Exhibit 10.19


 


CONTINENTAL-GEOPETRO (BENGARA-II) LTD.


 


SHARES 
SALE  & PURCHASE AGREEMENT


 


This agreement (the “Agreement”), is entered into on the 29th September 2006, by and among:


 


CNPCHK
(INDONESIA) LIMITED (hereinafter referred to as the “Buyer”), a British Virgin Islands company
whose registered address is P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands;


 


CONTINENTAL
ENERGY CORPORATION (hereinafter referred to as “Continental”), a British Columbia, Canada
corporation located at Suite 1200, 14001 Dallas Parkway, Dallas, Texas, 75240,
USA;


 


GEOPETRO
RESOURCES COMPANY (hereinafter referred to as “GeoPetro”), a California, USA, corporation
located at Suite 700, One Maritime Plaza, San Francisco, CA, 94111, USA; and


 


CNPC
(HONG KONG) LIMITED (hereinafter referred to as the “Guarantor”), a Bermuda company located at
39th Floor, 118 Connaught Road West, Hong Kong.


 


Continental and GeoPetro are also referred to
hereinafter as “Sellers” or
individually as the context may dictate as “Seller”.


 


RECITALS; THAT


 


Whereas, Continental-GeoPetro (Bengara-II) Ltd.
(hereinafter referred to as “CGB2”),
is a corporation with registered offices located at 4th Floor Ellen Skelton
Building, 3076 Drake’s Highway, Road Town, Tortola, British Virgin Islands and
principal operational offices located at Jl. R.S. Fatmawati 31A, Cilandak,
Jakarta, 12430, Indonesia.


 


Whereas, CGB2 was
incorporated under the name Apex (Bengara-II) Ltd. as an International Business
Company in the British Virgin Islands under the International Business
Companies Act on September 9, 1997 registration number 247888. Apex
(Bengara-II) Ltd. changed its name to Continental-Wisdom-GeoPetro (Bengara-II)
Ltd. on 5 June 2003. Continental-Wisdom-GeoPetro (Bengara-II) Ltd. changed its
name to Continental-GeoPetro (Bengara-II) Ltd. on 17 December 2003.


 


Whereas, CGB2 was
originally incorporated with an authorized share capital of US$50,000
consisting of 50,000 common shares of US$1.00 par value each, all of which are
issued, outstanding and fully paid up and as of the date hereof no changes have
been made to the authorized, issued, outstanding and fully paid up share
capital of CGB2.


 


Whereas, CGB2 was
formed expressly for the sole purpose of entering into, holding and operating the
Bengara-II Production Sharing Contract which it signed with Pertamina, the
state owned oil enterprise of the Republic of Indonesia, on December 4, 1997
(together with any amendments thereto, the “Bengara-II
PSC”, a copy of which is initialed by the Parties for the purpose of
identification). CGB2 owns an undivided 100% participating interest in the
contract rights in the Bengara-II PSC. CGB2 has no business interests, property
or assets other than those directly pertaining to the Bengara-II PSC.


 


Whereas, The
Bengara-II PSC covers a 3,650 square kilometers contract area (reduced from
4,867 square kilometers in a June 2001 Bengara-II PSC mandated relinquishment)
located partially onshore and partially offshore in the province of East
Kalimantan, Indonesia


 


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(“Bengara-II
Block”). In accordance with the terms and conditions of the
Bengara-II PSC, CGB2 has the exclusive authority to conduct, along with BP
Migas, petroleum exploration and production operations within the Bengara-II
PSC contract area for up to 30 years from 4 December 1997.


 


Whereas, the duly
registered beneficial Shareholders of CGB2 are Continental, who holds 30,000
common shares representing a 60% ownership interest in CGB2 and GeoPetro, who
holds 20,000 common shares representing a 40% ownership interest in CGB2.


 


Whereas, the Buyer
wishes to purchase and take up a percentage share holding in CGB2 and thereby
participate with Continental and GeoPetro in CGB2 and for that purpose the
Parties have created this Agreement.


 


Whereas, the
Guarantor wishes to guarantee the performance of the Buyer’s obligations under
this Agreement.


 


Now therefore, in consideration of the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties covenant and agree with each other as follows:


 


Article-1:  INTERPRETATION


 


1.1                               DEFINITIONS


 


In this Agreement, including the premises,
schedules and the exhibits hereto the following defined terms shall have the
meaning ascribed thereto as follows:


 


“Applicable
Law” means the applicable provisions of any Law having jurisdiction
over CGB2 or any of the Bengara-II Assets, and includes, without limitation,
the applicable provisions of any Permit issued to CGB2 in respect of the
Bengara-II Assets or any of them.


 


“Bengara-II
Assets” means collectively (i) an undivided 100% participating
interest in CGB2’s contract rights and interests in the Bengara-II PSC; (ii)
any Permit issued to CGB2 by a governmental authority in respect of activities
under or related to the Bengara-II PSC; (iii) all of CGB2’s rights and
interests under its third party contracts including any oil and gas sales
contracts, gas processing agreements and product offtake agreements; (iv) CGB2’s
bank accounts; and (v) all seismic, geological and well reports and other
assessment materials and technical data within and pertaining to the Bengara-II
PSC contract area.


 


“Bengara-II
PSC” means the Bengara-II Production Sharing Contract entered into
by CGB2 and Pertamina and approved by the Minister of Mines and Energy of the
Republic of Indonesia on 4 December 1997, including any amendments thereto or
extensions thereof.


 


“Bonus”
has the meaning ascribed thereto in Section-2.2.2.


 


“BP Migas”
means Badan Pelaksana Kegiatan Usaha Hulu Minyak Dan Gas Bumi, a state oil and
gas regulatory body established under the Directorate General of Oil and
Natural Gas of The Ministry of Mines and Energy (MIGAS) of the Republic of Indonesia;
and the successor in authority to Pertamina in relation to the Bengara-II PSC.


 


“Business
Day” means any day of the week except Saturday, Sunday or any
statutory holiday in Jakarta, Indonesia, Hong Kong or Dallas, Texas.


 


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“Buyer”
shall mean CNPCHK (Indonesia) Limited.


 


“Cash”
has the meaning ascribed thereto in Section-2.2.1.


 


“CGB2”
means Continental-GeoPetro (Bengara-II) Ltd., a Party to this Agreement, whose
common shares are being bought and sold in the transaction contemplated in this
Agreement.


 


“Closing”
and “Closing Date” have the
meanings ascribed thereto in Section-4.1.


 


“Continental”
means Continental Energy Corporation, a Party to this Agreement, and one of the
Sellers as further defined herein.


 


“Completion
Resolutions” means the Consent Resolutions of Directors and Consent
Resolutions of Members required to give full force and effect to the completion
of Closing this Agreement and the Shareholders Agreement as provided for in
Article-4.1 and attached hereto and made a part hereof in their entirety in
Schedule-E.


 


“Contractor”
refers to CGB2 in the context of being a production sharing “Contractor” as the
term is used in the Bengara-II PSC.


 


“Data
Confidentiality Agreement” means that certain Data Confidentiality
Agreement between CGB2 and the Guarantor dated 18 May 2006 pursuant to and in
accordance with which CGB2 on behalf of itself and on behalf of the Sellers
provided certain Evaluation Information to the Guarantor.


 


“Diligence
Materials” means, exclusive of the Evaluation Information, all
legal, financial, and any other related due diligence information provided by
the Sellers or by CGB2 to the Buyer, the Guarantor, or to their attorneys,
Clifford Chance of Hong Kong, Mochtar Karuwin and Komar of Jakarta, and
accountants Pieter, Uways & Rekan of Jakarta.


 


“Director”
means a member of the Board of Directors of CGB2.


 


“Earning
Obligation” has the meaning ascribed thereto in Section-2.2.3.


 


“Effective
Date” has the meaning ascribed thereto in Section 3.1.


