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Published: 2008-03-26

Tax Sharing Agreement - Murphy Oil Corp. and Deltic Timber Corp.



                             TAX SHARING AGREEMENT
                             ---------------------


     This Agreement is entered into as of the 11th day of December, 1996 between
Murphy Oil Corporation, ('Murphy Oil'), a Delaware corporation, and Deltic
Timber Corporation ('Deltic'), a Delaware corporation, successor corporation to
Deltic Farm & Timber Co., Inc.

                              W I T N E S S E T H:
                              - - - - - - - - - - 

     WHEREAS, Murphy Oil and Deltic intend to enter into a Distribution
Agreement dated as of December 11, 1996 (the 'Distribution Agreement'),
providing for the distribution by Murphy Oil to its stockholders of all of the
common stock of Deltic (the 'Distribution');

     WHEREAS, Murphy Oil and Deltic desire to set forth their agreement on the
rights and obligations of Murphy Oil, Deltic and their respective Affiliates
with respect to various Tax matters and the handling and allocation of federal,
state, and local Taxes incurred in Taxable periods beginning prior to the
Distribution Date;

     NOW, THEREFORE, in consideration of the mutual 

 
covenants and agreements hereinafter set forth, the parties agree as follows:

     1.  Definitions.
         ----------- 
     (a)  As used in this Agreement:

     'Affiliate' (and the correlative meaning, 'Affiliation') of any person
shall mean any individual, corporation, partnership or other entity directly or
indirectly controlling, controlled by or under common control with such person.

     'Code' shall mean the Internal Revenue Code of 1986, as amended, or any
successor thereto.

     'Consolidated Murphy Group Tax' shall mean the consolidated Federal Tax
liability of the Murphy Oil Consolidated Group for any period with respect to
which a consolidated Federal Tax Return is filed by Murphy Oil for such group.

     'Deltic Federal Tax Liability' shall mean, with respect to any Tax Sharing
Period, the sum of (i) the Deltic Group's share of Consolidated Murphy Group Tax
and (ii) any interest, penalties or other additions to such Taxes for such
period computed in each case as if the Deltic Group were not and never were part
of the Murphy Oil Consolidated 

                                       2

 
Group, but rather were a separate affiliated group of corporations filing a
consolidated Federal Tax Return.

     'Deltic Group' shall mean the corporations that are members of the
affiliated group of corporations of which Deltic will be the common parent
(within the meaning of Section 1504 of the Code) immediately after the
Distribution Date and any predecessors or successors thereto.

     'Deltic Tax Asset Statement' shall be, with respect to any Tax Asset
attributable to the Deltic Group ('Deltic Tax Asset'), a computation of the
Deltic Tax Asset Value prepared by a nationally recognized public accounting
firm selected by Deltic and acceptable to Murphy Oil.

     'Deltic Tax Asset Value' shall be the hypothetical benefit to the Deltic
Group produced by any Deltic Tax Asset had such Tax Asset been utilized by the
Deltic Group as a separate affiliated group of corporations filing a
consolidated Federal Tax Return for all periods.  Such hypothetical tax savings
shall be calculated in good faith and in accordance with past practices.

     'Distribution Date' shall mean the date on which Murphy Oil distributes to
its stockholders all of the common stock of Deltic.

                                       3

 
     'Federal Tax' shall mean any Tax imposed under Subtitle A of the Code.

     'Final Determination' shall mean (i) a 'determination' as defined in
Section 1313(a) of the Code, (ii) the date of acceptance by or on behalf of the
Internal Revenue Service of Form 870-AD (or any successor form thereto), as a
final resolution of tax liability for any taxable period, except that a Form
870-AD (or successor form thereto) that reserves the right of the taxpayer to
file a claim for refund and/or the right of the Internal Revenue Service to
assert a further deficiency shall not constitute a Final Determination with
respect to the item or items so reserved; or (iii) the payment (or receipt of a
refund) of Tax by Murphy Oil with respect to any item disallowed or adjusted by
the Internal Revenue Service.

     'Murphy Oil Consolidated Group' shall mean, with respect to any Taxable
period, the corporations that are members of the affiliated group of
corporations of which Murphy Oil is the common parent within the meaning of
Section 1504 of the Code.

