Exhibit 10.1

 

 

DATED 23rd September 2008

As Amended and Restated on 23rd October 2008

 

 

ATP OIL & GAS (UK) LIMITED

and

EDF PRODUCTION UK LTD

 

 

 

 

SALE AND PURCHASE AGREEMENT

in respect of certain interests under

United Kingdom Continental Shelf Petroleum Production Licence No. P.683 (Block
43/22a)

and

United Kingdom Continental Shelf Petroleum Production Licence No. P.1034 (Blocks
42/25a and 43/21a)

and

United Kingdom Continental Shelf Petroleum Production Licence No. P.033 (Block
49/12aN)

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CONTENTS

 

Clause    Heading 1.    DEFINITIONS AND INTERPRETATION 2.    SALE AND PURCHASE
OF THE INTERESTS 3.    CONSIDERATION 4.    INTERIM PERIOD 5.    COMPLETION 6.   
INDEMNITIES 7.    REPRESENTATIONS AND WARRANTIES 8.    ONGOING OBLIGATIONS AND
LIABILITIES 9.    ANNOUNCEMENTS AND CONFIDENTIALITY 10.    NOTICES 11.    COSTS
AND EXPENSES 12.    TAXATION 13.    VARIATION 14.    ASSIGNMENT 15.    RIGHTS OF
THIRD PARTIES 16.    GENERAL 17.          GOVERNING LAW AND ARBITRATION

 

SCHEDULE 1

Licence(s), related Licensed Interest Documents and other related information

SCHEDULE 2

Allocation of Consideration

SCHEDULE 3

Working Capital

SCHEDULE 4

Format for Interim Completion Statement and Final Completion Statement

SCHEDULE 5

AFEs

 

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THIS AGREEMENT is made the 23rd day of September 2008

and amended and restated on the              day of October 2008

BETWEEN

 

(1) ATP OIL & GAS (UK) LIMITED, a company incorporated in England and Wales
(company number 3949599 whose registered office is at Victoria House, London
Square, Cross Lanes, Guildford GU1 1UJ (the “Seller”); and

 

(2) EDF PRODUCTION UK LTD, a company incorporated in England and Wales (company
number 6683599 whose registered office is at 1 Blake Mews, Kew Gardens, London
TW9 3GA (the “Purchaser”).

WHEREAS

 

(A) The Seller wishes to sell and the Purchaser wishes to purchase the
Interests; and

 

(B) The Parties wish to set out the terms and conditions upon which the
aforesaid sale and purchase shall take place.

NOW THEREFORE IT IS HEREBY AGREED as follows:

 

1 Definitions and Interpretation

In this Agreement (including the recitals and the Schedules hereto):

 

1.1 The following expressions shall, except where the context otherwise
requires, have the following respective meanings:

“Accruals Basis of Accounting” means that basis of accounting under which costs
and benefits are regarded as applicable to the period in which the liability for
the cost is incurred or the right to the benefit arises regardless of when
calculated, discovered, invoiced, paid or received;

“Adjustments” means any or all (as the context may require) of the Working
Capital Adjustment, the Cash Calls Adjustment, the Petroleum Sales Adjustment
and the Interim Period Adjustment as calculated in accordance with Clause 3 and
any payments made by the Purchaser to the Seller or by the Seller to the
Purchaser pursuant to Clause 6 or Clause 12 or pursuant to a warranty claim
under Clause 7 together with such amounts (if any) equivalent to interest
payable in accordance with Clauses 3.15 and 3.16;

“Affiliate” means in relation to any Party, a subsidiary or a holding company of
that Party and includes the ultimate holding company of that Party and any
subsidiary of that holding company and for the purposes of this

 

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definition “holding company” and “subsidiary” shall be construed in accordance
with section 1159 of the Companies Act 2006;

“Agreed Rate” means for the London Interbank Offered Rate for one month for the
currency in question as quoted in the British Bankers’ Association internet site
(www.bba.org.uk/public/libor) for the first day of the relevant period in
respect of which interest is to be calculated plus one percent (1%) provided
that if the first day of the relevant period is not a Business Day then the rate
to be used shall be that for the most recent Business Day preceding the first
day of the relevant period;

“Agreement” means this Agreement including the recitals hereof and Schedules
hereto, as the same may be amended or varied from time to time in accordance
with its express terms;

“Assignment Documents” means the assignment and novation agreements in respect
of the Licensed Interest Documents in the agreed form together with any other
documents the Parties (acting reasonably) agree are necessary to effect the
assignment and transfer of the Interests from the Seller to the Purchaser and
release the Seller from contractual liability to third parties with respect to
the Interests (including any parent company guarantees or letters of credit
required of the Purchaser in support of the Purchaser’s obligations under any of
the Licensed Interest Documents);

“ATP Corporation” means ATP Oil & Gas Corporation incorporated and registered in
the State of Texas whose registered office is at 4600 Post Oak Place, Suite 200,
Houston, Texas, 77027, Texas, USA;

“ATP Corporation Guarantee” means the guarantee in the agreed form to be
provided by ATP Corporation and to be delivered to the Buyer pursuant to Clause
2.2.2;

“Benefits” has the meaning given in Clause 6.1;

“Block” means an offshore area located on the United Kingdom Continental Shelf
(“UKCS”) forming part of a Licence and being separately designated and numbered
as a block on the reference map showing all UKCS Licence blocks deposited at the
principal office of the UK Department of Business, Enterprise and Regulatory
Reform and “Blocks” means Block 43/22a, Block 42/25a and Block 43/21a, and Block
49/12aN.;

“Business Day” means a day (other than a Saturday, a Sunday or a legal bank or
public holiday) on which banks are or, as the context may require, were
generally open for business in England;

“Cash Calls Adjustment” is detailed in Clause 3.6;

“Completion” means the completion of the sale and purchase of the Interests in
accordance with the provisions of this Agreement;

“Completion Date” means the date on which Completion takes place;

 

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“Consequential Loss” has the meaning set out in Clause 7.17;

“Consideration” has the meaning set out in Clause 3.1;

“CT” means Corporation Tax as charged under the Income and Corporation Taxes Act
1988 (as amended) which for the avoidance of doubt includes the supplementary
charge as levied by section 501A of the Income and Corporation Taxes Act 1988
(as amended);

“Data” means, in respect of the Blocks, all data in the possession, custody or
control of the Seller directly and exclusively relating to the Interests in
whatever form the same are maintained excluding any data which the Seller may
not sell, transfer or otherwise dispose of as a result of confidentiality
obligations by which it is bound or which cannot be provided to the Purchaser
because such transfer is prohibited by the agreement under which it is acquired
and excluding internal interpretations and documents created for the Seller’s
(or its Affiliates’) own use;

“Data Room Documents” means the documents and data relating to the Interests
made available for the Purchaser’s inspection in the data room located at the
offices of Scotiawaterous, 33 Finsbury Square, London EC2A 1BB and/or sent to
the Purchaser prior to the date hereof as such documents and data are listed in
the index initialled by the Parties for the purposes of identification;

“Decommissioning Liabilities” means any and all claims, costs, charges,
expenses, liabilities, duties and/or obligations arising from, under or in
respect of the ownership or use of the Interests and/or the Blocks and relating
to the decommissioning and/or removing and/or making safe of all of the property
held in connection with the Interests whether such claims, costs, charges,
expenses, liabilities, duties and/or obligations are incurred under or pursuant
to any of the Licensed Interest Documents or under statutory law, common law or
otherwise and including the reinstatement and/or making good of the area covered
by the Licence(s) in accordance with good oil and gas field industry practice
and applicable law at the time of such decommissioning and/or removal and any
residual liability or obligation for anticipated and/or necessary continuing
insurance, maintenance and monitoring costs regardless in each case of any acts,
omissions, negligence or breach of duty (statutory or otherwise), conduct or
statements of the Seller or the condition of the Interests;

“Dollars” or “$” means dollars of the United States of America;

“Economic Date” means 1st  July 2008;

“EDF International” means EDF International of 20 place de la Défense, 92050
Paris la Défense, France;

“EDF International Guarantee” means the guarantee in the agreed form to be
provided by EDF International and to be delivered to the Seller pursuant to
Clause 2.2.2;

 

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“Encumbrances” means all liens, charges (fixed or floating), security interests,
pledges, options, net profit interests, rights of pre-emption, mortgages and
other third party rights which encumber legal or beneficial ownership save in
respect of the rights held by the Secretary under the Licences;

“Environment” means the natural and man-made environment including all or any
part of the following media namely air, water, and land including subsurface
strata lying beneath the surface of the ground or beneath a body of water, and
any living organisms or systems supported by those media;

“Environmental Law” means all applicable national and local laws, regulations,
directives and ministerial regulations and instructions, all judgments, orders,
instructions or awards of any court or competent authority and all codes of
practice, industry agreements and guidance notes which relate or apply to the
Environment or matters affecting the Environment including pollution,
contamination, emissions, hazardous substances or the creation of any adverse
impact on the Environment;

“Environmental Liabilities” means any and all claims, costs, charges, expenses,
liabilities, duties and/or obligations arising from, under or in respect of the
ownership or use of the Interests in relation to any Environmental Law or in
relation to cleaning up, decontamination of, removing and disposing of debris or
any property from and for reinstating any area of land, foreshore or seabed,
wherever situated, whether such claims, costs, charges, expenses, liabilities,
duties and/or obligations are incurred under or pursuant to any of the Licensed
Interest Documents or under statutory law, common law or otherwise and including
any residual liability or obligation for anticipated and/or necessary continuing
insurance, maintenance and monitoring costs regardless in each case of any acts,
omissions, negligence or breach of duty (statutory or otherwise), conduct or
statements of the Seller or the condition of the Interests;

“Final Completion Statement” has the meaning given in Clause 3.12;

“Forward Gas Sales Agreement” means forward Gas sales entered into prior to the
Economic Date under the Beach 2000 Master Agreement dated 16th March 2006
between Hess Energy Power and Gas Company (UK) Limited (1) and the Seller (2);

“Future Payment Liabilities” means the liability (ies) of the Seller to make
future and/or contingent payments to sellers under the terms of the:

 

 

(A)

the agreement dated 26th January 2001 between (1) the Seller (2) Britoil Public
Limited Company (3) and ATP Corporation, and

 

 

(B)

the agreement dated 10th March 2005 between (1) GDF Britain Limited (2) and the
Seller;

 

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“Gas” or “Natural Gas” means any hydrocarbons or mixture of hydrocarbons and
other gases consisting primarily of methane which at a temperature of fifteen
(15) degrees Celsius and at atmospheric pressure are or is predominantly in the
gaseous state;

“Heren” has the meaning set out in Clause 3.7;

“Interests” means:

 

  (a) an undivided legal interest in the Licence(s); and

 

  (b) an eighty percent (80%) interest in each of Block 49/12aNand a sixty-eight
percent (68%) interest in each of Block 43/22a, Block 42/25a and Block 43/21a);

together, in each case, with all rights and obligations attaching thereto
including for the avoidance of doubt a corresponding share of the Burdened
Interest as defined in the Joint Operating Agreement and including (i) the right
to take and receive a consequent share of all Petroleum produced from the
Block(s) under the Licence(s) on and after the Economic Date and (subject to
Clause 3.7 and Clause 12) to receive the gross proceeds from the sale or other
disposition thereof; (ii) a consequent share of the Seller’s legal and
beneficial right, title and interest in and to all property owned by the Seller
pursuant to or under any of the Licensed Interest Documents; and (iii) all
rights, liabilities and obligations associated with such interest under the
Licensed Interest Documents;

“Interim Completion Statement” has the meaning given in Clause 3.10;

“Interim Period” means the period from and including the Economic Date up to and
including the Completion Date;

“Interim Period Adjustment” is detailed in Clause 3.8;

“JDA” means the joint development agreement currently in force in respect of
operations pursuant to Licence P.1034 (Blocks 42/25a and 43/21a) and P.683
(Block 43/22a) (as detailed in Schedule 1), as the context so admits, each as
amended, supplemented and/or novated from time to time;

“Joint Operating Agreement” means the joint operating agreement currently in
force in respect of operations pursuant to Licence P.033 (Block 49/12aN) (as
detailed in Schedule 1) as amended, supplemented and/or novated from time to
time;

“Licence(s)” means the licence(s) of which details are set out in Schedule 1
and, where the context so admits, any one or more of such licences and any
licence issued to the Seller in full or partial substitution for any such
licence;

 

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“Licensed Interest Documents” means those documents listed as such in Schedule 1
and, where the context so admits, any one or more of such documents in each case
as the same may have been amended, supplemented and/or novated from time to
time;

“Limited Overriding Royalty Interest” has the meaning set out in the Joint
Operating Agreement and the Deed of Assignment dated 9th August 2006 between
ConocoPhillips (U.K.) Limited as assignor and ConocoPhillips (U.K.) Theta
Limited as assignee;

“Losses and Expenses” means any and all actions, proceedings, losses, damages,
liabilities, obligations claims, demands, costs and expenses including fines,
penalties, clean-up costs, legal and other professional fees and any VAT payable
but not recoverable in relation to any such matter, circumstances or item;