 


“Environmental
Deficiencies” means any (i) ground water, surface water or aquifer
contamination; (ii) soil contamination; (iii) toxic or hazardous substance
emission; or (iv) corrosion or deterioration of structures, equipment or other
property, that was directly caused by CGB2 as a direct and unequivocal result
of CGB2 work activities on the Bengara-II PSC block prior to the date of this
Agreement, the occurrence or existence of which could reasonably be expected to
give rise to criminal, quasi-criminal or civil liability on the part of CGB2 or
a holder of the Bengara-II Assets under presently subsisting Environmental Law.


 


“Environmental
Law” means any Applicable Law relating to protection of the
environment, persons or the public welfare from actual or potential exposure
(or the effects of exposure) to any actual or potential release, discharge,
spill or emission (whether past or present) of, or regarding the manufacture,
processing, production, gathering, transportation, use, treatment, storage or
disposal of, any chemical raw material, pollutant, contaminant or toxic,
corrosive or hazardous substance or waste.


 


“Evaluation
Information” means the geological, geophysical, engineering,
economic analyses and other technical information and data provided to the
Guarantor by CGB2 pursuant to the Data Confidentiality Agreement.


 


3

















 


“Financial
Statements” means the unaudited 31 August 2006 financial statements
of CGB2 attached as Schedule-A which have been prepared by the management of
CGB2 in accordance with GAAP.


 


“GAAP”
means Indonesian Generally Accepted Accounting Principles and Bengara-II PSC
accounting for cost recovery purposes consistent with Annex-C to the Bengara-II
PSC entitled “Accounting Procedure”.


 


“GeoPetro”
means GeoPetro Resources Company, a Party to this Agreement, and one of the
Sellers as further defined herein.


 


“JOA” means the CGB2
joint operating agreement dated 1 January 2000 amongst Continental, GeoPetro
and CGB2,which will be terminated as of Closing.


 


“Laws”
shall mean:


 


a)                                all
constitutions, treaties, laws, statutes, codes, ordinances, orders, decrees,
rules, regulations, and municipal by-laws, whether domestic, foreign or
international;


 


b)                               all
judgments, orders, writs, injunctions, decisions, rulings, decrees, and awards
of any governmental authority or body; and


 


c)                                all
policies, practices and guidelines or any governmental authority or body which,
although not actually having the force of law, are considered by such governmental
authority or body as requiring compliance as if having the force of law;


 


in each case binding on or affecting the
Party or Person referred to in the context in which such word is used; and “Law”
shall mean any one of them.


 


“Material”
means having a monetary value in excess of US$ 50,000.


 


“Material
Adverse Effect” in respect of a person means any change, effect,
event, occurrence, condition or development that has or could reasonably be
expected to have, individually or in the aggregate, a Material and adverse
impact on the business, operations, results of operations, assets,
capitalization or financial condition of such person, other than any changes
related to the economy or the industry in which the person carries on business.


 


“Material
Contracts” means in addition to the Bengara-II PSC, all other
contracts, agreements, arrangements and commitments of financially material
substance to which CGB2 is a Party, by which it is bound or pursuant to which
it is entitled to any right or benefit, either directly or indirectly,
including those listed and described in Schedule-B and for which the breach or
violation of, or default under, the terms of any such Material Contract, would
have a substantially Material Adverse Effect on CGB2 or the Bengara-II Assets;


 


“Member”
means a Shareholder of CGB2.


 


“Outstanding
Contractual Commitments” means the outstanding contractual
commitments of CGB2 to third parties as listed and described in Schedule F
hereto which shall be terminated by the Sellers as provided for in Article-3.4
on or before 30 September 2006.


 


“Parties”
shall mean Continental Energy Corporation, GeoPetro Resources Company, CNPCHK
(Indonesia) Limited and CNPC (Hong Kong) Limited; and “Party” shall mean any
one of them.


 


“Permit”
shall mean a permit, license, consent, approval, certificate, qualification,
specification, registration or other authorization; or a filing of a
notification, report or assessment, in each case


 


4

















 


necessary for the effective operation of CGB2’s
business, its ownership, possession, occupation or use of the Bengara II Assets
or any asset or the execution or performance of this Agreement.


 


“Pertamina”
means P.T. Pertamina (Persero) (f/k/a Perusahaan Pertambangan Minyak dan Gas Bumi
Negara), a state enterprise established under the laws of the Republic of
Indonesia; and a party to the Bengara-II PSC.


 


“POD”
means the official plan of development for a commercial discovery or
exploitation of a Petroleum accumulation prepared by the Company and submitted
to BP Migas for its approval.


 


“Restated
Memorandum and Articles” means the Memorandum and Articles of CGB2
as described in Section-2.2.6 and as attached to and made a part of this
Agreement as Schedule-D, all as may be amended by the CGB2 Shareholders from
time to time.


 


“Requisite
Approvals” means all governmental and regulatory consents, approvals
and authorizations of any nature required to be obtained in order to permit the
sale and transfer of CGB2 Shares (as hereinafter defined) to the Buyer to be
duly and lawfully completed without any adverse effect on any of the Bengara-II
Assets.


 


“Secretary”
refers to the corporate Secretary of CGB2.


 


“Sellers”
shall mean Continental and GeoPetro; and “Seller” shall mean either one of them.


 


“Shareholder”
means a Member or Shareholder of Shares in CGB2.


 


“Shares”
refers to common shares of CGB2.


 


“Shareholders
Agreement” shall have the meaning ascribed thereto in Section-2.2.5
and refers to the agreement amongst the Parties attached to and made a part of
this Agreement as Schedule-C and any other shareholders agreement(s) or joint
operating agreement(s) made amongst the Parties from time to time.


 


“Taxes”
means any federal, state, provincial, municipal or other governmental taxes or
assessments in the nature of taxes of any nature whatsoever (including, without
limitation, income taxes, capital taxes, sales taxes, property taxes, goods and
services taxes, stamp taxes, value added taxes and use taxes and withholding
tax of whatsoever nature), and includes any interest, penalty or other
additional obligation associated therewith.


 


“Third
Party Claim” shall mean and include without limitation, any claims:
(a) arising out of or in relation to the JOA and the Outstanding Contractual
Commitments prior to 30 September 2006; or (b) any claims arising out of the
termination of the JOA and the Outstanding Contractual Commitments prior to 30
September 2006; or (c) any amount or liability that is payable by CGB2 under or
in connection with any Outstanding Contractual Commitments after 30 September
2006; and any other claims provided that any such claims shall be strictly
limited to claims brought within one year of the date of this Agreement by a
third party who can demonstrate a valid and lawful written contract justifying
its claim or by a relevant regulatory authority in Indonesia.


 


“Warranty”
means the representation, undertakings and warranties as set out in Section-5.


 


5

















 


1.2                               SCHEDULES


 


The following additional agreements, annexes,
exhibits, schedules (collectively referred to hereinafter as “Schedules”) are annexed and attached to
this Agreement and form a part hereof and have the same force and effect as if
set out in the body of this Agreement:


 


	
  Schedule-A

  	
   

  	
  –

  	
   

  	
  CGB2’s
  Financial Statements at 31 August 2006

  
	
  Schedule-B

  	
   

  	
  –

  	
   

  	
  List of
  CGB2’s Material Contracts at 31 August 2006

  
	
  Schedule-C

  	
   

  	
  –

  	
   

  	
  Shareholders
  Agreement

  
	
  Schedule-D

  	
   

  	
  –

  	
   

  	
  Restated
  Memorandum and Articles

  
	
  Schedule-E

  	
   

  	
  –

  	
   

  	
  Completion
  Resolutions

  
	
  Schedule F

  	
   

  	
  –

  	
   

  	
  Outstanding
  Contractual Commitments

  



 


1.3                               CONSTRUCTION


 


In this Agreement, including the premises,
schedules and exhibits hereto, unless otherwise expressly stated:


 


a)                       References
to a “Party” or “Parties” are references to a Party or Parties to this
Agreement and include their respective successors and permitted assigns.


 


b)                      References
to “herein”, “hereby”, “hereunder”, “hereto”, “hereof” and similar expressions
are references to this Agreement and not to any particular section, subsection
or schedule.


 


c)                       References
to a statutory provision includes a reference to the statutory provision as
modified or re-enacted or both from time to time before the date of this
Agreement and any subordinate legislation made under the statutory provision
(as so modified or re-enacted) before the date of this Agreement.


