1048136 ALBERTA LTD.

c/o 2760 – 200 Granville Square

200 Granville Street

Vancouver, British Columbia

Canada V6C 1S4

August 10, 2005

 

Cascade Energy, Inc.

Suite 820, 3405 Folsom Blvd., Folsom, CA

95630

 

Attention: Mr. Chris Foster - CFO

Silver Star Energy Inc.

Suite 800, 11300 West Olympic Blvd., Los Angeles, CA

90064

 

Attention:              Mr. Robert McIntosh - CEO

Fidelis Energy Inc.
5151 East Broadway, Tucson, Arizona

85711

 

Attention: Mr. Sterling Klein - CFO

 

 

Gentlemen:

 

Re:

Data Sharing Agreement Among 1048136 Alberta Ltd. (“1048136”), Cascade Energy,
Inc. (“CSCE”), Silver Star Energy Inc. (“SVSE”) and Fidelis Energy Inc. (“FDEI”)

_

                                          
                                                                         
          

 

This Agreement outlines the terms upon which 1048136 will share certain
proprietary oil and gas engineering data that it owns respecting several
prospective areas in the State of Kansas.

 

Pursuant to an agreement (the “Wildes Agreement") dated the 5th day of June,
2005, between 1048136 and Wildes Exploration, LLC (“Wildes”), 1048136 purchased,
among other things, certain magnetic data acquired by airborne surveys over
lands (the “Lands”) in the State of Kansas that cover an area of approximately
1,000,000 acres, as well as interpretations of such data (including scaled
digital plots defining potential prospects, maps and other related data) (all
such data purchased by 1048136 by the Wildes Agreement, or derived from such
data, is collectively referred to herein as the “Data”). The Lands are described
more particularly in Exhibit “A” to the Wildes Agreement, a copy of which
agreement is attached hereto as Schedule “A”. A five (5%) percent gross
overriding royalty (the “Royalty”) has been reserved by Wildes for any “Oil and
Gas Interests” (as defined in the Wildes Agreement) acquired by 1048136, or any
other party who has reviewed the Data, prior to December 31, 2015 (the “Drop
Dead Date”). The Royalty shall encumber the Lands, in addition to any other
lessor royalties and other encumbrances affecting the Lands, as and when such
Lands are developed pursuant hereto.

 

Subject to compliance with the terms and conditions hereof, 1048136 will sell to
the parties hereto an interest in the Data and the right to use the Data to
develop the Lands in the manner hereinafter set forth.

 

1.

Interpretation

 

 

(a)

The headings of the clauses of this Agreement are inserted for convenience of
reference only and shall not affect the meaning or construction thereof.

 

(b)

Wherever the plural or masculine or neuter is used the same shall be construed
as meaning singular or feminine or body politic or corporate, or vice versa as
the context so requires.

 

 

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2

 

 

 

2.

Sale of Data

Subject to the terms hereof and the Royalty, 1048136 agrees to sell the
following interests in the Data to the parties as follows:

CSCE – 25%

FDEI – 25%

SVSE – 20%

 

(collectively the “Companies”)

 

in consideration for the Companies conducting and completing the development
programs and fulfilling the other terms and conditions set forth in hereinbelow.

3.

Earning Program

3.1            The Companies agree to pay, in proportion to the interests in the
Data that they are entitled to earn under this Agreement, the costs of the
acquisition, by way of lease or otherwise, of up to two (2) sections of the
Lands (the “Initial Lands”), selected by 1048136, for a two (2) well drilling
program such Initial Lands. The Companies agree to advance to 1048136 their
respective share of the funds required to complete acquisition of the Initial
Lands forthwith upon the receipt of written notification from 1048136 that it
has selected appropriate Initial Lands, and negotiated terms with the underlying
owners of such Initial Lands, in order to secure the Initial Lands.

3.2            Upon the completion of the acquisition of the Initial Lands, the
Companies shall fully fund, drill, abandon, or complete, as the case may be, two
(2) oil and/or gas wells (collectively the “Earning Wells”) on the Initial Lands
in accordance with this Agreement, against the receipt of authorizations for
expenditure from 1048136. Prior to the drilling, abandonment and or completion
of the Earning Wells, the Companies will have earned no interest in the Data,
the Earning Wells, or any part thereof. 1048136 shall be the operator (the
“Operator”) of all aspects the selection and acquisition of the Initial Lands
and the drilling of the Earning Wells.

