SEVEN SEAS PETROLEUM INC
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>sevform8kex10ii-11102.txt
<TEXT>
                                                                  Exhibit 10(II)

                      LIMITED CONSENT AND SECOND AMENDMENT
                       TO NOTE PURCHASE AND LOAN AGREEMENT

     THIS  LIMITED  CONSENT  AND  SECOND  AMENDMENT  TO LOAN  AGREEMENT  is made
effective the 30th day of October,  2002,  between SEVEN SEAS PETROLEUM  INC., a
Cayman Islands exempted company limited by shares (the  "Corporation"),  and all
of the  Subsidiaries  of the  Corporation  (the  "Subsidiaries")  and CHESAPEAKE
ENERGY CORPORATION, an Oklahoma corporation (the "Lender").

                              W I T N E S S E T H:

     WHEREAS,  the  Corporation  has failed to make the escrow deposit  required
pursuant to paragraph  7.9 of the Note Purchase and Loan  Agreement  between the
Corporation  and  the  Lender  dated  as  of  July  9,  2001,  as  amended  (the
"Agreement"),  which deposit was due on October 10, 2002 (the "October  Interest
Escrow Deposit");

     WHEREAS,  all amounts held in the interest escrow account have been pledged
to the Lender as Collateral Agent to secure the CEC Note and the Series A Notes;

     WHEREAS,  the failure to make the October  Interest Escrow Deposit,  if not
cured by October 31,  2002,  would cause a Default to occur under the  Agreement
giving  the  Lender as  Collateral  Agent the right to  exercise  its rights and
remedies  under the  Agreement  and the Related  Agreements  including,  without
limitation,  the right to  immediately  receive  all funds held in the  interest
escrow  account for  application in accordance  with the Collateral  Sharing and
Agency Agreement; and

     WHEREAS,  the  Corporation  and the  Subsidiaries  have  requested that the
Lender consent to the Corporation not making the October Interest Escrow Deposit
and future escrow  deposits  required under  paragraph 7.9 of the Agreement (the
"Future Interest Escrow  Deposits"),  which the Lender is willing to do, subject
to the terms and conditions of this Limited Consent and Second Amendment to Note
Purchase and Loan Agreement (the "Amendment").

     NOW, THEREFORE,  in consideration of the mutual covenants among the parties
hereto,  the funds previously  advanced to the Corporation by the Lender and the
benefits  realized  therefrom  by the  Corporation  and  the  Subsidiaries,  the
Corporation, the Subsidiaries and the Lender hereby agree as follows:

1. Defined Terms.  Except as otherwise defined herein,  all terms defined in the
Agreement  will have the same  meaning  herein as such terms are  defined in the
Agreement.  All terms  defined  in the  recitals  hereto  will have the  defined
meanings in this Amendment and in the Agreement as amended hereby.

2. Limited Consent.  Subject to the conditions and limitations set forth in this
Amendment,  the Lender hereby consents to the Corporation not making the October
Interest Escrow Deposit or the Future Interest Escrow  Deposits,  provided that:
(a)  simultaneously  with the execution  hereof,  the Corporation and the Lender
will issue joint  instructions  to the Escrow Agent to: (i) terminate the escrow
account  established  pursuant  to  the  Escrow  Agreement  (Existing  Indenture
Interest) among the Corporation,  the Lender and the Escrow Agent (the "Interest
Escrow") and (ii)  disburse to the Lender as  Collateral  Agent all funds in the
Interest Escrow;  (b) the Corporation and the Subsidiaries  will have commenced,
to the  satisfaction  of the  Lender,  taking all actions  necessary  to suspend
operations on the Sub-Thrust Test Well; (c) the Lender will have received budget
and cash sources and uses  information as the Lender has  reasonably  requested.
Without  limitation  of the  foregoing,  the consents and  agreements  set forth
herein are  limited  precisely  to the extent set forth  herein and shall not be
deemed to (i) be a consent or agreement  to, or waiver or  modification  of, any
other term or condition of the  Agreement  or any of the  documents  referred to
therein,  or (ii) except as expressly set forth  herein,  prejudice any right or
rights  which  the  Lender  may now have or may have in the  future  under or in
connection with the Agreement or any of the documents referred to therein.

