Exhibit 10.1


    
      
        

      


      Exhibit
        10.1

      


      


      ABRASIVE
        FLUID JET TECHNOLOGY

      PURCHASE
        AGREEMENT

      


      


      THIS
        AGREEMENT (herein the “Agreement”) is made and entered into as of this
        25th
        day of
        August, 2005, by and between Alberta Energy Partners, a general partnership
        organized in the State of Texas and consisting of Mark McAfee and Mark Alley
        as
        its two partners, and having its principal office in Montgomery County, Texas
        (herein “Alberta”), and Blast Energy Services, Inc., f/k/a Verdisys, Inc., a
        corporation incorporated in the State of California and having its principal
        office at 14550 Torrey Chase Boulevard, Suite 330, Houston, Texas 77014 (herein
        “Blast”) (collectively referred to as the “Parties” or individually as
“Party”).

      


      WHEREAS,
        Alberta owns the Abrasive Fluid Jet Technology (or “Technology” as more
        particularly defined herein), and is willing to grant to Blast a one-half
        interest therein as set forth in this Agreement; and

      


      WHEREAS,
        Blast desires to own a one-half interest in such Technology as a co-owner,
        and
        to use such Technology and to license the Technology to others; and

      


      WHEREAS,
        the Parties entered into a licensing agreement on or about October 27, 2004,
        which they now desire to replace in its entirety by substituting in replacement
        thereof this Agreement;

      


      NOW,
        THEREFORE, FOR AND IN CONSIDERATION of the mutual promises and covenants
        contained herein, and for other good and valuable consideration, the adequacy
        and sufficiency of which is hereby acknowledged, the Parties agree as
        follows:

      


      DEFINITIONS

      


      	1.  	
              For
                purposes of this Agreement, the terms “Confidential Technical Information”
                and “Technology” shall mean any and all technical information of Alberta
                relating to a process for a coherent abrasive jet cutting of steel,
                rock,
                and other formation materials in a well bore, and a formation access
                tool,
                abrasive nozzles, and conductor, for utilization of the process,
                and shall
                include, but not be limited to, the
                following:

            


      


      	a.  	
              descriptions,
                designs, drawings, and specifications of the Technology, all materials
                utilized in the Technology, and including, but not by way of limitation
                of
                the extent of the definition of the Technology, applied reference
                number
                US 60/627,308;

            


      


      	b.  	
              methods,
                know-how, specifications, and procedures employed or to be employed
                in the
                design, manufacture, fabrication, transportation, installation, storage,
                usage, sales, marketing or licensing of the Technology, and including
                all
                techniques, methodologies, procedures, tolerances, and sales, marketing
                and licensing information, related thereto;
                and

            


      


      	c.  	
              all
                information, acquired technology, developments, improvements, or
                other
                information which become available to Alberta relating to the Technology,
                and all enhancements of the Technology by either Party, during the
                term of
                this Agreement.

            


      


      	2.  	
              The
                terms “Confidential Technical Information” and “Technology” shall not
                mean:

            


      


      	a.  	
              information
                which at the time of disclosure to Blast by Alberta is in the public
                domain;

            


      


      	b.  	
              information
                which Blast can show was in its possession at the time of disclosure
                of
                such information to it by Alberta and not acquired directly or indirectly
                from Alberta; and

            


      


      	c.  	
              information
                acquired by Blast from a third party, after the disclosure of information
                to it by Alberta, and which the third party did not receive from
                Alberta
                or from any other party under an obligation of
                confidence.

            


      


      	3.  	
              The
                term “Royalty Payment” shall be defined as a share of non-License Payment
                revenues received from the use of the
                Technology.

            


      


      	4.  	
              The
                term “Licensing Payments” shall include all up front or annual fees from
                third party licensing activities plus any allocation of the ongoing
                share
                of revenues from licensing arrangements.

            


      


      	5.  	
              The
                term “Revenue” shall be defined as gross cash receipts or gross sales
                before any deductions.

            


      


      OWNERSHIP
        RIGHTS

      


      
        	
                6.

              	
                Alberta
                  hereby conveys, transfers and assigns to Blast (as a co-owner with
                  Alberta) a 50% undivided interest in all of Alberta’s rights, title and
                  interest in the Technology. Either party may hold or may sell,
                  convey or
                  assign their respective interests in the Technology, subject to
                  all
                  rights, terms, obligations and liabilities of this Agreement. Such
                  sale,
                  conveyance or assignment shall be subject to the approval of the
                  other
                  Party, which shall not be unreasonably withheld. This Agreement
                  shall be
                  assigned by either Party to any other Party owned or under the
                  effective
                  control of the assigning Party (or its shareholders) without the
                  approval
                  of the other Party. 

              


      

      


      
        	
                7.

              	
                In
                  the event of a potential sale by one of the Parties of an ownership
                  interest in the Technology, such sale terms shall be offered by
                  the
                  selling Party to the other Party in writing, with a written copy
                  of the
                  offer and the non-selling Party will have a right of first refusal
                  to
                  match said offered terms within twenty one (21) calendar days of
                  written
                  notice by the selling Party. A failure to accept the terms and
                  conditions
                  in writing as offered to the third party, within twenty one (21)
                  calendar
                  days of first notice shall be an act of
                  declining.

