Exhibit 2.1
 DATED November 23, 2010
 (1) SHELL U.K. LIMITED
 AND
 (2) ENDEAVOUR ENERGY UK LIMITED
 
 SALE AND PURCHASE AGREEMENT
 relating to
 Licence P.255, Block 22/6a North




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Table of Contents
 1. Definitions
    
    
    32. Sale and Purchase of the Interests
    
    
    123. Consideration
    
    
    134. Interim Period
    
    
    195. Completion
    
    
    216. Indemnities
    
    
    247. Ongoing Obligations and Liabilities
    
    
    368. Announcements
    
    
    369. Notices
    
    
    3610. Costs and Expenses
    
    
    3811. Taxation
    
    
    3812. Confidentiality
    
    
    4213. Variation
    
    
    4314. Assignment
    
    
    4315. General
    
    
    4316. Rights of Third Parties
    
    
    4417. Governing Law
    
    
    44Schedule 1 The Licence, the Licensed Interest Documents and other related informationSchedule 2 Allocation of Consideration for Taxation PurposesSchedule 3 Working CapitalSchedule 4 Form of Working Interest AssignmentSchedule 5 Interim and Final Completion Statement FormatsSchedule 6 Work Programmes and Budgets




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THIS AGREEMENT
 BETWEEN
 (1)
    
    SHELL U.K. LIMITED, a company incorporated in England (company number 00140141) and having
its registered office at Shell Centre, London, SE1 7NA (the Seller); and(2)
    
    ENDEAVOUR ENERGY UK LIMITED, a company incorporated in England (company number 05030838) and
having its registered office at 33rd Floor, City Point, One Ropemaker Street, London, EC2Y 9UE
(the Purchaser).
 WHEREAS
 NOW THEREFORE IT IS HEREBY AGREED
 1.
    
    Definitions1.1
    
    In this Agreement the following expressions shall, except where the context otherwise
requires, have the following respective meanings:Accruals Basis of Accounting:means the basis of accounting under which costs and
benefits are regarded as applicable to the period in which the liability to the cost is
incurred or the right to the benefit arises regardless of when invoiced, paid or received;Adjustment:means any or all (as the context may require) of the adjustments under any of
the Adjustment Clauses;Adjustment Clauses:means Clauses 3.3 to 3.11 inclusive, Clause 3.14 and Clauses 11.2 and
11.3;Affiliate:means
 (a)
    
    in the case of the Seller, Royal Dutch Shell plc and any entity which
Royal Dutch Shell plc directly or indirectly controls provided that:
 (i)
    
    an entity directly controls another entity if it owns fifty per
cent (50%) or more of the voting rights attached to the issued share capital of
the other entity; and(ii)
    
    an entity indirectly controls another entity if a series of
entities can be specified, beginning with the first entity and ending with the
other entity, so related that each entity of the series (except the ultimate
controlling entity) is directly controlled by one or more of the entities
earlier in the series; and
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(b)
    
    in the case of the Purchaser,
 (i)
    
    if the Purchaser is a subsidiary of another company, the
Purchasers ultimate holding company and any subsidiary (other than the
Purchaser itself) of the Purchasers ultimate holding company; or(ii)
    
    if the Purchaser is not a subsidiary of another company, any
subsidiary of the Purchaser.
  Agreed Rate:
 Agreement:
 Assignment Documents:
 Associated Parties:
 Base Consideration:
 Benefits:
 Block:
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Business Day:
 CAA2001:
 Cash Calls Adjustment:
 Claim Claims:
 Completion:
 Completion Date:
 Conditions Precedent:
 Consequential Loss:
 (a)
    
    loss of revenue, production or profits; and/or(b)
    
    losses associated with business interruption; and/or(c)
    
    loss of bargain (other than in respect of this Agreement), contract (other
than in respect of this Agreement), expectation or opportunity; and/or(d)
    
    any loss, claim or expense which arises out of or is connected with the sale,
disposal, exchange or use of, or the transportation or processing of, any production
from the Interests; and/or(e)
    
    any increase in operating or other costs; and/or(f)
    
    all indirect or consequential losses or damages howsoever arising;
 Consideration:
 CT:
 Damages Payment:
 Data:
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Data Room Documents:
 Decommissioning Obligations:
 Deferred Purchase Price:
 Disclosure Letter:
 Dollars $ or United States Dollars or US$:
 Economic Date: st
 Encumbrance:
 Environment:
 Environmental Laws:
 (a)
    
    harm or damage to or protection of the Environment and/or the provision of
remedies in respect of or compensation for harm or damage to the Environment; and/or(b)
    
    emissions, discharges, releases or escapes into or the presence in the
Environment of Hazardous Substances or the production, processing, management,
treatment, storage, transport, handling or disposal of Hazardous Substances or the
disposal, abandonment and/or making safe of any platform or other facility, clean up,
remediation; and/or(c)
    
    workplace or public health,
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Environmental Obligations:
 Excess Recovery:
 Execution Date:
 Field: ;
 Final Completion Statement:
 First Oil:
 Gas:
 Hazardous Substances:
 HMRC:
 Initial Purchase Price:
 Interests:
 (a)
    
    an undivided legal interest in the Licence and its Twenty per cent (20.00%)
beneficial interest in Block 22/6a North (sometimes also referred to as Block 22/6s
North) as defined in and pursuant to the Trust Deed including the Field but excluding
those parts of the Nelson Field (as also defined in the Trust Deed) as may from time
to time lie in Block 22/6a North as a result of a lateral extension thereof;(b)
    
    the Sellers entire legal and beneficial interest in and under (i) the JOA in
respect of Block 22/6a North and (ii) the Licensed Interest Documents (other than the
JOA and the Licence) relating to the Interests Area;(c)
    
    the Sellers entire interest in the Wells,
  (i)
    
    the right, to take and receive all production of Petroleum attributable to
the Sellers interests referred to at paragraphs (a) and (b) above; and(ii)
    
    a consequent share of the Sellers right, title and interest in and to
jointly owned funds, jointly owned property and all other assets (including the
Sellers interest in the Data) which are or may be attributable to the Sellers
interests referred to in paragraphs (a) and (b) above;
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Interests Area:
 Interests Information:
 Interim Completion Statement:
 Interim Period:
 Interim Period Adjustment:
 Interpretative Data:
 JOA:
 Joint Account:
 Joint Account Billings:
 Licence:
 Licensed Interest Documents:
 Longstop Date:
 Master Deed
 Natural Gas:
 NGL(s):
 Obligations:
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Oil:
 Operator:
 Other Cash Payments Adjustment:
 Other Cash Receipts Adjustment:
 Party: Parties
 Petroleum:
 Pounds £ Sterling:
 Purchasers Account:
 Relevant Third Parties:
 Safety Obligations:
 Secretary:
 Secretarys Consents:
 Section 29 Notice:
 Securities and Exchange Commission:
 Sellers Account:
 (a)
    
    in respect of Sterling amounts:Sort Code: 40-50-30;
Account No. 40188698;
Account Name: Shell UK Ltd (Exploration and Production);
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Swift Code: ABNAGB2L; IBAN No: GB17 ABNA 4050 3040 1886
98 at Royal Bank of Scotland, 250 Bishopsgate, London EC2M 4AA;(b)
    
    in respect of Dollars amounts:Sort Code: 60-92-42
Account No. 15115173;
Account Name: Shell UK Ltd;
Swift Code: CHASGB2L; IBAN No GB54CHAS60924215115173 at JP Morgan Chase Bank,
125 London Wall, EC2Y 5AJ;
 Stamp Duty Land Tax:
 Taxation:
 (a)
    
    CT, VAT and any other forms of taxation, duties, levies, imposts, charges,
Stamp Duty Land Tax, climate change levy or withholdings similar to or supplementing
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);
 Taxation Adjustment:
 Taxation Authority:
 The London Stock Exchange:
 Third Party Sum:
 Time Value Adjustment:
 Traded Data:
 Trust Deed: th
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UKCS:
 VAT:
 Warranties:
 Warranty Claim ;
 Well Wells
 Work Programmes and Budgets:
 Working Capital Adjustment:
 1.2
    
    All references to Clauses and Schedules are, unless otherwise expressly stated, references to
clauses of and schedules to this Agreement.1.3
    
    The headings in this Agreement are inserted for convenience only and shall be ignored in
construing this Agreement. Unless the context otherwise requires, in this Agreement the
singular shall include the plural and vice versa.1.4
    
    Except to the extent of the reference made thereto in the definition of Affiliate,
reference to statutory provisions shall be construed as a reference to those provisions as
amended, consolidated, extended or re-enacted from time to time.1.5
    
    Any reference to writing or written includes faxes and any legible reproduction of words
delivered in permanent and tangible form (but does not include email).1.6
    
    References in this Agreement to the words include, including and other shall be
construed as being without prejudice to the generality of the wording which precedes them and
as being without limitation and in the cases of include and including shall be construed
as if immediately followed by the words without prejudice to the generality of the
foregoing.1.7
    
    References in this Agreement to any agreement shall, be construed as a reference to such
agreement as the same may be supplemented, amended and/or novated from time to time.1.8
    
    Where a representation or warranty is qualified by the words so far as the Seller is aware,
or any similar expression, such words shall be construed as referring to the actual knowledge
or awareness of the directors of the Seller or
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the Sellers NOV Manager UK (together the Relevant Persons) and further the Seller
acknowledges that it hereby represents to the Purchaser that due and careful enquiry has
been made of the Relevant Persons and the Seller has used all reasonable endeavours to
ensure that such statement is accurate. The Seller shall not be required to make enquiries
of any other person.1.9
    
    The Schedules form part of this Agreement and have full force and effect as if expressly set
out in the main body of this Agreement.2.
    
    Sale and Purchase of the Interests2.1
    
    Subject to the terms of this Agreement, the Seller hereby agrees to sell and transfer to the
Purchaser and the Purchaser hereby agrees to purchase and acquire from the Seller the
Interests on Completion free from Encumbrances (other than those arising under the Licensed
Interest Documents), to the Purchaser, and the Purchaser hereby agrees to acquire from the
Seller, the Interests. The Parties acknowledge that for certain purposes as set out in this
Agreement, the transfers referred to in this Clause 2.1 shall, as between the Parties, be
deemed to be made with effect on and from the Economic Date. Accordingly it is intended that,
applying the Accruals Basis of Accounting:
 2.1.1
    
    the Seller shall be liable for and bear the cost of the Obligations which
relate to matters in respect of any period prior to the Economic Date (other than 
without prejudice to the provisions of Clause 6.10  Decommissioning Obligations,
Safety Obligations and Environmental Obligations) and shall receive the benefit of all
Benefits which relate to matters in respect of such period; and2.1.2
    
    (without prejudice to Clauses 6.4 to 6.6 inclusive) the Purchaser shall be
liable for and bear the cost of the Obligations which relate to matters in respect of
any period on or after the Economic Date and shall receive the benefit of all Benefits
which relate to matters in respect of such period.
 2.2
    
    The obligations of the Parties to complete the sale and purchase of the Interests under this
Agreement are conditional on fulfilment or waiver of the following conditions precedent:
 2.2.1
    
    receipt of all necessary written consents, approvals or waivers as the case
may be from the Relevant Third Parties in relation to the transfer by the Seller to
the Purchaser of the Interests, in form and substance reasonably acceptable to the
Seller and the Purchaser, including execution of the Assignment Documents by all
signatories thereto other than the Seller and the Purchaser; and2.2.2
    
    receipt of the Secretarys Consents, which are in all material respects
accurate and complete.
 2.3
    
    The contract of sale and purchase set out in this Agreement is in respect of all and not part
only of the Interests and therefore the Purchaser shall not be obliged to purchase, nor shall
the Seller be obliged to sell, part only of the Interests.
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2.4
    
    The Parties shall each use all reasonable endeavours to obtain fulfilment of the Conditions
Precedent as soon as practicable and in any event by 1st November 2011 or such
later date as the Parties may agree in writing (the Longstop Date). If the Conditions
Precedent are not satisfied by the Longstop Date then:
 2.4.1
    
    the Seller may by written notice to the Purchaser terminate this Agreement;
or2.4.2
    
    the Purchaser may by written notice to the Seller terminate this Agreement,
and,
  2.5
    
    The Seller and the Purchaser shall keep each other informed of progress towards the
satisfaction of the Conditions Precedent and shall notify the other as soon as is reasonably
practicable after a Condition Precedent has been satisfied or, as the case may be, waived.2.6
    
    Waiver of any of the Conditions Precedent shall require the mutual consent of the Seller and
the Purchaser, and such consent shall be in writing.3.
    