3. Amendment of Paragraph 7.9.  Paragraph 7.9 of the Agreement is hereby deleted
in its entirety and the following paragraph 7.9 is hereby substituted therefor:

     "7.9 Deposit  Control  Accounts.  On or before  November 15, 2002:  (a) the
          Corporation and the Subsidiaries will consolidate all their respective
          deposit  accounts into the deposit  accounts  listed on Schedule "7.9"
          attached  hereto  (the  "Deposit  Control  Accounts");  (b) all  other
          depository  accounts will be closed;  (c) the deposit  account control
          agreements  covering the Deposit  Control  Accounts will be amended to
          the extent reasonably  required by the Lender; and (d) the Lender will
          have received, reviewed and approved the budget of the Corporation and
          the  Subsidiaries  for all operations and business of the  Corporation
          and the Subsidiaries for the four (4) month period commencing November
          1, 2002,  including,  without limitation,  an itemized estimate of all
          cash sources and uses during such period (the "Operating Budget"). All
          revenues and funds  received by the  Corporation  or the  Subsidiaries
          from every source will be deposited into a Deposit Control Account and
          all funds deposited in any of the Colombian  Deposit Control  Accounts
          (in excess of amounts  necessary to pay ongoing  expenses for a period
          of two  (2)  weeks  as set  forth  in the  Operating  Budget  and  any
          additional  amounts  reasonably  approved  by the  Lender  or  legally
          required  to be  maintained  in  Colombia)  will be  immediately  wire
          transferred to a Deposit Control Account  designated in writing by the
          Lender which will be the primary Deposit Control Account (the "Primary
          Account").  Unless the Lender otherwise  consents in writing,  neither
          the Corporation nor the  Subsidiaries  will make any  disbursements or
          pay any costs,  expenses or other items not included in the  Operating
          Budget.  The Corporation and each of the Subsidiaries will provide the
          Lender weekly reports,  commencing  November 8, 2002, of: (i) all cash
          receipts,  cash transfers,  cash  disbursements  and all disbursements
          planned for the  succeeding  seven (7) days;  and (ii) a comparison of
          all actual receipts and disbursements to the Operating Budget."

4.  Amendment  of  Paragraph  11.1.  Paragraph  11.1 of the  Agreement is hereby
deleted in its entirety and the following  paragraph 11.1 is hereby  substituted
therefor:

    "11.1 Nonpayment;  Budget  Noncompliance.  A default in payment  when due of
          any  interest on or  principal of the CEC Note or a default in payment
          when due of any other amount  payable to the Lender under the terms of
          this Agreement or the Related Agreements or any payment or advances of
          any material amount not included in the Operating Budget or previously
          approved in writing by the Lender; or"

5. Representations,  Warranties and Covenants.  In order to induce the Lender to
enter into this Amendment to modify the Agreement and grant the limited  consent
set forth  herein,  the  Corporation  and the  Subsidiaries  hereby  jointly and
severally represent, warrant and covenant that:

     5.1  No Default.  Neither the  Corporation  nor any of the  Subsidiaries is
          materially  out of  compliance  with any of the covenants set forth in
          the  Agreement or the Related  Agreements  and no event of Default has
          occurred or is continuing.

     5.2  Obligations.  The Lender has fully  complied  with all of the Lender's
          obligations under the Related Agreements.  Neither the Corporation nor
          any of the Subsidiaries has any claims, actions,  defenses or set-offs
          of any kind against the Lender.

     5.3  Liens. Other than the liens,  transfers and security interests created
          by  the  Related  Agreements,   there  are  no  liens,   mortgages  or
          encumbrances in existence  which affect any of the collateral  pledged
          to the Lender or any of the assets of any of the Subsidiaries,  except
          liens for current  taxes not yet due and minor liens and  encumbrances
          which do not materially  impair the operations of the  Corporation and
          the Subsidiaries.