 


d)                      References
to an “Article”, “Section”, “subsection”, or “clause” are references to an
Article, Section, subsection, or clause of this Agreement.


 


e)                       References
to a “Schedule” are references to a Schedule to this Agreement as described in
Section-1.2.


 


f)                         References
to dollar amounts are references to US dollar amounts.


 


g)                      Words
importing the singular shall include the plural and vice versa.


 


h)                      Words
importing gender shall include the masculine, feminine and neuter genders.


 


i)                          References
to a “person” or “persons” shall include individuals, corporations,
partnerships, associations, bodies politic and other entities, all as may be
applicable in the context.


 


j)                          The use
of headings is for convenience of reference only and shall not affect the
construction or interpretation hereof.


 


1.4                               ENTIRE AGREEMENT


 


This Agreement, together with the
Shareholders Agreement and the Restated Memorandum and Articles, and together
with all other agreements, instruments, certificates, assignments and other
documents to be delivered by the Parties pursuant to this Agreement, constitute
the entire agreement between the Parties pertaining to the subject matter of
this Agreement, and supersede the Data Confidentiality Agreement and all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties, and there are no


 


6

















 


representations, warranties or other
agreements between the Parties in connection with the subject matter of this
Agreement except as specifically set forth in this Agreement, the Shareholders
Agreement and any document delivered pursuant to this Agreement. This Agreement
may be amended only by written instrument executed by both the Sellers and the
Buyer and the Guarantor.


 


Article-2:  CONSIDERATION


 


2.1                               SHARES SALE


 


The Sellers hereby agree to sell and
transfer, in aggregate, 35,000 fully paid ordinary common shares of CGB2 (the “CGB2 Shares”) representing a 70% shareholding
equity ownership in CGB2 to the Buyer, and the Buyer hereby agrees to purchase
and accept CGB2 Shares from the Sellers, on the following terms and conditions:


 


a)              Continental agrees
to sell and transfer to the Buyer, in accordance with the terms and conditions
of this Agreement, 21,000 fully paid ordinary common shares of CGB2 Shares,
free and clear of all encumbrances together with all rights attaching thereto
as of the date of this Agreement. At Closing, Continental shall retain for its
own account and interest 9,000 fully paid ordinary common shares of CGB2
representing an 18% ownership of CGB2.


 


b)             GeoPetro agrees to
sell and transfer to the Buyer, in accordance with the terms and conditions of
this Agreement, 14,000 fully paid ordinary common shares of CGB2 Shares, free
and clear of all encumbrances together with all rights attaching thereto as of
the date of this Agreement. At Closing, GeoPetro shall retain for its own
account and interest 6,000 fully paid ordinary common shares of CGB2 representing
a 12% ownership of CGB2.


 


2.2                               SHARES PURCHASE


 


As consideration for its purchase of the CGB2
Shares the Buyer shall undertake obligations in Section-2.2.4 through
Section-2.2.6 and pay and provide the aggregate consideration in Section-2.2.1
through Section-2.2.2 as follows:


 


2.2.1                                             CASH


 


In addition to
the other consideration paid or provided by Buyer as set out in Section-2.2.2
through Section-2.2.3 below, the Buyer shall pay cash consideration upon the
Closing Date in the aggregate amount of US$ 35,000 (“Cash”) in the form of two wire transfers, one in the amount of
US$ 21,000 wired to Continental and one in the amount of US$ 14,000 wired to
GeoPetro, both in immediately available US dollar funds.


 


2.2.2                                             BONUS


 


In addition to
the other consideration paid or provided by Buyer as set out in Section-2.2.1
above, and subject to and conditional upon the receipt of BP Migas approval of
the first POD by CGB2, or its successor within the Bengara-II PSC contract
area, the Buyer shall pay a cash bonus in the aggregate amount of US$ 5,000,000
(the “Bonus”), in the form of a
payment of cash in the amount of US$ 3,000,000 to Continental and a payment of
cash in the amount of US$ 2,000,000 to GeoPetro; provided further, that:


 


7

















 


a)              payment of the Bonus
shall be made in full to Continental and to GeoPetro by wire transfers within
five (5) business days of receipt of said written approval;


 


b)             in the event the
Parties decide to cause CGB2 to relinquish and terminate the entire Bengara-II
PSC prior to making an application for approval of any plan of development,
pursuant to the termination and relinquishment procedure set forth in the
Shareholders Agreement, then the Bonus payment obligation of the Buyer shall be
released and forgiven on the same date as the termination and relinquishment of
the entire Bengara-II PSC.


 


2.2.3                                             EARNING OBLIGATION


 


Upon the
Closing Date, the Buyer shall advance US$18,700,000 (the “Earning Obligation”)
in immediately available US dollar funds by wire transfer into the CGB2
multicurrency bank account number 808-215644-838 (referred to hereinafter as
the “Earn-In Joint Account” or the “EJA”) established at Hongkong and Shanghai
Banking Corporation Limited, Hong Kong main office, 1 Queen’s Road Central, and
operated as provided for in the Shareholders Agreement.


 


2.2.4                                             DEVELOPMENT LOANS


 


The Buyer
shall, conditional on the receipt of BP Migas approval of the first POD by
CGB2, become obliged to make advances from time to time required by the Company
to fund the working capital required for appraisal and development of any
successful Petroleum discovery of up to a total, maximum amount of forty one
million three hundred thousand US dollars, US$41,300,000 (the “Development Loans”) in excess of the
Earning Obligation funds, and utilize the Development Loans strictly in
accordance with the provisions set out in the Shareholders Agreement.


 


2.2.5                                             SHAREHOLDERS AGREEMENT


 


The Buyer and
the Guarantor has entered into a separate written agreement with Continental
and GeoPetro entitled the “Shareholders
Agreement” which is attached hereto in its entirety as Schedule-C.
The Shareholders Agreement, among other things, provides irrevocable, strict
and clear and comprehensive terms, conditions and procedures as to how:


 


a)              the Buyer’s Earning
Obligation as set forth in Section-2.2.3 shall be controlled, expended, and
realized as well as how the Earn-In Joint Account shall be established and
operated;


 


b)             the Development Loans
set forth in Section-2.2.4 shall be controlled, expended, and realized.


 


2.2.6                                             RESTATED MEMORANDUM &
ARTICLES


 


The Buyer has
entered into a separate written agreement with Continental and GeoPetro
entitled the “Restated Memorandum &
Articles” of CGB2 which is attached hereto in its entirety as Schedule-D.
The Restated Memorandum & Articles, together with the Shareholders
Agreement, among other things, provides irrevocable, strict, clear and
comprehensive terms, conditions and procedures as to how the Parties shall
manage, control, and operate CGB2 as a joint venture corporate vehicle to
operate the Bengara-II Assets on behalf of the Buyer, Continental and GeoPetro
in proportion to their respective CGB2 shareholding percentages.


 


8

















 


Article-3:  Effectiveness & Continuation


 


3.1                               EFFECTIVE DATE


 


The purchase and sale contemplated in this
Agreement shall be effective from the Closing Date upon signature of this
Agreement and of the Shareholders Agreement.


 


3.2                               CONTINUITY


 


The Buyer accepts and agrees that the Buyer’s
purchase of CGB2 Shares is a purchase of CGB2 and its Bengara-II Assets as a
going concern business enterprise. The Parties agree that continuation and
success of CGB2 and the Bengara-II Assets is of paramount priority and
importance to the benefit of all the Parties and therefore the Earning
Obligation funds and the Development Loan (where applicable) shall be expended
and utilized to satisfy and discharge CGB2’s Bengara II PSC and other
obligations, liabilities, payables, and commitments as and from the date of
this Agreement, including but not limited to those accrued and noted on the
Financial Statements and summarized and listed as Material Contracts.


