CHIEFTAIN INTERNATIONAL INC, DEF 14A, 1998-03-31

CHIEFTAIN INTERNATIONAL INC
DEF 14A, 1998-03-31
CRUDE PETROLEUM & NATURAL GAS

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<PAGE> 1

================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

<TABLE>
<S> <C>
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
</TABLE>

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary proxy statement
[ ] Confidential, for Use of the Commission Only
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

CHIEFTAIN INTERNATIONAL, INC.

(Name of Registrant as specified in its Charter)

________________________________
(Name of Person(s) filing Proxy Statement, if Other than the Registrant)

Payment of filing fee (Check the appropriate box):

<TABLE>
<S> <C>
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
</TABLE>

1. Title of each class of securities to which transaction applies:
_____________________________________________________________________

2. Aggregate number of securities to which transaction applies:
_____________________________________________________________________

3. Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11. (set forth the amount on which the filing fee is
calculated and state how it was determined):
_____________________________________________________________________

4. Proposed maximum aggregate value of transaction:
_____________________________________________________________________

5. Total fee paid:
_____________________________________________________________________

<TABLE>
<S> <C>
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
</TABLE>

(1) Amount previously paid:
______________________________________________________________________

(2) Form, Schedule or Registration Statement No.:
______________________________________________________________________

(3) Filing Party:
______________________________________________________________________

(4) Date Filed:
______________________________________________________________________

================================================================================
<PAGE> 2

CHIEFTAIN
INTERNATIONAL, INC.

1201 Toronto Dominion Tower
Edmonton Centre
Edmonton, Alberta, Canada
T5J 2Z1

Telephone (403) 425-1950
Facsimile (403) 429-4681

Notice of Annual Meeting of Shareholders
to be held on Thursday, May 14, 1998

The annual meeting of the shareholders of Chieftain International, Inc. ("the
Company") will be held in the Marlboro Room of The Westin Hotel, 10135 - 100
Street, Edmonton, Alberta, Canada on Thursday, May 14, 1998 at 10:30 a.m.
(Edmonton time) to receive and consider the annual report, the financial
statements and the report of the auditors on the financial statements, and in
addition for the following purposes:

1. to elect two directors;

2. to appoint auditors of the Company until the close of the next annual
meeting;

3. to transact all such other business as may properly come before the
meeting or any adjournment thereof.

The Board of Directors has fixed the close of business on the 6th day of April,
1998 as the record date for the determination of shareholders who are entitled
to notice of and to vote at the annual meeting. The share transfer books will
not be closed.

Please complete, date and sign the enclosed form of proxy and mail it promptly
in the enclosed postage-paid envelope.

By order of the Board of Directors

Esther S. Ondrack
March 20, 1998 Senior Vice President and Secretary
<PAGE> 3
[LOGO] CHIEFTAIN
INTERNATIONAL, INC.

1201 Toronto Dominion Tower
Edmonton Centre
Edmonton, Alberta, Canada
T5J 2Z1

Telephone (403) 425-1950
Facsimile (403) 429-4681

INFORMATION CIRCULAR

SOLICITATION OF PROXIES

This Information Circular and the accompanying Notice of Meeting and form of
proxy are being mailed to shareholders on or about March 27, 1998 in connection
with the solicitation of proxies by the management of Chieftain International,
Inc. (hereinafter called the "Company") to be voted at the annual meeting of
shareholders (the "meeting") to be held at 10:30 a.m., Edmonton time, in the
Marlboro Room of The Westin Hotel, 10135 - 100 Street, Edmonton, Alberta, Canada
on Thursday, May 14, 1998. Proxy soliciting material will also be mailed to
those who become shareholders of record after the date of first mailing and on
or before the record date. The Directors have fixed the close of business on
April 6, 1998 as the record date for the determination of shareholders who are
entitled to notice of and to vote at the meeting. The solicitation will be
primarily by mail and the cost will be borne by the Company. In addition, the
Company will reimburse banks, brokerage houses and other custodians, nominees or
fiduciaries for reasonable expenses incurred by them in forwarding proxy
material to their principals to obtain authorization for the execution of
proxies.

