMPANY COLOMBIA, as a compensation measure for the removal
     of herbal and tree coverage on some areas (15.5 m(3)), shall establish 5
     HAS of the surrounding involved areas of the main streams and creeks
     intercepted by the flow lines.

The final areas shall be determined by the Corporacion Autonoma Regional de
Cundinamarca (CAR), by using tree and bush species as determined by the
Environmental Management Plan (EPM), as follows: Madre de agua, Hojiancho,
cordoncillo, Amarillo pena, Pyande, rayado, Moho, Mario, Velero.

o    For selecting the flow line routes, the Company GHK COMPANY COLOMBIA, shall
     take into account the following environmental criteria:

o    Use the existing road infrastructure
o    Minimizing intervention in forest belts of secondary and pioneer succession
     stages in streams and creeks
o    Minimize the number of special crossings
o    Burying the pipe in the areas where there are dwellings close to the right
     of ways, observing the security areas
o    Avoid new transfer lines to the Guaduas-La Dorada Pipeline, provided that
     such lines would further deteriorate the environment to a comparison of
     layout alternatives
o    Minimize the fractionating of lots devoted to agricultural activities
o    Apply the established principles of ASME b382 standard

PARAGRAPH THIRD-. Constructing and operating the Early Production Facilities EPP
for a production estimated in 20000 BFPD and 6 MMSPCD.

The activities for production facilities authorized herein are:

Fluid Receipt System
Liquid and Gas Hydrocarbon Treatment System
Production Water Treatment System
Crude Tankage System (at least 1 day of production)
Nitrogen Injection Plant
Auxiliary Systems (chemical injection, diesel fuels, main electric system,
emergency electric system, instrumental air system, flaring system, rainwater
management system, tank level measurement automatic system, communication
system)

PARAGRAPH FOURTH-. Transfer line Constructing and operating at TP-1 well up to
k2+428 of the Guaduas-La Dorada Pipeline.

The crude transfer line activities authorized herein are:

o    Location and stacking
o    Equipment mobilization and tubing transportation
o    Right of way opening, preparation, and layout
o    Local transportation and pipe placement
o    Pipe lowering and burying
o    Special crossings
o    Ditch opening
o    Hydrostatic tests
o    Pumping

For the transfer line between TP-1 and k2+428 of the Guaduas-La Dorada Pipeline,
the Company GHK COMPANY COLOMBIA shall:
<PAGE>   4
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

o    For the hydrostatic tests take only the required volume (18.84m(3)) of the
     El Hoyon aquifer located in the TP-1 well (TP-1 has the corresponding
     environmental licenses).

o    The used water discharge shall be done by re-injection in the well ES-1
     upon treatment in accordance with the provisions set forth in Decree 475/98
     and pursuant to the Environmental Management Plan.

o    No discharge of any of these waters in superficial or irrigation flows is
     authorized.

o    Reutilize, to the extent possible, the test water for different portions of
     the pipe, thus decreasing the amount of water used and thus reducing the
     use of reactants for its further treatment.

o    Bury the pipes where there are dwellings close to the right of way.

o    In the event that there may be cutting wastes during the construction, such
     wastes must be transported to ZODMES authorized in he field of Guaduas for
     its proper disposal.

o    Revegetate 5680 m(2) in the involved areas as follows:

       ------------------------------------------------------------------
                        ABSCISA                 AREA
       ------------------------------------------------------------------

       ------------------------------------------------------------------

o    As a compensation measure for the removal of herbal and tree coverage on
     some areas, shall establish 6 HAS of the involved areas of the main streams
     and creaks intercepted by the flow lines.

The final areas shall be determined by the Corporacion Autonoma Regional de
Cundinamarca (CAR), using tree and bush species.

PARAGRAPH FIFTH-. The following are the coordinates of the new 34 drilling
locations to be built. From each of them, the Company GHK COMPANY COLOMBIA shall
only be able to drill a maximum of 4 development wells. From the injection well
locations the Company shall be able to drill 1 injection well

         COORDINATES OF THE AREAS OF INTEREST FOR THE DEVELOPMENT WELLS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
         LOCATIONS                 COORDINATES                RURAL AREA               MUNICIPALITY
-----------------------------------------------------------------------------------------------------------
<S>                                <C>                        <C>                      <C>

-----------------------------------------------------------------------------------------------------------
</TABLE>

ARTICLE SECOND-. The Environmental License granted herein also includes the
activity of removing washout and quarry material.

The Company GHK COMPANY COLOMBIA shall purchase such material from authorized
suppliers within the area.

PARAGRAPH FIRST-. For the purpose of obtaining washout and quarry material, all
the environmental management measures shall be taken strictly into account, so
as to develop an activity in accordance with the environmental standards and to
prevent from affecting the environment.

PARAGRAPH SECOND-. Prior to obtaining the abovementioned material, a copy of the
mining title or permit issued to the third party by the Ministry of Mines and
Energy shall be sent the Ministry of Environment.
<PAGE>   5
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

PARAGRAPH THIRD-. The Environmental License granted to the Company GHK COMPANY
COLOMBIA, includes the permits, authorizations, and assignments of environmental
nature, required for the use, exploitation or impact of the natural renewable
resources required in developing the project as indicated below

1.       Hydric Resources:

UNDERGROUND WATER CONCESSION

The underground waters collection of the El Hoyon aquifer is hereby authorized
through the upper part of the ES-4o , ES-6E, ES-9, TP-2E, TP-5, TP-11, and TP-14
wells in a 2.5 lps flow each, in order to meet the residential consumption needs
of the camp and cafeteria, and the industrial well needs only when the drilling
activities are being carried out.

Likewise, the underground water use of the El Hoyon aquifer along the upper part
of the TP-3E well in a 5 lps flow to meet the residential and industrial
consumption needs as part of the activities to be carried out in the production
facilities (under current CAR's consession)

The exploitation of the resource is authorized for a period of 12 hours per day,
in order to grant enough time for recovering the aquifer. The Company GHK
COMPANY COLOMBIA, shall install a flow meter at the wellhead and shall daily log
the exploitation conducted. This data shall be sent to this Ministry as well as
the water monitoring reports.

2.       RAINWATER AND WASTE INDUSTRIAL AND RESIDENTIAL TREATED WATERS DISPOSAL

The rainwater, waste industrial and residential water disposal for operating the
Guaduas field is authorized as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
             WASTE TYPE                      MANAGEMENT AND                          VOLUME
                                                DISPOSAL
-----------------------------------------------------------------------------------------------------------
<S>                                  <C>                                             <C>
Rainwater                            These are collected by a slope                  Variable
                                     top trench system and a
                                     perimetral ditch system, towards
                                     skimmers acting as by 3 chambers
                                     that act as grease tramps
                                     sedimenting and storage.  These
                                     can at last be taken to natural
                                     drainage by drain outlet and
                                     energy dispersers
-----------------------------------------------------------------------------------------------------------
Residential Waste Waters             These waters coming from             1.5 l/s per well and 1.5 lI/s for
                                     bathrooms, laundry, kitchens are     facilities is for production
                                     initially collected in a septic tank,
                                     and then to a Red Fox activated type
                                     mud plant. The final disposal shall
                                     be made to an infiltration field,
                                     spraying, in adjacent areas or by
                                     irrigation on unpaved roads upon
                                     compliance with the standards set
                                     forth in TABLE No.1
-----------------------------------------------------------------------------------------------------------
Industrial Waste Waters              It covers the waters resulting
                                     from the mud drilling treatment,
                                     hydrostatic tests, and
                                     water-related production, oily
                                     waters, waters used for equipment
                                     cleaning and maintenance.  These
                                     waters shall be treated by
                                     physical, chemical sedimentation
-----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   6
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

<TABLE>
<S>                                  <C>
-----------------------------------------------------------------------------------------------------------
                                     processes, coagulation,
                                     flocculation and aeration. in a
                                     pool system to be ultimately
                                     disposed through a reinjection
                                     process to the Guaduas formation
                                     by injection wells, spraying in
                                     adjacent areas or by irrigation
                                     of unpaved roads.  This latter
                                     shall be done in accordance with
                                     the standards set forth in Table
                                     No. 1.  The production related
                                     waters reinjection to the Guaduas
                                     formation shall comply with the
                                     standards set forth in CHART No. 2
-----------------------------------------------------------------------------------------------------------
</TABLE>

The Company GHK COMPANY COLOMBIA shall comply with the following standards in
disposing the residential and industrial waste waters, through spraying in
adjacent areas in the access roads.

                                   CHART NO, 1

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
              STANDARD                          EXPRESSED AS                MAXIMUM PERMISSIBLE
                                                                                  VALUE
-----------------------------------------------------------------------------------------------------------
<S>                                             <C>                         <C>
(ph)                                 Units
-----------------------------------------------------------------------------------------------------------
DBO
-----------------------------------------------------------------------------------------------------------
DQO                                                                     Absent
-----------------------------------------------------------------------------------------------------------
Grease and oils
-----------------------------------------------------------------------------------------------------------
Chlorides
-----------------------------------------------------------------------------------------------------------
Conductivity
-----------------------------------------------------------------------------------------------------------
Total hydrocarbons                                                      Absent
-----------------------------------------------------------------------------------------------------------
Tensoactives
-----------------------------------------------------------------------------------------------------------
Cadmium
-----------------------------------------------------------------------------------------------------------
Phenol
-----------------------------------------------------------------------------------------------------------
Mercury
-----------------------------------------------------------------------------------------------------------
Lead
-----------------------------------------------------------------------------------------------------------
Barium
-----------------------------------------------------------------------------------------------------------
Total solids
-----------------------------------------------------------------------------------------------------------
Sulfate
-----------------------------------------------------------------------------------------------------------
Coliformes fecales
-----------------------------------------------------------------------------------------------------------
Coliformes totales
-----------------------------------------------------------------------------------------------------------
Cyanide
-----------------------------------------------------------------------------------------------------------
</TABLE>
Provided by CAR. 1999

The Company GHK COMPANY COLOMBIA shall comply with the following standards when
disposing the industrial waste waters through reinjection.

                                   TABLA NO. 2
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
              STANDARD                          EXPRESSED AS                MAXIMUM PERMISSIBLE VALUE
-----------------------------------------------------------------------------------------------------------
<S>                                             <C>                         <C>
Conductivity
-----------------------------------------------------------------------------------------------------------
Total solids
-----------------------------------------------------------------------------------------------------------
Particles
-----------------------------------------------------------------------------------------------------------
Oil in water
-----------------------------------------------------------------------------------------------------------
Water pressure
-----------------------------------------------------------------------------------------------------------
Sulfates
-----------------------------------------------------------------------------------------------------------
Chloride
-----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   7
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

<TABLE>
<S>                                  <C>
-----------------------------------------------------------------------------------------------------------
Phenols
-----------------------------------------------------------------------------------------------------------
Color                                Units
-----------------------------------------------------------------------------------------------------------
Turbidity                            Units
-----------------------------------------------------------------------------------------------------------
Ph
-----------------------------------------------------------------------------------------------------------
</TABLE>

PARAGRAPH FIRST-. The production related waters reinjected in the Guaduas
formation is authorized in the ES1-S and TP-1S wells, in accordance to that set
forth in the study "Environmental Evaluation of the waste residential waters in
ES-1S by a numerical simulation."

Whereby the Company GHK COMPANY COLOMBIA shall:

1.   Determine the porosity and permeability of the Hoyon formation and
     particularly in the Guaduas formation, during the drilling of a well, in
     order to balance the completed samples.

2.   Keep a daily log of the water level through the annular, each time water is
     injected in order to semiquantatively determine the draw down horizon
     injection pressure.

3.   Build up a monitoring well network, with a minimum of six monitoring wells,
     close to the injection area, enabling the physical chemical quality
     monitoring of the water chart and measuring monitoring well levels, whereby
     there is a way to monitor any changes in the chemical composition of water.

     The estimated depth of such monitoring shall be the minimum corresponding
     to the top of the Guaduas formation, and the standards to be measured are
     contained in the obligations set forth in the monitoring program for
     underground waters.

4.   Keep itemized records of the physical chemical quality of the injection
     water at the authorized injection wells, as well as of the water production
     wells. To ensure that the injected water in the authorized wells complies
     with the minimum standards of quality standards set forth in Table No. 2.

5.   The authorized reinjection flow (Q) ranges between five thousand (5000) to
     Ten thousand (10000) barrels per day per well.

6.   Isolate completely the new injection wells in the Hoyon formation, thus
     ensuring that the injected fluid migration towards the formation be
     non-existent even in the long run.

     Likewise, (if technically possible) not cementing the base sand and coal
     base horizons of Guaduas formation (tkg) since these enable a rapid
     injected fluid storage given its hydraulic conditions.

3.   SOLID WASTE TREATMENT, MANAGEMENT, AND DISPOSAL

a)   BIODEGRADABLE ORGANIC WASTES

Part of the residential solid wastes generated in the cafeteria and dining rooms
shall be devoted to animal feeding. The remaining part of these wastes shall be
bioremedially and disposably treated in sanitary trenches, upon compliance with
the technical specifications regarding the final solid waste soil disposal.

The Company GHK COMPANY COLOMBIA shall install monitoring wells in the direct
area of influence of the final disposal site and shall prepare a quarterly
follow-up on the underground water quality.

<PAGE>   8
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

b)       RECYCLABLE WASTES

Glass, plastic, paper bottles, and plastic wrappings shall be stored in 55
gallon bins in the disposal area, with the following color labels: WHITE for
paper and cardboard; YELLOW, for plastics, GRAY, for glass. This material shall
be transported on a daily basis to Guaduas to be delivered to the organized
recycling groups.

c)       OILY MUDS

The wastes resulting from the maintenance activities of separation systems and
storage tanks and energy generation, shall be transported to the biodegradation
sites for the oily muds in the CLEX for its proper treatment.

d)       HAZARDOUS WASTES

The hazardous wastes such as a filter, batteries, chemical product packaging,
fuels and oils, cement sacks, radioactive elements, etc., shall be daily stored
in the supply center and shall be returned to the suppliers or manufacturers for
its final reutilization or disposal.

e)       FLAMMABLE WASTES

These are wastes such as: gloves, overall garment, burlaps, geomembrane cloths,
hydrocarbon -soaked cloths, toilet paper, gauzes and cottons, packages,
syringes, and first aid material. These shall be stored in 55-gallon red colored
bins, which shall be daily collected and taken to the supply center to be
burned.

The burner used to treat these wastes shall have combustion and post combustion
system ensuring the complete waste degradation as well as the control mechanisms
for particulates and emissions.

ARTICLE FORTH-. The Environmental License which is hereby granted. Conditions
the beneficiary of this Resolution to the fulfillment of the obligations
contained in the Environmental Impact Study and the Environmental Management
Plan submitted by the Company to the compliance of the current environmental
regulations, as well as to that established above to the compliance of following
obligations:

1.   The Company GHK COMPANY COLOMBIA shall submit 30 days prior to initiating
     the works, before this Ministry, an Environmental Management Plan and/or
     the update (according to each case) for each drilling project that the
     Company intends to carry out, including the respective flow lines,
     enclosing the topographic drawings of the locations and the material
     disposal sites, strictly complying with the following criteria:

o    No well drillings in slope areas or with over 40% slopes are allowed.
o    No well drillings at distances below 150 m of any riverbed are allowed.
o    No drillings or detonations less than 500 m of any faulting that may be
     detected in the area. are allowed
o    leave a non-protected intervention area of 150 m in connection with natural
     forest areas.
o    Leave a minimum 150-m distance as to dwellings, populated home areas and
     urban expansion areas, which are located in the area of direct influence.
o    Graded sites, to locate drilling platforms of 1.5 ha maximum.
o    Road widths of at the most 8 meters wide.

2.   When selecting and conforming the disposal and management zones of sterile
     material, the Company GHK COMPANY COLOMBIA shall implement the following
     environmental measures for handling excavation material disposal zones,
     (ZODMEs):
<PAGE>   9
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

o    The areas determined, as ZODME's shall be preferably located in a flat
     area; if this is not possible, due to the soil characteristics, a natural
     slope area should be selected, and especially focusing on the adequate
     management of the rainy waters.

o    The location site should be far away from the water bodies and from
     environmentally sensible areas set forth in the environmental zonings

o    No ZODME's shall be located at a distance less than 30 meters of the
     maximum flooding contour elevation of water bodies. This measure shall be
     taken into consideration in flooding areas during winter season at which
     time water dams take place.

o    The ZODME's site location shall be previously negotiated and no other areas
     may be used except those already established.

o    For the ZODME's preparation, the vegetable and organic soil layer shall be
     removed.

o    If the selected area is of high slope, a terrace or soil grading shall be
     carried out in order to provide support to the material that is going to be
     placed, at which case a granular material filter is required to ensure a
     normal area drainage, as well as energy dispersers and sedimentors in the
     areas where the material is driven to the natural drainage.

o    The Excavation materials shall expand over the area in loose layers, of not
     more than 40 to 50 cm width; then these should be rammed down with a
     bulldozer reaching at least an 80% compression.

o    Upon the material disposal, the surface shall be revegetated, in accordance
     with the established procedures for intervened areas.

3.   The Company GHK COMPANY COLOMBIA, prior to returning the hazardous
     material, shall submit before this Ministry agreements executed for this
     purpose between the Company and the suppliers responsible for finally
     disposing of such material.

