Exhibit
10.2


 


PETROLEUM,
NATURAL GAS AND GENERAL RIGHTS CONVEYANCE


 


THIS
AGREEMENT made as of the 29th day of May, 2020.


 


BETWEEN:


 


BLUE
SKY RESOURCES LTD., a body corporate, having an office in the City of Calgary, in the Province of Alberta (hereinafter referred
to as “Vendor”)


 


-
and -


 


PETROLIA
CANADA CORPORATION, a body corporate, having an office in the City of Calgary, in the Province of Alberta (hereinafter referred
to as “Purchaser”)


 





	 	 



 


	1.	DEFINITIONS



 


In
this Agreement, unless the context otherwise requires:


 


	 	(a)	“Abandonment
    and Reclamation Obligations” means all obligations under the Title Documents and the Regulations to:
	 	 	 	 
	 	 	(i)	abandon
    the Wells;
	 	 	 	 
	 	 	(ii)	decommission
    and remove the Tangibles, including associated foundations and structures; and
	 	 	 	 
	 	 	(i)	restore,
    remediate and reclaim the lands to which the Surface Rights relate;
	 	 	 	 
	 	(b)	“Adjustment
    Date” means the hour of 12:02 a.m., Calgary time, on the 1st day of May, 2020;
	 	 	 
	 	(c)	“AER”
    means The Alberta Energy Regulator and any predecessor thereof;
	 	 	 
	 	(d)	“AFE’s”
    means the authorities for expenditure and operations notices, if any, set out in Schedule “B” under the heading
    “AFEs”;
	 	 	 
	 	(e)	“Affiliate”
    of any Person means any other Person who directly or indirectly controls, is controlled by, or is under common control with,
    such Persons;
	 	 	 
	 	(f)	“Applicable
    Law” means any law, statute, regulation, rule, ordinance, order or directive enacted or issued by any Governmental
    Authority having jurisdiction over Vendor, Purchaser or the Assets, and includes, without limitation, the provisions and conditions
    of any permit, license or other governmental or regulatory authorization in respect of the Assets or any of them;


 




    	 



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	 	(g)	“Assets”
    means the Petroleum and Natural Gas Rights, the Tangibles and the Miscellaneous Interests, and all interests of Vendor
    arising under and by virtue of the Vermilion PSA;
	 	 	 
	 	(h)	“Business
    Day” means a day other than a Saturday, a Sunday or a statutory holiday in Calgary, Alberta;
	 	 	 
	 	(i)	“CO&O
    Agreements” means the agreement or agreements for the construction, ownership or operation of any Tangibles or Surface
    Rights, if any, set out in Schedule “D” under the heading “CO&O Agreements”;
	 	 	 
	 	(j)	“Environmental
    Liabilities” means any and all Losses and Liabilities in respect of environmental damage or contamination located
    within, upon or under the Lands (whether or not resulting from operations conducted with respect to the Assets) or lands appurtenant
    thereto, or other environmental problems pertaining to the Lands or caused by the Assets or the Lands or operations thereon
    or related thereto, however and by whomsoever caused, and whether caused by a breach of the applicable Regulations or otherwise,
    which occur or arise in whole or in part prior to, at or subsequent to the date hereof, and regardless of whether or not a
    reclamation certificate has been issued. Without limiting the generality of the foregoing, such environmental damage or contamination
    or other environmental problems shall include those arising from or related to (i) surface, underground, air, ground water,
    surface water or marine environment contamination; (ii) Abandonment and Reclamation Obligations; (iii) the restoration, cleanup
    or reclamation of or failure to restore, cleanup or reclaim any part of the Assets or the Lands; (iv) the removal of or failure
    to remove foundations, structures or equipment; (v) the transportation, storage, use or disposal of toxic or hazardous substances
    or hazardous, dangerous or non-dangerous oilfield substances or waste; (vi) the release, spill, escape or emissions of toxic,
    hazardous or oilfield waste substances; (vii) compliance with past, present and future Regulations relating to the environment
    or the protection thereof and Regulations related to employee and public health and safety matters; (viii) any operation carried
    out by others on lands not part of the Assets but in proximity to the Assets, which operations have caused damage to the environment;
    and (ix) damages and losses suffered by Third Parties as a result of any of the foregoing;
	 	 	 
	 	(k)	“Facilities”
    means the facility or facilities, if any, set out in Schedule “C” under the heading “Facilities”;
	 	 	 
	 	(l)	“Governmental
    Authority” means any domestic government, whether federal, provincial, state, territorial, local, regional, municipal,
    or other political jurisdiction, and any agency, authority, instrumentality, court, tribunal, board, commission, bureau, arbitrator,
    arbitration tribunal or other tribunal, or any quasi-governmental or other entity, insofar as it exercises a legislative,
    judicial, regulatory, administrative, expropriation or taxing power or function of or pertaining to government having jurisdiction
    over the Assets, the Parties or the Transaction;
	 	 	 
	 	(m)	“GST”
    means the goods and services tax administered pursuant to the Excise Tax Act (Canada) or under any successor or parallel
    federal or provincial legislation that imposes a tax on the recipient of goods and services;


 




    	 



    	- 3 -



    

 


	 	(n)	“Joint
    Venture Contracts” means the agreement or agreements: (i) for the transportation, processing or disposal of the
    Leased Substances or any of them or substances produced in connection with the Leased Substances or any of them; (ii) agreements
    for the contract operation by a Third Party of the Assets or any of them, and (iii) agreements to provide transportation,
    processing or disposal capacity or service to any Third Party, if any, set out in Schedule “D” under the heading
    “Joint Venture Contracts”;
	 	 	 