     'Murphy Oil Group' shall mean the corporations that are members of the
Murphy Oil Consolidated Group during 

                                       4

 
any Taxable period, excluding the corporations that are the members of the
Deltic Group.

     'Other Taxes' are defined in Section 4.

     'Post-Distribution Period' shall mean any taxable period (or portion
thereof) beginning after the close of business on the Distribution Date.

     'Pre-Distribution Period' shall mean any Taxable period (or portion
thereof) ending on or before the close of business on the Distribution Date.

     'Pre-Distribution Tax Liability' shall mean the Consolidated Murphy Group
Tax for any Pre-Distribution Period and for the portion of any Taxable period
including but not ending on the Distribution Date.

     'Prime' shall mean the rate announced from time to time as 'prime' by
Morgan Guaranty Trust Company to Murphy Oil as the prime rate.

     'Referee' is defined in Section 16.

     'Return' shall mean any Tax return, statement, report or form (including
estimated Tax returns and reports and information returns and reports) required
to be filed with any Taxing Authority.

     'Tax' (and the correlative meaning, 'Taxes,' 

                                       5

 
'Taxing' and 'Taxable') shall mean (A) any net income, gross income, gross
receipts, alternative or add-on minimum, sales, use, ad valorem, franchise,
profits, license, withholding, payroll, employment, excise, transfer, recording,
severance, stamp, occupation, premium, property, environmental, custom duty, or
other tax, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest and any penalty, addition to tax or
additional amount imposed by a Taxing Authority; (B) any liability of Murphy
Oil, Deltic or any Affiliate of Murphy Oil or Deltic (or, in each case, any
successor in interest thereto by merger or otherwise), as the case may be, for
the payment of any amounts of the type described in clause (A) for any taxable
period resulting from the application of Treasury Regulation Section 1.1502-6
or, in the case of any similar provision applicable under state law; and (C) any
liability of Murphy Oil, Deltic or any Affiliate of Murphy Oil or Deltic (or, in
each case, any successor in interest thereto by merger or otherwise) for the
payment of any amounts described in clause (A) as a result of any express or
implied obligation to indemnify any other party.

     'Tax Asset' shall mean any net operating loss, net 

                                       6

 
capital loss, excess tax credit, or other similar tax attribute which could
reduce Federal Taxes.

     'Tax Sharing Period' shall mean any taxable period (or any portion thereof)
beginning after December 31, 1986 and ending on or before the Distribution Date.

     'Tax Package' shall mean one or more packages of information reasonably
necessary for the purpose of preparing Federal Tax Returns of the Murphy Oil
Consolidated Group with respect to a Pre-Distribution Period completed in all
material respects in accordance with the standards that Murphy Oil has
heretofore established for its subsidiaries.

     'Taxing Authority' shall mean any governmental authority responsible for
the imposition of any Tax.

     (b) Any term used in this Agreement which is not defined in this Agreement
shall, to the extent the context requires, have the meaning assigned to it in
the Code or the applicable Treasury regulations thereunder.

     2.  Federal Taxes--Administrative and Compliance Matters.
         ---------------------------------------------------- 

     (a) Sole Tax Sharing Agreement.  The parties acknowledge that the members
         --------------------------                                           
of the Deltic Group are includible in the Murphy Oil Consolidated Group for the
Pre-

                                       7

 
Distribution Period. Any and all existing tax sharing agreements or
arrangements, written or unwritten, between the Murphy Oil Group and the Deltic
Group shall be terminated as of December 31, 1986, and after such date this
Agreement shall constitute the sole tax sharing agreement between the Murphy Oil
Group and each member of the Deltic Group.

     (b) Designation of Agent.  Each member of the Deltic Group hereby
         --------------------                                         
irrevocably designates Murphy Oil as its agent for the purpose of taking any and
all actions (including the execution of waivers of applicable statutes of
limitation) necessary or incidental to the filing of any Federal Tax Return, any
amended Federal Tax Return, or any claim for refund (including those resulting
from an item or Tax Asset that may arise in a Post-Distribution Period), credit
or offset of Tax or any other proceedings in each case relating to any Pre-
Distribution Period.

     (c) Pre-Distribution Period Returns.  Murphy Oil will prepare and file the
         -------------------------------                                       
consolidated Federal Tax Returns for all Pre-Distribution Periods.  Deltic shall
prepare and deliver to Murphy Oil a Tax Package with respect to the 1996 taxable
year on or before April 1, 1997.