“New Works” means the coiled tubing work to be conducted on the Wenlock W1 Well,
the Pilot Hole at the Wenlock W3 Well and the connection for W2 Well and W3 Well
as more specifically described in the AFEs set out in Schedule 5;

“Obligations” has the meaning given in Clause 6.1;

“Operator” means the entity acting as operator under the Licence(s) as currently
identified in Schedule 1;

“Party” means a party to this Agreement and “Parties” means both of the parties
to this Agreement;

“Petroleum” has the meaning given in the Licence(s);

“Petroleum Sales Adjustment” is detailed in Clause 3.7;

“Pounds”, “£” or “Sterling” means pounds sterling of the United Kingdom;

“Purchase Price” has the meaning given in Clause 3.1;

“Purchaser’s Accounts” means such account(s) as the Purchaser may specify by
notice in writing to the Seller not less than five (5) Business Days prior to
the due date of any payment;

“Secretary” means the Secretary of State for Business, Enterprise and Regulatory
Reform or any other person for the time being responsible for carrying out the
functions at present carried out by the Secretary of State for Business,
Enterprise and Regulatory Reform in relation to the Licence(s) or operations
carried out thereunder;

“Secretary’s Consents” means all necessary consents of the Secretary to the
transfer of the Interests from the Seller to the Purchaser;

 

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“Seller’s Account” means the following account with Barclays Bank plc, of P0
544, 54 Lombard Street, London EC3V 9EX Sort Code 20 - 06 -05, Account
No. 50776785 or such other accounts as the Seller may specify by notice in
writing not less than five (5) Business Days prior to the due date of any
payment;

“Taxation” means all forms of taxation, duties, levies, imposts, charges,
deductions and withholdings, direct or indirect, created or imposed by any
taxing, fiscal or other appropriate authority of the United Kingdom and (without
prejudice to the generality of the foregoing) includes:

 

  (a) CT, VAT and any other forms of taxation, duties, levies, imposts, charges,
deductions and withholdings similar to or supplementing or replaced by or
replacing the foregoing or any of them; and

 

  (b) all penalties, charges, interest, fines, costs and expenses, loss of
relief, allowance or credit relating to any form of, or claim for, taxation or
other imposition referred to in paragraph (a);

“VAT” means Value Added Tax as charged under the Value Added Tax Act 1994;

“Warranties means the representations and warranties given by the Seller to the
Purchaser in Clause 7.1; and

“Working Capital Adjustment” is detailed in Clause 3.5.

 

1.2 All references to Clauses, recitals and Schedules are, unless otherwise
expressly stated, references to clauses of and the recitals and schedules to
this Agreement.

 

1.3 The headings are inserted for convenience only and shall be ignored in
construing this Agreement. Unless the context otherwise requires, the singular
shall include the plural and vice versa.

 

1.4 Unless the context otherwise requires, references to persons shall include
natural persons, bodies corporate, unincorporated associations, partnerships,
authorities, government and government bodies.

 

1.5 Reference to statutory provisions shall be construed as reference to those
provisions as amended, consolidated, extended or re-enacted from time to time.

 

1.6 Any document expressed to be “in the agreed form” means a document in a form
approved by the Parties (acting reasonably).

 

1.7 References to the words “include”, “including” and “other” shall be
construed without limitation.

 

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2. Sale and Purchase of the Interests

 

2.1   2.1.1   Subject to the terms of this Agreement the Seller as legal and
beneficial owner hereby agrees to sell and transfer the

Interests to the Purchaser free from all Encumbrances save for the Limited
Overriding Royalty Interest pursuant to and as defined in the Joint Operating
Agreement for the Consideration and the Purchaser hereby agrees to purchase and
acquire the Interests from the Seller.

 

  2.1.2 The transfer referred to in Clause 2.1.1 shall, as between the Parties,
be deemed for all purposes to be made with effect on and from the Economic Date.

 

  2.1.3 The Parties agree to co-operate in complying with the provisions of the
Limited Overriding Royalty Interest and for such purpose they agree that the
entitlement of ConocoPhillips (U.K.) Theta Limited (“Conoco”) to Natural Gas
pursuant to the Limited Overriding Royalty Interest and the costs, charges,
expenses, liabilities and obligations arising from such entitlement shall be
borne as to 80% by the Purchaser and as to 20% by the Seller for so long as
Conoco has the benefit of the Limited Overriding Royalty Interest.

 

2.2 The obligations of the Parties to complete the sale and purchase of the
Interests under this Agreement is conditional on:

 

  2.2.1 the receipt of all necessary written consents, approvals or waivers as
the case may be in relation to the transfer by the Seller to the Purchaser of
the Interests, including the Secretary’s Consents and any consents, approvals
and/or waivers required under the Licence Interest Documents, in form and
substance reasonably acceptable to the Seller and the Purchaser;

 

  2.2.2 the approval of the Board of Directors of each of the Seller and the
Purchaser and each of ATP Oil & Gas Corporation, EDF SA and EDF International to
the transactions contemplated herein; and

 

  2.2.3 execution of the Assignment Documents by the signatory parties thereto
other than the Parties.

It is expressly acknowledged and agreed by the Purchaser that the obligations of
the Parties to complete the sale and purchase of the Interests under this
Agreement is not conditional on the Purchaser seeking or obtaining finance. The
Parties shall notify each other promptly of the decision taken pursuant to
Clause 2.2.2 by their respective Boards of Directors and the Boards of Directors
of their Affiliates and in the event of and upon notification having been
received that all such Boards have approved the sale and purchase of the
Interests and accordingly that such condition has been satisfied:

(i) the Buyer shall request the execution and delivery of the EDF International
Guarantee (and upon receipt of an executed copy) execute and deliver the ATP
Corporation Guarantee; and

(ii) the Seller shall request the execution and delivery of the ATP Corporation
Guarantee (and upon receipt of an executed copy) execute and deliver the EDF
International Guarantee.

 

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so that the Buyer shall deliver to the Seller the EDF International Guarantee
(duly executed by EDF International) and the Seller shall deliver to the Buyer
the ATP Corporation Guarantee (duly executed by ATP Oil & Gas Corporation)
within five (5) Business Days of satisfaction of such condition, and in the
event of failure so to deliver the Party who has not received the relevant
guarantee shall be entitled to terminate this Agreement which shall cease to
have effect and the Parties shall be freed and discharged from all liability,
save only for the continuing obligations under Clause 9.

 

2.3 The Parties shall each use reasonable endeavours to obtain fulfilment of the
conditions set out:

(a) in Clause 2.2.2 by 31st October 2008 and

(b) in Clauses 2.2.1 and 2.2.3 by 31st December 2008 (or such later dates as the
Parties may agree) provided that it shall be the primary responsibility of the
Seller (a) to make the application to the Secretary to obtain the Secretary’s
Consent and (b) to give the required notices in order to obtain the necessary
consents, approvals and waivers (as the case may be) to the transfer and
assignment of the Interests in order to obtain execution of the Assignment
Documents in accordance with the Licensed Interest Documents.

 

2.4

In the event that the conditions set out in Clause 2.2.2 have not all been
fulfilled and/or waived by the Parties by 31st October 2008, (or such later date
as may be agreed as aforesaid), and/or in the event that the conditions set out
in Clauses 2.2.1 and 2.2.3 have not all been fulfilled and/or waived by the
Parties by 31st December 2008 (or such later date as may be agreed as
aforesaid), then in either of such events any Party shall be entitled, to
terminate this Agreement within five (5) Business Days following the date upon
which the relevant conditions should have been fulfilled and/or waived by the
Parties as aforesaid by written notice to the other Party and upon receipt of
any such notice this Agreement shall cease to have effect and the Parties shall
be freed and discharged from all liability, save only for any prior breach of
Clause 2.3 (b), any liability under Clause 2.5 and for the continuing
obligations under Clause 9.

 

2.5 In consideration of the Seller entering into this Agreement, if Completion
does not occur as a result of the Purchaser’s failure to meet its obligations
under Clause 2.3 (b) or to carry out any of its obligations at Completion under
this Agreement including payment of the Purchase Price to the Seller on the
Completion Date then, in addition to any other obligation or liability pursuant
to this Agreement, the Purchaser shall forthwith pay to the Seller the aggregate
sum of five percent (5 %) of the Purchase Price, as compensation for any loss
suffered by the Seller in entering into this Agreement and the risk undertaken
by the Seller in so doing. The Parties acknowledge and agree that such sum is a
genuine pre-estimate of loss and is not a penalty.

 

3. Consideration

 

3.1 The consideration for the sale and transfer by the Seller to the Purchaser
of the Interests shall be the payment by the Purchaser to the Seller of the sum
of two hundred and sixty five million Pounds (£265,000,000) (the “Purchase
Price”) as adjusted pursuant to this Agreement (the “Consideration”).

 

3.2 Subject to Clause 12, the Consideration shall be allocated as set out in
Schedule 2.

 

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Adjustments

 

3.3 The Purchase Price shall be adjusted by the Adjustments which shall operate
by way of increases or decreases, as the case may be, to the Purchase Price
provided that no item taken into account in calculating any one of the
Adjustments shall be taken into account in calculating any one of the other
Adjustments so as to result in a Party making or receiving payment twice in
respect thereof.

 

3.4 No adjustment under this Clause 3 shall be made in respect of any matter to
which Clause 6.6 applies.

 

3.5 The Working Capital Adjustment, which if positive shall increase the
Purchase Price and if negative shall reduce the Purchase Price, shall be the
aggregate of the working capital balances in relation to the Interests
calculated in respect of each of the categories listed in Schedule 3 as at the
Economic Date by reference to the statements provided by the Operator and
otherwise in accordance with Schedule 3. Such working capital balances shall be
prepared in accordance with proper accounting and operating procedures and
otherwise in accordance with good oil and gas field practice.

 

3.6 The Cash Calls Adjustment, which shall increase the Purchase Price, shall be
the sum of all cash calls or billing invoices paid in respect of the Interests
by the Seller during and/or in respect of the Interim Period and which, using
the Accruals Basis of Accounting, relate to periods beginning on or after the
Economic Date pursuant to the Licensed Interest Documents.

 

3.7 The Petroleum Sales Adjustment, which shall decrease the Purchase Price,
shall be the notional value of the Gas produced in respect of the Interests in
each day of the Interim Period based on multiplying the volume of such Gas by
the Market Price for such Gas and for this purpose the Market Price shall be
calculated as follows:

Market Price = (0.25 x MP) + (0.75 x DP)

where:

“DP” means the applicable gas index price for Day D expressed in pence per therm
based on the arithmetic average of the Day ahead NBP bid prices and the Day
ahead NBP offer prices for Natural Gas (in pence per therm) published by Heren
on the preceding Day (D-1).

In case of a following a weekend or a public holiday the arithmetic average of
the Day ahead NBP bid prices and the Day ahead NBP offer prices published by
Heren on the last Banking Day before the weekend or public holiday shall be
used.

In the case of a weekend and a public holiday immediately preceding or following
a weekend then the arithmetic average of the Heren weekend NBP bid prices and
the weekend NBP offer prices on the preceding Banking Day for that weekend shall
be used.

 

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In the case of a public holiday mid week the arithmetic average of the special
NBP bid prices and special NBP offer prices for that period published by Heren
on the preceding Banking Day shall be used, provided that if no such prices are
published then the weekend NBP bid prices and weekend NBP offer prices for that
period published by Heren on the preceding Banking Day shall be used.

“Heren” means Heren Energy in European Spot Gas Markets.

“MP” means the applicable gas index price for Month M (expressed in pence per
therm) based on the arithmetic average of the month- ahead NBP bid prices and
the Month ahead NBP offer prices for Natural Gas (in pence per therm) for Month
M as published by Heren for each day of publication in Month M-1 which are then
averaged over the number of days in which prices are published.

 

3.8 The Interim Period Adjustment, which shall increase the Purchase Price,
shall be the sum of all expenditure incurred by the Seller, using the Accruals
Basis of Accounting, in respect of the Interests during the Interim Period,
including demurrage, brokers’ fees (other than fees of advisers engaged in
relation to the matters referred to herein), insurance premia and deductibles,
rent and licence fees and all other costs and expenses incurred by the Seller in
respect of the Interests which are in respect of the period on and after the
Economic Date and which have not been met by cash calls or other payments taken
into account under the foregoing provisions of this Clause 3 or Clause 12
provided that any such expenditure relating to any period prior to the Economic
Date which has not been taken into account in the Working Capital Adjustment
shall be for the account of the Seller.

 

3.9 Where any sums payable by the Purchaser to the Seller or by the Seller to
the Purchaser pursuant to Clauses 3, 6, 7 or 12 are expressed in Sterling, the
same shall be paid in Sterling.