	 	(o)	“Lands”
    means the lands set out in Schedule “A” under the heading “Lease Description / Rights Held”;
	 	 	 
	 	(p)	“Leased
    Substances” means all Petroleum Substances, rights to or in respect of which are granted, reserved or otherwise
    conferred by or under the Title Documents (but only to the extent that the Title Documents pertain to the Lands and to the
    zones and formations set out in Schedule “A” under the heading “Lease Description / Rights Held”);
	 	 	 	 
	 	(q)	“Losses
    and Liabilities” means all claims, liabilities, actions, proceedings, demands, losses, costs, penalties, fines,
    damages and expenses which may be sustained or incurred by any of a Party or its Representatives, including, without limitation,
    reasonable legal fees and disbursements on a solicitor and client basis;
	 	 	 
	 	(r)	“Miscellaneous
    Interests” means, subject to any and all limitations and exclusions provided for in this definition, all property,
    assets, interests and rights pertaining to the Petroleum and Natural Gas Rights and the Tangibles, or either of them, but
    only to the extent that such property, assets, interests and rights pertain to the Petroleum and Natural Gas Rights and the
    Tangibles, or either of them, including without limitation any and all of the following:
	 	 	 	 
	 	 	(i)	contracts
    and agreements relating to the Petroleum and Natural Gas Rights and the Tangibles, or either of them, including without limitation
    gas purchase contracts, processing agreements, transportation agreements and agreements for the construction, ownership and
    operation of facilities; but unless included as Production Contracts, excluding production sales contracts pertaining to the
    Leased Substances or any of them that cannot be terminated on notice of 31 days or less (without an early termination penalty
    or other cost), gas balancing or similar agreements pertaining to the Leased Substances or any of them, agreements for the
    transportation, processing or disposal of the Leased Substances or any of them or substances produced in connection with the
    Leased Substances or any of them, agreements for the contract operation by a Third Party of the Assets or any of them and
    agreements to provide transportation, processing or disposal capacity or service to any Third Party;
	 	 	 	 
	 	 	(ii)	the
    Surface Rights;
	 	 	 	 
	 	 	(iii)	all
    records, books, documents, licences, reports and data which relate to the Petroleum and Natural Gas Rights and the Tangibles,
    or either of them, including any of the foregoing that pertain to seismic, geological or geophysical matters; and


 




    	 



    	- 4 -



    

 


	 	 	(iv)	the
    Wells (and no other wells), including the wellbores and any and all casing;
	 	 	 	 
	 	(s)	“Party”
    means a party to this Agreement;
	 	 	 	 
	 	(t)	“Permitted
    Encumbrances” means:
	 	 	 	 
	 	 	(i)	liens
    for taxes, assessments and governmental charges which are not due or the validity of which is being diligently contested in
    good faith by or on behalf of Vendor;
	 	 	 	 
	 	 	(ii)	liens
    incurred or created in the ordinary course of business as security in favour of the person who is conducting the development
    or operation of the property to which such liens relate for Vendor’s proportionate share of the costs and expenses of
    such development or operation;
	 	 	 	 
	 	 	(iii)	mechanics’,
    builders’ and materialmen’s liens in respect of services rendered or goods supplied for which payment is not due;
	 	 	 	 
	 	 	(iv)	easements,
    rights of way, servitudes and other similar rights in land (including without limitation rights of way and servitudes for
    highways and other roads, railways, sewers, drains, gas and oil pipelines, gas and water mains, electric light, power, telephone,
    telegraph and cable television conduits, poles, wires and cables) which do not materially impair the use of the Assets affected
    thereby;
	 	 	 	 
	 	 	(v)	the
    right reserved to or vested in any Governmental Authority by the terms of any lease, licence, franchise, grant or permit or
    by any statutory provision, to terminate any such lease, licence, franchise, grant or permit or to require annual or other
    periodic payments as a condition of the continuance thereof;
	 	 	 	 
	 	 	(vi)	all
    Regulations and rights of general application reserved to or vested in any Governmental Authority to levy taxes on the Leased
    Substances or any of them or the income therefrom, and governmental requirements and limitations of general application as
    to production rates on the operations of any property;
	 	 	 	 
	 	 	(vii)	statutory
    exceptions to title, and the reservations, limitations, provisos and conditions in any original grants from the Crown of any
    of the mines and minerals within, upon or under the Lands;
	 	 	 	 
	 	 	(viii)	any
    security held by any Third Party encumbering Vendor’s interest in and to the Assets or any part or portion thereof,
    in respect of which Vendor delivers a discharge or no interest letter to Purchaser concurrent herewith;


 




    	 



    	- 5 -



    

 


	 	 	(ix)	the
    Production Contracts and agreement or agreements (if any) for the sale of Leased Substances that are terminable on not greater
    than 31 days’ notice (without an early termination penalty or other cost); and
	 	 	 	 
	 	 	(x)	all
    royalty burdens, liens, penalties, conversion rights and other claims of Third Parties set out in Schedule “A”
    under the heading “Royalty / Encumbrances”;
	 	 	 	 
	 	(u)	“Person”
    means any individual (or group of individuals), corporation, limited or unlimited liability company, joint venture, partnership
    (limited or general), trust, trustee, executor or similar official, Governmental Authority or other legal entity;
	 	 	 
	 	(v)	“Petroleum
    and Natural Gas Rights” means all rights to and in respect of the Leased Substances and the Title Documents (but
    only to the extent that the Title Documents pertain to the Lands), including without limitation the interests set out in Schedule
    “A” beside “VERMILION RESOU” under the heading ““WI” under the heading “DOI
    Code”;
	 	 	 	 
