PURCHASE AND SALE AGREEMENT
WORDSWORTH AREA, SE SASKATCHEWAN

This Agreement made the 1st day of July, 2010.

BETWEEN:

 
DELTA OIL & GAS (CANADA) INC., a body Corporate, with an office in the City of
Vancouver, British Columbia (hereinafter called the “Vendor” or “Trasferor”)

-and-

 
PETREX ENERGY LTD., a body Corporate, with an office in the City of Calgary,
Alberta (hereinafter called the “Purchaser” or “Transferee”)

WHEREAS the Vendor wishes to sell and the Purchaser wishes to purchase the
Assets (5% working interest) upon and subject to the terms and conditions set
forth in this Agreement.

NOW THEREFORE the Parties agree as follows:

1.           Definitions

Each capitalized term used in this Agreement will have the meaning given to it
in the Canadian Association of Petroleum Landmen 2000 Property Transfer
procedure (the “Property Transfer Procedure”).  In addition:
 
i)           “Effective Date” means 12:01a.m. on July 1, 2010.
 
ii)           “Closing Date” means 10:00a.m. on August 3, 2010 or such as
may  be agreed upon in writing by the Parties.

2.           Schedules & Exhibits

The following Schedules are attached hereto and made part of this Agreement:

i)           Schedule “A”, which is the Land Schedule and identifies:

(1)         the Lands; (2) the Leases; (3) any other agreements, documents or
data that are to be excluded form the Miscellaneous Interests under that
definition; (4) any encumbrances, Rights of First Refusal, production sale
agreements, other agreements or penalties required to be included in the land
Schedule under the definition of Permitted Encumbrances or the definition of
Title and Operating Documents; (5) any Facilities required to be included in the
land Schedule under the definition of Facilities, any other Tangibles described
in paragraph “C” of the definition of Tangibles and any assets otherwise falling
within the definition of Tangibles that are specifically excluded therefrom; and
(6) the Wells; and

 
 

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ii)           Schedule “B” Property Transfer Procedure elections and amendments
and the Exhibit “A” thereto that is the form of General Conveyance.

3.           Purchase and Sale

The Purchaser agrees to purchase from the Vendor and the Vendor agrees to sell
the Assets to the Purchaser on the terms and conditions set forth in the
Agreement.  Subject to the modifications that may be made under the Property
Transfer Procedure, the consideration payable by the Purchaser to the Vendor for
the Assets ifs $757,500.00 (the “Purchase Price” including 5% GST on Tangibles),
and shall be allocated among the Assets as follows:

    i)
To Petroleum and Natural Gas Rights
80%
$   599,990.00
   ii)
To Tangibles (exclusive of GST)
20%
$   150,000.00
  iii)
To Miscellaneous
 
$            10.00
 
SubTotal   
$   750,000.00
  iv)
5% GST on Tangibles
 
$       7,500.00
     
__  _______
 
TOTAL   
$757,500.00

 
4.         Payment of Purchase Price
 
The Purchaser will pay the Purchase Price to the Vendor at Closing.
 
5.        Incorporation by Reference of Property Transfer Procedure
 
The Property Transfer Procedure is hereby incorporated by reference into this
Agreement, subject to the elections and amendments listed in Schedule “B”.
 
In witness whereof the Parties have duly executed this Agreement.

 
Per: /s/ Douglas Bolen                                            
              Douglas Bolen
              DELTA OIL & GAS (CANADA) INC.

 

Per: /s/ William Nixon                                             
               Willia Nixon
               PETREX ENERGY LTD.
 