3.3            Upon the drilling, abandonment, or completion, as the case may
be, of the Earning Wells, the Companies shall have earned the undivided
interests in the Data set forth in paragraph 2 hereof, provided that the Data
shall only be used by the Companies thereafter in the manner set forth in this
Agreement. Subject to the Royalty, and any lessor royalties or other
encumbrances flowing with the Initial Lands, the working interests of the
parties in the Earning Wells and the Initial Lands shall be as follows:

CSCE – 25%

FDEI – 25%

SVSE – 20%

1048136 – 30%

 

3.4            Notwithstanding 1048136 shall be the Operator of all aspects of
the acquisition of the Initial Lands as well as the drilling, abandonment and or
completion of the Earning Wells (the “Initial Program”), it shall be carried by
the Companies on all costs incurred by the Companies through the Initial
Program.

 

4.

Follow-Up Programs/Joint Operating Agreement

Upon the completion of the Initial Program, the parties shall enter into an
industry standard joint operating agreement (the “JOA”) for the purpose of
jointly utilizing the Data to acquire and develop any of the Lands that the
parties so choose in accordance with the provisions of the JOA. Without
limitation, the JOA shall provide that 1048136 will initially continue as the
Operator and that the parties will initially fund the acquisition of selected
Lands and participate in development programs in accordance with their
respective working interests, as set forth in subparagraph 3.3 hereof. The JOA
shall initially allow the parties to vote on the approval of programs in
accordance with their respective working interests.

 

 

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3

 

 

 

5.

Termination

 

If at any time during prior to completion of the Initial Program, any of the
parties fail to duly pay or cure any default in the performance of any
obligation of this Agreement within a period of thirty (30) days after receipt
of a default notice from 1048136, 1048136 may terminate the this Agreement
respecting that party and assume the interests and obligations of that party
hereunder Exercise of such right by 1048136 shall be without prejudice to any
other rights or remedies 1048136 may have at law or in equity as a result of
such default of this Agreement.

 

6.

Confidentiality

6.1            This paragraph applies to all the Data and any other data,
records, projections, reports, calculations, opinions, maps, charts, documents,
and other information whatsoever, written or oral and whether or not noted
thereon to be confidential, pertaining to or derived from the Data, disclosed or
provided to the Companies, their employees, or agents, or to which the
Companies, their employees, or agents are given access by 1048136, except:

 

(a)

information which at the date hereof is in the public domain;

 

(b)

information which after the date hereof is published or otherwise becomes part
of the public domain through no fault of the Companies or any of their employees
or agents;

 

(c)

information which the Companies can show was in their possession prior to the
date hereof and was not acquired by the Companies directly or indirectly from
1048136 or anyone under an obligation of confidentiality to 1048136; and

 

(d)

information received by the Companies without restriction as to disclosure from
a third party who has the lawful right to disclose the same.

 

6.2            Prior to the Drop Dead Date the Companies shall keep all Data in
strict confidence and will not disclose or dispose of any of the same to any
third party; provided that:

 

(a)

information may be disclosed to those of the Companies’ directors, officers,
employees and agents who need to access to Data for the purposes of evaluating
the Lands, all of whom shall be directed by the Companies to treat the Data
confidentially;

 

(b)

the Companies may disclose Data pursuant to the order of any governmental or
judicial authority after at least fifteen (15) days prior notice to 1048136 and
marking the Data to show that it is confidential under the terms of this
Agreement; or

 

(c)

any disclosure of Data may be made to which 1048136 gives its prior written
consent.

 

6.3            The Companies and their employees, agents, or consultants will
use the Data only for the purpose of determining whether to proceed with the
development of the Lands (a “Transaction”) and for no other purpose; however, in
the event that a Transaction is entered into, this Agreement will cease to apply
to any Lands which are the subject of such Transaction.

 

6.4            1048136 makes no representations or warranties of any kind
whatsoever, express or implied, with respect to the accuracy of any Data or any
other statement, written or oral, made to the Companies or their employees or
agents respecting the Lands. The Companies agree that they will rely solely on
their own appraisals, estimates and interpretations of the Data in evaluating
the Lands.

 

6.5            Subject to the provisions hereof, the Companies agree not to
contact or have any communication with any underlying holders or owners of the
Lands, or anyone with a material interest in the Lands, prior to later of the
completion of the Initial Program and the full execution of the JOA.

 

 

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4

 

 

 

7.

Assignment

 

The Companies shall not assign their respective rights under this Agreement in
whole or in part without first obtaining the written consent of 1048136.

 

8.

No Partnership

 

The rights, duties, obligations and liabilities of the parties shall be several
and not joint or collective, it being the parties' express purpose and intention
that nothing herein shall be construed as creating a partnership of any kind or
imposing upon any party hereto any partnership duty, obligation or liability to
the other party other than as specifically set forth herein.

 

9.

Further Assurances

 

Each of the parties shall at all times do all such further acts and deliver all
such further deeds and documents as shall be reasonably required in order to
fully perform and carry out the terms of this Agreement.