Interim Completion Statement and Final Completion Statement

 

3.10 The Seller shall provide the Purchaser with a written statement of the
Consideration expected to be required as at the Completion Date (the “Interim
Completion Statement”). The Interim Completion Statement shall be provided no
later than ten (10) calendar days prior to the anticipated Completion Date and
shall be in the form set out in Schedule 4. The Seller may update the same and
the Parties shall endeavour to agree the Interim Completion Statement before
Completion, failing which the matter shall be dealt with in accordance with
Clauses 3.11 and 3.13.

 

3.11 If any of the amounts or portions thereof contained in the Interim
Completion Statement have not been agreed prior to Completion, the disputed
amounts or portions of the Adjustments shall be left out of account for the
purposes of Clause 5.2.2.1. The undisputed amounts or portions of the
Adjustments shall be added to the amount of the Purchase Price and such amount
so adjusted shall be payable at Completion. Payment of disputed amounts or
portions thereof shall be made within five (5) Business Days following agreement
of the Parties or determination under Clause 3.13.

 

3.12

Within sixty (60) Business Days after Completion, and without prejudice to the
provisions of Clauses 6, 7 and 12, the Seller shall provide the Purchaser with a
written statement of all of the Adjustments to be made

 

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hereunder and giving the final amount of the Consideration (the “Final
Completion Statement”), which statement shall be prepared in the form set out in
Schedule 4. If the Parties fail to agree the Final Completion Statement within
fifteen (15) Business Days of receipt by the Purchaser, the Final Completion
Statement shall be referred for determination in accordance with the provisions
of Clause 3.13. The agreed or determined amounts, to the extent not already paid
or taken into account on Completion, shall be paid by the Purchaser. Payment of
agreed or disputed amounts or portions thereof shall be made within ten
(10) Business Days following either agreement of the Parties or determination
under Clause 3.13 (as the case may be).

 

3.13 If the Parties cannot reach agreement on the contents of all or part of the
statements referred to in Clauses 3.10 and/or 3.12 within the time limit
provided in Clause 3.12, the disputed items may be referred by either the Seller
or the Purchaser for determination by an independent chartered accountant
nominated by the Parties or, in the absence of agreement between the Parties
within ten (10) Business Days of a Party notifying the other that it proposes to
refer the dispute to an independent chartered accountant, by the President of
the Institute of Chartered Accountants in England and Wales on the application
of such Party. The nominated chartered accountant shall be afforded such access
to books, records, accounts and documents in the possession of the Parties as he
may reasonably request, and he shall act as expert not as arbitrator. The said
accountant’s determination shall, in the absence of fraud or manifest error or
bias, be final and binding on the Parties, his fees and disbursements shall be
borne by the Seller and the Purchaser in equal shares and the Parties shall bear
their own costs in respect of such reference.

 

3.14 The Interim Completion Statement and the Final Completion Statement will be
prepared on the information available at the time of their preparation and shall
be without prejudice to any further claims arising under Clauses 6, 7 and/or 12
after the time of the preparation of such statements. The Seller and the
Purchaser shall liaise on the compilation and agreement of the Interim
Completion Statement and the Final Completion Statement and the Seller shall
provide to the Purchaser, as soon as reasonably practicable, all the Seller’s
calculations (and supporting documents) in the preparation of the Adjustments
for verification purposes including such explanations and methodology as the
Purchaser shall reasonably require. Without prejudice to the generality of the
foregoing, subject to and to the extent of any confidentiality obligations by
which it is bound, the Seller shall provide the Purchaser with copies of all
Operators’ reports, billing statements and correspondence and any other relevant
documentation in its possession necessary to support the Interim Completion
Statement and the Final Completion Statement. Where the Seller is unable to
provide the Purchaser with such information due to confidentiality obligations
by which it is bound it shall provide the same to an independent chartered
accountant for the purposes of certifying the accuracy of such information to
the Purchaser.

Time -value adjustments

 

3.15 An amount equivalent to interest (calculated on a compounded basis on the
accumulated daily balances) at the Agreed Rate shall be payable on the Purchase
Price from the Economic Date up to the Completion Date (both dates inclusive).

 

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3.16 In respect of the Adjustments, an amount equivalent to interest (calculated
on a compounded basis on the accumulated daily balances) at the Agreed Rate
shall be payable (and in the case of clauses 3.16.3 and 3.16.4 below be taken
into account in the calculation of the relevant Adjustment) on each of:

 

  3.16.1 the Working Capital Adjustment from the Economic Date up to and
including the Completion Date, and, in the case of final adjustments or disputed
items, thereafter up to and including the date of settlement thereof;

 

  3.16.2 the cash calls and billing invoices comprised in the Cash Calls
Adjustment from the date on which such cash call or billing invoice is paid by
the Seller up to and including the date of settlement of such element of the
Cash Calls Adjustment;

 

  3.16.3 the receipts comprised in the Petroleum Sales Adjustment from the date
of such receipt by or credit to the Seller up to and including the date of
settlement of such element of the Petroleum Sales Adjustment; and

 

  3.16.4 the items of expenditure comprised in the Interim Period Adjustment
from the date such item of expenditure is paid by the Seller up to and including
the date of settlement of such element of the Interim Period Adjustment.

 

3.17 The Parties agree that the amounts set out in Clauses 3.15 and 3.16 are
adjustments to the Purchase Price and not actual interest on any debt between
the Seller and the Purchaser and the Parties agree to submit their CT returns on
that basis.

 

4 Interim Period

 

4.1 During the Interim Period, (in so far as it falls after the date of this
Agreement) the Seller shall:

 

  4.1.1 continue to carry on its affairs in relation to the Interests in the
ordinary course and in accordance with good oil and gas field practice;

 

  4.1.2 (to the extent that it is able so to do having regard to the provisions
of the Licensed Interest Documents) consult with the Purchaser with regard to
the Interests where reasonably practicable and co-operate with the Purchaser so
as to ensure an efficient handover of the Interests on Completion;

 

  4.1.3 not, without the Purchaser’s prior written approval (not to be
unreasonably withheld or delayed), encumber, sell, assign or otherwise dispose
of the Interests or any part thereof, or purport to do any of the same;

 

  4.1.4 not, without the Purchaser’s prior written approval (not to be
unreasonably withheld or delayed) enter into or agree to enter into or become
party to any new licences, operating agreements, farm-in or farm-out agreements,
unitisation agreements, transportation agreements, long term gas sale or supply
agreements or any other material agreement or undertaking (by whatever name
called) relating to the Interests or permit any other person to enter into or
agree to enter in any such agreement on behalf of the Seller;

 

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  4.1.5 not, without the Purchaser’s prior written approval (not to be
unreasonably withheld or delayed), enter into or agree to enter into any
contract for the sale of gas and/or other Petroleum products relating to the
Interests or permit any other person to enter into or agree to enter in any such
contract on behalf of the Seller;

 

  4.1.6 maintain insurance in relation to the Interests (on behalf of and for
the benefit of the Purchaser) to such extent and at such levels as would be in
accordance with good oil and gas field practice and otherwise in accordance with
the JDA;

 

  4.1.7 not, without the Purchaser’s prior written approval (not to be
unreasonably withheld or delayed), undertake or agree to undertake any sole-risk
or non-consent activities in relation to the Interests;

 

  4.1.8 not, without the Purchaser’s prior written approval (not to be
unreasonably withheld or delayed), amend, renew, terminate or agree to amend,
renew or terminate any of the Licensed Interest Documents or waive or agree to
waive any of its rights or remedies under the Licensed Interest Documents
insofar as any such right or remedy is capable of relating to periods after the
Economic Date or is in respect of Decommissioning and/or Environmental
Liabilities;

 

  4.1.9 not, without the Purchaser’s prior written approval (not to be
unreasonably withheld or delayed) undertake any operations or commit to any work
programmes on Block 49/12b and

 

  4.1.10 not, without the Purchaser’s prior written approval (not to be
unreasonably withheld or delayed):

(1) approve any expenditure or capital commitment relating to any Interest
involving expenditure in excess of one hundred thousand Pounds (£100,000) in any
case other than:

 

  (a) any such expenditure in respect of which the Purchaser has given its prior
consent as referenced in Clause 4.2 below; or

 

  (b) any expenditure necessitated by any emergency for the safeguarding of
lives or property or the prevention of pollution (in which case the Seller shall
to the extent practicable in the circumstances consult with the Purchaser and in
any event as soon as reasonably practicable inform the Purchaser).

(2) approve any work programme or budget which (i) differs materially from the
2008 Budget prepared for the purposes of the Interests (a copy of which in
relation to the Tors Area has been provided to the Purchaser) or (ii) differs
from the Budget approved in relation to the Wenlock Field as referenced in the
AFEs in Schedule 5, in either case without the consent of the Purchaser and for
this purpose an increase in such Budget of more than 5 % or increase in any
expenditure or capital commitment as shown in such Budget of more than 10 %
shall be deemed to be material.

 

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4.2 Without prejudice to Clause 4.1, the Seller shall (subject to any
confidentiality obligations by which it is bound) between the date hereof and
Completion generally keep the Purchaser informed, in a timely manner, of all
material matters not of a routine or minor nature affecting the Interests
including the approval of any work programme, budget, AFE expenditure or capital
commitment relating to the Interests and make available for review by the
Purchaser and any person authorised by the Purchaser all Data reasonably
requested by the Purchaser. In this regard, the Purchaser acknowledges and
accepts the AFEs in respect of Block 49/12aN as set out in Schedule 5 and agrees
that its consent to the same is not required pursuant to Clause 4.1 save for the
New Works.

 

4.3 Notwithstanding that title to the Interests will not pass to the Purchaser
until Completion, the Purchaser shall assume all risk in the Interests with
effect from the date of this Agreement and accordingly (save for and without
prejudice to the Seller’s continuing obligations under Clause 4.1 (in particular
under Clause 4.1.6)) the Purchaser shall be responsible for insuring the
Interests and its rights and liabilities arising in relation thereto under the
terms of this Agreement.

 

4.4 During the Interim Period the Parties shall use their reasonable endeavours
to negotiate and agree in good faith a joint development agreement to apply in
relation to Licence P033, Block 49/12aN, such agreement to be, mutatis mutandis,
in similar terms to the JDA for Licence P.1034 (Blocks 42/25a and 43/21a) and
P.683 (Block 43/22a) and in the event that such agreement is not entered into on
Completion the Parties shall continue to act in good faith to complete the
agreement thereon and until such time the provisions of the JDA for Licence
P.1034 (Blocks 42/25a and 43/21a) and P.683 (Block 43/22a) shall be deemed to
apply in so far as reasonably practicable.

 

5 Completion

 

5.1 Completion under this Agreement shall take place within ten (10) Business
Days after all of the conditions referred to in Clause 2.2 have been satisfied,
at such location and at such time as the Parties may agree.

 

5.2 On the Completion Date all, but not part only, of the following business
shall be transacted:

 

  5.2.1 The Seller shall deliver to the Purchaser (to the extent not already
delivered prior to Completion and/or already in the possession of the
Purchaser):

 

  5.2.1.1 the Assignment Documents duly and validly executed by all the
signatory parties thereto other than the Purchaser;

 

  5.2.1.2 a copy of the Secretary’s Consents and all other relevant consents,
approvals or waivers, if any, referred to in Clause 2.2 and obtained by or on
behalf of the Seller;

 

  5.2.1.3 a copy, certified as a true copy and in full force and effect by a
director or the secretary of the Seller, of a resolution of the board of
directors of the Seller authorising a person or persons to execute this
Agreement and the Assignment Documents on behalf of the Seller; and

 

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  5.2.1.4 written confirmation in terms satisfactory to the Purchaser that the
Seller has notified to the relevant insurers the interest of the Purchaser in
all property, assets and rights associated with the Interests and the Licensed
Interest Documents.

 

  5.2.2 The Purchaser shall:

 

  5.2.2.1 pay to the Seller the sums specified in the Interim Completion
Statement, subject to Clause 3.11, by means of telegraphic transfer in
immediately available funds to the Seller’s Account for value in Sterlingon the
Completion Date;

 

  5.2.2.2 deliver to the Seller the Assignment Documents duly and validly
executed by the Purchaser;

 

  5.2.2.3 deliver to the Seller a copy of all relevant consents, approvals, or
waivers, if any, referred to in Clause 2.2 and obtained by or on behalf of the
Purchaser; and

 

  5.2.2.4 deliver to the Seller a copy, certified as a true copy and in full
force and effect by a director or the secretary of the Purchaser, of a
resolution of the board of directors of the Purchaser authorising a person or
persons to execute this Agreement and the Assignment Documents on behalf of the
Purchaser;

and the Parties acknowledge and agree that all acts and transactions
constituting Completion shall be regarded as a single transaction so that, at
the option of the Party who is interested in the carrying out of the relevant
act or transaction, no action or transaction shall be deemed to have taken place
unless and until all other actions and transactions constituting Completion
shall have taken place as provided in this Agreement. The Parties acknowledge
the essential nature of this provision.

 

5.3 Each of the Parties shall and, if appropriate, shall ensure that its
respective Affiliates shall execute such other documents and do all such other
acts and things as may reasonably be required, in order to effect the transfer
of the Interests to the Purchaser and to implement the transactions contemplated
hereunder and otherwise to carry out the true intent of this Agreement.

