kodiaksb2ex10-7.htm


    
      

      
Exhibit
      10.7

    
      AGREEMENT
        OF PURCHASE AND SALE

      TABLE
        OF CONTENTS

      
        
          
            	 	 	Page
	
                    1.00

                  	
                    INTERPRETATION

                  	
                    1

                  
	 	 	 
	
                    1.01

                  	
                    DEFINITIONS

                  	
                    1

                  
	
                    1.02

                  	
                    SCHEDULES

                  	
                    5

                  
	
                    1.03

                  	
                    REFERENCES

                  	
                    6

                  
	
                    1.04

                  	
                    HEADINGS

                  	
                    6

                  
	
                    1.05

                  	
                    SINGULAR/PLURAL

                  	
                    6

                  
	
                    1.06

                  	
                    USE
                      OF FUNDS

                  	
                    6

                  
	
                    1.07

                  	
                    DERIVATIVES

                  	
                    6

                  
	
                    1.08

                  	
                    INTERPRETATION
                      IF CLOSING DOES NOT OCCUR

                  	
                    6

                  
	
                    1.09

                  	
                    CONFLICTS

                  	
                    6

                  
	
                    1.10

                  	
                    RESPONSIBILITY
                      EXTENDS TO LEGAL COSTS

                  	
                    7

                  
	
                    1.11

                  	
                    KNOWLEDGE
                      OR AWARENESS

                  	
                    7

                  
	 	 	 
	
                    2.00

                  	
                    PURCHASE
                      AND SALE

                  	
                    7

                  
	 	 	 
	
                    2.01

                  	
                    AGREEMENT
                      OF PURCHASE AND SALE

                  	
                    7

                  
	
                    2.02

                  	
                    PAYMENT
                      OF PURCHASE PRICE

                  	
                    7

                  
	
                    2.03

                  	
                    GST

                  	
                    8

                  
	
                    2.04

                  	
                    DEPOSIT

                  	 8
	 	 	 
	
                    3.00

                  	
                    CLOSING

                  	
                    8

                  
	 	 	 
	
                    3.01

                  	
                    PLACE
                      OF CLOSING

                  	
                    8

                  
	
                    3.02

                  	
                    REQUIRED
                      APPROVALS

                  	
                    9

                  
	
                    3.03

                  	
                    SPECIFIC
                      CONVEYANCES

                  	
                    9

                  
	 	 	 
	
                    4.00

                  	
                    ADJUSTMENTS

                  	
                    9

                  
	 	 	 
	
                    4.01

                  	
                    BENEFITS
                      AND OBLIGATIONS TO BE APPORTIONED

                  	
                    9

                  
	
                    4.02

                  	
                    ADJUSTMENTS
                      TO ACCOUNTS

                  	
                    9

                  
	 	 	 
	
                    5.00

                  	
                    INTERIM
                      PROVISIONS

                  	
                    10

                  
	 	 	 
	
                    5.01

                  	
                    ASSETS
                      TO BE MAINTAINED IN PROPER MANNER

                  	
                    10

                  
	
                    5.02

                  	
                    VENDOR
                      AS AGENT

                  	
                    10

                  
	
                    5.03

                  	
                    RESTRICTIONS
                      ON CONDUCT OF BUSINESS

                  	
                    11

                  
	
                    5.04

                  	
                    OBLIGATIONS
                      OF THE PURCHASER

                  	
                    11

                  
	 	 	 
	
                    6.00

                  	
                    REPRESENTATIONS
                      AND WARRANTIES OF PARTIES

                  	
                    12

                  
	 	 	 
	
                    6.01

                  	
                    THUNDER'S
                      REPRESENTATIONS AND WARRANTIES

                  	
                    12

                  
	
                    6.02

                  	
                    CIMA’S
                      REPRESENTATIONS AND WARRANTIES

                  	
                    15

                  
	
                    6.03

                  	
                    PURCHASER'S
                      REPRESENTATIONS AND WARRANTIES

                  	
                    18

                  
	
                    6.04

                  	
                    SURVIVAL
                      OF REPRESENTATIONS AND WARRANTIES

                  	
                    19

                  
	
                    6.05

                  	
                    NO
                      ADDITIONAL REPRESENTATIONS OR WARRANTIES BY VENDOR

                  	
                    19

                  
	 	 	 
	
                    7.00

                  	
                    THIRD
                      PARTY RIGHTS AND CONSENTS

                  	
                    20

                  
	 	 	 
	
                    7.01

                  	
                    PREFERENTIAL
                      RIGHTS OF PURCHASE AND CONSENTS

                  	
                    20

                  
	 	 	 
	
                    8.00

                  	
                    PURCHASER'S
                      INSPECTION OF ASSETS

                  	
                    20

                  
	 	 	 
	
                    8.01

                  	
                    VENDORS
                      TO PROVIDE ACCESS

                  	
                    20

                  
	 	 	 
	
                    9.00

                  	
                    ARBITRATION

                  	
                    20

                  
	 	 	 
	
                    9.01

                  	
                    REFERENCE
                      TO ARBITRATION

                  	
                    20

                  
	
                    9.02

                  	
                    PROCEEDINGS

                  	
                    21

                  
	 	 	 
	
                    10.00

                  	
                    CONDITIONS
                      TO CLOSING

                  	
                    21

                  
	 	 	 
	
                    10.01

                  	
                    REQUIRED
                      CONSENTS

                  	
                    21

                  
	
                    10.02

                  	
                    CONDITIONS
                      FOR BENEFIT OF PURCHASER

                  	
                    21

                  
	
                    10.03

                  	
                    CONDITIONS
                      FOR BENEFIT OF VENDORS

                  	
                    22

                  
	
                    10.04

                  	
                    WAIVER
                      OF CONDITIONS

                  	
                    23

                  
	
                    10.05

                  	
                    FAILURE
                      TO SATISFY CONDITIONS

                  	
                    23

                  


          

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          
            	
                    11.00

                  	
                    CONFIDENTIALITY

                  	
                    23

                  
	 	 	 
	
                    11.01

                  	
                    OBLIGATION
                      TO MAINTAIN INFORMATION CONFIDENTIAL

                  	
                    23

                  
	
                    11.02

                  	
                    CONSULTANTS
                      AND ADVISORS BOUND

                  	
                    24

                  
	 	 	 
	
                    12.00

                  	
                    INDEMNITIES
                      FOR REPRESENTATIONS AND WARRANTIES

                  	
                    24

                  
	 	 	 
	
                    12.01

                  	
                    VENDOR’S
                      INDEMNITIES FOR REPRESENTATIONS AND WARRANTIES

                  	
                    24

                  
	
                    12.02

                  	
                    PURCHASER’S
                      INDEMNITIES FOR REPRESENTATIONS AND WARRANTIES

                  	
                    24

                  
	
                    12.03

                  	
                    TIME
                      LIMITATION

                  	
                    24

                  
	 	 	 
	
                    13.00

                  	
                    PURCHASER’S
                      INDEMNITIES

                  	
                    24

                  
	 	 	 
	
                    13.01

                  	
                    PURCHASER
                      GENERAL INDEMNITY

                  	
                    24

                  
	
                    13.02

                  	
                    VENDOR
                      GENERAL INDEMNITY

                  	
                    25

                  
	
                    13.03

                  	
                    ENVIRONMENTAL
                      INDEMNITY

                  	
                    25

                  
	
                    13.04

                  	
                    NO
                      MERGER OF LEGAL RESPONSIBILITIES

                  	
                    26

                  
	 	 	 
	
                    14.00

                  	
                    WAIVER

                  	
                    26

                  
	 	 	 
	
                    14.01

                  	
                    WAIVER
                      MUST BE IN WRITING

                  	
                    26

                  
	 	 	 
	
                    15.00

                  	
                    ASSIGNMENT

                  	
                    27

                  
	 	 	 
	
                    15.01

                  	
                    ASSIGNMENTS
                      BEFORE CLOSING

                  	
                    27

                  
	 	 	 
	
                    16.00

                  	
                    NOTICE

                  	
                    27

                  
	 	 	 
	
                    16.01

                  	
                    SERVICE
                      OF NOTICE

                  	
                    27

                  
	
                    16.02

                  	
                    ADDRESSES
                      FOR NOTICES

                  	
                    27

                  
	
                    16.03

                  	
                    RIGHT
                      TO CHANGE ADDRESS

                  	
                    28

                  
	 	 	 
	
                    17.00

                  	
                    POST
                      CLOSING  ADMINISTRATION

                  	
                    28

                  
	 	 	 
	
                    17.01

                  	
                    REGISTRATION
                      OF DOCUMENTS

                  	
                    28

                  
	
                    17.02

                  	
                    COORDINATION
                      OF ADMINISTRATIVE MATTERS

                  	
                    28

                  
	
                    17.03

                  	
                    VENDORS’
                      ACCESS TO DOCUMENTS

                  	
                    29

                  
	 	 	 
	
                    18.00

                  	
                    MISCELLANEOUS
                      PROVISIONS

                  	
                    29

                  
	 	 	 
	
                    18.01

                  	
                    FURTHER
                      ASSURANCES

                  	
                    29

                  
	
                    18.02

                  	
                    GOVERNING
                      LAW

                  	
                    29

                  
	
                    18.03

                  	
                    TIME

                  	
                    29

                  
	
                    18.04

                  	
                    NO
                      AMENDMENT EXCEPT IN WRITING

                  	
                    29

                  
	
                    18.05

                  	
                    CONSEQUENCES
                      OF TERMINATION

                  	
                    29

                  
	
                    18.06

                  	
                    SUPERSEDES
                      EARLIER AGREEMENTS

                  	
                    30

                  
	
                    18.07

                  	
                    ENUREMENT

                  	
                    30

                  


          

        

      

       

      SCHEDULES

      
        	
                Schedule
                  “A”:

              	
                Schedule
                  “A”, which includes: Part I - Lands, Leases and Encumbrances (including
                  preferential purchase rights and penalties);  Part II –
                  Production Sales Contracts; Part III- Facilities; Gas Gathering
                  Lines,
                  Pipelines, Facility, Processing, Treating, Transportation and Contract
                  Operating Agreements; Part IV- Wells; Part V-  Authorizations
                  for Expenditure;  Part VI- Areas of Mutual Interest; Part
                  VII-Default Notices, Claims, Lawsuits & Offset Drilling
                  Notices;

              


      

      
        	
                Schedule
                  “B”:

              	
                General
                  Conveyance for Canadian Assets

              


      

      
        	
                Schedule
                  “C”:

              	
                General
                  Conveyance for U.S. Assets

              


      

      
        	
                Schedule
                  “D”:

              	
                Specific
                  Conveyances for U.S. Assets

              


      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      AGREEMENT
        OF PURCHASE AND SALE

       

      THIS
        AGREEMENT made this 28th
        day of September,
        2007.

       

      BETWEEN:

       

      THUNDER
        RIVER ENERGY INC. (“Thunder”), a body corporate,
        registered to carry on business in the Province of Alberta and CIMA
        HOLDINGS INC. (“CIMA”), a New Mexico corporation (Thunder and CIMA
        hereinafter collectively called the “Vendors”)

       

      -
        and
        -

       

      KODIAK
        ENERGY, INC., a body corporate formed under the laws of Delaware and
        having an office in the City of Calgary, in the Province of Alberta (hereinafter
        called the “Purchaser”)

       

      WHEREAS
        the Vendors have agreed to sell the Assets to the Purchaser and the Purchaser
        has agreed to purchase the Assets from the Vendors on the terms and conditions
        set forth herein;

       

      NOW
        THEREFORE in consideration of the premises and the mutual covenants and
        warranties herein contained, the Parties agree as follows:

       

      
        	
                1.00

              	
                INTERPRETATION

              


      

       

      
        	
                1.01

              	
                Definitions

              


      

       

      In
        this
        Agreement, including the recitals and the Schedules, the following terms
        shall
        have the respective meanings hereby assigned to them:

       

      “Agreement”
        means this document, together with the Schedules attached hereto and made
        a part
        hereof.

       

      “Assets”
        means Petroleum and Natural Gas Rights, the Tangibles and the Miscellaneous
        Interests.

       

      “Business
        Day” means any day other than a Saturday, Sunday or a statutory holiday
        in Alberta or New Mexico.

       

      “Closing”
        means the exchange of Conveyance Documents on the Closing Date,
        the
        delivery by the Purchaser to the Vendors of the Purchase Price, and the transfer
        of the Assets by the Vendor to the Purchaser.

       

      “CIMA
        Assets” means the portion of the Assets located in the United States of
        America.

       

      “Closing
        Date” means 7:00 a.m. on September 28, 2007, or such other time and
        date as may be agreed to by the Parties.

       

      “Conveyance
        Documents” means, collectively, the documents which provide for the
        assignment, transfer or other disposition of the Assets to the Purchaser
        including those in Schedule “B” and “C”.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      “Effective
        Time” means 4:00 p.m. (Calgary time) on July 11, 2007.

       

      “EL-413” means
        exploration licence 413 issued under the Law of Canada.

       

      “Facilities”
        means the facilities set forth in Part IV of Schedule “A”.

       

      “GST”
        means tax payable pursuant to the Excise Tax Act (Canada) and in
        accordance with Subclause 2.03 hereof.

       

      “Lands”
        means the lands set forth and described in Schedule ”A”, insofar as rights
        to the Petroleum Substances underlying those lands are granted by the
        Leases.

       

      “Leases”
        means the leases, licences, permits, reservations, interests and other documents
        of title set forth and described in Schedule “A”, by virtue of which the holder
        thereof is entitled to explore for, drill for, win, take, own or remove
        Petroleum Substances within, upon or under the Lands or by virtue of which
        the
        holder thereof is deemed to be entitled to a share of Petroleum Substances
        removed from the Lands or share in the proceeds generated by, or to receive
        payments calculated by reference to the quantity or value of such production,
        and includes, if applicable, all renewals, extensions of and amendments to
        such
        documents and all documents issued in substitution therefor.