              


      

      


      
        	
                8.

              	
                Should
                  Blast decide to sell or merge the company in its entirety with
                  or into a
                  third party, Alberta shall have no rights to participate in the
                  proceeds
                  from such sale (except as rights otherwise become available by
                  virtue of
                  its shareholdings in Blast arising from this Agreement or otherwise),
                  but
                  such third party shall agree in writing to all of the terms, obligations,
                  and responsibilities of this
                  Agreement.

              


      

      


      TERMS
        AND CONSIDERATION

      


      	9.  	
              Alberta
                hereby sells, grants and conveys to Blast a 50% co-ownership interest
                in
                the Technology, which includes the unrestricted right to use the
                Technology as defined in paragraph 1, and to license such use to
                others,
                world-wide, consistent with the License Approval provisions in 15,
                16 and
                17 below, upon execution of this Agreement, in consideration for
                which,
                Blast promises to pay the consideration for such ownership, including
                terms for sharing revenues as part payment of such consideration,
                and
                restrictions upon ownership pending payment of certain consideration
                as
                follows:

            


      


      	a.  	
              Upon
                execution of this Agreement and as part of the purchase price
                consideration, Blast will convey to Alberta three million (3,000,000)
                restricted shares of its common stock. Blast will file a registration
                pursuant to requirements of the Securities and Exchange Commission
                within
                ninety (90) days of execution and use its best efforts to obtain
                effectiveness from the SEC, so that such stock may become unrestricted
                and
                trade publicly. Blast does not guaranty that the Securities and Exchange
                Commission will approve such filing. Alberta’s shares of Blast’s common
                stock shall be of the same class and type as other Blast common stock
                without any variance in voting or other
                rights.

            


      


      	b.  	
              Upon
                execution of this Agreement and as part of the purchase price
                consideration, Blast will issue to Alberta seven hundred fifty thousand
                (750,000) warrants for the purchase of shares of common stock of
                Blast,
                exercisable at forty five cents ($ .45) per share, and exercisable
                at such
                time as a minimum of $225,000 revenue has been received by operation
                of
                Blast’s first rig using the Technology. Such warrants will expire three
                (3) years from date of issuance. These warrants will be subject to
                dilution (reset) adjustment, in whole or in part, at the time they
                are
                exercised. Said warrants therefore shall be increased to offset any
                dilution that would occur by the issuance of additional shares of
                common
                stock by Blast from this date forward. (This issuance of warrants
                is in
                addition to the issuance of two hundred fifty thousand (250,000)
                warrants
                previously issued to Alberta’s affiliate, Albert Energy Holding, Inc.,
                pursuant to a prior separate agreement.)

            


      


      	c.  	
              Following
                the execution of this Agreement and as part of the purchase price
                consideration, Blast shall pay to Alberta one-half of Blast’s 50% share of
                the gross revenue from licensing the use of the Technology, (i.e.,
                seventy-five percent (75%) of such gross revenue being paid to Alberta,
                and twenty-five percent (25%) to Blast) in addition to its own one-half,
                until Alberta has received two million dollars ($2,000,000) from
                the extra
                50% of Blast’s portion, in addition to Alberta’s own one-half interest in
                such revenue. Following the payment of the two million dollars
                ($2,000,000), the Parties shall share all future licensing revenue
                equally.
                It
                is not intended that any form of corporate guarantee or debt obligation
                shall arise requiring disclosure within the published financial statements
                of Blast as a result of the disproportionate license revenue sharing
                provisions contained herein.

            


      


      
        	 	
                d.

              	
                As
                  part of the consideration to enter the agreement, Blast shall pay
                  to
                  Alberta a Royalty Payment of two thousand dollars ($2,000) per
                  well bore,
                  or two percent (2%) of the gross revenue received, whichever is
                  greater,
                  for each well bore in which Blast utilizes the Technology, with
                  payment
                  and an accounting at the close of each calendar month forty five
                  days (45)
                  after the close of said month. Services requested by Blast customers
                  from
                  third party vendors (e.g. pumping services) and invoiced by Blast
                  as a
                  pass through billing to the customer are not subject to Royalty
                  Payments.

              


      

      
        	 	
                e.

              	
                Alberta
                  shall have the option (but not the obligation) to build each drilling
                  rig
                  utilizing the Technology and in consideration Blast shall pay Alberta
                  all
                  of the actual invoice costs of the items used, plus fifty thousand
                  dollars
                  ($50,000) for each drilling rig (with the exception of the initial
                  drilling rig now under construction, which is the subject of a
                  separate
                  agreement). The fifty thousand dollars ($50,000) shall be paid
                  half at the
                  time construction of the rig begins and the balance when the rig
                  is
                  completed. Drilling rig cost invoices will be paid by Blast based
                  upon
                  their due dates. Blast will notify Alberta, in writing, of its
                  intention
                  to build each new rig together with any special requirements,
                  specifications, and contractual provisions that Blast may require.
                  Within
                  fourteen (14) calendar days of receipt of the notice, Alberta shall
                  either
                  agree to commit or decline to build the rig(s), in writing. If
                  Alberta
                  commits to accept the engagement, it will also provide an estimated
                  completion time and cost.
                  Alberta’s failure to formally agree to accept the terms and conditions
                  of
                  the construction within the fourteen (14) calendar days of the
                  notice
                  shall be considered a rejection to exercising the option.
                  