 

5.4 Following Completion, the Seller shall ensure that (to the extent not
delivered prior to Completion) copies of the Licensed Interest Documents and
copies of Data in the possession or control of the Seller as requested and
reasonably required by the Purchaser and which are not in the Purchaser’s
possession are made available for collection by the Purchaser at its own expense
and within normal business hours within thirty (30) Business Days after the
Completion Date. The costs of reproducing the Licence Interest Documents and the
Data shall be borne by the Purchaser. The Seller shall also following Completion
use its reasonable endeavours to obtain such waivers and/or releases (at the
cost of the Purchaser) which may be necessary so as to enable it to provide all
data in the possession, custody or control of the Seller directly and
exclusively relating to the Interests which may be the subject of
confidentiality obligations by which it is bound or which cannot be provided to
the Purchaser because such transfer is prohibited by the agreement under which
it is acquired and upon obtaining such waivers and/or releases shall promptly
provide the same to the Purchaser.

 

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5.5 Notwithstanding Completion:

 

  5.5.1 each provision of this Agreement (and any other document referred to in
it) not performed at or before Completion but which remains capable of
performance;

 

  5.5.2 the Warranties and the Purchaser’s warranties under Clause 7.2; and

 

  5.5.3 all covenants, indemnities and other undertakings contained in or
entered into pursuant to this Agreement,

will remain in full force and effect and (except as otherwise expressly
provided) without limit in time.

 

6 Indemnities

 

6.1 The Seller shall be liable for all costs, charges, expenses, liabilities and
obligations (including in respect of the Burdened Interest as defined in the JOA
in respect of the Interests (together “Obligations”) which accrue in or relate
to any period before the Economic Date and the Seller shall be entitled to all
income, receipts, rebates, credits and other benefits in respect of the
Interests (together “Benefits”) which accrue in or relate to any period before
the Economic Date.

 

6.2 The Purchaser shall be liable for all Obligations and entitled to all
Benefits which accrue in or relate to any period on or after the Economic Date.

 

6.3 Subject to Clauses 7 and 12 and save to the extent that the Consideration
includes any adjustment under Clause 3 which already takes account of any of the
following (with the intent that there shall be no-double – counting) :-

 

  6.3.1 if any Obligations are incurred by the Seller in respect of any period
on or after the Economic Date, the Purchaser shall reimburse and indemnify the
Seller in respect thereof;

 

  6.3.2 if any Obligations are incurred by the Purchaser in respect of any
period prior to the Economic Date, the Seller shall reimburse and indemnify the
Purchaser in respect thereof;

 

  6.3.3 if any Benefits accrue to the Seller in respect of any period on or
after the Economic Date, the Seller shall account to and reimburse the Purchaser
in respect thereof; and

 

  6.3.4 if any Benefits accrue to the Purchaser in respect of any period prior
to the Economic Date, the Purchaser shall account to and reimburse the Seller in
respect thereof

and any such reimbursements shall be treated as further adjustments to the
Purchase Price.

 

6.4 Any amount to be paid or reimbursed in accordance with Clause 6.3 or any
other provision of this Clause 6 shall be paid or reimbursed within ten
(10) Business Days of receipt thereof (or, in the case of Obligations, within
ten (10) Business Days of receipt of notification from the Party which has
incurred such Obligations) to the relevant Seller Account or Purchaser Account
(as the case may be) (unless otherwise intimated in writing).

 

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6.5 For the avoidance of doubt, and without prejudice to the provisions of
Clauses 6.1, 6.2 and 6.3, any Benefits or Obligations accruing in respect of the
Interests in the form of amounts receivable or payable resulting from any
adjustment in relation to the operation of, and expenditure attributable to, the
Interests in the period prior to the Economic Date shall accrue to the Seller.

 

6.6 Notwithstanding any other provision of this Agreement (but without prejudice
to the Warranty in Clause 7.14), the Purchaser shall at its cost and expense
perform and shall, to the extent of the Interests, be responsible for all
Decommissioning Liabilities and all Environmental Liabilities whether arising
before, on or after the Economic Date and shall indemnify and hold the Seller
and its Affiliates harmless against all and any Losses and Expenses however
arising out of or in connection with any and all Decommissioning Liabilities and
any and all Environmental Liabilities, in each case to the extent of the
Interests and regardless of whensoever such Decommissioning Liabilities or
Environmental Liabilities may arise or may have arisen and whether before, on or
after the Economic Date and regardless of whosoever is or was a licensee under
the Licence(s) or owned or leased the relevant property.

 

6.7 The Purchaser shall promptly notify the Seller of any circumstances of which
the Purchaser becomes aware and for which the Seller may have any benefit or
liability under Clause 6.1 and/or Clause 6.3 and, if requested by notice in
writing by the Seller, the Purchaser shall use its reasonable endeavours to
defend or pursue any claim on behalf of the Seller and shall act in accordance
with the Seller’s reasonable instructions in respect thereof. In such event, the
Seller shall indemnify the Purchaser in respect of all costs, claims and damages
suffered by the Purchaser in defending or pursuing such a claim on the Seller’s
behalf and acting in accordance with the Seller’s reasonable instructions.

 

6.8 The rights and obligations in this Clause 6 shall not come into effect
unless and until Completion takes place and for the avoidance of doubt any
payments arising under this Clause 6 shall be made after the Completion Date.
All adjustments and reimbursements made and the ascertainment of all Obligations
and Benefits under this Clause 6 shall be calculated using the Accruals Basis of
Accounting.

 

6.9 Notwithstanding any other provision of this Agreement, the Seller shall at
its cost and expense perform and shall, be responsible for all Future Payment
Liabilities whether arising before, on or after the Economic Date and shall
indemnify and hold the Purchaser and its Affiliates (including for this purpose
Edison S.p.A and its Affiliates) harmless against all and any Losses and
Expenses however arising out of or in connection with any and all Future Payment
Liabilities regardless of whensoever such Future Payment Liabilities may arise
or may have arisen and whether before, on or after the Economic Date and
regardless of whosoever is or was a licensee under the Licence(s) or owned or
leased the relevant property. Furthermore the Seller shall indemnify and hold
the Purchaser harmless against any breach of the Warranty contained in Clause
7.1.19.

 

6.10 The Seller shall ensure that there are no obligations outstanding at
Completion to sell gas or any other Petroleum products relating to the Interests
to any person and that (without limitation to the generality thereof) all
commitments under the Forward Gas Sales Agreement which may relate to the
Interests have been terminated. Furthermore the Seller shall indemnify and hold
the Buyer harmless against any Losses and Expenses however arising out of or in
connection with any breach of the Warranty contained in Clause 7.1.18.

 

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7 Representations and Warranties

 

7.1 Subject to the provisions of this Clause 7, the Seller hereby represents and
warrants to the Purchaser that save in respect of matters fairly disclosed (with
sufficient details to identify the nature and scope of the matters disclosed) in
the Data Room Documents, the Licence Interest Documents or this Agreement, the
following Warranties are true and accurate:

 

  7.1.1 the Seller is a licensee of the Licence(s) and the legal and beneficial
owner of the Interests and all property rights and interests attributable
thereto under the Licensed Interest Documents;

 

  7.1.2 save for the Limited Overriding Royalty Interest, no mortgage, charge
(whether fixed or floating), pledge, lien, encumbrance or other security or net
profit or royalty interest is in existence and in force over the Interests other
than arising under the Licence(s) nor, subject as aforesaid, has the Seller
entered into any agreement or commitment to create the same; nor, so far as the
Seller is aware, are there any other matters which restrict the Seller’s ability
freely to dispose of the Interests save for the terms of the Licence(s) and the
Licence Interest Documents;

 

  7.1.3 the Seller has not committed any breach of the Licence(s) or any of the
Licensed Interest Documents nor received notice that any of the parties to any
of the above-mentioned documents has committed any breach of the Licence
Interest Documents, which breach, at the date of making this statement, is in
either case of a material nature and is subsisting and would have a material
adverse effect upon the Seller’s ownership of the Interests;

 

  7.1.4 the Licence(s) and all rights and interests of the Seller thereunder or
deriving therefrom are in full force and effect and the Seller has not committed
any act or omission nor, so far as the Seller is aware, has any other licensee
of the Licence(s) committed any act or omission which would entitle the
Secretary to revoke the Licence(s) and no notice has been given to the Seller
or, so far as the Seller is aware, to any other licensee of the Licence(s), by
the Secretary of any intention to revoke the Licence(s);

 

  7.1.5 the Licence(s) is not in the course of being surrendered in whole or in
part;

 

  7.1.6 none of the current licensees of the Licence(s) or the current parties
to the JDA have given any notice of withdrawal from the Licence(s) or the JDA;

 

  7.1.7

the Seller is not a party to any litigation or arbitration or administrative
proceedings relating to the Interests in respect of which a writ or summons or
other formal pleading has been served or judgment issued, nor has the Seller
been notified of any claim (not formulated within a formal pleading as
aforesaid) or dispute in relation to, and which is likely materially to
prejudice or endanger in any material manner, the Interests, and the Seller is
not aware that any such litigation, arbitration or administrative proceedings
are threatened or pending, either by or against the Seller, and there are no
facts known to the Seller which are likely to give rise to any claim or dispute
which is likely so materially to prejudice or endanger in any material manner
the Interests, and, so far as the Seller is aware, none of the other licensees
of the Licence

 

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or the parties to the Licensed Interest Documents is a party to any litigation,
arbitration or administrative proceedings or any claim or dispute or judgment in
relation to, and which is likely materially to prejudice or endanger in any
material manner, the Interests;

 

  7.1.8 the Seller is duly incorporated with limited liability and validly
existing under the laws of England;

 

  7.1.9 the documents which contain or establish the Seller’s constitution
incorporate provisions which authorise, and all necessary corporate action has
been taken to authorise, the Seller to execute and deliver this Agreement and
perform the transaction contemplated by this Agreement;

 

  7.1.10 subject to fulfilment of the conditions set out in Clause 2.2, the
signing and delivery of this Agreement and the performance of any of the
transactions contemplated by this Agreement will not contravene or constitute a
material default under any provision contained in any agreement, instrument,
law, judgment, order, licence, permit or consent by which the Seller or any of
its Affiliates or their respective assets is bound or affected and

 

  7.1.11 the Licensed Interest Documents are the only material documents which
govern or relate to the creation, existence or validity of the Interests, and to
which the Seller is a party and the Seller is not under any contractual
obligation to enter into any further material agreement in relation to the
Interests other than for operational purposes;

 

  7.1.12 all accrued obligations and liabilities imposed by the Licence(s),
including the work obligations arising from the Licence(s), have been duly
fulfilled and discharged and there is no outstanding work obligation to be
fulfilled under the Licence(s);

 

  7.1.13 the Seller is not a party to any farm-in or farm-out agreement under
which it will become obliged to transfer the Interests or any part of them;

 

  7.1.14 In relation to the following:

 

  7.1.14.1 the Seller has not received any orders or directives under any
Environmental Laws in force at the date hereof which require any material work,
repairs, construction or capital expenditures with respect to the Interests
which have not been fully complied with in all material respects;

 

  7.1.14.2 the Seller has not received any demand or notice under any
Environmental Law in force at the date hereof with respect to a material breach
thereof related to the Interests;

 

  7.1.14.3 the Seller has not received any complaint from any UK government,
agency or group regarding any actual or alleged material environment damage or
material injury related to the Interests;

 

  7.1.14.4 so far as the Seller is aware the Seller has complied in all material
respects with Environmental Law in force at the date hereof in relation to the
Interests;

 

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  7.1.15 the Seller is not for statutory purposes deemed to be unable to pay its
debts and is able to pay its debts as they fall due and no steps have been taken
to propose any scheme of arrangement involving the Seller and its creditors
generally, obtain an administration order or appoint any administration or other
receiver or equivalent officer in relation to the Seller or any of its property
or to wind up or dissolve the Seller. No order has been made, petition presented
or meeting convened for the purpose of considering a resolution for the winding
up of the Seller or for the appointment of any provisional liquidator; and so
far as the Seller is aware, no petition has been presented for an administration
order to be made in relation to the Seller;

 

  7.1.16 the Seller is not party to, and nor is the Seller aware of, any
proposal by any other party to the Licensed Interest Documents to conduct any
sole risk or non-consent operations under the Licence(s) so as to impose upon
the Seller an obligation to pay any penalty or premium as a condition of
participating in any future operation under the Licensed Interest Document in
question;

 

  7.1.17 the Seller (and/or the Operator on behalf of the Seller) has in place
all insurances required by law and by the JDA and the Joint Operating Agreement
in relation to the Interests;

 

  7.1.18 all reserves of Petroleum arising from the Interests may following
Completion be freely lifted and disposed of by the Purchaser and are not
contracted for sale or otherwise committed to any person or entity;

 

  7.1.19 details of expenditures on which capital allowances have been claimed
or would have been claimed in the Seller’s corporation tax returns have been
provided to the Purchaser and to the extent that any part of the Consideration
is allocated to assets qualifying for capital allowances under Part 2 and Part 5
of the Capital Allowances Act 2001, such capital allowances are available;

 

  7.1.20 there are no outstanding obligations of the Seller (whether or not
attaching to the Interests) to make future and/or contingent payments to any
person from whom the Seller acquired all or part of the Interests (other than
the Future Payment Liabilities);

Provided that the Warranties given in Clauses 7.1.4 to 7.1.6 (inclusive) and
Clause 7.1.12 are, to the extent that the Seller does not have an interest in a
Block in such Licence, given so far as the Seller is aware and for the avoidance
of doubt provided further that no matters are disclosed pursuant to Clause 7.1
and 7.3 in relation to the Warranty in Clause 7.1.19.

