Exhibit 10.1

Empire Energy Corporation International

Renner Business Centre

16801 West 116th Street

Lenexa, KS 66219-9603, USA

STRICTLY PRIVATE AND CONFIDENTIAL

Mr. S.A. Sehsuvaroglu

3 Avenue des Baumettes

06000 - Nice

FRANCE

Dear Mr. Sehsuvaroglu:

We wish to confirm our discussions concerning your (referred to herein as the
“Executive”) employment by Empire Energy Corporation International (referred to
herein as the “Company”) on the terms and conditions set forth below.

 

1. POSITION AND RESPONSIBILITIES

Executive shall, with effect from 15 August 2007, serve the Company in the
capacity of President and Chief Executive Officer and shall fully and faithfully
perform such duties and exercise such powers as are incidental to such position
including those duties set out in the following paragraph in connection with the
business of the Company, its affiliates and joint ventures and such other
compatible duties and powers as may from time to time be assigned to the
Executive by the board of directors of the Company (the “Board of Directors”).

Executive acknowledges that the Company has affiliates (the “Affiliates”)
organised and carrying on business in various places throughout the world,
including Tasmania, Mauritius and China, and Executive agrees to provide his
services to such Affiliates of the Company as may be directed by the board of
directors of the Company (the “Board of Directors”) from time to time. In order
to carry out such responsibilities, Executive shall be appointed as President
and Chief Executive Officer of the Company’s parent corporation, or such other
position as is mutually agreed and shall be appointed or nominated for
appointment as a director of Empire Energy and its affiliates at each meeting of
shareholders at which directors are to be elected.

Executive shall report directly to the Board of Directors of the Company.
Executive shall have overall managerial supervision and responsibility for
operational, financial and financing aspects of the business of the Company and
any of its affiliates (the “Group”). Such responsibilities shall include but
shall not be limited to:

(a) appointing and managing such employees and consultants as are required to
achieve the Company’s aims and objectives;

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(b) implementing such corporate, human resources and information technology
policies and systems as may be necessary or appropriate to achieve the Company’s
aims and objectives;

(c) managing budgets and expenditure for the Group’s operations;

(d) developing and implementing an exploration and development program in
respect of the Group’s oil & gas assets in Tasmania; and

(e) identify strategic transactions for the benefit of the Group, whether via
acquisition, disposals, reorganisations, joint ventures, farm-in or other means.

Executive shall fully and faithfully perform such duties and fulfil such
obligations, as are commensurate with his appointment as an officer of the
Company. Executive shall devote full time and attention using his best efforts
to apply his skill and experience to perform his duties hereunder and promote
the interests of the business and projects of the Company provided that
Executive shall not be precluded from pursuing other business interests or
holding positions in other public or private companies which do not interfere
with Executive’s ability to carry out his responsibilities hereunder, and do not
otherwise contravene the requirements of this Agreement, and which have been
approved in advance by the Company’s Board of Directors.

The Executive shall perform his duties at such place or places as the Executive
and the Company may agree, including at a location operated by an Affiliate,
ordinarily during the customary hours of work of the Company or the relevant
Affiliate, as the case may be. It is acknowledged by the Executive that a
sufficient proportion of his time shall be spent in Tasmania, where the
Company’s oil & gas assets are located, in order to perform his duties and
fulfil his obligations under this Agreement.

 

2. TERM

The term of Executive’s employment as contemplated herein (the “Term”) shall be
effective for a three-year period from August 15, 2007 and shall continue until
August 14, 2010 or such earlier date as such employment may be terminated in
accordance with the provisions of this Agreement. This Agreement and Executive’s
employment by the Company may be renewed at the end of the said Term on
conditions mutually acceptable to the Executive and the Company; however, if the
same are not renewed, Executive’s employment will terminate on August 14, 2010
without further requirement of notice or pay in lieu thereof. The Company will
provide notice of at least one hundred eighty (180) days if it intends to renew
this Agreement.

 

3. COMPENSATION

a) Salary: For services rendered by Executive during the term of this Agreement,
Executive shall be paid a salary, payable in monthly installments, at an annual
rate of US$600,000 gross. This will be paid monthly on or around the 26th day of
the month into Executive’s nominated bank account(s). Such salary shall be
reviewed annually and will be

 

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increased at the sole discretion of the Board of Directors taking into account,
among other things, individual performance and general business conditions.