              


      

      


      
        	 	
                f.

              	
                Alberta
                  shall provide use of any of its leases to Blast for the purpose
                  of testing
                  its abrasive jetting services, while the initial rig is being
                  commissioned. Any out of pocket costs incurred by Alberta in such
                  field
                  testing shall be borne by Blast.

              


      

      


      
        	 	
                g.

              	
                The
                  Parties shall memorialize the 50% transfer of ownership with executed
                  assignment documents and filings with the US Patent and Trademark
                  Office.

              


      

      


      INDEMNITY

      


      
        	
                10.

              	
                Alberta
                  shall indemnify, defend and hold harmless Blast and its representatives
                  from and against all claims, losses, settlements, liabilities,
                  damages,
                  costs or expenses (including reasonable attorney’s fees and disbursements)
                  made against or incurred by Blast or its representatives of any
                  nature
                  whatsoever based upon, arising out of, or in connection with, any
                  use by
                  Alberta of the Technology.

              


      

      


      
        	
                11.

              	
                Blast
                  shall indemnify, defend and hold harmless Alberta and its representatives
                  from and against all claims, losses, settlements, liabilities,
                  damages,
                  costs or expenses (including reasonable attorney’s fees and disbursements)
                  made against or incurred by Alberta or its representatives of any
                  nature
                  whatsoever based upon, arising out of, or in connection with, any
                  use by
                  Blast of the Technology.

              


      

      RIGHT
        OF USE OF TECHNOLOGY BY ALBERTA

      


      
        	
                12.

              	
                Alberta
                  retains the right to use the Technology, or any adaptation of the
                  Technology, on oil, gas or mineral lease-holds where Alberta holds
                  a lease
                  interest. Alberta’s use of the Technology, in such a case, shall be
                  without obligation to pay Royalty Payments to
                  Blast.

              


      

      


      
        	
                13.

              	
                Alberta
                  shall not offer abrasive jetting services for oil, gas or mineral
                  applications for monetary or other valuable consideration paid
                  by third
                  parties, exclusive of section 12.

              


      

      


      
        	
                14.

              	
                In
                  the event the Parties shall intend to use the Technology in a new
                  business
                  application with a third party, that Party shall offer a right
                  of first
                  refusal to the other Party to enter into such operation on the
                  same terms
                  as those contemplated with the third party. In such circumstance,
                  the
                  offering Party shall fully disclose to the other Party the financial
                  and
                  other details of the proposed operation, and the other Party shall
                  have
                  twenty-one (21) calendar days in which to agree to participate
                  on the same
                  basis and conditions or to decline. A failure to formally agree
                  to accept
                  the terms and conditions of the third party within twenty-one (21)
                  days of
                  first notice shall be considered a rejection of the offer. The
                  offering
                  Party shall thereafter be free to proceed without obligation to
                  the
                  rejecting Party except that the offering Party shall pay to the
                  rejecting
                  Party, the same Royalty Payment terms described in 8. e herein
                  with
                  payment and an accounting pursuant to the accounting and payment
                  terms
                  described below. 

              


      

      LICENSE
        APPROVAL
        AND JOINT MANAGEMENT

      


      
        	
                15.

              	
                The
                  Parties hereby agree to develop a joint strategy and business plan,
                  designed to maximize Licensing Payments and deployment of the Technology.
                  Blast shall be responsible for the License Contract activities
                  with
                  oversight by Alberta. 

              


      

      


      
        	
                16.

              	
                Each
                  party’s approval is required for any license or grant of use of such
                  Technology to third parties, by either Party, which approval shall
                  not be
                  unreasonably withheld. Each Party shall have ten (10) calendar
                  days
                  following a request for approval to state its position and if no
                  response
                  is provided within the ten (10) day period, the non-responding
                  party shall
                  be deemed to have provided its approval. In the event either Party
                  reasonably disapproves of the license or grant of use of the Technology,
                  the license or grant of use shall not be undertaken.
                  

              


      

      


      
        	
                17.

              	
                The
                  management of the Technology shall be jointly held between the
                  Parties and
                  in the event of a deadlock in a decision (other than the approval
                  process
                  in paragraph 16 above), then the Parties shall use their best efforts
                  to
                  reach consensus. In the absence of a consensus between the Parties
                  to
                  change the management of the Technology, no decisions shall be
                  made to
                  change the arrangements that previously existed.
                  

              


      

      


      


      CONSULTING

      


      
        	
                18.

              	
                Alberta
                  agrees to make available to Blast personnel
                  necessary for training
                  on the use of
                  Technology for a reasonable fee to be determined in light of the
                  requirements and circumstances at such time. No obligation to use
                  such
                  training is created hereby.

              


      

      


      
        	
                19.

              	
                Alberta
                  agrees to continue the provision of consulting services to Blast
                  and Blast
                  agrees to continue to pay for such services at the rate of $10,000
                  per
                  month until such consulting term expires on December 31,
                  2005.