 

7.2 Subject to the provisions of this Clause 7 the Purchaser hereby represents
and warrants to the Seller as follows:

 

  7.2.1 the Purchaser is duly incorporated with limited liability and validly
existing under the laws of England;

 

  7.2.2 the documents which contain or establish the Purchaser’s constitution
incorporate provisions which authorise, and all necessary corporate action has
been taken to authorise, the Purchaser to execute and deliver this Agreement and
perform the transactions contemplated hereby;

 

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  7.2.3 subject to fulfilment of the conditions set out in Clause 2.2, the
signing and delivery of this Agreement and the performance of the transactions
contemplated by this Agreement, will not contravene or constitute a default
under any provision contained in any agreement, instrument, law, judgment,
order, licence, permit or consent by which the Purchaser or any of its
Affiliates or any of their respective assets is bound or affected and which
would result in the Purchaser being unable to perform its obligations under this
Agreement;

 

  7.2.4 no litigation, arbitration, administrative proceeding, dispute or
judgement against the Purchaser (or its Affiliates) or to which the Purchaser
(or its Affiliates) is a party which might by itself or together with any other
such proceedings have a material adverse effect on the Purchaser’s business,
assets or condition and which would materially and adversely affect its ability
to observe or perform its obligations under this Agreement and the transactions
contemplated hereby, is subsisting or, so far as the Purchaser is aware,
threatened or pending against the Purchaser or any of its assets or against its
Affiliates;

 

  7.2.5 there are no facts within the actual knowledge of the Purchaser or its
Affiliates at the date hereof which will entitle the Purchaser to make any claim
against the Seller and, insofar as there are any such facts, the Purchaser shall
not be entitled to make any claim in respect thereof; and

 

  7.2.6 the Purchaser is not for statutory purposes deemed to be unable to pay
its debts and is able to pay its debts as they fall due and no steps have been
taken to propose any scheme of arrangement involving the Purchaser and its
creditors generally, obtain an administration order or appoint any
administration or other receiver or equivalent officer in relation to the
Purchaser or any of its property or to wind up or dissolve the Purchaser. No
order has been made, petition presented or meeting convened for the purpose of
considering a resolution for the winding up of the Purchaser or for the
appointment of any provisional liquidator; and so far as the Purchaser is aware,
no petition has been presented for an administration order to be made in
relation to the Purchaser.

 

7.3 The Warranties are given as at the date of this Agreement and shall be
repeated as at the Completion Date subject to matters fairly disclosed (with
sufficient details to identify the nature and scope of the matters disclosed) in
the Data Room Documents, the Licence Interest Documents or this Agreement.
Accordingly, the Purchaser shall not be entitled to claim that any fact or
matter constitutes a breach of or inconsistency with the Warranties and the
Seller shall not be liable to the Purchaser for any claim to the extent that
such fact or matter has been so disclosed.

 

7.4 Subject to Clause 7.3 and without prejudice to Clause 7.2.5, the Purchaser’s
remedy for breach of any of the Warranties or any other provision of this
Agreement shall be limited to a claim for damages and/or indemnity and the
Purchaser shall not be entitled to any other form of remedy in relation thereto
including rescission of this Agreement. Any payment by the Seller to the
Purchaser for damages pursuant to a breach of any of the Warranties shall be
treated as a reduction in the Purchase Price to the extent of such payment.

 

7.5

Save in the case of fraud or wilful concealment of material facts, the Seller
shall not be liable for any claim for breach of any of the Warranties unless it
shall have received from the Purchaser, as soon as practicable after the
Purchaser becomes aware of the

 

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same, written notice containing reasonable details of the relevant claim
including the Purchaser’s bona fide provisional estimate of the amount of the
claim provided always that such notice is received on or before the expiry of
eighteen(18) months from the Completion Date in the case of the Warranties other
than the warranty contained in Clause 7.1.19 and in the case of such warranty
before 31 st March 2014. Any claim made shall be deemed to have been withdrawn
or satisfied unless arbitration proceedings in respect thereof have been both
issued and served on the Seller within six (6) months of the giving of such
notice.

 

7.6 Except as set out in Clause 7.1, neither the Seller nor any of its
Affiliates nor any officer, shareholder, director, employee, agent, adviser,
consultant or representative of the Seller or any of its Affiliates (including
their auditors) makes any representation, warranty, statement, opinion,
information or advice (including any representation, warranty, statement,
opinion, information or advice (a) communicated (orally or in writing) to the
Purchaser or any Affiliate of the Purchaser or (b) made in any data, information
or document communicated to the Purchaser or any Affiliate of the Purchaser or
made by any officer, shareholder, director, employee, agent, adviser, consultant
or representative of the Seller or any Affiliate of the Seller) and the
Purchaser acknowledges, affirms and warrants that (except as aforesaid) it has
not relied, and will not rely, upon any such representation, warranty,
statement, opinion, information or advice of any person in entering into this
Agreement or carrying out the transactions contemplated by this Agreement.
Without limiting the generality of the foregoing, the Seller makes no
representation or warranty as to: (i) the amounts, quality or deliverability of
reserves of oil, gas or other hydrocarbons attributable to the Interests,
(ii) any geological, geophysical, technical, engineering, economic or other
interpretations, forecasts or evaluations, (iii) any forecast of expenditures,
budgets or financial projections, (iv) any geological formation, drilling
prospect or hydrocarbon reserve, or (v) the physical state or condition of any
of the assets associated with the Interests and the Purchaser acknowledges that
all such assets are to be acquired by the Purchaser on an “as is, where is”
basis.

 

7.7 Save in the case of fraud or wilful concealment of material facts, the
Purchaser shall not be liable for any claim in relation to any breach of the
provisions of Clause 7.2 unless it shall have received from the Seller, as soon
as practicable after the Seller becomes aware of the same, written notice
containing reasonable details of the relevant claim including the Seller’s bona
fide provisional estimate of the amount of the claim and in any event such
notice is received on or before the expiry of twelve (12) months from the
Completion Date. Any claim made shall be deemed to have been withdrawn or
satisfied unless judicial proceedings in respect thereof have been both issued
and served on the Purchaser within six (6) months of the giving of such notice.

 

7.8 Save in the case of fraud or wilful concealment of material facts or breach
of the Warranty contained in Clause 7.1.19, the liability of the Seller in
respect of any claim for breach of the Warranties shall be limited as follows:

 

  7.8.1 the Seller shall have no such liability unless the total loss or damage
claimed to have been suffered by the Purchaser (acting in good faith) in respect
thereof when aggregated with other such claims amounts to two million Dollars
($2,000,000) or more, whereupon the whole of such liability and not merely the
excess shall be recoverable; and

 

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  7.8.2 individual claims with a value of less than two hundred and fifty
thousand Dollars ($250,000) shall be disregarded for all purposes including for
the calculation of the aggregate value of claims for the purposes of Clause
7.8.1; and

 

  7.8.3 the maximum aggregate liability of the Seller in respect of all such
claims (including interest and expenses) shall not exceed an amount equal to the
Purchase Price.

 

7.9 If:

 

  7.9.1 the Purchaser becomes aware of any circumstance which may result in the
Purchaser having a claim against the Seller under this Clause 7 as a result of
or in connection with a liability or alleged liability to a third party, or

 

  7.9.2 the Purchaser is or may be entitled by law to recover from some other
person any sum in respect of which the Purchaser may have a claim against the
Seller under this Clause 7,

the Purchaser shall promptly notify the Seller thereof in writing and the
Purchaser shall make no admission of liability, agreement, settlement or
compromise with any third party in relation to any such liability or alleged
liability without the prior written consent of the Seller and the Seller shall
at its expense be entitled to take and/or require the Purchaser to take any
action the Seller might reasonably request to prevent a claim arising or to
resist such liability or enforce such recovery (as the case may be) and to have
conduct of any appeal, dispute, compromise or defence and of any incidental
negotiations for the aforesaid purposes, subject to indemnifying the Purchaser
in terms reasonably acceptable to the Purchaser against any Losses and Expenses
the Purchaser may incur, and the Purchaser will give the Seller all practicable
co-operation, access, assistance and information for the purposes of preventing
such a claim, resisting such liability or enforcing such recovery as aforesaid.

 

  7.10 Where the Purchaser is or may be entitled to recover from some other
person any sum in respect of any liability, loss or damage the subject of a
claim by the Purchaser against the Seller in respect of any breach of the
Warranties or for which such a claim could be made, the Purchaser shall, before
seeking to recover any amount from the Seller under this Agreement, take all
reasonable steps as the Seller may reasonably require to enforce such recovery
and shall keep the Seller informed of the progress of any action taken and any
claim against the Seller shall be limited (in addition to the limitations on the
liability of the Seller referred to in this Clause 7) to the amount by which the
loss or damage suffered by the Purchaser as a result of such breach shall exceed
the amount so recovered. If the Seller pays to the Purchaser an amount pursuant
to a claim in respect of any breach of the Warranties and the Purchaser is
entitled to recover from some other person any sum to which it would not have
been or become entitled but for the circumstances giving rise to such a claim,
the Purchaser shall promptly undertake all appropriate steps to enforce such
recovery and shall forthwith repay to the Seller the amount recovered from the
third party or, if less, the amount paid by the Seller, less any costs and
expenses reasonably incurred by the Purchaser in recovering that amount from the
third party.

 

  7.11 The Seller shall not be liable for any breach of any provision of this
Clause 7 nor shall the Purchaser have any rights in respect of any inconsistency
therewith arising after the date hereof, to the extent that such breach or
inconsistency is occasioned by the Seller doing or omitting to do any act or
thing at the written request of the Purchaser.

 

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  7.12 A breach of warranties under Clause 7.1 or Clause 7.2 which is capable of
remedy shall not entitle a Party to make a claim unless the warrantor is given
notice of such breach and the warrantor has failed to commence remedial action
within thirty (30) days after the date on which such notice is served on the
warrantor. Without prejudice to the foregoing, if any claim shall arise by
reason of some liability which at the time that the claim is notified to a Party
is contingent only, such Party shall not be under any obligation to make any
payment in respect of such claim until such time as the contingent liability
ceases to be so contingent.

 

  7.13 Where a representation or warranty is qualified by the words “so far as
the Seller is aware”, or any similar expression, such representation or warranty
is given only to the extent that any of the officers or directors of the Seller
or ATP Oil & Gas Corporation or senior managers of the Seller have actual
knowledge of the matters to which it refers as at the date the representation or
warranty is given after due and careful inquiry only of those of the Seller’s
senior employees directly engaged in the management of the Interests and who
could reasonably be expected to have knowledge of the subject matter of the
relevant representation or warranty (and no other persons).

 

  7.14 Nothing in this Agreement shall relieve a Party of any duty, whether at
common law or otherwise, to mitigate any loss or damage incurred by it in
respect of any breach by the other Party of the representations, warranties,
indemnities or any other term of this Agreement or in respect of its subject
matter.

 

  7.15 A Party shall not be entitled to recover from the other Party the same
sum or loss more than once in respect of any claims for any breach of any
provision of this Agreement or in respect of its subject matter.

 

  7.16 Notwithstanding any other provisions of this Agreement, neither Party
shall be liable to the other Party under, arising out of or in any way connected
to this Agreement or the Assignment Documents, for any Consequential Loss,
whether arising in contract or in tort (including negligence, breach of
statutory duty or otherwise). For these purposes “Consequential Loss” means loss
of revenue, production or profits; or inability to produce Petroleum; or losses
associated with business interruption; or loss of bargain, contract (other than
this Agreement), expectation or opportunity; or any loss, claim or expense which
arises out of the delay, postponement, interruption to or inability to produce,
deliver or process production from the Interests; or any increase in operating
or other costs; or all indirect or consequential losses or damages howsoever
caused or arising.

 

8 Ongoing obligations and liabilities

 

  8.1 The Parties shall co-operate with each other and shall execute such
documents and take such actions as may reasonably be requested from time to time
in order to give full effect to the intent of this Agreement.

 

  8.2 Each Party undertakes to provide written advice to the other Party of any
event giving rise to an adjustment under Clause 6, Clause 7 or Clause 12.7 or
Clause 12.9.2, including such documentary evidence as is reasonably deemed to be
necessary by the other Party to verify the adjustment, within thirty (30) days
of becoming aware of such an event.