Company and Executive acknowledge that the services of the Executive are to be
supplied on the basis that the compensation (for the avoidance of doubt,
including base salary, bonus and any other remuneration) paid to the Executive
for services performed will be subject to applicable taxation. Executive shall
be paid in respect of services rendered abroad, the taxes thereon being the sole
liability and responsibility of the Executive. Executive will be responsible for
all taxes and employee’s national insurance (but not employers) or similar
contributions in respect of your remuneration, save to the extent that the
Company has made or does make an actual deduction in respect of such liability
(the “Additional Tax”) and you will indemnify the Company in full and without
any rights of set off against all claims and liabilities in respect of any
demand by any relevant authority against the Company in respect of the
Additional Tax provided always that before accepting any liability for or making
any payment in this respect the Company will afford the Executive a reasonable
opportunity to challenge the said alleged liability or payment and will give him
reasonable cooperation in so doing including providing him with any relevant
document.

b) Stock Options: Subject to regulatory or shareholder approval, if required,
the Company shall provide Executive with stock options to purchase 18,574,103 of
Class A common stock, equivalent as at the date hereof to 9% of the present
outstanding common shares in the Company under its Stock Option Plan, as amended
from time to time, subject to the terms and conditions set out in the Company’s
standard form of stock option agreement, and upon the following terms and
conditions:

 

  i. the effective date of the grant will be the date of execution of this
Agreement, or if such date falls within a black-out period, the third business
day following the lifting of the black-out period (the “Effective Date”);

 

  ii. the options will expire on September 1, 2012 unless Executive continues to
be employed by Empire Energy beyond that date, as more specifically provided in
the Company’s standard form of option agreement;

 

  iii. the exercise price per option for 12,382,736 of the total granted options
(the “Equivalent Options”) will be fixed on the Effective Date at the price of
$0.15 per share.

 

  iv. the exercise price per option for the remaining 6,191,367 options will be
fixed on the Effective date as follows: 2,063,781 at each of US$ 0.50 (the
“$0.50 Options”), US$ 1.00 (the “$1 Options”) and US$ 1.50 (the “$1.50
Options”).

 

  v. 4,127,579 of the Equivalent Options shall vest on August 15, 2007,
4,127,579 on August 15, 2008 and 4,127,578 on August 15, 2009.

 

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  vi. The $0.50 Options shall vest on August 15, 2007; the $1 Options shall vest
on August 15, 2008, and the $1.50 Options shall vest on August 15, 2009.

c) Bonuses: Subject to Board approval, if required, the Company shall provide
Executive with a bonus plan as follows:

 

  a. For services rendered by the Executive during any and every calendar year,
where the Company’s market capitalisation on August 15 of the relevant year has
increased by 10% or more over the market capitalisation on August 15 of the
previous year, the Company will pay the Executive a US$200,000 bonus.

 

  b. For services rendered by the Executive during his tenure, the Company will
pay the Executive a one-off US$1,000,000 bonus when commercial production of the
Company’s first commercial hydrocarbon discovery on the Group’s acreage as at
the date hereof has commenced.

 

  c. For services rendered by the Executive during his tenure where a financing
event has taken place under his leadership, the Company will pay the Executive a
bonus equal to 2% of the gross proceeds of any financing, provided that the
maximum bonus payable will be US$400,000.

 

4. BENEFITS, PERQUISITES AND BUSINESS EXPENSES

a) Executive shall be entitled to participate in future Stock Option Plan of
Company on such terms as may be determined by the Board of Directors in their
discretion.

b) Except to the extent that such benefits and perquisites are provided to the
Executive pursuant to any employment contract with a company in the Company,
Executive shall be entitled to participate in the employee benefit programs made
generally available to employees of the Company from time to time.

c) Executive shall be entitled to be reimbursed for all reasonable expenses
incurred by Executive in connection with the conduct of the business of the
Company. Such expenses shall be reimbursed within thirty (30) days following
presentation of sufficient evidence of such expenditures, provided such
expenditures are consistent with the policies and directives of the Company as
may be amended from time to time.

d) Executive shall be entitled to business class air travel at any time whilst
on Company business and his spouse shall also be entitled to business class air
travel when required or authorised to participate in Company business.

e) If required by the Company to operate from his domicile in France for
extended periods, Executive shall receive an office and administration allowance
not to exceed US$60,000 per annum which shall be payable by the Company monthly
in arrears. Such allowance shall be reviewed annually and adjusted as
appropriate in the sole discretion of the Board of Directors.