 
- 2 -

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SCHEDULE “A”
to a Purchase and Sale Agreement dated the 1st day of July 2010, between
Delta Oil & Gas (CANADA) Inc. and Petrex Energy Ltd.
as to a five percent (5%) working interest
 
FILE NO.
LAND
LEASE
FORMATION
ENCUMBRANCES
 
L.6-172
 
S/2 25-7-3 W2M
 
FREEHOLD P&NGL
 
To base of Mississippian (Alida) Formation
FH
ROY
15.00%
 
L.6-176
 
NW/4 14-7-3 W2M
 
FREEHOLD P&NGL
 
To base of Mississippian (Alida) Formation
FH
ROY
15.00%
 
L.6-179
 
NE/4 23-7-3 W2M
 
FREEHOLD P&NGL
 
To base of Mississippian (Alida) Formation
FH
ROY
15.00%
 
L.6-180
 
NW/4 23-7-3 W2M
 
FREEHOLD P&NGL
 
To base of Mississippian (Alida) Formation
FH
ROY
15.00%
 
L.6-181
 
SW/4 23-7-3 W2M
 
FREEHOLD P&NGL
 
To base of Mississippian (Alida) Formation
FH
ROY
15.00%
 
L.6-182
 
SE/4 23-7-3- W2M
 
FREEHOLD P&NGL
 
To base of Mississippian (Alida) Formation
FH
ROY
15.00%
 
L.6-184
 
NE/4 12-7-3 W2M
 
FREEHOLD P&NGL
 
To basement
FH
ROY
15.00%
 
L.6-188
 
NW/4 12-7-3 W2M
 
FREEHOLD P&NGL
 
To basement
FH
ROY
15.00%
 
L.6-189
 
NW/4 12-7-3 W2M
 
FREEHOLD P&NGL
 
To basement
FH
ROY
15.00%
 
L.6-190
 
NW/4 12-7-3 W2M
 
FREEHOLD P&NGL
 
To basement
FH
ROY
15.00%
 
L.6-192
 
NW/4 12-7-3 W2M
 
FREEHOLD P&NGL
 
To basement
FH
ROY
15.00%
 
L.6-193
 
SW/4 13-7-3 W2M
 
REEHOLD P&NGL
 
To basement
FH
ROY
15.00%
 
L.6-208
 
LSD 3-23-7-3-2 W2M
 
FREEHOLD P&NGL
 
To base of Mississippian (Alida) Formation
FH
ROY
22.50%
 
L.6-215
 
LSD 2-23-7-3 W2M
 
FREEHOLD P&NGL
 
To base of Mississippian (Alida) Formation
FH
ROY
22.50%
 
L.6-174
 
NW/4 24-7-3 W2M
CROWN P&NG
LEASE #57355
 
To base of Mississippian (Alida) Formation
CR
ROY
 
 
L.6-175
 
NE/4 14-7-3 W2M
CROWN P&NG
LEASE #54268
 
To base of Mississippian (Alida) Formation
CR
ROY
 
 
L.6-194
 
SW 1/4 11-7-3 W2M
CROWN P&NG
LEASE #58427
 
To basement
CR
ROY
 
 
L.6-195
 
SW 1/4 12-7-3 W2M
CROWN P&NG
LEASE #58428
 
To basement
CR
ROY
 
 
L.6-197
 
NW/4 13-7-3 W2M
CROWN P&NG
LEASE #58646
 
To basement
CR
ROY
 

 
A - 1

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FILE NO.
LAND
LEASE
DESCRIPTION
ENCUMBRANCES
L.6-183
SE/4 23-7-3 W2
SURFACE LEASE
 
SOUTHEAST QUARTER (1/4) OF SECTION TWENTY THREE (23), TOWNSHIP SEVEN 9&), RANGE
THREE (3) WEST OF THE SECOND (2) MERIDIAN CERTIFICATE OF TITLE NO. 107038043
   
L.6-199
 
NE/4 23-7-3- W2M
SURFACE LEASE
WELLSITE & ACCESS ROAD FOR THE TEXALTA ET AL WORDSWORTH EAST HZ
3B9-23/3A11-23-7-3 W2
   
L.6-200
 
SE/4 23-7-3 W2M
SURFACE LEASE
ACCESS ROAD FOR THE TEXALTA ET AL WORDSWORTH EAST HZ 3B9-23/3A11-23-7-3 W2M
HORIZONTAL WELL
   