 

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9 Announcements and Confidentiality

 

9.1 No Party shall, and each Party shall procure that none of its Affiliates
shall, issue or make any public announcement or statement regarding this
Agreement or any transactions contemplated hereby without the prior written
consent of the other Party, such consent not to be unreasonably withheld or
delayed, except to the extent that it is necessary for a Party or its Affiliate
to make such public announcement or statement in order to comply with a
statutory obligation, an obligation to include information in published or
audited accounts, or with the requirement of a competent government agency or
other regulatory body, the London Stock Exchange plc, the Securities and
Exchange Commission of the United States of America or a recognised stock
exchange on which that Party or such Affiliate has its shares or oil production
or royalty stock listed, in which event the Party proposing to make such an
announcement or statement shall, as soon as practicable and, if possible prior
to its release, issue a copy thereof to the other Party. In all circumstances
the Parties shall consult in relation to the form of the announcement.

 

9.2 The terms and conditions of this Agreement shall be held confidential by the
Parties and all information furnished or disclosed to a Party in connection with
the transactions contemplated by this Agreement (“Confidential Information”)
whether before or after the date hereof shall be held confidential by such Party
and neither the terms of this Agreement nor any Confidential Information shall,
subject to Clause 9.1, be divulged in any way to any third party by one Party
without the prior written approval of the other Party; provided that such Party
may, without such approval, disclose the same to:-

 

  9.2.1 any of its Affiliates provided such Party remains liable for any breach
of confidentiality by such Affiliate(s); or

 

  9.2.2 any outside professional consultants or other professional advisers
consulted in connection with this Agreement (including an expert and/or
accountant appointed hereunder) provided such Party obtains a similar
undertaking of confidentiality (but excluding this proviso) from such
consultants and advisers; or

 

  9.2.3 any bank or financial institution from whom such Party is seeking or
obtaining finance, provided such Party obtains a similar undertaking of
confidentiality (but excluding this proviso) from such bank or institution; or

 

  9.2.4 the extent required by any applicable laws, the Licence(s), or the
requirements of any recognised stock exchange or the Securities and Exchange
Commission of the United States of America in compliance with its rules and
regulations; or

 

  9.2.5 the extent required by any Government agency or authority lawfully
requesting the same; or

 

  9.2.6 any Court of competent jurisdiction acting in pursuance of its powers;
or

 

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  9.2.7 the extent that the terms of this Agreement or any Confidential
Information become public knowledge or for any other reason cease to be
confidential otherwise than through breach of this undertaking.

 

9.3 Notwithstanding the termination of this Agreement the provisions of this
Clause 9 shall continue to apply for a period of three (3) years from the date
hereof.

 

10 Notices

 

10.1 Except as otherwise provided in this Agreement any notice or other document
to be given under this Agreement shall be in writing and shall be deemed to be
duly given if it (or the envelope containing it) identifies the Party to whom it
is intended to be given as the addressee and:

 

  10.1.1 it is delivered personally; or

 

  10.1.2 it is sent by (i) pre-paid first class post or airmail or express or
other fast postal service or (ii) the recorded delivery service or
(iii) facsimile transmission,

to the appropriate address or facsimile number and marked for the attention of
the appropriate person shown in Clause 10.3 or to such other addresses and/or
facsimile numbers and/or marked for the attention of such other persons as may
be given by a Party for the purposes of this Agreement by notice to the other
Party.

 

10.2 Any notice duly given within the meaning of Clause 10.1 shall be deemed to
have been both given and received:

 

  10.2.1 if it is delivered in accordance with Clause 10.1.1, on such delivery;

 

  10.2.2 if it is duly posted or transmitted in accordance with Clause 10.1.2 by
any of the methods therein specified, on the second (or, when sent by airmail,
the fifth) Business Day after the day of posting or (in the case of a notice
transmitted by facsimile) on the first Business Day after the day of
transmission and receipt by the sender of a successful transmission report
indicating full and complete transmission.

 

10.3 The respective addresses for service are:

 

  Seller ATP Oil & Gas (UK) Limited

 

     Victoria House,

     London Square,

     Cross Lanes,

     Guildford GU1 1UJ

 

     Facsimile: 01483 307222

     Email: jgill@atpog.com

     Attention: John Gill

 

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     copied to:

 

     ATP Oil & Gas Corporation

 

     4600 Post Oak Place,

     Suite 200,

     Houston,

     Texas 11027-9726

 

     Facsimile: + 1 713 622 0289

     Email: jtschirhart@atpog.com

     Attention: John Tschirhart

 

 

  Purchaser EDF Production UK Ltd

 

     c/o 1 Blake Mews.

     Kew Gardens,

     London, TW9 3GA

 

     Facsimile: +44 208 439 9868

     Emails: amj@lawxl.com

     Emails: philippe.antoine@edf.fr

 

     Attention: Philippe M Antoine

 

     copied to:

 

     Facsimile: +33 1 5665 0837

 

     Attention: Charles-Henri Prou

     Emails: charles-henri.prou@edf.fr

 

 

10.4 For the purposes of this Clause 10 “notice” shall include any request,
demand, instructions or other document.

 

11 Costs and Expenses

 

11.1 Save as otherwise stated in this Agreement, each Party shall pay its and
its Affiliates’ own costs, expenses, duties and, except as otherwise expressly
agreed in writing, Taxation in relation to the preparation and execution of this
Agreement, the documents contemplated hereby or executed pursuant hereto and any
transactions contemplated by this Agreement.

 

11.2 Without prejudice to any other rights or remedies available to a Party
hereunder or at law, if any amount payable hereunder is not paid when due, the
defaulting Party shall pay interest on such amount from the due date of payment
(after as well as before judgment) at a rate equal to two percent (2%) above the
Agreed Rate calculated on a compounded basis on the accumulated daily balances.

 

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11.3 The Purchaser shall be responsible for payment in a timely fashion of any
and all stamp duty land tax, stamp duties, transfer taxes, registration fees and
other charges payable on or in respect of this Agreement, the Assignment
Documents and/or any related agreements and in respect of its or their subject
matter and any similar taxes, duties, fees and charges wheresoever arising in
relation to the transfer of the Interests to the Purchaser.

 

12 Taxation

 

12.1 The Seller confirms that it is registered and the Purchaser confirms that
it has applied for registration and will use its reasonable endeavours to obtain
registration before Completion, as taxable persons for the purposes of VAT and
that no election has been made and no election will be made prior to the
Completion Date under paragraph 2 of Schedule 10 to the Value Added Tax Act 1994
in relation to the Interests.

 

12.2 The Purchaser undertakes that it will use the Interests as part of its
business of searching for, boring for and getting petroleum as a going concern
for a sufficient period to comply with the requirements of Article 5 of the
Value Added Tax (Special Provisions) Order 1995 so that the assignment of the
Interests is treated as neither a supply of goods nor a supply of services for
VAT purposes.

 

12.3 The Purchase Price is stated net of any applicable VAT. The Parties believe
that the sale and transfer hereunder is a transaction which is outside the scope
of VAT by virtue of Article 5 of the Value Added Tax (Special Provisions) Order
1995 and/or that the transfer contemplated hereby is of a right over land
situated outside the United Kingdom and as such will be treated as outside the
scope of Value Added Tax by virtue of Article 5 of the Value Added Tax (Place of
Supply of Services) Order 1995. However, in the event that a Party is advised in
writing by HM Revenue and Customs that the transaction hereunder is subject to
VAT, the Purchaser undertakes to pay to the Seller, on delivery of a valid VAT
invoice, any amounts due in respect of VAT within thirty (30) days of demand.

 

12.4 Reimbursement pursuant to Clause 6.3 shall be exclusive of VAT which the
Party receiving the reimbursement may be required to charge and, if called upon
to do so by the such Party, the Party making the reimbursement undertakes to pay
such Party, on presentation of a valid VAT invoice, any amounts properly due in
respect of VAT set out in such invoice within thirty (30) days of demand.

 

12.5 Subject to Clause 12.3, any Adjustments pursuant to Clause 3 or payments or
reimbursements pursuant to Clause 6.3 or Clause 7 in respect of any payment or
receipt being an amount in respect of which VAT has been paid or received shall
be made on a basis disregarding the VAT element where the VAT paid is fully
deductible or is required to be accounted for in full to HM Revenue and Customs,
but otherwise shall be made on a basis which leaves the Seller and the Purchaser
in no better and no worse a position (after taking account of VAT, and subject
to the application of the other provisions of this Clause 12) than had the
payment or receipt not been made or received.

 

12.6

The Seller shall make an application to HM Revenue and Customs under
Section 49(1) (b) of the Value Added Tax Act 1994 for a direction that the
records relating to the Interests which under paragraph 6 of Schedule 11 to the
Value Added Tax Act 1994 have been maintained by the Seller or its Affiliates
should be preserved by the Seller or its Affiliates, as the case may be,

 

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notwithstanding the provisions of the said section. The Seller shall, as soon as
reasonably practicable following receipt thereof, provide the Purchaser with a
copy of any such direction and the Purchaser shall retain access at all
reasonable times during business hours to all books and records retained by the
Seller or its Affiliates in relation to VAT matters concerning the Interests and
the Seller covenants to retain such records as required by paragraph 6 of
Schedule 11 to the Value Added Tax Act 1994.

 

12.7 CT Adjustments

 

  12.7.1 The Purchase Price shall be increased by the Purchaser paying to the
Seller an amount equal to any CT paid by the Seller on any receipts taken into
account, using the Accruals Basis of Accounting, for the purposes of Clause 3.7,
the Petroleum Sales Adjustment.

 

  12.7.2 The Purchase Price shall be decreased by the Seller paying to the
Purchaser an amount equal to any CT relief received by the Seller on any cash
calls paid and any expenditure taken into account, using the Accruals Basis of
Accounting, for the purposes of Clause 3.6, the Cash Calls Adjustment and Clause
3.8, the Interim Period Adjustment.

 

  12.7.3 The Parties recognise that adjustments under this Clause 12.7 are
notional adjustments, as opposed to actual payments of, reliefs from or
reductions in CT liabilities. For the purpose of calculating these notional
adjustments it shall be assumed that both the Seller and the Purchaser are
single companies with no brought forward losses who are paying CT at the
standard rate applicable for the period concerned. Such notional adjustments
shall be effected by deducting from each relevant payment a notional CT charge.
In calculating the notional CT charge, the CT rate to be used will be the rate
which applies at the end of the month in which the receipt or payment arises, or
if the rate of CT changes during a month the arithmetic mean of the rates
applicable for that month shall be used.

 

  12.7.4 If the Parties cannot reach agreement on all or part of the adjustments
referred to in this Clause 12.7 within thirty (30) Business Days of receipt by
the Purchaser from the Seller of the Seller’s estimate of such adjustments, the
adjustments in dispute may be referred by either the Seller or the Purchaser for
determination by an independent expert nominated by the Parties or, in the
absence of agreement between the Parties within five (5) Business Days of a
Party notifying the other that it proposes to refer the dispute to an expert, by
the President of the Institute of Chartered Accountants in England and Wales on
the application of either the Seller or the Purchaser. Within twenty
(20) Business Days after the appointment of such expert, each Party may submit
to the expert a statement of the nature of the dispute, a description of the
submitting Party’s claims with respect thereto, and any other supporting
documentation or materials with respect thereto that the submitting Party
desires the expert to consider. The Party submitting such statement shall
provide a copy thereof to the other Party, who shall have ten (10) Business Days
from receipt thereof to submit a responding statement to the expert. The
nominated expert shall be afforded such access to books, records, accounts and
documents in the possession of the Parties as he may reasonably request, and he
shall act as expert not as arbitrator. The said expert’s determination shall, in
the absence of fraud or manifest error or bias, be final and binding on the
Parties, his fees and disbursements shall be borne by the Seller and the
Purchaser in equal shares and the Parties shall bear their own costs in respect
of such reference.

 

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12.8 The Seller shall be liable for any liabilities arising under Schedule 15 to
the Finance Act 1973 in respect of the Interests or the Licence(s)for periods
ending up to the Economic Date and the Purchaser shall be liable for all periods
thereafter.

 

12.9.1 The Seller and the Purchaser agree that the allocation of Consideration
set out in Schedule 2 is a just and reasonable apportionment of the
Consideration and both agree to submit their CT returns for all relevant years
on the basis of said allocation. Further, the Seller and the Purchaser agree
consistently to allocate the Consideration attributable to amounts eligible for
capital allowances between plant and machinery allowances and mineral extraction
allowances on their respective CT returns. Where HM Revenue and Customs does not
agree with the claim for capital allowances by the Purchaser, the allocation set
out in Schedule 2 shall be adjusted to take into account the just and reasonable
apportionment agreed by HM Revenue and Customs and to reflect any revised
disposal proceeds taken into account in the Seller’s revised CT returns.