All shares represented by proxy will be voted, provided that instruments of
proxy are received by CIBC Mellon Trust Company, registrar and transfer agent,
at its office at 600, 333 - 7th Avenue S.W., Calgary, Alberta, Canada, T2P 2Z1,
or by the Company at its principal office at 1201 Toronto Dominion Tower,
Edmonton Centre, Edmonton, Alberta, Canada, T5J 2Z1, no later than 10:30 a.m.,
May 13, 1998.

The Company's accounts are maintained, and all dollar amounts herein are stated,
in United States dollars. The average rates of exchange for Canadian dollars per
U.S.$1.00 during 1996, 1997 and during the period January 1 to February 27,
1998, were $1.3636, $1.3843 and $1.4375, respectively. The rates on December 31,
1996, December 31, 1997, and February 27, 1998 were $1.3696, $1.4291 and
$1.4235, respectively.

APPOINTMENT AND REVOCATION OF PROXIES

THE ENCLOSED PROXY IS SOLICITED BY AND ON BEHALF OF THE MANAGEMENT OF THE
COMPANY. THE PERSONS DESIGNATED IN THE ACCOMPANYING FORM OF PROXY ARE DIRECTORS
AND OFFICERS OF THE COMPANY. A SHAREHOLDER HAS THE RIGHT TO APPOINT SOME OTHER
PERSON, WHO NEED NOT BE A SHAREHOLDER, TO REPRESENT HIM OR HER AT THE MEETING
AND HE OR SHE MAY EXERCISE THIS RIGHT BY INSERTING SUCH OTHER PERSON'S NAME IN
THE BLANK SPACE PROVIDED IN THE FORM OF PROXY.

The instrument appointing a proxy shall be in writing and signed by the
shareholder or the shareholder's attorney authorized in writing. If the
shareholder is a corporation, the document must carry the signature of a duly
authorized officer or attorney thereof.

1
<PAGE> 4
A shareholder who has given a proxy in the accompanying form has the power to
revoke it. A proxy may be revoked by instrument in writing executed by the
shareholder or by his or her attorney authorized in writing or, if the
shareholder is a corporation, by a duly authorized officer or attorney thereof,
and deposited either at the head office of the Company at any time up to and
including the last business day preceding the day of the meeting, or any
adjournment thereof, at which the proxy is to be used, or with the chairman of
such meeting on the day of the meeting or adjournment thereof, and upon either
of such deposits the proxy is revoked. In addition, a proxy may be revoked in
any other manner permitted by law.

EXERCISE OF DISCRETION BY PROXY

The person named in the enclosed proxy will vote the shares in respect of which
he or she is appointed in accordance with the direction of the shareholder
appointing him or her. In the absence of specific direction, such shares will be
voted in favor of the election of the directors and the appointment of the
auditors named in this information circular. If any amendments or variations in
the matters identified in the notice of meeting or if any other matters properly
come before the meeting or any adjournment or adjournments thereof, the proxy
confers discretionary authority upon the shareholder's nominee to vote on such
amendments or variations or such other matters in accordance with his or her
best judgment. Proxies will not be voted with respect to any material amendment
or any material variation of the matters which come before the meeting. At the
date of the notice of meeting, management knows of no such amendment or
variation or other matter to come before the meeting.

VOTING SHARES

The registered holders of the outstanding common shares of the Company of record
at the close of business on April 6, 1998 are entitled to notice of and to vote
at the meeting. The number of common shares outstanding on December 31, 1997 was
13,622,375 and on February 27, 1998 was 13,589,975. Each common share entitles
the registered holder thereof to one vote, which may be given in person or by
proxy. Approval of each matter to come before the annual meeting requires an
affirmative vote by the holders of a majority of the shares represented at the
meeting, whether in person or by proxy. The quorum for the meeting is two
persons present and holding or representing by proxy at least one-third of the
issued shares of the Company for the time being having voting rights.