L.6-210
SE/4 23-7-3 W2M
SURFACE LEASE
 
WELLSITE & ACCESS ROAD HZ1C2-23/1B14-14-7-3 W2 WELL AT SE/4 SECTION 23, TOWNSHIP
7 RANGE 3 W2. CERTIFICATE OF TITLE 107038043
   
L.6-213
 
NE/4 23-7-3 W2M
SURFACE LEASE
WELLSITE 7 ACCESS ROAD FOR THE WORDSWORTH SWD - ROW
   
L.6-217
 
SE/4 23-7-3W2
SURFACE LEASE
SOUTHEAST QUARTER SECTION 23, TOWNSHIP 7, RANGE 3 WEST OF THE 2ND MERIDIAN 3.71
ACRES (1.5 HA)
   
L.6-218(A)
 
SE/4 23-7-3 W2
SURFACE LEASE
 
SOUTHEAST QUARTER (1/4) OF SECTION TWENTY THREE (23), TOWNSHIP SEVEN (7), RANGE
THREE (30) WEST OF THE SECOND (2) MERIDIAN CERTIFICATE OF TITLE NO. 107038043
(ROW) SWD
   
L.6-218(B)
 
SE/4 23-7-3 W2
SURFACE LEASE
SOUTHEAST QUARTER (1/4) OF SECTION TWENTY THREE (23), TOWNSHIP SEVEN (7), RANGE
THREE (30) WEST OF THE SECOND (2) MERIDIAN CERTIFICATE OF TITLE NO. 107038043:
FLOWLINE RIGHT OF WAY 2a2-23 TO 3B9 SWD
   
L.6-219
SE/4 23-7-3 W2M
SURFACE LEASE
 
FLOWLINE RIGHT OF WAY FROM TEXALTA ET AL WORDSWORTH E. HZ 1B1-23-7-3 W2 TO
2A2-23-7-3- BATTERY
   
L.6-220
SW/4 24-7-3 W2M
SURFACE LEASE
 
SOUTHWEST QUARTER (1/4) OF SECTION TWENTY FOUR (24), TOWNSHIP SEVEN (7), RANGE
THREE (3) WEST OF THE SECOND (2) MERIDIAN CERTIFICATE OF TITLE NO. 105486240 HZ
1B4-24
   
L.6-223
SE/4 23-7-3 W2
SURFACE LEASE
 
SE 1/4 SEC 23, TWP 7, RGE 3 W2M COT #107038043
   
L.6-238
SE/4 3-23-7-3 W2
SURFACE LEASE
 
TEXALTA ET AL WORDSWORTH HZ 1C3-23/3A13-13-7-3 W2; S/2 23, 7-3 W2 WELLSITE AND
ACCESS ROAD
   
L.6-224
SE/4 23-7-3 W2
SURFACE LEASE
 
SOUTHWEST QUARTER (1/4) OF SECTION TWENTY THREE (23), TOWNSHIP SEVEN (7), RANGE
THREE (3) WEST OF THE SECOND (2) MERIDIAN CERTIFICATE OF TITLE NO. 87R0412Ra
(ROW) HZ 1B4-24
   
L.6-214
ROW 3C1-23 TO 2A2-23
EASEMENT
 
FLOWLINE RIGHT OF WAY FROM 3C1-23 TO 2A2-23 BATTERY SE/4 SECTION 23, TOWNSHIP 7,
RANGE 3W2 - CERTIFICATE OF TITLE NO: 90R37104D (SK CERT #107038043)
   

 
A - 2

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AGREEMENTS
1 - A.6-094
Farmout, Option & Participation Agreement dated April 10, 2006
2 - A.6-110
Farmout, Option & Participation Agreement dated March 16, 2009
3 - A.6-117
Farmout & Participation Agreement dated October 1, 2009
4 - A.6-109
Salt Water Disposal Agreement dated May 15, 2009

