EXHIBIT 10.37
                             PARTICIPATION AGREEMENT

THIS AGREEMENT is made as of this 22nd day of January, 2004. BETWEEN:

(1)      ALADDIN MIDDLE EAST LTD ('AME'), a corporation organized and existing
         under the laws of the State of Delaware in the U.S.A., having offices
         in the city of Ankara and in the city of Wichita, Kansas, which is the
         designated Operator of all Sayer Group Consortium Exploration Licenses
         and Production Leases in Turkey, ERSAN PETROL SANAYII A.S. ('ERSAN'), a
         corporation existing under the laws of the Republic of Turkey, having
         its head office in the city of Ankara, TRANSMEDITERRANEAN OIL COMPANY
         LTD. ('TMO'), a corporation existing under the laws of the British
         Columbia, Canada, having head office in the city of Vancouver, Canada,
         GUNEY YILDIZI PETROL URETIM SONDAJ MUTEAHHITLIK ve TICARET A.S.
         ('GYP'), a corporation existing under the laws of the Republic of
         Turkey, having head office in the city of Adiyaman (hereinafter
         collectively referred to as the SAYER GROUP CONSORTIUM ('SGC')); and

(2)      AVENUE ENERGY INC., a corporation organized and existing under the laws
         of the State of Delaware in the U.S.A., having offices at Sherman Oaks,
         CA, USA at 15303 Ventura Blvd., 9th Fl. Sherman Oaks, CA, USA and in
         Australia at 34-36 Punt Road, Windsor, Melbourne, Australia,
         (hereinafter referred to as 'Avenue'); and

(3)      MIDDLE EAST PETROLEUM SERVICES LIMITED a corporation organized and
         existing under the laws of the Isle of Man, United Kingdom, having its
         registered office at Norton House, Farrants Way, Castletown, Isle of
         Man, 1M9 INR, British Isles and its representative office at Level 1,
         30 Patrick Street, Hobart 7000, Tasmania, Australia (hereinafter
         referred to as 'MEPS').

RECITALS:

(A)      On 14 November 2002 the Parties entered into a Farmin and Participation
         Agreement dated 14 November 2002 (as amended by amending agreements
         dated 20 December 2002 and 31 July 2003, and as supplemented by
         Memorandum of Understanding between the parties dated 22 May 2003, the
         'FPA').

(B)      Pursuant to the FPA, Avenue holds a 45% Participating Interest in each
         of the Tosun Licence and the Karakilise Licence and has validly
         exercised the options granted to it under clause 5 of the FPA (the
         "Kahta Option"), clause 6.1 of the FPA (the 'Clause 6.1 Option'), and
         clause 6.6(c) of the FPA (the 'Tethys Option').

(C)      Pursuant to the terms of the FPA, AME holds in trust for MEPS a 10%
         Participating Interest in both the Tosun Licence and the Karakilise
         Licence, and at closing of the Clause 6.1 Option is required to hold in
         trust for MEPS a 10% Participating Interest in the Licenses the subject
         of the Clause 6.1 Option, and at closing of the of the Kahta Option is
         required to hold in trust for MEPS a 10% Participating Interest in the
         Avenue Kahta Wells and (as modified by this Agreement) the Kahta Lease
         and pursuant to .Clauses 6.3 and 7.6 of the FPA AME is required to hold
         in trust for MEPS a 10%

         Participating interest in Future License Applications (the
         Participating Interests so held, or to be held, in trust for MEPS,
         (which, for the avoidance of doubt MEPS was not required to fund the
         Joint Operating Expenses in relation to such Participating Interests),
         being referred to herein as the 'MEPS Carried Interests').

(D)      The Parties wish to record their agreement regarding, inter alia:

         (a)      the entering into of a Joint Operating Agreement in relation
                  to the Karakilise License;

         (b)      the procedures for closing of the Clause 6.1 (a) Option and
                  the Tethys Option;

         (c)      the replacement of the MEPS Carried Interests with the MEPS
                  Royalty Interest; and

         (d)      the amendment and restatement of the Joint Operating Agreement
                  relating to the Tosun License; and

         (e)      the termination of the FPA.

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         NOW, THEREFORE, for and in consideration of the terms, conditions and
covenants herein set forth, the Parties agree as follows:

1.       Definitions and interpretation

         1.1      Definitions

         In this Agreement:

         Affiliate means, with respect to any Person, any other Person that (a)
         owns or controls the first Person, (b) is owned or controlled by the
         first Person, or (c) is under common ownership or control with the
         first Person, where 'own' means a direct or indirect ownership of more
         than 50% of the equity interests or rights to distributions on account
         of equity of the Person and 'control' means the direct or indirect
         power to direct the management or policies of the Person, whether
         through the ownership of voting securities, by contract, or otherwise.

         Application means an application for an Exploration License or
         Production Lease made under and in accordance with the Petroleum Law.

         Avenue Kahta Wells has the meaning specified in clause 3.2(a).

         Clause 6.1 Option has the meaning specified in recital B.

         Communication has the meaning specified in clause 15.1.

         Encumbrance means a lien, claim, encumbrance, security interest,
         option, charge or restriction of any kind, but excludes the ERSAN
         Royalty Interest and the MEPS Royalty Interest.

         ERSAN Royalty Interest means the right of ERSAN to a 2.5% overriding
         royalty interest in petroleum produced from the Exploration Licenses,
         (except for the Tethys Licenses where the overriding royalty is
         proportionately reduced to the SGC and Avenue Participating Interests
         and does not burden Tethys' Participating Interest), and other than the
         Gercus Licenses).

         Excluded Areas means all areas within, or within three kilometres of,
         the boundary of the areas covered by:

         (a)      Zeynel & Nemrut Fields: Petroleum District XII Gaziantep,
                  Production Lease No: ARI/AME-TMO/3170-3215;

         (b)      South Mardin: Petroleum District XI, Diyarbakir, Exploration
                  Licenses No: AR/AME-SEC/ 3730, 3731, 3732, 3733, 3763, 3764,
                  3765, 3766 and 3767; and

         (c)      Bulgurdao Field: Petroleum District XIV Adana, Production
                  Lease No: IR/EPS/723 & 724.

         Exploration License means a License issued under the Petroleum Law and
         conferring on the holder the rights set out in Article 50 of the
         Petroleum Law.

         FPA has the meaning specified in recital A.

         Gercus Licenses means Exploration Licenses AR/EPS-GYP 3749 and 3750 in
         Petroleum District X, Siirt in the Republic of Turkey.

         Gercus Royalty Interest means the royalty arrangement with HOS
         GeoConsult GmbH in the amount of a 3% overriding royalty in respect of
         the Gercus Licenses.

         GDPA means the General Director of Petroleum Affairs of the Republic of
         Turkey, or the holder from time to time of any successor or additional
         governmental office the consent of whom is required under the Petroleum
         Law (or any regulations or other subordinate legislation issued
         pursuant to or under authority of the Petroleum Law) in relation to the
         registration of a Petroleum Rights Holder and the transfer of an
         interest in an Exploration License or a Production Lease.

         Joint Operating Agreement means an agreement between the Participants
         in respect of any one or more SGC Interests relating to the conduct of
         the Joint Operations in relation to and the ownership of those SGC
         Interests.

         Joint Operating Expenses means all of the expenses incurred by the
         Operator and/or the Participants (or any of them) in connection with
         the Joint Operations, including but not limited to geological,
         geophysical, engineering and other studies, Exploration License fees
         and rentals, seismic, landsat or other studies, drilling, workover and
         development, pipelines tank farms and any other capital costs, to the

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         extent those expenses are properly borne by or chargeable to the
         Participants in the relevant Joint Operations (or any of them) under
         the terms of this Agreement or the applicable Joint Operating
         Agreement.

         Joint Operations means, in relation to any SGC Interest, all operations
         conducted by, for or on behalf of the Participants in that SGC Interest
         and in accordance with this Agreement and (when in effect) the Joint
         Operating Agreement, or any development program and budget plan
         thereunder.

         Kahta Lease has the meaning specified in clause 3.1.

         Karakilise License means each of Exploration Licenses
         AR/AME-EPS-AVE/2674, 2677 and 2678 in Petroleum District XI -
         Diyarbakir in the Republic of Turkey.

         MEPS Carried Interest has the meaning specified in recital C.

         MEPS Royalty Interest means the 5% overriding royalty interest granted
         to MEPS pursuant to clauses 2, 3, and 4 hereof which, in the case of
         the Tethys Licenses, such 5% overriding royalty interest shall be
         proportionately reduced in such Tethys Licenses, such that the interest
         held by Tethys from time to time pursuant to the terms of a
         Participation Agreement dated November 7, 2003 between Tethys and SGC
         shall not be burdened by the MEPS Royalty Interest, which burden shall
         only apply to the interests held by Avenue and the relevant SGC
         companies in such Tethys Licenses.

         Net Pre-tax Revenue means sales receipts (net of witholdings and
         deductions at source and excluding VAT (if any), but before income or
         corporate tax calculated and chargeable by reference to individual
         Participants), less:

         (a)      royalties or similar payments made or due to the Government or
                  under the ERSAN Royalty Interest and the MEPS Royalty Interest
                  in respect of such sales or related production; and

         (b)      operating costs incurred by the Operator and/or the relevant
                  Participants (or any of them) in connection with the
                  production of those receipts (as determined in accordance with
                  the applicable Joint Operating Agreement, but including
                  production and transportation charges, commissions, salaries,
                  fees and expenses chargeable to the joint account of the
                  relevant Participants).

         Nominated Affiliate means, in relation to a Party, any Affiliate of
         that Party designated by notice from that Party to the other Parties as
         the Person to whom, at closing of an acquisition of a Participating
         Interest under this Agreement, the relevant Participating Interest is
         to be transferred, or on behalf of whom its is to be held by AME,
         pursuant to this Agreement.