 

10.

Notice

 

Notwithstanding anything to the contrary contained herein, all notices required
or permitted hereunder shall be in writing. Any notice to be given hereunder
shall be deemed to be served properly if served in any of the following modes:

 

a)

personally, by delivering the notice to the party on which it is to be served at
that party's address for service; or

 

b)

by telecopy or telex (or by any other like method by which a written message may
be sent) directed to the party on which it is to be served at that party's
address for service. A notice so served shall be deemed to be received by the
addressee when actually received by it, if received within normal business hours
on any day other than a Saturday, Sunday or statutory holiday in British
Columbia or at the commencement of the next ensuing business day following
transmission if such notice is not received during such normal business hours;
or

 

c)

by mailing it first class (air mail if to or from a location outside of Canada)
registered post, postage prepaid, directed to the party on which it is to be
served at that party's address for service. Notices so served shall be deemed to
be received by the addressee at noon, local time, on the earlier of the actual
date of receipt or the fourth day (excluding Saturdays, Sundays and statutory
holidays in British Columbia) following the mailing thereof. However, if postal
service is (or is reasonably anticipated to be) interrupted or operating with
unusual delay, notice shall not be served by such means during such interruption
or period of delay.

 

11.

Address for Service

 

The address for service of notices hereunder of each of the parties shall be as
set forth on the first page hereof. A party may change its address for service
by notice to the other party, and such changed address for service thereafter
shall be effective for all purposes of this Agreement.

 

12.

Successors and Assigns

 

This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.

 

 

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5

 

 

 

13.

Proper Law

 

This Agreement and the relationship between the parties shall be construed and
determined according to the laws of the Province of British Columbia, and the
courts having original jurisdiction with respect to any matter or thing arising
directly or indirectly relating to this Agreement shall be the courts of the
Province of British Columbia.

 

14.

Supercession

 

This Agreement supercedes and replaces all other agreements, documents, writings
and verbal understandings between the parties with respect to the subject matter
of this Agreement.

 

15.

Counterparts

 

This Agreement may be executed in counterparts and by facsimile.

 

IN WITNESS WHEREOF each of the parties hereto has caused this Agreement to be
executed as of the day and year first noted below.

 

 

1048136 ALBERTA LTD.

CASCADE ENERGY INC.

 

 

per:/s/ Scott Marshall

per:/s/ Chris Foster

 

 

per:__________________________

per:_____________________________

 

August

, 2005

August

, 2005

 

SILVER STAR ENERGY INC.

FIDELIS ENERGY INC.

 

 

per:/s/ Robert McIntosh

per:/s/ Sterling Klein

 

 

per:__________________________

per:_____________________________

 

August

, 2005

August

, 2005

 

 

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SCHEDULE A

 

to the Agreement among 1048136 Alberta Ltd., Cascade Energy Inc., Silver Star
Energy Inc. and Fidelis Energy Inc.

 

(dated August 10, 2005)

 

Copy of Wildes Agreement

 

-attached hereto-

 

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AREA OF MUTUAL INTEREST AGREEMENT

 

This agreement (the “Agreement”) is dated this 5th day of June, 2005, by and
among Wildes Exploration, LLC (“Wildes Exploration”) and 1048136 Alberta Limited
(“Alberta Ltd.”); each of the two parties to this Agreement is a “Party,” and
collectively, the “Parties”).

RECITALS

A.            Wildes Exploration owns and has the right to transfer (i) the
magnetic data acquired from surveys conducted from the air by Airmag Surveys,
Inc. (the “Airmag Data”) covering approximately 1 million acres within the area
located in Kansas between longitude –98.4181 and –97.4008 and between latitude
37.7334 and 38.7975, more particularly described on Exhibit A, attached hereto
(such area is referred to herein as the “AMI”, (ii) proprietary RAMTM processing
and interpretation of the Airmag Data, which includes the final interpretation
scaled hard copy digital plots, identifying the RAMTM defined potential
prospectus (the “RAMTM Data”), (iii) miscellaneous maps, cultural, and digital
data involved in the RAMTM Data interpretation process, and (iv) other
miscellaneous maps, cultural, and digital data involved in the geological
process (collectively, the “Data”).

B.             Alberta Ltd. desires to purchase the Data from Wildes Exploration
on the terms set forth herein.

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the Parties hereby agree as follows:

AGREEMENT

1.              Contemporaneously with the execution of this Agreement, Alberta
Ltd. agrees and promises to pay to Wildes Exploration, in immediately available
funds, $250,000 on June 6, 2005, $250,000 on June 8, 2005, and $150,000 on June
10, 2005 in consideration for the Data.