 


3.3                               TERMINATION OF JOA


 


The Sellers and CGB2 shall enter into an
agreement terminating the JOA effective on the same date as this Agreement in
the form termination agreement provided attached to Completion Resolution
number 1. Any costs of CGB2 terminating the JOA shall be funded by the Sellers
on or before 30-September-2006 and dealt with as further provided for in
Section 3.6 below. The Sellers hereby expressly release CGB2 from any past or
future obligations that each of the Sellers may have against CGB2 under the JOA
with effect from the date of termination. Each of the Sellers shall severally indemnify
CGB2 in respect of any of their respective antecedent breaches and/or failure
of their respective obligations under the JOA prior to its termination.


 


3.4                               TERMINATION OF OUTSTANDING
CONTRACTUAL COMMITMENTS


 


Subject to the provisions of Article-3.6, the
Sellers shall cause CGB2 to terminate the Outstanding Contractual Commitments
on or before 30 September 2006 and the Sellers shall fund the costs incurred in
accordance with the Outstanding Contractual Commitments through 30 September
2006 and any costs of terminating the Outstanding Contractual Commitments in
the manner and as further provided for in Section 3.6 below.


 


3.5                               ACCUMULATED COST RECOVERY
30-JUNE-2006


 


CGB2 has reported accumulated shareholder
loans against the Bengara-II PSC work commitment in the agreed aggregate amount
of US$ 6,300,000 at September 30, 2006. Of this total, 60% has been contributed
to CGB2 by Continental and 40% has been contributed to CGB2 by GeoPetro


 


3.6                               CGB2 WORKING CAPITAL FUNDING AND
COSTS THROUGH 30-SEPTEMBER-2006


 


Notwithstanding the Closing Date of the
transactions contemplated in this Agreement, the Sellers shall continue to fund
CGB2 sufficiently to pay CGB2’s working capital needs to fund its operations
through 30 September 2006 plus such additional funds as CGB2 may require to
negotiate, sever consultants and terminate the JOA as provided for in Section-3.3
and the Contractual Commitments on or before 30 September 2006 as provided for
in Section 3.4.


 


9

















 


3.7                               CGB2 WORKING CAPITAL FUNDING AND
COSTS FROM 1-OCTOBER-2006


 


Notwithstanding the Closing Date of the
transactions contemplated in this Agreement, and in accordance with Section-3.3
through Section-3.6 above, the Earning Obligation funds and the Development
Loan (where applicable) shall be applied towards CGB2 working capital needs to
fund its operations commencing with effect from 1-October-2006 in accordance
with the provisions of this Agreement and the Shareholders Agreement.


 


Article-4:  COMPLETION


 


4.1                               CLOSING


 


The closing of the purchase and sale
contemplated hereby (“Closing”)
shall take place upon the signature of this Agreement and the Shareholders
Agreement upon a date (the “Closing Date”)
and at a place mutually agreed by the Parties. The Completion Resolutions
numbered 1 through 6 as included herein and attached hereto as Schedule-E,
together with their respective attachments and related agreements shall also be
signed by the applicable Parties at Closing and have full force and effect to
the same extent as if incorporated in the body of this Agreement.


 


4.2                               SELLERS’ CLOSING DELIVERIES


 


At the Closing, upon the Closing Date, the
Sellers shall deliver or cause to be delivered to the Buyer the following, in
form and substance satisfactory to the Buyer or as provided for in the
Completion Resolutions, duly authorized and executed:


 


a)              signature and
delivery of this Agreement;


 


b)             signature and
delivery of the Shareholders Agreement;


 


c)              signature and
delivery of the Restated Memorandum and Articles;


 


d)             transfers of CGB2
Shares to the Buyer from the Sellers as per the attachment to Completion
Resolution number-1 providing therefore;


 


e)              termination of the
JOA as per the attachment to
Completion Resolution number-1 providing therefore;


 


f)                resignation and
release letter of CGB2 Director Mr. S. J. Doshi as per the attachment to
Completion Resolution number-1 providing therefore;


 


g)             resignation and
release letter of CGB2 President & CEO Mr. Richard L. McAdoo, as per the
attachment to Completion Resolution number-6 providing therefore;


 


h)             consent to continue
to serve as a Director of CGB2 from Mr. Richard L. McAdoo as per the attachment
to Completion Resolution number-3 providing therefore;


 


i)                 signature of
Completion Resolutions numbered 1, 3 and 6 together with their attachments
covering the matters set out in the foregoing paragraphs 4.3.a through 4.3.h;
and


 


j)                 signature of
Completion Resolutions numbered 2 and 5 together with their attachments
covering the other Closing matters set out therein.


 


4.3                               BUYER’S CLOSING DELIVERIES


 


At the Closing, upon the Closing Date, the
Buyer shall deliver or cause to be delivered to the Sellers the following in
form and substance satisfactory to the Sellers, or as provided for in the
Completion Resolutions, duly authorized and executed:


 


10

















 


a)              signature and
delivery of this Agreement;


 


b)             signature and
delivery of the Shareholders Agreement;


 


c)              signature and
delivery of the Restated Memorandum and Articles;


 


d)             proof of payment of
the Cash by wire transfers from Buyer to the Sellers in respect of the share
purchase payments due to the Sellers provided for in Section-2.2.1;


 


e)              proof of payment by
wire transfer from Buyer to the Earn-In Joint Account of the Earning Obligation
payment provided for in Section-2.2.3;


 


f)                consents to become
Directors of CGB2 from Mr. Li Hualin and Mr. Cheng Cheng and consent to become
Secretary of CGB2 from Mr. Patrick Lau as per the attachments to Completion
Resolution number-1 and number-3 providing therefore;


 


g)             transfers of CGB2
Shares to the Buyer from the Sellers as per the attachment to Completion
Resolution number-1 providing therefore;


 


h)             signature of
Completion Resolutions numbered 1, 3 and 6 together with their attachments
covering the matters set out in the foregoing paragraphs 4.3.a through 4.3.g;
and


 


i)                 signature of
Completion Resolutions numbered 2 and 5 together with their attachments
covering the other Closing matters set out therein.


 


Article-5:  REPRESENTATIONS & WARRANTIES


 


5.1                               SELLERS REPRESENTATIONS &
WARRANTIES


 


a)                                               The
Sellers hereby unconditionally warrant and represent to the Buyer that each
Warranty is true, accurate and not misleading at the date of this Agreement.


 


b)                                              The
Sellers acknowledge that the Buyer is entering into this Agreement in reliance
on each Warranty.


 


c)                                               The
Sellers shall not invoke the Buyer’s knowledge (actual, constructive or
imputed) of a fact or circumstance in relation to the Evaluation Information.


 


5.2                               EACH SELLER’S SEVERAL
REPRESENTATIONS & WARRANTIES


 


Each Seller hereby severally, and not
jointly, represent and warrant to the Buyer on its own behalf that, as of the
date of this Agreement:


 


a)              each of the Sellers
is a corporation duly incorporated and validly subsisting under the laws of its
jurisdiction of incorporation;


 


b)             Continental is the
duly registered and beneficial owner of 30,000 fully paid and non assessable
common shares of CGB2 representing a sixty percent (60%) ownership of CGB2
which were received by Continental as a duly authorized share transfer
registered by CGB2;


 


11

















 


c)              GeoPetro is the duly
registered and beneficial owner of 20,000 fully paid and non assessable common
shares of CGB2 representing a forty percent (40%) ownership of CGB2 which were
received by GeoPetro as a duly authorized share transfer registered by CGB2;


 


d)             each of the Sellers
has full capacity and authority to sell and transfer its proportion of CGB2
Shares and to otherwise transact the affairs contemplated by this Agreement in
accordance with the provisions hereof;


 


e)              each of the Sellers
has all necessary power, authority and capacity to enter into and perform its
obligations under this Agreement and all other documents executed and delivered
by or on behalf of the Sellers pursuant hereto and to consummate the
transactions contemplated hereby;


 


f)                each of the
Sellers have taken all actions necessary for the authorization, execution and
delivery by it of this Agreement and to perform its obligations hereunder and
this Agreement has been duly authorized, executed and delivered;


 


g)             this Agreement and
all other documents executed and delivered by or on behalf of each of the
Sellers pursuant hereto shall constitute legal, valid and binding obligations
of each of the Sellers enforceable in accordance with their respective terms
and conditions;