	 	(w)	“Petroleum
    Substances” means any of crude oil, crude bitumen and products derived therefrom, synthetic crude oil, petroleum,
    natural gas, natural gas liquids, and any and all other substances related to any of the foregoing, whether liquid, solid
    or gaseous, and whether hydrocarbons or not, including without limitation sulphur;
	 	 	 
	 	(x)	“Purchase
    Price” has the meaning ascribed to that term in subsection 3(a);
	 	 	 
	 	(y)	“Regulations”
    means all statutes, laws, rules, orders and regulations in effect from time to time and made by any Governmental Authority
    having jurisdiction over the Assets;
	 	 	 
	 	(z)	“Representatives”
    means, with respect to any Party, its Affiliates, and the respective directors, officers, servants, agents, advisors,
    employees and consultants of that Party and its Affiliates;
	 	 	 
	 	(aa)	“Right
    of First Refusal” or “ROFR” means a right of first refusal, pre-emptive right of purchase or
    similar right whereby any Third Party has the right to acquire or purchase any of the Assets as a consequence of the Parties
    entering into this Agreement or the Transaction;
	 	 	 
	 	(bb)	“Sale
    Contracts” means the agreement or agreements for the sale of Leased Substances, if any, set out in Schedule “D”
    under the heading “Sale Contracts”;
	 	 	 
	 	(cc)	“Specific
    Conveyances” means all conveyances, assignments, transfers, novations and other documents or instruments that are
    reasonably required or desirable to convey, assign and transfer the interest of Vendor in and to the Assets to Purchaser and
    to novate Purchaser in the place and stead of Vendor with respect to the Assets;
	 	 	 
	 	(dd)	“Surface
    Rights” means all rights to use the surface of land in connection with the Assets, including, without limitation,
    rights to enter upon and occupy the surface of land on which the Tangibles and the Wells are located and rights to cross or
    otherwise use the surface of land for access to the Assets, excluding any such rights that pertain only to a well or wells
    other than the Wells;


 




    	 



    	- 6 -



    

 


	 	(ee)	“Take
    or Pay Obligations” means obligations to sell or deliver Petroleum Substances or any of them, rights to which are
    granted, reserved or otherwise conferred pursuant to the Title Documents, without being entitled in due course to receive
    and retain full payment for such Petroleum Substances;
	 	 	 
	 	(ff)	“Tangibles”
    means the Facilities, office equipment located at the Slave Lake field office, and any and all other tangible depreciable
    property and assets other than the Facilities which are located within, upon or in the vicinity of the Lands and which are
    used or are intended to be used to produce, process, gather, treat, measure, make marketable or inject the Leased Substances
    or any of them or in connection with water injection or removal operations that pertain to the Petroleum and Natural Gas Rights,
    including without limitation any and all gas plants, oil batteries, buildings, production equipment, pipelines, pipeline connections,
    meters, generators, motors, compressors, treaters, dehydrators, scrubbers, separators, pumps, tanks, boilers and communication
    equipment (including any SCADA systems);
	 	 	 
	 	(gg)	“Third
    Party” means any Person other than Vendor and Purchaser or any of their respective Affiliates;
	 	 	 
	 	(hh)	“this
    Agreement”, “herein”, “hereto”, “hereof” and similar expressions mean and refer
    to this Petroleum, Natural Gas and General Rights Conveyance;
	 	 	 
	 	(ii)	“Title
    Documents” means, collectively, any and all certificates of title, leases, reservations, permits, licences, assignments,
    trust declarations, operating agreements, royalty agreements, gross overriding royalty agreements, participation agreements,
    farm-in agreements, sale and purchase agreements, pooling agreements and any other documents and agreements granting, reserving
    or otherwise conferring rights to (i) explore for, drill for, produce, take, use or market Petroleum Substances, (ii) share
    in the production of Petroleum Substances, (iii) share in the proceeds from, or measured or calculated by reference to the
    value or quantity of, Petroleum Substances which are produced, and (iv) rights to acquire any of the rights described in items
    (i) to (iii) of this definition; but only if the foregoing pertain in whole or in part to Petroleum Substances within, upon
    or under the Lands and, further, to the zones and formations set out in Schedule “A” under the heading “Int
    Type / Lse No / Name” under the heading “Lse Type Lessor Type”;
	 	 	 
	 	(jj)	“Transaction”
    means the entering into of this Agreement and the sale of the Assets by Vendor to Purchaser pursuant to this Agreement;
	 	 	 
	 	(kk)	“Vermilion”
    means Vermilion Resources;
	 	 	 
	 	(ll)	“Vermilion
    PSA” means the Amended and Restated Agreement of Purchase and Sale (Greater Utikuma Lake Area, Alberta) between
    Vermilion, as vendor, and Vendor, as purchaser, made as of July 3, 2019 and amended and restated as of August 16, 2019, and
    as of January 13, 2020, and as of April 24, 2020; and


 




    	 



    	- 7 -



    

 


	 	(mm)	“Wells”
    means all wells which have been, are or may be used in connection with the Petroleum and Natural Gas Rights, including
    without limitation producing, shut-in, abandoned, water source, water disposal and water injection wells, the well
    or wells, if any, set out in Schedule “E” under the heading “Wells”.


 


	2.	INTERPRETATION



 


	 	(q)	The
    expressions “section”, “subsection”, “clause”, “subclause”, “paragraph”
    and “Schedule” followed by a number or letter or combination thereof mean and refer to the specified section,
    subsection, clause, subclause, paragraph and schedule of or to this Agreement.
	 	 	 