2.              Contemporaneously with the execution of this Agreement, Wildes
Exploration has delivered, and Alberta Ltd. has accepted, a set of the Data. The
Data is accepted by Alberta Ltd. “AS IS,” and without any representations or
warranties, except that Wildes Exploration represents and warrants that it owns
the Data and has the right to transfer the Data to Alberta Ltd.

3.              As further consideration for the Data and the covenants of
Wildes Exploration hereunder, Alberta Ltd. hereby covenants and agrees that if
prior to December 31, 2015, any member of Alberta Ltd., or any person or entity
affiliated with any member of Alberta Ltd. or any other person or entity that
review the Data, acquires an Oil and Gas Interest (defined below) within the
AMI. Alberta Ltd. shall convey (or cause to be conveyed) to Wildes Exploration,
as an overriding royalty, 5% of all of the oil and gas produced, saved and sold
from the land covered by the respective Oil and Gas Interest, which overriding
royalty shall be reduced proportionately if any such Oil and Gas Interest covers
less than the entire mineral fee estate in and to the land covered thereby. The
overriding royalty shall be computed on the same basis as the lessor’s royalty
under any Oil and Gas Interest encumbered by the overriding royalty. “Oil and
Gas Interest” means the following as they exist from time to time: an oil and
gas lease, lease option, mineral interest, royalty interest, overriding royalty
interest, or any rights under a farmout, farmin, joint venture, partnership,
drilling agreement, term assignment, options to acquire leases, net profits
interest, production payments, reversionary interest, carried interest or other
form of agreement which permits or contains the right to explore for or produce
oil, condensate, gas casinghead gas, natural gas liquids or related byproducts.
All overriding royalty interests due hereunder shall be conveyed to Wildes
Exploration within 30 days from the acquisition of an Oil and Gas Interest
triggering such right under the provisions of this paragraph 3.

 

 

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8

 

 

4.              Prior to December 31, 2015, Wildes Exploration shall not compete
with Alberta Ltd. by acquiring or attempting to acquire any Oil and Gas Interest
within the AMI, except for the overriding royalties that may be due Wildes
Exploration under paragraph 3 above. All Parties acknowledge that no Party
currently has any Oil and Gas Interests in the “AMI”.

5.              Wildes Exploration has contracted, and may in the future
contract, with Southport Explorations, Inc. (“Southport”) and Denver Mineral
Exploration, Inc. (“Demex”) regarding either licensing of technology and/or
certain services by Southport and/or Demex with regard to Southport’s and/or
Demex’s Digital Magneto-Telluric (“DMT”) technologies (the “DMT Technologies &
Services”), and Alberta Ltd. may enter into similar arrangements with Southport
and/or Demex, or their successors. Alberta Ltd. agrees not to impose any
restrictions on Southport, Demex or any successor owner or licensee of the DMT
Technologies & Services, or take any other act, that would preclude or interfere
with either Wildes Exploration’s use of the DMT Technologies & Services or any
prior partner of Wildes Exploration in the AMI’s use of the DMT Technologies &
Services.

6.              This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and all of which counterparts together shall
constitute one and the same instrument. Any counterpart of this Assignment may
be executed via facsimile transmission.

Executed as of the date and year first written above.

WILDES EXPLORATION, LLC

By: /s/ Brian Wilde

Name: Brian Wilde

Title: President

 

 

1048136 ALBERTA LIMITED

By: /s/ W. Scott Marshall

Name: W. Scott Marshall

Title: President

 

 

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9

 

 

EXHIBIT A

 

The AMI consists of two areas in the State of Kansas, the North Area and the
South Area, both described below by reference to the boundaries established by
the various corners listed in the respective descriptions.

NAD 27 (North American Datum of 1927) Clark 1866 ([NAD27] USA NADCON; geoid99 -

Counterminous US

 

 

Latitudes

Longitudes

North Area

 

 

 

38.7826

-98.2778

 

38.7826

-97.9324

 

38.7002

-97.9324

 

38.7002

-97.6881

 

38.5521

-97.6881

 

38.5521

-97.4085

 

38.4423

-97.4085

 

38.4423

-97.5695

 

38.2392

-97.5695

 

38.2392

-97.9382

 

38.4341

-97.9382

 

38.4341

-98.0012

 

38.5164

-98.0012

 

38.5164

-98.2778

South Area

 

 

 

38.1789

-98.3818

 

38.1789

-98.1213

 

38.0033

-98.1213

 

38.0033

-97.8973

 

37.9154

-97.8973

 

37.9154

-97.5636

 

37.7178

-97.5636

 

37.7178

-98.0466

 

37.7837

-98.0466

 

37.7837

-98.3818