 


h)             no dissolution,
winding up, bankruptcy, liquidation or similar proceedings have been commenced
or are pending or proposed in respect of either of the Sellers;


 


i)                 each Seller’s portion
of the CGB2 Shares are conveyed to the Buyer, free and clear of all liens,
encumbrances, security interests and other third party claims and interests of
any nature whatsoever except as otherwise set out herein;


 


j)                 there are no
Requisite Approvals stipulated by Indonesian statute or regulation of
Pertamina, BPMigas, MIGAS or other restrictions of any nature on the sale and
transfer of each Seller’s CGB2 Shares to the Buyer pursuant hereto, and each
Seller has the absolute right to effect such sale and transfer;


 


k)              there are no
agreements, options, rights or privileges (including, without limitation,
convertible securities, warrants or other rights of any nature) for the
purchase, subscription, allotment or issuance of any other shares in the
capital of CGB2, or of any other CGB2 securities of any nature or kind;


 


l)                 except for the
JOA, there is no voting trust or voting agreement or pooling agreement or proxy
with respect to any issued and outstanding shares in the capital of CGB2;


 


m)           neither of the Sellers
require the approval of its shareholders or any other third party or securities
regulators to authorize the sale and transfer of CGB2 Shares owned by such
Seller as contemplated in this Agreement; and


 


n)             neither the execution
and delivery of this Agreement nor the completion of the sale and transfer of
CGB2 Shares in accordance with the provisions of this Agreement nor the
compliance by each of the Sellers of its obligations hereunder will constitute
a default under, or be in contravention or breach of:


 


i)                                         any
provision of the articles of incorporation or any bylaws of either of the
Sellers,


 


12

















 


ii)                                      any
applicable shareholder agreements to which either Seller is party except for
the JOA;


 


iii)                                   other
applicable contracts of either of the Sellers; or


 


iv)                                  any
Laws applicable to either of the Sellers.


 


5.3                               SELLERS’ JOINT REPRESENTATIONS
& WARRANTIES


 


The Sellers hereby jointly, and not
severally, represent and warrant to the Buyer in the proportions of 60% for
Continental and 40% for GeoPetro that, with respect to CGB2, as of the date of
this Agreement or, as the context may require, in the case of the Financial
Statements as of the date of the Financial Statements set forth in Schedule-A
hereof and in the case of Material Contracts and third party commitments as of
the 1 October 2006 date set forth in Schedule-B hereof:


 


a)              the authorized
capital of CGB2 is US$50,000, made up of a single class and series of shares
consisting of 50,000 common shares (the “Shares”) of US$1.00 par value, of
which all 50,000 are currently issued, fully paid and outstanding;


 


b)             CGB2 is a company
duly incorporated, validly subsisting and in good standing under the laws of
the British Virgin Islands;


 


c)              CGB2 has full
capacity and authority to conduct and carry on the business of CGB2 and all
other activities currently or proposed to be conducted and carried on by it
under the Bengara-II PSC;


 


d)             CGB2 has full
capacity and authority to own, operate, hold, use and in all respects deal with
the Bengara-II PSC and the Bengara-II Assets or any assets derived there from;


 


e)              CGB2 is in good
standing under applicable corporate legislation in the Republic of Indonesia;


 


f)                no dissolution,
winding up, bankruptcy, liquidation or similar proceedings have been commenced
or are pending or proposed in respect of CGB2;


 


g)             CGB2 holds the sole,
legal and beneficial title to an undivided 100% interest in the Contractor’s
contract rights in the Bengara-II Assets, free and clear of all liens, encumbrances,
security interests and other third party claims of any nature whatsoever;


 


h)             the Bengara-II PSC is
valid, in full force and effect and in good standing except for approximately
US$19,000,000 shortfall in work commitments which have not yet been realized;


 


i)                 the Financial
Statements have been prepared in accordance with GAAP, consistently applied
throughout the respective periods covered thereby, and accurately, completely
and fairly present the assets, liabilities and financial position of CGB2, and
the results of its operations, as of the respective dates thereof and for the
respective periods covered thereby;


 


j)                 since the date of
the Financial Statements, there has not been any change in the financial
condition of CGB2, other than in the ordinary course of business or that would
have a Material Adverse Effect on CGB2 or the Bengara-II Assets;


 


13

















 


k)              since the date of
the Financial Statements, CGB2 has not incurred any onerous or unusual
liabilities, debts, claims, commitments or obligations, whether contingent or
otherwise, present or future;


 


l)                 other than in the
ordinary course of business and except as disclosed and set forth elsewhere
herein and in the Financial Statements, to the best of the Sellers’ knowledge,
CGB2 has no material liabilities, debts, claims or obligations of any nature,
whether absolute, accrued, determined, contingent or otherwise, present or
future that would have a Material Adverse Effect on CGB2 or the Bengara-II
Assets;


 


m)           the list and summary of
terms of the Material Contracts is a complete and accurate list of all material
third party agreements and contractual commitments in addition to those
provided for in the Bengara-II PSC and Permits as of the date thereof;


 


n)             other than in the
ordinary course of business and except as disclosed and set forth elsewhere
herein and in the summary and list of Material Contracts, to the best of the
Sellers’ knowledge, CBG2 has not entered into any additional material legally
binding contracts, arrangements, understanding, commitments with any third
party;


 


o)             all Material
Contracts are valid, binding and in full force and effect as to CGB2, and CGB2
is not in breach or violation of, or default under, the terms of any such
Material Contract, except where such breach, violation or default which would
not have a Material Adverse Effect on CGB2;


 


p)             Other than the
Bengara-PSC, the contractual commitments set out in Schedule F hereto that will
be severed prior to 30 September 2006 represents all the contractual
obligations and commitments that CGB2 entered into since the date of the
Financial Statements at the direction by the Sellers;


 


q)             CGB2 has complied and
continues to comply with all Applicable Laws. CGB2 has obtained, and has
complied with all the terms and conditions of each relevant Permit and action
required for the renewal or extension of each Permit has been taken;


 


r)                CGB2 is not a
party to any pension, retirement, bonus, profit sharing, compensation,
incentive, stock purchase, stock option, stock appreciation, severance,
change-of-control, savings; thrift, insurance, medical, hospitalization,
disability, death or other similar program, or practice providing Directors,
Officers, Shareholders or employees benefits;


 


s)              CGB2 has no outstanding
liabilities to any of its Officers for payment of salaries, bonuses, mandatory
pension or retirement payment or compensation for loss of office;


 


t)                except as
otherwise disclosed and set forth in the Financial Statements and provided for
in Article 5.3 of the Shareholders Agreement, CGB2 has filed Tax returns and
paid Taxes required to be paid by it when due; and adequate provision has been
made in the Financial Statements for all Taxes of any nature whatsoever for
which CGB2 may at any time in the future have any liability or obligation in
respect of operations, activities or transactions occurring prior to the
respective dates of such statements;


 


u)             CGB2 has not given
any Material guarantees and indemnities in respect of any third party;


 


v)             there are no
obligations or liabilities to the Government of Indonesia or BPMigas related to
the Bengara-II PSC or Bengara-II Assets that are not expressly set out in


 


14

















 


the written
version thereof provided to the Buyer prior to the execution of this Agreement
or provided for in Applicable Law;


 


w)           CGB2 owes no amount to
a present or former Director, other Officer of CGB2 other than for accrued
remuneration or reimbursement of business expenses;


 


x)               CGB2 has no intellectual
property rights and there is no active, pending or threatened claim against
CGB2 for the infringement or unauthorized use of another party’s intellectual
property rights and the Sellers are not aware of any circumstances leading to
such claim;


 


y)             there are no
Environmental Deficiencies caused by CGB2 or Bengara-II PSC operations and the
Sellers are not aware of any circumstances leading to such Environment
Deficiencies;


 


z)               CGB2 has no
insurance policies in effect and is not required under Applicable Law to take
out any insurance policies other than blowout and well control insurance at or
near the time of drilling a well;


 


aa)        CGB2 does not carry on
business or conduct any operations or activities of any nature in any
jurisdictions other than Indonesia, the British Virgin Islands, and Hong Kong
and none of the Bengara-II Assets are located in any other jurisdiction;