	 	(r)	The
    division of this Agreement into sections, subsections, clauses, subclauses and paragraphs and the provision of headings for
    all or any thereof are for convenience and reference only and shall not affect the construction or interpretation of this
    Agreement.
	 	 	 
	 	(s)	When
    the context reasonably permits, words suggesting the singular shall be construed as suggesting the plural and vice versa,
    and words suggesting gender or gender neutrality shall be construed as suggesting the masculine, feminine and neutral genders.
	 	 	 
	 	(t)	There
    are appended to this Agreement the following schedules pertaining to the following matters:


 


	Schedule
    “A”	-	Lands
    and Petroleum and Natural Gas Rights
	Schedule
    “B”	-	AFEs
	Schedule
    “C”	-	Facilities
	Schedule
    “D”	-	Sale
    Contracts, Joint Venture Contracts and
		 	CO&O
    Agreements 
	Schedule
    “E”	-	Wells


 


Such
schedules are incorporated herein by reference as though contained in the body hereof. Wherever any term or condition of such
schedules conflicts or is at variance with any term or condition in the body of this Agreement, such term or condition in the
body of this Agreement shall prevail.


 


	 	(jj)	All
    losses, costs, claims, damages, expenses and liabilities in respect of which a Party has a claim pursuant to this Agreement
    include without limitation reasonable legal fees and disbursements on a solicitor and client basis.
	 	 	 
	 	(u)	In
    this Agreement, the stated knowledge, information, belief or awareness of a Party consists only of the actual knowledge or
    awareness, as the case may be, of the current officers and senior managers of such Party, whose normal responsibilities relate
    to the matter in question in the course of their normal duties, and does not include knowledge, information or belief and
    awareness of any other Person or any constructive or imputed knowledge. Vendor does not have any obligation to make inquiry
    of Third Parties or the files and records of any Third Party or Governmental Authority in connection with representations
    and warranties that are made to its knowledge, information, belief or awareness.


 




    	 



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	3.	CONVEYANCE



 


	 	(a)	Vendor,
    for the payment to Vendor by Purchaser of 50% of the Purchase Price (as defined in the Vermilion PSA) payable by Vendor under
    the Vermilion PSA (the “Purchase Price”), the receipt of which is hereby acknowledged by Vendor, hereby sells,
    assigns, transfers, conveys and sets over to Purchaser, and Purchaser hereby purchases from Vendor, 50% of the right, title,
    estate and interest of Vendor (whether absolute or contingent, legal or beneficial) in and to the Assets, TO HAVE AND TO HOLD
    the same, together with all benefit and advantage to be derived therefrom, absolutely, subject to the terms of this Agreement.
	 	 	 
	 	(b)	The
    Parties shall allocate the Purchase Price as follows:


 


	Petroleum and Natural Gas Rights	 	90%
	Tangibles	 	10% less $10.00
	Miscellaneous Interests	 	$10.00



 


	 	(c)	Vendor
    acknowledges the receipt of the GST payable in respect of the Assets from Purchaser. Vendor shall remit the GST according
    to law. The GST registration number of Vendor is 74733 0488 RT0001. The GST registration number of Purchaser is ●. Purchaser
    shall be solely responsible for all sales taxes, transfer taxes, fees, charges, levies or similar assessments which may be
    imposed by any governmental authority and pertaining to its acquisition of the Assets or to the circulation and registration
    of any specific conveyances necessitated hereby and shall remit any such amounts to the applicable governmental authority
    according to law.
	 	 	 
	 	(d)	For
    the avoidance of doubt, the Parties acknowledge that:


 


	 	(i)	the
    amount and the scope of the Abandonment and Reclamation Obligations and the Environmental Liabilities associated with the
    Assets are not capable of being quantified at the time of the conveyance of the Assets herein and depend upon numerous unknowable
    factors that are not within the control of the Parties;
	 	 	 
	 	(ii)	under
    Applicable Law, the Abandonment and Reclamation Obligations and the Environmental Liabilities associated with the Assets are
    inextricably linked with such Assets so that Purchaser will be liable for Abandonment and Reclamation Obligations and Environmental
    Liabilities associated with the Assets in the absence of the specific assumption of such obligations by Purchaser in this
    Agreement or otherwise;
	 	 	 
	 	(iii)	the
    Parties have taken the fact that the Assets and any associated Abandonment and Reclamation Obligations and Environmental Liabilities
    are inextricably linked into account in reaching this Agreement and in establishing the Purchase Price for the Assets;
	 	 	 
	 	(iv)	neither
    the existence nor the amount of any accounting reserves for site reclamation costs or similar matters associated with the
    Assets in the financial statements or accounting records of either Party has been of any relevance to either Party in determining
    any matter under this Agreement, including the Purchase Price for the Assets;


 




    	 



    	- 9 -



    







 


	 	(v)	as
    a result of the foregoing, the Parties agree to attribute no value to the assumption of the Abandonment and Reclamation Obligations
    and the Environmental Liabilities, nor the indemnities provided for in Articles 6 and 7, associated with the Assets; and
	 	 	 
	 	(vi)	the
    Parties agree that the Purchase Price shall not be adjusted hereunder for any reason in relation to the Abandonment and Reclamation
    Obligations and the Environmental Liabilities.


