Exhibit 10.3

TERMINATION AGREEMENT

This TERMINATION AGREEMENT (this “Agreement”), dated as of the 29th day of
March, 2007 is between SYNTROLEUM INTERNATIONAL CORPORATION, a Delaware
corporation (“Syntroleum”) and SOVEREIGN OIL & GAS COMPANY II, LLC, a Texas
limited liability company (“Sovereign”).

RECITALS

A. Syntroleum and Sovereign are parties to that certain Joint Development
Agreement dated the 1st day of March, 2004, as amended by that certain
Syntroleum-Sovereign Letter Agreement on OML 113 Lease effective as of
December 17, 2004 (the “JDA”). Defined terms used in this Agreement and not
otherwise defined shall have the meanings given to them in the JDA.

B. By letter dated April 3, 2006, Syntroleum described the 2006-2007 budgets
pursuant to the JDA (the “2006 Budget Letter”).

C. Pursuant to the JDA, Sovereign obtained, on behalf of Syntroleum, Contract
Areas described in Schedule F of the JDA under the Field Names “Aje” (the “Aje
Field”) and “Ajapa” (the “Ajapa Field”).

D. Syntroleum Nigeria Limited, a company existing under the laws of the Republic
of Nigeria (“Syntroleum Nigeria”) was an Affiliate of Syntroleum prior to
January 19, 2007.

E. To develop the Aje Field, Syntroleum Nigeria entered into a Participation
Agreement for Oil Mining Lease 113, Federal Republic of Nigeria, with Yinka
Folawiyo Petroleum Company Limited, Lundin Petroleum B.V., Palace Exploration
Company, Challenger Minerals Inc., Providence Resources P.L.C. and Howard Energy
Co., Inc., dated as of January 12, 2005 (the “Aje Participation Agreement”).

F. Syntroleum presented Sovereign with notice of termination of the JDA dated
November 15, 2006.

G. The parties have agreed that certain terms of the JDA relating to termination
of the JDA should be clarified to be consistent with the intent of the parties
and the purposes of the JDA.

Accordingly, the parties agree as follows:

AGREEMENT

1. Termination. Except for Paragraph 3 hereof which shall expire on April 5,
2007, the JDA shall terminate effective March 31, 2007.

 

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2. JDA Section 6.1. Syntroleum and Sovereign agree, consistent with the terms of
the Budget Letter, that any and all unspent funds in the Escrow Account or
distributed to Sovereign during the 2006-2007 budget year pursuant to the JDA
(exclusive of the Multiplier, as defined in the Budget Letter), less any
contingent liabilities Sovereign has incurred (such as taxes and other levies or
claims by third parties against Sovereign), shall be returned to Syntroleum by
May 31, 2007. Sovereign will provide Syntroleum by April 30, 2007 a list of
outstanding invoices or purchase orders as of March 31, 2007.

3. JDA Section 6.6. Except for any transaction consummated between Syntroleum
and Energy Equity Resources Limited or its affiliates prior to the date of this
letter, Syntroleum agrees to provide to Sovereign warrants to purchase
twenty-five thousand (25,000) shares of Syntroleum Common Stock, at the Exercise
Price, in accordance with the terms of Section 6.6.2.1, upon any acquisition by
an Industry Partner of an interest of Syntroleum Nigeria Limited in the Aje
Field pursuant to a commitment to purchase executed after the date of this
letter and on or prior to April 5, 2007.

4. JDA Section 6.11. The parties agree that Sovereign Incentive Compensation
earned under Section 6.6 of the JDA shall include all payments to be made under,
pursuant to or in lieu of compensation described in Schedule 4 of the Aje
Participation Agreement, and that the provisions of the JDA relating to any such
payments, as described in Section 6.11, shall survive termination of the JDA,
regardless of when such payments are received by Sovereign.

5. JDA Section 8.3. The parties agree as follows regarding the effect of
Section 8.3 of the JDA following termination:

(a) No Contract Area (except the Aje Field and the Ajapa Field) has been taken
or is under active negotiation by Syntroleum. Following termination, Sovereign
shall be free to pursue and obtain interests in any Contract Area.