 


bb)      CGB2 has no property or
assets other than those included in the Bengara-II Assets;


 


cc)        neither CGB2 nor any of
its Directors or Officers has granted any general or special power of attorney
in favor of any person except for the power of attorney granted to the
Guarantor’s Jakarta attorneys, Mr. Rizal et.al. of MKK, for conducting legal
due diligence on the transaction contemplated in this Agreement;


 


dd)      CGB2 does not own, and has
never owned, directly or indirectly, any shares in the capital of any Person
and has never made any investment in, and does not have, and has never had, any
property interest in, any Person;


 


ee)        neither the execution and
delivery of this Agreement nor the completion of the sale and transfer of CGB2
Shares in accordance with the provisions of this Agreement nor the compliance
by each of the Sellers of its obligations hereunder will constitute a default under,
or be in contravention or breach of:


 


i)            any provision of the
articles of incorporation or any bylaws of CGB2,


 


ii)         any applicable
shareholder agreements or Material Contracts to which CGB2 is party except for
the JOA;


 


iii)      Applicable Laws;


 


iv)     the Bengara-II PSC; or


 


v)        any agreement which the
Bengara-II Assets are subject;


 


ff)            neither the execution
and delivery of this Agreement nor the completion of the sale and transfer of
CGB2 Shares in accordance with the provisions of this Agreement will trigger
any rights or occurrences, as a result of the change of control of CGB2 or
otherwise, that may give rise to the termination of, or any other sanction
under or in respect of, the Bengara-II PSC or that may otherwise cause a
Material Adverse Effect on CGB2 or its Bengara-II Assets;


 


15

















 


gg)      CGB2 is not a party to, and
is not otherwise aware of, any action, suit or other legal, administrative or
arbitration proceeding or governmental investigation, actual or threatened,
which might reasonably be expected to result in any Material Adverse Effect on
the Bengara-II Assets;


 


hh)      The Evaluation Information
given by, or on behalf of, the Sellers to the Buyer is authentic.


 


ii)              The Diligence
Materials given by, or on behalf of, the Sellers to the Buyer or to its
advisers leading to this Agreement is authentic, true, and not misleading and
all information about the CGB2 Shares, CGB2, the Bengara-II PSC and the
Bengara-II Assets which might be material for disclosure to a buyer of the CGB2
Shares has been disclosed to the Buyer in writing;


 


jj)              except as expressly
otherwise set forth herein these Sections 5.1 through 5.3 above; the Sellers
make absolutely NO representation and NO Warranty regarding the accuracy,
completeness or adequacy of the Evaluation Information and the Diligence
Materials provided by CGB2 to the Guarantor pursuant to and in accordance with
the Data Confidentiality Agreement.


 


5.4                               BUYER’S REPRESENTATIONS


 


The Buyer covenants with, and represents and
warrants to the Sellers severally that:


 


a)                       the Buyer
is a wholly owned subsidiary of the Guarantor;


 


b)                      the Buyer is
a corporation duly incorporated and validly subsisting under the laws of the
British Virgin Islands and has full capacity and authority to purchase CGB2
Shares, and to otherwise transact the affairs contemplated by this Agreement,
the Shareholders Agreement, and the Restated Memorandum and Articles, in
accordance with the provisions hereof and thereof;


 


c)                       the Buyer
has taken all corporate actions necessary to authorize the execution and
delivery of this Agreement, the Shareholders Agreement, and the Restated
Memorandum and Articles, and will at the Closing Date have taken all corporate
actions necessary to authorize and complete the purchase of CGB2 Shares in
accordance with the provisions hereof and thereof;


 


d)                      this Agreement,
the Shareholders Agreement and the Restated Memorandum and Articles, have been
validly executed and delivered, and it and all other documents executed and
delivered by or on behalf of the Buyer pursuant hereto shall constitute legal,
valid and binding obligations of the Buyer enforceable in accordance with their
respective terms and conditions;


 


e)                       completion
of the purchase of CGB2 Shares in accordance with the provisions of this
Agreement, the Shareholders Agreement, and the Restated Memorandum and
Articles, will not constitute a default under, or be in contravention or in
breach of any agreement or instrument to which the Buyer is a party, or by
which it is bound; and


 


f)                         the Buyer
has had the opportunity to consult his or her own independent professional
advisors with respect to the consequences of entering this Agreement.


 


16

















 


5.5                               GUARANTOR’S REPRESENTATIONS


 


The Guarantor covenants with, and represents
and warrants to the Sellers severally that:


 


a)              the Buyer is a
wholly owned subsidiary of the Guarantor;


 


b)             the Guarantor is a
corporation duly incorporated and validly subsisting under the laws of Bermuda
and has full capacity and authority to transact the affairs contemplated by
this Agreement, in accordance with the provisions hereof;


 


c)              the Guarantor has
taken all corporate actions necessary to authorize the execution and delivery
of this Agreement and the Shareholders Agreement and necessary to authorize,
undertake and complete the guarantee as provided for in Section-7;


 


d)             this Agreement and
the Shareholders Agreement have been validly executed and delivered, and it and
all other documents executed and delivered by or on behalf of the Guarantor
pursuant hereto shall constitute legal, valid and binding obligations of the
Guarantor enforceable in accordance with their respective terms and conditions;


 


e)              completion of the
purchase of CGB2 Shares in accordance with the provisions of this Agreement
will not constitute a default under, or be in contravention or in breach of any
agreement or instrument to which the Guarantor is a party, or by which it is
bound.


 


Article-6:  LIABILITY & INDEMNIFICATION


 


6.1                               SELLERS’ SEVERAL LIABILITY AND
INDEMNIFICATION


 


Subject to the provisions of Section-6.5 and Section-6.11,
and limited to the proportions of 60% to Continental and of 40% to GeoPetro,
each Seller shall severally, and not jointly, be liable to the Buyer for, and
shall, on demand, indemnify the Buyer from and against, any and all liability,
loss, costs, claims or damages of any nature (including, without limitation,
legal costs on a solicitor/client basis) suffered or incurred by the Buyer
(whether directly or by virtue of any Third Party Claim as defined in Section
6.8) as a result of any occurrence, matter or thing the occurrence, existence
or non disclosure of which would constitute a breach or failure of any
severally made representation and Warranty made by each respective Seller in
Section-5.2, and from and against a reduction in the value of the CGB2 Shares
or the value of Bengara-II Assets; or a liability which CGB2 becomes subject
to, incurs or an increase in a liability which it would not have been subject
to or would not have incurred had the breach not occurred.


 


6.2                               SELLERS’ JOINT LIABILITY AND
INDEMNIFICATION


 


Subject to the provisions of Section-6.5 and
Section-6.11, and limited to the proportions of 60% to Continental and of 40%
to GeoPetro, the Sellers shall jointly, and not severally, be liable to the
Buyer for, and shall, on demand, indemnify the Buyer from and against, any and
all liability, loss, costs, claims or damages of any nature (including, without
limitation, legal costs on a solicitor/client basis) suffered or incurred by
the Buyer (whether directly or by virtue of any Third Party Claim as defined in
Section 6.8) as a result of any occurrence, matter or thing the occurrence,
existence or non disclosure of which would constitute a breach or failure of
any jointly made representation and Warranty on behalf of CGB2 in Section-5.3,
and from and against a reduction in the value of the CGB2 Shares or the value
of Bengara-II Assets; or a liability which CGB2 becomes subject to, incurs or
an increase in a liability which it would not have been subject to or would not
have incurred had the breach not occurred.


 


17

















 


6.3                               BUYER’S LIABILITY AND
INDEMNIFICATION


 


Subject to the provisions of Section-6.5 and
Section-6.11, the Buyer shall be liable to the Sellers severally for, and shall
unconditionally and irrevocably indemnify the Sellers severally from and
against, any and all liability, loss, costs, claims or damages of any nature
(including, without limitation, legal costs on a solicitor/client basis)
suffered or incurred by the Sellers (whether directly or by virtue of any Third
Party Claim as defined in Section-6.8) as a result of any occurrence, matter or
thing the occurrence, existence or non-disclosure of which would constitute a
breach or failure of any representation, Warranty, covenant, agreement or other
obligation of the Buyer hereunder.


