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Valerus Compression Services, LLP
11335 Clay Road, Suite 190
Houston, Texas, 77041
(713) 744-6100

March 10, 2006

Encore Clean Energy Inc.
1250 Homer Street
Suite 305
Vancouver, BC V6B 1C5 C
anada

Attention: Dan Hunter

Re: Letter of Intent

Dear Mr. Hunter:

     This letter of intent sets forth the understandings and intentions of each
of Encore Clean Energy, Inc., a Nevada Corporation ("Encore") and Valerus
Compression Services, LLP (“Valerus”), a Texas Corporation ("Valerus"), with
respect to a proposed transaction described below (the "Proposed Transaction").

     Valerus is a gas-handling specialist with technical and operational
expertise in reciprocating and rotary gas compression for the pipeline industry.
Valerus’s products and services play a critical role in facilitating the
distribution of natural gas from its source to industrial, commercial and
residential end users.

     Encore is developing, under exclusive license, the Magnetic Piston
Generator (“MPG”), which is designed to convert waste heat into electricity.
Encore is also in the process of obtaining distribution rights to other existing
and proven waste heat to electricity devices.

     Valerus intends to both form a venture with Encore to further develop
Encore’s MPG device, its waste heat to electricity business, and to obtain
exclusive rights directly related to the oil and gas compression and wellhead
services industries (the Industries”).

1.

Basic Terms of Proposed Transaction

      (a)

Subject to availability of financing which Valerus and Encore agree to jointly
pursue, Valerus agrees to co-develop a heat to electricity version of Encore’s
MPG specific to the Industries.

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Encore Clean Energy, Inc.
March 8, 2006
Page 2

  (b)

Encore and Valerus agree to form and jointly own an LLC (the “LLC”) to own the
oil & gas pipeline and wellhead rights (‘the Rights”) to this version of the
MPG. Encore will contribute these rights on per kilowatt royalty basis, to be
determined in the definitive agreement. Valerus will develop the device(s) and
supply the LLC with access to its engineering, sales and service force.

2. Operating Agreement. As a condition to the closing of the Proposed
Transaction under a definitive agreement, Encore and the LLC will negotiate and
execute with Valerus an operating agreement in relation to the Encore LLC
operations related to the Industries.

3. Definitive Agreement. Encore and Valerus shall proceed in good faith toward
the negotiation and execution of a mutually acceptable definitive written
agreement governing the Proposed Transaction (the “Definitive Agreement”), with
such representations, warranties, indemnities, covenants and such other terms as
are customary in transactions of this type, subject to approval by legal counsel
for both Encore and Valerus. Subject to satisfaction of the conditions described
in Section 5 hereof, the parties will use their reasonable best efforts to enter
into this definitive agreement to consummate the Proposed Transaction on or
before June 9, 2006.

4. Access. From the date of this letter of intent through to the Closing Date,
representatives of Valerus shall be granted reasonable access to Encore's
premises and records for the purpose of performing its due diligence
investigation, and Encore shall furnish Valerus with all information and
documents reasonably requested relating to the Proposed Transaction. From the
date of this letter of intent through to the Closing Date, representatives of
Encore shall be granted reasonable access to Valerus's premises and records for
the purpose of performing its due diligence investigation, and Valerus shall
furnish Encore with all information and documents reasonably requested relating
to the Proposed Transaction. The due diligence investigations may include,
without limitation, a review of physical properties, financial records,
personnel, contracts and other documents and information.

5. Conditions. The Proposed Transaction will be subject to, among other things,
the satisfaction of the following conditions:

  (a)

Completion of a full legal and business due diligence examination by Valerus,
the results of which shall be to its sole satisfaction;

        (b)

Completion of a full legal and business due diligence examination by Encore, the
results of which shall be to its sole satisfaction;

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Encore Clean Energy, Inc.
March 8, 2006
Page 3

  (c)

Obtaining adequate financing for the Proposed Transaction;

        (d)

Execution of definitive agreements;

        (e)

Receipt of approvals from the Board of Directors of Encore and Valerus, if
necessary, to the extent that such approvals are required by applicable law;

        (f)

Receipt of required governmental or third party approvals, if any; and

        (g)

No material adverse change in the businesses of Encore or Valerus.

6. Expenses. Each party shall bear all fees and expenses in connection with all
other aspects of the Proposed Transaction including, without limitation, all
accounting and legal fees.

7. Confidentiality. The Proposed Transaction shall be maintained in confidence
by the parties, except to the extent that disclosure may be required by
applicable law. The parties will confer with each other to mutually approve the
content and timing of any public announcement regarding the Proposed
Transaction, provided that each party shall nevertheless be permitted to issue
any press release or report required by applicable law.

8. Standstill. By executing this letter of intent, Encore agrees that from the
date hereof to the earlier to occur of (i) cessation of good faith negotiations
between Encore and Valerus; or (ii) the Closing Date; neither Encore, nor
Encore's employees, officers, directors, agents, representatives or affiliates
shall, directly or indirectly, (a) solicit, initiate or encourage any proposal
or offer from any person relating to the properties subject to the Proposed
Transaction (any such inquiry, proposal or offering being referred to as an
"Alternative Proposal"); or (b)(i) participate in any negotiations with respect
to an Alternative Proposal; (ii) furnish to any person any confidential
information with respect to the property; or (iii) otherwise cooperate in any
way with, or assist or participate in, or facilitate or encourage the making or
soliciting of an Alternative Proposal.

9. Nonbinding. The parties agree that except for the paragraphs 6, 7 and 8, this
letter of intent is intended only as a summary of the current intentions of each
party with respect to the Proposed Transaction and is not intended to create any
enforceable legal obligations. Notwithstanding the foregoing, the Binding
Provisions shall survive termination of this letter of intent and shall be
legally binding upon and enforceable against the parties hereto and their
respective successors and permitted assigns.

10. Broker. Encore and Valerus represent and warrant to one another that they
have not retained any finder, broker, investment banker or the like (an
"Intermediary") with respect to the

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Encore Clean Energy, Inc.
March 8, 2006
Page 4

Proposed Transaction. Each party agrees to indemnify, defend and hold harmless
the other party from any claim from an Intermediary arising on their respective
accounts with respect to the transactions contemplated by this letter agreement.

     If the foregoing sets forth your understanding with regards to the Proposed
Transaction, please so acknowledge your agreement by signing a copy of this
letter of intent and returning it to the undersigned not later than 5pm Pacific,
March 10th, 2006.

  Very truly yours,       Valerus Compression Services, LP         By: Michael
McGhan   Its: Co-CEO

Agreed and Accepted on   March 10, 2006       Encore Clean Energy, Inc.        
          By: Dan Hunter   Its: Chief Executive Officer  

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