                                       8

 
     3.   Allocation of Federal Taxes.
          --------------------------- 

     (a)  General.  For any Tax Sharing Period, Deltic shall pay to Murphy Oil
          -------                                                             
an amount equal to the Deltic Federal Tax Liability.

     (b)  Estimated Payments. Murphy Oil shall determine the amounts of
          ------------------
estimated tax installments payable with respect to the Deltic Federal Tax
Liability for 1996. Deltic shall, within 5 days of receipt of such
determination, pay to Murphy Oil the amount so determined.

     (c)  Payment of Taxes for Tax Sharing Periods.
          ---------------------------------------- 

          (i)  On or before 5 days prior to the due date (including all
     applicable and valid extensions) for the Murphy Oil Consolidated Group's
     1996 Federal Tax Return, Murphy Oil shall deliver a statement to Deltic
     reflecting the Deltic Federal Tax Liability for 1996.

          (ii) On or before the date Murphy Oil files the Murphy Oil
     Consolidated Group's 1996 Federal Tax Return, Deltic shall pay to Murphy
     Oil, or Murphy Oil shall pay to Deltic, as appropriate, an amount equal to
     the difference, if any, between (x) the Deltic Federal Tax Liability for
     1996 and

                                       9

 
     (y) the aggregate amount of estimated tax installments paid with respect to
     the Deltic Federal Tax Liability for 1996 pursuant to Section 3(b).

         (iii)  If the Murphy Oil Consolidated Group's 1996 Federal Tax Return
     reflects a Deltic Tax Asset that may under applicable law be used to reduce
     Consolidated Murphy Group Tax for any taxable period, then within 30 days
     of receipt by Murphy Oil of a Deltic Tax Asset Statement, Murphy Oil shall
     pay to Deltic the amount owing pursuant to such Deltic Tax Asset Statement.

     (d)  Treatment of Adjustments for Tax Sharing Periods.  If any adjustment
          ------------------------------------------------                    
is made in a Federal Tax Return filed for any taxable period that includes a Tax
Sharing Period, after the filing thereof, then at the time of a Final
Determination of the adjustment, Murphy Oil shall pay Deltic or Deltic shall pay
to Murphy Oil, as the case may be, the difference between all payments actually
made under Section 3 with respect to the taxable year or period covered by such
Tax Return and all payments that would have been made under Section 3 taking
such adjustment into account, 

                                       10

 
together with any penalties and interest actually paid for each day until the
date of Final Determination.

     (e)  Carrybacks and Certain Other Matters.
          ------------------------------------ 

          (i)   Deltic agrees to carry to Pre-Distribution Periods any Tax Asset
     as to which such carryback is optional, if requested to do so by Murphy
     Oil.
          (ii)  Murphy Oil agrees to pay Deltic the Deltic Tax Asset Value for
     any Deltic Tax Asset arising in a Post-Distribution period that is carried
     back to reduce Consolidated Murphy Group Tax. Within 30 days of receipt by
     Murphy Oil of a Deltic Tax Asset Statement, Murphy Oil shall satisfy its
     obligations under this paragraph 3(e)(ii) by paying to Deltic the amount
     owing pursuant to such Deltic Tax Asset Statement.

          (iii) If, subsequent to the payment by Murphy Oil to Deltic of any
     amount referred to in Section 3(e)(ii) above, there shall be a Final
     Determination that results in a disallowance or a reduction of the Deltic
     Tax Asset so carried back, Deltic shall repay to Murphy Oil within 30 days
     of

                                       11

 
     such event the amount that would not have been payable to Deltic pursuant
     to Section 3(e)(ii) had the Deltic Tax Asset Value been determined in light
     of such event, plus interest at a rate equal to Prime computed from the
     date of payment made pursuant to Section 3(c)(ii) and penalties, if any,
     imposed solely in connection with a disallowance or reduction of the Deltic
     Tax Asset.
     
     (f)  Deductions for Certain Payments Made by Murphy Oil. Notwithstanding
          --------------------------------------------------
anything in this Agreement to the contrary, the amount of any Deltic Federal Tax
Liability or Deltic Tax Asset shall be computed without regard to any deduction
arising from the payment or satisfaction by Murphy Oil of any compensation
expense or compensatory award (including, without limitation, bonuses, stock
options, and restricted stock awards) that have not been and will not be
reimbursed by any member of the Deltic Group.