    Consideration3.1
    
    Base Consideration
 3.1.1
    
    The Base Consideration means the sum of the following:
 (a)
    
    a cash sum of ten million Pounds (£10,000,000) which shall
consist of the following;
 (i)
    
    a cash sum of six million Pounds (£6,000,000) (the
Initial Purchase Price), payable upon Completion of this Agreement; and(ii)
    
    a cash sum of four million Pounds (£4,000,000) (the
Deferred Purchase Price) payable in accordance with Clause 3.1.2;
 (b)
    
    the Working Capital Adjustment in accordance with Clause 3.5;
and(c)
    
    the Time Value Adjustment in accordance with Clause 3.14.1.
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3.1.2
    
    Payment of the Deferred Purchase Price (together with that part of the Time
Value Adjustment attributable thereto) shall be made by the Purchaser to the Seller by
means of telegraphic transfer in immediately available funds to the Sellers Account
for value in Pounds upon the earlier of:
 (a)
    
    the date three (3) months following the date on which
commercial quantities of Oil are exported from the Bacchus Field into the
Forties Pipeline System (First Oil); or(b)
    
    the last Business Day of the year 2011;
 3.1.3
    
    The Purchaser shall:
 (a)
    
    notify the Seller as to progress towards First Oil on a
monthly basis;(b)
    
    use all reasonable endeavours to give the Seller at least two
weeks prior notice of the expected date of First Oil; and(c)
    
    submit to the Seller for approval at least two weeks prior to
the earlier of the dates in Clause 3.1.2 a provisional calculation of that
part of the Time Value Adjustment attributable to the Deferred Purchase Price.
 3.2
    
    Allocation of Consideration
 3.2.1
    
    The Consideration shall be allocated for Taxation purposes as set out in
Schedule 2.3.2.2
    
    The Seller and the Purchaser agree that the allocation of Consideration
pursuant to Clause 3.2.1 is a just and reasonable apportionment of the Consideration.
 3.3
    
    Interim Period Adjustment
 3.3.1
    
    The Base Consideration shall be adjusted at Completion by the Interim
Period Adjustment which may be a positive or negative amount and shall be the amount
calculated at Completion as the sum of:
 (a)
    
    the Cash Calls Adjustment in accordance with Clause 3.6(b)
    
    the Other Cash Payments Adjustment in accordance with
Clause 3.7;(c)
    
    the Other Cash Receipts Adjustment in accordance with
Clause 3.8;(d)
    
    the Taxation Adjustment in accordance with Clause 11.3.
 3.3.2
    
    Without prejudice to Clause 2.1 and save as otherwise provided in Clauses
3.6, 3.7 and 3.8, the Interim Period Adjustment is based on
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cash payments (or substitutes for such cash payments such as credit notes) in the
Interim Period irrespective of whether or not the underlying transactions to
which they relate occur in respect of the Interim Period.3.3.3
    
    The Interim Period Adjustment shall attract an amount equivalent to interest
in accordance with Clause 3.14.2.3.3.4
    
    The Interim Period Adjustment shall be settled in accordance with the
provisions of Clauses 3.9, 3.10, 3.11, 5.2.1 and 5.2.4.
 3.4
    
    Adjustments
 3.4.1
    
    No item taken into account in calculating any one Adjustment or other
increases or decreases as the case may be under the Adjustment Clauses or Clause 6
shall be taken into account in calculating any of the other Adjustments under the
Adjustment Clauses or Clause 6 so as to result in a Party making payment twice or
receiving payment twice in respect thereof.3.4.2
    
    No Adjustment under this Clause 3 shall be made in respect of any matter to
which Clauses 6.4 to 6.7 inclusive, apply.3.4.3
    
    In the circumstances where the Completion Date is not at a month-end then,
to the extent not otherwise provided in this Agreement, Adjustments will be derived by
pro rating based on the number of days between the situation at the month-end prior to
the Completion Date and the situation at the month-end following the Completion Date.
 3.5
    
    Working Capital Adjustment
 3.5.1
    
    The Working Capital Adjustment, which if positive shall increase the Base
Consideration and if negative shall reduce the Base Consideration, shall be calculated
in accordance with Schedule 3.3.5.2
    
    The form of the Working Capital Adjustment is attached as the Exhibit which
forms Part B of Schedule 3 and the Parties agree to use such form in the calculation
of the Working Capital Adjustment.
 3.6
    
    Cash Calls AdjustmentThe Cash Calls Adjustment shall be the net sum of the total amounts specified in Clauses
3.6.1 and 3.6.2.
 3.6.1
    
    The positive adjustments are the total amount of all payments (or
substitutes for such payments such as credit notes) made by the Seller (or its
Affiliates) in respect of cash calls, billing invoices, claims, demands or statements
for the Interim Period pursuant to the relevant Licensed Interest Documents in respect
of the Interests.3.6.2
    
    The negative adjustments are the total amount of all received income,
reimbursements, recoveries or other receipts of any kind whatsoever or
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credits received by, or credited to, the Seller (or its Affiliates) (or the
Operator on behalf of the Seller) in the Interim Period in respect of the
Interests in respect of recoveries related to cash calls, billing invoices,
claims, demands or statements pursuant to the relevant Licensed Interest
Documents in respect of the Interests.
 3.7
    
    Other Cash Payments AdjustmentThe Other Cash Payments Adjustment shall be positive and shall be the sum of all payments
(or substitutes for such payments such as credit notes) in respect of costs and expenses
properly incurred by the Seller (or its Affiliates) for the Interim Period in respect of
the Interests (including the pro rated proportion of the licence fees which the Seller has
paid (or which are payable by the Seller) for Interests in respect of any period on or
after the Economic Date and all tariff and other payments for third party services, but
excluding any insurance premia or insurance brokers fees which the Seller (or its
Affiliates) may have paid) other than those dealt with by the positive adjustments under
the Cash Calls Adjustment Clause 3.6.1.3.8
    
    Other Cash Receipts AdjustmentThe Other Cash Receipts Adjustment, which shall be a negative adjustment, shall be the
total of the cash receipts or credits received by, or credited to, the Seller (or its
Affiliates) for the Interim Period in respect of the Interests other than those dealt with
by the negative adjustment under the Cash Calls Adjustment Clause 3.6.2.3.9
    
    Interim Completion Statement/Estimate of AdjustmentsThe Seller shall provide the Purchaser with a written statement of the amount of the Dollar
and Sterling balances resulting from the calculation of the Base Consideration (excluding
the Deferred Purchase Price and that part of the Time Value Adjustment attributable
thereto) and the Interim Period Adjustment (together with an amount equivalent to interest
on the Interim Period Adjustment pursuant to Clause 3.14.2), giving an estimate of all
Adjustments which are expected to be required to be paid hereunder in respect of the
Interests as at the Completion Date (the Interim Completion Statement). The Interim
Completion Statement shall be provided no later than ten (10) Business Days prior to the
date agreed by the Parties to be the estimated Completion Date. The Seller and the
Purchaser agree that if the information required for such timely preparation of the Interim
Completion Statement is not available, the Sellers best estimate of such information shall
be substituted. 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 3.10 and 3.12. The Interim Completion Statement shall be
in the format set out in Schedule 5.3.10
    
    Disputed Adjustments
 3.10.1
    
    Without prejudice to Clause 3.10.2, on Completion the amount of the Dollar and
Sterling balances specified in the Interim Completion
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Statement, as updated, shall be paid by the Purchaser or the Seller (as the
case may be).3.10.2
    
    If any of the amounts or portions thereof contained in the Interim Completion
Statement to be delivered pursuant to Clause 3.9 have not been agreed or determined
within five (5) Business Days of receipt of the Interim Completion Statement, the
Purchaser may serve notice on the Seller prior to Completion giving particulars of
the disputed amounts or portions of the Adjustments and the Parties shall use
reasonable endeavours to resolve the dispute within ninety (90) Business Days of
receipt by the Seller of the said notice.3.10.3
    
    Following the agreement of the Parties or determination under Clause 3.12 in
respect of such disputed amounts or portions thereof, any reimbursement of disputed
amounts or portions thereof paid pursuant to Clause 3.10.1 shall be made within the
Final Completion Statement, or if agreed or determined thereafter, within five (5)
Business Days following the earlier of agreement of the Parties of such disputed
amounts or portions thereof or determination under Clause 3.12 of such disputed
amounts or portions thereof.
 3.11
    
    Final Completion Statement/Final AdjustmentsWithin ninety (90) days after Completion, or within such other period as may be agreed by
the Parties, and without prejudice to the provisions of Clause 6, the Seller shall provide
the Purchaser with a written statement giving the final amount of the Consideration
(excluding the Deferred Purchase Price and that part of the Time Value Adjustment
attributable thereto) and all Adjustments to be made hereunder in respect of the Interests
together with the Time Value Adjustment required under Clause 3.14.1 and an amount
equivalent to interest required under Clause 3.14.2. If the Parties shall fail to agree
any such statement within fifteen (15) Business Days of receipt by the Purchaser, the
statement shall be referred for determination in accordance with the provisions of Clause
3.12. The agreed or determined amount, to the extent not already paid or taken into
account on Completion, shall be paid by the Purchaser or the Seller (as the case may be) to
the other. Payment of agreed or disputed amounts or portions thereof shall be made within
five (5) Business Days following either agreement of the Parties or determination under
Clause 3.12 (as the case may be). This final completion statement (the Final Completion
Statement) shall be in the format set out in Schedule 5.3.12
    
    Independent DeterminationIf the Parties cannot reach agreement on the contents of all or part of the statements
referred to in Clause 3.9 and/or 3.11 within the time limit provided for therein, the
disputed items may be referred by either the Purchaser or the Seller for determination by
an independent chartered accountant agreed by the Parties or, in the absence of agreement
between the Parties within five (5) Business Days of a Party notifying the others that it
proposes to refer the dispute to an expert, nominated by the President of the Institute of
Chartered Accountants in England and Wales. The nominated chartered accountant shall
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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 chartered 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.3.13
    
    Billing Statements
  3.14
    
    Time Value Adjustments.
 3.14.1
    
    The Time Value Adjustment, shall be computed as an amount equivalent to interest
(calculated on a monthly basis and compounded monthly) at the Agreed Rate on the
amount of that part of the Base Consideration consisting of the Initial Purchase
Price, the Deferred Purchase Price and the Working Capital Adjustment from the
Economic Date up to and including (in the case of the Initial Purchase Price) the
Completion Date, (in the case of the Deferred Purchase Price) the date of settlement
thereof in accordance with Clause 3.1.2 hereof and in the case of disputed items, if
after Completion, up to and including the date of settlement thereof.3.14.2
    
    An amount equivalent to interest (calculated on a monthly basis on each Adjustment
arising from Clauses 3.6 to 3.8 (inclusive) as the same has first been adjusted
pursuant to Clause 11.3 and compounded monthly) at the Agreed Rate shall be payable on
each item contained in the Interim Period Adjustment from the date of payment or
receipt, as appropriate, until the date on which the Interim Period Adjustment is
settled in respect of such item. Provided that, on those parts of the Interests where
the Seller is the Operator or where no JOA exists in relation to a Licence, the date
of payment or receipt for billings in respect of activities relating to such Licence
shall be deemed to be the fifteenth day of the calendar month for the period to which
the billings relates.
 3.15
    
    Currencies and Translation
 3.15.1
    
    Where any sums to be included in the Working Capital Adjustment are expressed in
Pounds or Dollars, such sums shall be included in Pounds and Dollars respectively.
Where any sums to be included in the Working Capital Adjustment are expressed in
currencies other than Pounds or Dollars, such sums shall be translated into Pounds at
the mean of the spot rates quoted per the 9.00AM Reuters benchmark for the currency
concerned in relation to trading on the Economic Date or,
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if no rate is quoted for that day, the most recent preceding day for which a rate
is quoted.3.15.2
    
    Where any sums to be included in the Interim Period Adjustment are expressed in
currencies other than Pounds or Dollars, such sums shall be translated into Pounds at
the mean of the spot rates quoted per the 9.00AM Reuters benchmark for the currency
concerned in relation to trading on the day on which such sum was originally paid by
the Seller (or its Affiliates) or originally received by or credited to the Seller (or
its Affiliates) or is deemed to have been so paid or received or credited or, if no
rate is quoted for that day, the most recent preceding day for which a rate is quoted.3.15.3
    
    Save as provided in Clauses 3.15.1 and 3.15.2 above, where any sums payable by the
Purchaser to the Seller or by the Seller to the Purchaser pursuant to Clauses 3 or 6
are expressed in currencies other than Pounds or Dollars, such sums shall be
translated into Pounds at the mean of the spot rates quoted per the 9.00AM Reuters
benchmark for the currency concerned in relation to trading on the day on which such
sums are paid by the Purchaser to the Seller or by the Seller to the Purchaser (as the
case may be) or, if no rate is quoted for that day, the most recent preceding day for
which a rate is quoted.
 4.1
    