         Operator means the operator of the Joint Operations on behalf of the
         Participants (subject to the provisions of the applicable Joint
         Operating Agreements, the Operator shall be AME).

         Participants means, in relation to a particular SGC Interest:

         (a)      the Persons who from time to time are registered with the GDPA
                  as the holders of that SGC Interest; and

         (b)      in respect of the period between closing of an acquisition by
                  Avenue of an interest in that SGC Interest and the
                  registration of Avenue as a licensee in respect of that SGC
                  Interest, where the context so admits, Avenue.

         Participating Interest means, in relation to an SGC Interest, an
         undivided interest (expressed as a percentage) in that SGC Interest,
         and in all rights, interests, obligations and liabilities attaching
         thereto or arising from the conduct of the Joint Operation in relation
         to that SGC Interest (including geological and geophysical data
         resulting from such Joint Operations and all wells resulting from such
         Joint Operations).

         Party or Parties means any party to this Agreement or all of them, as
         the context requires, and includes their respective successors and
         permitted assigns.

         Person includes any individual, corporation, company, partnership
         (general or limited), business trust, or other governmental or
         non-governmental entity or association.

         Petroleum Law means Petroleum Law No.6326 of the Republic of Turkey, as
         amended from time to time (including but not limited to Laws No. 6558,
         6987, 1702, 2217 and 2208), Petroleum Regulations promulgated
         thereafter under Government Decree 89/14111 published with the Official
         Gazette on July 17th 1989 issue no: 20224 as amended from time to time

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         and the Petroleum Marketing Law No. 5015, enacted on December 4, 2003
         and published in the Official Gazette, No. 25322, on December 20, 2003.

         Petroleum Right Holder means a Person registered under and in
         accordance with the Petroleum Law as a petroleum right holder.

         Production Lease means a lease issued under the Petroleum Law and
         conferring on the holder the rights set out in Article 60 of the
         Petroleum Law.

         SGC Interests means each of:

         (a)      the Tosun License;

         (b)      the Karakilise License;

         (c)      the Kahta Lease (in relation to the Avenue Kahta Wells);

         (d)      each of the other Exploration Licenses and Production Leases
                  listed in Schedule 'A' to the FPA; and

         (e)      the Exploration Licenses issued pursuant to any Application
                  which is the subject of clause 4.2.

         SGC Participants means, in relation to an SGC Interest, each of the
         Participants in that SGC Interest which is a member of SGC.

         Tethys Option has the meaning specified in recital B.

         Tosun License means Exploration License AR/AME-EPS-AVE/3462 in
         Petroleum District XII, Gaziantep in the Republic of Turkey.

         United States and US means the United States of America.

         VAT means value added tax applicable to the provision of goods and
         services according to the Value Added Tax Law No. 3065 published in the
         Turkish Official Gazette No. 18563 dated 2 November 1984 and the
         Counsel of Ministers' Decrees issued under the same Law.

         Withholding Tax means the withholding from the petroleum exploration
         and production revenues in accordance with Council of Ministers Decree
         No. 93/5147 published in the Turkish Official Gazette No. 21805(R)
         dated 30 December 1993 as may be amended and any other withholding that
         may be applicable to this Agreement or the Joint Operating Agreement,
         the activities and payments thereunder or hereunder or the parties
         hereto or thereto.

         1.2      Interpretation

         In this Agreement, unless otherwise specified:

         (a)      references to clauses or Schedules are to clauses of or
                  Schedules to this Agreement;

         (b)      headings are inserted for convenience only and shall not
                  affect the construction of this Agreement;

         (c)      references to any gender include all others if applicable in
                  the context;

         (d)      all uses of include or including mean without limitation;

         (e)      references to a contract, agreement, or other document mean
                  that contract, agreement, or document as amended, modified, or
                  supplemented, if applicable, from time to time;

         (f)      a reference to any statute or statutory provision shall be
                  construed as a reference to the same as it may have been, from
                  time to time, amended, modified or re-enacted;

         (g)      references to times of the day or a day are to the time or (as
                  the case may be) day in the State of California, USA;

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         (h)    where an obligation is expressed to be assumed by more than one
                Party, those Parties shall be liable jointly and severally in
                respect of that obligation;

         (i)    an Option shall be taken to have `lapsed' if the final date
                permitted under the terms of this Agreement for exercise of that
                Option has passed and the Option has not been exercised in
                accordance with this Agreement;

         (j)    references to Avenue taking or having taken any action, or
                making or having made any payment, in relation to or to its
                interest in an SGC Interest shall, where Avenue has notified a
                Nominated Affiliate in relation to that SGC Interest, be taken
                to refer to that Nominated Affiliate; and

         (k)    references to an Exploration License include any Production
                Lease granted to or at the request of the holders of that
                Exploration License pursuant to the terms of that Exploration
                License or the Petroleum Law (as applicable to that Exploration
                License or the holders thereof).

2.       Closing

         2.1      Date and time for closing

         Closing under clause 2.2 shall occur immediately following the
execution and delivery of this Agreement by all of the Parties, or on such other
date or at such other time as the Parties may agree.

         2.2      Obligations at closing

                  (a)      Closing of the Clause 6.1 Option shall occur in
                           accordance with clause 7 of the FPA, provided that:

                           (i)      the Joint Operating Agreements to be entered
                                    into by the relevant Participants in
                                    relation to the SGC Interests the subject of
                                    the Clause 6.1 Option shall be in form
                                    attached hereto as Schedule B;

                           (ii)     Avenue shall be transferred a 50%
                                    Participating Interest, rather than a 45%
                                    Participating Interest, in each such SGC
                                    Interest, subject to the Ersan Royalty
                                    Interest, the MEPS Royalty Interest and the
                                    Tethys Option; and

                           (iii)    for the purposes of the FPA (including
                                    clause 7) and this Agreement (including this
                                    paragraph (a) and clause 2.3 below), the SGC
                                    Interests the subject of the Clause 6.1
                                    Option shall be deemed to include
                                    Exploration Licenses AR/EPS/3700, 3701,
                                    3702, 3703, 3704 and 3705 in Petroleum
                                    District XVII-Izmir, which shall cease to be
                                    the subject of the Tethys Option; and

                           (iv)     for the avoidance of doubt, the payment of
                                    Three Hundred Fifteen Thousand Dollars
                                    (US$315,000) to AME (on behalf of SGC) with
                                    respect to the transfer -of a 50%
                                    Participating Interest in relation to the
                                    SGC Interests referred to in paragraphs (a)
                                    (ii) and a (iii) hereof; and

                           (v)      Contemporaneously with and subject to
                                    closing of the acquisition by Avenue or its
                                    Nominated Affiliate of a Participating
                                    Interest the SGC Licenses pursuant to this
                                    clause 2.2, the Participants holding
                                    Participating Interests in such SGC License
                                    hereby grant to MEPS a 5% overriding royalty
                                    interest in such SGC Licenses which interest
                                    MEPS is receiving as full consideration for
                                    its transfer and assignment back to Avenue
                                    and the respective member of SGC all of MEPS
                                    Carried Interest in each such SGC License
                                    reflected in Schedule A; and

                           (vi)     If, at the time when paragraph (a) (v) above
                                    would require the grant of an overriding
                                    royalty interest to MEPS, MEPS is not a
                                    Petroleum Right Holder, ERSAN shall be
                                    granted the overriding royalty interest to
                                    hold in trust for MEPS until such time as
                                    MEPS becomes a Petroleum Right Holder and
                                    the relevant overriding royalty interest is
                                    transferred to it.

                  (b)      closing of the Tethys Option shall occur in
                           accordance with clause 2.3 (which shall apply to such
                           closing to the exclusion of the corresponding
                           provisions of the FPA);

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                  (c)      AME and ERSAN shall transfer to Avenue one-half of
                           the 10% Participating Interest presently held by them
                           in trust for MEPS in each of the Tosun License and
                           the Karakilise License, so that Avenue shall hold a
                           50% Participating Interest in each such SGC Interest,
                           subject to the Ersan Royalty Interest, the MEPS
                           Royalty Interest and the Tethys Option; and

                  (d)      Avenue, AME and ERSAN shall enter into an amended and
                           restated Joint Operating Agreement in relation to the
                           Tosun License in the form attached as Schedule B
                           hereto.

         2.3      Tethys Option

                  SGC entered into a Participation Agreement with Tethys on
                  November 7, 2003, in accordance with the FPA, covering
                  AR/TMO-EPS-GYP/ 3794 AND 3795 and AR/AMEEPS/3748. Under the
                  terms of such Participation Agreement, Tethys acquired an
                  undivided 10% interest in said Licenses with an option to
                  acquire an additional 35% participating interest in said
                  Licenses upon the completion of certain work requirements, set
                  forth in said Participation Agreement. SGC shall arrange for
                  the preparation of a Restatement of the Operating Agreement
                  executed by SGC and Tethys which will restate the substantive
                  terms of the initial Operating Agreement expanded to include
                  Avenue as a signatory party, in recognition of Avenue's
                  Participating Interest in the Tethys Licenses and related
                  Operating Agreement. Upon agreement by all parties to the
                  restated Tethys JOA and the payment of One Hundred Thirty Five
                  Thousand Dollars (US $135,000.00) to AME (on behalf of SGC),
                  Assignments of the Tethys Licenses (AR/TMO-EPS-GYP 3794 & 3795
                  and AR/EPS-GYP 3748) will be delivered to Avenue.

         2.4      MEPS Royalty Interest

                  (a)      Contemporaneously with and subject to closing of the
                           acquisition by Avenue or its Nominated Affiliate of a
                           Participating Interest the Tethys Licenses pursuant
                           to clause 2.3, the Participants holding Participating
                           Interests in such Tethys License, Tosun License,
                           Karakilise License and Clause 6.1 Option Licenses
                           hereby grant to MEPS an overriding royalty interest
                           equivalent to 5% of the interest so held by Avenue
                           and SGC in the Tethys Licenses, which interest MEPS
                           is receiving as full consideration for its transfer
                           and assignment back to Avenue and the respective
                           member of SGC all of MEPS Carried Interest in each
                           such License reflected in Schedule A.