4.   In the specific location, facilities, and flow line management plans, the
     species and volumes of the forest material to be exploited shall be
     determined, and in case these are beyond those established in the standard
     (article 60 of Decree 1791 of 1996, i.e. 20 m(3)), the Company GHK COMPANY
     COLOMBIA shall process and obtain the authorization before the
     corresponding environmental authority, prior to the execution of the works.

5.   The Company GHK COMPANY COLOMBIA shall inform this Ministry and the
     Corporacion Autonoma Regional de Cundinamarca (CAR) about any changes that
     may emerge in the management, disposal and treatment of solid, liquid,
     atmospheric emissions, noise and waste

6.   EXCLUSION ZONES

The Company GHK COMPANY COLOMBIA shall restrain from performing any oil-related
activity in the areas of:

a)       San Francisco Forest Reserve and its compensation area.
b)       The area declared as a forest, hydric, and agricultural reserves by the
         municipality of Guaduas (set forth in accordance with the contract 024
         of September 5, 1998)
c)       Areas at a distance of approximately 100 meters to the water springs,
         river bed forests and a 30-meter the water bodies, as of the maximum
         flooding level.
d)       Populated areas (urban areas), infrastructure utilities, inlets and
         water catchment.
<PAGE>   10
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

7.   The Company GHK COMPANY COLOMBIA shall ensure that prior to the initiation
     of the well drilling, the foreseen residential and industrial waste water
     management and disposal systems are operating (those technically feasible).

8.   The Company GHK COMPANY COLOMBIA shall provide permanent maintenance to
     those access roads used for the project and those roads that lead to
     locations and/or facility areas, ensuring their stability, degradation
     control processes, water management, and dust emission control.

9.   The Company GHK COMPANY COLOMBIA shall implement the current environmental
     regulations set forth for banners and advertisement.

10.  The Company GHK COMPANY COLOMBIA shall avoid developing production
     activities on the areas identified as high environmental sensitive areas as
     set forth in the Environmental Impact Study (EIS), corresponding to the
     Zoning Map for Environmental Activity Management.

11.  The Company GHK COMPANY COLOMBIA shall ensure to permanently inform the
     community of the area of influence of each of the activities, both of the
     project itself and the various management measures and social management
     plan.

12.  The Administrative Act hereof, only authorizes the use of floor flares,
     confined in a burning pit with a maximum area of 25 m(2) and a minimum of a
     5 meter depth, which shall have a thermal, lightning, and sound insulation
     system. The installation of high flares is by no means hereby authorized.

13.  The Company GHK COMPANY COLOMBIA shall only mobilize crude on load trucks
     from 6 am to 6 pm at a maximum speed of 30 km/hour. Likewise, the Company
     shall comply with the current regulations set forth for hazardous substance
     transportation (corresponding classes).

14.  The Company GHK COMPANY COLOMBIA shall inform the dates for the simulacrums
     to be performed in accordance with the obligations set forth in the
     contingency plan.

15.  The Company GHK COMPANY COLOMBIA shall strictly comply with the Social
     Management Plan stated in the Environmental Management Plan submitted
     before this Ministry as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
              IMPACTS                            MEASURES                               POST-PROGRAMS
-----------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                                        <C>
o    Employment demand increase      -    Design and completion of a            Information and communication
o    Room and board demand                local and regional labor
     increase                             contracting policy
                                     -    Advertising and communication
                                          of the local and regional
                                          non-skilled labor hiring policy
                                     -    Information of the sectors
                                          demanding labor
                                     -    Community Relations office             Labor contracting
                                     -    Information Meetings
                                     -    Agreement execution and hiring
                                          obligation compliance
                                     -    Agreements acting in favor of
                                          observing coexistence standards
--------------------------------------------------------------------------------
</TABLE>

<PAGE>   11
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

<TABLE>
<S>                                  <C>                                        <C>
-----------------------------------------------------------------------------------------------------------------------
o    Temporary increase of           -    Design and completion of              Service offer and demand Management
     external elements arrival            specifications and the rules
                                          of the game of the social
                                          incersion/inclusion of the
                                          external elements
--------------------------------------------------------------------------------
o    Migration - Expectations        -    Designing and completing of           Services
                                          educational campaigns
                                     -    Information meetings
-----------------------------------------------------------------------------------------------------------------------
o    Morbidity/ increase             -    Improvement project in
o    Social service demand                rendering of health services
     increase
-----------------------------------------------------------------------------------------------------------------------
o    Significant income increase     -    Designing hiring policy               Education and training
o    Price increase                  -    Hiring Agreements
o    Cost of living increase         -    Resolution agreement
                                          issuance of price regulation
                                     -    Advertising material
--------------------------------------------------------------------------------
o    Vehicle flow increase           -    Designing sign posting, and           Institutional strengthening
                                          accident prevention plans
                                     -    Advertising material
--------------------------------------------------------------------------------
o    Solid and liquid waste          -    Information meeting
     generation                      -    Advertising material
o    Superficial water
     contamination/pollution
--------------------------------------------------------------------------------
o    Public utilities demand         -    Educational campaigns on              Archaeological interest zones
     increase (water and sewage)          "water management"
                                     -    Improvement project on the
                                          offer in rendering water
                                          service
                                     -    Educational/Teaching
                                          material
-----------------------------------------------------------------------------------------------------------------------
o    Deterioration  of Vehicular     -    Designing of improvement
     infrastructure                       and maintenance works
                                     -    Construction works for
                                          improvement and
                                          maintaining rural area access
                                          roads
-----------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------
              IMPACTS                                                   MEASURES
-----------------------------------------------------------------------------------------------------------------------
o    Natural resource demand         -    Information meetings
     increase                        -    Educational campaigns
o    Cultural increase on natural    -    Designing and performing reforestation projects
     resources                       -    Seed bed installation
                                     -    Community agreements
-----------------------------------------------------------------------------------------------------------------------
o    Home transfers                  -    Information meetings
                                     -    Negotiation Meetings
                                     -    Transfer designing
                                     -    Agreements
-----------------------------------------------------------------------------------------------------------------------
o    Use of the land changes         -    Agreement and integration social projects with the community
                                     -    Information meetings
-----------------------------------------------------------------------------------------------------------------------
o    Community conflict              -    Information meetings
     generation and creation         -    Agreements and commitments
                                     -    Compliance meetings
                                     -    Contract execution and obligation compliance
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   12
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

<TABLE>
<S>                                 <C>
-----------------------------------------------------------------------------------------------------------------------
o    Landscape damages               -    Information meetings
o    Space occupation                -    Agreements and commitments
                                     -    Compliance meetings
                                     -    Space management agreements
-----------------------------------------------------------------------------------------------------------------------
o    Damages on archeologically      -    Follow-up and supervision Plan
     sensible zones                  -    Rescue Plan
                                     -    Discovery Report, bordering interest area
                                     -    Oil activity staking
-----------------------------------------------------------------------------------------------------------------------
o    Atmosphere and noise            -    Information meetings
     pollution                       -    Advertising material
-----------------------------------------------------------------------------------------------------------------------
o    Offer and demand alteration,    -    Information meetings
     productive processes            -    Productive process management support project
o    Productive activity changes     -    Establishment of Productive and environmental management Foundation
-----------------------------------------------------------------------------------------------------------------------
o    Community management            -    Meetings and agreements
     demand increase                 -    Joint cooperation agreements
-----------------------------------------------------------------------------------------------------------------------
o    Institutional management        -    Meetings and agreements
     demand increase                 -    Technical, financial and managerial advisory
                                     -    Agreements and joint cooperation advisory
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

ARTICLE FIFTH-. The Company GHK COMPANY COLOMBIA. shall inform this Ministry
about changes for modifications of the Environmental License, when the
conditions of the area of intervention defined in the EIA vary with time towards
restrictive scenarios for the licensed activities.

ARTICLE SIXTH-. During the time of the project completion, a permanent
environmental follow-up shall be done, by means of an Environmental Audit so as
to monitor the activities and to verify compliance with the obligations set
forth in the Environmental Impact Study, in the Environmental Management Plan,
and in this Resolution.

An environmental management and progress report shall be submitted, before this
Ministry and the Corporacion Autonoma Regional de Cundinamarca (CAR) every six
months, the report shall include an itemized exploitation activity description,
and its environmental management as well as the environmental incident reports.

This report shall include at least the measure implementation evaluation as
adopted in the Environmental Management Plan, follow-up, monitoring, result and
conclusion analyses report program. Likewise, any contingencies that may rise
shall be reported, and such contingencies shall be reported on a monthly basis.

The report shall be focused on the analysis of the implementation of the various
environmental management measures that are adopted. The semiannual report shall
include the progress in the Social Management Plan, by submitting not only the
progress report but also a copy of the various interinstitutional and community
agreements.

Likewise, such auditing shall develop a monitoring and follow-up program on
water, air, and soil quality as follows:

1.   The surface water quality monitoring shall be quarterly prepared in the
     streams within the area of influence of the project, during all the field
     operation phase, based on the sample points submitted for the
     characterization of the main line of the environmental impact study for the
     development of Dindal and Rio Seco blocks.

2.   During the drilling of the developing wells, the monitoring shall be done
     in the streams adjacent to the location on a monthly basis, upstream and
     downstream at the points where the tributaries enter the flows of the
     stream.
<PAGE>   13
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

3.   The standards to be followed are: pH, total suspended solids, dissolved
     solids, fat and oils, dissolved oxygen, coliformes fecales, and totals,
     temperature, heat, turbidity chlorides, sulfates, nitrates, nitrites an
     conductivity, phenols, and hydrocarbons, which must comply with the
     standards set forth in Decree 1594/84 articles, 38,39, 40, and 41.

4.   The underground water quality monitoring shall be quarterly done both in
     the drilling platform areas, production facilities, grease waste management
     areas, and drilling cuttings, sanitary tanks, and industrial injection
     waste water wellsites.

     In each of these areas a minimum of six (6) monitoring wells shall be
     installed per hectare. The measurement standards are: grease and oil
     contents, pH, conductivity, sulfates, chlorides, and phenols.

5.   Soil monitoring (quarterly frequency). GHK shall perform the following for
     the oily muds and drilling cuttings by the biodegradation system:

6.   Bearing in mind that in Colombia there are no standards which define the
     soil quality control to evaluate the efficiency of the biodegradable
     systems, the 29B Standard of Louisiana State (United States) from October
     20, 1990 shall be followed. The following are the standards to be
     evaluated:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
                         29B STANDARD - LOIISIANA- OCTOBER 20, 1990
------------------------------------------------------------------------------------------------
              STANDARD                             UNITS                         VALUE
------------------------------------------------------------------------------------------------
<S>                                                <C>                       <C>
------------------------------------------------------------------------------------------------
                 pH
------------------------------------------------------------------------------------------------
      Sodium absorption reason                                               less than 12
------------------------------------------------------------------------------------------------
     Interchangeable sodium
          percentage                                                         less than 15%
------------------------------------------------------------------------------------------------
       Electric conductivity                                                  less than 4
------------------------------------------------------------------------------------------------
           Oils and fats                                                     less than 1%
------------------------------------------------------------------------------------------------
              Arsenic
------------------------------------------------------------------------------------------------
  Barium (hilly/mountainous land)
------------------------------------------------------------------------------------------------
              Cadmium
------------------------------------------------------------------------------------------------
              Chromium
------------------------------------------------------------------------------------------------
                Lead
------------------------------------------------------------------------------------------------
              Mercury
------------------------------------------------------------------------------------------------
              Selenium
------------------------------------------------------------------------------------------------
                Zinc
------------------------------------------------------------------------------------------------
               Silver
------------------------------------------------------------------------------------------------
</TABLE>

In addition to the standards described herein, a follow-up shall be done on the
class, fertility, and soil quality, prior, during and after the biodegradation
treatment, which shall be completed upon the compliance of the established
quality standards.

The land on which the biodegradation of oily wastes and drilling cuttings shall
be developed shall have a surface water drainage, which shall be collected in a
sump, from which these will be transported to the water treatment pools.

7.       AIR QUALITY MONITORING

ATMOSPHERIC EMISSIONS: For the Early Production Facility (EPP) monitoring shall
be done in the areas established in the specifications No. 4-01 of the
supplementary EIS document. For the Industrial Complex of Santacruz, the
following places shall be taken as reference for the air quality monitoring:
Police station in Guaduas, Facilities area entrance, TP.3 location, and half way
to the Western border of the complex. The frequency for the air quality
monitoring is semiannual and the standards to be analyzed are those established
as follows:
<PAGE>   14
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

               QUALITY AIR STANDARDS (ug/m(3)) Decree 02 of 1982
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
            Contaminator                  Schedule Standard       Daily Standard    Annual
                                                                                   Standard
--------------------------------------------------------------------------------------------------
<S>                                       <C>                     <C>              <C>
      Total Particled Material
--------------------------------------------------------------------------------------------------
                PM10
--------------------------------------------------------------------------------------------------
           Nitrogen Oxide
--------------------------------------------------------------------------------------------------
           Sulfur Oxides
--------------------------------------------------------------------------------------------------
          Carbon monoxide
--------------------------------------------------------------------------------------------------
               Ozone
--------------------------------------------------------------------------------------------------
            Hydrocarbons
--------------------------------------------------------------------------------------------------
</TABLE>

8.   NOISE MONITORING: For the EPP area, this will be done as set forth in the
     specifications 4.01 of the supplementary EIS document. For the Industrial
     Complex of Santacruz, the following places shall be taken as reference for
     noise monitoring: Police Station in Guaduas, facilities entrance, TP.3 well
     and half way to the Western complex border.

              ENVIRONMENTAL NOISE STANDARDS RESOLUTION 8321 OF 1983
<TABLE>
<CAPTION>
                                  Nivel de presion sonora de decibeles/Sound
                                  pressure level in decibels
<S>                               <C>                                               <C>
----------------------------------------------------------------------------------------------------
          Receipt Areas                             Day period                      Night period
----------------------------------------------------------------------------------------------------
Zone 1- Residential
----------------------------------------------------------------------------------------------------
Zone 2 -Commercial
----------------------------------------------------------------------------------------------------
Zone 3 - Industrial
----------------------------------------------------------------------------------------------------
Zone 4 - Peaceful
----------------------------------------------------------------------------------------------------
</TABLE>

The water, air, and soil monitoring results shall be informed to this Ministry
and the Corporacion Autonoma Regional de Cundinamarca (CAR) in each of the
progress and environmental management reports, by attaching an isonoice map at a
maximum interval of 25 meters and a 200- meter radio as of the borders of the
facilities, for the EPP and the industrial complex of Santacruz; for the areas
during the drilling phase the noise monitoring shall be done as of the well
axis, by enclosing an isonoise map with a maximum interval of 25 meters and a
200-meter radio. Such monitoring shall take into account other emissions sources
such as generators, flares, and compressors.

Likewise the Environmental Auditors shall submit the results of the
characterization of the atmospheric emissions produced by the incinerator,
contained in the progress environmental management reports.

Upon the completion of the flow line hydrostatic test of ES-4 to the TP-1, the
auditing shall prepare the physical-chemical quality analysis of the surface
sources in the sampling sites defined in the drawing No. 5 CB-1425, and in
accordance with the standards set forth in the Environmental Management Plan
(EMP) as follows:

o    Punto 1.y 2 Cano NN7........
o    Punto 19 Cano NN2......

In order to complete the hydrostatic test, the Transfer line from the TP-1 up to
k2+428 of the Guaduas-La Dorada Pipeline, the Environmental Auditors shall
prepare the physical-chemical quality analysis of the surface sources in the
following sampling sites:

o    Punto 1 Cano........
o    Punto 7 Rio Guaduero......
<PAGE>   15
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

ARTICLE SEVENTH-. The beneficiary of the Environmental License shall pay to the
Corporacion Autonoma Regional de Cundinamarca (CAR), the corresponding amount
for the retributive tax, compensatory rates, and for the amount of water used,
damages or usgee of the renewable natural resources.

ARTICLE EIGHTH-. In the event that while the works or operation are being
carried out, any unforeseen environmental aspect may occur, the Environmental
License and Environmental Management Plan beneficiary shall suspend the works
and inform the Ministry of Environment immediately, so that the Ministry shall
determine and request the corrective measures that the Ministry may deem
necessary, without prejudice against the measures that the Company GHK COMPANY
COLOMBIA may take, to avoid the environmental deterioration.

Non-compliance with these measures, may be a strong reason to apply existing
legal penalties, sanctions and fines.

ARTICLE NINTH: The Company GHK COMPANY COLOMBIA shall be liable for any damages
and/or environmental damages created by the company or by the its contractors,
and shall perform all the necessary activities required to correct the
environmental effects which may have been caused.

ARTICLE TENTH-. The Environmental License granted herein covers only the works
and activities set forth in the Environmental Impact Study, in the Environmental
Management Plans and in the Resolution herein.

Any modification to the conditions of the Environmental License, the
Environmental Management Plan, shall be informed immediately in writing to the
Ministry of Environment for an evaluation and approval. Except for the
modifications referred to in the Resolution No. 1137 of October 23, 1996, at
which case the beneficiary of the environmental License and the Environmental
Management Plans shall only inform, in advance, this Ministry about the
fulfillment of any such modifications.

Likewise, the Environmental License modifications shall be requested and
obtained, whenever a natural renewable resource is intended to be used,
exploited or affected, as opposed to those resources honored herein, or under
conditions which are different from those set forth in the Environmental Impact
Study, and in the decision herein.

ARTICLE ELEVENTH-. The Company GHK COMPANY COLOMBIA shall previously inform this
Ministry in writing about any modifications that may entail changes in the
project for its evaluation and approval.