WELLS
1
Texalta et al Wordsworth E HZ2A1-23-3111-14-7-3 W2 (5% WI)
2
Texalta et al Wordsworth E HZ1C2-23-1B14-14-7-3 W2 (5% WI)
3
Texalta et al Wordsworth E HZ1B1-23-3B9-14-7-3 W@ (5% WI)
4
Texalta et al Wordsworth E HZ1B4-24/1C5-13-7-3-W2 (BPO 0% /APO 2.5%)
5
Texalta et al Wordsworth E SWD RE DD 3B9-23-4A10-23-7-3 W2 (5% WI)
6
2A2-23-7-3 W2 Wordsworth Battery

 
EQUIPMENT AND FACILITIES
PUMPING UNIT AND BASE (wells 1-3 above)  > 5% WI
PUMPING UNIT AND BASE (well 4 above)  > BPO 0%/APO 2.5%
FLOWLINE to 2A2-23 BATTERY (well 4 above) > BPO o%/APO 2.5%
FLOWLINE TO 2A2023 BATTERY (Wells 1-3 above) > 5% APO
BATTERY 2A2-23-14-7-eW2 5 > % WI
       Storage Tank - Fiberglass API Spec Tank 400 BBL 12x20
       Storage Tank - Fiberglass API Spec Tank 500 BBL 12x25
       TREATER BUILDING
       TREATER
Texalta et al Wordsworth # 3B9-23/4B11-23-7-3 W2M
       Salt Water Disposal Well and Flowline

 
SEISMIC
Lines WO 1, 2, 3 & 4

 

 
A - 3

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SCHEDULE “B”
to a Purchase and Sale Agreement dated the 1st day of July 2010, between
Delta Oil & Gas (CANADA) Inc. and Petrex Energy Ltd.
as to a five percent (5%) working interest
 
CAPL PROPERTY TRANSFER PROCEDURE ELECTIONS AND AMENDMENTS
 

 

1.
GST (Subclause 2.03A):
N/A
       
a)  GST Election: Alternative
N/A
 
b)  GST Business # (Vendor):
N/A
 
c)  GST Business # (Purchaser):
N/A
     
2.
Interest Accrual (Clause 2.04): Alternate _________ Neither Alternate 1 nor
2     X   apply.
   
3.
Place of Closing (Clause 3.01):
Office of Purchaser
     
4.
Access to Transferee’s Files (Subclause 3.04B):
6 months
     
5.
Distribution of specific conveyances (Clause 3.05):
N/A
     
6.
Final Statement of Adjustments (Paragraph 4.02A(b)):
60 day period
     
7.
Treatment of income during interim period (Clause 4.03):
N/A
 
Income tax adjustment if alternate 1 applies:
N/A
 
Exception to 4.03A if Alternative 1 applies (Subclause 4.03B):
will not apply
     
8.
Transferor’s representations and warranties (Clause 6.02). Those representations
and warranties in that Clause that apply are indicated by an “X” below.
(Scenario A and B elections as indicated.)

 
X    Residency for tax purposes
X    Abandonment of wells
X    Lawsuits and claims
X    Condition of tangibles
X    No default notices
X    Well/intangibles license transfers
X    Compliance with leases
X     Reg. production penalties
X    Payment of Royalties
X     Reg. production allowables
X    Encumbrances
X     Area of mutual interest
X    No reduction
X     No offset obligations
X    Sale Agreements
X     Commitment to deliver
X    Provisions of documents
X     ARTC
X    Authorized expenditures
X     Quiet enjoyment
X    Environmental matters
__   Additional representations
X    Condition of wells
 