              


      

      


      PAYMENTS
        AND REPORTS

      


      
        	
                20.

              	
                The
                  Parties shall keep or cause to be kept, in accordance with good
                  accounting
                  practices, books, records, and accounts of operations, relating
                  to use and
                  licensing of the Technology, as may be necessary for determining
                  the
                  Royalty Payments and Licensing Payments that may become
                  due.

              


      

      


      
        	
                21.

              	
                An
                  accounting and all Royalty Payments shall be provided fifteen (15)
                  days
                  following the close of each month for cash received in the preceding
                  month. Payment shall be by check or wire transfer in US dollars
                  to the
                  bank account designated in writing by the Party receiving payment.
                  Licensing Payments from third parties shall be paid within seven
                  (7)
                  calendar days of receipt. 

              


      

      


      
        	
                22.

              	
                In
                  the event of any dispute with respect to accounting or payments
                  under this
                  Agreement, pursuant to the request of either Party, the Parties
                  shall
                  select an independent Certified Public Accountant to examine the
                  books and
                  records and to report the results of such examination to both parties
                  promptly. In the event such examination shows that payments to
                  either
                  Party have been understated by five percent (5%) or more, the other
                  Party
                  shall pay the cost of the examination; otherwise, the cost of the
                  examination shall be paid by the requesting
                  party.

              


      

      


      TERM

      


      
        	
                23.

              	
                The
                  Agreement shall remain in effect for the duration of the co-ownership
                  of
                  the Technology.

              


      

      


      


      BUY-OUT
        RIGHTS

      


      
        	
                24.

              	
                In
                  the event either of the Parties decides to liquidate
                  its assets, including its ownership in the Technology; or if a
                  Party is
                  dissolved other than in a reorganization; then the other Party
                  shall have
                  the first right of refusal to purchase that Party’s ownership interest in
                  the Technology as set forth below.

              


      

      


      	25.  	
              If
                one of the Parties decides to make an offer for the other party’s 50%
                interest, such offer should be made on the same or similar basis
                that the
                Party would be willing to sell its own 50% interest on the same terms
                and
                conditions offered. The Buy-Out Price shall be determined on the
                basis of
                arms length negotiations between the two Parties and shall be reached
                by
                consensus in a reasonable time frame. If a third party shall make
                an offer
                to purchase the Technology owner within six calendar months of a
                sale of
                the 50% interest between the Parties, then the buying party shall
                offer
                the selling party the right to participate in the third party sale
                on the
                same terms and conditions as if they were still a 50% owner. If the
                third
                party sale has not closed after six calendar months from the time
                of sale
                of the 50% share, such right to participate in the third party sale
                shall
                cease to exist. 

            


      


      
        	
                26.

              	
                Upon
                  payment of the purchase price, the Party making the purchase shall
                  become
                  the owner of one hundred percent (100%) of the Technology (including
                  the
                  patent and trademark rights related to such Technology) effective
                  with the
                  date of the event giving rise to the buy-out rights. Such buy-out
                  (whether
                  exercised or not) shall not affect the obligation of either Party
                  to the
                  other that may have accrued prior to such buy-out rights coming
                  into
                  existence. Upon payment of the purchase price, the selling party
                  shall
                  execute all documents necessary to transfer ownership to the buying
                  party.
                  The selling party hereby appoints the other party its attorney-in-fact
                  to
                  execute all such documents in the event the selling party fails,
                  refuses
                  or otherwise cannot execute such documents. Following the buy-out,
                  the
                  Party making the purchase shall assume all of the rights and obligations
                  of the selling Party with respect to any existing license or other
                  agreements or arrangements which grant rights to third parties
                  to use the
                  Technology.

              


      

      


      
        	
                27.

              	
                Notwithstanding
                  the foregoing buy-out provisions, no buy-out rights shall arise
                  against
                  Blast as long as Blast pays to Alberta or otherwise causes Alberta
                  to
                  receive no less than twenty five thousand dollars ($25,000) during
                  each
                  calendar year following an event described in paragraph 24 above.
                  

              


      

      


      CONFIDENTIALITY

      


      
        	
                28.

              	
                Subject
                  to the terms of this Agreement, the Parties agree to use
                  their best reasonable efforts to maintain
                  the Confidential Technical Information in confidence and to use
                  their best
                  efforts to prevent the disclosure thereof to others. Notwithstanding
                  the
                  foregoing, Blast may, to the extent necessary for its daily operations,
                  including for marketing purposes, such as but not limited to presentations
                  to clients and prospective clients, press releases, presentations
                  to
                  conferences, business forums, SEC filings, Stock Exchange requirements
                  and
                  the like, disclose
                  the Confidential Technical Information to the extent previously
                  agreed
                  upon by Alberta. Otherwise, third parties receiving any part of
                  the
                  Confidential Technical Information must have signed
                  confidentiality or non-disclosure agreements essentially in the
                  form
                  attached hereto. 

              


      

      


      
        	
                29.