ARTICLE TWELFTH-. In the event that there may be archaeological traces while the
project works are being developed, the Company GHK COMPANY COLOMBIA shall
immediately inform the Instituto Colombiano de Antroplogia-ICAN from the
Ministry of Culture eras well as this Ministry. ICAN shall determine the need to
perform an excavation phase or archaeological rescue.

ARTICLE THERTEENTH: The Company GHK COMPANY COLOMBIA shall execute a performance
insurance policy to the name of the Ministry of Environment for each of the
activities performed in the Guaduas field in the Dindal and Rio Seco blocks, for
equivalent to a 30% annual cost of the Environmental Management Plan and valid
for the project lifetime and two more years. Such insurance policy shall be
renewed every year.

ARTICLE FORTEENTH-: The Ministry of Environment shall monitor the fulfillment of
the works and shall verify, at any time, the compliance of the provisions set
forth herein, and in the contents of the Environmental Impact Study and in the
Environmental Management Plans.

Any non-compliance of the above shall give rise to the application of existing
legal penalties.
<PAGE>   16
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

ARTICLE FIFTEEHTH- The Environmental License hereby granted does not cover the
capturing or extracting of fauna specimens or wild flora.

ARTICLE SIXTEENTH-. The Company GHK COMPANY COLOMBIA shall invest one (1%) of
the project's total investment, in recovery, preservation, and monitoring
activities of the basin(s) nurturing the respective hydric source, in accordance
with that set forth in article 43 of the Law 99 of 1993.

The Company shall present an investment plan with its corresponding activity
timeline, in a maximum period of 4 months upon the execution of this order,
whereas the Company determines which of the following activities shall be
developed: reforestation, erosion control and soil recovery works, management of
forest regeneration process, and other similar activities.

These activities in which the investment shall be made, must be agreed upon with
the Corporacion Autonoma Regional de Cundinamarca (CAR) and shall be directly
performed by the beneficiary company of the Environmental License.

ARTICLE SEVENTEENTH.- In order to prevent forest fires field personnel shall
abstain from lightning fires, felling trees or supplying vegetal material.

ARTICLE EIGHTEENTH - The Company GHK COMPANY COLOMBIA shall inform, in writing,
the contractors and in general all the personnel involved in the project about
the obligations, control and prohibition means determined by the Ministry of
Environment the Resolution herein, as well as those obligations defined in the
Environment Impact Study and in the Environmental Management Plans submitted by
the company, and shall demand the compliance of said obligations.

ARTICLE NINETEENTH.- The Company GHK COMPNY COLOMBIA may not perform works
within the fringe owned by the State referred to in article 83 of the Decree
2611 of 1974, or in the retrieval areas of the surface waters established by the
territorial entity of the jurisdiction where the project will be developed.
Anyhow for crossings of water beds identified in the Environmental Impact Study,
submitted by the beneficiary of this License before the Ministry of Environment,
this fringe may be intervened taking, into account that GHK has the permits for
usage and exploitation or damage of the natural resources needed in performing
the works.

ARTICLE TWENTIETH. - Upon the completion of the various field works, the Company
GHK COMPANY COLOMBIA shall duly have all the evidence of waste elements and
materials, so that the landscape is not altered or the environment deteriorated.

ARTICLE TWENTYSECOND. - The Company GHK COMPANY COLOMBIA shall perform the
project in accordance with the information submitted before this Ministry.

ARTICLE TWENTYTHIRD. - The validity of the Environmental License herein shall be
that of the time that will take the project.

ARTICLE TWENTYFOURTH. - The beneficiary of the Environmental License shall
inform the municipal authorities of the region about the project and its scope
aimed towards obtaining the required permits necessary for the completion of the
planned works.

ARTICLE TWENTYFIFTH. - The Environmental License hereby granted by means of this
administrative act, shall confer no actual rights upon the lands affected by the
project.

ARTICLE TWENTYSIXTH. - The Company GHK COMPANY COLOMBIA shall inform in advance
and in writing this Ministry and the Corporacion Autonoma Regional de
Cundinamarca (CAR), the date when the works will be initiated.
<PAGE>   17
                     RESOLUTION NUMBER 0732 OF JULY 19, 2000

          "WHEREBY A HYDROCARBON EXPLOITATION ENVIRONMENTAL LICENSE IS
                                    GRANTED"

ARTICLE TWENTYSEVENTH. - Send copies of this Resolution, by the Environmental
License Legal Secretariat, to the Governor's office of the Department of
Cundinamarca, to the Municipal Mayor`s office of Guaduas, Chaguani, Viani,
Villeta, Quebrada Negar, Utica, and Caparrapi, and the Corporacion Autonoma
Regional de Cundinamarca (CAR).

ARTICLE TWENTYEIGHTH. - Notify the contents of this Administrative Act to the
Legal Representative of the Company GHK COMPANY COLOMBIA, or to its attorney
duly appointed.

ARTICLE TWENTYNINTH. - The Company GHK COMPANY COLOMBIA shall advertise at its
expense in a nation-wide newspaper the heading and the resolution portion of
this order, and of which copy shall be sent to the Ministry of Environment
destined to file No. 679.

ARTICLE THIRTIETH. The right of petition-may be filed against the present
Administrative Act by governmental action, which may be filed before the
Ministry of Environment in writing in the 5 first days following its
notification pursuant to article 50 and following, of the Administrative Law
Code.

                            TO BE ENTERED ACCORDINGLY

JUAN MAYR MALDONADO
Minister of Environment<PAGE>   1
                                                                   EXHIBIT 10(x)

                                 LOAN AGREEMENT

                                     BETWEEN

                            SEVEN SEAS PETROLEUM INC.

                                       AND

                            STILLWATER NATIONAL BANK
                             AND TRUST COMPANY, N.A.

                                DECEMBER 20, 2000

                     [SELF, GIDDENS & LEES, INC. LETTERHEAD]

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----

<S>                                                                                                            <C>
1.       Definition of Terms......................................................................................1
         1.1          Change of Control...........................................................................1
         1.2          Closing Date................................................................................2
         1.3          Collateral..................................................................................2
         1.4          Default.....................................................................................2
         1.5          Guarantees..................................................................................2
         1.6          Guarantor Collateral........................................................................2
         1.7          Guarantors..................................................................................2
         1.8          Guarantor Security Agreement................................................................2
         1.9          Loan........................................................................................3
         1.10         Loan Documents..............................................................................3
         1.11         Note........................................................................................3
         1.12         Obligations.................................................................................3
         1.13         Person......................................................................................3
         1.14         Pledged Stock...............................................................................3
         1.15         Reference Rate..............................................................................4
         1.16         Stock Pledge Agreement......................................................................4
         1.17         Subsidiaries................................................................................4

2.       Lending Agreement........................................................................................4

3.       Loan.....................................................................................................4
         3.1          Term........................................................................................5
         3.2          Interest....................................................................................5
         3.3          Payments....................................................................................5
         3.4          Voluntary Prepayment........................................................................5

4.       Advances; Payments.......................................................................................5
         4.1          Use of Proceeds.............................................................................5
         4.2          Request for Advance.........................................................................5
         4.3          Place of Advances and Payments..............................................................5

5.       Collateral Security......................................................................................6

6.       Conditions of Lending....................................................................................6
         6.1          Loan Documents..............................................................................6
         6.2          Authority...................................................................................6
         6.3          No Default..................................................................................6
         6.4          Opinion of Counsel..........................................................................6
         6.5          Arrangement Fee.............................................................................6
</TABLE>

                                      - i -

<PAGE>   3

<TABLE>
<S>                                                                                                            <C>
         6.6          Other Information...........................................................................6
         6.7          Prohibitive Orders..........................................................................7
         6.8          Information and Consents....................................................................7
         6.9          Assignments.................................................................................7

7.       Representations..........................................................................................7
         7.1          Existence...................................................................................7
         7.2          Authorized Capital Stock....................................................................7
         7.3          Financial Condition.........................................................................7
         7.4          Liabilities.................................................................................8
         7.5          Ownership...................................................................................8
         7.6          Permits.....................................................................................8
         7.7          Taxes.......................................................................................8
         7.8          Litigation..................................................................................8
         7.9          No Default..................................................................................9
         7.10         Full Disclosure.............................................................................9
         7.11         Survival of Representations.................................................................9
         7.12         Solvency....................................................................................9

8.       Affirmative Covenants....................................................................................9
         8.1          Performance of Obligations..................................................................9
         8.2          Notifications...............................................................................9
         8.3          Records Inspections........................................................................10
         8.4          Financial Information......................................................................10
                      8.4.1         Financial Statements.........................................................10
                      8.4.2         Other Information............................................................10
         8.5          Accounts...................................................................................11
         8.6          Additional Documents.......................................................................11
         8.7          Governmental Approvals.....................................................................11
         8.8          Taxes......................................................................................11
         8.9          Access.....................................................................................11
         8.10         Operation..................................................................................11
         8.11         Qualification; Licenses....................................................................11
         8.12         Insurance..................................................................................11
         8.13         Operation, Title, Pledge...................................................................12
         8.14         Compliance with Applicable Law.............................................................12
         8.15         Legal Existence............................................................................12

9.       Negative Covenants......................................................................................12
         9.1          Creation of Liens..........................................................................12
         9.2          Liquidation, Merger or Sale of Assets......................................................12
         9.3          Creation of Debt...........................................................................12
         9.4          Loans and Guaranties.......................................................................13
         9.5          Transfers..................................................................................13
         9.6          Other Agreements...........................................................................13
</TABLE>

                                     - ii -

<PAGE>   4

<TABLE>
<S>                                                                                                            <C>
         9.7          Limitation on Distributions and Redemptions................................................13
         9.8          Transactions with Affiliates...............................................................13
         9.9          Subsidiaries...............................................................................13

10.      Default.................................................................................................13
         10.1         Nonpayment of Note.........................................................................14
         10.2         Other Nonpayment...........................................................................14
         10.3         Breach of Agreement........................................................................14
         10.4         Lien Filings...............................................................................14
         10.5         Other Agreements...........................................................................14
         10.6         Representations............................................................................14
         10.7         Bankruptcy.................................................................................14
         10.8         Judgment...................................................................................14
         10.9         Maturity of Other Debt.....................................................................14
         10.10        Failure of Liens...........................................................................15
         10.11        Indenture..................................................................................15
         10.12        Change of Control..........................................................................15
         10.13        Opportunity to Cure........................................................................15

11.      Remedies................................................................................................15
         11.1         Acceleration of Note.......................................................................15
         11.2         Selective Enforcement......................................................................15
         11.3         Performance by Bank........................................................................15
         11.4         Waiver of Default..........................................................................16
         11.5         Deposits; Setoff...........................................................................16

12.      Miscellaneous...........................................................................................16
         12.1         Participating Banks........................................................................16
         12.2         Cumulative Remedies........................................................................16
         12.3         Survival of Representations................................................................16
         12.4         Expenses...................................................................................17
         12.5         Notices....................................................................................17
         12.6         Construction...............................................................................17
         12.7         Binding Effect.............................................................................18
         12.8         No Third Party Beneficiaries...............................................................18
         12.9         Assignment.................................................................................18
         12.10        Time.......................................................................................18
         12.11        Severability...............................................................................18
         12.12        Verbal Change..............................................................................18
         12.13        No Waiver..................................................................................18
         12.14        Acknowledgments and Admissions.............................................................18
         12.15        JOINT ACKNOWLEDGMENT.......................................................................19
         12.16        INDEMNITY..................................................................................19
         12.17        WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC................................................20
</TABLE>

                                     - iii -

<PAGE>   5

<TABLE>
<S>                       <C>       <C>
Schedule "1.5"             -        Guaranty Agreement
Schedule "1.8"             -        Guarantor Security Agreement
Schedule "1.11"            -        Promissory Note
Schedule "1.14"            -        Subsidiaries and Pledged Stock
Schedule "1.16"            -        Stock Pledge Agreement
Schedule "9.9"             -        Other Subsidiaries
</TABLE>

                                     - iv -

<PAGE>   6

                                 LOAN AGREEMENT

                  THIS LOAN AGREEMENT (this "Agreement") is made effective the
20th day of December, 2000, between SEVEN SEAS PETROLEUM INC., a Yukon
Territory, Canada corporation (the "Borrower"), and STILLWATER NATIONAL BANK AND
TRUST COMPANY, N.A. (the "Bank").

                                   WITNESSETH:

                  WHEREAS, the Borrower has requested that the Bank loan the
Borrower funds to provide a working capital line of credit, which the Bank is
willing to do subject to the terms and conditions set forth in this Agreement.

                  NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the funds to be advanced by the Bank under the Note
(as hereinafter defined) and other good and valuable consideration, the receipt
and sufficiency of all of which are hereby acknowledged, the Borrower and the
Bank hereby agree as follows:

1. Definition of Terms. All terms defined in this Agreement will have the
defined meaning when used in any of the Loan Documents (as hereinafter defined)
unless the context otherwise requires. Each accounting term not defined herein,
and each accounting term partly defined herein to the extent not defined, will
have the meaning given to it under generally accepted accounting principles. As
used in this Agreement, the following terms will have the meanings indicated:

         1.1      Change of Control. The occurrence of any of the following
                  events: (a) any Person other than the Borrower or one of the
                  Borrower's wholly-owned Subsidiaries acquires or holds any
                  legal or beneficial ownership of any Subsidiary; (b) any
                  Person or two or more Persons acting as a group acquires
                  beneficial ownership (within the meaning of Rule 13d-3 of the
                  SEC under the Securities Exchange Act of 1934, as amended, and
                  including holding proxies to vote for the election of
                  directors other than proxies held by the Borrower's management
                  or their designees to be voted in favor of Persons nominated
                  by the Borrower's Board of Directors) of fifty percent (50%)
                  or more of the outstanding voting securities of the Borrower,
                  measured by voting power (including both common stock and any
                  preferred stock or other equity securities entitling the
                  holders thereof to vote with the holders of common stock in
                  elections for directors of the Borrower); (c) one-third or
                  more of the directors of the Borrower consists of Persons not
                  nominated by the Borrower's Board of Directors (not including
                  as Board nominees any directors which the Board is obligated
                  to nominate pursuant to shareholders agreements, voting trust
                  arrangements or similar arrangements); or (d) the merger or
                  consolidation of the Borrower with or into another Person or
                  the merger or consolidation of another Person into the
                  Borrower, or the sale of all or substantially all of the
                  assets of the Borrower and the Subsidiaries to another Person
                  (other than a Person that is controlled by the Borrower or one
                  or more of

                                      - 1 -

<PAGE>   7

                  the Subsidiaries), and, in the case of any such merger or
                  consolidation, the securities of the Borrower that are
                  outstanding immediately prior to such transaction and which
                  represent one hundred percent (100%) of the aggregate voting
                  power of the voting stock of the Borrower are changed into or
                  exchanged for cash, securities or property, unless pursuant to
                  such transaction such securities are changed into or exchanged
                  for, in addition to any other consideration, securities of the
                  surviving corporation that represent immediately after such
                  transaction, at least a majority of the aggregate voting power
                  of the voting stock of the surviving corporation.

         1.2      Closing Date. The date upon which the Loan Documents are
                  signed by the Borrower and the Guarantors and accepted by the
                  Bank at the Bank's office in Oklahoma City, Oklahoma, all in
                  form and substance satisfactory to the Bank.

         1.3      Collateral. All of the Borrower's and the Guarantors' right,
                  title and interest in and to the property described in the
                  Loan Documents whether now owned or hereafter acquired
                  including without limitation: (a) the Guarantor Collateral;
                  (b) the Pledged Stock; and (c) all additions and accessions
                  to, replacements of, substitutions for, dividends on and
                  proceeds from any of the items listed in the foregoing parts
                  (a) and (b).

         1.4      Default. The occurrence of any of the events specified in
                  paragraph 10 of this Agreement.

         1.5      Guarantees. The agreement to be executed by the Guarantors in
                  favor of the Bank in substantially the form of Schedule "1.5"
                  attached hereto as a part hereof, whereby the Guarantors
                  unconditionally guarantee to the Bank payment of all
                  Obligations now or hereafter owing to the Bank by the Borrower
                  in connection with the Loan Documents and the full and
                  complete performance by the Borrower of the Loan Documents.

         1.6      Guarantor Collateral. The certificates of deposit or
                  government securities in form and substance satisfactory to
                  the Bank owned by one or more of the Guarantors and pledged to
                  the Bank to secure payment of the Obligations.

         1.7      Guarantors. The joint and several reference to (a) Robert A.
                  Hefner III, an individual ("Hefner"), (b) The GHK Company
                  L.L.C., an Oklahoma limited liability company ("GHK"), and (c)
                  Ramiiilaj A Limited Partnership, a Texas limited partnership
                  ("Ramiiilaj").

         1.8      Guarantor Security Agreement. The instrument and all
                  extensions, renewals and modifications thereof, executed and
                  delivered to the Bank by the Guarantors granting to the Bank a
                  first perfected security interest in and to the Guarantor
                  Collateral in substantially the form of Schedule "1.8"
                  attached hereto as a part hereof.

                                      - 2 -

<PAGE>   8

         1.9      Loan. The loan by the Bank to the Borrower evidenced by the
                  Note in the principal amount not to exceed TEN MILLION DOLLARS
                  ($10,000,000.00).

         1.10     Loan Documents. This Agreement, the Guarantees, the Guarantor
                  Security Agreement, the Note, the Stock Pledge Agreement and
                  all other instruments executed and delivered by the Borrower,
                  the Guarantors or any other Person or entity in connection
                  with the Loan contemplated by this Agreement, all instruments
                  issued pursuant to the foregoing documents and all extensions,
                  renewals, modifications and amendments thereof.