 
9.
Survival of representations and warranties (Clause 6.04):
12 months
     
10.
Option to terminate re: ROFR Exercises (Subclause 7.01D):
will not apply
     
11.
Delivery of Title Defects Notice (Subclause 8.02A):
5 business days

 
B - 1

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12.
Title defects mechanism (Subclause 8.02B):
         
13.
Responsibility of Transferor (Clause 13.01):
           
i)  Subclause 13.01A
Alternate 1
 
ii) Subclause 13.01B
12 months
       
14.
Limit on Transferor’s Responsibility (Subclause 13.03A):
will apply
       
15.
Minimum claim threshold (Subclause 13.03B):
will not apply
       
16.
Addresses for Service (Clause 15.02):
 

 
  Delta Oil & Gas (Canada) Inc.
  Attention:  Douglas Bolen
  Suite 605-700 West Pender Street
  Vancouver, BC  V6C  1G8
  Tel:  (604) 506-4243
  Fax: (604) 602-1525
  Email: douglasbolen@yahoo.com
 
  Petrex Energy Ltd.
  Attention: William Nixon
  8228 Elbow Drive S.W.
  Calgary, Alberta  T2V 1K4
  Tel:  (403) 255-8190
  Fax:  (403) 255-8007
  Email: Petrex@texalta.com

 

 
 
B - 2

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Exhibit “A” to the Property Transfer Procedure included as Schedule “B”
to a Purchase and Sale Agreement dated the1stday of July 2010, between
Delta Oil & Gas (Canada) Inc, and Petrex Energy Ltd. as to five percent (5%)
working interest.

 
GENERAL CONVEYANCE
Wordsworth, Saskatchewan

 
This General Conveyance made this 1st day of July 2010
 
BETWEEN:
 
DELTA OIL & GAS (CANADA) INC., a body Corporate, with an office in the City of
Vancouver, British Columbia (hereinafter called the “Vendor” or “Transferor”)
 
-and -
 
PETREX ENERGY LTD., a body Corporate, with an office in the City of Calgary,
Alberta (hereinafter called the “Purchaser” or the “Transferee”)

WHEREAS the Transferor has agreed to convey and the Transferee has agreed to
acquire the Transferor’s entire five percent (5%) working interest in the
Assets, the Parties agree as follows:
 
1.             Definitions
 
In this General Conveyance, “Agreement” means the Purchase and Sale Agreement
dated the 1st day of July 2010 between the Transferor and the Transferee. In
addition, the definitions provided for in the Agreement and in the Property
Transfer Procedure included as Schedule “B” to the Agreement are adopted in this
General Conveyance.
 
2.            Conveyance
 
The Transferor, for the consideration provided for in the Agreement, the receipt
and sufficiency of which is acknowledged by the Transferor, conveys the Assets,
to the Transferee. The Transferee acquires the Assets from the Transferor,
subject to the terms of the Agreement, and Permitted Encumbrances and to
compliance with the terms of the Title and Operating Documents.

3.             Effective Time

This General Conveyance is effective as of the Effective Date.

 
B - 3

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4.                 Subordinate Document

This General Conveyance is executed and delivered by the Parties under the
Agreement for the purposes of the provisions of the Agreement, and the terms
hereof are to be read in conjunction with the terms of the Agreement. The
Agreement will prevail if there is a conflict between the provisions of the
Agreement and this General Conveyance.
 
5.                 Enurement

This General Conveyance enures to the benefit of and binds upon the Parties and
their respective successors and permitted assigns.

 
6.                 Further Assurances

Each Party will, after the date of this General Conveyance, on a timely basis
and without further consideration, do all further acts and execute and deliver
all further documents that are reasonably required to carry out the terms of the
General Conveyance.

 
IN WITNESS WHEREOF the Parties have duly executed this General Conveyance.
 

Per: /s/ Douglas Bolen                                                  
              Douglas Bolen
              DELTA OIL & GAS (CANADA) INC.

Per: /s/ William Nixon                                                   
               William Nixon
               PETREX ENERGY LTD.

 

 
B - 4

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