 

12.9.2

If any part of the Consideration allocated as set out in Schedule 2 to assets
qualifying for capital allowances under Part 2 and/or Part 5 of the Capital
Allowances Act 2001 is not agreed by HM Revenue and Customs and the total of the
capital allowances claim of the Purchaser is reduced, the Seller shall pay to
the Purchaser, by way of adjustment to the Purchase Price, an amount equal to
fifty percent (50%) of the amount by which the total of the Purchaser’s claim
for capital allowances is reduced by HM Revenue and Customs provided always
that, save in the case of fraud or wilful concealment of material facts, the
Seller shall not be liable for any payment to the Purchaser pursuant to this
Clause 12.9.2 unless it shall have received from the Purchaser, as soon as
practicable after the Purchaser becomes aware of the amount of capital
allowances not being so agreed, written notice containing reasonable details of
the relevant claim including the Purchaser’s bona fide provisional estimate of
the amount of the claim and in any event such notice is received on or before
31st March 2014. Any payment under this clause shall not be due for payment
until the earlier of 1st January 2012 and the date on which the increased
Taxation that results from the adjustments to the allocation of consideration
falls due for payment to HM Revenue and Customs.

 

13 Variation

The terms and conditions of this Agreement shall only be varied by an agreement
in writing signed by each of the Parties and specifically referring to this
Agreement.

 

14 Assignment

No Party shall assign or transfer its rights or its obligations under this
Agreement without the prior written consent of the other Party save that
(a) prior to Completion the Purchaser may assign its rights under this Agreement
(in whole or in part) with the consent of the Seller (such consent not to be
unreasonable withheld or delayed) and (b) after Completion the Purchaser may
assign its rights under this Agreement (in whole or in part), in either case to
an Affiliate(s) and/or to an Affiliate(s) of Edison S.p.A.

 

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15 Rights of Third Parties

With the exception of the rights of the Seller’s Affiliates to enforce the terms
of Clause 6.6, nothing in this Agreement is intended to confer on any person any
right to enforce any term of this Agreement which that person would not have had
but for the Contracts (Rights of Third Parties) Act 1999. Notwithstanding the
foregoing, the Parties may by agreement rescind or vary any term of this
Agreement without the consent of any of the Seller’s Affiliates.

 

16 General

 

16.1 If there is any conflict between the provisions of this Agreement and the
provisions of the Assignment Documents, the provisions of this Agreement shall
prevail. The provisions of the main body of this Agreement shall prevail over
the provisions of the Schedules in the event of any conflict.

 

16.2 Without prejudice to the provisions of Clauses 7.5 and 7.7, this Agreement
shall remain in full force and effect notwithstanding Completion.

 

16.3 No waiver by any Party of any breach of a provision of this Agreement shall
be binding unless made expressly and in writing and any such waiver shall relate
only to the matter to which it expressly relates and shall not apply to any
subsequent or other matter.

 

16.4 This Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the Parties.

 

16.5 This Agreement may be executed in any number of counterparts but shall not
be effective until each Party has executed at least one counterpart. Each of the
executed counterparts shall be deemed to be an original of this Agreement, but
taken together, all the counterparts shall constitute one and the same
instrument.

 

16.6 This Agreement is not intended to constitute or create nor shall it be
construed so as to constitute or create any partnership, association, joint
venture or trust. Notwithstanding the foregoing if, for the income tax purposes
of the United States of America, this Agreement and the transactions under this
Agreement are regarded as a partnership, each Party which is affected thereby
elects to be excluded from the application of all of the provisions of
Subchapter “K” of Chapter 1 of Subtitle “A” of the Internal Revenue Code of 1986
as amended of the United States of America (the “Code”), as permitted and
authorised by Section 761 of the Code and the Treasury Regulations promulgated
under the Code, and any future income tax laws of the United States containing
similar provisions. No affected Party shall give any notices or take any other
action inconsistent with the election made hereby. In making the foregoing
election, each affected Party states that the income derived by it from the
transactions under this Agreement can be adequately determined without a
computation of partnership taxable income. A Party that is not subject to the
income tax laws of the United States of America in respect of this Agreement and
the transactions under this Agreement shall not be required to do any act or
execute any instrument which might subject it to the taxation jurisdiction of
the United States of America.

 

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16.7 Each provision of this Agreement is severable and distinct from the others
and if any such provision shall in whole or in part be held to any extent to be
illegal or unenforceable under any enactment or rule of law that provision or
part shall to that extent be deemed not to form part of this Agreement and the
validity and enforceability of the remainder of this Agreement shall not be
affected.

 

16.8

This Agreement, and the confidentiality agreement between the Parties dated
30th May 2008 contain the entire agreement between the Parties and supersedes
the Offer Letter dated 28 August 2008 from the Purchaser, the Letter Agreements
dated September 5, 2008 and September 11, 2008 between the Parties, all prior
negotiations, proposals, statements of intent, understandings and agreements
relating to the subject matter hereof. Each of the Parties agrees that it will
have no remedy in respect of any untrue representations or statements made by
the other Party or its advisers, unless made fraudulently, and upon which it
relied in entering this Agreement.

 

17 Governing Law and Arbitration

 

17.1 The construction validity and performance of this Agreement and all
agreements executed pursuant hereto shall be governed by English law (other than
choice of law rules).

 

17.2 Subject to Clause 3.13 and Clause 12.7.4, all disputes arising out of or in
connection with this Agreement shall be finally settled under the Rules of
Arbitration of the LCIA by three (3) arbitrators appointed in accordance with
those rules. London shall be the seat of arbitration and the language of the
arbitration shall be English and all documents submitted to the arbitration
shall be submitted to the arbitration in their original form together with an
English translation.

 

17.5 Each Party agrees that without preventing any other mode of service, any
document in any dispute referred to arbitration hereunder may be served on any
Party by being delivered to or left for that Party at its address for service of
notices under Clause 10 and each Party undertakes to maintain such an address at
all times in accordance with Clause 10 and to notify the other Party in advance
of any change from time to time of the details of such address in accordance
with the manner prescribed for service of notices under Clause 10.

 

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IN WITNESS whereof this Agreement has been signed by the duly authorised
representatives of the Parties on the day and year first above written.

 

 

SIGNED for and on behalf of ATP OIL & GAS (UK) LIMITED /s/ John Gill

Director

SIGNED for and on behalf of EDF PRODUCTION UK LTD /s/ Dominique Venet

Director

 

36

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Schedule 1

 

Licence(s), related Licensed Interest Documents and other related information

 

Tors Field – Kilmar Interest under UK Petroleum Production Licence No. P.683
dated 12th September 1989 and Garrow Interest under UK Petroleum Production
Licence No. P.1034 dated 6 th February 2002

 

(A) Blocks

Licence P.683 – Block 43/22a (including the Kilmar Field)

Licence P.1034 – Blocks 42/25a and 43/21a (including the Garrow Field)

 

(B) Licensees & Percentage Interests

 

 

ATP Oil & Gas (UK) Limited

        85 %    

Sojitz Energy Project Limited

        15 %    

 

(C) JDA

Agreement for the Joint Development of and Production from the Tors Fields
United Kingdom Petroleum Production Licences P.683 (Block 43/22a) and P.1034
(Blocks 42/25a and 43/21a) (to be known as the “Tors Development Agreement”)
dated 21st December 2005.

 

(D) Operator

ATP Oil & Gas (UK) Limited

 

(E) Licensed Interest Documents

Licence P.683 dated 12 September 1989.

DTI letter dated 1 October 1991.

Joint operating agreement (JOA) relating to licence P.683 dated 7 October 1991.

Deed of licence assignment dated 20 November 1991.

Novation and amendment agreement in respect of JOA dated 20 November 1991.

Deed of licence assignment dated 6 November 1992.

Novation agreement in respect of JOA dated 6 November 1992.

 

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Deed of licence assignment dated 1 January 1993.

Novation agreement in respect of JOA dated 1 January 1993.

Deed of licence assignment dated 25 January 1994.

Novation agreement in respect of JOA dated 25 January 1994.

Area of Mutual Interest Agreement dated 22 February 1994.

DTI letter and attached schedule of retained area dated 12 July 1995.

Deed of licence assignment dated 1 August 1995.

Deed of assignment of interest dated 1 August 1995.

Novation agreement in respect of JOA dated 1 August 1995.

Deed of licence assignment dated 21 December 1995.

Deed of assignment of interest dated 21 December 1995.

Novation agreement in respect of JOA dated 21 December 1995.

JOA relating to licences P.683 and P.891 dated 22 August 1996.

Seismic trade agreement dated 13 June 1997.

Deed of licence assignment dated 2 October 1998.

Deed of assignment of interest dated 2 October 1998.

Novation agreement in respect of JOA dated 2 October 1998.

Deed of rectification dated 2 October 1998.

Deed of licence assignment dated 1 May 2000.

Novation of Joint Operating Agreement dated 1 May 2000.

Sales and Purchase Agreement between ATP (UK), Arco and ATP Corp dated 7 May
2001.

Stamp Duty Agreement 7 May 2001.

Deed of Assignment 20 June 2001.

Novation of JOA 20 June 2001.

 

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Assignment of Percentage Interest 20 June 2001.

Licence P.1034 dated 6 February 2002, Blocks 42/25a and 43/21a dated 06 February
2002.

Deed of Licence Agreement 19 February 2003.

Deed of Adherence to Agreement for Provision of Claims Validation 6 May 2003.

Sale and Purchase Agreement – GDF and ATP – dated 10 March 2005

Heads of Terms for Offshore and Compression Services 21 March 2005.

Heads of Terms for Transportation 21 March 2005.

Heads of Terms for Processing Services 21 March 2005.

Extracts from Minutes of Board Meeting 25 May 2005.

Percentage of Interest Assignment 27 May 2005.

Deed of Licence Assignment 27 May 2005.

SEAL Pipeline Crossing Agreement 7 July 2005 Signature Page.

DTI Approval for dev of Kilmar Field 20 July 2005.

Construction & Tie-in Agreement (with P.683) 11 August 2005.

Letter of Agreement re ARCO (with P.683) 17 November 2005.

Joint Development Agreement (with P.683) 21 December 2005.

Letter Agreement re Decommissioning Security (with P.683) 21 December 2005

Deed of Licence Assignment (with P.683) 21 December 2005.

Novation of Construction & Tie-In (with P.683) 21 December 2005.

Side Letter To CTIA 14 February 2006.

Deed of Adherence to ABAAA 24 March 2006.

Deed of Adherence to ABUFA 24 March 2006.

Tors Field POSA 24 March 2006.

Side Letter to POSA 24 March 2006.

 

39

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EAGLES Tors Transportation Agreement 24 March 2006.

EAGLES Area Sub Allocation Agreement 24 March 2006.

Tors Bacton Processing Agreement 24 March 2006.

 

40

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The Wenlock Field Interests under UK Petroleum Production Licence No. P.033
dated 17th September 1964

 

(A) Blocks

Licence P.033 – Block 49/12aN (including the Wenlock Field).

 

(B) Licensees & Percentage Interests

 

ATP Oil & Gas (UK) Limited

        100 %    

 

(C) JOA

P.033 Joint Operating Agreement Block 49/12a North dated 14th December 2005.

 

(D) Operator

ATP Oil & Gas (UK) Limited.

 

(E) Licensed Interest Documents

UKCS Petroleum Production Licence P.033 dated 17/9/64.

Agreement between National Coal Board (Exploration) Limited and Continental Oil
dated 14/2/67 (and letter dated 10/3/67).

Deed of Assignment dated 7/3/67 (and Ministry of Power letter dated 6/3/67).

Supplemental Deed to Licence dated 17/8/70.

Schedule of Retained Area dated 18/9/70.

Letter agreement concerning UKCS Licences P.025 and P.033 dated 9/3/71.

Joint Operating Agreement dated 18/6/71 and letter dated 18/6/71 (and
supplementary agreement dated 18/6/71).

Sub-Licence relating to Block 49/17 dated 25/3/74.

Agreement for the transfer of certain of the assets and undertakings of BNOC
Exploration Limited dated 20/12/78.

Dept. Energy consent dated 17/8/79.

Deed of licence assignment dated 20/11/79.

Novation of JOA dated 20/11/79.

 

41

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Letter approving Conoco (UK) Limited as operator of Licence P.033 dated 15/8/80.

Dept. Energy letter approving Conoco resignation dated 24/10/80.

Novation agreement relating to JOA dated 24/11/80.

Letter from DoE – Development and Production Works consent dated 31/12/80.

DoE letter re assignment of sub-licence dated 19/10/81.

Scheme re Britoil dated 1/8/82 and DoE letter dated 9/11/82.

Dept. Energy consent dated 8/10/85.

JOA Amendment Agreement dated 14/10/85.

Dept. Energy consent dated 19/11/86.

Dept. Energy consent dated 8/12/86.

JOA Amendment Agreement dated 7/7/88.

Letter from Conoco re Conoco Development Limited dated 8/7/88.

Letter from Conoco re letter agreement dated 8/7/88.

Letters from Britoil plc relating to JOA dated 19/1/89.

Deed or licence assignment dated 1/2/89.

Letter Agreement re notice of assignment dated 1/12/89.