                  (b)      For the avoidance of doubt, the MEPS Royalty Interest
                           in Tethys Licenses shall represent an interest of not
                           less than a 2.75% overriding royalty interest and in
                           the event that Tethys does not earn its full 45%
                           Participating Interest, then such MEPS Royalty
                           Interest shall be adjusted to reflect an overriding
                           royalty interest equivalent to 5% of the combined
                           Participating Interests held by Avenue and SGC from
                           time to time.

                  (c)      If, at the time when paragraph (a) or (b) above would
                           require the grant of an overriding royalty interest
                           to MEPS, MEPS is not a Petroleum Right Holder, ERSAN
                           shall be granted the overriding royalty interest to
                           hold in trust for MEPS until such time as MEPS
                           becomes a Petroleum Right Holder and the relevant
                           overriding royalty interest is transferred to it.

         2.5      Trust

                  Pending registration of the transfer to Avenue of a
                  Participating Interest pursuant to paragraph (b), (c) or (d)
                  of clause 2.2, AME shall hold that Participating Interest in
                  trust and for the benefit of Avenue, on the terms, mutatis
                  mutandis, of clause 6.3.

         2.6      Termination of FPA

                  Immediately following the closing under clause 2.2, the FPA
                  shall terminate and cease to be of any force or effect. Such
                  termination shall be without prejudice to any antecedent
                  rights and remedies of the Parties accrued under or arising
                  out of the FPA and where Definitions in this Agreement refer
                  to Definitions in the FPA, such Definitions shall be adopted
                  for the purpose of this Agreement.

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3.       Kahta farmin

         3.1      Grant of Participating Interest

                  (a)      AME owns and controls a 100% interest in the
                           Production Lease IR/EPS/658 in Petroleum District XII
                           - Gaziantep (the 'Kahta Lease'), covering an area of
                           7,060 hectares (hereinafter referred to as the 'Kahta
                           Field').

                  (b)      Upon the giving of notice by Avenue under clause
                           3.2(a) in respect of any Avenue Kahta Well, AME
                           shall, as soon as possible thereafter:

                           (i)      grant to Avenue, free from Encumbrances, a
                                    50% Participating Interest in that Avenue
                                    Kahta Well;

                           (ii)     in relation to the first such notice only,
                                    transfer to Avenue, free from Encumbrances,
                                    a 50% Participating Interest in the Kahta
                                    Lease; and

                           (iii)    procure that Avenue's interest in the
                                    relevant Avenue Kahta Well as so granted,
                                    and (if applicable) Avenue's interest in the
                                    Kahta Lease, is registered with the GDPA in
                                    accordance with the Petroleum Law.

                  (c)      Notwithstanding clause 3.1(b) or any other provision
                           of this Agreement, except as expressly provided in
                           this clause 3 or clause 5, Avenue shall not, by
                           virtue of this Agreement or its holding of a 50%
                           Participating Interest in the Kahta Lease or the
                           Avenue Kahta Wells:

                           (i)      have any rights in respect of the production
                                    from any wells on the Kahta Lease other than
                                    the Avenue Kahta Wells, or to any plant or
                                    equipment situated on the Kahta Lease
                                    (except for plant and equipment used
                                    exclusively in relation to the Avenue Kahta
                                    Wells); or

                           (i)      grant to Avenue, free from Encumbrances, a
                                    50% Participating Interest in that Avenue
                                    Kahta Well;

                           (ii)     be required to contribute to the costs of or
                                    arising from any activities on the Kahta
                                    Lease, or to the rentals and other lease
                                    payments due under the Petroleum Law or the
                                    Kahta Lease,

                           and AME shall indemnify and hold harmless Avenue from
                           and against any and all such costs, and all other
                           liabilities arising as holder of an interest in the
                           Kahta Lease or the Avenue Kahta Wells.

         3.2      Workover and drilling of Avenue Kahta Wells

                  (a)      At any time and from time up to and including 14
                           November 2004, Avenue shall have the right, by notice
                           to AME, to require AME to workover up to 5 (in the
                           aggregate) existing wells on the Kahta Field and
                           drill up to 3 (in the aggregate) new wells on the
                           Kahta Field or other prospects of its choice in the
                           Kahta Lease (hereinafter referred to as the 'Avenue
                           Kahta Wells').

                  (b)      AME shall conduct the workover operations on the
                           Avenue Kahta Wells at a fixed turnkey price payable
                           by Avenue in the amount of US$150,000 per well
                           (exclusive of any applicable VAT).

                  (c)      AME shall conduct drilling operations on the Avenue
                           Kahta Wells at a fixed turnkey cost payable by Avenue
                           in the amount of US$400,000 per well (exclusive of
                           any applicable VAT.

                  (d)      Avenue shall pay to AME 100% of the costs of such
                           workover and drilling operations 30 days before
                           commencement of such operations.

         3.3      Production

                  (a)      AME shall, at its own cost, but subject to clause 3.3
                           (b), ensure that upon completion of the workover
                           operations or drilling operations, as the case may
                           be, unless Avenue directs otherwise, it shall
                           immediately put such wells on production and shall
                           arrange for the sale, transportation and delivery of
                           such production at the prevailing price for Kahta
                           crude.

                  (b)      AME shall charge a turnkey operating cost of US$2.0
                           per barrel and a turnkey trucking cost of US$1.0 per
                           barrel for each barrel produced and sold from such
                           Avenue Kahta Wells. No other fees, commissions,

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                           expenses, costs or other charges shall be payable by
                           Avenue, or deducted from revenues, in respect of the
                           matters to be arranged by AME pursuant to clause
                           3.3(a), all of which charges shall be the
                           responsibility of AME.

                  (c)      Except where clause 3.3(d) applies, the Net Pre-tax
                           Revenue derived from production from the Avenue Kahta
                           Wells shall accrue in the following proportions:

                           AME              50%
                           Avenue           50%

                  (d)      At any time when the aggregate Net Pre-tax Revenue
                           derived from production from the Avenue Kahta Wells
                           and received by Avenue under clause 3.3(c) or this
                           clause 3.3(d) is less than the sum of:

                           (i) the amount paid by Avenue under clause 3.2(d),
plus

                           (ii)     US$$2,750,000 (being Avenue's costs in
                                    relation to the drilling of the Tosun-1
                                    Well), Avenue shall, subject to clause
                                    3.3(b), be entitled to receive and retain
                                    all Net Pretax Revenue derived from
                                    production from the Avenue Kahta Wells, by
                                    way of recovery of such payments and costs.

                  (e)      Except when clause 3.3(d) applies, each of AME and
                           Avenue shall, in accordance with the Petroleum Law,
                           have the right to take its proportionate share of
                           production in kind at the end of any existing crude
                           oil sale contract by giving notice to the other
                           Participants at least 30 days prior to the expiration
                           of such contract. Such Participant taking its
                           production in kind shall be responsible for the cost
                           of any additional labour or equipment incurred as a
                           result of its exercise of such right.

                  (f)      AME and Avenue individually shall be responsible for
                           their own income and corporate tax liabilities and
                           for all withholding tax applicable to payments made
                           to it under this clause 3.

                  (g)      All costs related to drilling, testing and production
                           as well as operating revenue from crude oil sales
                           will be handled by AME as Operator and monthly
                           reports will be issued to Avenue or its Nominated
                           Affiliate.

         3.4      Joint Operating Agreement

                  The accounting procedures in the Karakilise JOA and, to the
                  extent not inconsistent with the foregoing provisions of this
                  clause 3, the other provisions of the Karakilise JOA shall
                  apply for the Avenue Kahta Wells.

         3.5      MEPS Royalty Interest

                  (a)      Contemporaneously with and subject to the grant to
                           Avenue pursuant to clause 3.1(b)(i) of a
                           Participating Interest in any Avenue Kahta Well, AME
                           and Avenue shall grant to MEPS a 5% overriding
                           royalty interest in that Avenue Kahta Well.

                  (b)      If, at the time when paragraph (a) above would
                           require the grant of an overriding royalty interest
                           to MEPS, MEPS is not a Petroleum Right Holder, ERSAN
                           shall be granted the overriding royalty interest to
                           hold in trust for MEPS until such time as MEPS
                           becomes a Petroleum Right Holder and the relevant
                           overriding royalty interest is transferred to it.

4.       Farmin to other SGC Interests

         4.1      New License and lease applications

         Prior to 15 May 2006 (but not after termination of this Agreement):

                  (a)      Avenue shall not make any Exploration License or
                           Production Lease Applications in the Republic of
                           Turkey including Territorial Waters, other than
                           through AME; and

                                       8
<PAGE>

                  (b)      Avenue shall have the right to request AME to make
                           such Exploration License or Lease Applications as
                           Avenue may require, and AME shall comply with such
                           request, but AME shall be under no obligation to
                           participate with Avenue in such Applications.

         4.2      New applications by SGC or its Affiliates

                  If, at any time prior to 15 May 2006, while Avenue or its
                  Nominated Affiliate is the holder of an interest in an
                  Exploration License or a Production Lease (or has such
                  interest held on its behalf under the terms of clause 6)
                  together with any one or more of the members of SGC or their
                  respective Affiliates, any one or more of the members of SGC,
                  or an Affiliate of a member of SGC, (whether alone or together
                  with any other party or parties) makes or intends to make an
                  Application for the grant of a new Exploration License, other
                  than an Exploration License over the Excluded Areas, that
                  member of SGC shall procure that Avenue (or its Nominated
                  Affiliate) is:

                  (a)      notified promptly of the intention to make the
                           Application, and of the information then available
                           which is relevant to the same (including the relevant
                           License area, participants and work program);

                  (b)      fully consulted in relation to the relevant
                           Application and all related matters and arrangements
                           (including as between the potential participants in
                           the Application or resulting Exploration License);
                           and

                  (c)      granted a full, fair and reasonable opportunity, at
                           all times in the period of 60 days after it receives
                           the notice under paragraph (a) above (or, if later,
                           the date on which the relevant Application is made),
                           and without payment of any consideration to any other
                           participant (other than in accordance with the
                           relevant Joint Operating Agreement), to acquire
                           (either directly when the License is granted, or by
                           way of assignment from the relevant participants, as
                           the circumstances permit and as soon as is
                           practicable) a Participating Interest equal to 50% of
                           the Participating Interest acquired by the SGC in the
                           resulting Exploration License (and any resulting
                           Production Lease) provided that SGC may not bring in
                           a joint venture partner or farminee without Avenue's
                           prior written consent, if Avenue elects to acquire a
                           Participating Interest.