    Interim Period
  4.1.1
    
    (having notified the Purchaser in advance of the subject matter thereof) consult with the
Purchaser in relation to any material decision in connection with the Interests (other than as
may be contemplated in the current Work Programmes and Budgets), provided that nothing in this
Clause 4.1 shall operate to fetter the discretion of the Seller in exercising its roles in
respect of such decision and the Seller shall not be obliged to act in accordance with any
wish, representation or purported instruction of the Purchaser;4.1.2
    
    not incur, commit to incur or approve any work programme, budget, expenditure or capital
commitment relating to any Licence involving expenditure in excess of five hundred thousand
pounds (£500,000) (net the Sellers and any Affiliates share) in any case other than:
 (a)
    
    any such expenditure covered by any budget approved prior to the date of
this Agreement; or(b)
    
    any such expenditure in respect of which the Purchaser has given its
prior written approval (not to be unreasonably withheld or delayed); or
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(c)
    
    any expenditure necessitated by any emergency (in which case the Seller
shall consult with the Purchaser to the extent practicable in the circumstances);
and
 4.1.3
    
    conduct operations regarding the Interests in the ordinary and usual course in accordance
with good and prudent oil and gas industry practice, so that the Interests are protected and
maintained;4.1.4
    
    maintain and renew all governmental licences, permits, authorisations, consents and
permissions necessary to own and operate the Interests;4.1.5
    
    use its reasonable endeavours to enable the Purchaser to attend, as an observer, any
meetings of the relevant operating or other committee under any Licensed Interest Documents,
subject to the consent of the other parties thereto;4.1.6
    
    not, without the Purchasers written consent (not to be unreasonably withheld or delayed),
grant any Encumbrance, sell, transfer, surrender, novate, assign, lease or otherwise dispose
of any of the Interests (excluding sales of production therefrom in the ordinary course of
business), or purport to do any of the same Provided that this provision shall not apply to
the entering into by the Seller of any deed in respect of the extension of the Licence beyond
its current expiry date.4.1.7
    
    not waive or agree to waive any of its material rights or remedies arising under the
Licensed Interest Documents or enter into any sole risk operation under any of the JOAs
without first obtaining the Purchasers prior consent thereto;4.2
    
    Subject to the provisions of this Agreement, the Purchaser shall accept the assets comprising
the Wells in the physical condition in which they exist at the date of this Agreement and,
notwithstanding that title will not pass until Completion, shall assume the risk of damages
thereto or the destruction thereof in whole or in part as from the date of this Agreement
irrespective of the negligence of the Seller including breach of duty, statutory or otherwise.4.3
    
    The Purchaser shall hold confidential all information furnished or disclosed to the Purchaser
by the Seller in connection with the transactions contemplated by this Agreement as well as
all information concerning the Interests contained in any analyses, compilations, studies or
other documents and any business and/or commercial information in respect of the Seller
(collectively, the Interests Information) and shall not, without the prior written consent
of the Seller, release or disclose any Interests Information to any other person. However,
the undertaking of confidentiality above shall not extend to any Interests Information which
is:
 4.3.1
    
    generally available to the public other than as a result of a wrongful
disclosure by the Purchaser; or4.3.2
    
    available to the Purchaser as owner of, or where the Purchaser is otherwise
entitled to, such information without any restriction on disclosure; or
 20




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4.3.3
    
    available to the Purchaser on a non-confidential basis from a source other
than the Seller if such source is entitled to disclose such information; or4.3.4
    
    lawfully requested by a Government agency of any court of competent
jurisdiction, or is required to be disclosed by the requirements of any recognised
stock exchange or the Securities and Exchange Commission; or4.3.5
    
    the Purchasers or its Affiliates/(s) officers, directors, employees,
accountants, lawyers, representatives, agents, consultants and financial advisers who
need to know the Interests Information in connection with the implementation or
financing of the transactions contemplated by this Agreement, who are informed by the
Purchaser of the confidential nature of the Interests Information and who the
Purchaser will ensure will observe the terms and conditions of this Clause 4.3 without
the benefit of this exception.
  4.4.1
    
    If Completion does not take place for any reason provided for in this
Agreement, the Purchaser shall remain bound by Clause 4.3, notwithstanding any
termination of this Agreement, until the earlier of the fifth (5th) anniversary of
such termination or such time as it has entered into a separate undertaking of
confidentiality on the same or similar terms in respect of the Interests Information
(and this Clause 4.4 shall also survive until such time).4.4.2
    
    If this Agreement is terminated as aforesaid, the Purchaser shall, at the
request of the Seller, promptly return to the Seller (and delete from the Purchasers
systems, where electronically stored) all the Interests Information.
 4.5
    
    If Completion does take place, the undertaking of confidentiality contained herein shall be
of no further effect to the extent that the Interests Information falls within the category of
data and information which is the subject of the confidentiality provisions in the Licensed
Interest Documents.4.6
    
    Save to the extent the Seller is required under the terms of the Licensed Interest Documents
or as agreed by the Purchaser (such consent not to be unreasonably withheld or delayed), the
Seller shall not do any act or thing or authorise any act or thing to be done over which it
has control or which it can otherwise, by the reasonable exercise of any right or power,
prevent being done which would prevent the Warranties in Clauses 6.10.1, 6.10.2, 6.10.3,
6.10.4, 6.10.5, 6.10.6(a), 6.10.7(a) and 6.10.9(a), from being true and accurate if repeated
prior to Completion.5
    
    Completion5.1
    
    Completion under this Agreement shall take place at the Sellers offices on the tenth (10th)
Business Day after the date on which the last of the Conditions Precedent has been fulfilled
or waived, or at such other location and/or at such
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other time as the Parties may agree Provided that if, for reasons beyond the reasonable
control of the Purchaser, Completion has not occurred by (i) 23rd November 2011, or (ii)
such earlier date which is the day before the day the relevant moratorium period in
relation to the Licence extension begins then, unless the Seller establishes to the
reasonable satisfaction of the Purchaser that Completion (i) can still take place in
accordance with the intent of this Agreement and (ii) Completion will not breach any term
of the Licence or the terms of the Licence extension proposed in relation thereto, this
Agreement shall be deemed to have terminated with immediate effect and neither Party shall
have any liability under this Agreement to the other Party save for its obligations set out
in Clause 12 and Clause 4.4.2 and save for liability for any breach of this Agreement prior
to the date of termination.
 5.2
    
    At Completion all, but not part only, of the following business shall be transacted:
 5.2.1
    
    The Purchaser shall:
 (a)
    
    pay to the Seller the balances due to the Seller pursuant
to the Interim Completion Statement prepared in accordance with Clauses 3.9
and 3.10.1 by means of telegraphic transfer in immediately available funds
to the Sellers Account for value in Dollars and/or Pounds (as the case may
be) on the Completion Date;(b)
    
    deliver to the Seller (to the extent not already
delivered prior to Completion) a copy of the relevant consents, approvals,
confirmations or waivers, if any, referred to in the Conditions Precedent
and obtained by or on behalf of the Purchaser;(c)
    
    deliver to the Seller (to the extent not already
delivered prior to Completion) 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 its entry
into the transactions contemplated by this Agreement and authorising a
person or persons to sign this Agreement and all of the other documentation
contemplated by this Agreement (including the Assignment Documents) on
behalf of the Purchaser; and(d)
    
    subject to Clause 5.2.3, execute and deliver those of the
Assignment Documents to which it is a signatory.
 5.2.2
    
    The Purchaser shall (and shall, if appropriate, ensure that its 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.
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5.2.3
    
    The Seller shall deliver to the Purchaser (to the extent not already
delivered prior to Completion):
 (a)
    
    the Assignment Documents duly executed by all the parties
thereto, or by the administrator on their behalf pursuant to the provisions of
the Master Deed, other than the Purchaser (and, in the case of the deeds of
Licence assignment, the Secretary);(b)
    
    a copy of all the documents comprising the Secretarys
Consent;(c)
    
    a copy of the other relevant consents, approvals,
confirmations or waivers, if any, referred to in the Conditions Precedent and
obtained by or on behalf of the Seller;(d)
    
    a copy, certified as a true copy of the power of attorney
authorising the execution of this Agreement and all the other documentation
contemplated by this Agreement (including the Assignment Documents) on behalf
of the Seller.
 5.2.4
    
    The Seller shall pay to the Purchaser any balances due to the Purchaser
pursuant to the Interim Completion Statement prepared in accordance with Clauses 3.9
and 3.10.1, by means of telegraphic transfer in immediately available funds to the
relevant Purchasers Account for value in Dollars and/or Pounds (as the case may be)
on the Completion Date.5.2.5
    
    The Seller shall (and shall, if appropriate, ensure that its Affiliates
shall) execute such other documents and do all other acts and things as may reasonably
be required, in order to effect the transfer of the Interests to the Purchaser, to
implement the transactions hereby contemplated and otherwise carry out the true intent
of this Agreement.
 5.3
    
    Without prejudice to its obligations under Clause 4, the Seller shall procure that (to the
extent not delivered prior to Completion) the Licensed Interest Documents and all Data in the
possession or control of the Seller (or copies of such Licensed Interest Documents and Data,
if copies, but not originals, are in the Sellers possession) are made available for
collection by the Purchaser at its own expense within normal business hours as soon as
reasonably practicable after the Completion Date;5.4
    
    The Purchaser acknowledges that the Seller shall have the right to retain copies of any
Licensed Interest Documents together with copies of such Data as the Seller may reasonably
require for the conduct of its business, subject to the same being maintained in confidence,
and in this regard the provisions of Clause 4.4 shall apply to the Seller in the same way as
they apply to the Purchaser.5.5
    
    The Purchaser undertakes that (i) subject to (ii) below, following Completion it shall not
and shall procure that its Affiliates shall not make use of any stationery, invoices, forms,
seals, trademarks, logos and any other similar articles or symbols showing the expression
Shell, Enterprise or any other
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expression likely to suggest a connection with the
Seller or with its Affiliates or with the Shell
group of companies.5.6
    
    Notwithstanding Completion:
 5.6.1
    
    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;5.6.2
    
    the Warranties under Clauses 6.10 and 6.11; and5.6.3
    
    all covenants and other undertakings contained in or entered into pursuant
to this Agreement;
  6
    
    Indemnities6.1
    
    Save to the extent that the intentions of Clauses 2.1.1 and 2.1.2 are achieved by the Working
Capital Adjustment and/or the Interim Period Adjustment and/or Clause 11.7, and subject to
Clause 6.10 and to any express provision to the contrary contained in this Agreement, the
provisions of Clause 6.2 shall apply.6.2
    
    Subject to Clause 6.1 above:
 6.2.1
    
    If any Obligations are incurred by the Seller (and/or one or more of all of
the Associated Parties of the Seller) which relate to matters in respect of any period
on or after the Economic Date, the Purchaser shall reimburse and indemnify the Seller
and its Associated Parties in respect thereof;6.2.2
    
    If any Obligations (other than Decommissioning Obligations and Safety
Obligations and Environmental Obligations) are incurred by the Purchaser (and/or one
or more of all of the Associated Parties of the Purchaser) which relate to matters in
respect of any period prior to the Economic Date, the Seller shall reimburse and
indemnify the Purchaser and the Purchasers Associated Parties in respect thereof;6.2.3
    
    If any Benefits accrue to the Seller (and/or one or more of all of the
Associated Parties of the Seller) which relate to matters in respect of any period on
or after the Economic Date, the Seller shall account to and reimburse the Purchaser in
respect thereof; and6.2.4
    
    If any Benefits accrue to, the Purchaser (and/or one or more of all of the
Associated Parties of the Purchaser) which relate to matters in respect of any period
prior to the Economic Date, the Purchaser shall account to and reimburse the Seller in
respect thereof.
 6.3
 6.3.1
    
    Settlement of any amount to be paid or reimbursed in accordance with this
Clause 6 shall be paid or reimbursed within ten (10) Business Days
 24




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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 Sellers Account or the Purchasers Account (as the case may be).
 6.3.2
    
    If there is any dispute as to the quantification of any amount payable under
this Clause 6 such dispute may be referred by either Party for determination by an
independent chartered accountant 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, nominated by the President
of the Institute of Chartered Accountants in England and Wales. 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 chartered 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.
 6.4
    
    Decommissioning ObligationsNotwithstanding anything to the contrary within the Assignment Documents or this Agreement
(other than the proviso to this Clause 6.4), the Purchaser will be responsible for and
shall indemnify, defend and hold the Seller and its Associated Parties harmless from and
against all duties, liabilities, obligations, costs (including legal costs) and Claims
arising in respect of decommissioning all of the property related to the Interests (which
shall be deemed to include any residual liability for making safe, maintaining, monitoring
and insuring) whether the same are incurred under the terms of the relevant Licence and the
other Licensed Interest Documents or under any applicable laws (including the requirements
of laws enacted after the Economic Date) and regulations, guidelines, custom and practice
(the Decommissioning Obligations) to the extent that any Decommissioning Obligations are
attributable to the Interests, whether arising before, on or after the Economic Date and
regardless of whether resulting from any acts or omissions, negligence or breach of duty,
whether statutory or otherwise, conduct or statements of the Seller or its Associated
Parties or any of them, including:
 6.4.1
    
    the plugging, replugging, and abandoning of all Wells associated with the
Interests, whether drilled or plugged before on or after the Economic Date;6.4.2
    
    removing and disposing of any and all terminals, facilities, platforms,
structures, equipment, umbilicals and pipelines comprising part of or related to the
Interests, including the disposal of the same contaminated with naturally occurring
radioactive material; and6.4.3
    
    compliance with the provisions of the Licence, the other Licensed Interest
Documents and all applicable laws and government rules,
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regulations, orders and requirements associated with the abandonment of all Wells
and the Interests Area.
  6.5
    