       

      “Miscellaneous
        Interests” means the Vendors’ entire right, title and interest in and
        to all property, assets and rights, other than the Petroleum and Natural
        Gas
        Rights and the Tangibles, to the extent such property, assets and rights
        pertain
        to the Petroleum and Natural Gas Rights or the Tangibles, or any rights relating
        thereto, including, without restricting the generality of the foregoing,
        the
        Vendors’ entire interest in:

       

      
        	
                 

              	
                (a)

              	
                the
                  Title and Operating Documents;

              


      

       

      
        	
                 

              	
                (b)

              	
                the
                  Surface Rights;

              


      

       

      
        	
                 

              	
                (c)

              	
                the
                  wellbores and casing of all Wells;
                  and

              


      

       

      
        	
                 

              	
                (d)

              	
                copies
                  of the geological, engineering, seismic, Facilities records and
                  other
                  records, files, reports data, correspondence and documents that
                  relate
                  directly to the Assets.

              


      

       

      “Parties”  means
        the parties to this Agreement, and “Party” means the Purchaser
        or one of the Vendors.

       

      “Permitted
        Encumbrances” means:

       

      
        	
                 

              	
                (a)

              	
                any
                  rents, royalties, production payments, net carried interests, net
                  profit
                  interests, reduction in interests, or other similar interests,
                  rights,
                  encumbrances, burdens or obligations described in Schedule ”A”
                  ;

              


      

       

      
        	
                 

              	
                (b)

              	
                any
                  preferential rights of purchase, right of first refusal or any
                  similar
                  restriction applicable to any of the Assets, as identified in
                  Schedule ”A”;

              


      

       

      
        	
                 

              	
                (c)

              	
                the
                  terms and conditions of the Leases, including, without limitation,
                  the
                  requirement to pay any rentals or royalties to the grantor thereof
                  to
                  maintain the Leases in good
                  standing;

              


      

       

      
        	
                 

              	
                (d)

              	
                the
                  right reserved to or vested in any grantor, government or other
                  public
                  authority by the term of any Lease or by the Regulations to terminate
                  any
                  Lease;

              


      

       


      
        
          
          

        

        
          -
            2 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (e)

              	
                easements,
                  rights of way, servitudes or other similar rights in land, including,
                  without in any way limiting the generality of the foregoing, rights
                  of way
                  and servitudes for highways, railways, sewers, drains, gas and
                  oil
                  pipelines, gas and water mains, electric light, power, telephone
                  or cable
                  television conduits, poles, wires or
                  cables;

              


      

       

      
        	
                 

              	
                (f)

              	
                rights
                  of general application reserved to or vested in any governmental
                  authority
                  to levy taxes on Petroleum Substances or the income or revenue
                  therefrom
                  and governmental restrictions on production rates from the Wells
                  or on
                  operations being conducted on the Lands or otherwise affecting
                  the value
                  of any of the Assets;

              


      

       

      
        	
                 

              	
                (g)

              	
                agreements
                  for the sale of Petroleum Substances, which are terminable on thirty
                  (30)
                  days' notice or less (without an early termination penalty or other
                  cost)
                  or which are set forth in
                  Schedule ”A”;

              


      

       

      
        	
                 

              	
                (h)

              	
                the
                  Regulations and any rights reserved to or vested in any municipality
                  or
                  governmental, statutory or public authority to control or regulate
                  any of
                  the Assets in any manner;

              


      

       

      
        	
                 

              	
                (i)

              	
                undetermined
                  or inchoate liens incurred or created as security in favour of
                  any person
                  with respect to the development or operation of any of the Assets,
                  as
                  regards a Vendor's share of the costs and expenses thereof, which
                  costs
                  and expenses are not due or delinquent as of the Closing
                  Date;

              


      

       

      
        	
                 

              	
                (j)

              	
                the
                  reservations, limitations, provisos and conditions in any grants
                  or
                  transfers from the Crown, United States government or State of
                  New Mexico
                  of any of the Lands or interests therein, and statutory exceptions
                  to
                  title;

              


      

       

      
        	
                 

              	
                (k)

              	
                the
                  terms and conditions of all agreements which relate to the Assets,
                  including but not limited to earning, ownership, operating, pooling
                  and
                  unitization agreements (other than those described in paragraph
                  (b)
                  above), except to the extent the foregoing create any Security
                  Interests,
                  burden, royalty, production payment, net carried interest, liens,
                  charges,
                  net profits interest or other similar interest, right, encumbrance,
                  obligation or liability which is not otherwise described in
                  Schedule ”A” or elsewhere in this
                  definition;

              


      

       

      
        	
                 

              	
                (l)

              	
                the
                  agreements identified in Schedule ”A” respecting the processing,
                  treating or transmission of Petroleum Substances or the operation
                  of Wells
                  by contract field operators;

              


      

       

      
        	
                 

              	
                (m)

              	
                penalties
                  which are disclosed in Schedule ”A” and which have arisen under
                  operating procedures or similar agreements as a consequence of
                  elections
                  by either or the Vendors not to participate in operations on the
                  Lands to
                  which the penalty applies;

              


      

       

      
        	
                 

              	
                (n)

              	
                liens
                  granted in the ordinary course of business to a public utility,
                  municipality or governmental authority with respect to operations
                  pertaining to any of the Assets;
                  and

              


      

       

      
        	
                 

              	
                (o)

              	
                mechanics',
                  builders' or materialman's liens in respect of services rendered
                  or goods
                  supplied, but only insofar as such liens relate to goods or services
                  for
                  which payment is not due, or the validity of which is being diligently
                  contested by or on behalf of either of the
                  Vendor.

              


      

       


      
        
          
          

        

        
          -
            3 -

          
            

          

        

        
          
          

        

      


      “Petroleum
        and Natural Gas Rights” means the entire right, title and interest of
        the Vendors described in Schedule ”A” in respect of the Leases to the
        extent that they apply to the Lands, including any existing contractual right
        of
        either of the Vendors to earn an interest under a farm-in or similar
        arrangement, and any overriding royalty or net profits interests accruing
        to
        either of the Vendors;

       

      “Petroleum
        Substances” means petroleum, natural gas and related hydrocarbons,
        sulphur, CO2,
        coalbed natural gas and every other mineral or substance, or any of them,
        whether gaseous, liquid or solid and whether hydrocarbons or not and includes
        helium;

       

      “Prepaid
        Gas Obligations” means, with respect to production, sale or related
        contracts pertaining to the Petroleum and Natural Gas Rights, the obligations
        of
        the Vendors under “take or pay” and similar provisions either to repay payments
        made by the purchasers thereunder for Petroleum Substances not taken by them
        or
        to deliver such gas or substances to such purchasers without full payment
        therefor.

       

      “Purchase
        Price” means the amount payable by the Purchaser to the Vendors
        pursuant to Clause 2.02 as modified by the adjustments and reductions
        provided for herein.

       

      “Prime
        Rate” means the per annum rate designated as the prime rate for
        Canadian dollar commercial loans by the main Calgary branch of the Royal
        Bank of
        Canada, with any change to that rate being effective under this Agreement
        on the
        same day as it is made effective by the Royal Bank of Canada.

       

      “Regulations”
        means all statutes, laws, rules, orders and regulations in effect from time
        to
        time and made by governments or governmental boards or agencies having
        jurisdiction over the Assets or any part thereof.

       

      “Security
        Interests” means any assignment, security, general security agreement,
        deed of trust, debenture, land charge, mortgage, charge, pledge, negative
        pledge, lien or other security interest whatsoever or howsoever created,
        which
        encumbers the title of either of the Vendors in and to any or all of the
        Assets
        or the proceeds to be received under this Agreement.

       

      “Specific
        Conveyances” means all conveyances, assignments, transfers, novations,
        trust agreements and other documents and instruments that are reasonably
        required or desirable to convey, assign and transfer the Assets to the Purchaser
        and to novate the Purchaser in the place and stead of the Vendors with respect
        to the Assets;

       

      “Surface
        Rights” means all rights to enter upon, use and occupy the surface of
        the Lands or any lands with which the Lands have been pooled or unitized
        or any
        lands upon which any Tangibles are located or of any lands to be crossed
        in
        order to gain access to any of the Lands or the Tangibles;

       

      “Tangibles”
        means the Vendors’ entire right, title and interest, whether leased or
        owned, in and to all tangible depreciable property and assets that
        are:

       

      
        	
              	
                (a)

              	
                the
                  Facilities;

              


      

       

      
        	
              	
                (b)

              	
                all
                  gas gathering lines and oil flow lines related to any of the
                  Wells;

              


      

       

      
        	
                 

              	
                (c)

              	
                located
                  in, on or about the Lands used or intended for use, in connection
                  with the
                  exploration, development, injection, production, processing, gathering,
                  storage, treatment, transportation of the Petroleum Substances
                  produced
                  from the Petroleum and Natural Gas Rights and the Lands or the
                  operations
                  thereon or relative thereto, including, without limitation, well
                  equipment, if any, relating to the
                  Wells;

              


      

       


      
        
          
          

        

        
          -
            4 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (d)

              	
                all
                  field inventory used or intended to be used in connection with
                  the assets
                  in existence as at the Effective Date which is not otherwise consumed
                  by
                  the Vendors in the ordinary course of operating the Assets;
                  and

              


      

       

      
        	
                 

              	
                (e)

              	
                any
                  additional items, whether located on or off the Lands, that are
                  indicated
                  in Schedule “A” to be specifically included as
                  Tangibles.

              


      

       

      “Thunder
        Assets” means the portion of the Assets located in Canada.

       

      “Title
        and Operating Documents” means, to the extent directly related to the
        Petroleum and Natural Gas Rights and the Tangibles, or either of
        them:

       

      
        	
                 

              	
                (a)

              	
                the
                  Leases;

              


      

       

      
        	
                 

              	
                (b)

              	
                agreements
                  affecting the Vendors’ interests in the Petroleum and Natural Gas Rights,
                  including, without limitation, operating agreements, royalty agreements,
                  farm-out or farm-in agreements, option agreements, participation
                  agreements, pooling agreements, sale and purchase agreements and
                  asset
                  exchange agreements;

              


      

       

      
        	
              	
                (c)

              	
                agreements
                  pertaining to the Surface Rights;

              


      

       

      
        	
                 

              	
                (d)

              	
                agreements
                  for the construction, ownership and operation of gas plants, gas
                  gathering
                  systems and other Tangibles;

              


      

       

      
        	
                 

              	
                (e)

              	
                service
                  agreements for the treating, gathering, storage, transportation
                  or
                  processing of Petroleum Substances or other third party Petroleum
                  Substances, the injection or subsurface disposal of substances,
                  the use of
                  wellbores or the operation of any Wells or Tangibles by a third
                  party;

              


      

       

      
        	
                 

              	
                (f)

              	
                any
                  approvals, authorizations or licenses required under the Regulations
                  for
                  the conduct of operations with respect to the Assets, including,
                  without
                  limitation, well and pipeline licences;
                  and

              


      

       

      
        	
                 

              	
                (g)

              	
                all
                  other documents that relate to the ownership, operation or exploitation
                  of
                  the Petroleum Substances or
                  Tangibles.

              


      

       

      “Title
        Defect” means a defect, deficiency or discrepancy in or affecting the
        title of the Vendors in and to any of the Assets, other than specifically
        disclosed herein or in Schedule ”A”, which is sufficiently material and
        adverse to the enforcement of title that it would not be acceptable to a
        prudent
        purchaser buying similar oil and gas properties, acting reasonably and excluding
        Permitted Encumbrances.

       

      “Wells”
        means all producing, shut-in, water source, disposal, injection, suspended
        and
        similar wells located upon or having bottom hole coordinates lying under
        the
        Lands or otherwise directly relating to Vendor’s operations and to the Petroleum
        Substances thereto which are set forth in Schedule ”A”.

       

      
        	
                1.02

              	
                Schedules

              


      

       

      The
        following Schedules are attached hereto and made part of this
        Agreement:

       


      
        
          
          

        

        
          -
            5 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (a)

              	
                Schedule ”A”,
                  which includes: Part I - Lands, Leases and Encumbrances ( including
                  preferential purchase rights and penalties);  Part II –
                  Production Sales Contracts;  Part III- Facilities; Gas Gathering
                  Lines, Pipelines, Facility, Processing, Treating, Transportation
                  and
                  Contract Operating Agreements;  Part IV- Wells; Part
                  V-  Authorizations for Expenditure;  Part VI- Areas of
                  Mutual Interest; Part VII-Default Notices, Claims, Lawsuits & Offset
                  Drilling Notices;

              


      

       

      
        	
                 

              	
                (b)

              	
                Schedule ”B”,
                  which is the form of general conveyance;
                  and

              


      

       

      
        	
                 

              	
                (c)

              	
                Schedule
                  “C”,  which are the conveyances for CIMA
                  Assets.

              


      

       

      
        	
                1.03

              	
                References

              


      

       

      The
        references “hereunder”, “herein” and “hereof” refer to the provisions of this
        Agreement, and references to Articles, Clauses, Subclauses, Paragraphs or
        Subparagraphs herein refer to Articles, Clauses, Subclauses, Paragraphs or
        Subparagraphs of this Agreement.  Any reference to time shall refer to
        the time in Calgary, Alberta, Canada during the respective intervals in which
        each is in force.

       

      
        	
                1.04

              	
                Headings

              


      

       

      The
        headings of the Articles, Clauses, Subclauses, Schedules and any other headings,
        captions or indices herein are inserted for convenience of reference only
        and
        shall not be used in any way in construing or interpreting any provision
        hereof.

       

      
        	
                1.05

              	
                Singular/Plural

              


      

       

      Whenever
        the singular or masculine or neuter is used in this Agreement or in the
        Schedules, it shall be interpreted as meaning the plural or feminine or body
        politic or corporate, and vice versa, as the context requires.

       

      
        	
                1.06

              	
                Use
                  Of Funds

              


      

       

      All
        references to “dollars” or “$” herein shall refer to lawful currency of the
        United Sates of America.

       

      
        	
                1.07

              	
                Derivatives

              


      

       

      Where
        a
        term is defined herein, a capitalized derivative of such term shall have
        a
        corresponding meaning unless the context otherwise requires.

       

      
        	
                1.08

              	
                Interpretation
                  If Closing Does Not
                  Occur

              


      

       

      In
        the
        event that Closing does not occur, each provision of this Agreement which
        presumes that the Purchaser has acquired the Assets hereunder shall be construed
        as having been contingent upon Closing having occurred.