SHARE OWNERSHIP

The following table describes those shareholders which, to the knowledge of the
Company, own beneficially, as at February 27, 1998, more than 5 percent of the
outstanding common shares of the Company:

<TABLE>
<CAPTION>
------------------------------------------------------ ------------------------------ ------------------------------
Name and Address Amount and Nature of
Of Beneficial Owner Beneficial Percent of Class
Ownership of Common Shares
------------------------------------------------------ ------------------------------ ------------------------------
<S> <C> <C>
Guardian Life Insurance Company of America
201 Park Avenue 1,107,000(1) 8.1
New York, N.Y. 10003
------------------------------------------------------ ------------------------------ ------------------------------
Stanley A. Milner
President and Chief Executive Officer of the Company 710,386(2) 5.2
1201 Toronto Dominion Tower, Edmonton Centre
Edmonton, Alberta, Canada T5J 2Z1
------------------------------------------------------ ------------------------------ ------------------------------
</TABLE>

(1) The information is based on Schedule 13-G filings with the Securities and
Exchange Commission. The beneficial owner is believed to have sole
dispositive and voting power with respect to 406,200 common shares and
shared dispositive and voting power with respect to 128,800 common shares.

(2) Includes 115,000 shares issuable upon exercise of options exercisable
within 60 days and 48,750 shares issuable upon conversion of Chieftain
International Funding Corp. $1.8125 Convertible Redeemable Preferred
shares.

2
<PAGE> 5
The table below indicates the number of the Company's common shares and the
Chieftain International Funding Corp. $1.8125 Convertible Redeemable Preferred
Shares (the "Preferred Shares") owned by the directors, including those
nominated for election; the Named Executive Officers as defined on page 5; and
all directors and officers as a group. All of the common shares shown as
issuable upon exercise of options are issuable within 60 days.

Each Preferred Share is convertible into 1.25 common shares of the Company.

<TABLE>
<CAPTION>
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
SHARES BENEFICIALLY OWNED AS AT FEBRUARY 27, 1998
Common Shares Percent of Class(1) Preferred Shares Percent of Class

- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
<S> <C> <C> <C> <C>
Stephen C. Hurley 52,271(2) - - -
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
Hugh J. Kelly 27,666(3) - 10,000 -
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
John E. Maybin 27,666(4) - - -
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
Stanley A. Milner 661,636(5) 4.83 39,000 1.43
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
David E. Mitchell 36,666(3) - - -
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
Louis G. Munin 30,666(3) - 2,000 -
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
Esther S. Ondrack 97,708(6) - - -
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
Stuart T. Peeler 26,667(7) - 21,500 -
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
Edward L. Hahn (8) 32,234(9) - - -
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
Ronald J. Stefure (10) 32,405(11) - - -
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
All directors and officers as a group 1,146,456(12) 8.14 72,500 2.66
- - --------------------------------------- ------------------- ------------------ ---------------------- -------------------
</TABLE>

(1) Percentages of less than one are omitted.

(2) Includes 50,000 shares issuable upon exercise of options.

(3) Includes 26,666 shares issuable upon exercise of options.

(4) Includes 26,166 shares issuable upon exercise of options.

(5) Includes 115,000 shares issuable upon exercise of options. In addition, an
associate of S. A. Milner owns 15,000 shares.

(6) Includes 75,833 shares issuable upon exercise of options.

(7) Includes 14,167 shares issuable upon exercise of options.

(8) E.L. Hahn is Senior Vice President, Finance and Treasurer of the Company.

(9) Includes 24,166 shares issuable upon exercise of options.

(10) R. J. Stefure is Controller of the Company.

(11) Includes 31,666 shares issuable upon exercise of options.

(12) Includes 495,328 shares issuable upon exercise of options.

COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors held five regularly scheduled or special meetings during
the year ended December 31, 1997. Each member of the Board of Directors
including those nominated for election attended all of the meetings of the Board
of Directors and of the committees on which he served during 1997. The Company
has standing Audit, Nominating and Corporate Governance, Compensation and
Pension Committees of the Board of Directors. The members of the committees are
appointed by the full Board upon recommendation of the Nominating and Corporate
Governance Committee.