 


6.4                               GUARANTOR’S LIABILITY AND
INDEMNIFICATION


 


Subject to the provisions of Section-6.5 and
Section-6.11, the Guarantor and its successors shall be unconditionally and
irrevocably liable to the Sellers in the stead of the Buyer and shall indemnify
the Sellers in the event of any failure by Buyer in respect of any of its
obligations under Section-6.3.


 


6.5                               ENFORCEMENT LIMITATION


 


Notwithstanding the provisions of Sections
6.1 through 6.4 above, and notwithstanding any statutory or regulatory
provision, principle of law or rule of equity to the contrary:


 


a)                                      neither
the Buyer nor the Sellers shall be entitled to recover any indirect,
consequential or special damages from the other;


 


b)                                     each
Party shall be obligated to use reasonable efforts to mitigate any liability,
loss, costs, claims or damages sustained by it in connection with any matter
for which the other Party may have liability to it;


 


c)                                      neither
the Buyer nor the Sellers shall be entitled to invoke or claim any
indemnification from the other under this Section-6 as a result of any
liability, loss, costs, claims or damages of any nature suffered or incurred
by:


 


i)            CGB2 or by the
Bengara-II Assets from the Closing Date;


 


ii)         CGB2 or by the Bengara-II
Assets prior to the Closing Date if there is reasonable expectation that such
Third Party Claim as defined in Section-6.8 or assessment of any Tax is
recoverable under the Bengara-II PSC;


 


iii)      the Sellers or by the Buyer
as a direct result and consequence of being a shareholder in CGB2 from the
Closing Date; and


 


iv)     the Sellers or by the Buyer
as a direct result and consequence of being, from the Closing Date, a joint
venture participant in the Bengara-II Assets, or any other joint venture
agreement to which it is a party pertaining to the Bengara-II Assets


 


v)        any commitments or
obligations due to Indonesian authorities pursuant to the Bengara-II PSC or
related to obligations incumbent upon any Indonesian production sharing
contractor in the normal course of conducting Bengara-II PSC activities; and
any Taxes claimed by any tax authorities having jurisdiction, in each case
which cost may be recovered under the Bengara-II PSC.


 


6.6                               OBLIGATION TO REIMBURSE


 


The Party providing indemnification hereunder
(the “Indemnifying Party”) shall
reimburse, on demand, to the Party being indemnified hereunder (the “Indemnified Party”) the amount, without any
accumulated interest, of any losses suffered or incurred by the Indemnified
Party.


 


18

















 


6.7                               NOTIFICATION


 


Promptly upon obtaining knowledge thereof,
the Indemnified Party shall notify the Indemnifying Party of any cause which
the Indemnified Party has determined has given or could give rise to
indemnification under this Section-6. The omission so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any duty to
indemnify and hold harmless which otherwise might exist with respect to such
cause unless (and only to that extent) the omission to notify materially
prejudices the ability of the Indemnifying Party to exercise its right to
defend as provided in this Section-6.


 


6.8                               DEFENSE OF THIRD PARTY CLAIM


 


If any legal proceeding shall be instituted
or any claim or demand shall be asserted by a third party against the
Indemnified Party (each a “Third Party Claim”
as defined in Section-1.1), then the Indemnifying Party shall have the right,
after receipt of the Indemnified Party’s notice under Section-6.7 and upon
giving notice to the Indemnified Party within 14 calendar days of such receipt,
to defend the Third Party Claim at its own cost and expense with counsel of its
own selection, provided that:


 


a)                                      the
Indemnified Party shall at all times have the right to fully participate in the
defense at its own expense;


 


b)                                     the
Third Party Claim seeks only monetary damages and does not seek any injunctive
or other relief against the Indemnified Party;


 


c)                                      the
Indemnifying Party unconditionally acknowledges in writing its obligation to
indemnify and hold the Indemnified Party harmless with respect to the Third
Party Claim; and


 


d)                                     legal
counsel chosen by the Indemnifying Party is satisfactory to the Indemnified
Party, acting reasonably.


 


Amounts payable by the Indemnifying Party
pursuant to a Third Party Claim shall be paid in accordance with the terms of
the settlement or, the judgment, as applicable.


 


6.9                               NO COMPROMISE


 


The Indemnifying Party shall not be permitted
to compromise and settle or to cause a compromise and settlement of any Third
Party Claim, without the prior written consent of the Indemnified Party,
unless:


 


a)                                      the
terms of the compromise and settlement require only the payment of money and do
not require the Indemnified Party and/or CGB2 to admit any wrongdoing or take
or refrain from taking any action; and


 


b)                                     the
Indemnified Party receives, as part of the compromise and settlement, a legally
binding and enforceable unconditional satisfaction or release, which is in form
and substance satisfactory to the Indemnified Party, acting reasonably, from any
and all obligations or liabilities it and/or CGB2, if applicable, may have with
respect to the Third Party Claim.


 


6.10                        FAILURE TO DEFEND


 


If the Indemnifying Party fails within 10
calendar days from receipt of the notice of a Third Party Claim to give notice
of its intention to defend the Third Party Claim in accordance with
Section-6.8; or to comply at any time with any of Section-6.8.c, then the
Indemnifying Party shall be deemed to have waived its right to defend the Third
Party Claim and the Indemnified Party shall have the right (but not the
obligation) to undertake or to cause CGB2 to undertake the defense


 


19

















 


of the Third Party Claim and compromise and
settle the Third Party Claim on behalf, for the account and at the risk and
expense of the Indemnifying Party.


 


6.11                        LIMITATION ON INDEMNIFICATION


 


The obligations of indemnification set out in
the preceding sections of this Section-6 shall survive the Closing but shall
automatically expire and terminate in their entirety upon the first anniversary
of this Agreement.


 


6.12                        EXCLUSIONS


 


Nothing in this clause 6 shall have the
effect of limiting or restricting any liability of the Sellers in respect of a
Warranty Claim arising as a result of any fraud, willful misconduct or willful
concealment.


 


Article-7:  PARENT COMPANY GUARANTEE


 


7.1          The Guarantor and its successors hereby unconditionally and
irrevocably guarantee to the Sellers the due and punctual performance by the
Buyer of all of its obligations under this Agreement, under the Shareholders
Agreement and under the Restated Memorandum and Articles and undertakes to
severally indemnify and keep indemnified the Sellers against all losses,
damages, costs and expenses of whatsoever nature which it may suffer or incur
by reason of any default or unreasonable delay on the part of the Buyer in the
performance of the said obligations.


 


7.2          If any of the obligations of the Buyer that are the subject
of the guarantee contained in this Article-7 cease to be valid or enforceable
(in whole or in part) on any ground whatsoever (including, but not limited to,
any defect in or want of powers of the relevant party or irregular exercise
thereof or any lack of authority on the part of any person purporting to act on
behalf of the relevant party or any legal or other limitation, disability or
incapacity, or any change in the constitution of, or any amalgamation or
reconstruction of, or the liquidation receivership or insolvency of the
relevant party) the Guarantor shall nevertheless be liable to the Sellers
severally in respect of the purported obligation or liability as if the same
were fully valid and enforceable and the Guarantor was the principal obligor in
respect thereof.


 


Article-8:  GENERAL


 


8.1                               CONFIDENTIAL INFORMATION


 


The Parties shall maintain confidential the
content of this Agreement and the Shareholders Agreement attached, except as
provided for in Section-8.3.


 


8.2                               BROKERS’ FEES


 


No Party shall be liable for the payment of
any commissions or compensation in the nature of finders’ fees to any broker or
agent acting on behalf of the other Party.


 


20

















 


8.3                               PUBLIC ANNOUNCEMENTS


 


Any press release or filing required of a
Party by securities regulatory authorities having jurisdiction with respect to
the transaction contemplated in this Agreement and the Shareholders Agreement,
shall be made by each of the Parties exerting its best efforts to cooperate and
coordinate with the other Parties as to the form, nature and extent of such
disclosure.