       

      
        	
                1.09

              	
                Conflicts

              


      

       

      If
        there
        is any conflict or inconsistency between a provision of the body of this
        Agreement and that of a Schedule or a Conveyance Document, the provision
        of the
        body of this Agreement shall prevail.  If any term or condition of
        this Agreement conflicts with a term or condition of a Lease or the Regulations,
        the term or condition of such Lease or the Regulations shall prevail, and
        this
        Agreement shall be deemed to be amended to the extent required to eliminate
        any
        such conflict.

       


      
        
          
          

        

        
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            6 -

          
            

          

        

        
          
          

        

      


      
        	
                1.10

              	
                Responsibility
                  Extends to Legal Costs

              


      

       

      References
        to costs in the liability and indemnification obligations prescribed in this
        Agreement shall be deemed to include reasonable legal costs on a solicitor
        and
        his own client basis or attorney costs.

       

      
        	
                1.11

              	
                Knowledge
                  or Awareness

              


      

       

      Where
        a
        representation or warranty in this Agreement is made on the basis of the
        knowledge or awareness of a Vendor, such knowledge or awareness consists
        of the
        actual knowledge or awareness of the current officers and supervisory employees
        of that Vendor which are primarily responsible for the matters in question
        in
        the course of their normal duties.

       

      
        	
                2.00

              	
                PURCHASE
                  AND SALE

              


      

       

      
        	
                2.01

              	
                Agreement
                  of Purchase and Sale

              


      

       

      The
        Purchaser agrees to purchase the Assets from the Vendors and the Vendors
        agree
        to sell the Assets to the Purchaser on the terms and conditions set forth
        herein.

       

      
        	
                 

              	
                (a)

              	
                The
                  Purchase Price payable for the Assets is up to Twenty-Seven Million
                  Dollars ($27,000,000.00).

              


      

       

      
        	
                 

              	
                (b)

              	
                In
                  determining the Purchase Price, the Parties have taken into account
                  the
                  Purchaser's assumption of responsibility, if any, for any future
                  plugging,
                  abandonment and reclamation costs associated with the Assets, as
                  set forth
                  in this Agreement and the Vendors’ release of responsibility
                  therefor.

              


      

       

      
        	
                2.02

              	
                Payment
                  of Purchase Price

              


      

       

      The
        Purchase Price shall be paid as follows:

       

      
        	
                 

              	
                (a)

              	
                by
                  payment of a $100,000 deposit (receipt whereof is hereby acknowledged
                  by
                  the Vendors);

              


      

       

      
        	
                 

              	
                (b)

              	
                by
                  payment of $900,000 by way of bank draft or certified cheque to
                  Thunder
                  and the issuance of Seven Million (7,000,000) shares of the Purchaser
                  to
                  Thunder on Closing;

              


      

       

      
        	
                 

              	
                (c)

              	
                by
                  way of the issuance by the Purchaser of shares from treasury as
                  follows:

              


      

       

      
        	
                 

              	
                (i)

              	
                2
                  million shares on the earlier of June 30, 2008 and the date of
                  completion
                  of the Purchasers seismic program on
                  EL-413;

              


      

       

      
        	
                 

              	
                (ii)

              	
                1
                  million further shares on the earlier of March 30, 2009 and date
                  of the
                  spudding of a well on EL-413 with a proposed total depth of 1,500
                  meters;

              


      

       

      
        	
                 

              	
                (iii)

              	
                1.5
                  million further shares on the spudding of a well on EL-413 with
                  a proposed
                  total depth of 2,500 meters or greater;
                  and

              


      

       


      
        
          
          

        

        
          -
            7 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (iv)

              	
                1.5
                  million further shares within ten (10) Business Days of the conversion
                  of
                  any part of EL-413 to a Significant Discovery
                  License.

              


      

       

      It
        is
        acknowledged that the actions described in (ii), (iii) or (iv) above will
        only
        occur if the Purchaser is satisfied that the actions are justified and should
        be
        undertaken.  Therefore it is agreed that if those actions are not
        taken the Purchaser shall reconvey EL-413 to Thunder provided that:

       

      
        	
                 

              	
                (v)

              	
                the
                  Purchaser shall have earned an undivided 6.25% working interest
                  in 200,000
                  acres of EL-413 if it satisfies (c)(i) above,
                  or

              


      

       

      
        	
                 

              	
                (vi)

              	
                the
                  Purchaser shall have earned an additional undivided 12.50% working
                  interest in 200,000 acres of EL-413 if it satisfies (c)(ii) above,
                  or

              


      

       

      
        	
                 

              	
                (vii)

              	
                the
                  Purchaser shall have earned an additional undivided 25.00% working
                  interest in 200,000 acres of EL-413 if it satisfies (c)(iii)
                  above.

              


      

       

      If
        all of
        the actions described in (c) above are satisfied then the Purchaser shall
        issue
        at least 100,000 further shares to Thunder if an engineering report prepared
        in
        accordance with industry standards from a qualified, experienced professional
        engineering firm shows that there are at least 100 million barrels of possible
        commercial reserves of Petroleum Substances in place under EL-413.  If
        such reports shows there are more than 100 million barrels of possible
        commercial reserves of Petroleum Substances in place under EL-413 then the
        Purchaser shall make a further payment of up to a maximum of Four Million
        Nine
        Hundred Thousand (4,900,000) shares with the Vendors being issued 100,000
        shares
        for each 10 million barrels of possible commercial reserves of Petroleum
        Substances in place under EL-413.  For the purpose of all calculations
        in this Aricle 2.00 each share of the Purchaser issued as part of the Purchase
        Price shall have a deemed value of $2.00.  The class of shares issued
        shall be that class of shares of the Purchaser which are trading.

       

      
        	
                2.03

              	
                GST

              


      

       

      The
        Purchaser shall remit to Thunder at Closing the six percent (6%) GST applicable
        to that portion of the Purchase Price allocated to the Tangibles forming
        part of
        the Thunder Assets in accordance with the Excise Tax Act
        (Canada).  The Vendor undertakes to remit the GST to the appropriate
        governmental authority in accordance with the Excise Tax Act
(Canada).

       

      The
        Parties acknowledge and agree that seismic being purchased by the Purchaer
        has
        been valued at $416,000.00, and GST is payable thereon.

       

      
        	
                2.04

              	
                DEPOSIT

              


      

       

      If
        the
        transactions described in this Agreement do not close for any reason other
        then
        a default by the Purchaser then the deposit and any interest earned thereon
        shall be promptly returned to the Purchaser.  Otherwise if the
        transactions do not close the deposit and any interest earned thereon shall
        be
        forfeited to the Vendors as liquidated damages.

       

      
        	
                3.00

              	
                CLOSING

              


      

       

      
        	
                3.01

              	
                Place
                  of Closing

              


      

       

      Unless
        otherwise agreed in writing by the Parties, Closing shall take place at the
        offices of the Purchaser on the Closing Date.

       


      
        
          
          

        

        
          -
            8 -

          
            

          

        

        
          
          

        

      


      
        	
                3.02

              	
                Required
                  Approvals

              


      

       

      In
        accordance with Clause 10.01,
        it is a condition precedent to Closing that any and all approvals and consents
        required under the Regulations shall have been obtained or that such approval
        or
        consent shall have been waived in writing or otherwise lapsed or, as agreed
        in
        writing between the Parties, shall be obtained subsequent to
        Closing.

       

      
        	
                3.03

              	
                Specific
                  Conveyances

              


      

       

      
        	
                 

              	
                (a)

              	
                The
                  Vendors and the Purchaser shall cooperate in the preparation of
                  the
                  Specific Conveyances so that all Specific Conveyances can be executed
                  and
                  delivered at Closing.

              


      

       

      
        	
                 

              	
                (b)

              	
                The
                  costs of preparation of the Specific Conveyances, are to be borne
                  by the
                  Vendors and the costs of registration, filing and/or recording
                  of the
                  Specific Conveyances are to be borne by the
                  Purchaser.

              


      

       

      
        	
                4.00

              	
                ADJUSTMENTS

              


      

       

      
        	
                4.01

              	
                Benefits
                  and Obligations to be
                  Apportioned

              


      

       

      
        	
                 

              	
                (a)

              	
                All
                  benefits and obligations of any kind and nature accruing, payable,
                  paid,
                  received or receivable with respect to the Assets (including, without
                  limitation, maintenance, development, capital and operating costs,
                  advances, payments with respect to the Permitted Encumbrances,
                  proceeds
                  from the sale of production, accounts receivable and incentives
                  accruing
                  pursuant to the Regulations) shall be apportioned, as of the Effective
                  Time, between the Vendors and the Purchaser in accordance with
                  generally
                  accepted accounting principles, subject to the provisions of this
                  Agreement.  All such benefits and obligations which relate to
                  any matter or time period occurring before the Effective Time shall
                  be for
                  the Vendors’ account and all those benefits and obligations which relate
                  to any matter or time period occurring after the Effective Time
                  shall be
                  for the Purchaser's account.  All costs of whatever nature
                  pertaining to work performed or goods or services provided with
                  respect to
                  the Assets prior to the Effective Time shall be borne by the Vendors,
                  notwithstanding that such costs may be payable in whole or in part
                  after
                  the Effective Time.

              


      

       

      
        	
                 

              	
                (b)

              	
                All
                  rentals and all similar payments required to preserve any of the
                  Leases
                  and all taxes (other than income taxes and taxes based on the volume
                  of
                  the production of Petroleum Substances) levied with respect to
                  the Assets
                  shall be apportioned between the Vendors and the Purchaser on a
                  per diem
                  basis as of the Effective Time, unless and to the extent that such
                  apportionment in favour of the Vendors is waived by the
                  Vendors.

              


      

       

      
        	
                 

              	
                (c)

              	
                Petroleum
                  Substances which were produced, but not sold, as of the Effective
                  Time
                  shall be credited to the Vendors.

              


      

       

      
        	
                4.02

              	
                Adjustments
                  to Accounts

              


      

       

      
        	
                 

              	
                (a)

              	
                An
                  interim accounting and adjustment will be conducted for Closing,
                  based on
                  the Vendors’ good faith estimate of all adjustments to be made for the
                  transactions herein pursuant to this Article.  Such interim
                  accounting and adjustment shall be delivered to the Purchaser for
                  its
                  review and comment at least two (2) Business Days prior to Closing,
                  together with all applicable back-up information related
                  thereto.  A final accounting and adjustment (“Final
                  Statement”) shall be conducted within ninety (90) days of the
                  Closing Date.  Subject to Subclauses (b) and (c) of this
                  Clause, the Parties shall not be obligated to make any adjustments
                  after
                  such ninety (90) day period (excluding any amount owing to a Party
                  by the
                  other Party pursuant to a Final Statement) unless such adjustment
                  has been
                  specifically requested, by notice, within such period.  All
                  adjustments shall be settled by payment by the Party required to
                  make
                  payment hereunder within thirty (30) days of being notified of
                  the
                  determination of the amount owing.

              


      

       


      
        
          
          

        

        
          -
            9 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (b)

              	
                The
                  Purchaser may audit the books, records and accounts of the Vendors
                  respecting the Assets for the purpose of effecting adjustments
                  pursuant to
                  this Article.  Such audit shall be conducted upon reasonable
                  notice to the Vendors at the Vendors’ offices during the Vendors’ normal
                  business hours, and shall be conducted at the sole expense of the
                  Purchaser.  Any claims of discrepancies disclosed by such audit
                  which relate to the Final Statement shall be made in writing to
                  the
                  Vendors within two (2) months following  the receipt by
                  Purchaser of the Final Statement, and the Vendors shall respond
                  in writing
                  to any claims of discrepancies within two (2) months of the receipt
                  of
                  such claims.  To the extent that the Parties are unable to
                  resolve any outstanding claims of discrepancies disclosed by such
                  audit
                  within two (2) months of the Vendors’ response thereto, such audit
                  exceptions shall be resolved pursuant to
                  Article 9.00.

              


      

       

      
        	
                 

              	
                (c)

              	
                Notwithstanding
                  the preceding Subclauses of this Clause, any adjustments resulting
                  from
                  joint venture audits, Crown, New Mexico or United States Federal
                  or other
                  royalty audits or Crown, New Mexico or United States Federal royalty
                  invoices relating to the Assets and established by an audit conducted
                  pursuant to the Regulations, the Leases or any joint venture or
                  other
                  agreements to which the Assets are subject shall be made within
                  the period
                  set out in the applicable audit provisions, with payment being
                  made by the
                  Party required to make payment hereunder in accordance with the
                  Effective
                  Time within thirty (30) days of being notified of the determination
                  of the
                  amount owing.

              


      

       

      
        	
                 

              	
                (d)

              	
                Any
                  amount owing to a Party by the other Party pursuant to any provision
                  of
                  this Agreement after Closing and remaining unpaid shall bear compound
                  interest, as computed monthly, from the day such amount is due
                  to be paid
                  until the day such amount was paid, at the Prime Rate plus 2% per
                  annum,
                  regardless of whether such Party has given the other Party prior
                  notice of
                  the accrual of interest hereunder.

              


      

       

      
        	
                5.00

              	
                INTERIM
                  PROVISIONS

              


      

       

      
        	
                5.01

              	
                Assets
                  to be Maintained in Proper
                  Manner

              


      

       

      Prior
        to
        Closing, the Assets shall be and remain at the risk of the Vendors in respect
        of
        any material damage or destruction to the Assets.  For purposes of
        this provision, the phrase “damage or destruction” shall not include the effect
        of any change of pricing of Petroleum Substances produced or the effect of
        changes to any of the items described in Section 6.05(a), (b) and
        (d).  Legal title, ownership and possession of the Assets shall not
        pass to the Purchaser until Closing.

       

      
        	
                5.02

              	
                Vendor
                  as Agent

              


      

       

      If
        Closing occurs, insofar as the Vendors maintain the Assets and take actions
        with
        respect thereto on behalf of the Purchaser in accordance with this
        Article 5.00, at Closing the Vendors shall be deemed to have been the agent
        of the Purchaser hereunder.  The Purchaser ratifies all actions which
        the Vendors took or refrained from taking in accordance with the terms of
        this
        Article 5.00, with the intention that all such actions shall be those of
        the Purchaser.