     5.4  Authorization.  The Corporation and each of the  Subsidiaries are duly
          authorized  to execute and  deliver  this  Amendment  and are and will
          continue to be duly authorized to perform their respective obligations
          under the Agreement and the Related  Agreements.  The  Corporation and
          each  of  the  Subsidiaries  have  duly  taken  all  corporate  action
          necessary to authorize the  execution  and delivery of this  Amendment
          and to authorize the performance of the obligations of Corporation and
          each of the Subsidiaries hereunder.

     5.5  No Conflicts.  The execution and delivery by the  Corporation  and the
          Subsidiaries of this Amendment, the performance by Corporation and the
          Subsidiaries of their respective  obligations  hereunder and under the
          Agreement  and the  Related  Agreements  and the  consummation  of the
          transactions contemplated hereby do not and will not conflict with any
          provision  of law,  statute,  rule or  regulation  or the  articles of
          incorporation and bylaws of the Corporation or the Subsidiaries, or of
          any material agreement,  judgment, license, order or permit applicable
          to or binding upon the Corporation or the  Subsidiaries,  or result in
          the  creation of any lien,  charge or  encumbrance  upon any assets or
          properties of the  Corporation or the  Subsidiaries.  Except for those
          which have been obtained, no consent, approval, authorization or order
          of any court or  governmental  authority or third party is required in
          connection  with the execution and delivery by the  Corporation or any
          of  the   Subsidiaries   of  this   Amendment  or  to  consummate  the
          transactions contemplated hereby.

     5.6  Binding Effect.  When duly executed and delivered,  this Amendment and
          the  Agreement  will each be a legal  and  binding  obligation  of the
          Corporation  and each of the  Subsidiaries,  enforceable in accordance
          with its terms, except as limited by bankruptcy, insolvency or similar
          laws of general application  relating to the enforcement of creditors'
          rights and by equitable principles of general application.

     5.7  Deposit  Control  Accounts.  Neither  the  Corporation  nor any of the
          Subsidiaries  will  hereafter  create  or  establish  any  depository,
          investment,  savings or other similar  accounts other than the Deposit
          Control Accounts.

     5.8  Other Agreements. The Corporation and the Subsidiaries will diligently
          pursue: (a) the separation of the Operating Subsidiaries' ownership of
          the oil and gas producing  assets and Concession  Agreements  covering
          such  assets  from  the  ownership  of  the   interests,   rights  and
          liabilities  of  the  Operating   Subsidiaries   under  the  remaining
          Concession   Agreements  (the  "Deep   Rights");   (b)  the  sale  and
          disposition of all of the capital stock of the Operating  Subsidiaries
          which own all of the existing producing assets on terms and conditions
          acceptable  to the  Lender;  and (c) the sale  and/or  farm out of the
          rights,  interests and  liabilities  of the  Subsidiaries  in the Deep
          Rights  on  terms  and  conditions   acceptable  to  the  Lender.  The
          separation   of  the  Deep  Rights  from  the   producing   assets  as
          contemplated  pursuant to this paragraph will be accomplished  through
          an  assignment,  contribution  and/or  sale of the Deep  Rights by the
          Operating  Subsidiaries  to one or more other  Subsidiaries or through
          the "spin off" of such Deep  Rights to one or more other  Subsidiaries
          in a manner that will not impair the Lender's  collateral position and
          as required by  Colombian  law to preserve  the net  operating  losses
          relating to the Deep Rights in such other Subsidiaries,  to the extent
          practicable. As used in this Amendment, "Operating Subsidiaries" means
          Petrolinson  S.A.,  GHK  Company  Colombia  and Seven  Seas  Petroleum
          Colombia Inc.

     5.9  Sub-Thrust Test Well. The Corporation and the  Subsidiaries  will take
          all  actions  necessary  to  immediately  suspend  operations  on  the
          Sub-Thrust  Test Well so that  operations with respect thereto will be
          fully  suspended  and the  Sub-Thrust  Test Well  secured on or before
          November 10, 2002.