         4.3      Joint Operating Agreements

                  Upon the issue of an Exploration License in respect of which
                  Avenue or its Nominated Affiliate has notified its wish to
                  acquire a Participating Interest pursuant to clause 4.3(c),
                  Avenue or (as the case may be) the Nominated Affiliate and the
                  other Participants shall enter into a Joint Operating
                  Agreement relating to their respective interests therein, such
                  agreement shall be based upon the agreed form Operating
                  Agreement attached hereto as Schedule B, specific to the
                  Exploration Licenses in each prosect.

         4.4      MEPS Royalty Interest

                  (a)      Contemporaneously with and subject to closing of each
                           acquisition by Avenue or its Nominated Affiliate of a
                           Participating Interest in an SGC Interest pursuant to
                           clause 4.2, the Participants holding Participating
                           Interests in that SGC Interest hereby grant to MEPS a
                           5% overriding royalty interest in the SGC Interest,
                           which interest MEPS is receiving as full
                           consideration for its transfer and assignment back to
                           Avenue and the respective member of SGC all of MEPS
                           Carried Interest in each Exploration License included
                           within the SGC Interest, reflected on Schedule A.

                  (b)      If, at the time when paragraph (a) above would
                           require the grant of an overriding royalty interest
                           to MEPS, MEPS is not a Petroleum Right Holder, ERSAN
                           shall be granted the overriding royalty interest to
                           hold in trust for MEPS until such time as MEPS
                           becomes a Petroleum Right Holder and the relevant
                           overriding royalty interest is transferred to it.

                  (c)      The form of assignment of royalty interest to MEPS
                           shall be in the form of Schedule C hereto.

5.       Administration Fee

         5.1      Monthly fee

                  Following the date of this Agreement, Avenue shall be required
                  to pay to AME a monthly administration fee which shall cover
                  the ongoing Exploration License and Production Lease rentals

                                       9
<PAGE>

                  and the filings required to keep in good standing the
                  Exploration Licenses and Production Leases in which Avenue or
                  its Nominated Affiliate has an interest, as set out on
                  Schedule 'A' hereto.

         5.2      Adjustments to acreage

                  For each acre by which, following the date of this Agreement,
                  the acreage under SGC Interests in which Avenue or its
                  Nominated Affiliate have a Participating Interest increases or
                  decreases, the amount of the monthly administration fee
                  payable under clause 5.1 shall be increased (in the case of an
                  increase in acreage) or decreased (in the case of a decrease
                  in acreage) by an amount equal to the product of (i) US$0.10
                  and (ii) the Participating Interest of Avenue or its Nominated
                  Affiliate in the relevant SGC Interest divided by twelve (12).

6.       Consents and approvals

         6.1      Governmental approvals

                  (a)      The Parties acknowledge that a grant or assignment to
                           Avenue or its Nominated Affiliate of a Participating
                           Interest in an SGC Interest may not be given full
                           effect unless and until:

                           (ii)     the GDPA has registered the relevant
                                    transfer or grant.

                  (b)      AME shall, on behalf of and in consultation with
                           Avenue or its Nominated Affiliate, take all necessary
                           and appropriate measures to obtain the consent and
                           approval of the GDPA to the grants, transfers and
                           assignments to Avenue or its Nominated Affiliate
                           contemplated by this Agreement.

                           (i)      the proposed grantee or assignee has been
                                    registered with the GDPA as Petroleum Right
                                    Holder; and

         6.2      Nominated Affiliates of Avenue

                  (a)      If Avenue nominates a Nominated Affiliate to acquire
                           an interest in an SGC Interest pursuant to clause
                           4.2, Avenue shall use its best endeavours to provide
                           AME with all relevant documentation required to
                           register its Nominated Affiliate as a Petroleum Right
                           Holder and AME will use its best endeavors to
                           register Avenue's Nominated Affiliate as a Petroleum
                           Right Holder as soon as possible.

                  (b)      If such a Nominated Affiliate has not been registered
                           as a Petroleum Right Holder by the date upon which,
                           pursuant to clause 4.2, a Participating Interest
                           would otherwise be required to be granted or
                           transferred to the Nominated Affiliate:

                           (i)      each SGC Participant who, would otherwise be
                                    required to transfer to Avenue's Nominated
                                    Affiliate all or part of its Participating
                                    Interest in the relevant SGC Interest shall
                                    instead transfer that Participating Interest
                                    (or part thereof) to AME to be held in trust
                                    in accordance with this clause 6.2(b)(i) and
                                    clause 6.3.

                           (ii)     AME shall deliver to Avenue or its Nominated
                                    Affiliate, in such form as Avenue may
                                    reasonably require, a declaration or other
                                    instrument, duly executed by AME and
                                    providing that the Participating Interest
                                    which clause 4.2 would otherwise require be
                                    granted or (as the case may be) transferred
                                    to Avenue's Nominated Affiliate instead be
                                    held in trust by AME for Avenue's Nominated
                                    Affiliate; and

         6.3      Trust arrangement

                  During the period when a Participating Interest in an SGC
                  Interest is to be held in trust pursuant to clause 6.2(b)(i),
                  until the date upon which Avenue's Nominated Affiliate obtains
                  the formal grant or assignment of that Participating Interest,
                  AME and (in relation to paragraphs (b), (f) and (g) below
                  only) each SCG Participant who holds an interest in the
                  relevant SCG Interest shall:

                  (a)      hold that Participating Interest as bare trustee for
                           Avenue's Nominated Affiliate;

                  (b)      privately recognise the right, title and interest in
                           and to the Participating Interest held in trust by
                           AME and deal with Avenue's Nominated Affiliate as the
                           owner and holder thereof;

                                       10
<PAGE>

                  (c)      not assign, encumber or otherwise adversely affect
                           title to such Participating Interest;

                  (d)      receive and hold all proceeds, benefits and
                           advantages accruing to or in respect of such interest
                           for the benefit of Avenue's Nominated Affiliate,
                           without entitlement at any time to commingle any of
                           the same with its own or any other assets;

                  (e)      in accordance with the relevant Joint Operating
                           Agreement, deliver to Avenue's Nominated Affiliate in
                           a timely manner all revenues, production allocations,
                           and proceeds received by it pertaining to such
                           interest;

                  (f)      allow Avenue's Nominated Affiliate to participate as
                           a member of the Operating Committee in accordance
                           with they relevant Joint Operating Agreement as if it
                           were the holder of the Participating Interest and a
                           party to that Joint Operating Agreement in respect
                           thereof;

                  (g)      not, without the prior written consent of Avenue's
                           Nominate Affiliate, agree to any amendment or
                           alteration of such Joint Operating Agreement;

                  (h)      not enter into or agree to any amendment or
                           alteration of any other agreement relating to the
                           relevant SGC Interest or otherwise commit or agree to
                           make or incur any undertaking, expenditures or
                           arrangement affecting the Participating Interest of
                           Avenue's Nominated Affiliate in that SGC Interest, in
                           any way except as expressly provided for in this
                           Agreement; and

                  (i)      procure that, as soon as reasonably practicable after
                           Avenue's Nominated Affiliate is registered as a
                           Petroleum Right Holder, there is delivered to
                           Avenue's Nominated Affiliate a duly executed
                           assignment or other instrument of grant or transfer
                           sufficient to transfer to Avenue's Nominated
                           Affiliate full legal and beneficial title in the
                           Participating Interest which has been held in trust
                           as aforesaid, free and clear from Encumbrances.

                  The perpetuity period in relation to the trusts referred to in
                  clauses 6.2(b)(i) and 6.3(a) shall be 50 years or, if less,
                  the maximum period of time permitted under the law of the
                  State of California, USA, but the termination or failure of
                  such trusts shall not affect the rights of Avenue or its
                  Nominated Affiliate", under the other provisions of this
                  Agreement, including clauses 6.3(b) to (i).

         6.4      Refusal of GDPA to register Nominated Affiliate

                  If so requested by Avenue at any time after! GDPA has declined
                  to register Avenue's Nominated Affiliate as a Petroleum Right
                  Holder, the relevant interest shall be transferred to Avenue.

         6.5      Costs and expenses

                  If AME is required to hold a Participating terest in trust for
                  Avenue's Nominated Affiliate under clause 6.2(b)(i), Avenue or
                  is Nominated Affiliate shall:

                  (a)      bear its share of all costs, expenses', and
                           liabilities attributable to the Participating
                           Interest held in trust for Avenue's, Nominated
                           Affiliate in accordance with this Agreement and the
                           terms of the applicable Joint Operating Agreement as
                           if it were the legal and beneficial owner' thereof
                           during such period; and

                  (b)      within 14 days of having been invoiced for the same
                           by AME, reimburse the reasonable and documented
                           out-of-pocket costs and expenses incurred by AME in
                           meeting its obligation under clauses 6.2(b)(i) and
                           6.4.