       


      
        
          
          

        

        
          -
            10 -

          
            

          

        

        
          
          

        

      


      
        	
                5.03

              	
                Restrictions
                  on Conduct of Business

              


      

       

      Prior
        to
        Closing, the Vendors shall not, without the prior written consent of the
        Purchaser:

       

      
        	
                 

              	
                (a)

              	
                voluntarily
                  assume any new obligation or new commitment with respect to the
                  Assets,
                  where the Vendors’ share of the expenditure associated with such
                  obligation or commitment is estimated to exceed One Thousand Dollars
                  ($1,000.00);

              


      

       

      
        	
                 

              	
                (b)

              	
                surrender
                  or abandon any of the Assets;

              


      

       

      
        	
                 

              	
                (c)

              	
                amend
                  or terminate any agreement or enter into any new agreement respecting
                  the
                  Assets;

              


      

       

      
        	
                 

              	
                (d)

              	
                propose
                  any operation with respect to the Assets or initiate the exercise
                  of any
                  right arising as a result of the ownership of the
                  Assets;

              


      

       

      
        	
                 

              	
                (e)

              	
                sell,
                  transfer or otherwise dispose of the Assets, or any of them, except
                  as may
                  be required by the Vendors to comply with its obligations respecting
                  any
                  preferential rights, as provided in Clause 7.01;
                  or

              


      

       

      
        	
                 

              	
                (f)

              	
                grant
                  a Security Interest or any encumbrance with respect to any of the
                  Assets.

              


      

       

      However,
        the Vendors may assume such obligations or commitments and propose or initiate
        such operations or exercise any such right or option without the prior consent
        of the Purchaser, if the Vendors reasonably determine that such expenditures
        or
        actions are necessary for the protection of life or property, in which case
        the
        Vendors shall promptly notify the Purchaser of such intention or actions
        and the
        Vendors’ estimate of the costs and expenses associated therewith.

       

      
        	
                5.04

              	
                Obligations
                  of the Purchaser

              


      

       

      Subject
        to Clause 5.03,
        if an operation or the exercise of any right or option respecting the Assets
        is
        proposed in circumstances in which such operation or the exercise of such
        right
        or option would result in an obligation of the Purchaser, the following
        Paragraphs shall apply to such operation or the exercise of such right or
        option
        (hereinafter referred to as the “Proposal”):

       

      
        	
                 

              	
                (a)

              	
                the
                  Vendors shall promptly give notice of the Proposal to the Purchaser,
                  including with such notice the particulars of such Proposal in
                  reasonable
                  detail;

              


      

       

      
        	
                 

              	
                (b)

              	
                the
                  Purchaser shall, not later than twenty-four (24) hours prior to the
                  time the Vendors are required to make an election with respect
                  to the
                  Proposal, advise the Vendors, by notice, whether it wishes the
                  Vendors to
                  exercise its rights with respect to the Proposal on behalf of the
                  Purchaser, provided that failure of the Purchaser to make such
                  election
                  within such period shall be deemed to be an election by the Purchaser
                  to
                  participate in the Proposal;

              


      

       

      
        	
                 

              	
                (c)

              	
                the
                  Vendors shall make the election authorized by the Purchaser with
                  respect
                  to the Proposal within the period during which the Vendors may
                  respond to
                  the Proposal; and 

              


      

       


      
        
          
          

        

        
          -
            11 -

          
            

          

        

        
          
          

        

      


      the
        election by the Purchaser not to participate in any Proposal required to
        preserve the existence of any of the Assets shall not entitle the Purchaser
        to
        any reduction of the Purchase Price in the event that the Vendors’ interest
        therein is terminated as a result of such election, and such termination
        shall
        not constitute a failure of the Vendors’ representations and warranties
        pertaining to such Assets.

       

      
        	
                6.00

              	
                REPRESENTATIONS
                  AND WARRANTIES OF
                  PARTIES

              


      

       

      
        	
                6.01

              	
                Thunder's
                  Representations and
                  Warranties

              


      

       

      Thunder
        represents and warrants to the Purchaser that:

       

      
        	
                 

              	
                (a)

              	
                Standing:  Thunder
                  is a corporation, duly organized, valid and subsisting, and authorized
                  to
                  carry on business in the Province of Alberta and the Northwest
                  Territories;

              


      

       

      
        	
                 

              	
                (b)

              	
                Requisite
                  Authority: Thunder has the requisite capacity, power and authority to
                  execute this Agreement and the Conveyance Documents and to perform
                  the
                  obligations to which it thereby becomes
                  subject;

              


      

       

      
        	
                 

              	
                (c)

              	
                No
                  Conflict: The execution and delivery of this Agreement and the
                  completion of the sale of the Assets in accordance with the terms
                  of this
                  Agreement are not and will not be in violation or breach of, or
                  be in
                  conflict with:

              


      

       

      
        	
                 

              	
                (i)

              	
                any
                  term or provision of the constating or other governing documents
                  of
                  Thunder;

              


      

       

      
        	
                 

              	
                (ii)

              	
                any
                  agreement, instrument, permit or authority to which Thunder is
                  a party or
                  by which Thunder is bound; or

              


      

       

      
        	
                 

              	
                (iii)

              	
                the
                  Regulations or any judicial order, award, judgement or decree applicable
                  to Thunder or the Assets;

              


      

       

      
        	
                 

              	
                (d)

              	
                Execution
                  and Enforceability: Thunder has taken all actions necessary to
                  authorize the execution and delivery of this Agreement, and, as
                  of the
                  Closing Date, Thunder shall have taken all actions necessary to
                  authorize
                  and complete the sale of the Assets in accordance with the provisions
                  of
                  this Agreement.  This Agreement has been validly executed and
                  delivered by Thunder, and this Agreement and all other documents
                  executed
                  and delivered on behalf of Thunder hereunder shall constitute legal,
                  valid
                  and binding obligations of Thunder enforceable in accordance with
                  their
                  respective terms and conditions;

              


      

       

      
        	
                 

              	
                (e)

              	
                Residency
                  for Tax Purposes: Thunder is not a non-resident of Canada within the
                  meaning of the Income Tax Act
                  (Canada);

              


      

       

      
        	
                 

              	
                (f)

              	
                No
                  Finders' Fees: The Purchaser shall not have any responsibility for any
                  obligation or liability, contingent or otherwise, for brokers'
                  or finders'
                  fees, if any, incurred by Thunder with respect to the transactions
                  herein;

              


      

       

      
        	
                 

              	
                (g)

              	
                Lawsuits
                  and Claims: Except as specifically identified in Schedule ”A”,
                  there are no unsatisfied judgements, claims, proceedings, actions,
                  governmental investigations or lawsuits in existence, or to the
                  best of
                  the knowledge of Thunder, contemplated or threatened against or
                  with
                  respect to the Assets, and there exists no particular circumstance
                  which
                  Thunder reasonably believes will give rise to such a claim, proceeding,
                  action, governmental investigation or lawsuit and no matter described
                  in
                  Schedule “A” will affect title to the Assets or the Purchaser’s enjoyment
                  thereof;

              


      

       


      
        
          
          

        

        
          -
            12 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (h)

              	
                Compliance
                  with Leases and Agreements: No act or omission has occurred whereby
                  Thunder is, or would be, in default under the terms of the Regulations,
                  any Lease or any agreement pertaining to the Thunder Assets, where
                  such a
                  default would impact materially and adversely upon the Assets,
                  or any of
                  them and to the best of the knowledge of Thunder, no third party
                  is in
                  default under the terms of any Lease of any agreement pertaining
                  to the
                  Thunder Assets, where such a default would impact materially and
                  adversely
                  upon the Thunder Assets;

              


      

       

      
        	
                 

              	
                (i)

              	
                No
                  Default Notices:  Thunder has not received any notice of
                  default under the Leases or any notice alleging its default under
                  any
                  agreement pertaining to any of the Assets, which default has not
                  been
                  rectified as of the date of this Agreement or to the best knowledge
                  of
                  Thunder, there exists no particular circumstance which Thunder
                  reasonably
                  believes will give rise to such a
                  notice;

              


      

       

      
        	
                 

              	
                (j)

              	
                Payment
                  of Royalties and Taxes:  To the best of the knowledge of the
                  Vendor, all royalties and all ad valorem, property, production,
                  severance
                  and similar taxes and assessments based on, or measured by, its
                  ownership
                  of the Assets, the production of Petroleum Substances from the
                  Lands or
                  the receipt of proceeds therefrom that are payable by Thunder and
                  which
                  accrued prior to the Effective Time have been or will be properly
                  and
                  fully paid and discharged in the manner and at the time prescribed
                  by the
                  Leases and the Regulations;

              


      

       

      
        	
                 

              	
                (k)

              	
                Encumbrances:
                  Thunder does not warrant its title to the Thunder Assets, but does
                  warrant
                  that it’s interest in the Thunder Assets is free and clear of any and all
                  liens, Security Interests, mortgages, pledges, claims, options,
                  encumbrances, rights of first refusal, preferential rights, overriding
                  royalties, net profits interests or other similar interests or
                  burdens
                  created by, through or under Thunder or of which Thunder has knowledge,
                  other than the Permitted
                  Encumbrances;

              


      

       

      
        	
                 

              	
                (l)

              	
                Agreements:  The
                  Agreements disclosed in Schedule A” comprise all agreements for the
                  sale of Petroleum Substances produced from the Thunder Assets not
                  terminable on 30 days without penalty, all gas balancing agreements
                  affecting the Thunder Assets, and all of the material agreements
                  described
                  in paragraphs (c), (d), (e) and (f) in the definition of “Title and
                  Operating Documents”;

              


      

       

      
        	
                 

              	
                (m)

              	
                Meeting
                  of Shareholders: The Special Meeting of Shareholders of Thunder at
                  which the sale of the Thunder Assets to the Purchaser was approved
                  was
                  properly called and properly held and all resolutions passed at
                  such
                  meeting were validly passed in accordance with applicable
                  law;

              


      

       

      
        	
                 

              	
                (n)

              	
                Sale
                  of Petroleum Substances: No purchaser or seller of Petroleum
                  Substances has refused to remit to the Vendor proceeds from the
                  sale
                  thereof and the Petroleum and Natural Gas Rights are not subject
                  to any
                  Prepaid Gas Obligations;

              


      

       

      
        	
                 

              	
                (o)

              	
                Environmental
                  Matters: Except as specifically identified in Schedule ”A”,
                  Thunder is not aware of:

              


      

       


      
        
          
          

        

        
          -
            13 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (i)

              	
                and
                  has not received any orders or directives pursuant to the Regulations
                  which relate to environmental matters 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 or to the best knowledge of Thunder, there exists no particular
                  circumstance which Thunder reasonably believes will give rise to
                  any such
                  order, directive, demand or notice;
                  or

              


      

       

      
        	
                 

              	
                (ii)

              	
                and
                  has not received any demand or notice issued pursuant to the Regulations
                  with respect to any spill or the breach of any environmental, health
                  or
                  safety law applicable to any of the Assets, including, without
                  limitation,
                  any Regulations respecting the use, storage, treatment, transportation
                  or
                  disposition of environmental contaminants, which demand or notice
                  remains
                  outstanding as of the date hereof or to the best knowledge of Thunder,
                  there exists no particular circumstance which Thunder reasonably
                  believes
                  will give rise to any such order, directive, demand or
                  notice;

              


      

       

      
        	
                 

              	
                (p)

              	
                Authorized
                  Expenditures: Except for the usual operating expenses incurred in
                  normal operations, there are no outstanding authorizations for
                  expenditure
                  or outstanding financial commitments respecting the Thunder Assets,
                  pursuant to which expenditures are or may be required by the Purchaser
                  or
                  in respect of which any amount is outstanding, other than those
                  set forth
                  in Schedule ”A” or as may be authorized on behalf of the Purchaser in
                  accordance herewith;

              


      

       

      
        	
                 

              	
                (q)

              	
                Area
                  of Mutual Interest: None of the Lands are subject to an agreement
                  which provides for an area of mutual interest, except as specifically
                  identified in Schedule ”A”;

              


      

       

      
        	
                 

              	
                (r)

              	
                Assets
                  Comprise Substantially All of Vendor’s Assets: The Thunder Assets do
                  comprise all or substantially all of Thunder’s
                  assets;

              


      

       

      
        	
                 

              	
                (s)

              	
                Full
                  Access:  Except as otherwise provided in this Agreement,
                  Thunder has made available to the Purchaser all material information
                  within its possession and control pertaining to or affecting the
                  Assets
                  (other than economic evaluations or other proprietary evaluations
                  to which
                  the Purchaser is not entitled access hereunder and other than trade
                  seismic, geological interpretations and financial records), insofar
                  as
                  such documents and information are known to Thunder, and it has
                  not
                  withheld from the Purchaser any material documents or information
                  reasonably required to make not misleading those documents and
                  information
                  made available by Thunder to the
                  Purchaser;

              


      

       

      
        	
                 

              	
                (t)

              	
                Investors:  The
                  Vendors represent that each of them is a sophisticated investor
                  and has
                  the knowledge and intellectual skill to evaluate an investment
                  in the
                  Purchaser.  Each of the Vendors represent that they were not
                  established for the purpose of obtaining an investment in the Purchaser
                  or
                  any similar company. The Vendors represent that they have sufficient
                  other
                  assets than the consideration securities to meet their operational
                  and
                  other ordinary expenses and do not need the value of the consideration
                  shares for any purpose now or in the future. The consideration
                  securities
                  to be acquired by each of the Vendors will be acquired for investment
                  for
                  such Vendor's own account and not with a view for the resale or
                  distribution of any part thereof.  Each Vendor agrees that it
                  will not resell any of the securities received under this Agreement
                  except
                  in compliance with the United States and state securities laws,
                  including
                  pursuant to a registration under the Securities Act of 1933 or
                  pursuant to
                  an available exemption from registration and agrees not to engage
                  in
                  hedging transactions with regard to such securities unless in compliance
                  with the Securities Act. The Vendors agree that have not and will
                  not take
                  any action to have the consideration securities transferred into
                  bearer
                  form, regardless if the law of any state permits securities to
                  be held in
                  bearer form;

              


      

       


      
        
          
          

        

        
          -
            14 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (u)

              	
                Legend:  Each
                  of the Vendors understands that it will acquire securities under
                  this
                  Agreement that are characterized as "restricted securities" under
                  the
                  United States federal securities laws. It is understood that the
                  certificates evidencing the consideration securities may bear the
                  legend
                  set forth below in this section. The Vendors hereby consent to
                  the
                  inclusion of such legend on certificates of securities they receive
                  hereunder and for the placement of stop orders against the transfer
                  of
                  such securities, which may be enforced by the Company by instruction
                  to
                  its transfer agent or recourse to appropriate judicial authorities
                  to
                  prevent the registration of any transfer not in accordance with
                  the
                  provisions of this Agreement and the legend set forth
                  below:

              


      

       

      "THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES REPRESENTED
        HEREBY MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE
        OF
        AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL,
        REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY TO THE EFFECT THAT THE PROPOSED
        SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT REGISTRATION UNDER
        THE
        ACT AND SUCH SALE, TRANSFER OR DISPOSITION IS IN COMPLIANCE WITH REGULATION
        S
        PROMULGATED UNDER THE ACT, TO THE EXTENT THEN APPLICABLE”; AND

       

      
        	
                 

              	
                (v)

              	
                Statements:  No
                  representation or warranty by any Vendor contained in this Agreement
                  and
                  no information contained in any Schedule or other instrument furnished
                  or
                  to be furnished to the Purchaser pursuant to this Agreement or
                  in
                  connection with the transactions contemplated hereby contains or
                  will
                  contain any untrue statement of a material fact or omits or will
                  omit to
                  state a material fact necessary in order to make the statements
                  contained
                  therein not misleading.