              	
                When
                  Confidential Technical Information is required to be disclosed
                  by either
                  party by law, regulation or judicial or administrative process,
                  such Party
                  will promptly give notice to the other Party of the existence,
                  terms and
                  circumstances surrounding such required disclosure in order that
                  the other
                  Party may have an opportunity to intervene to contest such
                  disclosure.

              


      

      


      
        	
                30.

              	
                The
                  Parties’ obligations to maintain Confidential Technical Information in
                  confidence shall continue throughout the commercial life of the
                  Technology.

              


      

      


      


       

      REPRESENTATIONS
        AND WARRANTIES

       

      


      
        	
                31.

              	
                The
                  Parties agree that this Agreement constitutes a legal, valid and
                  binding
                  obligation for each Party, enforceable against such Party in accordance
                  with its terms (subject always to applicable bankruptcy, insolvency,
                  receivership and other similar laws relating to or affecting the
                  enforcement of creditor’s rights generally and to general principles of
                  equity).

              


      

      


      
        	
                32.

              	
                The
                  Parties warrant
                  and represent to each other: that
                  each (i) is duly formed and organized and validly existing under
                  the laws
                  of the jurisdiction of its formation, (ii) is properly qualified
                  to do
                  business and is in good standing under the laws of each jurisdiction
                  in
                  which it does business, (iii) has all necessary corporate or similar
                  power
                  and authority to execute and deliver this Agreement and to consummate
                  the
                  transaction contemplated hereby; and that
                  this Agreement, its execution and the fulfillment and compliance
                  with the
                  terms and conditions hereof, do not violate or conflict with any
                  provision
                  of or result in any breach of or default under any (i) organizational
                  documents of each Party, (ii) law or judicial, award, or similar
                  decree,
                  or (iii) agreement, to which parties
                  are
                  bound for their representations and
                  warranties.

              


      

      


      
        	
                33.

              	
                Alberta
                  makes the following representations and warranties, and acknowledges
                  that
                  such representations and warranties are material and that Blast
                  has relied
                  upon them in entering into this
                  Agreement:

              


      

      


      	a.  	
              Alberta
                is the sole and absolute owner of the Technology and has an absolute
                right
                to enter into the transaction represented by this
                Agreement;

            


      


      	b.  	
              Alberta
                is under no legal restriction and is free to disclose the Technology
                and
                all other technical information related to the Technology to
                Blast;

            


      


      	c.  	
              Alberta
                is not aware of any prior art that would invalidate its patent
                application;

            


      


      	d.  	
              Alberta
                owns the Technology free and clear of any liens, licenses, or known
                enforceable claims of others;

            


      


      FORCE
        MAJEURE

      


      
        	
                34.

              	
                If
                  performance of this Agreement by either Party is prevented, restricted
                  or
                  interfered with by reason of war, revolution, civil commotion,
                  acts of
                  public enemies, blockage, embargo, strikes, or any law, order,
                  proclamation, regulation, ordinance, demand or requirement having
                  a legal
                  effect of any government or any judicial authority or representative
                  of
                  any such government, beyond the reasonable control of the Party
                  affected,
                  then such affected Party shall upon giving written notice to the
                  other
                  Party be excused from such performance to the extent of such prevention,
                  restriction or interference; but provided, however, that the affected
                  Party shall use its best efforts to avoid or remove such cause
                  or causes
                  of nonperformance and shall continue performance hereunder to the
                  utmost
                  of its ability whenever such causes are
                  removed.

              


      

      


      ARBITRATION

      


      
        	
                35.

              	
                All
                  claims, disputes or controversies arising out of, in connection
                  with or in
                  relation to this Agreement shall be decided by arbitration in accordance
                  with the Commercial Rules of the American Arbitration Association
                  then in
                  force and, to the maximum extent applicable, the Texas Arbitration
                  Act
                  (Texas Civil Practice & Remedies Code, '172.031
                  et. seq.). For claims, disputes or controversies which either Party
                  may
                  have in excess of $1,000,000, exclusive of claims for interest,
                  attorneys
                  fees and costs, three (3) neutral arbitrators shall be used. Otherwise
                  a
                  single arbitrator shall be used. For purposes of determining the
                  number of
                  arbitrators, the Parties’ claims and counterclaims shall not be additive.
                  The arbitration shall be conducted in Harris County, Texas. The
                  decision
                  of the arbitrator(s) shall be final, binding and enforceable in
                  any court
                  of competent jurisdiction, and the Parties agree that there shall
                  be no
                  appeal from the arbitrator(s)’ decision except as provided by applicable
                  law. All statutes of limitation that would otherwise be applicable
                  shall
                  apply to any arbitration proceeding. The right to arbitrate shall
                  survive
                  the termination of this Agreement. The Parties acknowledge and
                  agree that
                  this Agreement includes activities in interstate commerce and that
                  the
                  Federal Arbitration Act shall control and apply to all arbitrations
                  conducted hereunder, notwithstanding any state law provisions to
                  the
                  contrary.

              


      

      


      
        	
                36.

              	
                The
                  Parties irrevocably agree to be joined as parties in any arbitration
                  proceeding which involves claims, disputes or controversies which
                  either
                  Party may have with other parties not a Party this Agreement and
                  which
                  involve issues which are otherwise subject to arbitration under
                  this
                  Agreement.