 


	4.	REPRESENTATIONS
                                         AND WARRANTIES OF VENDOR



 


Purchaser
acknowledges that it is purchasing Vendor’s interest in and to the Assets on an “as is, where is” basis, without
representation and warranty and without reliance on any information provided to or on behalf of Purchaser by Vendor or any Third
Party, except that and subject in all instances to Permitted Encumbrances, Vendor makes the following representations and warranties
to Purchaser, no claim in respect of which shall be made or be enforceable by Purchaser unless written notice of such claim, with
reasonable particulars, is given by Purchaser to Vendor within a period of twelve (12) months from the date hereof:


 


	 	(a)	Standing:
    Vendor is a corporation duly organized and validly existing under the laws of the jurisdiction of incorporation of Vendor,
    is authorized to carry on business in the Province in which the Lands are located, and now has good right, full power and
    absolute authority to sell, assign, transfer, convey and set over the interest of Vendor in and to the Assets according to
    the true intent and meaning of this Agreement; 
	 	 	 
	 	(b)	Requisite
    Authority: the execution, delivery and performance of this Agreement has been duly and validly authorized by any and all
    requisite corporate, shareholders’ and directors’ actions and will not result in any violation of, be in conflict
    with or constitute a default under any articles, charter, bylaw or other governing document to which Vendor is bound; 
	 	 	 
	 	(c)	No
    Conflicts: the execution, delivery and performance of this Agreement will not result in any violation of, be in conflict
    with or constitute a default under any term or provision of any agreement or document to which Vendor is party or by which
    Vendor is bound, nor under any judgment, decree, order, statute, regulation, rule or license applicable to Vendor;
	 	 	 
	 	(d)	Enforceability:
    this Agreement and any other agreements delivered in connection herewith constitute valid and binding obligations of Vendor
    enforceable against Vendor in accordance with their terms;
	 	 	 
	 	(e)	No
    Approvals or Authorizations Required: no authorization or approval or other action by, and no notice to or filing with,
    any governmental authority or regulatory body exercising jurisdiction over the Assets is required for the due execution, delivery
    and performance by Vendor of this Agreement, other than authorizations, approvals or exemptions from requirement therefor,
    previously obtained and currently in force;


 




    	 	 	 



    	 	- 10 -	 



    

 


	 	(f)	Finders’
    Fees: Vendor has not incurred any obligation or liability, contingent or otherwise, for brokers’ or finders’
    fees in respect of this Agreement or the transaction effected by it for which Purchaser shall have any obligation or liability;
	 	 	 
	 	(g)	Canadian
    Resident:  Vendor is not a non-resident within the meaning of Section 116 of the Income Tax Act (Canada)
    and the interest of Vendor in and to the Assets does not constitute all or substantially all the property of Vendor;
	 	 	 
	 	(h)	Title:  Vendor
    has not alienated or encumbered the Assets or any part or portion thereof, Vendor has not committed and is not aware of there
    having been committed any act or omission whereby the interest of Vendor in and to the Assets or any part or portion thereof
    may be cancelled or determined, and the Assets are now free and clear of all royalty burdens, liens, penalties, conversion
    rights and other claims of Third Parties, created by, through or under Vendor or of which Vendor has knowledge;
	 	 	 
	 	(i)	ROFRs:
    none of the interest of Vendor in and to the Assets is subject to any ROFR rights created by, through or under Vendor or of
    which Vendor is aware, that become operative by virtue of this Agreement or the Transaction;
	 	 	 
	 	(j)	No
    Adverse Claims: Vendor has not received notice from any Third Party claiming an interest in and to the Assets adverse
    to the interest of Vendor and Vendor has no reason to believe that any such claim may be made;
	 	 	 
	 	(k)	Receipt
    of Revenues: Vendor is receiving from Third Parties on a timely basis, all revenues to which Vendor is entitled in connection
    with the Assets;
	 	 	 
	 	(l)	Compliance
    with Agreements: Vendor has not failed to comply with, perform, observe or satisfy any term, condition, obligation or
    liability which has heretofore arisen under the provisions of any of the Title Documents or any other agreements and documents
    to which the Assets are subject;
	 	 	 
	 	(m)	No
    Defaults: Vendor has not received notice of default and is not, to the knowledge, information and belief of Vendor, in
    any default under any obligation, agreement, document, order, writ, injunction or decree of any court or of any commission
    or administrative agency, which might result in impairment or loss of the interest of Vendor in and to the Assets or which
    might otherwise adversely affect the Assets;
	 	 	 
	 	(n)	No
    Actions or Proceedings: no suit, action or other proceeding before any court or governmental agency has been commenced
    against Vendor or, to the knowledge, information and belief of Vendor, has been threatened against Vendor or any Third Party,
    which might result in impairment or loss of the interest of Vendor in and to the Assets or which might otherwise adversely
    affect the Assets or any rights to, and rights to enter upon, use or occupy the surface of any lands which are or may be used
    to gain access to or otherwise use the Petroleum and Natural Gas Rights and the Tangibles, or either of them;


 




    	 	 	 



    	 	- 11 -	 



    

 


	 	(o)	Amounts
    Payable: all amounts due and payable to Third Parties prior to the date hereof and pertaining to the Assets have been
    fully paid, including without limitation (i) any and all ad valorem and property taxes, (ii) any and all production, severance
    and similar taxes, charges and assessments based upon or measured by the ownership or production of the Leased Substances
    or any of them or the receipt of proceeds therefor, and (iii) all amounts due and payable in connection with Permitted Encumbrances;
	 	 	 
	 	(p)	Outstanding
    AFE’s:  in respect of the Assets, there are no financial commitments of Vendor which are in excess of
    $50,000 and which are now due or which may hereafter become due by virtue of matters occurring or arising prior to the date
    hereof, other than as set out on Schedule “B”;
	 	 	 
	 	(q)	Licenses
    and Permits:  in respect of the Assets that are operated by Vendor, if any, Vendor holds all valid licenses,
    permits and similar rights and privileges that are required and necessary under Applicable Law to operate the Assets as presently
    operated;
	 	 	 