              


      

       

      
        	
                6.02

              	
                CIMA’s
                  Representations and
                  Warranties

              


      

       

      CIMA
        represents and warrants to the Purchaser that:

       

      
        	
                 

              	
                (a)

              	
                Standing:  CIMA
                  is a corporation, duly organized, valid and subsisting, and authorized
                  to
                  carry on business in the State of New
                  Mexico;

              


      

       

      
        	
                 

              	
                (b)

              	
                Requisite
                  Authority: CIMA has the requisite capacity, power and authority to
                  execute this Agreement and the Conveyance Documents and to perform
                  the
                  obligations to which it thereby becomes
                  subject;

              


      

       

      
        	
                 

              	
                (c)

              	
                No
                  Conflict: The execution and delivery of this Agreement and the
                  completion of the sale of the CIMA Assets in accordance with the
                  terms of
                  this Agreement are not and will not be in violation or breach of,
                  or be in
                  conflict with:

              


      

       

      
        	
                 

              	
                (i)

              	
                any
                  term or provision of the constating or other governing documents
                  of
                  CIMA;

              


      

       


      
        
          
          

        

        
          -
            15 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (ii)

              	
                any
                  agreement, instrument, permit or authority to which CIMA is a party
                  or by
                  which CIMA is bound; or

              


      

       

      
        	
                 

              	
                (iii)

              	
                the
                  Regulations or any judicial order, award, judgement or decree applicable
                  to CIMA or the Assets;

              


      

       

      
        	
                 

              	
                (d)

              	
                Execution
                  and Enforceability: CIMA has taken all actions necessary to authorize
                  the execution and delivery of this Agreement, and, as of the Closing
                  Date,
                  CIMA shall have taken all actions necessary to authorize and complete
                  the
                  sale of the Assets in accordance with the provisions of this
                  Agreement.  This Agreement has been validly executed and
                  delivered by CIMA, and this Agreement and all other documents executed
                  and
                  delivered on behalf of CIMA hereunder shall constitute legal, valid
                  and
                  binding obligations of CIMA enforceable in accordance with their
                  respective terms and conditions;

              


      

       

      
        	
                 

              	
                (e)

              	
                Residency
                  for Tax Purposes: CIMA is a resident of the United States of America
                  for tax purposes;

              


      

       

      
        	
                 

              	
                (f)

              	
                No
                  Finders' Fees: The Purchaser shall not have any responsibility for any
                  obligation or liability, contingent or otherwise, for brokers'
                  or finders'
                  fees, if any, incurred by CIMA with respect to the transactions
                  herein;

              


      

       

      
        	
                 

              	
                (g)

              	
                Lawsuits
                  and Claims: Except as specifically identified in Schedule ”A”,
                  there are no unsatisfied judgements, claims, proceedings, actions,
                  governmental investigations or lawsuits in existence, or to the
                  best of
                  the knowledge of CIMA, contemplated or threatened against or with
                  respect
                  to the CIMA Assets, and there exists no particular circumstance
                  which CIMA
                  reasonably believes will give rise to such a claim, proceeding,
                  action,
                  governmental investigation or
                  lawsuit;

              


      

       

      
        	
                 

              	
                (h)

              	
                Compliance
                  with Leases and Agreements: No act or omission has occurred whereby
                  CIMA is, or would be, in default under the terms of the Regulations,
                  any
                  Lease or any agreement pertaining to the CIMA Assets, where such
                  a default
                  would impact materially and adversely upon the CIMA Assets, or
                  any of them
                  and to the best of the knowledge of CIMA, no third party is in
                  default
                  under the terms of any Lease of any agreement pertaining to the
                  CIMA
                  Assets, where such a default would impact materially and adversely
                  upon
                  the CIMA Assets;

              


      

       

      
        	
                 

              	
                (i)

              	
                No
                  Default Notices:  CIMA has not received any notice of
                  default under the Leases or any notice alleging its default under
                  any
                  agreement pertaining to any of the CIMA Assets, which default has
                  not been
                  rectified as of the date of this Agreement or to the best knowledge
                  of
                  CIMA, there exists no particular circumstance which the Vendor
                  reasonably
                  believes will give rise to such a
                  notice;

              


      

       

      
        	
                 

              	
                (j)

              	
                Payment
                  of Royalties and Taxes:  To the best of the knowledge of
                  CIMA, all royalties and all ad valorem, property, production, severance
                  and similar taxes and assessments based on, or measured by, its
                  ownership
                  of the CIMA Assets, the production of Petroleum Substances from
                  the Lands
                  or the receipt of proceeds therefrom that are payable by CIMA and
                  which
                  accrued prior to the Effective Time have been or will be properly
                  and
                  fully paid and discharged in the manner and at the time prescribed
                  by the
                  Leases and the Regulations;

              


      

       


      
        
          
          

        

        
          -
            16 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (k)

              	
                Encumbrances:
                  CIMA does not warrant its title to the CIMA Assets, but does warrant
                  that
                  it’s interest in the CIMA Assets is free and clear of any and all
                  liens,
                  Security Interests, mortgages, pledges, claims, options, encumbrances,
                  rights of first refusal, preferential rights, overriding royalties,
                  net
                  profits interests or other similar interests or burdens created
                  by,
                  through or under CIMA or of which CIMA has knowledge, other than
                  the
                  Permitted Encumbrances;

              


      

       

      
        	
                 

              	
                (l)

              	
                Agreements:  The
                  Agreements disclosed in Schedule A” comprise all agreements for the
                  sale of Petroleum Substances produced from the CIMA Assets not
                  terminable
                  on 30 days without penalty, all gas balancing agreements affecting
                  the
                  CIMA Assets, and all of the material agreements described in paragraphs
                  (c), (d), (e) and (f) in the definition of “Title and Operating
                  Documents”;

              


      

       

      
        	
                 

              	
                (m)

              	
                Meeting
                  of Shareholders: The Meeting of Shareholders of CIMA at which the sale
                  of the CIMA Assets to the Purchaser was approved was properly called
                  and
                  properly held and all resolutions passed at such meeting were validly
                  passed in accordance with applicable
                  law.

              


      

       

      
        	
                 

              	
                (n)

              	
                Sale
                  of Petroleum Substances: No purchaser or seller of Petroleum
                  Substances has refused to remit to CIMA proceeds from the sale
                  thereof and
                  the Petroleum and Natural Gas Rights are not subject to any Prepaid
                  Gas
                  Obligations;

              


      

       

      
        	
                 

              	
                (o)

              	
                Environmental
                  Matters: Except as specifically identified in Schedule ”A”, CIMA
                  is not aware of:

              


      

       

      
        	
                 

              	
                (i)

              	
                and
                  has not received any orders or directives pursuant to the Regulations
                  which relate to environmental matters and which require any work,
                  repairs,
                  construction or capital expenditures with respect to the CIMA Assets,
                  where such orders or directives have not been complied with in
                  all
                  material respects or to the best knowledge of CIMA, there exists
                  no
                  particular circumstance which CIMA reasonably believes will give
                  rise to
                  any such order, directive, demand or notice;
                  or

              


      

       

      
        	
                 

              	
                (ii)

              	
                and
                  has not received any demand or notice issued pursuant to the Regulations
                  with respect to any spill or the breach of any environmental, health
                  or
                  safety law applicable to any of the CIMA Assets, including, without
                  limitation, any Regulations respecting the use, storage, treatment,
                  transportation or disposition of environmental contaminants, which
                  demand
                  or notice remains outstanding as of the date hereof or to the best
                  knowledge of CIMA, there exists no particular circumstance which
                  CIMA
                  reasonably believes will give rise to any such order, directive,
                  demand or
                  notice;

              


      

       

      
        	
                 

              	
                (p)

              	
                Authorized
                  Expenditures: Except for the usual operating expenses incurred in
                  normal operations, there are no outstanding authorizations for
                  expenditure
                  or outstanding financial commitments respecting the CIMA Assets,
                  pursuant
                  to which expenditures are or may be required by the Purchaser or
                  in
                  respect of which any amount is outstanding, other than those set
                  forth in
                  Schedule ”A” or as may be authorized on behalf of the Purchaser in
                  accordance herewith;

              


      

       

      
        	
                 

              	
                (q)

              	
                Area
                  of Mutual Interest: None of the Lands are subject to an agreement
                  which provides for an area of mutual interest, except as specifically
                  identified in Schedule ”A”;

              


      

       


      
        
          
          

        

        
          -
            17 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (r)

              	
                CIMA
                  Assets Comprise Substantially All of CIMA’s Assets: The CIMA Assets do
                  comprise all or substantially all of CIMA’s CIMA
                  Assets;

              


      

       

      
        	
                 

              	
                (s)

              	
                Full
                  Access:  Except as otherwise provided in this Agreement,
                  CIMA has made available to the Purchaser all material information
                  within
                  its possession and control pertaining to or affecting the CIMA
                  Assets
                  (other than economic evaluations or other proprietary evaluations
                  to which
                  the Purchaser is not entitled access hereunder and other than trade
                  seismic, geological interpretations and financial records), insofar
                  as
                  such documents and information are known to CIMA, and it has not
                  withheld
                  from the Purchaser any material documents or information reasonably
                  required to make not misleading those documents and information
                  made
                  available by CIMA to the Purchaser;
                  and

              


      

       

      
        	
                 

              	
                (t)

              	
                Burdens
                  on Production:  No Lease is subject to royalty, overriding
                  royalty, production payments and other burdens on production to
                  an extent
                  greater than 17.5% and CIMA has not created, conveyed, assigned,
                  granted,
                  or transferred overriding royalty interests, production payments,
                  or other
                  burdens on production burdening any Lease, save and except the
                  following
                  which may pertain to one or more
                  Lease:

              


      

       

      
        
          	
                  Grizzly
                    Land & Permit Service, Inc.

                	 	
                    .5%

                
	
                  Canadian
                    Wildcat Corporation

                	 	
                  1.0%

                
	
                  Charles
                    Reynolds

                	 	
                  2.0%

                
	
                  John
                    Michael Richardson

                	 	
                  1.0%

                
	
                  Murray
                    Welch

                	 	
                    .5%

                
	
                  Total

                	 	
                  5.0%

                


        

      

       

      The
        overriding royalty interests shall be subject to pooling for purposes of
        forming
        a standard proration or spacing unit fixed by law for the pool or area in
        which
        the land is situated, plus a tolerance of 10%.  In addition, all
        burdens shall be subject to proportionate reduction in the event Vendor’s
        interest in a Lease is less than the entire leasehold estate or the Lease
        covers
        less than the entire oil and gas mineral estate.

       

      
        	
                6.03

              	
                Purchaser's
                  Representations and
                  Warranties

              


      

       

      The
        Purchaser represents and warrants to the Vendors that:

       

      
        	
                 

              	
                (a)

              	
                Standing:
                  The Purchaser is a corporation duly organized, valid and subsisting
                  under
                  the laws of its jurisdiction  of
                  incorporation;

              


      

       

      
        	
                 

              	
                (b)

              	
                Requisite
                  Authority: The Purchaser has the requisite capacity, power and
                  authority to execute this Agreement and the Conveyance Documents
                  and to
                  perform the obligations to which it thereby becomes subject, and
                  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 the Purchaser is bound;

              


      

       

      
        	
                 

              	
                (c)

              	
                No
                  Conflict: The execution and delivery of this Agreement and the
                  completion of the purchase of the Assets in accordance with the
                  terms of
                  this Agreement are not and will not be in violation or breach of,
                  or be in
                  conflict with the Regulations or any judicial order, award, judgement
                  or
                  decree applicable to the Purchaser;

              


      

       


      
        
          
          

        

        
          -
            18 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (d)

              	
                Execution
                  and Enforceability: The Purchaser has taken all actions necessary to
                  authorize the execution and delivery of this Agreement and, as
                  of the
                  Closing Date, the Purchaser shall have taken all actions necessary
                  to
                  authorize and complete the purchase of the Assets in accordance
                  with the
                  provisions of this Agreement.  This Agreement has been validly
                  executed and delivered by the Purchaser, and this Agreement and
                  all other
                  documents executed and delivered on behalf of the Purchaser hereunder
                  shall constitute valid and binding obligations of the Purchaser
                  enforceable in accordance with their respective terms and
                  conditions;

              


      

       

      
        	
                 

              	
                (e)

              	
                No
                  Sales Commission: The Purchaser has not incurred any obligation or
                  liability, contingent or otherwise, for brokers' or finders' fees
                  with
                  respect to the transactions herein for which the Vendors shall
                  have any
                  responsibility; and

              


      

       

      
        	
                 

              	
                (f)

              	
                Transfers
                  of Licences, Permits and Authorizations:  The Purchaser is
                  not aware of anything that would prohibit the Purchaser from obtaining
                  or
                  holding any well licences, authorizations or other permits or licences
                  related to the Assets with the relevant governmental
                  authorities.