              


      

      


      
        	
                37.

              	
                The
                  Parties irrevocably waive any objection to the joinder of other
                  parties
                  who are not parties to this Agreement to any arbitration commenced
                  pursuant to this Agreement.

              


      

      


      MISCELLANEOUS
        PROVISIONS

      


      
        	
                38.

              	
                This
                  Agreement was negotiated, consummated and entered into in Harris
                  County,
                  Texas. The Parties agree that the validity and interpretation of
                  this
                  Agreement shall be governed by the laws of the State of Texas,
                  and that
                  venue and jurisdiction of any disputes relating to this Agreement
                  shall
                  lie in Harris County, Texas.

              


      

      


      
        	
                39.

              	
                This
                  Agreement contains the entire and only agreement of the Parties
                  relating
                  to the Technology, but does not supersede or interfere with an
                  agreement
                  of the Parties co-existent with this Agreement relating to construction
                  of
                  a drilling rig which utilizes the Technology. Any prior representation,
                  agreement, or promise, of either party, including the License Agreement
                  of
                  on or about October 27, 2004 (which is superseded and replaced
                  by this
                  Agreement), not incorporated in this Agreement, is null and void,
                  except
                  that that Parties acknowledge and agree that the License Agreement
                  was
                  intended to be executed between Blast and Alberta Energy Partners
                  and that
                  all warrants delivered or deliverable through that License Agreement
                  should be to Alberta Energy Partners. Any amendment of this Agreement
                  shall be in writing and executed by both
                  Parties.

              


      

      


      
        	
                40.

              	
                If
                  any provision of this Agreement is found to be unenforceable under
                  applicable law, the unenforceable provision shall be amended to
                  conform to
                  that which is enforceable, and any lack of enforceability of any
                  provision
                  shall not affect the continued effect and enforceability of the
                  remainder
                  of the Agreement if continued compliance of the Parties with the
                  remainder
                  of the Agreement is commercially reasonable of attainment and consistent
                  with the over-all intent and purpose of the
                  Agreement.

              


      

      


      
        	
                41.

              	
                The
                  failure of either Party to exercise any of its rights under this
                  Agreement
                  shall neither constitute a waiver of those rights nor excuse the
                  other
                  Party of its obligations under this
                  Agreement.

              


      

      


      
        	
                42.

              	
                Any
                  notice given or required to be given under this Agreement shall
                  be in
                  writing and addressed to the Party executing this Agreement at
                  the address
                  shown below. Any notice given by United States certified mail or
                  by
                  courier service shall be effective upon
                  receipt.

              


      

      


      
        	
                43.

              	
                Neither
                  Blast nor Alberta shall be responsible for the other Party's federal,
                  state or other taxes arising out of monies or other consideration
                  provided
                  between the Parties under this
                  Agreement.

              


      

      


      
        	
                44.

              	
                This
                  Agreement shall be executed in four sets of counterparts and any
                  duly
                  executed copy thereof shall be considered an original for these
                  purposes.

              


      

      


      
        	
                45.

              	
                Nothing
                  shall be construed herein to suggest that the Parties are entering
                  into a
                  Joint Venture, Partnership, Agency, or other such form of relationship
                  between them. As co-owners of the Technology, the Parties do not
                  intend to
                  file a tax return as partners and will take the actions necessary
                  to elect
                  out of subchapter K of the Internal Revenue
                  Code.

              


      

      


      IN
        WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
        their
        duly authorized representatives and effective as of the date first above
        written.

       

      


      ALBERTA
        ENERGY PARTNERS

      43
        Brookgreen Circle North

      Montgomery,
        Texas 77356

      


      


      By:
        ___s/Mark
        McAfee__________

       

      Mark
        McAfee, General Partner

       

      


      


      By:
        __s/Mark
        Alley_____________

      Mark
        Alley, General Partner

       

      


      


      


      BLAST
        ENERGY SERVICES, INC. (f/k/a Verdisys, Inc.)

      14550
        Torrey Chase Boulevard, Suite 330

      Houston,
        Texas 77014

      


      By:
        s/David
        Adams _

       

      David
        M.
        Adams

      President
        & Co-Chief Executive Officer

      


      


      
        	
                WITNESS

              	 	
                WITNESS

              	 
	 	 	 	 
	
                By:
                  

              	
                s/
                  Mark Alley

              	 	
                By:
                  

              	
                s/
                  John O’Keefe

              	 
	
                Mark
                  Alley

              	 	
                John
                  O’Keefe

              	 


      

      


      



      
        
            

           

        

        
           

          
            

          

        

        
           

        

      


      SCHEDULE
        A

      MODEL
        CONFIDENTIALITY AGREEMENT

      


      


      THIS
        AGREEMENT, entered into this _____________, by and between Blast
        Energy Services, Inc.
        a
        corporation organized and existing under the laws of the State of California.,
        ("Disclosing Party"), and_____________,
        a
        corporation organized and existing under the laws of the State of_____________
        ("Receiving Party"). Disclosing Party and Receiving Party are sometimes herein
        individually called a “Party” and collectively called the
“Parties”.