         6.6      Approval and waivers of rights by SGC and MEPS

                  MEPS and each member of SGC hereby irrevocably and
                  unconditionally consents to and approves for all purposes the
                  grant, exercis and closing of the acquisition by Avenue or its
                  Nominated Affiliate of Participating Int rest in the SGC
                  Interests, as contemplated in this Agreement, and waives any
                  and all rights, interests, options or other claims or any kind
                  and howsoever arising that would con ict with or impede or
                  otherwise fetter any such grant, exercise or closing or the
                  consummation of the transactions contemplated in this
                  Agreement.

                                       11
<PAGE>

7.       Undertakings

         7.1      Undertakings by SGC

                  Each member of SGC (including AME, in its respective
                  capacities as a Participant, the Operator and the drilling
                  contractor) undertakes as follows:

                  (a)      Access: to make available to Avenue and its advisors
                           and consultants full and unrestricted access to, and
                           if so requested provide to them copies (made at the
                           expense of the recipient) of, all agreements,
                           instruments, documents, bo ks, records, assets, data
                           and other materials in the possession or control of
                           each or any ember of SGC and reasonably required by
                           Avenue in relation to this Agreement and the matters
                           contemplated herein, including in relation to:

                           (i)      the actual and planned Joint Operations and
                                    the assets and liabilities associated
                                    therewith;

                           (ii)     the status, financial condition, operations
                                    and technical capabilities of each of the
                                    other Participants;

                           (iii)    the existing commercial ai{Irangements
                                    (whether or not legally binding) between all
                                    or any of the other Participants relating in
                                    any way to, or to matters that may affect,
                                    the Joint Operations (including any existing
                                    joint venture agreements); and

                           (iv)     the ownership and status of the SGC
                                    Interests and other interests which are, or
                                    may be, the subject of this Agreement.

                  (b)      No inconsistent acts or omissions: not to do, or
                           permit or suffer to be done, any act or thing which
                           is inconsistent with this Agreement or the
                           treansaction contemplated herein, or would give rise
                           to a breach of the representations and warranties
                           given by SGC to Avenue in this Agreement.

                  (c) Dealings with third parties:

                           (i)      neither it nor any of their officers,
                                    directors, employees, agents, shareholders
                                    or representatives (including a consultant)
                                    shall make, or casue to be made, in
                                    connection with the SGC Interests, the Joint
                                    Operations, this Agreement or the
                                    transactions contemplated bythis Agreement,
                                    payments, loans or gifts or promises or
                                    offer of payments, loans or gifts of any
                                    money or anything of value, directly or
                                    indirectly:

                                    (A)     to or for the use or benefit of any
                                            official or employee of any
                                            government or agency or
                                            instrumentality thereof (including
                                            without limitation any enterprise
                                            wned or controlled by such
                                            government), or any Person acting in
                                            an official capacity for or on
                                            behalf of any government,
                                            department, a ency or
                                            instrumentality;

                                    (B)     to or for the use or bene it of any
                                            political party or official or
                                            candidate thereof, or any official
                                            or employee of a public
                                            international organization, or any
                                            person acting in an official
                                            capacity for or on behalf of any
                                            political party or pu Dlic
                                            international organization;

                                    (C)     in violation of any applicable law;
                                            or

                                    (D)     to any other Person eit er as an
                                            advance or as a reimbursement if it
                                            knows that any part of s ch payment,
                                            loan or gift will be directly or
                                            indirectly given or paid b such
                                            other Person to an official, party,
                                            party official or candidate refe ed
                                            to in sub-paragraph (A) or (B)
                                            above, or will reimburse such other
                                            erson for payments, gifts, or loans
                                            previously made, to any such
                                            official, party, party official or
                                            candidate;

                           (ii)     the receipt by it of the consideration which
                                    may be obtained hereunder or of any funds or
                                    interests nder the SGC Interests does not
                                    violate the laws, decrees and regulatio s of
                                    the Republic of Turkey;

                                       12
<PAGE>

                           (iii)    it shall answer and shall c use each of its
                                    officers, directors, employees and
                                    attorneys-in-fact, and its Affiliates and
                                    their respective officers, directors,
                                    employees and . ttomeys-in-fact, to answer,
                                    and shall exert reasonable commercial effo s
                                    to cause its and their consultants to
                                    answer, in reasonable detail, an
                                    questionnaire or other written or oral
                                    communications, or any request for
                                    information from Avenue or its outside
                                    auditors, relating to the representations,
                                    warranties, covenants and undertakings set
                                    forth in p.ragraphs (i) and (ii) above; and

                           (iv)     to provide, on or before the 30th day after
                                    notice from Avenue so requesting, Avenue
                                    with c-rtification to the effect that it has
                                    not, and its Affiliates and their perso el
                                    have not, made or sought any payments,
                                    directly or indirectly, in via lation of
                                    paragraph (i) or (ii) above.

         7.2      Insurance

                  (a)      AME, in its capacity as Operator, hall obtain and
                           maintain, with respect to each of the Avenue Kahta
                           Wells and t e operations and property relating
                           thereto, all insurance required under the Pet oleum
                           Law, the Kahta Lease or any other applicable law.
                           Without limitation to the foregoing, AME shall obtain
                           and maintain:

                           (i)      Workers' Compensation an. Employer's
                                    Liability Insurance;

                           (ii)     Employer's Third Party Liability Insurance;
                                    and,

                           (iii)    Comprehensive General Li bility Insurance,

                           in each case with a reputable and cr-ditworthy
                           insurer and on terms that are commercially reasonable
                           and custo ary for such risks in the same or similar
                           circumstances.

                  (b)      AME shall, with respect to all insurance obtained by
                           it pursuant to paragraph (a) above:

                           (i)      informa Avenue at least ten (10 days before
                                    the inception or renewal dates of the
                                    applicable insurance contract or contracts
                                    of the salient terms and conditions
                                    (including premia) quoted by the insurers to
                                    AME;

                           (ii)     promptly inform Avenue when such insurance
                                    is taken out and supply Avenue with copies
                                    of the relevant policies when the same are
                                    issued;

                           (iii)    arrange Avenue and the other relevant
                                    Participants, according to their respective
                                    Participating Interests, to be named as
                                    co-insureds on the relevant policies;

                           (iv)     duly file and notify the relevant
                                    Participants of all claims and take all
                                    necessary and proper steps to collect any
                                    proceeds and credit them to the joint
                                    account of such Participants.

                           Subject to the foregoing, any of the Parties may
                           obtain such insurance as it deems advisable for its
                           own account and a its own expense, provided that each
                           such policy contains a waiver of subrogation in favor
                           of the other Parties.

                  (c)      AME, as Operator, shall:

                           (i)      take all reasonable steps o ensure that all
                                    contractors (including subcontractors)
                                    performing work in respect to the Joint
                                    Operations obtain and maintain all insurance
                                    required under the Kahta Lease, the
                                    Petroleum Law and any other applicable law,
                                    and such other insurance as AME or (where
                                    the relevant contractor is AME or an
                                    Affiliate of AME) Avenue deems reasonable
                                    and appr priate; and

                           (ii)     with respect to all insurance obtained by
                                    such contractors (subcontractors), take all
                                    reasonable steps to arrange for such
                                    contractors (including sub-contractors; to
                                    obtain from their insurers a waiver of
                                    subrogation in favour of the Participants in
                                    the relevant Avenue Kahta Wells in respect
                                    of their Participating Interests therein.

                                       13
<PAGE>

                  (d)      Nothing in this clause 7.2 shall limit or otherwise
                           affect the obligations of AME as contractor
                           (including sub-contractor) in respect of any of the
                           Joint Operations, including obligations under any
                           applicable drilling contract at its cost to obtain
                           and maintain insurance cover.

8.       Representations and warranties

         8.1      SGC's representations and warranties

                  Each member of SGC severally represents and warrants to Avenue
                  that, on the date of this Agreement and at and immediately
                  prior to closing of each acquisition by Avenue or its
                  Nominated Affiliate of a Participating Interest in an SGC
                  Interest pursuant to clause 2.2, 3.1(b) or 4.2:

                  (a)      Each of the SGC Interests is in good standing and in
                           full force and effect and was entered into and
                           granted in full compliance with all applicable laws
                           and regulations of the Republic of Turkey.

                  (b)      It has the right, power and authority to grant or (as
                           applicable) transfer and assign the legal and
                           beneficial ownershi, of the Participating Interest in
                           the relevant SGC Interests to Avenue or its Nominated
                           Affiliate under the terms and conditions herein
                           contained.

                  (c)      No event has occurred or circumstances exist which
                           would or could give rise to, cause or be the basis or
                           revocation, invalidation or termination of the
                           relevant SGC Interests.

                  (d)      Save as disclosed herein in relation to the ERSAN
                           Royalty Interest, MEPS Royalty Interest, Gercus
                           Royalty Interest and the royalty interest of the
                           Government of Turkey arising and r the Petroleum Law,
                           it has not transferred or assigned to any Person, or
                           gran ed or permitted or suffered to subsist any
                           Encumbrance of any kind and in a :y manner any of the
                           rights held by it under the relevant SGC Interests,
                           or agreed t do so, and the relevant SGC Interests are
                           free and clear of all Encumbrances.

                  (e)      To the best of its knowledge, the e are no pending,
                           threatened or outstanding claims, lawsuits, judgments
                           of a court of law, arbitration or administrative
                           proceeding or any other circumstances likely to give
                           rise to same, affecting the relevant SGC Interests,
                           this Agreement or the transactions to be effected
                           hereunder or pursuant hereto, and all obligations
                           under or arising out of the relevant SGC Interests
                           requiring performance on or before the date of giving
                           or repetition of this representation and warranty
                           have been fully performed.

                  (f)      Its execution, delivery and performance of this
                           Agreement do not and will not:

                           (i)      conflict with;

                           (ii)     result in a breach of;

                           (iii)    constitute a default under;

                           (iv)     accelerate or permit the acceleration of the
                                    performance required by;

                           (v)      permit the exercise of or give rise to the
                                    giving of any required notice with respect
                                    to any right of consent or any preferential
                                    purchase right, option or right of first
                                    refusal with respect to;

                           (vi)     require any consent, authorization or
                                    approval under;

                           (vii)    give rise to a right of termination under or
                                    materially modify; or (viii) result in the
                                    creation or impasition of any Encumbrance
                                    upon,

                           the relevant SGC Interests or any of er material
                           agreement, license, permit, consent or instrument to
                           which it is , party or is subject, or under the
                           Petroleum Law.