              


      

       

      
        	
                6.04

              	
                Survival
                  of Representations and
                  Warranties

              


      

       

      Each
        Party acknowledges that the other may rely on the representations and warranties
        made by such Party pursuant to Clauses 6.01,
        6.02
        or 6.03,
        as the case may be.  The representations and warranties in to
        Clauses 6.01,
        6.02
        or 6.03
        shall be true at the time of Closing, and such representations and warranties
        shall continue in full force and effect and shall survive the Closing for
        a
        period of two (2) years from the Closing, for the benefit of the Party for
        which
        such representations and warranties were made.  In the absence of
        fraud, however, no claim or action shall be commenced with respect to a breach
        of any such representation or warranty, unless, within such period, written
        notice specifying such breach in reasonable detail has been provided to the
        Party which made such representation or warranty.

       

      
        	
                6.05

              	
                No
                  Additional Representations or Warranties by
                  Vendor

              


      

       

      The
        Vendors makes no representation or warranties to the Purchaser in addition
        to
        those expressly enumerated in Clauses 6.01 and 6.02.  Except
        and to the extent provided in Clauses 6.01 and 6.02,
        the Vendors do not warrant title to the Assets or make representations or
        warranties with respect to:

       

      
        	
                 

              	
                (a)

              	
                the
                  quantity, quality or recoverability of Petroleum Substances respecting
                  the
                  Lands;

              


      

       

      
        	
                 

              	
                (b)

              	
                any
                  estimates of the value of the Assets or the revenues applicable
                  to future
                  production from the Lands;

              


      

       

      
        	
                 

              	
                (c)

              	
                any
                  engineering, geological or other interpretations or economic evaluations
                  respecting the Assets;

              


      

       

      
        	
                 

              	
                (d)

              	
                the
                  rates of production of Petroleum Substances from the Lands;
                  or

              


      

       

      
        	
                 

              	
                (e)

              	
                any
                  environmental matters relating to the
                  Assets.

              


      

       

      The
        Purchaser acknowledges that it has made its own independent investigation,
        analysis, evaluation, verification and inspection of the Vendors’ interests in
        the Assets and the state and condition thereof and that it has relied solely
        on
        such investigation, analysis, evaluation, verification and inspection as
        to its
        assessment of the condition (environmental or otherwise), quantum and value
        of
        the Assets.

       


      
        
          
          

        

        
          -
            19 -

          
            

          

        

        
          
          

        

      


      
        	
                7.00

              	
                THIRD
                  PARTY RIGHTS AND
                  CONSENTS

              


      

       

      
        	
                7.01

              	
                Preferential
                  Rights Of Purchase and
                  Consents

              


      

       

      
        	
                 

              	
                (a)

              	
                If
                  any of the Assets are subject to a preferential right of purchase
                  or
                  similar restriction, or if the disposition herein requires the
                  consent of
                  any third party, the relevant Vendor shall promptly serve all notices
                  as
                  are required under such preferential purchase or consent
                  provision.  Each such notice shall include a request for a
                  waiver of any preferential or similar right to purchase any of
                  the Assets
                  and for the granting of any consent that may be
                  required.

              


      

       

      
        	
                 

              	
                (b)

              	
                The
                  Purchaser, as soon as possible after signing this Agreement, acting
                  reasonably and in good faith, shall provide to the relevant Vendor
                  the
                  value placed by the Purchaser on any of the Assets with respect
                  to which
                  the such Vendor is required to specify a value in a notice served
                  pursuant
                  to this Clause.  The Vendors shall not be obligated to use such
                  a value where, in their opinion, acting reasonably, the value is
                  unreasonable.  If the Vendor makes such a determination, the
                  Vendors and Purchaser shall consult with each other with respect
                  to the
                  value to be included in the subject
                  notice.

              


      

       

      
        	
                 

              	
                (c)

              	
                If
                  the holder of any preferential right to purchase any of the Assets
                  exercises such right, the Purchaser may elect not to proceed with
                  the
                  transaction contemplated herein.

              


      

       

      
        	
                8.00

              	
                PURCHASER'S
                  INSPECTION OF ASSETS

              


      

       

      
        	
                8.01

              	
                Vendors
                  to Provide Access

              


      

       

      
        	
                 

              	
                (a)

              	
                The
                  Vendors shall, subject to the Regulations and all contractual and
                  fiduciary obligations and limits, at the Vendors’ office during normal
                  business hours, provide the Purchaser and its nominees reasonable
                  access
                  to the Vendors’ records, files and documents directly relating to the
                  Assets, for the purpose of the Purchaser's review of Vendor's title
                  thereto, including, without limitation, the Leases and applicable
                  operating agreements, unit agreements, overriding royalty agreements
                  and
                  production sale contracts; and

              


      

       

      
        	
                 

              	
                (b)

              	
                Prior
                  to signing this Agreement, Purchaser and its nominees acknowledge
                  they
                  have been provided by Vendors with a reasonable opportunity to
                  inspect the
                  field Assets at Purchaser's sole cost, risk and expense, insofar
                  as the
                  Vendors could  reasonably provide access to such field
                  Assets.

              


      

       

      
        	
                9.00

              	
                ARBITRATION

              


      

       

      
        	
                9.01

              	
                Reference
                  to Arbitration

              


      

       

      
        	
                 

              	
                (a)

              	
                Insofar
                  as the Parties are unable to agree on any matter which expressly
                  may be
                  referred to arbitration hereunder, either Party may serve the other
                  Party
                  written notice that it wishes such matter referred to
                  arbitration.

              


      

       


      
        
          
          

        

        
          -
            20 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (b)

              	
                The
                  Parties shall meet within seven (7) days of the receipt of a notice
                  issued
                  pursuant to Subclause 9.01(a), to attempt to agree on a single
                  arbitrator qualified by experience, education and training, to
                  determine
                  such matter.  If the Parties are unable to agree on the
                  selection of the arbitrator, the Party which issued such notice
                  shall
                  forthwith make application to a judge of the Court of Queen's Bench
                  of the
                  Province of Alberta pursuant to the Arbitration Act of the Province
                  of
                  Alberta (“Arbitration Act”) for the appointment of a single arbitrator,
                  and failing such action on the part of the Party which issued such
                  notice,
                  the other Party may make such
                  application.

              


      

       

      
        	
                9.02

              	
                Proceedings

              


      

       

      
        	
                 

              	
                (a)

              	
                The
                  arbitrator selected pursuant to Clause 9.01(a) shall proceed as soon
                  as is practicable to hear and determine the matter in dispute,
                  and shall
                  be directed to provide a written decision respecting such matter
                  within
                  forty-five (45) days of appointment.  The Parties shall provide
                  such assistance and information as may be reasonably necessary
                  to enable
                  the arbitrator to determine such
                  matter.

              


      

       

      
        	
                 

              	
                (b)

              	
                Except
                  to the extent modified in this Article, the arbitrator shall conduct
                  any
                  arbitration hereunder pursuant to the provisions of the Arbitration
                  Act.

              


      

       

      
        	
                10.00

              	
                CONDITIONS
                  TO CLOSING

              


      

       

      
        	
                10.01

              	
                Required
                  Consents

              


      

       

      
        	
                 

              	
                (a)

              	
                It
                  is a condition precedent to Closing for the benefit of both the
                  Vendors
                  and the Purchaser that any and all approvals required under the
                  Regulations and any and all consents of third parties required
                  pursuant to
                  Article 7.00 to permit the transactions to be completed shall have
                  been
                  obtained or that such approval or consent requirement shall have
                  been
                  waived in writing or otherwise lapsed.  Each of the Parties
                  shall use all reasonable efforts to obtain any such
                  consents.

              


      

       

      
        	
                 

              	
                (b)

              	
                The
                  Parties shall co-operate in seeking, any approvals or consents
                  required
                  from regulatory or governmental authorities, including without
                  limitation,
                  well licences, facilities, pipelines, mineral licences, permits
                  or Leases
                  which are to be obtained after
                  Closing.

              


      

       

      
        	
                10.02

              	
                Conditions
                  for Benefit of
                  Purchaser

              


      

       

      The
        obligation of the Purchaser to complete the purchase hereunder is subject
        to the
        following conditions precedent:

       

      
        	
                 

              	
                (a)

              	
                No
                  Substantial Damage:  There shall have been no damage to or
                  alteration of any of the Assets between the Effective Time and
                  the Closing
                  Date which, in the Purchaser's reasonable opinion, would materially
                  and
                  adversely affect the value of the Assets, except and to the extent
                  approved in writing by the Purchaser, provided that a change in
                  the prices
                  at which Petroleum Substances may be sold in no event shall be
                  regarded as
                  material damage to or an alteration of the
                  Assets;

              


      

       

      
        	
                 

              	
                (b)

              	
                Availability
                  of Documents:  The Vendors shall have provided the nominees
                  of the Purchaser with reasonable access to the Vendors’ records and
                  documents pertaining to the Assets, in order to confirm the Vendors’ title
                  to the Assets;

              


      

       


      
        
          
          

        

        
          -
            21 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (c)

              	
                Material
                  Compliance by Vendors:  The Vendors shall have performed or
                  complied in all material respects with each of the terms, covenants
                  and
                  conditions of this Agreement to be performed or complied with by
                  the
                  Vendors at or prior to the Closing
                  Date;

              


      

       

      
        	
                 

              	
                (d)

              	
                Representations
                  are Correct:  The representations and warranties of each of
                  the Vendors contained in Clauses 6.01 and 6.02
                  is true and correct in all material respects as of the Closing
                  Date;

              


      

       

      
        	
                 

              	
                (e)

              	
                Delivery
                  of Conveyance Documents:  The Vendors shall have delivered
                  the following to the Purchaser:

              


      

       

      
        	
                 

              	
                (i)

              	
                conveyances,
                  in the forms attached as Schedule  ”B” and “C”, which have been
                  executed by the Vendors;

              


      

       

      
        	
                 

              	
                (ii)

              	
                the
                  Specific Conveyances, all specific assignments, registerable transfers,
                  novation agreements, notices of assignment, trust agreements and
                  other
                  instruments required to convey the Vendors’ interest in the Assets to the
                  Purchaser, unless and to the extent that the Purchaser allows the
                  Vendors
                  to deliver such documents to the Purchaser at a later date, provided
                  that
                  such documents shall not require the Vendors to assume or incur
                  any
                  obligation, or to provide any representation or warranty, beyond
                  that
                  contained in this Agreement;

              


      

       

      
        	
                 

              	
                (iii)

              	
                copies
                  of all consents to disposition and waivers of preferential rights
                  of
                  purchase, rights of first refusal or any similar restriction obtained
                  by
                  the Vendors with respect to the sale of the Assets to the
                  Purchaser;

              


      

       

      
        	
                 

              	
                (iv)

              	
                originals
                  of the Vendors’ records (or, if unavailable, photocopies of records),
                  files, reports and data pertaining to the Assets, insofar as such
                  delivery
                  is permitted and required hereunder, unless and to the extent that
                  the
                  Purchaser agrees to allow the Vendors to deliver such records,
                  files,
                  reports and data at a later date;
                  and

              


      

       

      
        	
                 

              	
                (v)

              	
                such
                  other documents as may be specifically required hereunder or as
                  may be
                  reasonably requested by the Purchaser upon reasonable notice to
                  the
                  Vendors;

              


      

       

      
        	
                 

              	
                (f)

              	
                Title:  Purchaser
                  shall have received opinions, satisfactory to it, as to the title
                  to the
                  Assets;

              


      

       

      
        	
                 

              	
                (g)

              	
                Royalties:  CIMA
                  shall have rectified all filing and description errors in connection
                  with
                  any interest of any nature affecting the CIMA Assets to the satisfaction
                  of the Purchaser and at the sole cost of CIMA;
                  and

              


      

       

      
        	
                 

              	
                (h)

              	
                Legal
                  Opinion:  Legal opinions shall have been provided to the
                  Purchaser, satisfactory to it and its solicitor, respecting the
                  enforceability of this Agreement and the General Conveyance against
                  Thunder and the validity of the Special Shareholder Meeting held
                  by
                  Thunder to approve the transaction described in this
                  Agreement.

              


      

       

      
        	
                10.03

              	
                Conditions
                  for Benefit of
                  Vendors

              


      

       

      The
        obligation of the Vendors to complete the sale hereunder is subject to the
        following conditions precedent:

       


      
        
          
          

        

        
          -
            22 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (a)

              	
                Material
                  Compliance by Purchaser: The Purchaser shall have performed or
                  complied in all material respects with each of the terms, covenants
                  and
                  conditions of this Agreement to be performed or complied with by
                  the
                  Purchaser at or prior to the Closing
                  Date;

              


      

       

      
        	
                 

              	
                (b)

              	
                Payment
                  of Purchase Price: The Purchaser shall have tendered to the Vendor the
                  Purchase Price and the applicable GST in the manner provided for
                  in
                  Clause Error!
                  Reference source not found., subject
                  to any adjustments
                  provided for in Article 4 and any alteration expressly provided for
                  herein;

              


      

       

      
        	
                 

              	
                (c)

              	
                Representations
                  are Correct: Each of the representations and warranties of the
                  Purchaser contained in Clause 6.03
                  is true and correct in all material respects as of the Closing
                  Date;
                  and

              


      

       

      
        	
                 

              	
                (d)

              	
                Delivery
                  of Documents:  The Purchaser shall have executed and
                  delivered to the Vendors one copy of the conveyance in the form
                  attached
                  as Schedules ”B” and “C” and such other documents as may be
                  specifically required hereunder.

              


      

       

      
        	
                10.04

              	
                Waiver
                  of Conditions

              


      

       

      The
        conditions in Clauses 10.02 and 10.03 are for the sole benefit of the
        Purchaser and the Vendors respectively.  The Party for the benefit of
        which such conditions have been included may waive any of them, in whole
        or in
        part, by written notice to the other Party, without prejudice to any of the
        rights of the Party waiving such condition, including, without limitation,
        reliance on or enforcement of the representations, warranties or covenants
        which
        are preserved and pertain to conditions similar to the condition so
        waived.  However, the Purchaser may not waive the existence and
        operation of any preferential right of a third party to purchaser any of
        the
        Assets or, without the concurrence of the Vendors, any required consent of
        a
        third party to the Vendor’s disposition of any of the Assets.