AUDIT COMMITTEE

The Audit Committee, which during 1997 consisted of L.G. Munin as Chairman and
J.E. Maybin, D.E. Mitchell and S.T. Peeler, all non-employee directors, held
four meetings during 1997. The primary function of the Audit Committee is to
assist the Board of Directors in providing corporate oversight in the areas of
financial reporting, internal control and the audit process. In connection with
these reviews it meets alone with Company personnel and with the independent
auditors who have access to the Committee at any time. The Committee recommends
to the Board for its approval the annual appointment of external auditors.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

The Nominating and Corporate Governance Committee is comprised of J.E. Maybin as
Chairman, and D.E. Mitchell, L.G. Munin and S.T. Peeler. This Committee assists
the Board by reviewing corporate governance and Board nomination matters and
making recommendations to the Board as appropriate. The Committee met once
during 1997 to consider the size and composition of the Board of Directors,
nominees for the election of directors at the 1997 annual meeting and corporate
governance practices.

3
<PAGE> 6
COMPENSATION COMMITTEE

The Compensation Committee is comprised of S.T. Peeler as Chairman and H.J.
Kelly, J.E. Maybin and D.E. Mitchell, none of whom are, with the exception of D.
E. Mitchell, who is the non-executive Chairman of the Board, officers of the
Company. The primary function of the Compensation Committee is to assist the
Board of Directors by reviewing compensation matters and making recommendations
to the Board with respect to compensation arrangements and benefit plans for
officers of the Company and with respect to the Company's Share Option Plan and
by reviewing and approving compensation budgets, benefits plans and policies,
salaries of certain non-officer employees, and succession planning. The
Compensation Committee met four times in 1997.

PENSION COMMITTEE

The Pension Committee is comprised of H.J. Kelly as Chairman, E.L. Hahn, J.E.
Maybin, D.E. Mitchell and S.T. Peeler. This Committee reviews generally and
makes recommendations to the Board of Directors with regard to the Company's
retirement plans, related agreements and the appointment and performance of
retirement fund investment managers. This committee met once during 1997.

ELECTION OF DIRECTORS

The Articles of the Company provide that directors are elected and retire in
rotation. Directors are elected to hold office until the close of the third
ensuing annual meeting and at each annual meeting approximately one-third of the
board is elected. Effective upon the termination of the forthcoming annual
meeting, the terms of Stanley A. Milner and David E. Mitchell will expire. It is
proposed that two directors be elected for the ensuing three years. Management
will place before the annual meeting as nominees Stanley A. Milner and David E.
Mitchell and PROXIES GIVEN PURSUANT TO THIS SOLICITATION BY MANAGEMENT WILL BE
VOTED FOR THE ELECTION OF SAID NOMINEES UNLESS INDICATED OTHERWISE. While
management knows of no reason why the said nominees will be unable or unwilling
to serve as directors, if for any reason they shall be unable or unwilling to
serve, it is intended that proxies given pursuant to this solicitation by
management will be voted for substitute nominees selected by management.

Information is given below with respect to the nominees and the directors whose
terms of office as directors will continue after the meeting.

<TABLE>
<CAPTION>
---------------------------------------------------------------- ----------------- ------------
SERVED AS TERM
NAME AND PRINCIPAL OCCUPATION DIRECTOR SINCE EXPIRES
---------------------------------------------------------------- ----------------- ------------
<S> <C> <C>
STEPHEN C. HURLEY, Dallas, Texas
Senior Vice President and Chief Operating Officer of the 1997 2000
Company (1)
---------------------------------------------------------------- ----------------- ------------
HUGH J. KELLY, Mandeville, Louisiana
Corporate Director and Consultant 1989 1999
---------------------------------------------------------------- ----------------- ------------
JOHN E. MAYBIN, Calgary, Alberta
Corporate Director 1991 2000
---------------------------------------------------------------- ----------------- ------------
STANLEY A. MILNER, A.O.E., LL.D., Edmonton, Alberta
President and Chief Executive Officer of the Company 1988 2001(2)
---------------------------------------------------------------- ----------------- ------------
DAVID E. MITCHELL, O.C., Calgary, Alberta
Chairman of Alberta Energy Company Ltd. 1989 2001(2)
---------------------------------------------------------------- ----------------- ------------
LOUIS G. MUNIN, Dallas, Texas
Corporate Director and Financial Consultant 1989 1999
---------------------------------------------------------------- ----------------- ------------
ESTHER S. ONDRACK, Edmonton, Alberta
Senior Vice President and Secretary of the Company (3) 1988 2000
---------------------------------------------------------------- ----------------- ------------
STUART T. PEELER, Tucson, Arizona
Corporate Director and Petroleum Industry Consultant 1989 1999
---------------------------------------------------------------- ----------------- ------------
</TABLE>

(1) Mr. Hurley joined the Company as Senior Vice President and Chief Operating
Officer in September, 1995. From 1987 until 1991 he was Vice President,
Exploration of Ocean Drilling & Exploration Company and from 1991 to 1995
he was Vice President, Exploration of Murphy Exploration and Production
Company.