	 	(r)	Operations:  any
    and all operations of Vendor, and to the knowledge, information and belief of Vendor, any and all operations by Third Parties,
    on or in respect of the Assets, have been conducted in accordance with good oil and gas industry practices and in material
    compliance with all Applicable Laws and the Regulations;
	 	 	 
	 	(s)	Operation
    of Tangibles:  the Tangibles operated by Vendor, if any, are in good and operable condition, reasonable wear
    and tear excepted, and the Tangibles operated by Third Parties, if any, are in good and operable condition, reasonable wear
    and tear excepted, to the knowledge, information and belief of Vendor;
	 	 	 
	 	(t)	Areas
    of Mutual Interest: there are no active area of mutual interest provisions in any of the Title Documents or other agreements
    or documents to which the Assets are subject;
	 	 	 
	 	(u)	Environmental
    Notices: Vendor is not aware of:


 


	 	(i)	and
    has not received any orders or directives which relate to Abandonment and Reclamation Obligations, Environmental Liabilities
    or environmental compliance matters under the Regulations and which require any work, repairs, construction or capital expenditures
    with respect to the Assets, where such orders or directives have not been complied with in all material respects;
	 	 	 
	 	(ii)	and
    has not received any demand or notice issued with respect to the breach of any environmental, health or safety law applicable
    to the Assets, including without limitation, respecting the use, storage, treatment, transportation or disposition of environmental
    contaminants, which demand or notice remains outstanding on the date hereof; or
	 	 	 
	 	(iii)	any
    particular existing circumstance that it reasonably believes to be material and a reportable event under the Regulations;


 




    	 	 	 



    	 	- 12 -	 



    

 


	 	(v)	Environmental
    Information: Vendor has made available to Purchaser all information in the possession of Vendor or to which Vendor has
    access relevant to environmental damage or contamination or other environmental problems pertaining to the Assets;
	 	 	 
	 	(w)	Sale
    Contracts and Joint Venture Contracts: except for the Sale Contracts and Joint Venture Contracts,, Vendor is not a party
    to and Vendor’s interest in and to the Assets is not otherwise bound or affected by any (i) production sales contracts
    pertaining to the Leased Substances or any of them that cannot be terminated on notice of 31 days or less (without an early
    termination penalty or other cost), (ii) gas balancing or similar agreements pertaining to the Leased Substances or any of
    them, (iii) agreements for the transportation, processing or disposal of the Leased Substances or any of them or substances
    produced in connection with the Leased Substances or any of them, (iv) agreements for the contract operation by a Third Party
    of the Assets or any of them, and (v) agreements to provide transportation, processing or disposal capacity or service to
    any Third Party;
	 	 	 
	 	(x)	Take
    or Pay Obligations: there are no Take or Pay Obligations; and
	 	 	 
	 	(y)	Provision
    of Documents: Vendor has made available to Purchaser all Title Documents that are in the possession or control of Vendor.


 


	5.	REPRESENTATIONS
                                         AND WARRANTIES OF PURCHASER



 


Purchaser
makes the following representations and warranties to Vendor, no claim in respect of which shall be made or be enforceable by
Vendor unless written notice of such claim, with reasonable particulars, is given by Vendor to Purchaser within a period of twelve
(12) months from the date hereof:


 


	 	(a)	Standing:
    Purchaser is a corporation duly organized and validly existing under the laws of the jurisdiction of incorporation of Purchaser,
    is authorized to carry on business in the Province in which the Lands are located, and now has good right, full power and
    absolute authority to purchase the interest of Vendor in and to the Assets according to the true intent and meaning of this
    Agreement;
	 	 	 
	 	(b)	Requisite
    Authority: the execution, delivery and performance of this Agreement has been duly and validly authorized by any and all
    requisite corporate, shareholders’ and directors’ actions and will not result in any violation of, be in conflict
    with or constitute a default under any articles, charter, bylaw or other governing document to which Purchaser is bound;
	 	 	 
	 	(c)	No
    Conflicts: the execution, delivery and performance of this Agreement will not result in any violation of, be in conflict
    with or constitute a default under any term or provision of any agreement or document to which Purchaser is party or by which
    Purchaser is bound, nor under any judgment, decree, order, statute, regulation, rule or license applicable to Purchaser;
	 	 	 
	 	(d)	Enforceability:
    this Agreement and any other agreements delivered in connection herewith constitute valid and binding obligations of Purchaser
    enforceable against Purchaser in accordance with their terms;


 




    	 	 	 



    	 	- 13 -	 



    

 


	 	(e)	No
    Approvals or Authorizations Required: no authorization or approval or other action by, and no notice to or filing with,
    any governmental authority or regulatory body exercising jurisdiction over the Assets is required for the due execution, delivery
    and performance by Purchaser of this Agreement, other than authorizations, approvals or exemptions from requirement therefor,
    previously obtained and currently in force;
	 	 	 
	 	(f)	Finders’
    Fees: Purchaser has not incurred any obligation or liability, contingent or otherwise, for brokers’ or finders’
    fees in respect of this Agreement or the transaction effected by it for which Vendor shall have any obligation or liability;
    and
	 	 	 
	 	(g)	Investment
    Canada Act: Purchaser is not a non-Canadian person for the purposes of the Investment Canada Act.