       

      
        	
                10.05

              	
                Failure
                  to Satisfy Conditions

              


      

       

      In
        the
        event any of the conditions in Clauses 10.02 or 10.03 have not been
        satisfied at or before the Closing Date and such condition has not been waived
        by the Party for the benefit of which such condition has been included, such
        Party may terminate this Agreement by written notice to the other Party
        specifying the reason for termination, provided that except as otherwise
        provided in this Agreement, any such termination shall not affect any rights
        or
        claims such Party may have against any other Party for breach of such other
        Party's representations or obligations under this Agreement.  A Party
        may not terminate this Agreement in such manner after Closing, and its remedies
        thereafter, if any, with respect to the failure to satisfy such conditions
        shall
        be limited to damages.  A termination under this provision does not
        affect the rights of the Parties with respect to the deposit as provided
        in
        section 2.04.

       

      
        	
                11.00

              	
                CONFIDENTIALITY

              


      

       

      
        	
                11.01

              	
                Obligation
                  to Maintain Information
                  Confidential

              


      

       

      Information
        respecting the Assets shall be retained in confidence and used only for the
        purposes of this acquisition, provided that upon Closing, the Purchaser's
        rights
        to use or disclose such information shall be subject only to any operating,
        unit
        or other agreements that may apply thereto.  Any additional
        information obtained as a result of such access which does not relate to
        the
        Assets shall continue to be treated as confidential and shall not be used
        by the
        Purchaser without the prior written consent of the Vendors.  After
        Closing, the Vendors agree that all information respecting the Assets shall
        be
        retained in confidence.  However, the restrictions on disclosure and
        use of information in this Agreement shall not apply to information to the
        extent it:

       


      
        
          
          

        

        
          -
            23 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (a)

              	
                is
                  or becomes publicly available through no act or omission of the
                  Vendors or
                  Purchaser, as the case may be, or its respective consultants or
                  advisors;

              


      

       

      
        	
                 

              	
                (b)

              	
                is
                  obtained lawfully from a third party, where the Vendors or Purchaser,
                  as
                  the case may be, has made reasonable efforts to determine that
                  such third
                  party is not a party to or bound by any confidentiality agreement
                  with the
                  Vendors; or

              


      

       

      
        	
                 

              	
                (c)

              	
                in
                  the case of the Purchaser, is already in the Purchaser's possession
                  at the
                  time of disclosure, without restriction on
                  disclosure.

              


      

       

      However,
        specific items of information shall not be considered to be in the public
        domain
        merely because more general information respecting the Assets is in the public
        domain.

       

      
        	
                11.02

              	
                Consultants
                  and Advisors Bound

              


      

       

      If
        the
        Purchaser employs consultants, advisors or agents to assist in its review
        of the
        Assets pursuant to Article 8.00 the Purchaser shall be responsible to the
        Vendors for ensuring that such consultants, advisors and agents comply with
        the
        restrictions on the use and disclosure of information set forth in
        Clause 11.01.

       

      
        	
                12.00

              	
                INDEMNITIES
                  FOR REPRESENTATIONS AND
                  WARRANTIES

              


      

       

      
        	
                12.01

              	
                Vendor’s
                  Indemnities for Representations and
                  Warranties

              


      

       

      From
        and
        after Closing, the Vendors shall be liable to the Purchaser and be responsible
        for and shall, in addition, indemnify, release and save the Purchaser harmless
        from and against all losses, costs, claims, damages, expenses and liabilities
        which the Purchaser may suffer, sustain, pay or incur resulting from, arising
        out of, attributable to or connected with any breach of any representation
        or
        warranty made by the Vendors under Clauses 6.01 or 6.02.

       

      
        	
                12.02

              	
                Purchaser’s
                  Indemnities for Representations and
                  Warranties

              


      

       

      From
        and
        after Closing, the Purchaser shall be liable to the Vendors and be responsible
        for and shall, in addition, indemnify, release and save the Vendors harmless
        from and against, all losses, costs, claims, damages, expenses and liabilities
        which the Vendors may suffer, sustain, pay or incur resulting from, arising
        out
        of, attributable to or connected with any breach of any representation or
        warranty made by the Purchaser under Clause 6.03.

       

      
        	
                12.03

              	
                Time
                  Limitation

              


      

       

      No
        claim
        under this Article 12.00 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 two
        (2)
        years from Closing.

       

      
        	
                13.00

              	
                PURCHASER’S
                  INDEMNITIES

              


      

       

      
        	
                13.01

              	
                Purchaser
                  General Indemnity

              


      

       

      Provided
        that Closing has occurred, the Purchaser shall:

       


      
        
          
          

        

        
          -
            24 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (a)

              	
                be
                  liable to the Vendors for all losses, costs, damages and expenses
                  whatsoever which the Vendors may suffer, sustain, pay or incur;
                  and

              


      

       

      
        	
                 

              	
                (b)

              	
                indemnify,
                  defend and save the Vendors and their directors, officers, servants,
                  agents, consultants and employees harmless from and against all
                  claims,
                  liabilities, actions, proceedings, demands, losses, costs, damages
                  and
                  expenses whatsoever which may be brought against or suffered by
                  the
                  Vendors, their directors, officers, servants, agents, consultants
                  or
                  employees or which they may sustain, pay or
                  incur;

              


      

       

      as
        a result of any matter or thing arising out of, resulting from, attributable
        to
        or connected with the Assets and occurring or accruing subsequent to the
        Effective Time, except any losses, costs, damages, expense, claims, liabilities,
        actions, proceedings and demands to the extent that the same are caused by
        the
        gross negligence or wilful misconduct of the Vendors, their directors, officers,
        servants, agents, consultants, employees or assigns, and excluding any claims,
        liability, actions, proceedings or demands brought or filed after the Effective
        Time and pertaining to events that occurred before the Effective
        Time.  The responsibility prescribed by this Clause, however, does not
        provide either an extension of any representation or warranty contained in
        Clause 6.03 or an additional remedy for the Purchaser's breach of such a
        representation or warranty.  No claim may be brought pursuant to this
        Clause 13.01 unless written notification thereof is given to Vendors within
        two
        (2) years following the Closing.

       

      
        	
                13.02

              	
                Vendor
                  General Indemnity

              


      

       

      Provided
        that Closing has occurred, the Vendors shall, jointly and
        severally:

       

      
        	
                 

              	
                (a)

              	
                be
                  liable to the Purchaser for all losses, costs, damages and expenses
                  whatsoever which the Purchaser may suffer, sustain, pay or incur;
                  and

              


      

       

      
        	
                 

              	
                (b)

              	
                indemnify,
                  defend and save the Purchaser and its directors, officers, servants,
                  agents, consultants, employees or assigns harmless from and against
                  all
                  claims, liabilities, actions, proceedings, demands, losses, costs,
                  damages
                  and expenses whatsoever which may be brought against or suffered
                  by the
                  Purchaser, its directors, officers, servants, agents, consultants,
                  employees or assigns or which they may sustain, pay or
                  incur;

              


      

       

      as
        a
        result of any matter or thing arising out of, resulting from, attributable
        to or
        connected with the Assets and occurring or accruing on or before the Effective
        Time, except any losses, costs, damages, expense, claims, liabilities, actions,
        proceedings and demands to the extent that the same are caused by the gross
        negligence or wilful misconduct of the Purchaser, its directors, officers,
        servants, agents, consultants, employees or assigns.  The
        responsibility prescribed by this Clause, however, does not provide either
        an
        extension of any representation or warranty contained in Clauses 6.01 or
6.02
        or an additional remedy for the Vendors’ breach of such a representation or
        warranty.  No claim may be brought pursuant to this Clause 13.02
        unless written notification thereof is given to Vendors within two (2) years
        following the Closing.

       

      
        	
                13.03

              	
                Environmental
                  Indemnity

              


      

       

      The
        Purchaser acknowledges that with respect to the environmental condition of
        the
        Assets, it is acquiring the Assets on an “as is” basis, subject only to the
        representations and warranties set forth in Clause 6.01.

       


      
        
          
          

        

        
          -
            25 -

          
            

          

        

        
          
          

        

      


      The
        Purchaser acknowledges that it is familiar with the condition of the Assets,
        including the past and present use of the Lands and the Tangibles, that the
        Vendor has provided the Purchaser with a reasonable opportunity to inspect
        the
        Assets at the sole cost, risk and expense of the Purchaser (insofar as the
        Vendor could reasonably provide access) and the Purchaser is not relying
        upon
        any representation or warranty of the Vendor as to the condition, environmental
        or otherwise, of the Assets, except as is specifically made pursuant to
        Clauses 6.01 and 6.02.

       

      Provided
        that Closing has occurred, the Purchaser shall:

       

      
        	
                 

              	
                (a)

              	
                be
                  solely liable and responsible for any and all losses, costs, damages
                  and
                  expenses which the Vendors may suffer, sustain, pay or incur;
                  and

              


      

       

      
        	
                 

              	
                (b)

              	
                indemnify,
                  defend and save the Vendors and each of its directors, officers,
                  servants,
                  agents, consultants and employees harmless from any and all claims,
                  liabilities, actions, proceedings, demands, losses, costs, damages
                  and
                  expenses whatsoever which may be brought against or suffered by
                  the
                  Vendors, their directors, officers, servants, agents, consultants
                  or
                  employees or which they may sustain, pay or
                  incur;

              


      

       

      as
        a
        direct result of any environmental liabilities regardless of the date from
        which
        they may have accrued, including without limitation, the abandonment of all
        Wells and the reclamation of the surface lands pertaining to the Lands, except
        in each case for environmental liabilities and liabilities to Purchaser which
        constitute or result from a breach of the representations and warranties
        made by
        the Vendors in Clauses 6.01 and 6.02.

       

      This
        liability and indemnity, pursuant to section 13.03, shall apply without
        limit and without regard to cause or causes, including without limitation,
        the
        negligence of the Parties or any other person.

       

      Notwithstanding
        any other provision of this Agreement, Purchaser shall have no responsibility
        or
        liability for the abandonment of wells which are not included in the
        Wells.

       

      
        	
                13.04

              	
                No
                  Merger of Legal
                  Responsibilities

              


      

       

      The
        representations, warranties, liabilities and indemnities created in this
        Agreement shall be deemed to apply to, and shall not merge in, all assignments,
        transfers, conveyances, novations, trust agreements and other documents
        conveying any of the Assets from the Vendors to the Purchaser, notwithstanding
        the terms of such assignments, transfers, conveyances, novations and other
        documents, the Regulations or any rule of law or equity to the contrary,
        and all
        such rules are hereby waived.

       

      
        	
                14.00

              	
                WAIVER

              


      

       

      
        	
                14.01

              	
                Waiver
                  Must be in Writing

              


      

       

      No
        waiver
        by any Party of any breach (whether actual or anticipated) of any of the
        terms,
        conditions, representations or warranties contained herein shall take effect
        or
        be binding upon that Party unless the waiver is expressed in writing under
        the
        authority of that Party.  Any waiver so given shall extend only to the
        particular breach so waived and shall not limit or affect any rights with
        respect to any other or future breach.

       


      
        
          
          

        

        
          -
            26 -

          
            

          

        

        
          
          

        

      


      
        	
                15.00

              	
                ASSIGNMENT

              


      

       

      
        	
                15.01

              	
                Assignments
                  Before Closing

              


      

       

      Prior
        to
        Closing, neither Party may assign its interest in or under this Agreement
        or to
        the Assets without the prior written consent of the other Party, except as
        may
        be required by the Vendor to comply with its obligations respecting any
        preferential rights, as provided in Article 7.00.

       

      
        	
                16.00

              	
                NOTICE

              


      

       

      
        	
                16.01

              	
                Service
                  of Notice

              


      

       

      Notwithstanding
        anything to the contrary contained herein, all notices required or permitted
        hereunder shall be in writing.  Any notice to be given hereunder shall
        be deemed to be served properly if served in any of the following
        modes:

       

      
        	
                 

              	
                (a)

              	
                personally,
                  by delivering the notice to the Party on which it is to be served
                  at that
                  Party's address for service.  Personally served notices shall be
                  deemed to be received by the addressee when actually delivered
                  as
                  aforesaid, provided that such delivery shall be during normal business
                  hours on any Business Day in Alberta.  If a notice is not
                  delivered on such a day or is delivered after the addressee's normal
                  business hours, such notice shall be deemed to have been received
                  by such
                  Party at the commencement of the addressee's first Business Day
                  next
                  following the time of the delivery;
                  or

              


      

       

      
        	
                 

              	
                (b)

              	
                by
                  fax (or by any other like method by which a written message may
                  be sent)
                  directed to the Party on which it is to be served at that Party's
                  address
                  for service.  A notice so served shall be deemed to be received
                  by the addressee when actually received by it, if received within
                  normal
                  business hours on any Business Day in Alberta or at the commencement
                  of
                  the next ensuing Business Day following transmission if such notice
                  is not
                  received during such normal business
                  hours.

              


      

       

      
        	
                16.02

              	
                Addresses
                  for Notices

              


      

       

      The
        address for service of notices hereunder of each of the Parties shall be
        as
        follows:

      

        
          	
                   

                	
                  Vendors:

                	
                  Thunder
                    River Energy Inc.

                


        

        P.O.
          Box
          636, Station M

        Calgary,
          Alberta

        T2J
          2J3

         

        
          	
                   

                	
                  Attention:

                	
                  President

                


        

        


         

        
          	
                   

                	
                  With
                    a copy to:

                	
                  McLeod
                    & Company LLP

                


        

        Gulf
          Canada Square, Suite 850

        401
          -
          9th Avenue
          S.W.

        Calgary,
          AB  T2P 3C5

         

        
          	
                   

                	
                  Attention:

                	
                  R.
                    Gordon Cormie

                


        

      

      


       


      
        
          
          

        

        
          -
            27 -

          
            

          

        

        
          
          

        

      

      

        
          	
                   

                	
                  Purchaser:

                	
                  Kodiak
                    Energy, Inc.

                


        

        Suite
          460, 734 7 Ave. SW

        Calgary,
          Alberta

        T2P
          3P8

         

        Attention:
          President

        Fax:
          (403) 513-2670

         

      

      
        	
                16.03

              	
                Right
                  to Change Address

              


      

       

      A
        Party
        may change its address for service by notice to the other Party, and such
        changed address for service thereafter shall be effective for all purposes
        of
        this Agreement.