(b) Sovereign retains the rights to all electronic and hardcopy work product
that it generated in the conduct of its work under the JDA, but Sovereign agrees
to provide copies of such work product to Syntroleum prior to termination of the
JDA pursuant to Section 8.3. All Confidential Information provided to third
parties by Syntroleum shall be subject to Article 12 of the JDA.

6. Payments by Sovereign Pursuant to Sections 8.3 and 8.4. Syntroleum and
Sovereign agree that Sovereign shall pay $50,000 for all equipment to be
purchased pursuant to Section 8.4.

7. Transfers of Aje and Ajapa Interests. Syntroleum represents and warrants to
Sovereign the following:

 

  (a)

that the executed letter from Syntroleum Nigeria Limited to Sovereign Oil & Gas
Company II, LLC and Syntroleum International Corporation dated January 2007 was
included on the disclosure schedule regarding existing agreements of Syntroleum
Nigeria Limited when the interests of Syntroleum Nigeria Limited

 

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were conveyed by Syntroleum to Energy Equity Resources (Norway) Limited and/or
its subsidiaries or affiliates on or about January 19, 2007; and

 

  (b) no transfers of interests of Syntroleum or any subsidiary or affiliate of
Syntroleum in the Aje Field or the Ajapa Field occurred prior to January 19,
2007, except for the following:

 

  (i) Syntroleum Nigeria Limited’s transfer of interests in the Aje Field to
Lundin Nigeria Limited, Palace Exploration Nigeria Limited, Challenger Minerals
(Nigeria) Limited, P.R. Oil & Gas Nigeria Limited and Howard Energy Nigeria
Limited;

 

  (ii) Syntroleum Nigeria Limited’s transfer of 50% of its participating
interest in the Ajapa Field to Energy Equity Resources Oil & Gas Limited in July
2006. To the best of Syntroleum’s knowledge, this transfer has yet to be
approved by the applicable Nigerian authorities; and

 

  (iii) Syntroleum Nigeria Limited’s agreement to transfer a 3% participating
interest in the Aje Field to Energy Equity Resources Oil & Gas Limited in August
2006. This transfer was not effectuated once the Aje partner group elected not
to drill the Aje-4 well in October 2006. Subsequently, Syntroleum Nigeria
Limited orally offered the same terms to Energy Equity Resources Oil & Gas
Limited if a new industry partner was brought in to drill the Aje-4 well.

 

  (c) none of the transfers by Syntroleum or any subsidiary of affiliate of
Syntroleum to Energy Equity Resources (Norway) Limited and/or its subsidiaries
or affiliates described herein materially affected, modified, amended or
otherwise diminished the rights of Sovereign pursuant to the Aje Participation
Agreement or any overriding royalty interest of Sovereign in the Aje Field or
the Ajapa Field.

8. Waiver of Consent. Sovereign hereby waives its right to receive notice from
Syntroleum and consent to any transfer of interest of Syntroleum Nigeria Limited
in either the Aje Field or the Ajapa Field to Energy Equity Resources (Norway)
Limited and/or its subsidiaries or affiliates.

9. Survival; Assigns. The terms of this Agreement shall survive termination of
the JDA and shall inure to the benefit of and be binding on the successors and
assigns of the parties hereto.

10. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Texas (without giving
effect to the conflict of laws provisions thereof).

11. Submission to Jurisdiction. Each party hereto submits to the nonexclusive
jurisdiction of the federal and state courts located in Harris County, Texas,
for any action or proceeding relating

 

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to this Agreement, and each party waives any objection which it may have based
on improper venue or forum non conveniens to the conduct of any proceedings in
such courts.

12. Counterparts. This Agreement may be executed in counterparts which, taken
together, shall constitute the entire agreement.

Executed as of the date first written above.

 

SYNTROLEUM INTERNATIONAL CORPORATION By:   /s/ Richard L. Edmonson Name:  
Richard L. Edmonson Title:   Vice President and General Counsel   SOVEREIGN OIL
& GAS COMPANY II, LLC By:   /s/ Joseph M. Bruso Name:   Joseph M. Bruso Title:  
President

 

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