     4.  Other Taxes.
         ----------- 

         (a) Liability for all Taxes other than Federal Taxes ('Other Taxes'),
attributable to any member of the Deltic Group, shall be the sole responsibility
of the Deltic Group.  The responsibility for filing all Returns relating 

                                       12

 
to Other Taxes attributable to any member of the Deltic Group for all Tax
periods ending on or before the Distribution Date shall be the sole
responsibility of Murphy Oil. Except as otherwise provided in the Distribution
Agreement, the responsibility for filing all Returns relating to Other Taxes
attributable to any member of the Deltic Group for all Tax periods ending after
the Distribution Date shall be the sole responsibility of Deltic. Liability for
Other Taxes attributable to any member of the Murphy Oil Group and the
responsibility for filing all Returns relating to such Other Taxes shall be the
sole responsibility of the Murphy Oil Group. Each party agrees to indemnify and
hold the other harmless in accordance with the undertakings contained in this
Section 4(a).

     (b) The Deltic Group shall be entitled to all refunds and credits of Other
Taxes attributable to any member of the Deltic Group, and the Murphy Oil Group
shall be entitled to all refunds and credits of Other Taxes attributable to any
member of the Murphy Oil Group.

     5.  Certain Representations and Covenants.
         ------------------------------------- 

     (a) Representations.  Deltic and Murphy Oil, as 
         ---------------                                                       

                                       13

 
the case may be, represent that, as of the date hereof and on the Distribution
Date, (i) there is no plan or intention (A) to liquidate Deltic or Murphy Oil or
to merge Deltic or Murphy Oil with any unaffiliated corporation subsequent to
the Distribution or (B) to sell or otherwise dispose of any asset of Deltic or
Murphy Oil subsequent to the Distribution, except, in each case, in the ordinary
course of business; (ii) neither Deltic nor Murphy Oil is aware of any plan or
intention by the current stockholders of Murphy Oil to sell, exchange, transfer
by gift, or otherwise dispose of any of their stock in Murphy Oil or Deltic
subsequent to the Distribution; and (iii) Murphy Oil has received a
representation to that effect from C.H. Murphy, Jr., First United Bancshares,
First National Bank of El Dorado and First National Bank of Magnolia.

     (b) Deltic Covenants.  Deltic covenants to Murphy Oil that (i) during the
         ----------------                                                     
two-year period following the Distribution Date it will not liquidate, merge,
consolidate, combine or affiliate with any other person, discontinue or
materially change the conduct of a material portion of its businesses
independently and with its own employees, redeem or otherwise reacquire its
stock, or sell, exchange, dis-

                                       14

 
tribute or otherwise dispose of its assets other than (A) in the ordinary course
of business or (B) in the case of any disposition by Deltic of its farmland, in
the event an attractive unsolicited offer is received; (ii) following the
Distribution, Deltic will, for a minimum of two years, continue the active
conduct of the historic business conducted by Deltic throughout the five year
period prior to the Distribution; (iii) within one year of the Distribution,
Deltic will use its best efforts to consummate an offering of $30-40 million of
common, convertible preferred or 'straight' preferred stock, provided that in no
event will the offering, when added to any other issuances of stock by Deltic
that are contemplated at the time of the Distribution Date, exceed an amount
that, if all such issuances were treated as made immediately prior to the
Distribution, would cause Murphy Oil to own less than 80% of the total combined
voting power of all classes of stock of Deltic entitled to vote or less than 80%
of the total number of shares of all other classes of stock of Deltic; (iv) that
it will diligently undertake to effectuate its growth strategies, including the
acquisition of timber properties, in accordance with the plan presented to the
Board of Directors

                                       15

 
of Murphy on August 7, 1996, and (v) on or after the Distribution, Deltic will
not, nor will it permit any member of the Deltic Group to, make or change any
accounting method, amend or take any Tax position on any Tax Return, take any
other action, omit to take any action or enter into any transaction that
reasonably could be expected to result in any increased Tax liability or
reduction of any Tax Asset of the Murphy Oil Consolidated Group or any member
thereof (immediately after the Distribution) in respect of any Pre-Distribution
Period, without first obtaining the written consent of an authorized
representative of Murphy Oil.