         1.11     Note. The promissory note and all extensions, renewals,
                  modifications, consolidations and increases thereof executed
                  by the Borrower and delivered to the Bank pursuant to this
                  Agreement to evidence the Loan and advances thereunder
                  contemplated by this Agreement in the principal amount of TEN
                  MILLION DOLLARS ($10,000,000.00). The Note will be payable on
                  the terms stated in paragraph 3 of this Agreement and will be
                  in substantially the form of Schedule "1.11" attached hereto
                  as a part hereof.

         1.12     Obligations. The obligation of the Borrower to: (a) pay the
                  principal of and interest on the Note in accordance with the
                  terms thereof and to satisfy all of the Borrower's other
                  liabilities to the Bank, whether under this Agreement or
                  otherwise, whether now existing or hereafter incurred, matured
                  or unmatured, direct or contingent, joint or several,
                  including any extensions, modifications, renewals, or
                  increases thereof and substitutions therefor; (b) repay to the
                  Bank all amounts advanced by the Bank under this Agreement or
                  otherwise on behalf of the Borrower including, without
                  limitation, overdrafts and advances for principal or interest
                  payments to other secured parties, mortgagees, lessors or
                  lienors, or for taxes, levies, insurance, rent, repairs to or
                  maintenance or storage of any of the Collateral; (c) reimburse
                  the Bank, on demand, for all of the Bank's expenses and costs
                  including reasonable fees and expenses of the Bank's counsel
                  in connection with the preparation, negotiation, amendment,
                  modification, or enforcement of this Agreement and the Loan
                  Documents including, without limitation, any proceeding
                  brought or threatened to enforce payment of any of the
                  obligations referred to in this paragraph 1.12; and (d)
                  perform all other obligations of the Borrower under the Loan
                  Documents.

         1.13     Person. An individual, corporation, partnership, limited
                  liability company, association, joint stock company, trust or
                  trustee thereof, estate or executor thereof, unincorporated
                  organization or joint venture, tribunal, or any other legally
                  recognizable entity.

         1.14     Pledged Stock. All of the issued and outstanding capital stock
                  of the Subsidiaries owned by the Borrower and certain of the
                  Borrower's Subsidiaries as set forth at Schedule "1.14"
                  attached hereto as a part hereof.

                                      - 3 -

<PAGE>   9

         1.15     Reference Rate. The national prime fluctuating rate of
                  interest published from time to time in The Wall Street
                  Journal (whether or not charged or published by the Bank). It
                  is a rate recognized by the Bank based on various factors,
                  including the Bank's costs and desired return, general
                  economic conditions and other factors and is used as a
                  reference point by the Bank for pricing some loans. The Bank
                  may price loans at, above or below the Reference Rate. Any
                  change in the Reference Rate will take effect, without notice
                  (which notice is hereby waived), on the day such change is
                  published in The Wall Street Journal.

         1.16     Stock Pledge Agreement. The instrument and all extensions,
                  renewals and modifications thereof, executed and delivered to
                  the Bank by the Borrower and certain of the Borrower's
                  Subsidiaries granting to the Bank a first perfected security
                  interest in and to the Pledged Stock in substantially the form
                  of Schedule "1.16" attached hereto as a part hereof.

         1.17     Subsidiaries. The wholly owned subsidiaries of the Borrower
                  listed at Schedule "1.14" attached hereto as a part hereof.

2. Lending Agreement. Subject to the terms and conditions of this Agreement, the
Bank agrees to lend to the Borrower and the Borrower agrees to borrow from the
Bank up to the principal amount of the Note which represents the total amount of
the Loan. Notwithstanding any other provision of the Loan Documents, any advance
herein provided for will not be required to be made by the Bank if since the
Closing Date and up to the date of such requested advance: (a) any event of
Default, or any event which, with notice or passage of time, would constitute an
event of Default, has occurred and has not been cured by the Borrower or waived
by the Bank; (b) Hefner has died or has been judicially declared incompetent;
(c) the Borrower's right to do business has been suspended by Yukon Territory,
Canada, and has not been continued in the Cayman Islands; (d) the Borrower
requests such additional advance for any purpose other than the purposes set
forth at paragraph 4.1 of this Agreement; (e) there has been, in the reasonable
opinion of the Bank, a material adverse change in the financial condition of any
Guarantor from that shown by the financial statements referenced in this
Agreement; (f) any litigation or governmental proceeding has been instituted
involving the Collateral which, in the opinion of the Bank will, to a material
extent, adversely affect the value of the Collateral; or (g) if, since the date
of this Agreement and up to the date of the advance request, any liens, claims
or encumbrances against the Collateral have been made or filed and have not been
removed or settled to the satisfaction of the Bank. On the Bank's request, prior
to the making of any such advance, the Borrower will furnish to the Bank a
certificate dated the requested date of such advance and signed by the Borrower
to the effect that no change or event referred to in clauses (a), (b), (c), (d),
(e), (f) and (g) of this paragraph 2 has occurred.

3. Loan. The Borrower and the Bank specifically agree that the aggregate of
advances made during the term of the Note may exceed the face amount thereof,
but the unpaid principal balance at any time will not exceed such face amount.
The Loan will be evidenced by the Note and will be payable as follows:

                                      - 4 -

<PAGE>   10

         3.1      Term. The term of the Note will be for the period commencing
                  on the Closing Date and ending on December 31, 2001 (the
                  "Maturity Date").

         3.2      Interest. Prior to Default, advances under the Note will bear
                  interest from the date of advance at the per annum rate equal
                  to the Reference Rate plus 75/100 percent (.75%). After
                  Default, all amounts due under the Note will bear interest at
                  the greater of: (a) fifteen percent (15%) per annum; or (b)
                  the Reference Rate plus five percent (5%) per annum. All
                  interest will be computed for the actual number of days
                  elapsed at a per diem charge based on a year consisting of
                  three hundred sixty (360) days.

         3.3      Payments. Provided that no event of Default has occurred or is
                  continuing under any of the Loan Documents, there will be no
                  required principal payments on the Note until the Maturity
                  Date. Commencing on January 31, 2001, and on the last day of
                  each successive month thereafter until the Note is paid in
                  full, the Borrower will pay to the Bank all accrued unpaid
                  interest on the Note. The entire unpaid principal balance of
                  the Note plus all accrued and unpaid interest thereon will be
                  due and payable on the Maturity Date.

         3.4      Voluntary Prepayment. The Borrower will have the right at any
                  time to prepay the Note in whole or in part, without premium
                  or penalty, but with interest accrued to the date of
                  prepayment.

4. Advances; Payments. Advances under the Note will be made by the Bank for the
following purposes and subject to the following limitations:

         4.1      Use of Proceeds. All proceeds of each advance under the Note
                  will be used solely for: (a) working capital purposes; and (b)
                  payment of costs incurred by the Borrower or the Bank in
                  connection with the preparation, administration and
                  enforcement of the Loan Documents.

         4.2      Request for Advance. Not later than 11:00 a.m. on the date of
                  advance, the Borrower will notify the Bank in writing of the
                  total amount of the requested advance under the Note.

         4.3      Place of Advances and Payments. Advances under the Note will
                  be made at the Bank's office or by wire transfer of
                  immediately available funds to a bank account designated by
                  the Borrower in the advance request. All payments and
                  prepayments of principal or interest on the Note will be made
                  to the Bank in collected and freely transferable funds at or
                  before 11:00 a.m. Oklahoma City, Oklahoma time on the date due
                  at the Bank's office at 6305 Waterford Boulevard, Suite 205,
                  Oklahoma City, Oklahoma. All payments will be paid in full
                  without set off or counterclaim and without reduction for, and
                  free from, any and all taxes, levies, imposts, duties, fees,
                  charges, deductions, withholdings, restrictions or conditions
                  of any nature imposed by any government or any political
                  subdivision

                                      - 5 -

<PAGE>   11

                  or taxing authority thereof. If any payment under the Note or
                  this Agreement becomes due and payable on a day other than a
                  business day, the maturity thereof will be extended to the
                  next succeeding business day and such extension of time will
                  in such case be included in the computation of payments of
                  interest.

5. Collateral Security. Payment and performance of the Obligations will be
secured by the Guarantees, all of the Collateral and such other or additional
property as is agreed to by the Borrower and the Bank.

6. Conditions of Lending. The obligation of the Bank to perform this Agreement
to make the initial or any future advances under the Note is subject to the
satisfaction and continued performance by the Borrower and the Guarantors of the
following conditions precedent:

         6.1      Loan Documents. The execution, acknowledgment (where
                  appropriate) and delivery by the appropriate parties of the
                  Loan Documents, all in form and substance satisfactory to the
                  Bank, and delivery of possession to the Bank of any Collateral
                  the possession of which is necessary to perfect the Bank's
                  security interest including, without limitation, any
                  certificates evidencing the Pledged Stock.

         6.2      Authority. The Bank will have received: (a) certified copies
                  of the instruments creating the Borrower, GHK and Ramiiilaj
                  and/or governing the operation of the Borrower, GHK and
                  Ramiiilaj, complete with all amendments thereto and
                  certificates to be filed in connection therewith; and (b)
                  certified copies of resolutions and other documents reasonably
                  required to authorize the execution, delivery and performance
                  of the Loan Documents, all in form and substance satisfactory
                  to the Bank.

         6.3      No Default. The representations and warranties set forth in
                  paragraph 7 of this Agreement will be true and correct on and
                  as of the date of the initial advance of funds under the Note
                  and each additional advance with the same effect as if such
                  representations and warranties had been made on and as of such
                  date and there will have occurred and be continuing no
                  Default.

         6.4      Opinion of Counsel. The Bank will have received the opinion or
                  opinions of the Borrower's and the Guarantors' counsel in form
                  and substance reasonably acceptable to the Bank and the Bank's
                  counsel.

         6.5      Arrangement Fee. The Bank will have received a non-refundable
                  arrangement fee from the Borrower in the amount of Twelve
                  Thousand Five Hundred Dollars ($12,500.00) as reimbursement to
                  the Bank for processing the Loan.

         6.6      Other Information. The Bank will have received current
                  financial statements for the Borrower and the Guarantors and
                  such other information, documents and

                                      - 6 -

<PAGE>   12

                  instruments concerning the Borrower, the Subsidiaries, the
                  Guarantors and the Collateral, as the Bank reasonably
                  requests.

         6.7      Prohibitive Orders. No order, writ or injunction of any court
                  or administrative agency is in effect or is being sought
                  prohibiting the transactions contemplated by this Agreement or
                  the other Loan Documents.

         6.8      Information and Consents. The Borrower and the Guarantors will
                  have furnished to the Bank any consents of third parties to
                  the transactions contemplated by this Agreement which may be
                  required under any other agreements binding on the Borrower,
                  any of the Subsidiaries or the Guarantors.

         6.9      Assignments. With respect to any secured indebtedness being
                  paid off out of an advance under the Note, the Bank will have
                  received an assignment, in form and substance satisfactory to
                  the Bank, of all liens, encumbrances and security interests
                  securing such indebtedness.

7. Representations. The Borrower represents and warrants to the Bank that the
following circumstances exist on the date of this Agreement and will continually
exist throughout the term of the Loan:

         7.1      Existence. The Borrower is and will continue to be a
                  corporation duly organized and validly existing under the laws
                  of Yukon Territory, Canada until such corporate existence is
                  duly and validly continued in the Cayman Islands. Each of the
                  Subsidiaries is and will continue to be a corporation duly
                  organized and validly existing under the laws of the
                  jurisdiction under which such Subsidiary was formed. GHK is
                  and will continue to be a limited liability company duly
                  organized and validly existing under the laws of the State of
                  Oklahoma. Ramiiilaj is and will continue to be a limited
                  partnership duly organized and validly existing under the laws
                  of the State of Texas. The Borrower, GHK and Ramiiilaj and
                  have adequate power, authority and legal right to enter into
                  and carry out the provisions of the Loan Documents, to borrow
                  money and to give security for borrowings as required by this
                  Agreement and to consummate the transactions hereby
                  contemplated. The Loan Documents, upon their execution and
                  delivery, will constitute valid, legal and binding obligations
                  of the Borrower and the Guarantors, enforceable in accordance
                  with their terms, subject only to applicable bankruptcy,
                  insolvency or similar laws generally affecting the enforcement
                  of creditor's rights.

         7.2      Authorized Capital Stock. The authorized capital stock and
                  outstanding capital stock of each of the Subsidiaries is as
                  set forth at Schedule "1.14" attached hereto as a part hereof
                  and there are no outstanding options, warrants or other
                  convertible securities issued or outstanding with respect to
                  any of the Subsidiaries.

         7.3      Financial Condition. The Borrower's consolidated financial
                  statements dated as of September 30, 2000, and the Guarantors'
                  financial statements dated as of June

                                      - 7 -

<PAGE>   13

                  30, 2000, copies of which have been furnished to the Bank, are
                  correct and complete and fairly reflect the financial
                  condition of the Borrower, the Subsidiaries and the Guarantors
                  as of the date thereof and have been prepared in conformity
                  with accounting principles applied on a basis consistent with
                  that of preceding periods. There has occurred no material
                  adverse change in the financial condition of the Borrower, any
                  of the Subsidiaries or the Guarantors from the date of such
                  financial statements to the date of execution of this
                  Agreement.

         7.4      Liabilities. Neither the Borrower, any of the Subsidiaries nor
                  any Guarantor has any material liabilities, direct or
                  contingent, except those disclosed in the financial statements
                  referred to in paragraph 7.3 of this Agreement.

         7.5      Ownership. The Borrower has good and marketable title to the
                  Pledged Stock, free and clear of all liens, security interest,
                  claims or encumbrances, except for liens and security
                  interests in favor of the Bank. The Guarantors have good and
                  marketable title to the Guarantor Collateral, free and clear
                  of all liens, security interest, claims or encumbrances,
                  except for liens and security interests in favor of the Bank.

         7.6      Permits. The Borrower and each of the Subsidiaries has, or
                  will obtain, all governmental and private permits,
                  certificates, consents and franchises which are material to
                  the business, property, assets, operations or condition,
                  financial or otherwise, of the Borrower or the Subsidiaries,
                  to carry on their respective businesses as now being conducted
                  and to own or lease and operate their respective properties as
                  now owned or leased. All such governmental and private
                  permits, certificates, consents and franchises are, or will
                  be, valid and subsisting, and, to the best knowledge of the
                  Borrower and the Guarantors, there is no existing violation
                  thereof.

         7.7      Taxes. The Borrower, each of the Subsidiaries and the
                  Guarantors have filed all Canadian, foreign, federal, state
                  and local tax returns which are required to be filed and has
                  paid or made provisions for payment of all taxes which have or
                  may become due pursuant to said returns or pursuant to any
                  assessment, except such taxes as are being contested in good
                  faith and as to which adequate reserves have been provided.
                  Neither the Borrower nor the Guarantors know of any basis for
                  the assessment of any deficiency taxes.

         7.8      Litigation. There is no action, suit, proceeding or
                  investigation pending, or, to their knowledge, threatened
                  against the Borrower, any of the Subsidiaries, any Guarantor
                  or the Collateral which will: (a) materially and adversely
                  affect the Borrower, the Guarantors or the Collateral; (b)
                  impair the ability of the Borrower or the Subsidiaries to
                  carry on their respective businesses as presently
                  contemplated; or (c) result in any substantial liability not
                  adequately covered by insurance.

                                      - 8 -

<PAGE>   14

         7.9      No Default. The execution, delivery and performance by the
                  Borrower and the Guarantors of this Agreement and the Loan
                  Documents will not violate any provision or constitute a
                  default under any indenture, agreement or instrument to which
                  the Borrower, any of the Subsidiaries or any Guarantor is a
                  party or by which the Borrower, any of the Subsidiaries, any
                  Guarantor or the Collateral is bound or affected.

         7.10     Full Disclosure. Neither this Agreement nor any statement or
                  instrument referred to herein nor any other information,
                  report or statement delivered to the Bank by the Borrower or
                  the Guarantors contains any untrue statement or omits to state
                  a material fact necessary to make the statements herein or
                  therein not misleading.

         7.11     Survival of Representations. All representations and
                  warranties made by the Borrower and the Guarantors herein will
                  survive the delivery of the Loan Documents and the making of
                  the Loan evidenced thereby, and any investigation at any time
                  made by or on behalf of the Bank will not diminish the Bank's
                  right to rely thereon. All statements contained in any
                  certificate or other instrument delivered by or on behalf of
                  the Borrower or the Guarantors under or pursuant to this
                  Agreement or in connection with the transactions contemplated
                  hereby will constitute representations and warranties made by
                  the Borrower and the Guarantors hereunder.

         7.12     Solvency. Upon giving effect to the issuance of the Note, the
                  execution of the Loan Documents by the Borrower and the
                  Guarantors and the consummation of the transactions
                  contemplated hereby, the Borrower and the Guarantors will be
                  solvent (as such term is used in applicable bankruptcy,
                  liquidation, receivership, insolvency or similar laws).

8. Affirmative Covenants. Until the expiration of the Bank's obligation to
advance funds under this Agreement and the payment in full of the Obligations,
unless the Bank otherwise consents in writing, the Borrower agrees to perform or
cause to be performed the following:

         8.1      Performance of Obligations. The Borrower will pay and perform
                  all Obligations under the Loan Documents. The Borrower and the
                  Subsidiaries will perform all obligations under all material
                  contracts and agreements relating to their respective
                  businesses, and will enforce the performance of the
                  obligations of the other parties thereto.