Deed of licence assignment dated 24/2/93.

Trust Deed dated 24/2/93.

JOA Novation and Amendment Agreement dated 24/2/93.

JOA Novation and Amendment Agreement dated 30/6/93.

DTI letter of approval dated 13/6/94.

Letter to DTI attaching licence assignment form re Britoil transfer dated
18/11/94.

JOA Novation and Amendment Agreement dated 9/12/94.

Letters to/from DTE re Britoil transfers dated 15/12/94.

Letters to DTI re Licence Assignment dated 9/3/95 and 17/5/95.

Fax to DTI re Licence dated 22/6/95.

 

42

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Letters from DTI dated 21/6/95 and 23/6/95.

JOA Amendment Agreement (undated).

JOA Amendment Agreement dated 29/12/94.

Deed of licence assignment dated 29/6/95.

Trust Deed (Block 49/16 Ganymede Extension Area) dated 29/6/95.

JOA Amendment Agreement dated 30/9/95.

JOA Novation Agreement dated 3/11/95.

Letters to DTI re Licence dated 18/11/96, 20/12/96 and 18/2/97.

Letter of consent from DTI dated 20/12/96 and letter dated 13/3/97.

DTI letter of consent dated 24/7/97.

Supplemental Deed to Trust Deed (49/16) dated 30/11/97.

DTI letter of consent dated 23/12/97.

Deed of licence assignment dated 9/2/98.

Consent to assignment of sub-licence dated 9/2/98.

Supplemental Deed to Trust Deed (49/16) dated 9/2/98.

JOA Novation Agreement dated 26/3/98.

DTI letter of consent dated 30/7/98.

Deed of licence assignment dated 25/11/98.

JOA Novation and Amendment Agreement dated 25/11/98.

Supplemental Deed to Trust Deed (49/16) dated 25/11/98.

Deed of licence assignment dated 25/11/98.

JOA Novation Agreement dated 27/11/98.

DTI consent dated 9/8/99.

Deed of licence assignment dated 19/4/00.

Deed of licence assignment dated 11/5/00.

Supplemental Deed to Trust Deed (49/16) dated 11/05/00.

 

43

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DTI consent dated 25/7/00.

JOA Novation and Amendment Agreement dated 30/10/00.

Deed of licence assignment dated 30/10/00.

Agreement for the sale and purchase of assets in relation to UKCS Block 49/12a
North dated 26/1/01.

Stamp Duty Agreement relating to U.K. Petroleum Production Licence P.033 – Block
49/12a North dated 26/1/01.

Novation and Amendment to the Southern North Sea Joint Operating Agreement
relating to Licences P.033 and P.130 (Amendment Number 20) dated 30/3/01.

Deed of Novation of Trust Deed U.K. Petroleum Production Licence P.033 (Block
49/16 – Ganymede Extension Area) dated 30/3/01.

Deed of Assignment in respect of U.K. Petroleum Production Licence P.033 dated
30/3/01.

Assignment of Percentage Interest relating to Block 49/12a North dated 30/3/01.

Novation and Amendment to the Operating Agreement relating to Exploration and
Production Operations under UK Production Licences Nos. P.033 and P.130
Amendment No. 21 dated 21/12/01.

Supplemental Deed to Trust Deed in relation to Sub-Licence P.033 (Block 49/17)
dated 26/4/02.

Novation and Amendment of the Operating Agreement relating to Exploration and
Production Operations in certain parts of the Southern North Sea under U.K.
Petroleum Production Licences Nos. P.033 and P.130 – Amendment No.22 dated
15/5/02.

Novation and Amendment of the Operating Agreement relating to Exploration and
Production Operations in certain parts of the Southern North Sea under U.K.
Petroleum Production Licences Nos. P.033 and P.130 – Amendment No.23 dated
12/11/02.

Deed of Novation and Amendment to Trust Deed relating to U.K. Petroleum
Production Licence No. P.033 (Block 49/16 – Ganymede Extension Area) dated
12/11/02.

Letter from ConocoPhillips (U.K.) Limited re merger dated 10/12/02.

Letter from BP Exploration Operating Company Ltd re transfer of assets under
P.033 dated 23/5/03.

Deed of Assignment in respect of UK Petroleum Production Licence P.033 dated
19/5/03.

Deed of Novation of and Amendment to Trust Deed relating to U.K. Petroleum
Production Licence No. P.033 (Block 49/16 – Ganymede Extension Area) dated
19/5/03.

 

44

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Novation and Amendment of the Operating Agreement relating to Exploration and
Production Operations in certain parts of the Southern North Sea under U.K.
Petroleum Production Licences Nos. P.033 and P.130 –Amendment No.24 dated
19/05/03.

Novation and Amendment of the Operating Agreement relating to Exploration and
Production Operations in certain parts of the Southern North Sea under UK
Petroleum Production Licences Nos. P.033 and P.130 –Amendment No.25 dated
4/6/03.

Execution Deed re transfer of interests in Southern Waters Production JOA dated
31/10/03.

Novation and Amendment of the Operating Agreement relating to Exploration and
Production Operations in certain parts of the Southern North Sea under UK
Petroleum Production Licences Nos. P.033 and P.130 –Amendment No 27 dated
22/12/03.

Amendment of the Operating Agreement relating to Exploration and Production
Operations in certain parts of the Southern North Sea under UK Petroleum
Production Licences Nos. P.033 and P.130 – Amendment No.29 dated 14/9/05.

Sale and Purchase Agreement in relation to P.033, Block 49/12a North –
(including Venture Discovery area) dated 14/12/05.

Letter Agreement re acquisition of ConocoPhillips interest in P.033 dated
14/12/05.

Joint Operating Agreement Block 49/12a North dated 14/12/05.

Trust Deed in respect of United Kingdom Petroleum Production Licence P.033 Block
49/12A North (Area K) dated 14/12/05.

Deed of Amendment No.30 to Operating Agreement relating to Exploration and
Production Operations in Certain Parts of the Southern North Sea under UK
Petroleum Production Licences P.033 and P.130 dated 14/12/05.

Trust Deed in respect of United Kingdom Petroleum Production Licence P.033 Block
49/12a North (Area K) and part Block 49/16 (Viper Area) dated 23/12/05.

Grant of Permission to enter 500m zone for the purpose of ROV inspection dated
28/5/06.

Letter of Credit re Wenlock dated 8/8/06.

Novation and Amendment Agreement in respect of Joint Operating Agreement Block
49/12A (North) dated 9/8/06.

Deed of Assignment of Limited Overriding Royalty Interest 9/8/06.

DTI letter re Wenlock Field Development dated 18/8/06.

DTI letter re Development and Production Works dated 18/8/06.

Agreement relating to Preparatory work for the possible tie-in of the Wenlock
Facilities to Inde Platform 49/23AC dated 29/8/06.

Construction and Tie-in Agreement relating to the tie-in of the Wenlock
Facilities to Inde Platform 49/23 AC dated 11/9/06.

 

45

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Cable Crossing Agreement in respect of the Wenlock/Inde 23AC Pipelines and the
Norsea Communications Cable dated 12/9/06.

ATP Power of Attorney dated 19/12/06.

Decommissioning Security Agreement relating to Wenlock Field dated 21/12/06.

Novation of Joint Operating Agreement relating to Block 49/12a North dated
21/12/06.

Letter of undertaking re Decommissioning Security Agreement dated 21/12/06.

Letter Agreement relating to Sale and Purchase Agreement in relation to P.033,
Block 49/12a (North) dated 21/12/06.

Trust Deed in respect of Licence P.033 dated 14/6/07.

Letter from ConocoPhillips re Licence P.033 Rationalisation dated 21/6/07.

Execution Deed in respect of UK Petroleum Production Licence P.025, Part of
Block 53/1a Camelot Fields and Associated Infrastructure and Non-Producing
Acreage dated 25/6/07.

Deed of Rectification in relation to the Amoco Bacton Allocation and Attribution
Agreement and the Amoco Bacton User Fields Agreements dated 28/6/07.

Schedule 3 to Deed of Rectification dated 28/6/07.

Execution Deed relating to transfer of Victor/Jupiter/Bell P.025/P.033 Interests
(Licences and Trust Deeds) dated 28/6/07.

Amoco Bacton User Fields Agreement New User Group Notice for Wenlock Field dated
27/7/07.

Amoco Bacton Allocation and Attribution Agreement New User Notice for Wenlock
Field dated 1/8/07.

Deed of Adherence to the Amoco Bacton Allocation and Attribution Agreement dated
4/10/07.

Deed of Adherence to the Amoco Bacton User Fields Agreement dated 4/10/07.

Amending Agreement to the Amoco Bacton Allocation and Attribution Agreement
dated 16/10/07.

Agreement for Transportation of Natural Gas from the Wenlock Field via the Inde
Facilities and Provision of Offshore Services dated 16/11/07.

Agreement for Reception, Processing and Redelivery of Natural Gas from the
Wenlock Field at the Perenco Bacton Terminal dated 16/11/07.

Wenlock Backgassing Agreement dated 20/11/07.

Supplemental Agreement to Joint Operating Agreement Block 49/12A (North) dated
20/11/07.

 

46

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Execution Deed in respect of UK Petroleum Production Licences P.033 (Block
49/17) and P.025 (Block 49/22a) (Victor) dated 30/11/07.

Deed of Novation and Amendment of Trust Deed in respect of Licence P.033 dated
19/12/07.

Deed of Assignment in respect of United Kingdom Petroleum Production Licence No.
P.033 dated 19/12/07.

Amoco Bacton Allocation and Attribution Agreement New User Group Notice dated
23/1/08.

Amoco Bacton User Fields Agreement New User Group Notice dated 23/1/08.

 

47

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Schedule 2

Summary of the Consideration allocated to assets qualifying for Capital
Allowances

 

 

Field/Area   Plant & Machinery (£s)   Mineral exploration
& access – (£s)        £s

Wenlock

    99,471,975   462,434        101,280,000

Tors

  134,179,135   572,290        163,720,000          £265,000,000

Any balance of the respective considerations will be allocated to the Licences

 

48

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Schedule 3

Working Capital

 

1. Pursuant to Clause 3.5, the working capital balance shall be determined in
relation to the Interests in accordance with the provisions of this Schedule 3,
by adding together the amounts of the Cash Balances, VAT Receivable, Other
Assets, Inventory (net of provisions) and Prepayments (the “Positive Balance”)
for the Interests and adding together the amounts of any overdraft balance, VAT
Payable, Accruals and Other Liabilities (the “Negative Balance”) for the
Interests and deducting the Negative Balance from the Positive Balance, and
adding together the net balances.

 

2. Elements

The elements of working capital shall comprise those items set out in the
Exhibit to this Schedule 3, which items shall relate solely to the Interests and
have the following meanings:

 

“Accruals”

  means the amounts accrued by the Joint Account but unpaid as at the Economic
Date;

“Cash Balances”

  means cash balances held by the Joint Account at the Economic Date;

“Inventory”

  means the value of equipment held at the Economic Date;

“Joint Account”

  means any joint account held by the Operator in accordance with the JOA;

“Other Assets”

  means other assets due to the Joint Account but unpaid at the Economic Date;

“Other Liabilities”

  means the other liabilities accrued by the Joint Account but unpaid as at the
Economic Date;

“Prepayments”

  means amounts prepaid by the Seller or the Operator on account of expenditure
incurred on an accruals basis of accounting after the Economic Date;

“VAT Receivable/Payable”

  means VAT due to/from the Joint Account but not recovered/paid at the Economic
Date.

 

3. Valuation of certain elements

For all elements of working capital, the figures shall be derived from the
statements provided by the Operator.

 

49

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Exhibit to Schedule 3

Working Capital Statement

 

INTEREST    100%
  JOINT VENTURE  
£   

INTEREST

%

   INTEREST SHARE
£ AS PER OPERATOR STATEMENTS          CASH BALANCES          PREPAYMENTS      
   VAT RECEIVABLE/PAYABLE          OTHER ASSETS          INVENTORY         
ACCRUALS                       OTHER LIABILITIES                               
                                                   TOTAL WORKING CAPITAL      
             

 

50

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Schedule 4

Format for Interim Completion Statement and Final Completion Statement

 

STATEMENT OF CONSIDERATION

             

Description

 

Clause/Schedule

  

Amount £

  

Amount £

         

Purchase Price

  Clause 3.1            

Interest thereon

  Clause 3.15            

Adjustments

             

Working Capital Adjustment

  Clause 3.5, Schedule 3    +/-         

Interest thereon

  Clause 3.16    +/-    +/-                        

Cash Calls Adjustment

  Clause 3.6    +         

Interest thereon

  Clause 3.16    +    +                        

Petroleum Sales Adjustment

  Clause 3.7    -         

Interest thereon

  Clause 3.16    -    -                        

Interim Period Adjustment

  Clause 3.8    +         

Interest thereon

  Clause 3.16    +    +                                                        
                               

Total consideration (incl Adjustments)

                             

 

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Schedule 5

AFEs referenced in Clause 4.2

 

52