 

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5. VACATION AND HOLIDAYS

In combination with all vacation and holidays granted pursuant to any Executive
employment contract within the Company, Executive shall be entitled to an
aggregate eight (8) weeks paid vacation (inclusive of statutory holidays which
fall in the jurisdiction where the Executive is based from time to time) during
each year of Executive’s employment hereunder. Such vacation shall be utilized
by Executive at such time or times as do not materially interfere with the
ongoing conduct of the Company’s business operations.

 

6. TERMINATION OF EMPLOYMENT

a) Termination by the Company without cause: The Company shall be entitled to
terminate Executive’s employment at any time without cause by giving Executive
12 months prior written notice of the termination of Executive’s employment, or
in lieu of such notice, by continuing Executive’s monthly salary payments for a
period of 12 months from the date of termination of Executive’s employment. In
the event of the termination of Executive’s employment hereunder without cause,
Executive shall be immediately relieved of all of his responsibilities and
authorities as an officer, director and employee of the Company and as an
officer, director and employee of each and every affiliate in the Company
effective as of the date of termination of Executive’s employment fixed by the
Company. In the event of Executive’s termination without cause, rights and
benefits of the Executive under the employee benefits plans and programs of the
Company shall, unless prohibited by the relevant plan, be continued for the 12
month period referred to above. If any such benefit or program cannot be so
continued, Executive shall be entitled to receive a cash payment equal to the
value of such benefits for such period.

b) Termination by the Company for cause: The Company shall be entitled to
terminate Executive’s employment for cause at any time without notice and
without any payment in lieu of notice. In the event of the termination of
Executive’s employment for cause, the Company’s obligations hereunder shall
immediately cease and terminate and Executive shall be immediately relieved of
all of his responsibilities and authorities as an officer, director and employee
of the Company and as an officer, director and employee of each and every
affiliate in the Company and in such an event there will be no continued salary
payments by the Company to Executive and any rights and benefits of Executive
under the employee benefit plans and programs of the Company will immediately
terminate in accordance with the terms of such plans and programs. For purposes
of this paragraph 6(b) and of Executive’s employment with the Company “cause”
shall include, without limitation, the following circumstances,

 

  i) Executive has committed a criminal offence involving moral turpitude or has
improperly enriched himself at the expense of the Company;

 

  ii) Executive, in carrying out his duties hereunder, (i) has been wilfully and
grossly negligent, or (ii) has committed wilful and gross misconduct or,
(iii) has failed to comply with an instruction or directive from the Board of
Directors (and which is not otherwise cured within thirty (30) days);

 

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  iii) Executive has breached a material term of this Agreement (and which is
not otherwise cured within thirty (30) days);

 

  iv) Executive becomes bankrupt or in the event a receiving order (or any
analogous order under any applicable law) is made against Executive or in the
event Executive makes any general disposition or assignment for the benefit of
his creditors;

 

  v) Executive shall be diagnosed as being afflicted by chronic alcoholism or
drug addiction; or

 

  vi) Executive has been disqualified from acting as a director in any relevant
jurisdiction.

Termination of Executive’s employment for cause shall be effective upon the date
of the notice of termination given to the Executive and the lapse of any
applicable cure period without remedy of the matters set out in such notice.

c) Termination by the Executive: Unless otherwise mutually agreed, Executive
shall be entitled to terminate Executive’s employment at any time without cause
by giving the Company 12 months prior written notice of such termination in the
first year of this Agreement, or 6 months’ prior written notice of such
termination thereafter. In the event of Executive’s termination without cause,
rights and benefits of the Executive under the employee benefits plans and
programs of the Company shall cease from the date the termination becomes
effective.

d) Disability: Executive’s employment shall terminate automatically upon written
notice from the Company in the event of Executive’s absence or inability to
render the services required hereunder due to disability, illness, incapacity or
otherwise for an aggregate of one hundred eighty (180) days during any twelve
(12) month period of the term, provided that such disability, illness,
incapacity or other cause has not occurred during the execution of the business
of the Company by the Executive. In the event of any such absence or inability,
Executive shall be entitled to receive the compensation provided for herein for
the first ninety (90) days thereof, whereafter Executive shall only be entitled
to receive such compensation, if any, as may be determined by the Board of
Directors. Executive shall investigate the cost to Company of Disability
Insurance and its availability. Company shall continue at its expense the
present Life and SOS insurances held by Executive or equivalent, the total cost
to Company being approx. US$ 5,000 annually.