         8.2      Notifications. The Borrower will give prompt written notice to
                  the Bank of: (a) any event of Default; (b) any change of
                  management of the Borrower; (c) all material litigation
                  affecting the Borrower, the Subsidiaries, the Guarantors or
                  the Collateral; and (d) any other matter which has resulted
                  in, or might result in (i) a material adverse change in the
                  consolidated financial condition of the Borrower, the
                  Subsidiaries or the Guarantors or (ii) a material adverse
                  change in the ability

                                      - 9 -

<PAGE>   15

                  of the Borrower to perform the Obligations, warranties,
                  covenants and conditions of the Loan Documents.

         8.3      Records Inspections. The Borrower and the Subsidiaries will
                  maintain full and accurate accounts and records of operations
                  on a basis consistent with prior periods. The Borrower will
                  permit the Bank and the Bank's designated representatives to
                  have access to the records and accounts of the Borrower and
                  the Subsidiaries at all reasonable times to perform such
                  inspections, audits and examinations as the Bank might
                  reasonably request from time to time.

         8.4      Financial Information. The Borrower and the Guarantors will
                  furnish to the Bank:

                  8.4.1    Financial Statements. Accurate books and records of
                           account will be kept by the Borrower and the
                           Guarantors in accordance with accounting principles
                           consistently applied. The Bank will have the right to
                           examine and copy such books and records and the
                           Canadian, foreign, federal and state income tax
                           returns of the Borrower and the Guarantors, to
                           discuss the affairs, finances and accounts of the
                           Borrower and the Guarantors, and to be informed as to
                           the same at such times and intervals as the Bank
                           might reasonably request. The Borrower will furnish
                           to the Bank no later than ninety (90) days after the
                           close of the Borrower's fiscal year, year end annual
                           audited consolidated financial statements of the
                           Borrower. The annual audited financial statements of
                           the Borrower will be prepared by an independent
                           certified public accounting firm selected by the
                           Borrower and approved by the Bank, will be prepared
                           in accordance with generally accepted accounting
                           principles consistently applied and will be certified
                           to the Bank. The Guarantors will furnish to the Bank
                           annual year end financial statements. The financial
                           statements of the Guarantors will be certified to the
                           Bank, will be prepared in accordance with generally
                           accepted accounting principles consistently applied
                           and will be in form and substance satisfactory to the
                           Bank. Within thirty (30) days after request by the
                           Bank, the Borrower and the Guarantors will furnish to
                           the Bank complete copies of all Canadian, foreign,
                           federal and state income tax returns for the
                           preceding year with all schedules attached.

                  8.4.2    Other Information. At the Bank's request from time to
                           time, the Borrower and the Guarantors will provide
                           the Bank with such other information as the Bank may
                           reasonably request regarding the business affairs and
                           financial condition of the Borrower, the Subsidiaries
                           and the Guarantors and the Borrower and the
                           Guarantors will provide access to the Bank at all
                           reasonable times to all documents and information
                           relating to the Collateral.

                                     - 10 -

<PAGE>   16

         8.5      Accounts. The Borrower will maintain the Borrower's primary
                  accounts on deposit with a financial institution approved by
                  the Bank which approval will not be unreasonably withheld.

         8.6      Additional Documents. The Borrower and the Guarantors will
                  promptly, on demand by the Bank, perform or cause to be
                  performed such actions and execute or cause to be executed all
                  such additional agreements, contracts, indentures, documents
                  and instruments as might be reasonably requested by the Bank
                  to satisfy the requirements of this Agreement and the
                  disbursement of funds hereunder.

         8.7      Governmental Approvals. The Borrower will obtain and
                  continuously maintain and will cause each of the Subsidiaries
                  to obtain and continuously maintain all permits, licenses,
                  easements, rights-of-way and governmental authorities
                  necessary for the proper operation of their respective
                  businesses.

         8.8      Taxes. All taxes, assessments, governmental charges and levies
                  imposed on the Borrower, the Subsidiaries or the Guarantors or
                  the assets, income or profits of the Borrower, the
                  Subsidiaries or the Guarantors, will be paid prior to the date
                  on which penalties attach thereto, provided that neither the
                  Borrower, the Subsidiaries nor the Guarantors will be required
                  to pay any such charge which is being contested in good faith
                  by proper proceedings and for which adequate reserves have
                  been established under generally accepted accounting
                  principles.

         8.9      Access. Any representative of the Bank will have reasonable
                  access to the Collateral and any other business property owned
                  by the Borrower or the Guarantors.

         8.10     Operation. The Borrower agrees to operate its business and to
                  cause each of the Subsidiaries to operate their respective
                  businesses in a prudent and efficient manner consistent with
                  normal industry practices.

         8.11     Qualification; Licenses. The Borrower will take such actions
                  or cause such actions to be taken as might be required to
                  maintain the existence of the Borrower and each of the
                  Subsidiaries and all governmental and private permits,
                  licenses and authorities of the Borrower and the Subsidiaries
                  necessary or desirable to the continuation of their respective
                  businesses and will comply with all statutes and governmental
                  regulations.

         8.12     Insurance. Policies of insurance will be maintained by the
                  Borrower and the Subsidiaries with companies, in amounts, and
                  against reasonable risks satisfactory to the Bank. The
                  Borrower and the Guarantors will furnish the Bank with a
                  schedule of all insurance policies in effect and, upon request
                  of the Bank, evidence of payment of the premium for each
                  insurance policy.

                                     - 11 -

<PAGE>   17

         8.13     Operation, Title, Pledge. The Borrower agrees to grant to the
                  Bank first perfected security interests covering all of the
                  Collateral and to promptly deliver to the Bank such security
                  documents and other instruments as might be required by the
                  Bank to subject the Collateral to liens in favor of the Bank.
                  The Borrower will maintain and defend good and marketable
                  title to the Collateral free and clear of all claims, liens or
                  encumbrances except those in favor of the Bank.

         8.14     Compliance with Applicable Law. The Borrower and the
                  Guarantors will continuously comply with all applicable
                  regulations, rules, ordinances or orders of the United States
                  of America, any state, or any other jurisdiction, or of any
                  agency of federal state and local taxing authority or other
                  agency which might materially and adversely affect the
                  business, operations or financial condition of the Borrower.

         8.15     Legal Existence. The Borrower will take such actions or cause
                  such actions to be taken as might be required to maintain the
                  legal existence of the Borrower and each of the Subsidiaries
                  and the right to conduct their respective businesses in those
                  countries and states in which the nature of the business
                  requires qualification to do business therein, will comply
                  with and will cause each of the Subsidiaries to comply with
                  all valid and applicable statutes, rules and regulations and
                  will continue to conduct the respective businesses of the
                  Borrower and the Subsidiaries in substantially the same manner
                  and field as such businesses are now conducted.

9. Negative Covenants. The Borrower agrees that until the expiration of the
obligation of the Bank to advance funds under this Agreement and payment in full
of the Obligations, unless the Bank waives compliance in writing:

         9.1      Creation of Liens. Neither the Borrower, any of the
                  Subsidiaries nor the Guarantors will create, assume or suffer
                  to exist any pledge, security interest, encumbrance or other
                  lien (including the lien of an attachment, judgment or
                  execution) securing a charge or obligation affecting any or
                  all of the Collateral, excluding only the liens granted to the
                  Bank.

         9.2      Liquidation, Merger or Sale of Assets. Neither the Borrower
                  nor any of the Subsidiaries will liquidate, dissolve or
                  convey, sell, assign or otherwise dispose of any substantial
                  part of their respective assets, except for sales in the
                  ordinary course of business. None of the Subsidiaries will
                  enter into any consolidation, merger, partnership, syndicate,
                  pool or other combination, except with the Borrower or another
                  Subsidiary.

         9.3      Creation of Debt. The Borrower will not incur, create or
                  suffer to exist any indebtedness for borrowed money, or issue,
                  discount or sell any obligation of the Borrower, excluding
                  only: (a) the indebtedness to the Bank contemplated by this
                  Agreement; (b) current accounts payable arising in the
                  ordinary course of the Borrower's business; (c) indebtedness
                  outstanding as of the Closing Date; and (d)

                                     - 12 -

<PAGE>   18

                  other indebtedness of the Borrower and the Subsidiaries not to
                  exceed Twenty-five Million Dollars ($25,000,000.00) in the
                  aggregate.

         9.4      Loans and Guaranties. The Borrower will not make any loans,
                  advances or extensions of credit to any Person, firm or
                  corporation nor become a guarantor or surety directly or
                  indirectly, except loans, advances and extensions of credit to
                  or among the Borrower and the Subsidiaries and loans to
                  employees relating to their employment.

         9.5      Transfers. The Borrower will not transfer or permit to be
                  transferred voluntarily or by operation of law any interest in
                  the Collateral and the Borrower will not sell, transfer or
                  otherwise dispose of or create, assume or suffer to exist any
                  pledge, lien, security interest, charge or encumbrance on any
                  interest in any of the Subsidiaries owned by the Borrower.

         9.6      Other Agreements. The Borrower will not enter into any
                  agreement that limits or restricts the ability of the Borrower
                  to comply with the terms of the Loan Documents.

         9.7      Limitation on Distributions and Redemptions. The Borrower will
                  not: (a) declare, pay or make any dividends or other
                  distributions in respect of any class of capital stock or
                  other interest in the Borrower; or (b) enter into any
                  management agreement with any affiliate or other Person except
                  in the ordinary course of business. Excluding any such items
                  by, between or among the Borrower and the Subsidiaries,
                  neither the Borrower nor any of the Subsidiaries will directly
                  or indirectly make any capital contribution to or purchase,
                  redeem, acquire or retire any of the capital stock of the
                  Borrower or the Subsidiaries (whether such capital stock is
                  now or hereafter issued, outstanding or created).

         9.8      Transactions with Affiliates. The Borrower will not engage in
                  any material transaction with any affiliate of the Borrower on
                  terms which are less favorable to the Borrower than those
                  which would have been obtainable at the time in arm's-length
                  dealing with Persons other than such affiliates.

         9.9      Subsidiaries. The Borrower will not create or own any
                  subsidiaries other than the Subsidiaries and subsidiaries
                  listed on Schedule "9.9" attached hereto as a part hereof. The
                  Borrower will not permit any of the Subsidiaries to issue any
                  additional capital stock of any class or series or incur any
                  secured indebtedness without the Bank's written consent.

10. Default. The Bank may terminate all obligations of the Bank to make further
disbursements under the Note and the Bank may declare the Note and all other
indebtedness and Obligations of the Borrower owing to the Bank to be due and
payable if any of the following events occur and are not remedied by the
Borrower or waived by the Bank in writing:

                                     - 13 -

<PAGE>   19

         10.1     Nonpayment of Note. A default in payment when due of any
                  interest on or principal of the Note; or

         10.2     Other Nonpayment. A default in payment when due of any other
                  amount payable to the Bank under the terms of any of the Loan
                  Documents; or

         10.3     Breach of Agreement. A default by the Borrower or the
                  Guarantors in the performance or observance of any agreement
                  contained in the Loan Documents, or under the terms of any
                  other instrument delivered to the Bank in connection with this
                  Agreement; or

         10.4     Lien Filings. The existence of any lien on the Collateral
                  without indemnification therefor satisfactory to the Bank; or

         10.5     Other Agreements. The rescission, abandonment, disclaimer or
                  breach of the Guarantees or other agreement affecting any part
                  of the Collateral or the Guarantees; or

         10.6     Representations. Any representation, statement, certificate,
                  schedule or report made or furnished to the Bank by the
                  Borrower or the Guarantors proves to be false or erroneous in
                  any material respect at the time of the making thereof or any
                  representation or warranty ceases to be complied with in any
                  material respect; or

         10.7     Bankruptcy. The Borrower, any of the Subsidiaries or any
                  Guarantor becomes bankrupt or makes a general assignment for
                  the benefit of creditors; or the Borrower, any of the
                  Subsidiaries or any Guarantor applies for, or consents to, the
                  appointment of a trustee, receiver or liquidator or authorizes
                  such application or consent, or if proceedings seeking such
                  appointment are commenced against the Borrower, any of the
                  Subsidiaries or any Guarantor and remain undismissed and
                  unstayed for ninety (90) days; or the Borrower, any of the
                  Subsidiaries or any Guarantor authorizes or files a voluntary
                  petition in bankruptcy or applies for or consents to the
                  application of any bankruptcy, reorganization, readjustment of
                  debt, insolvency, dissolution, liquidation or other similar
                  law of any jurisdiction; or

         10.8     Judgment. Entry by any court of judgment against the Borrower,
                  any of the Subsidiaries or any Guarantor in excess of One
                  Million Dollars ($1,000,000.00) which is not adequately
                  covered by insurance or secured by a supersedes bond, or any
                  attachment of any material portion of the assets of the
                  Borrower, any of the Subsidiaries or any Guarantor which is
                  not discharged to the satisfaction of the Bank within thirty
                  (30) days thereof; or

         10.9     Maturity of Other Debt. The occurrence of an event of default
                  under or the acceleration of the maturity of the indebtedness
                  of the Borrower or any Guarantor

                                     - 14 -

<PAGE>   20

                  to any other Person in an amount in excess of One Million
                  Dollars ($1,000,000.00); or

         10.10    Failure of Liens. Failure of the Bank's liens and security
                  interests covering the Collateral to constitute a first and
                  prior lien on any material portion of the Collateral; or

         10.11    Indenture. The occurrence of an event of default under the
                  Borrower's Indenture covering the Borrower's $110,000,000
                  12.5% Senior Notes due 2005 or any action by the holders of
                  such Senior Notes to amend the Borrower's Indenture; or

         10.12    Change of Control. Any Change of Control occurs.

         10.13    Opportunity to Cure. In the event the Borrower cures or causes
                  to be cured such Default within thirty (30) days after receipt
                  of written notice thereof, the parties will be restored to
                  their respective rights and obligations under this Agreement
                  as if no Default had occurred, except that no right to cure or
                  notice of Default will be given as to events of Default in
                  paragraphs 10.1, 10.4, 10.5, 10.7, 10.8, 10.10, 10.11 or
                  10.12. The Borrower's opportunity to cure will be applicable
                  as herein set forth notwithstanding any contrary provisions
                  contained in any of the other Loan Documents.

11. Remedies. In the event of Default, the Bank will have the following
remedies:

         11.1     Acceleration of Note. The Bank may, at the Bank's option,
                  declare the Note and all other Obligations to be immediately
                  due and payable, and the Bank will be entitled to proceed to
                  selectively and successively enforce the Bank's rights under
                  the Loan Documents or any one or more of them.

         11.2     Selective Enforcement. In the event the Bank elects to
                  selectively and successively enforce the Bank's rights under
                  any one or more of the instruments securing payment of the
                  Obligations, such action will not be deemed a waiver or
                  discharge of any other lien or encumbrance securing payment of
                  the Obligations until such time as the Bank has been paid in
                  full all sums owing to the Bank.

         11.3     Performance by Bank. In the event the Borrower fails to cure
                  any Default in the time provided, the Bank will at any time
                  thereafter have the right (but not the obligation) to: (a)
                  take possession of the Collateral and dispose of the
                  Collateral in such manner as the Bank determines in the Bank's
                  sole discretion (subject to the Bank's obligations to make a
                  rights offering); (b) make such payments and perform such acts
                  as might be determined by the Bank to be necessary or
                  appropriate to perform or to cure any default in performance
                  by the Borrower under all agreements affecting the Collateral;
                  and (c) make advances under the Note without the consent of
                  the Borrower to pay interest accrued thereon and all costs of
                  such operation. If the Bank exercises such option, all costs
                  will be paid

                                     - 15 -

<PAGE>   21

                  to the Bank by the Borrower. The Borrower and the Guarantors
                  hereby authorize the Bank to increase the indebtedness owing
                  by the Borrower to the Bank by such costs and agrees that the
                  Loan Documents will evidence and secure payment of such costs
                  whether or not the total funds advanced exceed the face amount
                  of the Loan Documents.

         11.4     Waiver of Default. The Bank may, by an instrument in writing
                  signed by the Bank, waive any Default which has occurred and
                  any of the consequences of such Default, and in such event,
                  the Bank, the Borrower and the Guarantors will be restored to
                  their respective former positions, rights and obligations
                  hereunder. Any Default so waived will, for the purposes of
                  this Agreement, be deemed to have been cured and not to be
                  continuing; but no such waiver will extend to any subsequent
                  or other Default or impair any consequence of such subsequent
                  or other Default.

         11.5     Deposits; Setoff. Regardless of the adequacy of any other
                  collateral security held by the Bank, any deposits or other
                  sums credited by or due from the Bank to the Borrower or the
                  Guarantors (excluding any funds held in escrow by the Bank
                  pursuant to a written escrow agreement) will at all times
                  constitute collateral security for all indebtedness and
                  obligations of the Borrower and the Guarantors to the Bank and
                  may be set off against any and all liabilities of the Borrower
                  and the Guarantors to the Bank. The rights granted by this
                  paragraph 11.5 are in addition to the rights of the Bank under
                  any statutory banker's lien now or hereafter in effect.

12. Miscellaneous. It is further agreed as follows:

         12.1     Participating Banks. The Borrower and the Guarantors agree
                  that although the Loan Documents name the Bank as the holder
                  thereof, the Bank is authorized to sell participation
                  interests in the Loan to other financial institutions (a
                  "Participating Bank") and the Borrower and the Guarantors
                  agree that, subject to the terms of the agreements of
                  participation, each Participating Bank will be entitled to
                  rely on the terms of the Loan Documents as if the
                  Participating Bank had been named as an original party to the
                  Loan Documents.