6.  Conditions  of Extension  and  Amendment.  The  obligation  of the Lender to
perform  this  Amendment  is  subject  to  the  continued   performance  by  the
Corporation and the Subsidiaries of the following conditions precedent:

     6.1  Related  Agreements.  This  Amendment  will have  been duly  executed,
          acknowledged  (where  appropriate)  and delivered to the Lender by the
          Corporation   and  the   Subsidiaries,   all  in  form  and  substance
          satisfactory to the Lender.

     6.2  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 Amendment or the Related Agreements.

     6.3  Authority.  The Lender will have  received  certificates  of corporate
          resolutions and other documents  reasonably  required to authorize the
          execution,   delivery  and   performance  of  this  Amendment  by  the
          Corporation all in form and substance satisfactory to the Lender.

     6.4  Information and Consents.  The Corporation and the  Subsidiaries  will
          have  furnished to the Lender such financial  statements,  budgets and
          other information as the Lender will have requested,  and any consents
          of third parties to the  transactions  contemplated  by this Amendment
          which  may be  required  under  any other  agreements  binding  on the
          Corporation or any of the Subsidiaries.

     6.5  No Default. The representations, warranties and covenants set forth in
          paragraph  5 of this  Amendment  will be true and correct on and as of
          the date hereof and no Default will have occurred and be continuing.

7. Lender Agreements.  In connection with the  representations and agreements of
the Corporation and the Subsidiaries set forth herein,  the Lender hereby agrees
that:  (a) the Lender will apply the funds paid to the Lender from the  Interest
Escrow in accordance with the Collateral Sharing Agreement; (b) the Lender will,
subject to satisfaction that its collateral position is unimpaired,  approve the
spin off of the Deep Rights to separate  Subsidiaries  other than the  Operating
Subsidiaries;  and (c) subject to the Lender's  obligations under the Collateral
Sharing  Agreement and the other Related  Agreements,  the Lender will cooperate
with the Corporation in the  establishment and compliance with the Corporation's
obligations as outlined in the Operating Budget.

8. Release.  On execution of this  Amendment,  the  Corporation  and each of the
Subsidiaries hereby  unconditionally and irrevocably release,  acquit, waive and
forever  discharge the Lender and its  participants,  subsidiaries,  affiliates,
directors, officers, shareholders, employees, agents, attorneys, representatives
and  each  of  their  respective  heirs,   legal   representatives,   executors,
administrators, successors and assigns (the "Released Parties") from any and all
duties, obligations,  representations, claims, actions, suits, causes of action,
demands,  liabilities,  losses,  damages,  contracts,  agreements,  obligations,
accounts,  defenses  and offsets of any kind or character  whatsoever,  known or
unknown, suspected or unsuspected,  in contract or in tort, at law or in equity,
asserted  or  assertable,   now  existing  or  hereafter  to  accrue  which  the
Corporation or the Subsidiaries ever had, now have or may hereafter have against
the  Released  Parties,  jointly or  severally,  for or by any reason or matter,
cause  or  thing  whatsoever  occurring  prior  to the  date of this  Amendment,
including without limitation such claims and defenses as fraud, mistake,  duress
and usury which relate, in whole or in part, directly or indirectly,  to (a) the
any of the transactions contemplated by the Agreement or this Amendment, (b) the
Agreement,   this  Amendment  or  any  of  the  Related  Agreements,   the  loan
transactions  evidenced  thereby or any  agreements or commitments in connection
therewith,  or (c) any past or  present  relationship  of the  Corporation,  the
Subsidiaries  or any of their  affiliates  with the  Lender.  In  addition,  the
Corporation and the  Subsidiaries  agree not to sue any of the Released  Parties
regarding any of the foregoing matters.