       

      
        	
                17.00

              	
                POST
                  CLOSING  ADMINISTRATION

              


      

       

      
        	
                17.01

              	
                Registration
                  of Documents

              


      

       

      The
        Purchaser shall register promptly after Closing all Specific Conveyances
        and any
        other documents which require registration.  The Purchaser shall be
        responsible for registration of any document contemplated in this section
        and
        any fees related to such registrations.  After Closing, Purchaser
        shall bear all costs of preparing and registering any further assurances
        required to convey title to the Assets.

       

      
        	
                17.02

              	
                Coordination
                  of Administrative
                  Matters

              


      

       

      
        	
                 

              	
                (a)

              	
                After
                  Closing, until the Purchaser becomes the recognized holder of the
                  Assets
                  in the place of the Vendors, the Vendors shall, to the extent that
                  the
                  Purchaser is not recognized:

              


      

       

      
        	
                 

              	
                (i)

              	
                receive
                  and hold in trust all proceeds, benefits and advantages accruing
                  from the
                  Assets for the benefit, use and ownership of the Purchaser, with
                  entitlement to commingle any of them with its own or any other
                  assets;

              


      

       

      
        	
                 

              	
                (ii)

              	
                in
                  a timely manner deliver to the Purchaser all revenues, proceeds
                  and other
                  benefits received by the Vendors for the
                  Assets;

              


      

       

      
        	
                 

              	
                (iii)

              	
                in
                  a timely manner deliver to the Purchaser all third party notices
                  and
                  communications received by the Vendors for the
                  Assets;

              


      

       

      
        	
                 

              	
                (iv)

              	
                in
                  a timely manner deliver to third parties all notices and communications
                  as
                  the Purchaser may reasonably request and all monies and other items
                  the
                  Purchaser reasonably provides for the Assets;
                  and

              


      

       

      
        	
                 

              	
                (v)

              	
                as
                  agent of the Purchaser, do and perform all acts and things, and
                  execute
                  and deliver all agreements, notices and other documents and instruments,
                  that the Purchaser reasonably requests for the purpose of facilitating
                  the
                  exercise of rights incidental to the ownership of the
                  Assets.

              


      

       


      
        
          
          

        

        
          -
            28 -

          
            

          

        

        
          
          

        

      


      
        	
                 

              	
                (b)

              	
                The
                  Vendors shall not be liable to the Purchaser for any loss or damage
                  suffered by the Purchaser in connection with the arrangements established
                  by the Purchaser in connection with the arrangement established
                  by
                  Subclause 17.02(a),
                  except to the extent that the loss or damage is caused
                  by
                  the Vendors’ gross negligence or its wilful
                  misconduct.

              


      

       

      
        	
                17.03

              	
                Vendors’
                  Access to Documents

              


      

       

      The
        Vendors may retain or subsequently obtain from the Purchaser copies or
        photocopies of any of the documents comprised in Miscellaneous Interests
        necessary to enable them to comply with any Regulations or the requirements
        of
        any authority or to conduct audits relating to the period prior to the Effective
        Time.

       

      
        	
                18.00

              	
                MISCELLANEOUS
                  PROVISIONS

              


      

       

      
        	
                18.01

              	
                Further
                  Assurances

              


      

       

      At
        the
        Closing Date and thereafter as may be necessary, the Parties shall execute,
        acknowledge and deliver such instruments and take such other actions as may
        be
        reasonably necessary to fulfil their respective obligations under this
        Agreement.  The Vendors shall cooperate with the Purchaser as
        reasonably required to secure execution by third parties of the documents
        referred to in Subclause 10.02(e).

       

      
        	
                18.02

              	
                Governing
                  Law

              


      

       

      This
        Agreement shall be subject to and be interpreted, construed and enforced
        in
        accordance with the laws in effect in the Province of Alberta and, where
        applicable in relation to CIMA Assets, the laws of the State of New
        Mexico.

       

      
        	
                18.03

              	
                Time

              


      

       

      Time
        shall be of the essence in this Agreement.

       

      
        	
                18.04

              	
                No
                  Amendment Except in
                  Writing

              


      

       

      This
        Agreement may be amended only by written instrument executed by the Vendors
        and
        the Purchaser.

       

      
        	
                18.05

              	
                Consequences
                  of Termination

              


      

       

      If
        this
        Agreement is terminated in accordance with its terms prior to Closing, then
        except for the provisions of Article 11.00 and the covenants, warranties,
        representations or other obligations breached prior to the time at which
        such
        termination occurs, the Parties shall be released from all of their obligations
        under this Agreement.  If this Agreement is so terminated, the
        Purchaser shall promptly return to the Vendors all materials delivered to
        the
        Purchaser by the Vendors hereunder, together with all copies of them that
        may
        have been made by or for the Purchaser and the Vendors shall return the
        deposit.

       


      
        
          
          

        

        
          -
            29 -

          
            

          

        

        
          
          

        

      


      
        	
                18.06

              	
                Supersedes
                  Earlier Agreements

              


      

       

      This
        Agreement supersedes all other agreements between the Parties with respect
        to
        the Assets and expresses the entire agreement of the Parties with respect
        to the
        transactions contained herein and any prior agreements between the Parties
        regarding the transaction contemplated herein are hereby
        terminated.

       

      
        	
                18.07

              	
                Enurement

              


      

       

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

       

      IN
        WITNESS WHEREOF the Parties have duly executed this
        Agreement.

      


      


      
        	 	
                THUNDER
                  RIVER ENERGY INC.

              
	 	 
	 	
                Per:  ___________________________________

              
	 	 
	 	
                Per:  ___________________________________

              
	 	 
	 	 
	 	 
	 	
                CIMA
                  HOLDINGS INC.

              
	 	 
	 	
                Per:  ___________________________________

              
	 	 
	 	
                Per:  ___________________________________

              
	 	 
	 	 
	 	 
	 	
                KODIAK
                  ENERGY, INC.

              
	 	 
	 	
                Per:  ___________________________________

              
	 	 
	 	
                Per:  ___________________________________

              


      

      


       

       

       

       

       

       


      
        
          
          

        

        
          -
            30 -

          
            

          

        

        
          
          

        

      


      SCHEDULE
        “A”

       

      
        

      

      
      

       

      Lands,
        Leases and Encumbrances (including penalties and preferential
        rights)

       

      


       

      


       

      


       

      


       

      


       

      


       

      


       

      


       

      


       

      


       

       

       

       

      


       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      SCHEDULE
        “A”

       

      
        

      

       

      PART
        II

       

      Production
        Sales Contracts

      
         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

         

         

         

        


         



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      SCHEDULE
        “A”

       

      
        
          

        

      

       

      PART
        III

       

      Facilities,
        Gas Gathering Lines, Pipelines, Facility, Processing, Treating, Transportation
        and Contract Operating Agreements

      
         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

         

         

         

        


         



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      SCHEDULE
        “A”

       

      
        
          

        

      

       

      PART
        IV

       

      N/A

      
         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

         

         

         

        


         



        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      SCHEDULE
        “A”

       
        
          

        

      

       

      PART
        V

       

      Authorizations
        for Expenditure

       

      None

      
         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

         

         

         

        


         



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      SCHEDULE
        “A”

       

      
        
          

        

      

       

      PART
        VI

       

      Areas
        of Mutual Interest

       

      None

      
         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

         

         

         

        


         



        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      SCHEDULE
        “A”

       

      
        
          

        

      

       

      PART
        VII

       

      Default
        Notices, Claims, Lawsuits & Offset Drilling Notice

      
         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

        


         

         

         

         

        


         



        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      SCHEDULE
        “B”

       

      GENERAL
        CONVEYANCE

       

      This
        Conveyance made this 28th day of
        September,
        2007.

       

      BETWEEN:

       

      THUNDER
        RIVER ENERGY INC., a body corporate, registered
        to carry on business in the Province of Alberta and having an office in the
        City
        of Calgary, in the Province of Alberta (hereinafter called the
“Vendor”)

       

      -
        and
        -

       

      KODIAK
        ENERGY, INC., a body corporate having an office in the City of Calgary,
        in the Province of Alberta (hereinafter called the
“Purchaser”)

       

      WHEREAS
        the Vendor has agreed to sell and convey the Vendor's entire right, title,
        estate and interest in the Assets to the Purchaser and the Purchaser has
        agreed
        to purchase and accept all of the Vendor's right, title, estate and interest
        in
        and to the Assets;

       

      THE
        PARTIES AGREE AS FOLLOWS:

       

      
        	
                1.

              	
                Definitions

              


      

       

      In
        this
        Conveyance, including the recitals, “Agreement” means the Agreement of Purchase
        and Sale dated the 28th day of
        September,
        2007, between the Vendor, CIMA Holdings Inc. and the Purchaser.  In
        addition, the definitions provided for in the Agreement are adopted in this
        Conveyance.

       

      
        	
                2.

              	
                Conveyance

              


      

       

      The
        Vendor, for the consideration provided for in the Agreement, the receipt
        and
        sufficiency of which is acknowledged by the Vendor, sells, assigns, transfers
        and conveys the Vendor's interest in the Assets to the Purchaser, and the
        Purchaser purchases and accepts such interest from the Vendor, TO HAVE AND
        TO
        HOLD the same absolutely, subject to the terms of the Agreement, the Permitted
        Encumbrances and compliance with the terms of the Leases.

       

      
        	
                3.

              	
                Effective
                  Time

              


      

       

      This
        Conveyance is effective as of the Effective Time.

       

      
        	
                4.

              	
                Subordinate
                  Document

              


      

       

      This
        Conveyance is executed and delivered by the Parties pursuant to the Agreement
        for the purposes of the provisions of the Agreement, and the terms hereof
        shall
        be read in conjunction with the terms of the Agreement.  The Agreement
        shall prevail if there is a conflict between the provisions of the Agreement
        and
        this Conveyance.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      
        	
                5.

              	
                Enurement

              


      

       

      This
        Conveyance enures to the benefit of and is binding upon the Parties and their
        respective successors and permitted assigns.

       

      
        	
                6.

              	
                Further
                  Assurances

              


      

       

      Each
        Party shall, after the date of this Conveyance, at the request of the other
        Party and without further consideration, do all further acts and execute
        and
        deliver all further documents which are reasonably required to perform and
        carry
        out the terms of this Conveyance.

       

      IN
        WITNESS WHEREOF the Parties have duly executed this Conveyance.

       

      


      
        	 	
                THUNDER
                  RIVER ENERGY INC.

              
	 	 
	 	
                Per:  __________________________________

              
	 	 
	 	
                Per:  __________________________________

              
	 	 
	 	 
	 	 
	 	
                KODIAK
                  ENERGY, INC.

              
	 	 
	 	
                Per:  __________________________________

              
	 	 
	 	
                Per:  __________________________________

              


      

      


       

      


       

      


       

      


       

      


       

      


       

      


       

      


       


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      SCHEDULE
        “C”

       

      GENERAL
        CONVEYANCE

       

      This
        Conveyance made this 28th day of
        September,
        2007.

       

      BETWEEN:

       

      CIMA
        HOLDINGS INC., a body corporate, incorporated in
        the State of New Mexico, United States of America (hereinafter called the
        “Vendor”)

       

      -
        and
        -

       

      KODIAK
        ENERGY, INC., a body corporate having an office in the City of Calgary,
        in the Province of Alberta (hereinafter called the
“Purchaser”)

       

      WHEREAS
        the Vendor has agreed to sell and convey the Vendor's entire right, title,
        estate and interest in the Assets to the Purchaser and the Purchaser has
        agreed
        to purchase and accept all of the Vendor's right, title, estate and interest
        in
        and to the Assets;

       

      THE
        PARTIES AGREE AS FOLLOWS:

       

      
        	
                7.

              	
                Definitions

              


      

       

      In
        this
        Conveyance, including the recitals, “Agreement” means the Agreement of Purchase
        and Sale dated the 28th day of
        September
        2007, between the Vendor, Thunder River Energy Inc. and the
        Purchaser.  In addition, the definitions provided for in the Agreement
        are adopted in this Conveyance.

       

      
        	
                8.

              	
                Conveyance

              


      

       

      The
        Vendor, for the consideration provided for in the Agreement, the receipt
        and
        sufficiency of which is acknowledged by the Vendor, sells, assigns, transfers
        and conveys the Vendor's interest in the Assets to the Purchaser, and the
        Purchaser purchases and accepts such interest from the Vendor, TO HAVE AND
        TO
        HOLD the same absolutely, subject to the terms of the Agreement, the Permitted
        Encumbrances and compliance with the terms of the Leases.

       

      
        	
                9.

              	
                Effective
                  Time

              


      

       

      This
        Conveyance is effective as of the Effective Time.

       

      
        	
                10.

              	
                Subordinate
                  Document

              


      

       

      This
        Conveyance is executed and delivered by the Parties pursuant to the Agreement
        for the purposes of the provisions of the Agreement, and the terms hereof
        shall
        be read in conjunction with the terms of the Agreement.  The Agreement
        shall prevail if there is a conflict between the provisions of the Agreement
        and
        this Conveyance.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      
        	
                11.

              	
                Enurement

              


      

       

      This
        Conveyance enures to the benefit of and is binding upon the Parties and their
        respective successors and permitted assigns.

       

      
        	
                12.

              	
                Further
                  Assurances

              


      

       

      Each
        Party shall, after the date of this Conveyance, at the request of the other
        Party and without further consideration, do all further acts and execute
        and
        deliver all further documents which are reasonably required to perform and
        carry
        out the terms of this Conveyance.

       

      IN
        WITNESS WHEREOF the Parties have duly executed this Conveyance.

       

      


      
        	 	
                CIMA
                  HOLDINGS INC.

              
	 	 
	 	
                Per:  ___________________________________

              
	 	 
	 	
                Per:  ___________________________________

              
	 	 
	 	 
	 	 
	 	
                KODIAK
                  ENERGY, INC.

              
	 	 
	 	
                Per:  ___________________________________

              
	 	 
	 	
                         __________________________________

              


      

      


       

      


      


       

      


       

      


       

      


       

      


       

      


       

      


       


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      SCHEDULE
        “D”

       

      SPECIFIC
        COVENYANCES FOR U.S. ASSETS