     (c)  Murphy Oil Covenants.  On or after the Distribution, Murphy Oil will
          --------------------                                                
not, nor will it permit any member of the Murphy Oil Group to make or change any
accounting method, amend any Tax Return or take any Tax position on any Tax
Return, take any other action, omit to take any action or enter into any
transaction that reasonably could be expected to result in any increased Tax
liability or reduction of any Tax Asset of the Deltic Group or any member
thereof (immediately after the Distribution) in respect of any Pre-Distribution
Period, without first obtaining the written consent of an authorized

                                       16

 
representative of Deltic.

     (d) Exceptions.  Notwithstanding the foregoing, Deltic may take actions
         ----------                                                         
inconsistent with the covenants contained in Section 5(b)(i) and 5(b)(ii) above,
or may, within one year of the Distribution, issue shares in excess of the
amount described in Section 5(b)(iii) above if:

     (i)   Deltic obtains a ruling from the Internal Revenue Service to the
   effect that such actions will not result in the Distribution being taxable to
   Murphy Oil or its stockholders; or

     (ii)  Deltic obtains an unqualified opinion acceptable to Murphy Oil to the
   same effect as in Section 5(d)(i) from a nationally recognized independent
   tax counsel.

     (e) Best Efforts.  For purposes of the covenant contained in Section
         ------------                                                    
5(b)(iii), if Deltic does not make the offering described therein within one
year of the Distribution, Deltic will be considered to have used its best
efforts to do so if Deltic obtains a ruling from the Internal Revenue Service to
the effect that failure to make such offering will not result in the
Distribution being taxable to Murphy Oil or its stockholders.

                                       17

 
     6.  Indemnities.
         ----------- 

     (a) Deltic Indemnity.  Deltic and each member of the Deltic Group will
         ----------------                                                  
jointly and severally indemnify Murphy Oil and each member of the Murphy Oil
Group, against and hold them harmless, on an after tax basis, from

     (i)   any Pre-Distribution Tax Liability assessed after the Distribution
   Date pursuant to a Final Determination, to the extent attributable to an
   adjustment of any item of income, gain, gross receipts, loss, credit,
   deduction or other tax attribute of any member of the Deltic Group;

     (ii)  any liability resulting from a breach by Deltic or any member of the
   Deltic Group after the Distribution Date of any representation or covenant
   made by Deltic herein; and

     (iii) all direct and indirect costs and expenses (including, without
   limitation, legal fees and expenses and any personnel costs and expenses)
   incurred by Murphy Oil with respect to any item or liability described in
   Section 6(a)(i) or (ii).

     (b) Murphy Oil Indemnity.  Murphy Oil and each member of the Murphy Oil
         --------------------                                               
Group will jointly and severally 

                                       18

 
indemnify Deltic and each member of the Deltic Group against and hold them
harmless, on an after tax basis from

     (i)  any Pre-Distribution Tax Liability, other than any such liabilities
   described in Sections 6(a)(i) or (ii) hereof,

     (ii) any liability resulting from a breach by Murphy Oil or any member of
   the Murphy Oil Group after the Distribution Date of any representation or
   covenant made by Murphy Oil herein.

     (c)  Discharge of Indemnity.   Deltic and Murphy Oil shall discharge their
          ----------------------                                               
obligations under Sections 6(a) and 6(b) hereof, respectively, by paying the
relevant amount within 15 days of demand therefor.  After a Final Determination
of an obligation of Deltic under Section 6(a), Murphy Oil shall send a statement
to Deltic showing the amount due thereunder.  Notwithstanding the foregoing, if
either Deltic or Murphy Oil disputes in good faith the fact or amount of its
obligation under Section 6(a) or Section 6(b), then no payment of the amount in
dispute shall be required until any such good faith dispute is resolved in
accordance with Section 16 hereof; provided, however, that any amount not paid
                                   --------  -------
within 30 days of demand therefor shall

                                       19

 
bear interest at a rate equal to Prime computed from the date of demand.