9.  Supersession.  It is agreed and  understood  between  the  Corporation,  the
Subsidiaries and the Lender that: (a) except to the extent the Agreement and the
Related Agreements are amended by this Amendment,  the Agreement and the Related
Agreements will remain in full force and effect and unabated;  (b) the Agreement
together with all amendments thereto and all Related Agreements are incorporated
herein by reference and made a part of this  Amendment and the  Corporation  and
the Subsidiaries hereby adopt,  confirm and reaffirm each and every covenant and
obligation  set forth in the  Agreement  and each of the Related  Agreements  as
fully as if each of such matters were restated and set forth in this  Amendment;
(c) the  Agreement  and the Related  Agreements,  as amended by this  Amendment,
supersede any and all prior agreements entered into between the Corporation, the
Subsidiaries and the Lender; (d) subject to the satisfactory  performance of the
terms and conditions  stated in the Agreement and the Related  Agreements unless
otherwise stated herein,  this Amendment will be effective as of the date hereof
but will be binding on the Lender  only after  execution  hereof by all  parties
hereto;  (e) the  execution of this  Amendment  will not  discharge,  interrupt,
impair,  abate or  otherwise  modify the priority or the validity of any lien or
security interest securing payment of the indebtedness  evidenced and secured by
the Agreement and the Related  Agreements;  and (f) this Amendment is a "Related
Agreement" and all provisions of the Agreement and any of the Related Agreements
pertaining to Related Agreements apply hereto.

10. Default.  The  Corporation,  the  Subsidiaries and the Lender agree that any
breach by the  Corporation of any of the terms or conditions of the Agreement as
amended  by this  Amendment  will  constitute  an event  of  Default  under  the
Agreement and the Related Agreements.

11. Miscellaneous. It is further agreed as follows:

     11.1 Counterparts. This Amendment may be executed in multiple counterparts,
          each of which will be an  original  instrument,  but all of which will
          constitute one agreement.

     11.2 Governing  Law.  This  Amendment  will be governed by and construed in
          accordance the laws of the State of Oklahoma and any  applicable  laws
          of  the  United   States  of  America  in  all   respects,   including
          construction, validity and performance.

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

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

     11.5 Time. Time is of the essence of this Amendment, the Agreement and each
          provision of the Related Agreements.

     11.6 FINAL  AGREEMENT.  THIS  AMENDMENT,  THE  AGREEMENT  AND  THE  RELATED
          AGREEMENTS  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.

     IN WITNESS WHEREOF,  the Corporation,  the Subsidiaries and the Lender have
executed this Agreement as of the date first above written.

                        SEVEN SEAS PETROLEUM INC., a Cayman Islands
                        exempted company limited by shares

                        By   LARRY A. RAY
                             Larry A. Ray, President

                                                             (the "Corporation")


                        SEVEN SEAS PETROLEUM HOLDINGS INC., a
                        Cayman Islands exempted company limited by shares

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        SEVEN SEAS PETROLEUM TURKEY INC., a British
                        Columbia corporation

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        SEVEN SEAS RESOURCES AUSTRALIA  INC., a
                        British Columbia corporation

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        SEVEN SEAS PETROLEUM USA INC., a Delaware
                        corporation

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        SEVEN SEAS PETROLEUM AUSTRALIA INC., a
                        Cayman Islands exempted company limited by shares

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        SEVEN SEAS PETROLEUM PNG INC., a Cayman
                        Islands exempted company limited by shares

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        SEVEN SEAS PETROLEUM ARGENTINA INC., a
                        Cayman Islands exempted company limited by shares

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        SEVEN SEAS PETROLEUM MEDITERRANEAN
                        INC., a Cayman Islands exempted company limited by
                        shares

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        SEVEN SEAS PETROLEUM TURKEY, INC., a
                        Cayman Islands exempted company limited by shares

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        SEVEN SEAS PETROLEUM COLOMBIA INC., a
                        Cayman Islands exempted company limited by shares

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        PETROLINSON S.A., a Panamanian corporation

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        GHK COMPANY COLOMBIA, an Oklahoma
                        corporation

                        By   LARRY A. RAY
                             Larry A. Ray, President


                        GUADUAS PIPELINE COMPANY, a Cayman Islands
                        exempted company limited by shares

                        By   LARRY A. RAY
                             Larry A. Ray, President

                                                            (the "Subsidiaries")


                        CHESAPEAKE ENERGY CORPORATION,
                        an Oklahoma corporation

                        By  MARCUS C. ROWLAND
                            Marcus C. Rowland, Exective Vice President and
                            Chief Financial Officer

                                                                  (the "Lender")

</TEXT>
</DOCUMENT>