 


	6.	INDEMNITIES
                                         FOR REPRESENTATIONS AND WARRANTIES






 


	 	(a)	Vendor
    shall be liable to Purchaser for and shall, in addition, indemnify Purchaser from and against, all losses, costs, claims,
    damages, expenses and liabilities suffered, sustained, paid or incurred by Purchaser which would not have been suffered, sustained,
    paid or incurred had all of the representations and warranties contained in section 4 been accurate and truthful, provided
    however that nothing in this subsection 6(a) shall be construed so as to cause Vendor to be liable to or indemnify Purchaser
    in connection with any representation or warranty contained in section 4 if and to the extent that Purchaser did not rely
    upon such representation or warranty. 
	 	 	 
	 	(b)	Purchaser
    shall be liable to Vendor for and shall, in addition, indemnify Vendor from and against, all losses, costs, claims, damages,
    expenses and liabilities suffered, sustained, paid or incurred by Vendor which would not have been suffered, sustained, paid
    or incurred had all of the representations and warranties contained in section 5 been accurate and truthful, provided however
    that nothing in this subsection 6(b) shall be construed so as to cause Purchaser to be liable to or indemnify Vendor in connection
    with any representation or warranty contained in section 5 if and to the extent that Vendor did not rely upon such representation
    or warranty.
	 	 	 
	 	(c)	No
    claim under this section 6 shall be made or be enforceable by a Party unless written notice of such claim, with reasonable
    particulars, is given by such Party to the Party against whom the claim is made within a period of twelve (12) months from
    the date hereof.


 


	7.	PURCHASER’S
                                         INDEMNITIES



 


	 	(a)	Purchaser
    shall be liable to Vendor for and shall, in addition, indemnify Vendor from and against, all Losses and Liabilities suffered,
    sustained, paid or incurred by Vendor which arise out of any matter or thing occurring or arising from and after the date
    hereof and which relates to the Assets, provided however that Purchaser shall not be liable to nor be required to indemnify
    Vendor in respect of any losses, costs, claims, damages, expenses and liabilities suffered, sustained, paid or incurred by
    Vendor which arise out of acts or omissions of Vendor.


 




    	 	 	 



    	 	- 14 -	 



    

 


	 	(b)	Purchaser
    shall see to the timely performance of all Abandonment and Reclamation Obligations pertaining to the Assets which in the absence
    of this Agreement would be the responsibility of Vendor.  Purchaser shall be liable to Vendor for and shall, in
    addition, indemnify Vendor from and against, all Losses and Liabilities suffered, sustained, paid or incurred by Vendor should
    Purchaser fail to timely perform such obligations.
	 	 	 
	 	(c)	Purchaser
    shall be liable to Vendor for and shall, in addition, indemnify Vendor from and against, all Environmental Liabilities suffered,
    sustained, paid or incurred by Vendor which pertain to environmental damage or contamination or other environmental problems
    pertaining to or caused by the Assets or operations thereon or related thereto, however and by whomsoever caused, and whether
    such environmental damage or contamination or other environmental problems occur or arise in whole or in part prior to, on
    or subsequent to the date hereof.  Purchaser shall not be entitled to exercise and hereby waives any rights or remedies
    Purchaser may now or in the future have against Vendor in respect of such environmental damage or contamination or other environmental
    problems, whether such rights and remedies are pursuant to the common law or statute or otherwise, including without limitation,
    the right to name Vendor as a third party to any action commenced by any Third Party against Purchaser.  Without
    limiting the generality of the foregoing, such environmental damage or contamination or other environmental problems shall
    include (i) surface, underground, air, ground water or surface water contamination, (ii) the abandonment or plugging of or
    failure to abandon or plug any of the Wells, (iii) the restoration or reclamation of or failure to restore or reclaim any
    part of the Assets, (iv) the breach of applicable government rules and regulations in effect at any time, and (v) the removal
    of or failure to remove foundations, structures or equipment.
	 	 	 
	 	(d)	Notwithstanding
    any other provision in this Agreement, Purchaser shall not be liable to nor be required to indemnify Vendor in respect of
    any Losses and Liabilities suffered, sustained, paid or incurred by Vendor in respect of which Vendor is liable to and has
    indemnified Purchaser pursuant to subsection 6(a), and Vendor shall not be liable to nor be required to indemnify Purchaser
    in respect of any Losses and Liabilities suffered, sustained, paid or incurred by Purchaser in respect of which Purchaser
    is liable to and has indemnified Vendor pursuant to subsection 6(b), in both cases disregarding the time limit set out in
    subsection 6(c).


 


	8.	FURTHER
                                         ASSURANCES



 


Each
Party will, from time to time and at all times hereafter upon request, without further consideration, do such further acts and
deliver all such further assurances, deeds and documents as shall be reasonably required in order to fully perform and carry out
the terms of this Agreement. Until Purchaser is novated, with respect to the interest of Vendor in and to the Assets, into the
Title Documents and any other agreements and documents to which the Assets are subject, Vendor shall act as Purchaser’s
agent (including without limitation to serve operation notices and authorizations for expenditure) as Purchaser reasonably and
lawfully directs. Purchaser shall be liable to Vendor and shall, in addition, indemnify Vendor from and against, all losses, costs,
claims, damages, expenses and liabilities suffered, sustained, paid or incurred by Vendor arising in connection with all acts
or omissions of Vendor in its capacity as agent of Purchaser to the extent such acts and omissions were expressly or impliedly
authorized by Purchaser.


 




    	 	 	 



    	 	- 15 -	 



    

 


	9.	NO
                                         MERGER



 


The
covenants, representations, warranties and indemnities contained in this Agreement shall be deemed to be restated in any and all
assignments, conveyances, transfers and other documents conveying the interests of Vendor in and to the Assets to Purchaser, subject
to any and all time and other limitations contained in this Agreement. There shall not be any merger of any covenant, representation,
warranty or indemnity in such assignments, conveyances, transfers and other documents notwithstanding any rule of law, equity
or statute to the contrary and such rules are hereby waived.