                  (g)      It has delivered to Avenue a true, correct and
                           complete copy of

                           (i)      the relevant SGC Interests (including all
                                    attachments thereto);

                                       14
<PAGE>

                           (ii)     all material correspondence between it, on
                                    the one hand, and the Government of the
                                    Republic of Turkey or any department, agency
                                    or authority thereof (including any local or
                                    regional government or governmental agency
                                    or authority), on the other hand, relating
                                    to the SGC Interests;

                           (iii)    all agreements between it and all or any of
                                    the other Parties relating in any way to or
                                    that may in any way affect the relevant SGC
                                    Interests or the arrangements contemplated,
                                    in the Agreement; and

                           (iv)     all material technical, accounting,
                                    geological, geophysical and geotechnical
                                    data in its possession or control regarding
                                    the relevant SGC Interests and the areas
                                    covered thereby.

                  (h)      In conducting operations with respect to the areas
                           the subject of the SGC Interests, it has:

                           (i)      complied in all respects with the terms and
                                    conditions of the SGC Interests and all
                                    applicable laws and regulations of the
                                    Republic of Turkey;

                           (ii)     obtained and (to the extent such operations
                                    have been undertaken) complied with all
                                    requisite permits, licenses and
                                    authorizations (including as extended, if
                                    applicable) required under such laws and
                                    regulations; and

                           (iii)    incurred no obligations or liabilities
                                    (whether liquidated or unliquidated, fixed
                                    or contingent, known', or unknown) related
                                    to the area the subject of the SGC Interests
                                    except 'as expressly set forth in the terms
                                    of SGC Interests.

         8.2      Mutual representations and warranties

                  Each Party represent and warrants severally to each other
                  Party that:

                  (a)      It is a duly organised, validly existing entity of
                           the type described in the introduction to this
                           Agreement and is in good standing under the laws of
                           the jurisdiction of its formation. It has all
                           requisite power and authority to enter into and to
                           perform its obligations under this Agreement.

                  (b)      Its execution, delivery and performance of this
                           Agreement have been authorised by all necessary
                           corporate action, on its part and that of its equity
                           owners (if required) and do not and will not (i)
                           violate any law, rule, regulation, order or decree
                           applicable to it or (ii) violate its organisational
                           documents.


                  (c)      This Agreement is a legal and binding obligation of
                           that Party, enforceable against that Party in
                           accordance with its terms, except to the extent
                           enforceability is modified by bankruptcy,
                           reorganisation and other similar laws affecting the
                           rights of creditors generally and by general
                           principles of equity.


                  (d)      There is no litigation pending or, to the best of its
                           knowledge, threatened to which that Party or any of
                           its Affiliates is a party that could reasonably be
                           expected to have a material adverse effect on the
                           financial condition, prospects, or business of that
                           Party or Affiliate its ability to perform its
                           obligations under this Agreement.

                  (e)      The recitals to this Agreement, insofar as they
                           relate to that Party, are true and accurate.

                  (f)      Neither it nor any of its Affiliates nor any of their
                           officers, directors, employees, agents, shareholders
                           or representatives (including a consultant) has made,
                           or caused to be made, in connection 'iwith the SGC
                           Interests, the Joint Operations, this Agreement or
                           the transactions contemplated by this Agreement,
                           payments, loans or gifts or promises or offer, of
                           payments, loans or gifts of any money or anything of
                           value, directly or indirectly:

                           (i)      to or for the use or benefit of any official
                                    or employee of any government or agency or
                                    instrumentality thereof (including without
                                    limitation any enterprise owned or
                                    controlled by such government), or any
                                    Person acting in an official capacity for
                                    Ior on behalf of any government, department,
                                    agency or instrumentality;

                                       15
<PAGE>

                           (ii)     to or for the use or benefit of any
                                    political party or official or candidate
                                    thereof, or any official or employee of a
                                    public international organization, or any
                                    person acting in an official capacity for or
                                    on behalf of any political party or public
                                    international organization;

                           (iii)    in violation of any applicable law; or

                           (iv)     to any other Person either as an advance or
                                    as a reimbursement if it knows that any part
                                    of such payment, loan or gift will be
                                    directly or indirectly given or paid by such
                                    other Person to an official, party, party
                                    official or candidate referred to in
                                    sub-paragraph (i) or (ii) above, or will
                                    reimburse such other Person for payments,
                                    gifts, or loans previously ade, to any such
                                    official, party, party official or
                                    candidate.

                  (g)      It and, by way of dividends or return of capital, its
                           shareholders and ultimate beneficial owners
                           constitute all of the Persons or entities who are to
                           receive, directly or indirectly, any part of the
                           benefits which may be received by it hereunder or
                           under the SGC Interest or the Joint Operations, and
                           neither it nor any of its Affiliates nor any
                           director, o ficer, employee or attorney-in-fact of it
                           or any of its Affiliates, nor any shareholder or
                           ultimate beneficial owner of more than 5% of the
                           issued and outstanding shares of any class of it or
                           any of its Affiliates, is:

                           (i)      an official or employee of any government,
                                    or any department, agency or instrumentality
                                    of any government;

                           (ii)     a political party or official thereof;

                           (iii)    a candidate for political office therein;

                           (iv)     an official or employee of air public
                                    international organization; or

                           (v)      a Person acting in an official capacity for
                                    or on behalf of any government, or any
                                    department, agency or instrumentality
                                    thereof, any political party, or any public
                                    international organization.

                  (h)      The receipt by it of the considerati n which may be
                           obtained hereunder or of any funds or interests under
                           the SGC Interests does not violate the laws, decrees
                           and regulations of the republic of Turkey.

                  (i)      No other Person or entity claiming by, through or
                           under it or any of its Affiliates, and no director,
                           officer, employee o,-attorney-in-fact of or
                           consultant to any of the preceding is or shall be
                           entitled to any fee or compensation by reason of the
                           execution or implementation of this Agreement.

9.       Indemnities and liabilities

         9.1      Reciprocal indemnities for breach

                  Each Party agrees that it shall indemnify and hold harmless
                  the other Parties from and against any and all losses, costs,
                  demands and damages sustained by a Party as a result of any
                  breach by the former of any of its representations or
                  warranties in this Agreement or the undertakings in clause 7.

         9.2      Indemnity against pre-existing liabilities

                  AME shall indemnify and hold harmless Avenue and any Nominated
                  Affiliate from and against any and all claims, demands, losse
                  ', damages, expenses, costs, obligations, duties, commitments,
                  liabilities, judgments, order, decrees, actions and
                  proceedings (including the payment of reasonable attorneys'
                  fees) arising out of or connected with the SGC Interests or
                  activities relating thereto which arose or occurred prior to
                  November 14, 2002. The Parties recognize that there exist
                  disagreements regarding the costs incurred for the rental of
                  tanks at the Batman Tupra Refinery and the tanks constructed
                  on the Karakilise License, which are unresolved aid unaffected
                  by the indemnification set forth above.

                                       16
<PAGE>

         9.3      Limitation of liability

                  No Party shall be liable for any consequent#al, incidental,
                  indirect, special, exemplary or punitive damages in any action
                  arising out Of this Agreement.

10.      Term and termination

         10.1     Term

                  This Agreement takes effect from the date of execution hereof
                  by all of the Parties and shall remain in effect until
                  terminated pursuant to or as referred to in clause 10.2.

         10.2     Termination

                  This Agreement may be terminated by any warty upon the giving
                  of a Communication to any other Party which has failed to cure
                  any material breach of this Agreement, following a 30 day
                  prior Communication to such breathing Party, which
                  Communication shall state the nature of such alleged breach.
                  Any termination of this Agreement shall not release the
                  breaching party from liability for damages to any other
                  Parties hereunder. Notwithstanding the foregoing, the Parties
                  acknowledge that they are fiduciaries to each other within the
                  scope of the terms of this P' greement, and fiduciary duties
                  under California law of loyalty, disclosure and fai dealing
                  between the Parties shall be applicable.

         10.3     Survival of rights and remedies

                  The termination of this Agreement shall not prejudice or limit
                  the rights and remedies of a Party arising out of or in
                  connection with any antecedent breach of this Agreement
                  (including a breach of representation and warranty).

         10.4     Provisions surviving termination

                  The following provision of this Agreement hall continue to
                  apply notwithstanding the termination of this Agreement:

                  (a)      clauses 9 (Indemnities) and 12 (Confidentiality); and
                           26

                  (b)      any other provision that expr ssly or by necessary
                           implication survives termination of this Agreement.

11.      Assignment and encumbrances

         11.1     No assignment without consent

                  Except as provided in this clause 11, none of the Parties may
                  transfer or assign its rights or obligations under this
                  Agreement in whole or in part without the prior approval of
                  each of the other Parties, provided that if any s ch other
                  Party in its absolute discretion is satisfied with the
                  financial capability of th proposed assignee or transferee,
                  such consent shall not to be unreasonably withheld by that
                  Party.

         11.2     Assignment to Affiliates

                  Each of Avenue and MEPS shall have the ight to assign and
                  transfer all or part of its rights and obligations under this
                  Agreeme t to an Affiliate registered or with a branch in
                  Turkey. Avenue or, as the case may be, M PS, shall guarantee
                  and hereby guarantees the performance of any such Affiliate to
                  who it assigns rights and obligations under this Agreement.

         11.3     Deed of adherence

                  As a condition to any transfer of rights and obligations of a
                  Party under this Agreement, the transferee must execute a deed
                  by which it agrees to be bound by this Agreement.