      


      1. Disclosure
        of Confidential Information.
        The
        Disclosing Party is willing, in accordance with the terms and conditions
        of this
        Agreement, to disclose to the Receiving Party certain confidential information,
        which is proprietary, relating to the abrasive fluid jetting technology
        (“Technology”) which may be in tangible, intangible or electronic form, together
        with any notes, memoranda, analyses, evaluations, charts, drawings or summaries
        derived therefrom. The foregoing is herein referred to, individually or
        collectively as the context may require, as the "Confidential
        Information". The
        obligation of Disclosing Party to disclose Confidential Information to Receiving
        Party is subject to applicable provisions of agreements that Disclosing Party
        has with third parties. 

      


      2. Confidentiality
        Obligation and Non-Competition. 
        In
        consideration of the disclosure of Confidential Information referred to in
        Paragraph 1 hereof, the Receiving Party agrees that the Confidential Information
        shall be kept strictly confidential and shall not be sold, traded, published
        or
        otherwise disclosed to anyone in any manner whatsoever, including by means
        of
        photocopy or reproduction, without the Disclosing Party's prior written consent,
        except as provided in Paragraphs 3, 4 and 5 below.

      


      3. Confidentiality
        Exceptions.
        The
        Receiving Party may disclose the Confidential Information without the Disclosing
        Party's prior written consent only to the extent such information:

      


      
        	 	
                (A)

              	
                is
                  already known to the Receiving Party as of the date of disclosure
                  hereunder;

              


      

      


      
        	 	
                (B)

              	
                is
                  already in possession of the public or becomes available to the
                  public
                  other than through the act or omission of the Receiving
                  Party;

              


      

      


      
        	 	
                (C)

              	
                is
                  required to be disclosed under applicable law or by a governmental
                  order,
                  decree, regulation or rule (provided that the Receiving Party shall
                  give
                  written notice to the Disclosing Party prior to such disclosure);
                  or

              


      

      


      
        	 	
                (D)

              	
                is
                  acquired independently from a third party that represents that
                  it has the
                  right to disclose such information at the time it is acquired by
                  the
                  Receiving Party.

              


      

      


      4. Disclosure
        to Affiliated Companies.
        The
        Receiving Party may disclose the Confidential Information without the Disclosing
        Party's prior written consent to an Affiliated Company (as hereinafter defined),
        provided that the Receiving Party guarantees the adherence of such Affiliated
        Company to the terms of this Agreement. "Affiliated
        Company"
        shall
        mean any company or legal entity which (a) controls either directly or
        indirectly a Party, or (b) which is controlled directly or indirectly by
        such
        Party, or (c) is directly or indirectly controlled by a company or entity
        that
        directly or indirectly controls such Party. "Control"
        means
        the right to exercise more than 50% or more of the voting rights of such
        company.

      


      5. Other
        Permitted Disclosures.
        The
        Receiving Party shall be entitled to disclose the Confidential Information
        without the Disclosing Party's prior written consent to such of the following
        persons who have a clear need to know in order to evaluate the Area of
        Operations:

      


      (A) employees,
        officers and directors of the Receiving Party;

      


      (B) employees,
        officers and directors of an Affiliated Company;

      


      
        	 	
                (C)

              	
                any
                  professional consultant or agent retained by the Receiving Party
                  for the
                  purpose of evaluating the Confidential Information;
                  or

              


      

      


      	(D)  	
              any
                bank, financial institution or person that finances the participation
                by
                Receiving Party or an Affiliate of Receiving Party of the Technology,
                including any professional consultant retained by such entity for
                the
                purpose of evaluating the Confidential
                Information.

            


      


      Prior
        to
        making any such disclosures to persons under subparagraphs (C) and (D) above,
        however, the Receiving Party shall obtain from each such person an undertaking
        of confidentiality, with substantially the same content as this
        Agreement.

       

      6. Use
        of Confidential Information by Receiving Party.
        The
        Receiving Party and its Affiliated Companies, if any, shall use or permit
        the
        use of the Confidential Information disclosed under Paragraphs 4 or 5 above
        to
        evaluate the Area of Operations and determine whether to enter into a
        transaction with Disclosing Party or one of its Affiliates for evaluation
        of the
        Technology.

      


      7. Responsibility
        to Ensure Confidentiality.
        The
        Receiving Party shall be responsible for ensuring that all persons to whom
        the
        Confidential Information is disclosed under this Agreement shall keep such
        information confidential and shall not disclose or divulge the same to any
        unauthorized person. Neither Party shall be liable in an action initiated
        by one
        against the other for special, indirect or consequential damages resulting
        from
        or arising out of this Agreement, including, without limitation, loss of
        profit
        or business interruptions, however it may be caused.

      


      8. Ownership
        of Confidential Information.
        The
        Confidential Information shall remain the property of the Disclosing Party,
        and
        the Disclosing Party may demand the return thereof at any time upon giving
        written notice to the Receiving Party. Within 10 days of receipt of such
        notice,
        the Receiving Party shall return all of the original Confidential Information
        and shall destroy all copies and reproductions (both written and electronic)
        in
        its possession and in the possession of persons to whom it was disclosed
        pursuant to Paragraphs 4 and 5 hereof. .