     (d)  Refunds.  Any refunds of Tax, net of any tax payable by reason of the
          -------                                                              
receipt of such refund, received by Murphy Oil relating to a Pre-Distribution
Period, to the extent attributable to any item or adjustment of any item of
income, loss, credit, deduction or other tax attribute of any member of the
Deltic Group shall be paid by Murphy Oil to Deltic within 30 days of receipt of
such refund.

     (e)  Method of Calculation.  Except as otherwise provided, the amount of
          ---------------------                                              
Deltic's liability under Section 6(a)(i) and Murphy Oil's liability under
Section 6(b)(i) and 6(d) shall be calculated as if the Deltic Group were not and
never were part of the Murphy Oil Group, but rather were a separate affiliated
group of corporations filing a consolidated Federal Tax Return for all periods.

     7.  Communication and Cooperation.
         ----------------------------- 

     (a) Consult and Cooperate.  Deltic and Murphy Oil shall consult and
         ---------------------                                          
cooperate (and shall cause each of their Affiliates to cooperate) fully at such
time and to the extent reasonably requested by the other party in connection
with all matters subject to this Agreement.  Such 

                                       20

 
cooperation shall include, without limitation,

     (i)   the retention and provision on reasonable request of any and all
   information including all books, records, documentation or other information,
   any necessary explanations of information, and access to personnel, until the
   expiration of all applicable statutes of limitations (giving effect to any
   extension, waiver, or mitigation thereof);

     (ii)  the execution of any document that may be necessary or helpful in
   connection with any required Return or in connection with any audit,
   proceeding, suit or action; and

     (iii) the use of the parties' best efforts to obtain any documentation from
   a governmental authority or a third party that may be necessary or helpful in
   connection with the foregoing.

     (b)   Provide Information. Murphy Oil and Deltic shall keep each other
           -------------------
fully informed with respect to any material development relating to all matters
subject to this Agreement.

     8.    Audits and Contest.
           ------------------ 

     (a)   Murphy Oil shall have full control over all 

                                       21

 
matters relating to any Federal Tax Return filed by the Murphy Oil Consolidated
Group or any Federal Tax audit, dispute or proceeding (whether administrative or
judicial) relating to any Tax matters of the Murphy Oil Consolidated Group.
Murphy Oil shall have absolute discretion with respect to any decisions to be
made, or the nature of any action to be taken, with respect to any matter
described in the preceding sentence.

     (b)  With respect to Returns relating to Other Taxes attributable to any
member of the Deltic Group, except as otherwise provided in the Distribution
Agreement, Deltic shall have full control over all matters relating to any state
audit, dispute or proceeding (whether administrative or judicial) in connection
therewith.  Deltic shall have absolute discretion with respect to any decisions
to be made, or the nature of any action to be taken, with respect to any matter
described in the preceding sentence.

     9.  Payments.
         -------- 
     All payments to be made hereunder shall be made in immediately available
funds.  Payments shall be deemed made when received.

     10.   Notices.
           ------- 

                                       22

 
     Any notice, demand, claim, or other communication under this Agreement
shall be in writing and shall be deemed to have been given upon the delivery or
mailing thereof, as the case may be, if delivered personally or sent by
certified mail, return receipt requested, postage prepaid, to the parties at the
following addresses (or at such other address as a party may specify by notice
to the other):

     If to Murphy Oil, to:

     Murphy Oil Corporation
     200 Peach Street
     P.O. Box 7000
     El Dorado, AR 71731-7000

     Attn: Income Tax Manager


     If to Deltic, to:

     Deltic Timber Corporation
     200 Peach Street
     P.O. Box 7000
     El Dorado, AR 71731-7000

     Attn: Vice President, Finance and Administration


     11.  Costs and Expenses.
          ------------------ 

     Except as expressly set forth in this Agreement, each party shall bear its
own costs and expenses incurred pursuant to this Agreement.  For purposes of
this Agreement, 'out-of-pocket' expenses shall include reasonable attorney 

                                       23

 
fees, accountant fees and other related professional fees and disbursements.

     12.  Effectiveness; Termination and Survival.
          --------------------------------------- 

     This Agreement shall become effective upon the consummation of the
Distribution.  Notwithstanding anything in this Agreement to the contrary, this
Agreement shall remain in effect and its provisions shall survive for the full
period of all applicable statutes of limitations (giving effect to any
extension, waiver or mitigation thereof).