e) Death: In the event of the death of Executive during the term of this
Agreement, Executive’s salary will be paid to Executive’s spouse to the end of
the third month following the month in which Executive’s death occurs. Rights
and benefits of Executive under the employee benefit plans and programs of the
Company, including life insurance, will be determined in accordance with the
terms and conditions of such plans and programs.

f) Effect of Termination: Executive agrees that, upon termination of his
employment for any reason whatsoever, Executive shall thereupon be deemed to
have immediately resigned any position that Executive may have as an officer,
director or employee of the Company and each

 

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and every affiliate of the Company. In such event, Executive shall, at the
request of the Company or any affiliate in the Company, forthwith execute any
and all documents appropriate to evidence such resignation. Executive shall not
be entitled to any payment in respect of such resignation in addition to those
provided for herein, except as expressly provided for pursuant to any other
employment agreement entered into with any affiliate in the Company. On
termination of employment or otherwise on demand by the Company, Executive must
immediately return all property belonging to the Company and its affiliates.

g) Survival of Terms: It is expressly agreed that notwithstanding termination of
Executive’s employment with the Company for any reason or cause or in any
circumstances whatsoever, such termination shall be without prejudice to the
rights and obligations of Executive and the Company respectively in relation to
the time up to and including the date of termination and the provisions of
paragraphs 3, 6(f), 8 and 9 of this Agreement, all of which shall remain and
continue in full force and effect.

 

7. CHANGE OF CONTROL

a) Definitions: The following terms used in this paragraph 7 shall have the
meanings set forth below:

 

  i) “Change of Control” shall mean the occurrence of:

 

  (A) the acquisition of shares of Company and/or securities (“Convertible
Securities”) convertible into, exchangeable for or representing the right to
acquire shares of Company as a result of which a person, group of persons or
persons acting jointly or in concert, or persons associated or affiliated within
the meaning of the relevant securities legislation with any such person, group
of persons or any of such persons acting jointly or in concert (collectively,
the “Acquirers”), beneficially own, directly or indirectly, shares of Company
and/or Convertible Securities such that, assuming only the conversion, exchange
or exercise of the Convertible Securities beneficially owned, directly or
indirectly, by the Acquirers, the Acquirers would beneficially own, directly or
indirectly, shares that would entitle the holders thereof to cast more than 35%
of the votes attaching to all shares in the capital of Company that may be cast
to elect directors of Company; or

 

  (B) the election at any meeting of shareholders of Company of a majority of
directors to the Board of Directors of Company who are not recommended by
management;

provided however that the acquisition or ownership of shares and/or Convertible
Securities of Company by persons, funds or entities managed by or which are
associated or affiliated with or acting jointly and in concert with any of the
above and/or the acquisition of shares and/or Convertible Securities in the
normal course of the raising of capital which exceed 35% of the votes attaching
to all shares in the capital of Company shall not constitute or be deemed to
constitute a Change in Control.

 

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b) Rights Upon Change in Control: If a Change in Control occurs:

 

  i) for a period of six (6) months following the date of the Change of Control,
the Executive shall have the right to elect that the Change of Control is a
termination of his employment by the Company which shall be deemed to be
termination of Executive’s employment without cause by the Company. If the
Executive notifies the Company of this election in writing, or in the event that
the Company shall terminate Executive’s employment without cause during such
period of six (6) months following the date of the Change of Control, the
Executive shall be entitled to receive and the Company shall pay to Executive an
additional severance payment equal to 3% of the transaction value that resulted
in the Change of Control subject to a maximum severance payment of $10 million.
The payments set out in this paragraph 7 are in addition to any other rights
provided hereunder (including without limitation the payments contemplated under
paragraph 6(a)) with respect to termination of Executive’s employment without
cause. If the Executive does not elect termination, this Agreement will continue
in full force and effect in accordance with its terms.