(2) Date when proposed term of office will expire.

(3) Mrs. Ondrack was Vice President and Secretary of the Company until June,
1995.

4
<PAGE> 7
EXECUTIVE COMPENSATION

The following table sets forth certain information regarding the compensation
during each of the Company's three most recently completed fiscal years of the
Chief Executive Officer and the Company's next four most highly compensated
executive officers, collectively "Named Executive Officers".

<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
(U.S. $)
- - ---------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long - Term Compensation
-------------------------------------------------------------------
Awards Payouts
-------------------------------
Securities Restricted
Under Shares
Name and Other Options or
Principal Annual and SARs Restricted LTIP All Other
Position Year Salary Bonus Compensation Granted Share Units Payouts Compensation(1)
($) ($) ($) (#) ($) ($) ($)
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stanley A. Milner 1997 320,273 250,000 (2) 25,000 -- -- 83,568
President and 1996 293,592 150,000 (2) -- -- -- 76,475
Chief Executive Officer 1995 267,117 100,000 (2) 60,000 -- -- 55,790
- - ---------------------------------------------------------------------------------------------------------------------------
Stephen C. Hurley 1997 245,946 185,000 (2) 25,000 -- -- 52,317
Senior Vice President and 1996 226,689 100,000 (2) -- -- -- 45,414
Chief Operating Officer 1995 57,981(3) -- (2) 100,000(4) -- -- 3,723
- - ---------------------------------------------------------------------------------------------------------------------------
Edward L. Hahn 1997 136,176 40,000 (2) 10,000 -- -- 34,755
Senior Vice President, 1996 130,078 35,000 (2) -- -- -- 33,102
Finance and Treasurer 1995 125,464 50,000 (2) 10,000 -- -- 25,968
- - ---------------------------------------------------------------------------------------------------------------------------
Esther S. Ondrack 1997 122,157 40,000 (2) 15,000 -- -- 30,517
Senior Vice President 1996 116,246 35,000 (2) -- -- -- 28,979
and Secretary 1995 112,127 50,000 (2) 20,000 -- -- 22,900
- - ---------------------------------------------------------------------------------------------------------------------------
Ronald J. Stefure 1997 95,570 35,000 (2) 9,000(5) -- -- 21,063
Controller 1996 78,293 20,000 (2) -- -- -- 13,619
1995 70,048(6) 33,333 (2) 10,000 -- -- 10,906
- - ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The amounts in this column represent Company contributions to the defined
contribution retirement plans, the savings plan and the life insurance plan
in which plans the Named Executive Officers participate on the same basis
as all other employees. Such amounts do not include directors fees paid to
S.A. Milner ($34,500 in 1995, $30,000 in 1996, and $24,000 in 1997), E.S.
Ondrack ($30,900 in 1995, $30,000 in 1996, and $24,000 in 1997), and S.C.
Hurley ($9,423 in 1997) or a relocation allowance of $358,100 paid to S.C.
Hurley in 1996.

(2) The value of perquisites and benefits for each of the Named Executive
Officers is not greater than the lesser of Cdn.$50,000 and 10% of total
annual salary and bonus.

(3) Mr. Hurley joined the Company in September, 1995.

(4) Includes 25,000 Share Appreciation Rights ("SARs") and 75,000 share
options.

(5) Includes 4,000 SARs and 5,000 share options

(6) Mr. Stefure was appointed Controller in June, 1995.

The following table sets forth information regarding grants of share options and
Share Appreciation Rights ("SARs") to the Named Executive Officers during the
financial year ended December 31, 1997.