         12.2     Cumulative Remedies. No failure on the part of the Bank to
                  exercise and no delay in exercising any right hereunder will
                  operate as a waiver thereof, nor will any single or partial
                  exercise by the Bank of any right hereunder preclude any other
                  or further right of exercise thereof or the exercise of any
                  other right.

         12.3     Survival of Representations. All representations and
                  warranties made herein will survive the making of the Loan
                  hereunder and the delivery of the Loan Documents.

                                     - 16 -

<PAGE>   22

         12.4     Expenses. On the Closing Date, the Borrower will (except where
                  prohibited by applicable law) pay all reasonable fees, costs,
                  expenses (including legal expenses and attorneys' fees) and
                  disbursements of the Bank incident to: (a) the preparation,
                  negotiation, amendment, modification, or enforcement of this
                  Agreement and the Loan Documents or the protection of the
                  rights of the Bank in connection with the Loan Documents and
                  the transactions contemplated thereby; and (b) the collection
                  or enforcement of the Loan Documents whether by judicial
                  proceedings, proceedings under Chapter 7 or 11 of the
                  Bankruptcy Code or any successor statute thereto, or
                  otherwise.

         12.5     Notices. Any notice, demand or communication required or
                  permitted to be given by any provision of this Agreement will
                  be in writing and will be deemed to have been given and
                  received when delivered personally or by telefacsimile to the
                  party designated to receive such notice, or on the date
                  following the day sent by overnight courier, or on the third
                  (3rd) business day after the same is sent by certified mail,
                  postage and charges prepaid, directed to the following
                  addresses or to such other or additional addresses as any
                  party might designate by written notice to the other parties:

<TABLE>
<S>                                     <C>
                  The Bank:             Stillwater National Bank and Trust Company, N.A.
                                        Attention: Mr. G.P. Johnson Hightower
                                        6305 Waterford Blvd., Suite 205
                                        Oklahoma City, Oklahoma 73118

                  with copy to:         C. Ray Lees, Esquire
                                        Self, Giddens & Lees, Inc.
                                        210 Park Avenue, Suite 2725
                                        Oklahoma City, Oklahoma 73102

                  The Borrower:         Seven Seas Petroleum Inc.
                                        Attention: Larry A. Ray, President
                                        5555 San Felipe, Suite 1700
                                        Houston, Texas 77056

                  with copy to:         Gary F. Fuller, Esquire
                                        McAfee & Taft
                                        211 North Robinson, 10th Floor
                                        Oklahoma City, Oklahoma 73102
</TABLE>

         12.6     Construction. The Loan Documents are intended to constitute
                  contracts made under the laws of the State of Oklahoma and to
                  be construed in accordance with the internal laws of said
                  state. Nothing in this Agreement will be construed to
                  constitute the Bank as a joint venturer with the Borrower or
                  to constitute a partnership. The descriptive headings of the
                  paragraphs of this Agreement (except the terms defined at
                  paragraph 1 hereof) are for convenience only and are not to

                                     - 17 -

<PAGE>   23

                  be used in the construction of the content of this Agreement.
                  This Agreement may be executed in multiple counterparts, each
                  of which will constitute one agreement.

         12.7     Binding Effect. This Agreement will be binding on and will
                  inure to the benefit of the Bank, the Borrower and their
                  respective heirs, successors and assigns.

         12.8     No Third Party Beneficiaries. Nothing in this Agreement,
                  express or implied, is intended to confer upon any Person,
                  other than the parties hereto and their respective heirs,
                  successors and assigns, any rights or remedies under or by
                  reason of this Agreement or to constitute such Person a third
                  party beneficiary of this Agreement.

         12.9     Assignment. Neither this Agreement, the Loan Documents nor the
                  proceeds from the Loan will be assigned without the Bank's
                  prior written consent, and without such consent, there will be
                  no right to designate a payee of the proceeds from the Loan.

         12.10    Time. Time is of the essence of this Agreement and each
                  provision of the other Loan Documents.

         12.11    Severability. In case any one or more of the provisions
                  contained in the Loan Documents should be invalid, illegal or
                  unenforceable in any respect in any jurisdiction, the
                  validity, legality and enforceability of such provision or
                  provisions will not in any way be affected or impaired thereby
                  in any other jurisdiction; and the validity, legality and
                  enforceability of the remaining provisions contained herein
                  and therein will not in any way be affected or impaired
                  thereby.

         12.12    Verbal Change. The Loan Documents may not be amended, altered,
                  modified or changed verbally, but only by an agreement in
                  writing signed by the party against whom enforcement of any
                  amendment, waiver, change, modification or discharge is
                  sought.

         12.13    No Waiver. No advance of the proceeds from the Loan under any
                  of the Loan Documents will constitute a waiver of any of the
                  representations, warranties, conditions or covenants of the
                  Borrower or the Guarantors under the Loan Documents. In the
                  event the Borrower or any Guarantor is unable to satisfy any
                  warranty, condition or covenant contained in the Loan
                  Documents, no advance of the proceeds from the Loan will
                  preclude the Bank from thereafter declaring such inability to
                  be an event of Default.

         12.14    Acknowledgments and Admissions. The Borrower and the
                  Guarantors hereby represent, warrant, acknowledge and admit
                  that: (a) each of them has made an independent decision to
                  enter into this Agreement and the other Loan Documents to
                  which it is a party, without reliance on any representation,
                  warranty, covenant

                                     - 18 -

<PAGE>   24

                  or undertaking by the Bank, whether written, oral or implicit,
                  other than as expressly set out in this Agreement or in
                  another Loan Document delivered on or after the date hereof;
                  (b) there are no representations, warranties, covenants,
                  undertakings or agreements by the Bank as to the Loan
                  Documents except as expressly set out in this Agreement or in
                  another Loan Document delivered on or after the date hereof;
                  (c) the Bank has no fiduciary obligation toward the Borrower
                  or the Guarantors with respect to any Loan Document or the
                  transactions contemplated thereby; (d) the relationship
                  pursuant to the Loan Documents between the Borrower and the
                  Guarantors, on the one hand, and the Bank, on the other hand,
                  is and will be solely that of debtor and creditor,
                  respectively; (e) no partnership or joint venture exists with
                  respect to the Loan Documents between the Borrower or the
                  Guarantors and the Bank; (f) should a Default occur or exist,
                  the Bank will determine in its sole discretion and for its own
                  reasons what remedies and actions it will or will not exercise
                  or take at the time; (g) without limiting any of the
                  foregoing, neither the Borrower nor any Guarantor is relying
                  upon any representation or covenant by the Bank, or any
                  representative thereof, and no such representation or covenant
                  has been made, that the Bank will, at the time of an event of
                  Default, or at any other time, waive, negotiate, discuss or
                  take or refrain from taking any action permitted under the
                  Loan Documents with respect to any such event of Default or
                  any other provision of the Loan Documents; and (h) the Bank
                  has relied upon the truthfulness of the acknowledgments in
                  this paragraph 12.14 in deciding to execute and deliver this
                  Agreement and to become obligated hereunder.

         12.15    JOINT ACKNOWLEDGMENT. THIS WRITTEN AGREEMENT AND THE OTHER
                  LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
                  PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
                  CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
                  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         12.16    INDEMNITY. THE BORROWER AND THE GUARANTORS AGREE TO INDEMNIFY
                  THE BANK, UPON DEMAND, FROM AND AGAINST ANY AND ALL
                  LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES, PENALTIES,
                  FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES
                  OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS,
                  ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE
                  WHATSOEVER (IN THIS PARAGRAPH COLLECTIVELY CALLED "LIABILITIES
                  AND COSTS") WHICH TO ANY EXTENT (IN WHOLE OR IN PART) MAY BE
                  IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE BANK GROWING
                  OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH THE
                  COLLATERAL, THE LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS

                                     - 19 -

<PAGE>   25

                  (INCLUDING THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME
                  ASSOCIATED THEREWITH OR CONTEMPLATED THEREIN (WHETHER ARISING
                  IN CONTRACT OR TORT OR OTHERWISE AND INCLUDING ANY VIOLATION
                  OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY THE BORROWER,
                  THE GUARANTORS OR THE BANK OR ANY LIABILITIES OR DUTIES OF THE
                  BORROWER, THE GUARANTORS OR THE BANK WITH RESPECT TO HAZARDOUS
                  MATERIALS FOUND IN OR RELEASED INTO THE ENVIRONMENT).

                  THE FOREGOING INDEMNIFICATION WILL APPLY WHETHER OR NOT SUCH
                  LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN
                  WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT
                  LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
                  NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE BANK, PROVIDED
                  ONLY THAT THE BANK WILL NOT BE ENTITLED UNDER THIS PARAGRAPH
                  TO RECEIVE INDEMNIFICATION FOR THAT PORTION, IF ANY, OF ANY
                  LIABILITIES AND COSTS WHICH IS PROXIMATELY CAUSED BY ITS OWN
                  INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS
                  DETERMINED IN A FINAL JUDGMENT OR WHICH RELATES TO ACTIONS
                  TAKEN BY THE BANK AFTER THE BANK HAS TAKEN TITLE TO THE
                  COLLATERAL. IF ANY PERSON (INCLUDING THE BORROWER, ANY OF ITS
                  AFFILIATES OR ANY GUARANTOR) EVER ALLEGES SUCH GROSS
                  NEGLIGENCE OR WILLFUL MISCONDUCT BY THE BANK, THE
                  INDEMNIFICATION PROVIDED FOR IN THIS PARAGRAPH WILL
                  NONETHELESS BE PAID UPON DEMAND, SUBJECT TO LATER ADJUSTMENT
                  OR REIMBURSEMENT, UNTIL SUCH TIME AS A COURT OF COMPETENT
                  JURISDICTION ENTERS A FINAL JUDGMENT AS TO THE EXTENT AND
                  EFFECT OF THE ALLEGED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
                  AS USED IN THIS PARAGRAPH THE TERM "BANK" WILL REFER NOT ONLY
                  TO THE PERSON DESIGNATED AS SUCH BUT ALSO TO EACH DIRECTOR,
                  OFFICER, AGENT, ATTORNEY, EMPLOYEE, PARTICIPATING BANK,
                  REPRESENTATIVE AND AFFILIATE OF THE BANK.

         12.17    WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF THE
                  BORROWER, THE GUARANTORS AND THE BANK HEREBY KNOWINGLY,
                  VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY (A) WAIVES, TO THE
                  MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
                  A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
                  OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR
                  IN CONNECTION WITH THE LOAN DOCUMENTS OR

                                     - 20 -

<PAGE>   26

                  ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH,
                  BEFORE OR AFTER MATURITY, (B) WAIVES, TO THE MAXIMUM EXTENT
                  NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
                  RECOVER IN ANY SUCH LITIGATION ANY "SPECIAL DAMAGES," AS
                  DEFINED BELOW, (C) CERTIFIES THAT NO PARTY HERETO NOR ANY
                  REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS
                  REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH
                  PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
                  THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT IT HAS BEEN
                  INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS
                  AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
                  OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
                  IN THIS PARAGRAPH. AS USED IN THIS PARAGRAPH, "SPECIAL
                  DAMAGES" INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
                  PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT
                  INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS
                  EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY
                  HERETO.

                  IN WITNESS WHEREOF, the parties have executed this Agreement
effective the date first above written.

                            SEVEN SEAS PETROLEUM INC., a Yukon
                            Territory, Canada corporation

                            By  /s/ LARRY A. RAY
                              -----------------------------------------------
                              Larry A. Ray, President

                            (the "Borrower")

                            STILLWATER NATIONAL BANK AND TRUST
                            COMPANY, N.A.

                            By  /s/ G.P. JOHNSON HIGHTOWER
                              -----------------------------------------------
                              G.P. Johnson Hightower, Senior Vice President

                            (the "Bank")

                                     - 21 -

<PAGE>   27

                               GUARANTY AGREEMENT

                  THIS GUARANTY AGREEMENT is made effective the 20th day of
December, 2000, by ROBERT A. HEFNER III, an individual, THE GHK COMPANY L.L.C.,
an Oklahoma limited liability company, and RAMIIILAJ A LIMITED PARTNERSHIP, a
Texas limited partnership (jointly and severally referred to herein as the
"Guarantors"), each having a mailing address at c/o The GHK Company L.L.C., 6305
Waterford Boulevard, Suite 470, Oklahoma City, Oklahoma 73118, in favor of
STILLWATER NATIONAL BANK AND TRUST COMPANY, N.A. (the "Lender"), having a
mailing address at 6305 Waterford Boulevard, Suite 205, Oklahoma City, Oklahoma
73118.

                                   WITNESSETH:

                  WHEREAS, Seven Seas Petroleum Inc., a Yukon Territory, Canada
corporation (the "Borrower"), and the Lender have entered into that certain Loan
Agreement of even date herewith (the "Loan Agreement"), pursuant to which the
Lender has agreed to extend certain credit (the "Loan") to the Borrower
evidenced by that certain Promissory Note of even date herewith in the principal
amount of Ten Million Dollars ($10,000,000.00); and

                  WHEREAS, this Agreement is executed by the Guarantors and
delivered to the Lender to induce the Lender to make the Loan and in
satisfaction of a material condition precedent to such extension of credit by
the Lender.

                  NOW, THEREFORE, in consideration of the Loan by the Lender to
the Borrower and the benefits to be derived by the Guarantors therefrom, it is
agreed as follows:

1. Definitions. Except as otherwise defined herein, all terms defined in the
Loan Agreement will have the same meanings herein as therein defined unless the
context otherwise requires. All references herein to any Loan Document, or other
document or instrument refer to the same as from time to time amended,
supplemented or restated. As used in this Agreement, "Obligors" means, jointly
and severally, the Borrower, the Guarantors and any other endorsers, guarantors
or obligors, primary or secondary, of any or all of the Obligations.

2. Guaranty. The Guarantors jointly and severally irrevocably and
unconditionally guarantee to the Lender the payment of the Obligations of the
Borrower contained in the Loan Documents including, without implied limitation,
the payment of all principal, interest, attorneys' fees, expenses of collection
and other sums now or hereafter owing by the Borrower to the Lender thereunder.
The obligation of the Guarantors hereunder is an absolute, unconditional,
irrevocable and continuing guaranty of payment and performance and will not
terminate until the Borrower has paid in full all amounts owing to the Lender
under the Loan Documents and has performed all of the Borrower's Obligations
under the Loan Documents. Without limiting the generality of the foregoing, each
Guarantor's liability hereunder will extend to and include all post-petition
interest, expenses and other duties and liabilities of the Borrower described
above in this paragraph which would be owed by the Borrower but for the fact
that such Obligations are unenforceable or not allowable due to the existence of
a bankruptcy, reorganization, or similar proceeding involving the Borrower. If
the

<PAGE>   28

Borrower for any reason fails to pay any Obligation, as and when such Obligation
will become due and payable, whether at its stated maturity, as a result of the
exercise of any power to accelerate, or otherwise, the Guarantors will, upon
demand by the Lender, pay such Obligation in full to the Lender. If the Borrower
for any reason fails to perform promptly any Obligation, the Guarantors will,
upon demand by the Lender, cause such Obligation to be performed or, if
specified by the Lender, provide sufficient funds, in such amount and manner as
the Lender determines in good faith, for the prompt, full and faithful
performance of such Obligation by the Lender or such other Person as the Lender
designates. As between each of the Guarantors and the Lender, this Agreement
will be considered a primary and liquidated liability of each Guarantor.

3. Unconditional Guaranty. No action which the Lender may take or omit to take
in connection with any of the Loan Documents, any of the Obligations (or any
other indebtedness owing by the Borrower to the Lender), or any Collateral, and
no course of dealing of the Lender with any Obligor or any other Person, will
release or diminish any Guarantor's obligations, liabilities, agreements or
duties hereunder, affect this Agreement in any way, or afford any Guarantor any
recourse against the Lender, regardless of whether any such action or inaction
may increase any risks to or liabilities of the Lender or any Obligor or
increase any risk to or diminish any safeguard of any Collateral. Without
limiting the foregoing, each of the Guarantors hereby expressly agrees that the
Lender may, from time to time, without notice to or the consent of such
Guarantor, do any or all of the following: (a) amend, change or modify, in whole
or in part, any one or more of the Loan Documents and give or refuse to give any
waivers or other indulgences with respect thereto; (b) neglect, delay, fail, or
refuse to take or prosecute any action for the collection or enforcement of any
of the Obligations, to foreclose or take or prosecute any action in connection
with any Collateral or Loan Document, to bring suit against any Obligor or any
other Person, or to take any other action concerning the Obligations or the Loan
Documents; (c) accelerate, change, rearrange, extend or renew the time, rate,
terms or manner for payment or performance of any one or more of the Obligations
(whether for principal, interest, fees, expenses, indemnifications, affirmative
or negative covenants, or otherwise); (d) compromise or settle any unpaid or
unperformed Obligation or any other obligation or amount due or owing, or
claimed to be due or owing, under any one or more of the Loan Documents; (e)
take, exchange, amend, eliminate, surrender, release, or subordinate any or all
Collateral for any or all of the Obligations, accept additional or substituted
Collateral therefor, and perfect or fail to perfect the Lender's rights in any
or all Collateral; (f) discharge, release, substitute or add Obligors; or (g)
apply all monies received from Obligors or others, or from any Collateral for
any of the Obligations, as the Lender may determine to be in the Lender's best
interest, without in any way being required to marshall Collateral or assets or
to apply all or any part of such monies upon any particular Obligations. No
action or inaction of any Obligor or any other Person, and no change of law or
circumstances, will release or diminish any Guarantor's obligations,
liabilities, agreements or duties hereunder, affect this Agreement in any way,
or afford any Guarantor any recourse against the Lender.

4. No Release. The Guarantors agree that the Guarantors' liability hereunder
will not be released, reduced, impaired or affected by the occurrence of any one
or more of the following events: (a) the Lender obtaining collateral from the
Borrower or any other Obligor to secure payment or performance under the Loan
Documents; (b) the assumption of liability by any other Person (whether as
guarantor or otherwise) for payment or performance under the Loan Documents; (c)
the release, surrender, exchange, loss, termination, waiver or other discharge
of any collateral securing payment

                                      - 2 -

<PAGE>   29
or performance under the Loan Documents; (d) the subordination, relinquishment
or discharge of the Lender's rights relating to the Loan Documents or any
collateral described therein; (e) the dissolution, insolvency, bankruptcy,
reorganization or disability of the Borrower, any other Obligor or any other
Person now or hereafter liable for payment or performance under the Loan
Documents; (f) the increase, renewal, consolidation, extension, modification,
rearrangement or amendment from time to time of the Loan or of the terms of any
one or more of the Loan Documents; (g) the sale, encumbrance, transfer or other
modification of the ownership of the Borrower or the Borrower's assets or the
change in the financial condition or management of the Borrower; (h) the
invalidity, unenforceability or insufficiency of any one or more of the Loan
Documents or any collateral securing payment or performance thereunder; or (i)
the release of any Person from any personal liability with respect to all or
part of the guaranteed Obligations.

5. Enforcement. The Lender may invoke the benefits of this Agreement and any
Collateral pledged by the Guarantors before pursuing any remedies against any
Obligor or any other Person and before proceeding against any other Collateral
now or hereafter existing for the payment or performance of any of the
Obligations. The Lender may maintain an action against any Guarantor on this
Agreement or the Guarantor Security Agreement without joining any other Obligor
therein and without bringing a separate action against any other Obligor. If any
payment to the Lender by any Obligor is held to constitute a preference or a
voidable transfer under applicable state or federal laws, or if for any other
reason the Lender is required to refund such payment to the payor thereof or to
pay the amount thereof to any other Person, such payment to the Lender will not
constitute a release of any Guarantor from any liability hereunder, and each
Guarantor agrees to pay such amount to the Lender on demand and agrees and
acknowledges that this Agreement will continue to be effective or will be
reinstated, as the case may be, to the extent of any such payment or payments.
Any transfer by subrogation which is made as contemplated in this Agreement
prior to any such payment or payments will (regardless of the terms of such
transfer) be automatically voided upon the making of any such payment or
payments, and all rights so transferred will thereupon revert to and be vested
in the Lender. This is a continuing guaranty and will apply to and cover all
Obligations and renewals and extensions thereof and substitutions therefor from
time to time.

6. Waiver of Rights. The Guarantors waive notice of the incurrence of any
Obligation by the Borrower, and notice of any kind concerning the assets,
liabilities, financial condition, creditworthiness, businesses, prospects, or
other affairs of the Borrower (it being understood and agreed that: (a) each
Guarantor will take full responsibility for informing itself of such matters,
(b) the Lender will not have any responsibility of any kind to inform any
Guarantor of such matters, and (c) the Lender is hereby authorized to assume
that each Guarantor, by virtue of its relationships with the Borrower which are
independent of this Agreement, has full and complete knowledge of such matters
whenever the Lender extends credit to the Borrower or take any other action
which may change or increase such Guarantor's liabilities or losses hereunder).
The Guarantors waive diligence, presentment, protest, notice of dishonor, notice
of acceptance of this Agreement and all other notices of any nature except as
provided in the Loan Documents or this Agreement. Performance by the Guarantors
hereunder will not entitle the Guarantors to any payment by the Borrower or any
other Obligor of the Obligations of the Borrower whether under the Loan
Documents or otherwise by reason of any claim for contribution, indemnification,
reimbursement, subrogation or otherwise, until such time as the Borrower and any
other Obligor of the Obligations of the Borrower under the Loan Documents have
paid in full all amounts owing to the Lender and have performed all of the

                                      - 3 -

<PAGE>   30

Borrower's Obligations under the Loan Documents. Notwithstanding anything herein
to the contrary, except as specifically provided herein, the Guarantors hereby
waive all rights of subrogation, contribution, reimbursement or indemnity
against the Borrower (but not against any other party). If any Guarantor makes
payment to the Lender of all or any portion of the Obligations and if all of the
Obligations will be finally paid in full, the Lender will, at such Guarantor's
request and expense, execute and deliver to such Guarantor (without recourse,
representation or warranty) appropriate documents necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the Obligations
resulting from such payment by such Guarantor; provided that such transfer will
be subject to the provisions of this Agreement and the rights of any other
Obligor (excluding the Borrower) paying a portion of the Obligations.

7. Expenses of Collection. The Guarantors agree that in any action brought to
enforce this Agreement, the Guarantors will pay to the Lender the reasonable
attorneys' fees, court costs and other litigation expenses incurred by the
Lender.

8. Cumulative Remedies. On the occurrence of any event of Default under the Loan
Documents or this Agreement, the Lender will be entitled to selectively and
successively enforce any one or more of the rights held by the Lender, and such
action will not be deemed a waiver of any other right held by the Lender. Except
as provided herein or in the Loan Documents, all of the remedies of the Lender
under this Agreement and the Loan Documents are cumulative and not alternative.
Each Guarantor will be liable to the Lender hereunder for any deficiency
resulting from the exercise by the Lender of any rights or remedies even though
any rights which the Guarantors may have against the Borrower or others may be
destroyed or diminished by exercise of any such right or remedy. No failure on
the part of the Lender to exercise, and no delay in exercising, any right
hereunder or under any other Loan Document will operate as a waiver thereof; nor
will any single or partial exercise of any right preclude any other or further
exercise thereof or the exercise of any other right. The rights, powers and
remedies of the Lender provided herein and in the other Loan Documents are
cumulative and are in addition to, and not exclusive of, any other rights,
powers or remedies provided by law or in equity. The rights of the Lender
hereunder are not conditional or contingent on any attempt by the Lender to
exercise any of its rights under any other Loan Document against any Obligor or
any other Person.

9. Successors and Assigns. No Guarantor's rights or obligations hereunder may be
assigned or delegated, but this Agreement and such obligations will pass to and
be fully binding upon the successors of each Guarantor, as well as each
Guarantor. This Agreement will apply to and inure to the benefit of the Lender
and the Lender's successors or assigns. Without limiting the generality of the
immediately preceding sentence, the Lender may assign, grant a participation in,
or otherwise transfer any Obligation held by it or any portion thereof, and the
Lender may assign or otherwise transfer its rights or any portion thereof under
any Loan Document, to any other Person, and such other Person will thereupon
become vested with all of the benefits in respect thereof granted to the Lender
hereunder unless otherwise expressly provided by the Lender in connection with
such assignment or transfer.

10. Subordination. Each Guarantor hereby subordinates and makes inferior to the
Obligations any and all indebtedness now or at any time hereafter owed by the
Borrower to any Guarantor except for services actually rendered by the
Guarantors, or any of them, to the Borrower or reimbursement

                                      - 4 -

<PAGE>   31

of expenses Lender actually paid by the Guarantors, or any of them. Each
Guarantor agrees that after the occurrence of any event of Default such
Guarantor will neither permit the Borrower to repay such indebtedness or any
part thereof nor accept payment from the Borrower of such indebtedness or any
part thereof without the prior written consent of the Lender. If any Guarantor
receives any such payment without the prior written consent of the Lender, the
amount so paid will be held in trust for the benefit of the Lender, will be
segregated from the other funds of such Guarantor, and will forthwith be paid
over to the Lender to be held by the Lender as collateral for, or then or at any
time thereafter applied in whole or in part by the Lender against, all or any
portions of the Obligations, whether matured or unmatured, in such order as the
Lender elects.

11. Representations and Warranties. Each Guarantor hereby represents and
warrants to the Lender as follows: (a) the recitals at the beginning of this
Agreement are true and correct in all respects; (b) each Guarantor which is not
a natural Person is a limited partnership, limited liability company or
corporation duly organized, validly existing and in good standing under the laws
of the state of its organization or incorporation and such Guarantor has all
requisite partnership, limited liability company or corporate power and
authority to execute, deliver and perform this Agreement and pledge the
Guarantor Collateral; (c) the execution, delivery and performance by each
Guarantor of this Agreement have been duly authorized by all necessary
partnership, limited liability company or corporate action and do not and will
not contravene its certificate of limited partnership or limited partnership
agreement, articles of organization or operating agreement or certificate or
articles of incorporation or bylaws; (d) the execution, delivery and performance
by each Guarantor of this Agreement do not and will not contravene any law or
governmental regulation or any contractual restriction binding on or affecting
such Guarantor, or any of its affiliates or properties including, without
limitation, the Guarantor Collateral, and do not and will not result in or
require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to the Guarantor Collateral or any other
properties; (e) no authorization or approval or other action by, and no notice
to or filing with, any governmental authority or other regulatory body or third
party is required for the due execution, delivery and performance by any
Guarantor of this Agreement or the Guarantor Security Agreement; (f) this
Agreement is a legal, valid and binding obligation of each Guarantor,
enforceable against such Guarantor in accordance with its terms except as
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights; (g) there is no action, suit
or proceeding pending or, to the knowledge of any Guarantor, threatened against
or otherwise affecting any Guarantor or any of the Guarantor Collateral before
any court, arbitrator or governmental department, commission, board, bureau,
agency or instrumentality which may materially and adversely affect any
Guarantor's financial condition or its ability to perform its obligations
hereunder; (h) the direct or indirect value of the consideration received and to
be received by each Guarantor in connection herewith and the incurrence of such
liability and obligations in return for such consideration may reasonably be
expected to benefit such Guarantor, directly or indirectly; (i) no Guarantor is
"insolvent" on the date hereof (that is, the sum of such Guarantor's absolute
and contingent liabilities, including the Obligations, does not exceed the fair
market value of such Guarantor's assets), each Guarantor's capital is adequate
for the businesses in which such Guarantor is engaged and intends to be engaged
and no Guarantor has incurred (whether hereby or otherwise), nor does any
Guarantor intend to incur or believe that it will incur, debts which will be
beyond its ability to pay as such debts mature; and (j) all balance sheets,
earning statements, financial data and other information concerning the
Guarantors which have been furnished to the Lender to induce the Lender to
accept this Agreement (or otherwise furnished to the Lender in connection with

                                      - 5 -

<PAGE>   32

the transactions contemplated hereby or associated herewith) fairly represent
the financial condition of each Guarantor as of the dates and the results of
such Guarantor's operations for the periods for which the same are furnished.
None of such balance sheets, earnings and cash flow statements, financial data
and other information contains any untrue statement of a material fact or omits
to state any material fact which is necessary to make any statements contained
therein not misleading.

12. Loan Agreement Provisions. Each of the Guarantors hereby represents,
warrants, acknowledges and agrees that: (a) such Guarantor has reviewed and is
familiar with all of the terms and conditions of the Loan Agreement and all of
the other Loan Documents; (b) all of the representations and warranties set
forth in the Loan Agreement pertaining to the Guarantors are true and correct;
(c) the Loan Agreement contains covenants and conditions relating to the
Guarantors and binding on the Guarantors; and (d) such Guarantor will comply
with all of the terms, covenants, conditions and agreements set forth in the
Loan Agreement applicable to such Guarantor in the same manner and to the same
extent as if such Guarantor was an original party to the Loan Agreement.

13. Acknowledgments and Admissions. The Guarantors hereby represent, warrant,
acknowledge and admit that: (a) each of them has made an independent decision to
enter into this Agreement and the other Loan Documents to which it is a party,
without reliance on any representation, warranty, covenant or undertaking by the
Lender, whether written, oral or implicit, other than as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof; (b) there are no representations, warranties, covenants, undertakings or
agreements by the Lender as to the Loan Documents except as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof; (c) the Lender has no fiduciary obligation toward the Borrower or the
Guarantors with respect to any Loan Document or the transactions contemplated
thereby; (d) the relationship pursuant to the Loan Documents between the
Borrower and the Guarantors, on the one hand, and the Lender, on the other hand,
is and will be solely that of debtor and creditor, respectively; (e) no
partnership or joint venture exists with respect to the Loan Documents between
the Borrower or the Guarantors and the Lender; (f) should a Default occur or
exist, the Lender will determine in its sole discretion and for its own reasons
what remedies and actions it will or will not exercise or take at the time; (g)
without limiting any of the foregoing, no Guarantor is relying upon any
representation or covenant by the Lender, or any representative thereof, and no
such representation or covenant has been made, that the Lender will, at the time
of an event of Default, or at any other time, waive, negotiate, discuss or take
or refrain from taking any action permitted under the Loan Documents with
respect to any such event of Default or any other provision of the Loan
Documents; and (h) the Lender has relied upon the truthfulness of the
acknowledgments in this paragraph in deciding to execute and deliver the Loan
Documents and to become obligated hereunder.

14. JOINT ACKNOWLEDGMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

15. INDEMNITY. THE GUARANTORS AGREE TO INDEMNIFY THE LENDER, UPON DEMAND, FROM
AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,

                                      - 6 -

<PAGE>   33

CLAIMS, LOSSES, DAMAGES, PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS,
SETTLEMENTS, COSTS, EXPENSES OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF
ATTORNEYS, ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER
(IN THIS PARAGRAPH COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY
EXTENT (IN WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST
THE LENDER GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH
THE COLLATERAL, THE LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS (INCLUDING
THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME ASSOCIATED THEREWITH OR
CONTEMPLATED THEREIN (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE AND
INCLUDING ANY VIOLATION OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY THE
BORROWER, THE GUARANTORS OR THE LENDER OR ANY LIABILITIES OR DUTIES OF THE
BORROWER, THE GUARANTORS OR THE LENDER WITH RESPECT TO HAZARDOUS MATERIALS FOUND
IN OR RELEASED INTO THE ENVIRONMENT).

THE FOREGOING INDEMNIFICATION WILL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE LENDER, PROVIDED ONLY THAT THE
LENDER WILL NOT BE ENTITLED UNDER THIS PARAGRAPH TO RECEIVE INDEMNIFICATION FOR
THAT PORTION, IF ANY, OF ANY LIABILITIES AND COSTS WHICH IS PROXIMATELY CAUSED
BY ITS OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED IN A
FINAL JUDGMENT OR WHICH RELATES TO ACTIONS TAKEN BY THE LENDER AFTER THE LENDER
HAS TAKEN TITLE TO THE COLLATERAL. IF ANY PERSON (INCLUDING THE BORROWER, ANY OF
ITS AFFILIATES OR ANY GUARANTOR) EVER ALLEGES SUCH GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT BY THE LENDER, THE INDEMNIFICATION PROVIDED FOR IN THIS PARAGRAPH
WILL NONETHELESS BE PAID UPON DEMAND, SUBJECT TO LATER ADJUSTMENT OR
REIMBURSEMENT, UNTIL SUCH TIME AS A COURT OF COMPETENT JURISDICTION ENTERS A
FINAL JUDGMENT AS TO THE EXTENT AND EFFECT OF THE ALLEGED GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. AS USED IN THIS PARAGRAPH THE TERM "LENDER" WILL REFER NOT
ONLY TO THE PERSON DESIGNATED AS SUCH BUT ALSO TO EACH DIRECTOR, OFFICER, AGENT,
ATTORNEY, EMPLOYEE, PARTICIPATING LENDER, REPRESENTATIVE AND AFFILIATE OF THE
LENDER.

16. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF THE GUARANTORS AND THE
LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY (A) WAIVES,
TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
A JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT
ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR ANY
TRANSACTION CONTEMPLATED THEREBY OR

                                      - 7 -

<PAGE>   34

ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY, (B) WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY "SPECIAL DAMAGES," AS DEFINED BELOW, (C) CERTIFIES THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS PARAGRAPH.
AS USED IN THIS PARAGRAPH, "SPECIAL DAMAGES" INCLUDES ALL SPECIAL,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES
NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED
TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.

17. Miscellaneous. This Agreement has been negotiated, executed and delivered in
Oklahoma City, Oklahoma County, Oklahoma, and is intended to be construed in
accordance with the laws of the State of Oklahoma. All actions relating to or
arising under this Agreement, whether filed by the Lender or the Guarantors,
will be instituted only in a state court sitting in Oklahoma County, Oklahoma,
or a federal court sitting in Oklahoma City, Oklahoma. If any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect or
application for any reason, such invalidity, illegality or unenforceability will
not affect any other provisions herein contained and such other provisions will
remain in full force and effect. This Agreement cannot be amended except by an
agreement in writing signed by the Guarantors and the Lender.

                  IN WITNESS WHEREOF, the Guarantors and the Lender have
executed this Agreement effective the date first above written.

                                                /s/ ROBERT A. HEFNER, III
                                            -----------------------------------
                                            ROBERT A. HEFNER, III, individually

                                      - 8 -

<PAGE>   35

                 THE GHK COMPANY L.L.C., an Oklahoma
                 limited liability company

                 By /s/ ROBERT A. HEFNER, III
                   ------------------------------------------------
                     Robert A. Hefner, III, Manager

                 RAMIIILAJ A LIMITED PARTNERSHIP, a Texas
                 limited partnership

                 By       Hefner Investment Company, a Texas
                          corporation, its General Partner

                          By /s/ ROBERT A. HEFNER, III
                            -----------------------------------
                              Robert A. Hefner, III, President

                 (the "Guarantors")

                 STILLWATER NATIONAL BANK AND TRUST
                 COMPANY, N.A.

                 By /s/ G.P. JOHNSON HIGHTOWER
                   ------------------------------------------------
                     G.P. Johnson Hightower, Senior Vice President

                 (the "Lender")

                                      - 9 -

<PAGE>   36

                          GUARANTOR SECURITY AGREEMENT

                  THIS GUARANTOR SECURITY AGREEMENT is executed effective the
20th day of December, 2000, among ROBERT A. HEFNER III, an individual
("Hefner"), THE GHK COMPANY L.L.C., an Oklahoma limited liability company
("GHK"), RAMIIILAJ A LIMITED PARTNERSHIP, a Texas limited partnership
("Ramiiilaj" and jointly and severally with Hefner and GHK, the "Debtors"), each
having a notice address at c/o The GHK Company L.L.C., 6305 Waterford Boulevard,
Suite 470, Oklahoma City, Oklahoma 73118, and STILLWATER NATIONAL BANK AND TRUST
COMPANY, N.A. (the "Secured Party"), having a notice address at 6305 Waterford
Boulevard, Suite 205, Oklahoma City, Oklahoma 73118.

                                   WITNESSETH:

                  WHEREAS, Seven Seas Petroleum Inc., a Yukon Territory, Canada
corporation (the "Borrower"), is liable to the Secured Party under that certain
Promissory Note of even date herewith in the principal amount of Ten Million
Dollars ($10,000,000.00) (the "Note") in connection with that certain Loan
Agreement of even date herewith (the "Loan Agreement") between the Borrower and
the Secured Party which Note is unconditionally guaranteed by the Debtors
pursuant to that certain Guaranty Agreement of even date herewith; and

                  WHEREAS, as a material condition precedent to the Secured
Party entering into the Loan Agreement, the Debtors have agreed to secure
payment of the Note and all other Obligations of the Borrower to the Secured
Party by granting the Secured Party a lien, security interest and pledge
covering certain assets of the Debtors.

                  NOW, THEREFORE, (i) in order to comply with the terms and
conditions of the Loan Agreement; (ii) for and in consideration of the premises
and the agreements herein contained; and (iii) for other good and valuable
consideration, the receipt and sufficiency of all of which are hereby
acknowledged, the Debtors hereby agree with the Secured Party as follows:

1. Definitions. Unless otherwise defined herein, all terms which are defined in
the Loan Agreement will have the same meanings herein as therein unless the
context otherwise requires, and all terms used herein which are defined in the
Oklahoma Uniform Commercial Code (the "UCC") will have the same meanings herein
unless the context otherwise requires.

2. Security Interest. The Debtors hereby grant to the Secured Party a security
interest in, an assignment of, a general lien upon and a right of set-off
against the following described property (the "Property"):

         2.1      all of the Debtors' right, title and interest in and to the
                  certificates of deposit and government securities described in
                  Schedule "A" attached hereto as a part hereof and all
                  additions and accessions to, replacements of, substitutions
                  for, dividends on and proceeds therefrom and any other
                  deposits, certificated or uncertificated securities, treasury
                  notes, bonds or other similar items;

<PAGE>   37

         2.2      any additional assets or property from time to time delivered
                  to or deposited with the Secured Party as security for the
                  Obligations or otherwise pursuant to the terms of this
                  Agreement; and

         2.3      all proceeds, products, additions to, replacements of,
                  substitutions for and accessions of any and all Property
                  described in subparagraphs 2.1 and 2.2 in this paragraph 2.

3. Secured Indebtedness. The security interest granted hereby in the Property is
given to secure the Borrower's payment of: (a) the Note together with interest
thereon; (b) any and all other or additional Obligations of the Borrower to the
Secured Party; (c) all extensions, renewals, amendments, modifications,
substitutions and changes in form to the Note; (d) all costs and expenses
incurred in connection with the collection of the Note and any other Obligations
and enforcement of the Loan Documents and the Secured Party's rights under this
Agreement and all other Loan Documents including, without limitation, the
collection or enforcement of the Loan Documents whether by judicial proceedings,
proceedings under Chapter 7 or 11 of the Bankruptcy Code or any successor
statute thereto, or otherwise, and including attorneys' fees and expenses; (e)
all advances made by the Secured Party to protect the security hereof, including
advances made for or on account of levies, insurance, repairs, taxes and for
maintenance or recovery of the Property, together with interest thereon at the
Default rate specified in the Note; (f) any and all other indebtedness,
liabilities and obligations of the Borrower to the Secured Party whether now
owing or hereafter incurred; and (g) performance of the agreements herein set
forth (the foregoing items (a) through (g) are collectively referred to herein
as the "Secured Indebtedness").

4. Debtors' Representations and Covenants. The Debtors hereby warrant, represent
and agree as follows:

         4.1      Principal Place of Business. Hefner and GHK's principal place
                  of business is in the State of Oklahoma. Ramiiilaj's principal
                  place of business is in the State of Texas.

         4.2      Title. The Debtors have absolute title to the Property free
                  and clear of all liens, encumbrances and security interests
                  except the security interest hereby granted to the Secured
                  Party and such other rights, if any, of the Secured Party, and
                  the Debtors warrant and will defend the same unto the Secured
                  Party against the claims and demands of all persons and
                  parties whomsoever.

         4.3      Transfers. Without the prior written consent of the Secured
                  Party, the Debtors agree that the Debtors will not: (a) sell,
                  exchange, lease or in any manner dispose of any of the
                  Property or any interest therein; or (b) permit any lien,
                  encumbrance or security interest to attach thereto except
                  those contemplated herein.

         4.4      Value of Property. The Debtors will not, in any event, permit
                  anything to be done that may impair the value of the Property
                  or the security intended to be afforded by this Agreement.

         4.5      Secured Party's Security Interest. This Agreement creates a
                  valid and binding security interest in the Property securing
                  the Secured Indebtedness. All filings and

                                      - 2 -

<PAGE>   38

                  other actions necessary or appropriate (other than notation on
                  any certificate of title or title registration) to perfect or
                  protect such security interest will be or have been duly
                  taken. No further or subsequent filing, recording,
                  registration or other public notice of such security interest
                  (other than notation on any certificate of title or title
                  registration) is necessary in any office or jurisdiction in
                  order to perfect such security interest or to continue,
                  preserve or protect such security interest except for
                  continuation statements.

         4.6      Inspection of Records. The Secured Party may from time to
                  time, upon request, inspect all of the Debtors' records
                  concerning the Property.

         4.7      Further Assurances. The Debtors will from time to time: (a)
                  sign, execute, deliver and file, alone or with the Secured
                  Party, any financing statements, security agreements or other
                  documents; (b) procure any instruments or documents as may be
                  reasonably requested by the Secured Party; and (c) take all
                  further action that may be necessary or desirable, or that the
                  Secured Party may request, to confirm, perfect, preserve and
                  protect the security interests intended to be granted hereby.
                  In addition, the Debtors hereby authorize the Secured Party to
                  execute and deliver on behalf of the Debtors and file such
                  financing statements, security agreements and other documents
                  without the signature of the Debtors either in the Secured
                  Party's name or in the name of the Debtors and as agent and
                  attorney-in-fact for the Debtors. The Debtors will do all such
                  additional and further acts or things, give such assurances
                  and execute such documents or instruments as the Secured Party
                  requires to vest more completely in and assure to the Secured
                  Party its rights under this Agreement including, without
                  limiting the generality of the foregoing, marking
                  conspicuously each of its records pertaining to the Property
                  with a legend, in form and substance satisfactory to the
                  Secured Party, indicating that such Property is subject to the
                  security interest granted by this Agreement.

         4.8      Filing Reproductions. At the option of the Secured Party, a
                  carbon, photographic or other reproduction of this Agreement
                  or of a financing statement covering the Property will be
                  sufficient as a financing statement and may be filed as a
                  financing statement.

         4.9      Financing Statement Filings; Notifications. The Debtors will
                  immediately notify the Secured Party of any condition or event
                  that may change the proper location for the filing of any
                  financing statements or other public notice or recordings for
                  the purpose of perfecting a security interest in the Property.
                  Without limiting the generality of the foregoing, the Debtors
                  will: (a) immediately notify the Secured Party of any change
                  to a jurisdiction other than the States of Oklahoma or Texas
                  in the location of the Debtors' principal place of business;
                  (b) notify the Secured Party monthly of any change in the
                  location any of the Property to another state; and (c)
                  immediately notify the Secured Party of any change in any
                  Debtor's name or identity. In any notice furnished pursuant to
                  this paragraph 4.9, the Debtors will expressly state that the
                  notice is required by this Agreement and contains facts that
                  will or may require

                                      - 3 -

<PAGE>   39

                  additional filings of financing statements or other notices
                  for the purpose of continuing perfection of the Secured
                  Party's security interest in the Property.

5. Secured Party's Expenditures. If the Debtors fail to make any expenditure or
pay any sum necessary to discharge any lien, encumbrance, levy, security
interest or other charge on the Property, the Secured Party may but will not be
required to make any expenditure for such purpose or purposes and all sums so
expended will be payable on demand, will bear interest at the rate specified in
the Note and all such sums and interest will additionally be secured hereby. The
Debtors will pay all costs of filing any financing, continuation or termination
statements with respect to the security interest granted hereby in the Property.

6. Default; Remedies. On the occurrence of any event of Default or if the
Borrower or the Debtors fail to keep, observe, comply with and perform all of
the obligations and undertakings under this Agreement or any of the other Loan
Documents or fail to pay any principal or interest on the Note when due, then,
and in any such event, the Secured Party may, at its option and without notice
to any party, declare all or any portion of the Secured Indebtedness to be
immediately due and payable and may proceed to enforce payment of the same, to
exercise any or all rights and remedies provided herein, in the other Loan
Documents, and by the UCC and otherwise available at law or in equity. The
Secured Party may at any time and from time to time sell, resell, assign and
deliver, in the Secured Party's discretion, all or any part of the Property, in
one or more parcels at the same or different times, and all right, title and
interest, claim and demand therein and right of redemption thereof, at public or
private sale. Whenever an event of Default exists, the Debtors on demand by the
Secured Party, will assemble any part of the Property in the Debtors' control
and make it available to the Secured Party at a place reasonably convenient to
the parties hereto. All remedies hereunder are cumulative, and any indulgence or
waiver by the Secured Party will not be construed as an abandonment of any other
right hereunder or of the power to enforce the same or another right at a later
time. Whether the Secured Party elects to exercise any other rights or remedies
under this Agreement or applicable law, the Secured Party will be entitled to
have a receiver appointed to take possession of any part of the Property in the
Debtors' control without notice, which notice the Debtors hereby waive,
notwithstanding anything contained in this Agreement or any law heretofore or
hereafter enacted.

7. Power of Attorney. The Secured Party is hereby fully authorized and empowered
(without the necessity of any further consent or authorization from the Debtors)
and the right is expressly granted to the Secured Party, and the Debtors hereby
constitute, appoint and make the Secured Party as the Debtors' true and lawful
attorney-in-fact and agent for the Debtors and in the Debtors' name, place and
stead with full power of substitution, in the Secured Party's name or the
Debtors' name or otherwise, for the Secured Party's sole use and benefit, but at
the Debtors' cost and expense, to exercise, without notice, all or any of the
following powers at any time with respect to all or any of the Property after
the occurrence of any Default under this Agreement or any of the other Loan
Documents: (a) to liquidate all of the Property and collect, receive and give
acquittance for any and all monies due or to become due by virtue thereof and
otherwise deal with proceeds; (b) to receive, take, endorse, assign and deliver
any and all checks, notes, drafts, documents and other negotiable and
non-negotiable instruments and chattel paper taken or received by the Secured
Party in connection therewith; (c) to sell, transfer, assign or otherwise deal
in or with the Property or the proceeds or avails thereof, as fully and
effectively as if the Secured Party were the absolute owner

                                      - 4 -

<PAGE>   40

thereof; and (d) to exercise any and all rights and remedies available to the
Secured Party under the Loan Documents and applicable law and apply all
collected proceeds from the Property to the Secured Indebtedness in such order
and amounts as the Secured Party determines in the Secured Party's sole
discretion; provided, however, the Secured Party will be under no obligation or
duty to exercise any of the powers hereby conferred upon it and will be without
liability for any act or failure to act in connection with the collection of, or
the preservation of any rights under, any Property.

8. Sale Procedure. Except as expressly provided for herein, no demand or
advertisement, all of which are hereby expressly waived by the Debtors, will be
required in connection with any sale or other disposition of any part of the
Property which threatens to decline speedily in value or which is of a type
customarily sold on a recognized market. In all other events, the Secured Party
will give the Debtors, at least ten (10) days prior notice of the time and place
of any public sale and of the time after which any private sale or other
disposition is to be made, which notice the Debtors agree is reasonable, all
other demands and advertisements being hereby waived. The Secured Party will not
be obligated to make any sale of Property, regardless of the fact that notice of
sale may have been given. The Secured Party may adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for sale, and such sale may be made at the time and place
to which the same was so adjourned. Upon each public or private sale of
Property, the Secured Party or any holder of the Note, or any of their
respective affiliates, may purchase all or any of the Property being sold, free
from any equity or right of redemption, which is hereby waived and released by
the Debtors, and may make payment therefor in cash or, at the Secured Party's or
such holder's option (by endorsement without recourse), by tendering or
releasing principal or accrued and unpaid interest on the Note, in lieu of cash,
in a face amount equal to the amount of the purchase price. The Debtors agree to
pay all reasonable costs and expenses of every kind for sale or delivery,
including brokers' and attorneys' fees, and after deducting such costs and
expenses from the proceeds of sale, the Secured Party will apply any residue to
the payment of the Secured Indebtedness and the Debtors will continue to be
liable for any deficiency in accordance with the Loan Documents. The balance, if
any, remaining after payment in full of all of the Secured Indebtedness will be
paid to the Debtors or as otherwise directed by any court having appropriate
jurisdiction.

9. Secured Party's Duties. The powers conferred upon the Secured Party by this
Agreement are solely to protect its interest in the Property and will not impose
any duty upon the Secured Party to exercise any such powers. The Secured Party
will be under no duty whatsoever to make or give any presentment, demand for
performance, notice of nonperformance, protest, notice of protest, notice of
dishonor, or other notice or demand in connection with any of the Property or
the Secured Indebtedness, or to take any steps necessary to preserve any rights
against other parties. The Secured Party will not be liable for failure to
collect or realize upon any or all of the Secured Indebtedness or Property, or
for any delay in so doing, nor will the Secured Party be under any duty to take
any action whatsoever with regard thereto.

10. Continuing Agreement. This is a continuing agreement and the grant of a
security interest hereunder will remain in full force and effect and all the
rights, powers and remedies of the Secured Party hereunder will continue to
exist until all of the Secured Indebtedness is paid in full as the same becomes
due and payable and until the Secured Party, upon written request of the
Debtors, has executed a written termination statement, reassigned to the
Debtors, without recourse, the Property

                                      - 5 -

<PAGE>   41

and all rights conveyed hereby and returned possession of any Property in the
Secured Party's possession to the Debtors.

11. Preservation of Liability. Neither this Agreement nor the exercise by the
Secured Party of (or the failure to so exercise) any right, power or remedy
conferred herein or by law will be construed as relieving any person liable on
the Secured Indebtedness from liability on the Secured Indebtedness and for any
deficiency thereon.

12. Notices. Any notice or demand under this Agreement or in connection with
this Agreement may be given at the addresses set forth in the initial paragraph
of this Agreement or by telefacsimile, but actual notice, however given or
received, will always be effective.

13. Successors and Assigns. The covenants and agreements herein contained by or
on behalf of the Debtors will bind the Debtors, and the Debtors' legal
representatives, successors and assigns and will inure to the benefit of the
Secured Party and the Secured Party's successors and assigns.

14. Invalidity. If any provision hereof will for any reason be held to be
invalid or unenforceable, such invalidity or unenforceability will not affect
any other provision hereof.

15. Construction. This Agreement will be construed and interpreted in accordance
with the laws of the State of Oklahoma.

         IN WITNESS WHEREOF, this Agreement is executed effective the date first
above written.

                                /s/ ROBERT A. HEFNER, III
                                -------------------------------------------
                                ROBERT A. HEFNER, III, individually

                                THE GHK COMPANY L.L.C., an Oklahoma limited
                                liability company

                                By /s/ ROBERT A. HEFNER, III
                                  -----------------------------------------
                                    Robert A. Hefner, III, Manager

                                      - 6 -

<PAGE>   42

                              RAMIIILAJ A LIMITED PARTNERSHIP, a Texas
                              limited partnership

                              By       Hefner Investment Company, a Texas
                                       corporation, its General Partner

                                       By /s/ ROBERT A. HEFNER, III
                                         ------------------------------------
                                           Robert A. Hefner, III, President

                              (jointly and severally, the "Debtors")

                              STILLWATER NATIONAL BANK AND TRUST
                              COMPANY, N.A.

                              By /s/ G.P. JOHNSON HIGHTOWER
                                ---------------------------------------------
                                G.P. Johnson Hightower, Senior Vice President

                              (the "Secured Party")

                                      - 7 -

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