     13.  Section Headings.
          ---------------- 

     The headings contained in this Agreement are inserted for convenience only
and shall not constitute a part hereof or in any way affect the meaning or
interpretation of this Agreement.

     14.  Entire Agreement; Amendments and Waivers.
          ---------------------------------------- 

     (a)  Entire Agreement.  This Agreement contains the entire understanding of
          ----------------                                                      
the parties hereto with respect to the subject matter contained herein.  No
alteration, amendment, modification, or waiver of any of the terms of this
Agreement shall be valid unless made by an instrument signed by an authorized
officer of Murphy Oil and Deltic, or 

                                       24

 
in the case of a waiver, by the party against whom the waiver is to be
effective.

     (b) Waiver. No failure or delay by any party in exercising any right, power
         ------                                                                 
or privilege hereunder shall operate as a waiver hereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any right, power or privilege.

     15.  Governing Law and Interpretation.  This Agreement has been made in and
          --------------------------------                                      
shall be construed and enforced in accordance with the laws of the State of
Arkansas without regard to principles of conflicts of law.

     16.  Dispute Resolution.  If the parties hereto are unable to agree to
          ------------------                                               
resolve any disagreement or dispute relating to this Agreement other than with
respect to Section 5 within 20 days, such disagreement or dispute shall be
resolved by a nationally recognized law firm or accounting firm expert in tax
matters that is mutually acceptable to the parties hereto ('Referee'). A Referee
so chosen shall resolve any such disagreement pursuant to such procedures as it
may deem advisable. Any such resolution shall be binding on the parties hereto
without further recourse. The costs of any such Referee shall be

                                       25

 
apportioned between Murphy Oil and Deltic as determined by such Referee in such
manner as the Referee deems reasonable, taking into account the circumstances of
the dispute, the conduct of the parties and the resolution of the dispute.

     17.  Counterparts.
          ------------ 

     This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

     18.  Assignments; Third Party Beneficiaries.
          -------------------------------------- 

This Agreement shall be binding upon and shall inure only to the benefit of the
parties hereto and their respective successors and assigns.  This Agreement is
not intended to benefit any person other than the parties hereto and such
successors and assigns, and no such other person shall be a third party
beneficiary hereof.

                                       26

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


                             Murphy Oil on its own behalf and on
                             behalf of the companies
                             listed on Schedule 1 hereto.

                             By: /s/ S. Cosse
                                --------------------------


                             Title: Senior Vice President
                                   -----------------------


                             Deltic on its own behalf and on
                             behalf of the companies
                             listed on Schedule 2 hereto.


                             By: /s/ Clefton D. Vaughan
                                --------------------------


                             Title: Vice President
                                   -----------------------

                                       27

 
                                   Schedule 1


Arkansas Oil Company
El Dorado Exploration, S.A.
Murphy Denmark Oil Company
Murphy Eastern Oil Company
Murphy Equatorial Guinea Oil company
Murphy France Oil Company
Murphy Ireland Oil Company
Murphy Italy Oil Company
Murphy Loop, Inc.
Murphy Latin America Refining & Marketing, Inc.
Murphy New Zealand Oil Company
Murphy Oil Trading Company (Eastern)
Murphy Pakistan Oil Company
Norske Murphy Oil Company
Spur Oil Corporation
Murphy Gas Gathering, Inc.
New Murphy Oil (U.K.) Corporation
Murphy Exploration & Production Company
Murphy Building Corporation
El Dorado Engineering, Inc.
El Dorado Contractors, Inc.
Ocean International Finance Corporation
Norske Ocean Exploration Company
Ocean Spain Oil Company
Ocean Exploration Company
ODECO Gabon Oil Company
Ocean Gabon Oil Company
Murphy Overseas Ventures, Inc.
ODECO Italy Oil Company
Ocean France Oil Company
Mentor Holding Corporation
Murphy Western Oil Company
Mentor Excess & Surplus Lines Insurance Co.
Mentor Insurance and Reinsurance Corporation
Murphy Spain Oil Company
Murphy Somalia Oil Company
Murphy Yemen Oil Company
Murphy Oil USA, Inc.
Murphy Ventures Corporation
Murphy South Atlantic Oil Company

                                       28

 
                                   Schedule 2

Deltic Timber Purchasers, Inc.
Chenal Properties, Inc.

                                       29