         11.4     Dealings with SGC Interests

                  Until such time as Avenue or its Nominated Affiliate receives
                  an Assignment of its Participating Interest in any Licenses
                  comprising the SGC Interests, AME undertakes and shall ensure
                  that its interest in the SGC hit rests shall not be assigned,
                  transferred or otherwise disposed or burdened by any
                  Encumbrance, royalty, production payment or overriding royalty

                                       17
<PAGE>

                  of any type whatsoever, ubject only to the Ersan Royalty
                  Interest, the MEPS Royalty Interest, Gercus Royalty In erest,
                  Tethys Option and royalties payable to the Government of
                  Turkey in accordance with the laws of the Republic of Turkey.

12.      Confidentiality

         12.1     Duty of confidence

                  Each Party shall, and shall cause its Affilia es to, keep
                  confidential all of the terms of this Agreement and all
                  written and/or electroni ally stored financial data and other
                  proprietary and commercially sensitive inf rmation regarding
                  the SGC Interests and the Joint Operations; provided, however,
                  that t is obligation of confidentiality shall not apply to any
                  disclosure of information:

                  (a)      that is in or enters the public domain without a
                           breach of a duty of confidentiality by the disclosing
                           Person or was obtained from a third party having no
                           confidentiality restriction to the Parties;

                  (b)      the disclosure of which is required of the disclosing
                           Party or its Affiliate by law, regulation, legal
                           process, or order of any court or governmental body
                           having jurisdiction (including applicable State and
                           Federal securities laws, rules and regulations in the
                           USA) or pursua t to the regulations of any securities
                           exchange upon which any, of the Parties or it
                           Affiliate is (or is to be) listed or its securities
                           are (or are to be) traded;

                  (c)      to its Affiliates or a bona fide potential assignee
                           of the disclosing Party, and to the employees,
                           agents, consultants, bankers, financial and
                           professional advisers of that Party, its Affiliate or
                           any such bona fide potential assignee, provided that
                           (i) they have a reasonable need to know the
                           information and (ii) they are instructed and agree in
                           writing to maintain this information confidential; or

                  (d)      by any Party or its Affiliates or am Person referred
                           to in paragraph (c) above to whom Avenue has
                           disclosed the same, to investors or targeted
                           potential investors in any Party or its Affiliates o
                           financial institutions or their advisors, in
                           connection with a capital raising of fthe listing of
                           equities or project financing or the like.

         12.2     Announcements

                  Any announcement or circular or other publicity relating to
                  this Agreement or any termination hereof shall prior to its
                  publication be approved in writing by each of the Parties as
                  to its content, form and manner of publication (such approval
                  not to be unreasonably withheld or delayed) save for any
                  announcement, circular or other publicity required to be made
                  or issued by any Party or its Affiliate pursuant to applicable
                  State and Federal securities laws, rules and regulations in
                  the USA or the regulations of any securities exchange upon
                  which it is (or is to be) listed or its securities are (or are
                  to be) traded. Save as permitted by the preceding sentence, no
                  Party shall make any announcement or issue any circular or
                  othe publicity relating to this Agreement or any termination
                  hereof, provided that such Party shall use its reasonable
                  endeavours to provide a copy of such publicity five days nor
                  to the making or issue thereof.

         12.3     Survival

                  The provisions of clauses 12.1 and 12.2 shall survive for a
                  period of 2 years following termination of this Agreement.

13.      Taxes

         13.1     General

                  Expect as otherwise stated herein, any tars and duties (other
                  than VAT and stamp taxes applicable in the Republic of Turkey)
                  or o her levies payable in the Republic of Turkey as a direct
                  result of the transfer and assign ent of the interests in the
                  SGC Interests to Avenue or its Nominated Affiliate pursu t to
                  this Agreement (but excluding income, corporate or similar
                  taxes assessed separat ly by reference to individual Parties)
                  shall be paid by the Parties in proportion to their respective
                  Participating Interests in the relevant SGC Interest
                  (including any such Participating Interest held on its behalf
                  by AME under the terms of this Agreement).

                                       18
<PAGE>

         13.2     VAT

                  Unless otherwise expressly stated in this Agreement, all
                  amount expressed to be payable under this Agreement shall be
                  inclusive of any applicable VAT.

         13.3     Stamp tax

                  Avenue shall be liable for all stamp tax arising in the
                  Republic of Turkey in connection with the execution of this
                  Agreement (if any). SGC agree to cooperate, as reasonably
                  required by Avenue, in relation to the determination of
                  whether, and if so how much, such stamp tax is payable, and in
                  relation to having stamp tax assessed in the Republic of
                  Turkey.

14.      Default

         In the event that a Party defaults in the performance of any of its
         obligations under this Agreement, then the other Parties (or any of
         them) shall be entitled to rights and remedies available at law or
         equity (including damages and/or specific performance, as permitted by
         applicable law).

15.      Notices

         15.1     Manner of service

                  Any written communication or document, ncluding process in any
                  legal action or proceedings (a 'Communication') which an Party
                  may desire to give or deliver in connection with this
                  Agreement shall be d livered by hand or sent by fax or email
                  to the addressee at its address or fax number ore ail address
                  set out in clause 15.3. Any such notice sent by fax or email
                  shall be confi ed in hard copy form by post or by hand,
                  provided that a failure or delay in this rega d shall not
                  prevent the notice from having been effectively delivered upon
                  receipt by he addressee of the relevant fax or email as stated
                  below.

         15.2     Time of notice

                  A Communication shall be deemed to have been given and
                  received: (a) if delivered by hand, at the time of delivery;
                  or

                  (a)      if delivered by hand, at the time of delivery; or

                  (b)      if sent by fax, on the day foil wing the day of
                           acknowledgement by the addressee's facsimile
                           receiving equipment of receipt of the entire
                           Communication; or

                  (c)      if sent by email, on the day following the day of
                           acknowledgement of the addressee's receipt of the
                           email by confirmation back to the sender from the
                           recipient, but not addressee's receipt of the email
                           recipient in an electronic comm otherwise.


         15.3 Addresses

         The current addresses, fax numbers and, were applicable, contact names
         of the Parties for the purposes of Communications are as follows:

         AME - on Behalf of SGC:
         ALADDIN MIDDLE EAST LTD.
         Attn: Mr Oyman Sayer and Cem Sayer
         Sogutozu Caddesi No: 23
         Balgat-Ankara*
         06520 Turkey
         Tel: +90.312.2871915 or 287 1988
         Fax:+90.312.2873357 or 287 5768
         Email: csayer@tr.net

                                       19
<PAGE>

         Avenue:
         Attn: Mr Jonathan Herzog
         15303 Ventura Blvd., 9th Fl.
         Sherman Oaks, CA, USA
         Tel: +818 380 3020
         Fax:+818 380 3021
         Email: jonathan.herzog@avenuegroupinc.com

         Copied to:
         Attn: Mr Levi Mochkin
         34-36 Punt Road
         Windsor, Melbourne, Australia
         Tel: +(613) 9533 7800
         Fax:+(613) 9533 7900
         Email: Lm10itt@aol.com

         Copied to:
         Jeffrey E. Sultan, Esq.
         Jeffer, Mangels, Butler & Marmaro LLP
         Seventh Floor
         1900 Avenue of the Stars
         Los Angeles, California 90067-4308
         Tel: (310) 201-3515
         Fax: (310) 712-8515
         E-mail: jes@jmbm.com

         And to:
         Dr Jaap Poll
         45 Philip Road
         Dalkeith, WA 6009
         Australia
         Tel: +61 8 9386 2045
         Fax: + 61 8 9386 2053
         Email: jaappoll@ozemail.com.au

         MEPS:
         Ken Fellowes or Rae Webster
         Level 1, 30 Patrick Street, Hobart
         Tasmania 7000, Australia
         Tel: +613 6231 1118
         Fax: +613 6231 5020
         Email: kjf@mepsltd.com

         And to:
         Ken Fellowes and Cem Sayer
         Sogiitozii Caddesi No:23
         Balgat-Ankara*
         06520 Turkey
         Tel: +90.312.2871915 or 287 1988
         Fax:+90.312.2873357 or 287 5768
         Email: csayer@tr.net

         A Party may change its address, fax numbe', email address or contact
         name for the purpose of Communications by serving notice on t e other
         Parties in accordance with this clause.

         15.4     Proof of service

                  In proving service of a Communication, it shall be sufficient
                  to prove that the envelope containing the Communication was
                  properly addressed and delivered to the address shown thereon,
                  or that fax transmission of the Communication was made after
                  obtaining in person or by telephone appropriate evid nee of
                  the capacity of the addressee to receive the same, as the case
                  may be.

                                       20
<PAGE>

16.      General

         16.1     Entire agreement

                  This Agreement shall set forth the entire a eement and
                  understanding between the Parties as to the subject matter
                  thereof, and supersedes and cancels all prior negotiations,
                  discussions, representations, agreements and understandings
                  whether written or oral pertaining to such subject matter.

         16.2     Further assurances

                  Each of the Parties shall do all such acts and execute and
                  deliver all such documents as may be reasonable required in
                  order to fully perform and carry out the terms of this
                  Agreement.

         16.3     Successors and assigns

                  This Agreement shall be binding upon and shall inure to the
                  benefit of each of the Parties and their respective successors
                  and permitt~d assignees.

         16.4     No waiver

                  No waiver by a Party of a failure or failure by any of the
                  other Parties to perform any provision of this Agreement shall
                  operate or be construed as a waiver in respect of any other or
                  further failure whether of a like or different character or a
                  waiver by any other Party. No failure or delay on the part of
                  a Party in exercising any right, power or privilege hereunder
                  and no course of dealir'g between that Party and any other
                  Party shall operate as a waiver thereof, nor shall any single
                  or partial exercise of any right, power or privilege hereunder
                  preclude any other or rther exercise thereof or the exercise
                  of any other right, power or privilege. The rights nd remedies
                  herein expressly provided are cumulative and not exclusive of
                  any other 'ghts or remedies which a Party would otherwise have
                  at law or in equity or othe ise.