<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------

OPTION AND SAR GRANTS DURING 1997

- - ----------------------------------------------------------------------------------------------------------------------------
Number of Shares % of Total Options Exercise Potential Realizable Value at Assumed
Under Options or SARs Granted or Base Annual Rates of Stock Price Expiration
Name and SARs Granted in 1997 Price ($)(2) Appreciation for Option Term Date
5% 10%
- - ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stanley A. Milner 25,000 11% 21.32 332,250 845,000 May 15, 2007
Stephen C. Hurley 25,000 11% 21.32 332,250 845,000 May 15, 2007
Edward L. Hahn 10,000 4% 21.32 132,900 338,000 May 15, 2007
Esther S. Ondrack 15,000 7% 21.32 199,350 507,000 May 15, 2007
Ronald J. Stefure 5,000 2% 21.32 66,450 169,000 May 15, 2007
4,000(1) 6% 19.87 17,120 36,880 Mar. 20, 2001
- - ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Share Appreciation Rights

(2) Market value of shares underlying options or SARs on the date of grant

5
<PAGE> 8
The options are exercisable as to one-third of the granted amount on and after
each of the first three anniversaries of the date of grant. Exercisability of
options accelerates in certain events, including death, disability, retirement
and change in control. The exercisability of options is contingent upon
continued service except that options exercisable on the date of termination of
employment may be exercised thereafter under certain conditions.

No options were exercised by the Named Executive Officers in 1997. The following
table shows the value, on December 31, 1997, of the unexercised options held by
the Named Executive Officers.

<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------------------
SHARE OPTION EXERCISES IN 1997 AND YEAR-END 1997 SHARE OPTION VALUES
- - ---------------------------------------------------------------------------------------------------------------------------
Unexercised Options held on Value of Unexercised in-the-Money
Securities Acquired Aggregate Value December 31, 1997 Options on December 31, 1997
-------------------------------------------------------------
Name on Exercise Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stanley A. Milner - - 115,000 45,000 $784,050 $152,400
Stephen C. Hurley - - 50,000 50,000 300,000 150,000
Edward L. Hahn - - 24,166 13,334 158,219 25,405
Esther S. Ondrack - - 75,833 21,667 483,972 50,802
Ronald J. Stefure - - 31,666 8,334 186,744 25,405
- - ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

CHANGE IN CONTROL AGREEMENTS

The Company has agreements with senior personnel, including the Named Executive
Officers, that provide for the payment of certain benefits under certain
circumstances following a change in control of the Company. If, following a
change in control, the employment of a Named Executive Officer is terminated by
the Company other than for cause, by disability, retirement or death, or by the
individual for good reason, the Named Executive Officer will receive a severance
payment equal to two times the individual's average annual base salary during
the previous three years and certain benefits for a two year period following
termination of employment.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors is responsible for
reviewing compensation policies and practices of the Company, both generally and
in specific relation to the appointment and compensation of the officers and
certain members of senior management. The Compensation Committee makes
recommendations to the Board of Directors with respect thereto and with respect
to benefit plans including the Share Option Plan and grants thereunder.

Compensation of the Company's employees, including officers and senior
management, is comprised of salary, periodic bonuses for outstanding effort and
results, various benefit plans, including a retirement plan and a savings plan,
and stock options. Compensation plans are designed to provide competitive levels
of compensation which will attract and retain competent, motivated personnel who
will perform to their potential to increase the value of the Company for the
benefit of the shareholders.

Salaries are reviewed annually in relation to the achievement of both corporate
and individual performance objectives and with a view to achieving and
maintaining external competitiveness and internal equity. Grants are made under
the Share Option Plan in the discretion of the Board of Directors on the advice
of the Compensation Committee and vary as to timing and amount with the
responsibilities and performance of the individual.

The compensation of the President and Chief Executive Officer of the Company,
Mr. Stanley A. Milner, is comprised of the same components and is determined in
the same manner as that of the other executive officers.

<TABLE>
<S> <C> <C>
Submitted on behalf of the Compensation Committee: Stuart T. Peeler, Chairman John E. Maybin
Hugh J. Kelly David E. Mitchell
</TABLE>

The Board of Directors has accepted all recommendations of the Compensation
Committee.