    Environmental ObligationsNotwithstanding anything to the contrary within the Assignment Documents or this Agreement
(other than the proviso to this Clause 6.5), the Purchaser will be responsible for and
shall indemnify and hold the Seller and its Associated Parties harmless from and against
all duties, obligations, liabilities, costs (including legal costs) and Claims arising
from, under or in respect of the ownership or use of the Interests relating to
environmental occurrences, events and activities (the Environmental Obligations) to the
extent that any Environmental Obligations are attributable to the Interests, whether
arising before, on or after the Economic Date and regardless of whether resulting from any
acts or omissions, negligence or breach of duty, whether statutory or otherwise, conduct or
statements of the Seller or its Associated Parties or any of them, including:
 6.5.1
    
    any surface or subsurface contamination or pollution of the Environment due
to the proper or improper discharge, treatment, release, escape or disposal (onsite or
offsite) of any waste material, hazardous waste or any other waste in connection with
the operation of the Interests Area;6.5.2
    
    the clean-up or containment of spills, waste, pollution or contamination on
or from the Wells or any part of the Interests Area;6.5.3
    
    the underground injection of produced water or other chemicals or materials;
and/or6.5.4
    
    compliance or failure to comply with applicable Environmental Laws and
government environmental rules, regulations, orders and requirements in connection
with the Interests.
  6.6
    
    Safety ObligationsNotwithstanding anything to the contrary within the Assignment Documents or this Agreement,
the Purchaser will be responsible for and shall indemnify and hold the Seller and its
Associated Parties harmless from and against all duties, obligations, liabilities, costs
(including legal costs) and Claims arising from, under or in respect of, use or ownership
of the Interests relating to safety occurrences, events and activities (the Safety
Obligations), whether arising before, on or after the Economic Date and regardless of
whether resulting from any acts or omissions, negligence or breach of duty, whether
statutory or
 26




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otherwise of the Seller or its Associated Parties or any of them or the condition of the
Interests including:
 6.6.1
    
    safety hazards and deficiencies that may exist on the Interests Area and any
expenditures that may be necessary to correct those safety hazards and deficiencies;6.6.2
    
    compliance or failure to comply with applicable safety laws and government
safety rules, regulations, orders and requirements, including all expenditures
necessary to comply with the safety cases for the Interests Area submitted to the
Health and Safety Executive, or to modify and amend such safety cases and to comply
with such modified or amended safety cases; and/or6.6.3
    
    the exposure of any person to chemicals and other Hazardous Substances or
materials or forms of energy, whether artificial or naturally occurring.
 6.7
 6.7.1
    
    Each of the Purchaser and the Seller acknowledges that its obligations to
indemnify and keep indemnified, defend, and hold, respectively, the Seller and the
Purchaser and their Associated Parties harmless under this Clause 6 include
obligations to pay all legal costs and other costs incurred by the indemnified party
in defending all Claims. As to each Claim, each indemnified party, in its sole
discretion, may elect to (a) manage its own defence, in which event the indemnifying
party will reimburse that indemnified party and its Associated Parties for all legal
costs incurred in defending such Claims within thirty (30) Business Days of delivery
to the indemnifying party of invoices for these fees and costs; or (b) tender its
defence as to any Claim to the indemnifying party, in which event the indemnifying
party shall be responsible for all aspects of defending the Claim at issue and
resulting liabilities (save to the extent that liability therefor is allocated to the
indemnified party in terms of this Agreement).6.7.2
    
    Where any audit pursuant to a JOA takes place after the Completion Date, the
Purchaser shall use reasonable endeavours to enable the Seller to make representations
directly to any relevant Operator and shall in any event be obliged to take account of
the Sellers representations in connection with such audit and to notify the Seller of
any audit adjustment as soon as practicable after the results of such audit are known.
If as a result of any audit adjustment or otherwise, either the Seller or the
Purchaser is, on the principles set out in Clauses 2.1 and 6.2, liable to pay any
amount to the other, then, to the extent that the Consideration has not already been
adjusted pursuant to the provisions of Clause 3 in respect thereof, or the amount has
not otherwise been paid in accordance with Clause 6.2, such amount shall be paid to
the Sellers Account or the Purchasers Account (as appropriate) within thirty (30)
Business Days after the amount receivable or payable as a result of such an audit or
other subsequent adjustment has been taken
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into account by the relevant Operator in the Operators billing statement.
 6.8
 6.8.1
    
    The Seller and the Purchaser acknowledge that the Seller maintains a
worldwide program of property and liability insurance coverage for itself and its
Affiliates. This programme has been designed to achieve a co-ordinated risk
management package for the entire corporate group.6.8.2
    
    It is understood and agreed by the Purchaser that:
 (a)
    
    no insurance coverage shall be provided under the
Sellers policies to the Purchaser at any time; and(b)
    
    from and after Completion, any and all policies insured
or reinsured by any of the Sellers captive insurers which, but for this
provision, would have insured the Interests shall be deemed terminated,
commuted and cancelled ab initio; and(c)
    
    no claims regarding any matter whatsoever, whether or not
arising from events occurring prior to the Economic Date, shall be made by
the Purchaser against or with respect to any of the Sellers policies
regardless of their date of issuance.
 6.8.3
    
    The Purchaser shall indemnify and defend the Seller and its Affiliates, and
shall hold them harmless from, any Claim made after the Execution Date against any of
the Sellers policies by the Purchaser or any company or person claiming to be
subrogated to the Purchasers rights, including all costs and expenses (including
legal fees) related thereto. Such indemnity shall include coverage of any claim by an
insurer for reinsurance, retrospective premium payments or prospective premium
increases attributable to any such claim.
 6.9
    
    The rights and obligations in Clauses 6.1 to 6.8 inclusive shall not come into effect unless
and until Completion takes place.6.10
    
    Representations and WarrantiesSubject to the provisions of this Clause 6.10 and save as fairly disclosed under the terms
of the Disclosure Letter, or set out in the Licensed Interest Documents or Data Room
Documents, the Seller hereby represents, undertakes and warrants to the Purchaser as at the
date of this Agreement as follows:
 6.10.1
    
    The Seller is duly incorporated with limited liability and validly existing under
the laws of England and Wales;6.10.2
    
    The documents which contain or establish the Sellers constitution incorporate
provisions which authorise, and all necessary corporate action has been taken on the
part of the Seller to authorise, the Seller to execute and deliver this Agreement and
perform the transactions contemplated by this Agreement;
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6.10.3
    
    The signing and delivery of this Agreement and, subject to fulfilment of the
Conditions Precedent, the performance of any of the transactions contemplated by this
Agreement will not contravene or constitute a default under:
 (a)
    
    any provision contained in any agreement; or(b)
    
    any instrument, law, judgement, order, licence, permit or
consent;
  6.10.4
    
    The Seller is a licensee of the Licence and the sole legal and beneficial owner of
the Interests and all rights accruing to it under the Licensed Interest Documents with
the right to sell and transfer the legal and beneficial interest therein (subject to
the terms thereof);6.10.5
    
    Subject to the provisions of the Licence, the JOA and the other Licensed Interest
Documents and any obligation to pay rent under the relevant Licence, no Encumbrance is
in existence and in force over the Interests nor, subject as aforesaid, is there in
effect any agreement or commitment to create the same nor are there any other matters
which restrict the Sellers ability freely to dispose of the Interests or any
Petroleum attributable thereto;6.10.6
    
    The Seller:
 (a)
    
    has not committed any material breach of the Licence or of
any of the Licensed Interest Documents;(b)
    
    nor received notice that any of the parties to any of the
above-mentioned documents is in breach thereof,
  6.10.7
    
    (a) The Licence and all rights and interests of the Seller thereunder or deriving
therefrom are in full force and effect.
 (b)
    
    No notice has been given to the Seller or, so far as the
Seller is aware, to any other licensee of the Licence, by the Secretary of any
intention to revoke the Licence;
 6.10.8
    
    The Licence is not in the course of being surrendered in whole or in part and, so
far as the Seller is aware, there is no proposal to do so;
 6.10.9
    
    (a) The Seller has not given any notice of withdrawal from the Licence or the JOA;
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(b)
    
    So far as the Seller is aware, none of the current
licensees of the Licence or the current parties to the JOA have given any
notice of withdrawal from the Licence or JOA which is still current;
 6.10.10
    
    All accrued obligations and liabilities imposed by the Licence, including the work
obligations arising from the Licence (but excluding, for the avoidance of doubt, those
obligations in respect of the Wells which are assumed by the Purchaser hereunder),
have been duly fulfilled and discharged and there is no outstanding work obligation to
be fulfilled under the Licence;6.10.11
    
    The Seller is not a party to any litigation or arbitration or administrative
proceedings in respect of which a writ or summons or other formal pleading has been
served or judgement issued, nor is there any claim (whether or not formulated within a
formal pleading as aforesaid) or dispute in relation to, and which is likely
materially to prejudice or detrimentally affect in any material manner, the Interests,
and, so far as the Seller is aware, no such litigation, arbitration, administrative
proceedings, claim or dispute are threatened or pending either by or against the
Seller, and, so far as the Seller is aware, there are no facts which are likely to
give rise to any claim or dispute which is likely so to prejudice or detrimentally
affect in any material manner the Interests, and, so far as the Seller is aware, none
of the other licensees of the Licence or the parties to the Licensed Interest
Documents is a party to any litigation, arbitration or administrative proceedings or
any claim or dispute or judgement in relation to, and which is likely to prejudice or
detrimentally affect in any material manner, the Interests;6.10.12
    
    The Seller is solvent and able to pay its debts as they fall due. No order has
been made or petition presented, meeting convened or resolution passed for the winding
up of the Seller, nor has any receiver been appointed or any distress, execution or
other process been levied in respect of the Interest. No administrative or other
receiver has been appointed by any person over the Interests of the Seller or any part
thereof, nor has any order been made by, or petition presented to, the Court for the
appointment of an administrator in respect of the Seller. No administrator of the
Seller has been appointed by any person entitled to appoint such an administrator
pursuant to schedule B1 to the Insolvency Act 1986, nor have any documents been filed
with the Court for the appointment of such an administrator, and not has any notice of
intention to appoint such an administrator been given by any such person. No
composition in satisfaction of the debts of the Seller, scheme of arrangement of its
affairs or its members or both, or any class of either its creditors or members or
both, has been proposed, sanctioned or approved. No distress, distraint, charging
order, garnishee order, execution, or other process has been levied or applied for in
respect of the whole or any part of the Interests. No event has occurred causing, or
which on intervention or notice by any third party may cause, any floating charge
created by the Seller to crystallise over the Interests or any part of them, not any
charge created by it to become
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enforceable over the Interests or any of them, nor has such crystallisation
occurred and nor is such enforcement in process. ;
 6.11
    
    Subject to the terms of this Agreement, the Purchaser hereby represents and warrants to the
Seller as follows:
 6.11.1
    
    The Purchaser is duly incorporated with limited liability and validly existing under
the laws of England and Wales;6.11.2
    
    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;6.11.3
    
    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, judgement, order, licence,
permit or consent by which the Purchaser or any of its Affiliates or any of its assets
is bound or affected;6.11.4
    
    It will acquire the Wells as is, where is, and with all faults; and6.11.5
    
    No litigation, arbitration, administrative proceeding, dispute or judgement against
the Purchaser or its Affiliates or to which the Purchaser or any of its Affiliates is
a party which might by itself or together with any such other proceedings have a
material adverse effect on the Purchasers or any of its Affiliates 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 its Affiliates or any of its assets;
  6.12.1
    
    A Warranty Claim by the Purchaser shall be limited to damages and the Purchasers
claim for breach of any other provision of this Agreement shall be limited to damages or
specific performance or injunction (or similar discretionary remedy) and in either case,
the Purchaser shall not be entitled to any other form of remedy in relation thereto
including rescission.6.12.2
    
    Any damages recoverable by the Purchaser under this Agreement shall be assessed on the
basis of:
 (a)
    
    the diminution in value of the Interests in the case
of a claim for breach of warranty or representation under this Agreement;
or(b)
    
    the direct loss, damage or expense incurred by the
Purchaser in the case of a claim for breach of any other provision under
this Agreement;
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which in either case shall be directly attributable to the matter or
circumstance giving rise to that claim and shall not in either case be taken to
be greater than the Consideration.
 6.13
    
    The Seller shall not be liable for any Warranty Claim unless it shall have received from the
Purchaser, as soon as practicable after the Purchaser becomes aware of the same, a notice
containing reasonable details of the relevant Warranty Claim including the Purchasers
provisional estimate of the amount of the Warranty Claim provided always that such notice is
received on or before the date which is twelve (12) months after the Completion Date. Any
such Warranty Claim made shall be deemed to have been withdrawn unless proceedings in respect
thereof have been both issued and served on the Seller within three (3) months of the giving
of such notice.6.14
    
    A breach of the Warranties which is capable of remedy shall not entitle the Purchaser to make
a Warranty Claim unless the Seller is given notice of such breach and the Seller has failed:
 6.14.1
    
    where the necessary remedial action consists of offshore operational activities, to
commence any such physical remedial action involving operational activities within
forty-five (45) days after the date on which such notice is served on the Seller and to
work diligently to complete such remedial action; and otherwise6.14.2
    
    to undertake and complete remedial action within thirty (30) days after the date on
which such notice is served on the Seller,
 provided that nothing in this 6.14 shall require the Purchaser to defer making a Warranty
Claim until after the period specified in Clause 6.13.6.15
    