         16.5     Amendment

                  Except where specifically provided, this Agreement may be
                  amended only by an instrument in writing signed by duly
                  authorised representatives of each of the Parties.

         16.6     No partnership or agency;

                  (a)      Nothing in this Agreement (or in ny of the
                           arrangements contemplated hereby) shall be deemed to
                           constitute a partnership between the Parties or any
                           of them, nor constitute any Party the a ent of any
                           other Party for any purpose. Notwithstanding the
                           foregoing the parties acknowledge they are
                           fiduciaries to each other and fiduciary duties under
                           California law of loyalty, disclosure and fair
                           dealing shall be applicable.

                  (b)      In addition, no Party shall without the written
                           consent of each of the other Parties enter into
                           contracts with third parties as agent for the Parties
                           nor shall any Party describe itself as agent as
                           aforesaid or in any way hold itself as being agents
                           as aforesaid or as representing the Parties.

         16.7     Severance

                  If any of the provisions of this Agreement is finally
                  determined to be, or becomes, invalid, illegal or
                  unenforceable, or if the actions or matters contemplated by
                  any of the provisions of this Agreement are finally determined
                  to be, or become, illegal, then such provisions shall, so far
                  as invalid or unenforceable, be given no effect and shall be
                  deemed not to be included in this Agreement, but without
                  affecting or invalidating the emaining provisions of this
                  Agreement. Notwithstanding the foregoing, the Parties shall
                  thereupon negotiate in good faith in order tlp agree the terms
                  of a mutually satisfactory provision achieving as nearly as
                  possible tl#e same commercial effect, to be substituted for
                  the provision found to be invalid, illegal or unenforceable.

         16.8     Costs and expenses

                  Each Party shall be responsible for all of the costs and
                  expenses (including, without limitation, legal costs and
                  expenses) incurred by that Party in connection with the
                  preparation, negotiation and conclusion of this Agreement.

                                       21
<PAGE>

         16.9     Counterparts

                  This Agreement may be entered into in any number of
                  counterparts, each of which when executed by one or more
                  Parties shall be an original, but all the counterparts shall
                  together constitute one and the same instrument.

         16.10    Governing law

                  This Agreement shall be governed by and construed in
                  accordance with the laws of the State of California, USA,
                  excluding any provisions thereof, which would require the
                  application of the laws of any other jurisdiction.

         16.11    Arbitration

                  (a)      Any dispute arising out of or in connection with this
                           Agreement, including any question regarding its
                           existence, validity or termination, shall be referred
                           to and finally resolved under the rules of the London
                           Court of International Arbitration, which rules are
                           deemed to be incorporated by reference into this
                           clause.

                  (b)      The number of arbitrators shall be one (or three if
                           the Parties mutually so agree).

                  (c)      The seat or legal place of arbitration shall be San
                           Francisco, California, USA.

                  (d)      The language to be used in the arbitral proceedings
                           shall be English.

                  (e)      The arbitrators' award may include compensatory
                           damages against either Party, but under no
                           circumstances shall the arbitrators be authorized to
                           nor shall they award punitive damages or multiple
                           damages against any Party.

                  (f)      The Parties hereby exclude any right of application
                           or appeal to any court, to the extent that they may
                           validly so a fee, and in particular in connection
                           with any question of law arising during the ourse of
                           the arbitration or out of the arbitration panel.

IN WITNESS WHEREOF the Parties have executed this Agreement as of the date above
written.

ALADDIN MIDDLE EAST LTD.


By:  /s/ George C. Bruce
George C. Bruce


ERSAN PETROL SANAYII A.S.


By:  /s/ George C. Bruce
George C. Bruce, Attorney-in-fact

TRANSMEDITERRANEAN OIL COMPANY LTD


By:  /s/ George C. Bruce
George C. Bruce, Attorney-in-fact


GUNEY YILDIZI PETROL URETIM SONDAJ MUTEAHHITLIK ve TICARET A.S.


By:  /s/ George C. Bruce
George C. Bruce, Attorney-in-fact

                                       22
<PAGE>


                                  SCHEDULE 'A'

                  AVENUE EXPLORATION LICENSE & PRODUCTION LEASE
                      ACQUISITION AND ADMINISTRATION COSTS
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------
SCHEDULE 'A' - AVENUE ENERGY INC EXPLORATION LICENSE & PRODUCTION LEASE ACQUISITION AND ADMINISTRATION COST
U.S.$0.10/NET ACRE/YEAR
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
 NO. OF       NAME OF     LICENSE    LICENSE          POST FARMIN        TOTAL      TOTAL     AVENUE      LIC.
PETROLEUM    PETROLEUM    PREFIX     NUMBER       COMPANY                 AREA       AREA       NET      ADMIN
DISTRICT      DISTRICT                           REGISTERED  % HELD      (HEC.)    (ACRES)     ACRES      FEE
-----------------------------------------------------------------------------------------------------------------------
<S>         <C>         <C>         <C>        <C>          <C>        <C>       <C>        <C>        <C>

   X           SIIRT       AR/AME       2759      AVENUE      50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                         11,086     27,394     13,967     $1,370
-----------------------------------------------------------------------------------------------------------------------
   X           SIIRT    AR/AME-TMO  2598,2599,    AVENUE      50.00%
                                    2600, 2601
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                        118,272    292,250    146,125    $14,613
-----------------------------------------------------------------------------------------------------------------------
   X           SIIRT       AR/TMO       3118      AVENUE      50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        30.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   TMO        20.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                         38,846     95,988     47,994     $4,799
-----------------------------------------------------------------------------------------------------------------------
   X           SIIRT     AR/TMO-    3794, 3795    AVENUE      50.00%
                         EPS-GYP
-----------------------------------------------------------------------------------------------------------------------
                                                   EPS        10.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   GYP        25.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        27.50%
-----------------------------------------------------------------------------------------------------------------------
                                                  TETHYS      10.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                         96,492    238,432     65,569     $6,557
-----------------------------------------------------------------------------------------------------------------------
   X           SIIRT    AR/EPS-GYP  3749, 3750    AVENUE      50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        40.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   EPS        10.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                         99,328    245,439    122,720    $12,272
-----------------------------------------------------------------------------------------------------------------------
   X           SIIRT    ARI/AME-TMO   2260        AVENUE      50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        20.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   TMO        30.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                          1,937      4,786      2,393       $239
-----------------------------------------------------------------------------------------------------------------------
   X           SIIRT     R/AME-EPS    3254        AVENUE      50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                          2,145      5,300      2,650      $265
-----------------------------------------------------------------------------------------------------------------------
   XI       DIYARBAKIR  AR/AME-    2674, 2677,    AVENUE      50.00%
                        EPS-AVE       2678
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        45.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   EPS         5.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                        122,943    303,792    151,896    $15,190
-----------------------------------------------------------------------------------------------------------------------
   XI       DIYARBAKIR  AR/EPS-AME    3748        AVENUE      27.50%
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        27.50%
-----------------------------------------------------------------------------------------------------------------------
                                                   EPS        35.00%
-----------------------------------------------------------------------------------------------------------------------
                                                  TETHYS      10.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                          1,452      3,588        987        $99
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------
SCHEDULE 'A' - AVENUE ENERGY INC EXPLORATION LICENSE & PRODUCTION LEASE ACQUISITION AND ADMINISTRATION COST
U.S.$0.10/NET ACRE/YEAR
-----------------------------------------------------------------------------------------------------------------------
<S>         <C>         <C>         <C>        <C>          <C>        <C>       <C>        <C>        <C>
  XII        GAZIANTEP   AR/AME-      3462        AVENUE      50.00%
                         EPS-AVE
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        27.50%
-----------------------------------------------------------------------------------------------------------------------
                                                   EPS        22.50%
-----------------------------------------------------------------------------------------------------------------------
                                                                          3,278      8,100      4,050      $405
-----------------------------------------------------------------------------------------------------------------------
  XII        GAZIANTEP   AR/AME- 3612             AVENUE      50.00%
                         EPS-GYP
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                         48,525    119,905     59,953     $5,995
-----------------------------------------------------------------------------------------------------------------------
  XII        GAZIANTEP     IR/EPS      658        AVENUE      50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   EPS        50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                          7,060     17,445      8,723       $872
-----------------------------------------------------------------------------------------------------------------------

  XIII         HATAY      AR/TMO      3786        AVENUE      50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   TMO        25.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        25.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                         49,539    122,411     61,205     $6,121
-----------------------------------------------------------------------------------------------------------------------
   XV          KONYA     AR/EPS    3637, 3638,    AVENUE      50.00%
                                   3639, 3640
-----------------------------------------------------------------------------------------------------------------------
                                                   EPS        10.00%
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        40.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                        199,221    492,275    246,138    $24,614
-----------------------------------------------------------------------------------------------------------------------
  XVI         ANTALYA   AR/AME-    3726, 3727,    AVENUE      50.00%
                        TMO-EPS      3728
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                        149,310    368,945    184,473    $18,447
-----------------------------------------------------------------------------------------------------------------------
  XVII         IZMIR    AR/AME-EPS 3700, 3701,    AVENUE      50.00%
                                   3702, 3703,
                                   3704, 3705
-----------------------------------------------------------------------------------------------------------------------
                                                   AME        50.00%
-----------------------------------------------------------------------------------------------------------------------
                                                                        281,899    696,572    348,286    $34,829
-----------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------
        TOTAL CONCESSIONS              30      TOTAL HEC'S & ACRES    1,279,858  3,162,529  1,466,858    $111,857
-----------------------------------------------------------------------------------------------------------------------
               INITIAL ACREAGE ACQUISITION COST $450,000               AVENUE MONTHLY ACREAGE ADM. FEE    $9,321
-----------------------------------------------------------------------------------------------------------------------

</TABLE>