6
<PAGE> 9
PERFORMANCE GRAPHS

The graphs which follow assume that C$100 and US$100, respectively, were
invested on April 30, 1989, when the Company commenced operations, and December
31, 1992 in the Company's common shares, The Toronto Stock Exchange (TSE) 300
Composite Index, the TSE Oil and Gas Producers Index and the American Stock
Exchange (AMEX) Market Value Index. The graphs on page 8 also assume that US$100
was invested on December 31, 1995 in the American Stock Exchange Natural
Resources Index which was reformulated by AMEX during 1997 with effect from
December 31, 1995. Reinvestment of dividends is assumed in all cases. The graphs
were plotted using the data shown below each graph.

Cumulative Value of C$100 Invested on April 30, 1989

[LINE GRAPH]

Cumulative Value of C$100 Invested on December 31, 1992

[LINE GRAPH]

7
<PAGE> 10
Cumulative Value of US$100 Invested on April 30, 1989

[LINE GRAPH]

<TABLE>
<CAPTION>
- - -------------- ------- -------- --------- ----------- ----------- ---------- ----------- ----------- --------- ---------- ----------
Apr. 30 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Mar 13
1989 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- - -------------- ------- -------- --------- ----------- ----------- ---------- ----------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CII US$ 100 150 140 105 129 122 75 131 193 157 175
- - -------------- ------- -------- --------- ----------- ----------- ---------- ----------- ----------- --------- ---------- ----------
Market Value 100 110 89 114 116 138 126 159 169 205 214
Index
- - -------------- ------- -------- --------- ----------- ----------- ---------- ----------- ----------- --------- ---------- ----------
Nat. Res 100 123 132 120
- - -------------- ------- -------- --------- ----------- ----------- ---------- ----------- ----------- --------- ---------- ----------
</TABLE>

Cumulative Value of US$100 Invested on December 31, 1992

[LINE GRAPH]

<TABLE>
<CAPTION>
---------------- -------------- ------------- ------------- ----------------- ---------------- ---------------- -------------
Dec. 31, 1992 Dec. 31, 1993 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1996 Dec. 31, 1997 Mar. 13,1998
---------------- -------------- ------------- ------------- ----------------- ---------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CIIUS$ 100 95 58 102 150 122 137
---------------- -------------- ------------- ------------- ----------------- ---------------- ---------------- -------------
Market Value 100 120 109 137 146 177 186
Index
---------------- -------------- ------------- ------------- ----------------- ---------------- ---------------- -------------
Nat. Res 100 123 132 120
---------------- -------------- ------------- ------------- ----------------- ---------------- ---------------- -------------
</TABLE>

COMPENSATION OF DIRECTORS

With effect from January 1, 1997, each Director receives an annual retainer of
$25,000, which is paid in quarterly installments. Each non-executive Director is
also paid at the rate of $900 for each Board meeting and committee meeting

8
<PAGE> 11
attended. Directors receive no compensation for the time required to prepare for
or travel to or from Board or committee meetings. The Company reimburses
reasonable out-of-pocket expenses incurred by Directors. On May 15, 1997, each
of the Directors was granted an option on 5,000 common shares at the exercise
price of $21.32 U.S. per share.

STATEMENT OF CORPORATE GOVERNANCE PRACTICES

The Company supports and complies with the corporate governance guidelines of
The Toronto Stock Exchange. The Company's Board of Directors participates
actively in strategic planning and in the identification and management of
business risks confronting the Company. Corporate objectives, budgets and
corporate authorities are reviewed and approved regularly. The Company's Board
and Board Committees have ongoing involvement in succession planning,
shareholder communications, internal control matters and management information
systems. The Board has a non-executive Chairman and is comprised of eight
members, five of whom are nonrelated.

APPOINTMENT OF AUDITORS

As set forth in the notice, action will be taken at the meeting to provide for
the appointment of auditors until the close of the next annual meeting. THE
PROXIES HEREBY SOLICITED WILL BE EXERCISED IN FAVOR OF THE APPOINTMENT OF PRICE
WATERHOUSE which firm has been the Company's auditors since the Company's
inception. A representative of Price Waterhouse is expected to be present at the
meeting.

OTHER MATTERS

There is no business of which the management of the Company is aware to be
presented for action by the shareholders at the meeting to which this
Information Circular relates other than that mentioned herein or in the Notice
of Meeting. The date by which shareholder proposals must be received by the
Company for inclusion in the information circular and proxy form relating to the
1999 annual meeting is December 1, 1998.