      


      9. Further
        Agreements.
        If the
        Parties agree to participate in further agreements, which include
        confidentiality provisions, then this Agreement shall terminate automatically
        on
        the date the Receiving Party enters into a further agreement with Disclosing
        Party or one of its Affiliates that contains provisions covering the
        confidentiality of data for the Technology. Unless earlier terminated under
        the
        preceding sentence, the confidentiality obligations set forth in this Agreement
        shall terminate two (2) years after the date of this Agreement.

      


      10. Right
        to Disclose Confidential Information.
        The
        Disclosing Party hereby represents and warrants that it has the right and
        authority to disclose the Confidential Information to the Receiving Party,
        subject to the terms of agreements of Disclosing Party with third parties
        relating to the Confidential Information. The Disclosing Party, however,
        makes
        no representations or warranties, express or implied, as to the quality,
        accuracy and completeness of the Confidential Information disclosed hereunder,
        and the Receiving Party expressly acknowledges the inherent risk of error
        in the
        acquisition, processing and interpretation of technical data. The Disclosing
        Party, its Affiliated Companies, their officers, directors and employees
        shall
        have no liability whatsoever with respect to the use of or reliance upon
        the
        Confidential Information by the Receiving Party.

      


      11 General
        Provisions. 

      


      (A) Governing
        Law.
        This
        Agreement shall be governed by and interpreted in accordance with the laws
        of
        the State of Texas, without regard to principles of conflicts of law that
        would
        refer the matter to the laws of another jurisdiction.

      


      (B) Dispute
        Resolution. 

      All
        claims, disputes or controversies arising out of, in connection with or in
        relation to this Agreement shall be decided by arbitration in accordance
        with
        the Commercial Rules of the American Arbitration Association then in force
        and,
        to the maximum extent applicable, the Texas Arbitration Act (Texas Civil
        Practice & Remedies Code, '172.031
        et. seq.). For claims, disputes or controversies which either Party may have
        in
        excess of $1,000,000, exclusive of claims for interest, attorneys fees and
        costs, three (3) neutral arbitrators shall be used. Otherwise a single
        arbitrator shall be used. For purposes of determining the number of arbitrators,
        the Parties’ claims and counterclaims shall not be additive. The arbitration
        shall be conducted in Harris County, Texas. The decision of the arbitrator(s)
        shall be final, binding and enforceable in any court of competent jurisdiction,
        and the Parties agree that there shall be no appeal from the arbitrator(s)’
decision except as provided by applicable law. All statutes of limitation
        that
        would otherwise be applicable shall apply to any arbitration proceeding.
        The
        right to arbitrate shall survive the termination of this Agreement. The Parties
        acknowledge and agree that this Agreement includes activities in interstate
        commerce and that the Federal Arbitration Act shall control and apply to
        all
        arbitrations conducted hereunder, notwithstanding any state law provisions
        to
        the contrary. 

      


      (C)
        Approval
        of Offers. Unless
        otherwise expressly stated in writing, any prior or future proposals or offers
        made in the course of the Parties’ discussions are implicitly subject to all
        necessary management and government approvals and may be withdrawn by either
        Party at any time. Nothing contained herein is intended to confer upon Receiving
        Party any right whatsoever to Disclosing Party’s interests. Receiving Party
        agrees with Disclosing Party that neither the review of Confidential Information
        nor the granting of access thereto creates any obligation on Receiving Party
        or
        Disclosing Party to acquire or dispose of, respectively, any interest in
        their
        operations.

      


      (D). Further
        Agreements.
        Unless
        otherwise expressly stated in writing, any prior or future proposals or offers
        made in the course of the Parties' discussions are implicitly subject to
        all
        necessary management and other approvals and may be withdrawn by either Party
        at
        any time. Nothing contained herein is intended to confer upon the Receiving
        Party any right whatsoever to the Disclosing Party's interest in their
        operations.

      


      (E). Amendments
        to Agreement.
        No
        amendments, changes or modifications to this Agreement shall be valid except
        if
        the same are in writing and signed by a duly authorized representative of
        each
        of the Parties hereto.

      


      (F) Entire
        Agreement.
        This
        Agreement comprises the full and complete agreement of the Parties hereto
        with
        respect to the disclosure of the Confidential Information and supersedes
        and
        cancels all prior communications, understandings and agreements between the
        Parties hereto, whether written or oral, expressed or implied. 

      


      (G) Notices.
        Any
        notice given hereunder by either Party shall be given in writing and shall
        be
        delivered in person, or sent by facsimile, or mailed by first class or
        registered mail, postage prepaid, and shall be considered to have been well
        and
        sufficiently given when received by the Party to whom it is addressed as
        follows. Each Party shall have the right to change its address at any time
        and/or designate that copies of all notices be directed to another person
        at
        another address, by giving written notice thereof to the other
        Party.

      


       

      


      IN
        WITNESS WHEREOF,
        the
        duly authorized representatives of the Parties have caused this Agreement
        to be
        executed on the date first written above.

      


      


      BLAST
        ENERGY SERVICES, INC.

      


      


      By:___________________________

      


      


      RECEIVING
        PARTY

      


      


      By:__________________________