 

8. NON-COMPETITION AND NON-SOLICITATION

a) Executive agrees that during the period of the Executive’s employment with
the Company and for a period of six (6) months from the last payment of
compensation to Executive by the Company, Executive shall not engage in or
participate in any business activity that competes, directly or indirectly, with
the businesses of the Company or any affiliate in the Company, provided,
however, that Executive shall not be precluded from competing with the business
of the Company in the event of a termination of Executive’s employment as a
result of a material breach by the Company of the provisions of this Agreement.

b) Notwithstanding anything to the contrary contained herein Executive may,
without being deemed to compete, directly or indirectly, with the businesses of
the Company or any affiliate in the Company own not more than five percent
(5%) of any class of the outstanding securities of any corporation listed on a
securities exchange or traded in any over-the-counter market.

c) Executive agrees that for a period of six (6) months following the
termination of Executive’s employment with the Company for any reason
whatsoever, Executive will not, whether as principal, agent, employee, employer,
director, officer, shareholder or in any other individual or representative
capacity, solicit or attempt to retain in any way whatsoever any of the
employees of the Company or of any affiliates in the Company, provided however,
that the Executive shall not be precluded from soliciting or retaining employees
of the Company in the event of a termination of Executive’s employment as a
result of a material breach by the Company of the provisions of this Agreement,
or in the event that Executive’s employment is terminated or deemed to be
terminated by the Company without cause (including without limitation, pursuant
to paragraph 7 hereof).

 

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d) It is the desire and the intent of the parties that the provisions of this
paragraph 8 shall be enforceable to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular portion of this paragraph 8 is
adjudicated unenforceable in any jurisdiction such adjudication shall apply only
in that particular jurisdiction in which such adjudication is made.

 

9. CONFIDENTIAL INFORMATION

a) Executive agrees not to disclose either while in the Company’s employ or at
any time thereafter to any person not employed by the Company or by any
affiliate of the Company or not engaged to render services to the Company or to
any affiliate in the Company, any trade secrets or confidential information of
or relating to the Company or any affiliate in the Company obtained by Executive
while in the employ of the Company; provided, however, that this provision shall
not preclude Executive from the use or disclosure of information known generally
to the public (other than that which Executive may have disclosed in breach of
this Agreement) or of information required to be disclosed by law or court order
applicable to Executive or information authorized to be disclosed by the Board
of Directors.

b) Executive also agrees that upon leaving the Company’s employ, Executive will
not take, without the prior written consent of the Board of Directors, any
drawing, blueprint, specification, report or other document belonging or
relating to the Company or to any affiliate in the Company.

 

10. NOTICES

Any notices, requests, demands or other communications provided for by this
Agreement shall be in writing and shall be sufficiently given when and if mailed
by registered or certified mail, return receipt requested, postage prepaid, or
sent by personal delivery, overnight courier or by facsimile to the party
entitled thereto at the address stated at the beginning of this Agreement or at
such other address as the parties may have specified by similar notice.

Any such notice shall be deemed delivered on the tenth business day following
the mailing thereof if delivered by prepaid post or if given by means of
personal delivery on the day of delivery thereof or if given by means of courier
or facsimile transmission on the first business day following the dispatch
thereof.

 

11. ENTIRE AGREEMENT

This Agreement contains the entire agreement between the parties hereto with
respect to the matters herein and supersedes all prior agreements and
understandings, oral or written, between the parties hereto relating to such
matters.

 

12. ASSIGNMENT

Except as herein expressly provided, the respective rights and obligations of
Executive and the Company under this Agreement shall not be assignable by either
party without the written consent of the other party and shall, subject to the
foregoing, enure to the benefit of and be binding upon Executive and the Company
and their permitted successors or assigns. Nothing

 

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herein expressed or implied is intended to confer on any person other than the
parties hereto any rights, remedies, obligations or liabilities under or by
reason of this Agreement.

 

13. APPLICABLE LAW

This Agreement shall be deemed a contract under, and for all purposes shall be
governed by and construed in accordance with, the laws of England. Each of the
parties hereto hereby irrevocably submit and attorn to the non-exclusive
jurisdiction of the courts of England with respect to any proceedings brought in
respect of this Agreement or the subject matter hereof.

 

14. AMENDMENT OR MODIFICATION; WAIVER

No provision of this Agreement may be amended or waived unless such amendment or
waiver is authorized by the Company (including any authorized officer or
committee of the Board of Directors) and is in writing signed by Executive and
by a duly authorized representative of the Company. Except as otherwise
specifically provided in this Agreement, no waiver by either party hereto of any
breach by the other party of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar breach, condition or provision at the same time or at any prior or
subsequent time.

 

    EMPIRE ENERGY CORPORATION INTERNATIONAL       Per: /s/ Malcolm R. Bendall  
  Malcolm R. Bendall Accepted and agreed:     Per: /s/ S. A. Sehsuvaroglu      
S. A. Sehsuvaroglu     Dated : July 25, 2007    

 

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