ADDITIONAL INFORMATION

Copies of the Company's latest Annual Information Form and any documents
incorporated therein by reference; the Company's latest Annual Report on Form
10-K and any documents incorporated therein by reference; the Company's audited
Consolidated Financial Statements for the year ended December 31, 1997 and any
interim financial statements issued subsequent thereto, and this Information
Circular may be obtained from the Secretary of the Company at 1201 Toronto
Dominion Tower, Edmonton Centre, 10205 - 101 Street, Edmonton, Alberta, Canada,
T5J 2Z1.

CERTIFICATE

The foregoing contains no untrue statement of a material fact and does not omit
to state a material fact that is required to be stated or that is necessary to
make a statement not misleading in light of the circumstances in which it was
made.

<TABLE>
<S> <C>
S.A. Milner, A.O.E.,LL.D. E.L. Hahn
President and Senior Vice President, Finance and Treasurer,
Chief Executive Officer Chief Financial Officer
</TABLE>

Edmonton, Alberta
March 20, 1998

9
<PAGE> 12

CHIEFTAIN INTERNATIONAL, INC.
1201 TORONTO DOMINION TOWER
EDMONTON CENTRE
EDMONTON, ALBERTA, CANADA
T5J 2Z1

INSTRUMENT OF PROXY
PROXY SOLICITED ON BEHALF OF MANAGEMENT FOR THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD ON MAY 14, 1998

The undersigned shareholder of CHIEFTAIN INTERNATIONAL, INC. (the "Company"),
revoking any proxy heretofore given, hereby nominates, constitutes and appoints
STANLEY A. MILNER, President and Chief Executive Officer, or failing him, ESTHER
S. ONDRACK, Senior Vice President and Secretary, or, instead of either of them,
________________________________ as proxy of the undersigned, with full power of
substitution, to attend the annual meeting of shareholders of the Company to be
held on the 14th day of May, 1998, and any and all adjournments thereof and to
vote and otherwise act thereat for and on behalf of and in the name of the
undersigned, as indicated below:

1. to vote FOR [ ] or WITHHOLD vote on [ ] the election as directors of the
nominees named in the Information Circular dated March 20, 1998, to hold
office until the annual meeting of shareholders in the year 2001, such
nominees being Stanley A. Milner and David E. Mitchell;

2. to vote FOR [ ] or WITHHOLD vote on [ ] the appointment of Price
Waterhouse as auditors of the Company;

3. to vote in his or her discretion upon any amendments and/or variations to
the matters identified in the notice of meeting and upon such other business
as may properly come before the meeting or any and all adjournments thereof;

the undersigned hereby ratifying and confirming all that the said proxy may do
by virtue hereof.

THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT WHICH RECOMMENDS VOTING FOR ALL
ITEMS. THIS PROXY WILL BE VOTED AS SPECIFIED AND IF NOT SPECIFIED, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR ALL ITEMS.

____________________________________
(Date)

____________________________________
(Signature of Shareholder)

The instrument appointing a proxy shall be in writing and shall be executed by
the shareholder or his or her attorney authorized in writing. If the shareholder
is a corporation, the instrument must be signed by a duly authorized officer or
attorney.

A shareholder who has given a proxy in the above form has the power to revoke
it. Procedures for revocation are described in the Information Circular.

THE PERSONS DESIGNATED IN THE ABOVE FORM OF PROXY ARE OFFICERS AND DIRECTORS OF
THE COMPANY. A SHAREHOLDER HAS THE RIGHT TO APPOINT SOME OTHER PERSON, WHO NEED
NOT BE A SHAREHOLDER, TO REPRESENT HIM OR HER AT THE MEETING, AND HE OR SHE MAY
EXERCISE THIS RIGHT BY INSERTING SUCH OTHER PERSON'S NAME IN THE BLANK SPACE
PROVIDED IN THE FORM OF PROXY.

PLEASE FILL OUT, DATE, SIGN AND RETURN THE PROXY PROMPTLY, USING THE ENCLOSED
ENVELOPE, TO:

Chieftain International, Inc.
c/o CIBC Mellon Trust Company
600 The Dome Tower
333 - 7th Avenue S.W.
Calgary, Alberta, Canada
T2P 2Z1