    Except as set forth in Clause 6.10, neither the Seller nor any of its Affiliates nor any
officer, shareholder, director, employees, agent, consultant, auditor or representative of the
Seller or of any of its Affiliates makes any representation, warranty or undertaking,
statement, opinion, information or advice (including any representation, warranty,
undertaking, statement, opinion, information or advice whether (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, consultant, auditor or
representative of the Seller or any of its Affiliates) and the Purchaser acknowledges, affirms
and warrants that it has not relied, and will not rely, upon such representation, warranty,
undertaking, statement, opinion, information or advice 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 Petroleum attributable to the
Interests, (ii) any geological, geophysical, 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, (v) the
state, condition or fitness for purpose of any of the physical assets, including all onshore
and offshore: installations, structures, platforms, pipelines, plant,
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equipment, machinery, wells and facilities related to the Interests and/or to operations
under the Licence, the JOA and or other Licensed Interest Documents, or (vi) the existing or
future statutory or regulatory regime, including as to Taxation, applicable to the
acquisition and operation of oil and gas properties, or (vii) market prices of Gas, Oil or
other Petroleum.6.16
    
    The liability of the Seller (whether in contract, tort, including negligence, breach of duty,
or otherwise) in respect of a Warranty Claim shall be limited as follows:
 6.16.1
    
    there shall be disregarded for all purposes any Warranty Claim if the amount of the
damages to which the Purchaser would otherwise be entitled in respect of such Warranty
Claim is less than One hundred thousand Pounds (£100,000);6.16.2
    
    the Seller shall have no liability unless and until the damages to which the Purchaser
is entitled in aggregate in respect of all Warranty Claims qualifying under Clause
6.16.1 exceed One million Pounds (£1,000,000) (in which case the Purchaser shall be able
to claim for the whole amount of such claims and not just only the excess);
 and
 6.16.3
    
    the maximum aggregate liability of the Seller in respect of all Warranty Claims, and
any breach of any provision of this Agreement, shall not exceed an amount equal to 100%
of the Consideration.
 6.17
    
    If:
 6.17.1
    
    any circumstance arises which may result in the Purchaser having a Warranty Claim
against the Seller as a result of or in connection with a liability or alleged liability
to a third party; or6.17.2
    
    the Purchaser is or may be entitled by law to recover from some other person, firm,
authority or body corporate any sum in respect of which the Purchaser may have a
Warranty Claim against the Seller, the Purchaser shall promptly notify the Seller
thereof and, unless the Purchaser also notifies the Seller that it withdraws the said
Warranty Claim, the Seller, shall be entitled (provided always that it does not act to
unreasonably prejudice the business of the Purchaser) (i) to take and/or require the
Purchaser to take any action the Seller might reasonably request to resist such
liability or enforce such recovery in the name of the Purchaser but at the cost and
expense of the Seller, and (ii) to have conduct of any appeal, dispute, compromise or
defence of the dispute and of any incidental negotiations for the aforesaid purposes,
and the Purchaser will give the Seller all co-operation, access and assistance for the
purposes of resisting such liability or enforcing such recovery as the Seller may
reasonably require.6.18
    
    If the Seller pays to the Purchaser an amount pursuant to a Warranty Claim, and
the Purchaser is entitled to recover from some other
 33




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person any sum to which it would not have been or become entitled but for the
circumstances giving rise to such a Warranty Claim, the Purchaser shall
undertake all reasonable steps to enforce such recovery and shall forthwith
repay to the Seller following such recovery so much of the amount paid by it as
does not exceed the amount recovered from the third party, less all costs,
charges and expenses reasonably incurred by the Purchaser in obtaining such
recovery from the third party.
 6.19
    
    The Seller shall have no liability in respect of any of Warranty Claim to the
extent that the Warranty Claim is occasioned by the Seller doing or omitting to do any
act or thing at the express written request of, or with the written agreement of the
Purchaser prior to Completion.6.20
    
    Nothing in this Agreement shall relieve the Purchaser of any duty, whether at
common law or otherwise, to mitigate any loss or damage incurred by it in respect of any
Warranty Claim.6.21
    
    The Purchaser shall not be entitled to recover from the Seller the same sum or
loss more than once in respect of any Warranty Claim of any of them.6.22
    
    The Seller shall not be liable to the Purchaser for any Warranty Claim in respect
of a breach of the Warranties to the extent that:
 6.22.1
    
    the subject of such Warranty Claim has been fairly disclosed in this
Agreement, the Licensed Interest Documents, in the Data Room Documents or
the Disclosure Letter with sufficient details to identify the nature and
scope of the matter disclosed; or6.22.2
    
    allowance, provision or reserve has been made, for the benefit of the
Purchaser, for such Warranty Claim in the Final Completion Statement.
 6.23
    
    Save as set out in this Agreement, the Seller shall not be liable to the
Purchaser for any Warranty Claim or any of them to the extent such Warranty Claim was
increased by or to the extent to which the Warranty Claim arose as a result of an act,
omission or transaction carried out after the date hereof by the Purchaser or the
Purchasers Associated Parties otherwise than:
 6.22.1
    
    in the ordinary and usual course of business, or6.22.2
    
    in pursuance of a legally binding commitment entered into prior to the
date hereof;
 6.24
    
    The Seller shall not be liable in respect of any Warranty Claim to the extent
that such Warranty Claim is attributable to, or is increased as a result of, any
legislation not in force at the date hereof or to any
 34




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change of law, regulation, directive, requirement or administrative practice or
any change in rates of tax, which in each case is not in force at the date
hereof.6.25
    
    If any Warranty Claim shall arise by reason of some liability which at the time
that the Warranty Claim is notified to the Seller is contingent only, the Seller shall
not be under any obligation to make any payment in respect of such Warranty Claim until
such time as the contingent liability ceases to be so contingent.6.26
    
    Notwithstanding any other provision of this Agreement, neither the Seller nor the
Purchaser shall under any circumstances howsoever arising whether arising in contract or
tort (including negligence, breach of duty, statutory or otherwise) be liable to the
other Party under, arising out of or in any way connected with this Agreement or the
Assignment Documents for any Consequential Loss.6.27
    
    If:
 6.27.1
    
    the Seller makes a payment in respect of a Warranty Claim to the
Purchaser (the Damages Payment);6.27.2
    
    at any time after making the Damages Payment the Purchaser or any
Associated Party of the Purchaser receives any sum other than from the
Seller which would not have been received but for the matter or
circumstance giving rise to that Warranty Claim (the Third Party Sum);6.27.3
    
    the receipt of the Third Party Sum was not taken into account in
calculating the Damages Payment; and6.27.4
    
    the aggregate of the Third Party Sum and the Damages Payment exceeds the
amount required to compensate the Purchaser in full for the loss or
liability which gave rise to the Warranty Claim in question (such excess
being the Excess Recovery),
 the Purchaser shall, promptly following receipt of the Third Party Sum by it or
its Associated Party, repay to the Seller an amount equal to the lower of (i)
the Excess Recovery and (ii) the Damages Payment.6.28
    
    The Seller shall not be liable in respect of any Warranty Claim to the extent
that any Taxation for which the Purchaser is now or in the future accountable or liable
to be assessed is reduced or extinguished as a result of the matter giving rise to such
Warranty Claim.6.29
    
    The Purchaser shall refrain from doing, and shall procure that its Affiliates
shall refrain from doing, any act or thing (other than in the ordinary course of
business) which may give rise to a Warranty Claim which would not otherwise arise.
 35




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6.30
    
    None of the limitations in this Clause 6 shall apply to any Warranty Claim which
arises (or to the extent that it is increased) as a consequence of fraud or fraudulent
misrepresentation by the Seller or its Affiliates.6.31
    
    The Warranties, set out in Clauses 6.10.1, 6.10.2, 6.10.3, 6.10.4, 6.10.5,
6.10.6(a), 6.10.7(a) and 6.10.9(a), shall be deemed to have been repeated immediately
prior to Completion.
 7
    
    Ongoing Obligations and Liabilities7.1
    
    At all times from the date hereof (including following Completion), the Seller and the
Purchaser shall use all reasonable endeavours to obtain from the relevant authorities an
irrevocable release of the Seller and each Affiliate of the Seller from its or their
obligations and liabilities under the Petroleum Act 1998 and all notices and regulations
served and issued pursuant thereto (and under any antecedent legislation which is the subject
of consolidation by the said Act), insofar as the same relate to the Interests. For the
avoidance of doubt, the aforesaid obligation shall include procuring release from any Section
29 Notice or Notices issued to the Seller or any of its Affiliates .7.2
    
    The Seller and the Purchaser shall co-operate with each other and execute and deliver to each
other such other instruments and documents and take such other actions as may reasonably be
requested from time to time in order to carry out, evidence and confirm their rights under,
and the intended purpose of, this Agreement.8
    
    AnnouncementsNeither the Seller nor the Purchaser shall (and the Seller and the Purchaser will procure
that no Affiliate shall) be entitled, without the prior written consent of the other, which
consent can be withheld for any reason, to issue or make any public announcement or statement
regarding this Agreement or any transactions contemplated hereby. Notwithstanding the
foregoing provisions and the provisions of Clauses 4.3 and 12, such provisions shall not
apply to the extent that it is necessary for that 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, The London Stock Exchange, the Securities and Exchange Commission or other
securities or regulatory body, or a recognised stock exchange on which that Party or such
Affiliate has its shares or stock listed, in which event the Party proposing to make such an
announcement or statement shall (and in the case of an Affiliate of such Party will procure
that such Affiliate shall), where reasonably practicable, issue a copy thereof to the other
Party prior to its release for approval which approval shall not be unreasonably withheld or
delayed.9
    
    Notices9.1
    
    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
 36




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given if it (or the envelope containing it)
identifies the Party to which it is intended to
be given as the addressee and, in the case of the
Seller, is marked for the attention of the
Manager Business Development  Europe  or such
other person as may be notified to the Purchaser
by the Seller and, in the case of the Purchaser
is marked for the attention of the Director of
Commercial Operations or such other person as
may be notified to the Seller by the Purchaser
and it is:
 9.1.1
    
    delivered personally; or9.1.2
    
    sent by (i) first class post or (ii) the recorded delivery service or (iii)
facsimile transmission
 to the respective addressee or facsimile number shown in Clause 9.4 below or to such other
addresses and/or numbers as a Party may by notice to the other Party expressly substitute
therefore.9.2
    
    Any notice duly given within the meaning of Clause 9 shall be deemed to have been both given
and received:
 9.2.1
    
    if it is delivered in accordance with Clause 9.1.1, on such delivery;9.2.2
    
    if it is duly posted or transmitted in accordance with Clause 9.1.2, by any of
the methods there specified, on the second (or, when sent by airmail, fifth) Business
Day after the day of posting or (in the case of a notice transmitted by facsimile
transmission) upon receipt by the sender of the correct transmission report.
 9.3
    
    For the purposes of this Clause 9, notice shall include any request, demand, instructions
or other document.9.4
    
    The relevant addresses and facsimile numbers for the Parties are as follows:
 The Seller:
    
    Shell U.K. Limited
1 Altens Farm Road,
Nigg,
Aberdeen,
AB12 3FY
Attention: Deal Lead EU
Fax: 01224 881248The Purchaser:
    
    Endeavour Energy UK Limited
114 St Martins Lane
London
WC2N 4BE
Attention: Director of Commercial Operations
Fax: 020 7451 2351
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10
    
    Costs and Expenses10.1
    
    Save as stated in Clause 10.3, the Seller and the Purchaser shall each 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.10.2
    
    Without prejudice to any other rights hereunder, if any amount payable hereunder is not paid
when due, the defaulting Party shall pay an amount equivalent to interest on such amount from
the due date of payment (after as well as before judgement) at a rate equal to two per cent
(2%) above the Agreed Rate calculated on a compounded basis on the accumulated daily balances
at the start of each calendar month.10.3
    
    The Purchaser shall be responsible for payment in a timely fashion of any and all Stamp Duty
Land Tax payable on or in respect of this Agreement, the Assignment Documents, and in respect
of its or their subject matter.10.4
    
    The Purchaser warrants to the Seller that it has incurred no liability, contingent or
otherwise, for brokers or finders fees in connection with this Agreement or the transaction
contemplated by it for which the Seller will have any responsibility.11
    
    Taxation11.1
    
    General
 11.1.1
    
    Notwithstanding any other provisions of this Agreement, the Seller shall retain
access to all books, records and Operators information, which relate to the Interests
for all periods prior to the Completion Date for the purposes of administering their
Taxation affairs and as required by law. The Purchaser shall retain all such books,
records and information received by the Purchaser.11.1.2
    
    The Purchaser shall, as soon as reasonably practicable, ensure that the Seller is
informed of all documentation relating to Taxation in respect of the Interests in
periods prior to the Completion Date delivered to the Purchaser by the Operator
(otherwise than by the Seller) and shall promptly deliver copies of such documentation
which are reasonably required by the Seller for the purposes of the Sellers Taxation
affairs to the Seller.11.1.3
    
    The Seller shall promptly provide the Purchaser with copies of any information or
documents relating wholly or partly to the Interests for periods prior to the
Completion Date which are reasonably required by the Purchaser for the purposes of the
Purchasers Taxation affairs.
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11.2
    
    Allocation of Consideration and Interim Period Adjustment
 11.2.1
    
    The Seller and the Purchaser acknowledge that by transferring the full amount of the
Consideration due to the Seller pursuant to this Agreement, the Purchaser has incurred
expenditure on the various assets indicated by the categories (i) to (iii) of Schedule
2 as established thereunder but only to the extent so established.11.2.2
    
    The Seller and the Purchaser acknowledge that the Interim Period Adjustment is a
reimbursement of receipts and transfer of payments as set out in Schedule 5. The
Purchaser shall be entitled to claim capital allowances on that part of the Interim
Period Adjustment that represents capital expenditure that can attract capital
allowances under CAA2001 and the Seller shall treat the equivalent of the value of any
such expenditure on which the Seller has claimed capital allowances as disposal
receipts for the purposes of CAA2001.11.2.3
    
    The remaining part of the Interim Period Adjustment shall adjust that part of the
Consideration allocated to Licence as detailed in Schedule 2.11.2.4
    
    The Seller and the Purchaser undertake to submit to HMRC computations of liability
to CT on the basis of the provisions of Clause 11.2.1 (and the allocations shown in
Schedule 2) and Clause 11.2.2 and agree that they shall use reasonable endeavours to
agree with HMRC the figures so presented.11.2.5
    
    The Seller covenants that it will treat the allocations in Schedule 2 as disposal
proceeds in the following manner;
 (a)
    
    in respect of the allocation to Plant and machinery, as
part of the disposal value under Section 61(2) CAA2001; and(b)
    
    in respect of the allocation to Mineral exploration and
access, as part of the disposal values under Section 443(4) CAA2001 and/or
Section 423(1) CAA2001 in such proportions as determined by the Seller.
 11.3
    
    Taxation Adjustment
 11.3.1
    
    Pursuant to Clause 3.3.1(d), the Taxation Adjustment shall be computed as being
the net sum of the amounts computed under Clause 11.3.2, and11.3.2
    
    An adjustment in respect of CT shall be made by totalling the sums resulting from
computing fifty per cent (50%) of each of the following amounts:
 (a)
    
    the net expenditures as shown in the Joint Account
Billings or other documentation that support the Cash Calls Adjustment,
excluding all such expenditures that represent capital expenditure that can
attract capital allowances under
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CAA2001. For the avoidance of doubt, such expenditures shall also
exclude any movements to working capital balances;(b)
    
    the Other Cash Receipts Adjustment;(c)
    
    the Other Cash Payments Adjustment as reduced by any part
of such Adjustment that represents capital expenditure that can attract
capital allowances under CAA2001; and
 11.3.3
    
    Each element of the Taxation Adjustment in Clause 11.3.2 shall have the reverse
orientation to the underlying transaction such that positive adjustments shall have a
negative Taxation Adjustment and vice versa.11.3.4
    
    Any changes in the statutory rate of CT applicable after the date of this Agreement
shall require the percentage in Clause 11.3.2 to be amended to reflect the new rate in
respect of adjustments to be made after the effective date of such new tax rates.
 11.4
    
    Taxation on Post Completion Payments and ReceiptsAny payments or receipts made after Completion between the Parties, except for any
payment under Clause 3.10, shall be adjusted for Taxation so as to produce the same
economic result as required by Clause 2.1.11.5
    
    VAT
 11.5.1
    
    All sums payable under this Agreement are exclusive of VAT, which will be added
where applicable and will be payable by the Purchaser on production of a valid VAT
invoice.11.5.2
    
    The Purchaser and the Seller confirm that they are registered or registerable as
taxable persons for the purposes of VAT as at the date of Completion.11.5.3
    
    The Purchaser and the Seller confirm that no election has been made and confirm that
no election will be made prior to the Completion Date under paragraph 2 schedule 10
Value Added Tax Act 1994 in relation to any of the Interests.11.5.4
    
    Notwithstanding that the Parties believe that the sale and transfer hereunder is a
transaction which is outside the scope of VAT by virtue of the Value Added Tax
(Special Provisions) Order 1995, in the event that either the Purchaser or the Seller
is advised in writing by HMRC after full disclosure of all material facts that the
transaction hereunder is subject to VAT, the Purchaser undertakes that, if called upon
to do so by the Seller, it will pay to the Seller on presentation by the Seller of a
VAT invoice any amounts properly due in respect of VAT set out in such invoice within
thirty (30) days of demand.11.5.5
    
    Subject to Clauses 11.5.1 and 11.5.4, any Adjustments pursuant to Clause 3 or
payments or reimbursements pursuant to Clause 6.2 will be subject to VAT where
applicable. However, where payment is due by
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the Seller to the Purchaser, the Parties agree that where any such Adjustment,
payment or reimbursement is made, there is no obligation to adjust the original
VAT charge, provided the Purchaser was entitled to recover all the original VAT
on the supply as input tax.11.5.6
    
    Notwithstanding that the Parties believe that the sale and transfer hereunder is a
transaction which is outside the scope of VAT by virtue of the Value Added Tax
(Special Provisions) Order 1995, if the conditions under Article 5 thereof are not met
the Parties believe that the sale and transfer contemplated hereby is a supply of
services in relation to land situated outside the United Kingdom by virtue of the VAT
(Place of Supply of Services) Order 1992 and is thus outside the scope of UK VAT.
 11.6
    
    Withholding Taxes
 11.6.1
    
    The Seller shall, where required by UK law, withhold tax from any payments made to
the Purchaser to the extent required by such law and, upon written request from the
Purchaser, shall provide a withholding tax receipt or other documentary evidence of
the withholding tax to the Purchaser. The Seller shall undertake to pay such withheld
tax to the relevant authority on a timely basis, whereupon such amount shall be deemed
as payment to the Purchaser and the Seller shall have no further obligation to pay
such amount to the Purchaser.11.6.2
    
    The Purchaser shall, where required by UK law, withhold tax from any payments made
to the Seller to the extent required by such law and, upon written request from the
Seller, shall provide a withholding tax receipt or other documentary evidence of the
withholding to the Seller. The Purchaser shall undertake to pay such withheld tax to
the relevant authority on a timely basis, whereupon such amount shall be deemed as
payment to the Seller and the Purchaser shall have no further obligation to pay such
amount to the Seller.
 11.7
    
    Territorial extension to UK
 11.7.1
    
    Within twenty (20) Business Days after receipt of an invoice from the Seller, the
Purchaser shall reimburse to the Seller any amount paid by the Seller with respect to
the Interests pursuant to any notice under paragraph 4 of schedule 15 of the Finance
Act 1973 received by the Seller after the Economic Date, to the extent that the income
which gave rise to such assessment was for work performed after the Economic Date and
provided further that the Seller has used reasonable endeavours to establish the
validity of the aforesaid notice. The Seller shall indemnify and keep the Purchaser
indemnified for any amount which the Purchaser is required to pay pursuant to any
notice issued under the aforesaid Act and which related to work performed in respect
of the Interests prior to the Economic Date provided the Purchaser has used all
reasonable endeavours to establish the validity of such notice.
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11.7.2
    
    Within twenty (20) Business Days after receipt of invoices from the Purchaser, the
Seller shall reimburse to the Purchaser any amount paid by the Purchaser with respect
to the Interests pursuant to any notice under paragraph 4 of schedule 15 to the
Finance Act 1973 received by the Purchaser after the Economic Date, to the extent that
the income which gave rise to such assessment was for work performed prior to the
Economic Date and provided further that the Purchaser has used all reasonable
endeavours to establish the validity of the aforesaid notice. The Purchaser shall
indemnify the Seller for any amount which the Seller is required to pay pursuant to
any notice issued under the aforesaid Act and which related to work performed in
respect of the Interests on or after the Economic Date.
 12
    
    Confidentiality12.1
    
    The existence of and the terms of this Agreement shall be held confidential by the Parties
and shall not be divulged in any way by a Party to any third party without the prior written
approval of the other Party provided that either Party may, without such approval, disclose
such terms to:
 12.1.1
    
    any outside professional consultants or advisers, upon obtaining a similar
undertaking of confidentiality (but excluding this proviso) from such consultants
and/or advisers;12.1.2
    
    any bank or financial institution from whom such Party is seeking or obtaining
finance, upon obtaining a similar undertaking of confidentiality (but excluding this
proviso) from such bank or institution;12.1.3
    
    the extent required by any applicable laws, the Licence, or the requirements of any
recognised stock exchange in compliance with its rules and regulations;12.1.4
    
    any Government agency lawfully requesting such information;12.1.5
    
    any Court of competent jurisdiction acting in pursuance of its powers;12.1.6
    
    any of its Affiliates who prior to disclosure are informed by the relevant Party of
the confidential nature of the terms of this Agreement and the relevant Party shall
procure that such Affiliate will observe the confidentiality of the terms of this
Agreement; or12.1.7
    
    any Relevant Third Party but only to the extent required to allow the Condition
Precedent in Clause 2.2.1 to be satisfied.
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13
    
    VariationThe 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
    
    AssignmentNone of the rights or the obligations of a Party under this Agreement is assignable or
transferable without the prior written consent of the other Party, save that the Purchaser
is entitled to assign and transfer its rights (but not its obligations) in this Agreement
to an Affiliate of the Purchaser that has taken legal title to the Interests.15
    
    General15.1
    
    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.15.2
    
    Without prejudice to the provisions of Clause 6.13, this Agreement shall remain in full force
and effect notwithstanding Completion.15.3
    
    No waiver by the Seller or the Purchaser 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.15.4
    
    This Agreement (together with the Assignment Documents) represents the entire understanding,
and constitutes the whole agreement in relation to its subject matter and, except in the case
of fraud, supersedes any previous agreement understanding, undertaking, representation,
warranty and arrangement of any nature between the Parties (or any of them) with respect
thereto.15.5
    
    This Agreement shall inure to the benefit of and be binding upon the respective successors
and permitted assigns of the Parties.15.6
    
    Any term or provision of this Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or provision in any
other situation or in any other jurisdiction.15.7
    
    This Agreement may be executed in any number of counterparts and by the Parties on different
counterparts but shall not be effective until each Party has executed at least one (but not
necessarily the same) counterpart. Each counterpart shall constitute an original of this
Agreement but all counterparts together shall constitute one and the same agreement.
 43




---



##### 



16
    
    Rights of Third PartiesSave for the indemnities and other provisions of Clause 6 which are expressed to be for the
benefit of the Sellers or the Purchasers Associated Parties, no term of this Agreement is
enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a
party to this Agreement, provided that in no way shall the foregoing operate to prevent or
restrict the enforcement of this Agreement by any Party for the benefit of an Affiliate of
such Party or any other third party. The Parties may by agreement rescind or vary any term
of, this Agreement without the consent of any of the Sellers or the Purchasers Associated
Parties.17
    
    Governing LawThe construction validity and performance of this Agreement and all agreements executed
pursuant hereto shall be governed by English law and the Parties hereby irrevocably submit
to the exclusive jurisdiction of the English Courts.
 IN WITNESS
 SIGNED  SHELL U.K. LIMITED
 /s/ Michael SmithSIGNEDfor and on behalf ofENDEAVOUR ENERGY UK LIMITED/s/ Carl Grenz
 44




---



##### 



Schedule 1
The Licence, the Licensed Interest Documents
and other related information
 (1)
    
    LicenceUnited Kingdom Petroleum Production Licence number P.255 dated 30th
November 1977(2)
    
    Licensees and Percentage Interests
 JOA PercentageLicence/ Block
    
    Licensee
    
    InterestP.255, Block 22/6a
North
    
    Shell U.K. Limited
    
    
    20.00
    %Apache North Sea Limited
    
    
    50.00
    %Endeavour Energy UK Limited
    
    
    10.00
    %First Oil Expro Limited
    
    
    20.00
    %
 (3)
    
    JOAJoint Operating Agreement for UKCS Licence No. P.255 Block 22/6a(North)(4)
    
    OperatorApache North Sea Limited(5)
    
    Licensed Interest Documents
 Doc ReferenceNo
    
    Doc Title and DateEP00106-24
    
    Deed of Assignment in respect of various Shell / Esso Licences
(Signed 27/09/83 ) CopyEP00425-00
    
    Licence to Search and Bore for and Get Petroleum in Block Nos 28/1a,
30/14, 30/19a, 30/20 and Part of 22/6a (Signed 30/11/77)EP00425-01
    
    Deed of Variation Relating to Petroleum Production Licence P255
Blocks 28/1A, 30/14, 30/19A, 30/20 and Part 22/6A (Signed 14/05/85)EP00425-03
    
    Schedule Licence Number P255 Schedule of retained Area from 25
November 1987 (Signed 08/12/87)EP00425-04
    
    UK Continental Shelf Licence P255 Blocks 30/14, 30/19a, 30/20 and
Part 22/6a Joint Operating Agreement (Signed 16/06/89)EP00425-05
    
    Supplemental Agreement to P255 Operating Agreement Amendment (Signed
12/07/89)
 45




---



##### 



Doc ReferenceNo
    
    Doc Title and DateEP00425-08
    
    Deed of Assignment of UK Petroleum Production Licence Number P255
iro Farm Out of Shell/Esso Interest to FINA (Signed 12/07/89)EP00425-13
    
    Trust Deed Relating to UK Petroleum Production Licence Number P255
(Signed 17/12/91)EP00425-14
    
    Second Supplemental Agreement to P255 Operating Agreement (Signed
17/12/91)EP00425-15
    
    Schedule Licence Number P255 Schedule of retained Area from 25
November 1991 Block 22/6A (Signed 18/11/91)EP00425-18
    
    Deed of Novation of Trust Deed Relating to UK Petroleum Production
Licence Number P255 (Signed 23/04/92)EP00425-20
    
    Deed of Assignment of UK Petroleum Production Licence Number P255
(Signed 23/04/92)EP00425-38
    
    Deed of Novation of Trust Deed Relating to UK Petroleum Production
Licence Number P255 (Signed 20/09/96)EP00425-40
    
    Deed of Assignment of United Kingdom Petroleum Production Licence
Number P255 (Signed 20/09/96)EP00425-45
    
    Deed of Novation of Trust Deed Relating to UK Petroleum Production
Licence P255 (Signed 20/03/98)EP00425-48
    
    Deed of Licence Assignment Relating to UK Petroleum Production
Licence P255(Signed 20/03/98)EP00425-49
    
    Supplemental Deed to Trust Deed Relating to United Kingdom Production
Licence Number P255 (Signed 31/05/00)EP00425-51
    
    Deed of Licence Assignment of United Kingdom Production Licence
Number P255 (Signed 31/05/00)EP01001-99
    
    Execution Deed for United Kingdom Petroleum Production Licence P255
Dated 30 November 1977 and UK Continental Shelf Licence P255
Operating Agreement Dated 16 June 1989 (Signed 22/10/04) Certified
CopyEP01011-42
    
    Execution Deed iro United Kingdom Petroleum Production Licence P255
and Affected Petroleum Agreements (Signed 10/05/05) Certified CopyEP01015-20
    
    Execution Deed re UK Petroleum Production Licence P255 Block 30/19a
and Affected Petroleum Agreements (Signed 26/09/05) Certified CopyEP01015-21
    
    Execution Deed re UK Petroleum Production Licence P255 Block 30/19a
and Affected Petroleum Agreements (Signed 26/09/05) Certified CopyEP01023-53
    
    Joint Operating Agreement for UKCS Licence No P255 Block 22/6a
(North) (Signed 15/09/06) (2 Original Copies Signed in Counterpart)EP01023-54
    
    Deed of Assignment iro United Kingdom Petroleum Production Licence No
P255 (Signed 15/09/06) Copy (Six Originals Signed in Counterpart)EP01023-55
    
    Trust Deed re United Kingdom Petroleum Production Licence P255
(Signed 15/09/06) Copy (Six Originals Signed in Counterpart 2 Apache
copies)EP01023-68
    
    Transfer of Operatorship Agreement iro UK Petroleum Production
Licence No P255 Block 22/6a North (excluding the Nelson Field)
(Signed 15/09/06) (2 originals signed in counterpart)EP01025-75
    
    Deed of Novation of Trust Deed re UK Petroleum Production Licence
P255 (Signed 08/12/06)EP01025-76
    
    Deed of Assignment iro United Kingdom Petroleum Production Licence
P255 (Signed 08/12/06)EP01025-77
    
    Novation of Joint Operating Agreement re UK Petroleum Production
Licence P255 Block 22/6a North (Signed 08/12/06)
 46




---



##### 



Doc ReferenceNo
    
    Doc Title and DateEP01048-83
    
    Bacchus Field Transportation Processing and Operating Services
Agreement between Apache North Sea Limited, Endeavour Energy UK
Limited and Shell U.K. Limited (Signed 14/06/10) Certified CopyEP01048-84
    
    Bacchus Field Construction and Tie-In Agreement between Apache North
Sea Limited, Endeavour Energy UK Limited and Shell U.K. Limited
(Signed 14/06/10) Certified CopyEP01048-85
    
    Decommissioning Security Agreement re the Bacchus Field between
Apache North Sea Limited, Shell U.K. Limited and Endeavour Energy UK
Limited (Signed 14/06/10)EP01050-58
    
    Execution Deed re UK Petroleum Production Licence P255 Block 22/6a
North and Affected Petroleum Agreements (Signed 29/10/10) Certified
CopyEP00309-00
    
    Unit Operating Agreement Forties Field UK Continental Shelf
(effective date 01/01/84)EP00309-26
    
    Amendment to Forties Field Unit Operating Agreement (signed 15/03/95)EP00309-18
    
    Amendment to Unit Operating Agreement Forties Field (signed 10/08/92)EP00309-07
    
    Unit Operating Amendment Agreement (Forties Field) (signed 01/07/86)[]
    
    Amending Agreement to Forties Field Unit Operating Agreement (signed
15/09/06)[]
    
    Letter Agreement supplemental to a Farm-Out Agreement of 10/12/04
(signed 16/05/05)[]
    
    Schedule of Retained Area (ref 08/03/06/572) (effective date 23/11/09)
 47




---



##### 



Schedule 2
 Allocation of Consideration for Taxation Purposes
 ALLOCATION OF INITIAL PURCHASE PRICE AND THE DEFERRED
PURCHASE PRICE PER CLAUSE 3.1.1
 POUNDS(i) Plant and machinery
    
    £(ii) Mineral exploration and access
    
    £(iii) Licence
    
    £10,000,000Totals
    
    £10,000,000
 1.
    
    In allocating Consideration for Taxation purposes, the Initial Purchase Price and Deferred
Purchase Price per Clause 3.1.1(a), the Working Capital Adjustment per Clause 3.1.1(b) and the
Time Value Adjustment per Clause 3.1.1(c) shall be fully allocated to Licence under (iii)
above.2.
    
    The total Interim Period Adjustment less such expenditures that represent capital expenditure
qualifying for capital allowances under CAA2001 shall be fully allocated to Licence under
(iii) above. Such expenditure that represents capital expenditure that does qualify for
capital allowances under CAA2001 shall be allocated to Plant and Machinery under (i) above.3.
    
    Any amount equivalent to interest payable under Clause 3.14.2 shall be allocated to Licence
under (iii) above.4.
    
    For the avoidance of doubt, any sums that may become payable pursuant to a warranty claim
under Clause 6 shall be added to or deducted from Licence under (iii) above except to the
extent that the warranty specifically relates to (i) or (ii) above.5.
    
    In allocating the Working Capital Adjustment, the Time Value Adjustment, the Interim Period
Adjustment, the amount equivalent to interest under Clause 3.14.2, and any adjustment required
under Clause 6 in the manner set out in this Schedule, the final amount allocated to the
Licence under (iii) above shall not be a negative
 48




---



##### 



amount. Should the aggregate of the Working Capital Adjustment, the Time Value Adjustment,
Interim Period Adjustment, the amount equivalent to interest under Clause 3.14.2 and any
adjustment required under Clause 6 to be allocated to the Licence under (iii) above exceed the
amount of the Consideration under Clause 3.1.1 allocated to the Licence, the remainder shall be
allocated to Plant and Machinery under (i) above.
 49




---



##### 



Schedule 3
Working Capital
Part A
 1.
    
    Pursuant to Clause 3.5 of this Agreement, the Working Capital Adjustment for the Interests
shall be computed in accordance with the provisions of this Schedule, by:
 1.1.
    
    adding together the amounts, as valued at the Economic Date, of the:
 1.1.1.
    
    Cash Balances, VAT Receivable and Other Assets on the Joint Account; and1.1.2.
    
    Benefits under paragraph 3 below,
 (the Positive Balance) for the Interests; and
 1.2.
    


    adding together the amounts, as valued at the Economic Date, of the:
 1.2.1.
    
    overdraft balance, VAT Payable, Accruals and Other Liabilities on the Joint
Account; and1.2.2.
    
    Obligations under paragraph 3 below,
 (the Negative Balance) for the Interests; and
 1.3.
    
    deducting the Negative Balance from the Positive Balance.
 2.
    
    Elements on Joint AccountThe elements of working capital on Joint Account to be included in this Working Capital
Adjustment shall be all of the items of current assets and current liabilities listed in Joint
Account Billings or other documentation from the Operator. These shall include, but not be
limited to, the items set out in the Exhibit in Part B to this Schedule where such items shall
have the following meanings:Accruals:means the amounts accrued in accordance with the Accruals Basis of Accounting by
the Joint Account but unpaid;Cash Balances:means cash balances held by the Joint Account;Other Assets:means other assets due to the Joint Account but not received by the Joint
Account;Other Liabilities:means the other liabilities accrued in accordance with the Accruals Basis
of Accounting by the Joint Account but unpaid;VAT Receivable/Payable:means VAT due to/from the Joint Account but not recovered/paid.
 50




---



##### 



3.
    
    Elements of Working CapitalThe elements of working capital not on Joint Account to be included in this Working
Capital Adjustment shall be Obligations and Benefits based on the principles in paragraph
2 as recorded in the accounts of the Seller (other than on the Joint Account).4.
    
    Valuation of elements
 4.1.
    
    All elements on Joint Account shall be valued as the amounts shown in the Joint
Account Billings or other documentation from the Licence Operator as at the date in
question. All other elements of working capital shall be valued by the Seller as at the
date in question based on appropriate supporting documentation to be provided by the
Seller.4.2.
    
    Valuation of Obligations and Benefits:
 4.2.1
    
    Subject to paragraph 4.2.2 below, the value of Obligations and
Benefits valued under paragraph 3 above shall be included in the Exhibit to this
Schedule without any reduction for Taxation.4.2.2
    
    Any Obligations and Benefits valued under paragraph 3 above shall be
adjusted to account for Taxation as follows:
 (a)
    
    to the extent that the Obligation represents
operating expenditure that can obtain a revenue deduction for CT, the
value shall be reduced by fifty per cent (50%);(b)
    
    to the extent that the Benefit represents a receipt
or credit of a revenue nature for CT, the value shall be reduced by fifty
per cent (50%).
 51




---



##### 



Schedule 3
Part B  EXHIBIT
Form of Working Capital Adjustment Statement
 Elements on Joint Account
 100%
    
    
    Effective
    
    
    Interest
    
    
    InterestJoint Venture
    
    
    Interest
    
    
    Share
    
    
    Share£
    
    
    %
    
    
    £
    
    
    $InterestCash BalancesVAT Receivable/PayableOther AssetsAccrualsOther LiabilitiesTotalInterestCash BalancesVAT Receivable/PayableOther AssetsAccrualsOther LiabilitiesTotalElements on Sellers AccountsTotal on Sellers AccountsTOTAL WORKING CAPITAL
 52




---



##### 



Schedule 4
 Form of Working
Interest Assignment
 Dated  20[]
 (1) SHELL U.K. LIMITED
AND
(2) ENDEAVOUR ENERGY UK LIMITED
 
 INTEREST ASSIGNMENT IN RESPECT OF LICENCE P.255,
BLOCK 22/6a NORTH




---



##### 



THIS DEEDis made this
    
    day of
    
    20[ ]
 BETWEEN:
 (1)
    
    SHELL U.K. LIMITED, whose registered office is situated at Shell Centre, London, SE1 7NA
(Seller); and(2)
    
    ENDEAVOUR ENERGY UK LIMITEDwhose registered office is situated at 33rd Floor City Point,
One Ropemaker Street, London, EC2Y 9UE (Purchaser).
 WHEREAS:
 (A)
    
    The Seller and the Purchaser have agreed pursuant to an agreement dated [          ] (the
Agreement) that, inter alia, the Seller shall assign and transfer to the Purchaser the
Interests.(B)
    
    The Secretary of State for Energy and Climate Change has given all necessary approvals to
this Deed.
 NOW IT IS HEREBY AGREED:
 1.
    
    In this Deed, terms defined in the Agreement shall have the meaning ascribed thereto in the
Agreement.2.
    
    With effect on and from the date hereof, the Seller hereby assigns the Interests to the
Purchaser and the Purchaser hereby accepts the Interests.3.
    
    This Deed shall be governed by and construed in accordance with English law.
 IN WITNESS WHEREOF




---



##### 



Schedule 5
 Interim and Final Completion Statement Formats
 STATEMENT OF SETTLEMENT BALANCES
 Clause/
    
    Amount
    
    Amount
    
    
    Amount
    
    AmountDescription
    
    Schedule
    
    £
    
    £
    
    
    $
    
    $Base ConsiderationConsideration
    
    Clause 3.1.1Working Capital Adjustment
    
    Clause 3.5, Schedule 3
    
    +/-Time Value Adjustment
    
    Clause 3.14.1Interim Period AdjustmentCash Calls Adjustment
    
    Clause 3.6
    
    +/-
    
    
    
    
    
    +/-Other Cash Payments Adjustment
    
    Clause 3.7
    
    +
    
    
    
    
    
    ++/-
    
    
    
    
    
    +/-Other Cash Receipts Adjustment
    
    Clause 3.8
    
    -
    
    
    
    
    
    -+
    
    
    
    
    
    ++
    
    
    
    
    
    +Taxation Adjustment
    
    Clause 11.3
    
    +/-
    
    
    
    
    
    +/-Adjustment equivalent to interest
    
    Clause 3.14.2
    
    +/-
    
    
    
    
    
    +/-Settlement Balances
    
    
    
    £
    
    
    
    
    
    $




---



##### 



Schedule 6
 Work Programmes and Budgets
 Bacchus Project Monthly Report #1
Cut-off date 30 September 2010
 1.
    
    PROJECT DESCRIPTIONThe Bacchus project comprises three subsea production wells tied back to the Forties Alpha
platform via a 6.8km subsea bundle containing production, produced water reinjection/heating,
gas lift, scale squeeze, methanol pipelines, HP/LP hydraulics, future chemicals and
power/signal cabling. The subsea isolation valve towhead is an integral part of the bundle
within the 500m safety zone. The topsides modifications include piping systems, pig traps,
high integrity pressure protection system, multiphase flow meter, methanol and biocide
packages, controls/fire and gas upgrades. The subsea control system incorporates hydraulic
power unit and master control station to the topsides scope of work.2.
    
    EXECUTIVE SUMMARY
 2.1
    
    Health, Safety and Environment
 
    
    No injuries.
    
    Project HSE Plan achieved progress is 28%.
    
    Subsea 7 HSE-MS audit was completed with no major findings.
 2.2
    
    Summary of Work in Period
 
    
    The caisson riser was successfully installed to the Forties Alpha platform.
    
    Significant focus on project plan integrity and reporting capability.
    
    Conducted successful HSE management visits to Isleburn, Invergordon and Subsea 7
Wester to review towhead and pipeline bundle fabrication progress.
 2.3
    
    Overall Progress and Cost
 
    
    Overall activity progress is 42% complete (Appendix B).
    
    Approved AFE value = £48,466k (Appendix C).
    
    Actual spend since inception to date = £31,447k (Appendix C).
    
    Estimated final cost = £143,720k (Appendix C).




---



##### 



3.
    
    PERIOD PROGRESS
 3.1
    
    Subsurface
 
    
    Pre-drill data packages and input to well planning progressed.
 3.2
    
    Drilling and Completions
 
    
    Drill centre location and tree/well running sequence is subject of clarification
pending installation method confirmation by Apache drilling/Rowan
    
    Well planning progressed. Alternate well trajectories and drilling of pilot holes
are being evaluated to reduce the risk of finding and completing in the reservoir.
These will we discussed with the JV at a wells TCM in November.
    
    Rowan Gorilla VII expected to be ready leave Dundee for Forties Echo around
20th October.
 3.3
    
    Subsea Pipelines
 
    
    Subsea 7 replaced its project manager due to ill health.
    
    Successfully installed the Bacchus riser caisson and clamps.
    
    Commenced pipeline bundle fabrication at Subsea 7s Wester site and completed
100% of outer carrier pipe welding.
    
    Commenced Bacchus and SSIV bundle towhead fabrication.
 3.4
    
    Topsides Modifications
 
    
    Topsides preparation works and temporary installations completed for subsea
clamps and caisson pull-in.
    
    Completed HIPPS system SIL/LOPA assessments, indicating SIL2 rather than SIL3
assumed by FEED deliverables.
    
    Completed ESD valve bid evaluation, recommendation and purchase documents
prepared for issue ahead of purchase order placement.
    
    Received bids for control valves for technical and commercial evaluation.
    
    Received final vendor clarification responses on multi-phase flow meter and
methanol package.
    
    Agreed an alternative location to the FEED proposal for methanol package,
reducing installation difficulty and destruct at south side of old MOL turbine
exhausts.
    
    Facilities Execution (refer to project report for detail)
    
    The timing of the Forties Alpha shutdown in 2011, when many of the Bacchus
tie-ins will be completed is being revised. The timing of Bacchus completion will
not be impacted
 3.5
    
    Subsea Trees/Controls




---



##### 




    
    Completed site receipt testing of Bacchus trees.
    
    Completed master control station hardware factory acceptance test.
    
    Continuedthe build of the subsea distribution unit and subsea control
module-mounting base.
 3.6
    
    Commercial & Legal
 
    
    Progressed allocation and back-out arrangements.
    
    Progressed negotiations with BP re FPS transportation & processing and raw gas
sale and purchase agreements.
 Appendices




---



##### 



Appendix A: HSE Performance Report& Statistics
 Positives:
 
    
    Achieved injury free month
    
    Achieved incident free caisson installation at Forties Alpha
    
    HSE Plan 28% complete
    
    Subsea 7 HSE-MS audit completed with no major findings
 Negatives:
 
    
    One Non Injurious Incident occurred during tug demobilisation activities at Invergordon
when forklift damaged caisson protective coating.
 Incident statistics:
 ProjectINCIDENT
    
    Monthly
    
    AccumulativeCLASSIFICATION
    
    Performance
    
    PerformanceLTI
    
    
    0
    
    
    
    0MTC
    
    
    0
    
    
    
    1RWC
    
    
    0
    
    
    
    0FAC
    
    
    0
    
    
    
    0NII
    
    
    1
    
    
    
    2NM
    
    
    0
    
    
    
    0
 Legend:LWC
    
    Lost Work CaseMTC
    
    Medical Treatment CaseRWC
    
    Restricted Work CaseFAC
    
    First Aid CaseNII
    
    Non injurious IncidentNM
    
    Near Miss INCIDENT STATUS
 Company /Date
    
    Location
    
    Incident Description
    
    ClassificationAug 12, 2010
    
    RBG Invergordon
    
    Uncontrolled movement of winch during caisson pull as a result of base plate weld failure due to overload.
    
    NIIAug 23, 2010
    
    RBG (HCS) Invergordon
    
    IP Burned hand on touching space heater exhaust when he tripped over habitat scaffold frame.
    
    MTCSep 11, 2010
    
    RBG Invergordon
    
    Uncertified forklift driver hit caisson damaging protective coating during tug demoblisation activities
    
    NII




---



##### 



Appendix A:
HSE Performance Report & Statistics (continued)




---



##### 



Appendix B: Level 1 Project Schedule




---



##### 



Appendix C: Cost Report
 MANAGEMENT INFORMATION - BACCHUS DEVELOPMENTMONTH:Block 22/6a (North) - Licence P255
    
    
    
    
    
    Sep-10ApprovedITD
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Development
    
    Estimated(All figures GBP 000s)
    
    Approved AFE
    
    Expenditure
    
    Phasing of Expenditure to Date and Estimate to Complete
    
    Budget
    
    Final Cost
    
    Variance2010
    
    20111Q
    
    2Q
    
    3Q
    
    4Q
    
    1Q
    
    2Q
    
    3Q
    
    4QConstructionBA-10-079-01
    
    FEED Pre Sanction
    
    
    752
    
    
    
    752
    
    
    
    0
    
    
    
    768
    
    
    
    (16
    )
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    752
    
    
    
    752
    
    
    
    0BA-10-079-02
    
    Detailed Design & Procurement Pre Sanction
    
    
    3,970
    
    
    
    3,970
    
    
    
    0
    
    
    
    0
    
    
    
    3,970
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    3,970
    
    
    
    3,970
    
    
    
    (1
    )no AFE
    
    Project Execution Pre Sanction
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,500
    
    
    
    0
    
    
    
    (5,500
    )X
    
    Project Management
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    3,743
    
    
    
    896
    
    
    
    758
    
    
    
    834
    
    
    
    376
    
    
    
    4,889
    
    
    
    6,607
    
    
    
    1,719X
    
    Topsides
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    4,850
    
    
    
    2,123
    
    
    
    1,750
    
    
    
    647
    
    
    
    0
    
    
    
    4,207
    
    
    
    9,370
    
    
    
    5,163BA-10-079-03
    
    Subsea
    
    
    43,743
    
    
    
    26,725
    
    
    
    0
    
    
    
    0
    
    
    
    26,725
    
    
    
    6,292
    
    
    
    5,860
    
    
    
    3,850
    
    
    
    3,980
    
    
    
    1,710
    
    
    
    45,801
    
    
    
    48,416
    
    
    
    2,616X
    
    Subsea Controls
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    1,103
    
    
    
    2,215
    
    
    
    373
    
    
    
    0
    
    
    
    0
    
    
    
    3,234
    
    
    
    3,692
    
    
    
    458Drillingno AFE
    
    Drilling Engineering
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    615
    
    
    
    0
    
    
    
    (615
    )X
    
    Well 1
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    580
    
    
    
    12,700
    
    
    
    12,109
    
    
    
    0
    
    
    
    0
    
    
    
    23,910
    
    
    
    25,389
    
    
    
    1,479X
    
    Well 2
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    580
    
    
    
    1,500
    
    
    
    19,700
    
    
    
    119
    
    
    
    0
    
    
    
    20,664
    
    
    
    21,899
    
    
    
    1,235X
    
    Well 3
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    580
    
    
    
    1,400
    
    
    
    21,000
    
    
    
    645
    
    
    
    21,802
    
    
    
    23,625
    
    
    
    1,823Total Expenditure
    
    
    
    
    48,466
    
    
    
    31,447
    
    
    
    0
    
    
    
    768
    
    
    
    30,679
    
    
    
    17,148
    
    
    
    25,874
    
    
    
    39,940
    
    
    
    26,580
    
    
    
    2,731
    
    
    
    135,343
    
    
    
    143,720
    
    
    
    8,377




---



##### 



Appendix D: Photographs
 
 Caisson pull-in operation
 
 Caisson successfully seated in the dead weight support
 64




---



##### 



Appendix D: Photographs (continued)
 
 Bundle outer sheath extended across the Wester site landscape
 65




---



##### 



Bundle internal carrier pipe alignment and pre-heat activity
 Appendix D: Photographs (continued)
 
 66




---



##### 



Inland site workshop bundle assembly line
 
 Bundle internal and outer sheath pipelines on Wester site tracks
 67




---



##### 



APACHE
NORTH SEA LTD
 MANAGEMENT INFORMATION - BACCHUS DEVELOPMENTMONTH:Block 22/6a (North) - Licence P255
    
    
    
    
    
    Sep-10Approved
    
    
    
    
    
    
    
    
    
    
    
    
    
    WorstApproved
    
    ITD
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Development
    
    Estimated
    
    
    
    
    
    
    
    
    
    Case(All figures GBP 000s)
    
    AFE
    
    Expenditure
    
    Phasing of Expenditure to Date and Estimate to Complete
    
    Budget
    
    Final Cost
    
    Variance
    
    Comments
    
    EFC2010
    
    20111Q
    
    2Q
    
    3Q
    
    4Q
    
    1Q
    
    2Q
    
    3Q
    
    4QConstructionBA-10-079-01
    
    FEED Pre Sanction
    
    
    752
    
    
    
    752
    
    
    
    0
    
    
    
    768
    
    
    
    -16
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    752
    
    
    
    752
    
    
    
    -0
    
    
    
    
    
    
    
    752BA-10-079-02
    
    Detailed Design & Procurement Pre Sanction
    
    
    3,970
    
    
    
    3,970
    
    
    
    0
    
    
    
    0
    
    
    
    3,970
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    3,970
    
    
    
    3,970
    
    
    
    -0
    
    
    
    
    
    
    
    3,970x
    
    Project Management
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    3,743
    
    
    
    896
    
    
    
    758
    
    
    
    834
    
    
    
    376
    
    
    
    6,669
    
    
    
    6,607
    
    
    
    -62
    
    
    
    
    
    
    
    6,607x
    
    Topsides
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    4,850
    
    
    
    2,123
    
    
    
    1,750
    
    
    
    647
    
    
    
    0
    
    
    
    4,727
    
    
    
    9,370
    
    
    
    4,643
    
    
    Change in materials
    
    
    9,370BA-10-079-03
    
    Subsea
    
    
    43,743
    
    
    
    26,725
    
    
    
    0
    
    
    
    0
    
    
    
    26,725
    
    
    
    6,292
    
    
    
    5,860
    
    
    
    3,850
    
    
    
    3,980
    
    
    
    1,710
    
    
    
    48,541
    
    
    
    48,416
    
    
    
    -124
    
    
    
    
    
    
    
    48,416x
    
    Subsea Controls
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    1,103
    
    
    
    2,215
    
    
    
    373
    
    
    
    0
    
    
    
    0
    
    
    
    3,594
    
    
    
    3,692
    
    
    
    98
    
    
    
    
    
    
    
    3,692Drillingx
    
    Well 1
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    580
    
    
    
    12,700
    
    
    
    12,109
    
    
    
    0
    
    
    
    0
    
    
    
    24,148
    
    
    
    25,389
    
    
    
    1,241
    
    
    
    
    
    
    
    25,389x
    
    Well 2
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    580
    
    
    
    1,500
    
    
    
    19,700
    
    
    
    119
    
    
    
    0
    
    
    
    20,902
    
    
    
    21,899
    
    
    
    997
    
    
    
    
    
    
    
    21,899x
    
    Well 3
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    580
    
    
    
    1,400
    
    
    
    21,000
    
    
    
    645
    
    
    
    22,040
    
    
    
    23,625
    
    
    
    1,584
    
    
    
    
    
    
    
    23,625Total Expenditure
    
    
    
    
    
    
    48,466
    
    
    
    31,447
    
    
    
    0
    
    
    
    768
    
    
    
    30,678
    
    
    
    17,148
    
    
    
    25,874
    
    
    
    39,940
    
    
    
    26,580
    
    
    
    2,731
    
    
    
    135,343
    
    
    
    143,720
    
    
    
    8,376
    
    
    
    
    
    
    
    143,7206.2
    %
 68