 


	10.	ENTIRE
                                         AGREEMENT



 


The
provisions contained in any and all documents and agreements collateral hereto shall at all times be read subject to the provisions
of this Agreement and, in the event of conflict, the provisions of this Agreement shall prevail. No amendments shall be made to
this Agreement unless in writing, executed by the Parties. This Agreement supersedes all other agreements, documents, writings
and verbal understandings among the Parties relating to the subject matter hereof and expresses the entire agreement of the Parties
with respect to the subject matter hereof.


 


	11.	SUBROGATION



 


The
assignment and conveyance effected by this Agreement is made with full right of substitution and subrogation of Purchaser in and
to all covenants, representations, warranties and indemnities previously given or made by others in respect of the Assets or any
part or portion thereof.


 


	12.	GOVERNING
                                         LAW



 


This
Agreement shall, in all respects, be subject to, interpreted, construed and enforced in accordance with and under the laws of
the Province of Alberta and applicable laws of Canada and shall, in all respects, be treated as a contract made in the Province
of Alberta. The Parties irrevocably attorn and submit to the exclusive jurisdiction of the courts of the Province of Alberta and
courts of appeal therefrom in respect of all matters arising out of or in connection with this Agreement.


 


	13.	ENUREMENT



 


This
Agreement shall be binding upon and shall enure to the benefit of the Parties and their respective administrators, trustees, receivers,
successors and assigns.


 


	14.	TIME
                                         OF ESSENCE



 


Time
shall be of the essence in this Agreement.


 






    	 	 	 



    	 	- 16 -	 



    

 


	15.	NOTICES



 


The
addresses for service of the Parties shall be as follows:


 


	Vendor
    -	Blue
    Sky Resources Ltd.
	 	300,
    840 - 6th Avenue SW
	 	Calgary,
    AB T2P 3E5
	 	 
	 	Attention:
    President
	 	Email:
    ilyas@blueskyep.com
	 	 
	Purchaser
    -	Petrolia
    Canada Corporation
	 	335,
    1500 – 14th Street SW
	 	Calgary,
    AB T3C 1C9
	 	 
	 	Attention:
    Sr. Vice President
	 	Email:
    Quinten.B@PetroliaCanada.ca


 


All
notices, communications and statements required, permitted or contemplated hereunder shall be in writing, and shall be delivered
as follows:


 


	 	(a)	by
    personal service on a Party at the address of such Party set out above, in which case the item so served shall be deemed to
    have been received by that Party when personally served;
	 	 	 
	 	(b)	by
    email, in which case for such notice to be effective, at least one representative of each Party addressee must acknowledge
    receipt of such email (provided that an automated response from the email account or server of the intended recipient does
    not constitute an affirmative reply) and the notice must be in portable document format (pdf); or
	 	 	 
	 	(c)	except
    in the event of an actual or threatened postal strike or other labour disruption that may affect mail service, by mailing
    first class registered post, postage prepaid, to a Party at the address of such Party set out above, in which case the item
    so mailed shall be deemed to have been received by that Party on the fifth day following the date of mailing (the date of
    mailing being the day immediately prior to the postmarked date of the envelope containing the notice, communication or statement
    or if the subject envelope has been lost or destroyed, the date of such notice, communication or statement or if undated the
    date of the transmittal letter accompanying the same).


 


A
Party may from time to time change its address for service or its email address or both by giving written notice of such change
to the other Party.


 


	16.	NO
                                         ADJUSTMENTS



 


Notwithstanding
any other provision in this Agreement, there shall be no adjustments made between the Parties in respect of benefits and obligations
of any kind and nature relating to the operation of the Assets conveyed pursuant to this Agreement, including without limitation
maintenance, development, operating and capital costs, government incentives and administration fees, royalties and other burdens,
and proceeds from the sale of production, whether accruing, payable or paid and received or receivable.


 




    	 	 	 



    	 	- 17 -	 



    

 


	17.	LIMIT
                                         OF LIABILITY



 


In
no event shall the liability of Vendor to Purchaser in respect of claims of Purchaser arising out of or in connection with this
Agreement exceed, in the aggregate, the Purchase Price.


 


	18.	REGISTRATION
                                         OF SPECIFIC CONVEYANCES



 


Forthwith
after the date hereof, Purchaser shall at its cost circulate and register, as the case may be, all conveyances, assignments, transfers,
novations and other documents or instruments in respect of the Assets and that by their nature may be circulated or registered,
provided that Vendor shall at Purchaser’s cost register all Assignments of Dispositions (Alberta Crown Surface Rights) and
Transfer Forms (Alberta Crown Sub-Surface Rights).


 


	19.	COUNTERPARTS
                                         AND ELECTRONIC TRANSMISSION



 


This
Agreement may be executed in several counterparts, each of which when so executed shall be deemed to be an original, and such
counterparts shall constitute one and the same instrument, and notwithstanding the date of execution, shall be deemed to bear
date as of the date of this Agreement. This Agreement shall be considered properly executed by either Party if executed and transmitted
by facsimile or other electronic means to the other Party. A valid and binding contract shall arise if and when counterpart execution
pages are executed and delivered by Vendor and Purchaser.


 


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


 


	BLUE SKY RESOURCES LTD.





	 	PETROLIA
    CANADA CORPORATION
	 	 	 	 
	Per: 	/s/
    Ilyas Chaudhary	 	Per:	/s/
    James Edward Burns        
	 	 	 	 	 
	Per:	 	 	Per: