Indemnity Agmt. 10/31/96 - Apache Canada Ltd.

October 31, 1996


To each of the Parties Listed on attached Schedule I


Re: Apache Corporation Global Credit Facility Indemnity Agreement


Ladies and Gentlemen:


Reference is hereby made to (i) that certain Intercreditor Agreement of even date herewith, in the form attached hereto as Exhibit "A" unless the parties hereto otherwise agree (the "Intercreditor Agreement"), among the various commercial lending institutions (the "U.S. Lenders") as are or may become parties to that certain Fourth Amended and Restated Credit Agreement of even date herewith among the U.S. Borrower (as herein defined), the U.S. Lenders, the Global Administrative Agent (as herein defined), the U.S. Co-Agent (as herein defined) and the Arrangers therein named (the "Arrangers") (as it may be amended, supplemented, restated or otherwise modified and in effect from time to time, the "U.S. Credit Agreement"), the various commercial lending institutions (the "Australian Lenders") as are or may become parties to that certain Credit Agreement of even date herewith among the Australian Borrower (as herein defined), the Australian Lenders, the Global Administrative Agent, the Australian Administrative Agent (as herein defined) and the Arrangers (as it may be amended, supplemented, restated or otherwise modified and in effect from time to time, the "Australian Credit Agreement"), the various commercial lending institutions (the "Canadian Lenders", and together with the U.S. Lenders and the Australian Lenders, the "Lenders") as are or may become parties to that certain Credit Agreement of even date herewith among the Canadian Borrower (as herein defined), the Canadian Lenders, the Global Administrative Agent, the Canadian Administrative Agent (as herein defined) and the Arrangers (as it may be amended, supplemented, restated or otherwise modified and in effect from time to time, the "Canadian Credit Agreement"), The First National Bank of Chicago, as Global Administrative Agent (the "Global Administrative Agent"), The Chase Manhattan Bank, as Co-Agent under the U.S. Credit Agreement (the "U.S. Co-Agent"), Chase Securities Australia Limited (ACN 002 888 011), as the Administrative Agent for the Australian Lenders (the "Australian Administrative Agent"), Bank of Montreal, as the Administrative Agent for the Canadian Lenders (the "Canadian Administrative Agent" and together with the Global Administrative Agent and the Australian Administrative Agent, the "Administrative Agents"), First Chicago Capital Markets, Inc., as Arranger, and Chase Securities Inc., as Arranger; (ii) that certain Fourth Amended and Restated Credit Agreement of even date herewith among Apache Corporation (the "U.S. Borrower"), the U.S. Lenders, the Global Administrative Agent, the U.S. Co-Agent and the Arrangers; (iii) that certain Credit Agreement of even date herewith among Apache Energy Limited (ACN 009 301 2 To each of the Parties Listed on attached Schedule I October 31, 1996 Page 2


964) and Apache Oil Australia Pty. Limited (ACN 050 611 688) (collectively, the "Australian Borrower"), the Australian Lenders, the Global Administrative Agent, the Australian Administrative Agent and the Arrangers; (iv) that certain Credit Agreement of even date herewith among Apache Canada Ltd. (the "Canadian Borrower", and together with the U.S. Borrower and the Australian Borrower, the "Borrowers"), the Canadian Lenders, the Global Administrative Agent, the Canadian Administrative Agent and the Arrangers, as each may be amended, supplemented, restated or otherwise modified and in effect from time to time. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.


The Canadian Borrower consents to the terms and provisions of this letter agreement (this "Indemnity Agreement") and the Intercreditor Agreement, including, without limitation, the terms and provisions regarding the disclosure of information, the sharing of payments, and the purchase and sale of participations in the Credit Agreements, consents to all actions required of any Administrative Agent or Lender pursuant to the terms and conditions of the Intercreditor Agreement, and agrees to take all actions necessary to give effect to the terms and provisions of this Indemnity Agreement and the Intercreditor Agreement. The Canadian Borrower agrees that any amounts which are paid (or received by way of setoff, combination of accounts or similar arrangements) to cure any Debt Limit Excession shall be made by the U.S. Borrower to the U.S. Lenders, by the Australian Borrower to the Australian Lenders and by the Canadian Borrower to the Canadian Lenders in accordance with their respective Sharing Percentages as determined by the Administrative Agents in accordance with the terms of the Intercreditor Agreement. It is the intention of the parties hereto that, except as otherwise set forth in this Indemnity Agreement, under no circumstances will any Borrower be required to pay any principal amount under the Global Loan Documents in excess of outstanding Obligations with respect to its Credit Agreement and any guaranty executed by the Borrower plus any interest, fees and other amounts as set forth in this Indemnity Letter and any other Global Loan Document.


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