 


8.4                               COMMUNICATIONS


 


All notices and other communications given in
connection with this Agreement shall be in writing, and the respective
addresses of the Parties for the service of any such notices or other
communications shall be as follows:


 


BUYER &
GUARANTOR:


CNPCHK
(INDONESIA) LIMITED & CNPC (HONG KONG) LIMITED


39th Floor,
118 Connaught Road West, Hong Kong


Attention:  President, 
Fax No:  (852) 2868-1741


 


SELLERS:


CONTINENTAL
ENERGY CORPORATION


Suite 1200,
14001 Dallas Parkway, Dallas, Texas, 75240


Attention:  President, 
Fax No:  (1-972) 934-6718


and


GEOPETRO
RESOURCES COMPANY


Suite 700, One
Maritime Plaza, San Francisco, California 94111


Attention:  President, Fax No:  (1-415) 398-9227


 


Unless there is evidence that it was received
earlier, all notices and communications given in connection with this Agreement
shall be deemed to be sufficiently given if delivered by courier upon the date
of signature of the courier’s delivery ticket. A Party may change its address
for service by giving written notice thereof to the other Parties.


 


8.5                               TRANSACTION EXPENSES


 


Each party shall pay its own costs and
expenses of and incidental to the negotiation, preparation, execution and
implementation by it of this Agreement and of all other documents referred to
in it.


 


8.6                               ASSIGNMENT, SUCCESSIONS IN
INTEREST


 


This Agreement and the provisions hereof
shall inure to the benefit of and be binding upon the Parties and their
respective successors and permitted assigns. No Party may assign its rights
under this Agreement unless as provided for in the Shareholders Agreement.


 


8.7                               GOVERNING LAW


 


This Agreement shall be governed by and
construed in accordance with the laws of Hong Kong.


 


The courts of Hong Kong shall have
non-exclusive jurisdiction to hear and determine any suit, action or
proceedings (“Proceedings”), and
to settle any disputes, which may arise out of or in connection with this
Agreement and, for such purposes, the parties hereto irrevocably submit to the
jurisdiction of the courts of Hong Kong.


 


21

















 


Each party irrevocably waives any objection
which it might at any time have to the courts of Hong Kong being nominated as
the forum to hear and determine any proceedings and to settle any disputes and
agrees not to claim that the courts of Hong Kong are not a convenient or
appropriate forum.


 


8.8                               FURTHER ASSURANCES


 


Each of the Parties shall from time to time
and at all times on and after the Closing Date, without further consideration,
do and perform all such further acts and things, and execute and deliver all
such further agreements, assurances, notices, releases and other documents and
instruments, as may reasonably be required to more fully assure the transfer of
CGB2 Shares to the Buyer and the performance of the Buyer in carrying out the
Earning Obligation and making the Development Loans in accordance with the
provisions of this Agreement, the Shareholders Agreement, and the Restated
Memorandum and Articles, and otherwise to assure the carrying out of the intent
and purpose of this Agreement, the Shareholders Agreement attached, and the
Restated Memorandum and Articles:


 


a)                                      the
performance of any Party of its obligations under this Agreement;


 


b)                                     the
performance of any Party of its obligations under the Shareholders Agreement;


 


c)                                      the
performance of any Party of its obligations under the Restated Memorandum and
Articles; and


 


d)                                     the
carrying out of the intent and purpose of this Agreement, the Shareholders
Agreement and the Restated Memorandum and Articles.


 


8.9                               WAIVER


 


The failure to exercise or delay in
exercising a right or remedy provided by this Agreement or by law does not
impair or constitute a waiver of the right or remedy or an impairment of or a
waiver of other rights or remedies. No single or partial exercise of a right or
remedy provided by this Agreement or by law prevents further exercise of the
right or remedy or the exercise of another right or remedy. No waiver by any
Party shall be effective unless in writing, and a waiver shall affect only the
matter, and the occurrence thereof, specifically identified in the writing
granting such waiver and shall not extend to any other matter or occurrence.


 


8.10                        SEVERABILITY


 


If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.


 


8.11                        RIGHTS CUMULATIVE


 


a)                                      Each
Party’s rights and remedies contained in this Agreement are cumulative and not
exclusive of rights or remedies provided by Applicable Law.


 


b)                                     Except
to the extent that they have been performed and except where this Agreement
provides otherwise, the obligations contained in this Agreement remain in force
after Closing.


 


c)                                      All
payments made by the Parties under Article-6 shall be made gross, free of right
of counterclaim or set off and without deduction of any kind other than any
deductions required by law.


 


22

















 


8.12                        NON MERGER


 


The provisions contained in this Agreement
shall survive the Closing and shall not merge in any transfer or other document
or instrument issuing pursuant hereto or in connection herewith. Without
limiting the generality of the foregoing, the liability of a Party for any
breach of any of its representations, warranties, covenants, agreements or
other obligations hereunder prior to the completion of the purchase and sale
contemplated hereby shall not be extinguished or in any manner diminished by
such completion.


 


8.13                        MUTUAL DRAFTING


 


This Agreement, the Shareholders Agreement,
and the Restated Memorandum and Articles, are the joint product of the Sellers,
the Buyer and the Guarantor and each provision hereof and thereof has been
subject to the mutual consideration, negotiation and agreement of all of the
Parties and shall not be construed for or against any Party.


 


8.14                        TIME OF ESSENCE


 


Time shall be of the essence in this
Agreement.


 


8.15                        COUNTERPARTS


 


This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be an
original, but all the counterparts together shall constitute one and the same
instrument and have the same force and effect as if all of the Parties had
executed the same instrument.


 


23

















 


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


 


	
   

  	
  The GUARANTOR

  CNPC (HONG KONG) Limited

  	
   

  	
  The BUYER

  CNPCHK (Indonesia) Limited

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
    /s/ Wang Mingcai

  	
   

  	
   

  	
    /s/ Wang Mingcai

  	
   

  
	
   

  	
  Wang Mingcai

  	
   

  	
  Wang Mingcai

  
	
   

  	
  Chairman

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The SELLERS

  GEOPETRO RESOURCES COMPANY

  	
   

  	
  

  CONTINENTAL ENERGY CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
    /s/ S. J. Doshi

  	
   

  	
   

  	
    /s/ Richard L. McAdoo

  	
   

  
	
   

  	
  S. J. Doshi

  	
   

  	
  Richard L. McAdoo

  
	
   

  	
  President and CEO

  	
   

  	
  President and CEO

  



 


24

















 


Schedule to the Continental-GeoPetro
(Bengara-II) Ltd.


Shares Sale and Purchase Agreement       September
2006


 


SCHEDULE-A


FINANCIAL STATEMENTS


 


List of Contents Schedule-A – Copies of
Financial Statements which includes:


 


1.               CGB2 Balance Sheet
31 August 2006.


2.               CGB2 Cost Recovery
Statement 31 August 2006.


3.               CGB2 Income
Statement 31 August 2006.


4.               CGB2 Shareholder
Loans Joint Interest Billing Statement 31 August 2006.


5.               CGB2 Shareholder
Loans Joint Interest Billing Statement Continental 31 August 2006.


6.               CGB2 Shareholder
Loans Joint Interest Billing Statement GeoPetro 31 August 2006.


 


25

















 


Continental GeoPetro (Bengara-II) Ltd.


Monthly Financial Statements Expressed in US$


Balance Sheet


 


	
   

  	
   

  	
  31-Aug-06

  	
   

  
	
   

  	
   

  	
  Since PSC Projection Inception - 4Dec 97

  	
   

  
	
  Description of Account

  	
   

  	
  Balance
  at

  End Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ASSETS

  	
   

  	
   

  	
   

  
	
  Cash on Hand

  	
   

  	
   

  	
   

  
	
  Cash in Bank
  Accounts - US$ Accounts

  	
   

  	
  $

  	
  42,501.78

  	
   

  
	
  Cash in Bank
  Accounts - Rupiah Accounts

  	
   

  	
  $

  	
  1,184.75

  	
   

  
	
  Petty Cash

  	
   

  	
  $

  	
  1,667.83

  	
   

  
	
  Cash In
  Transit

  	
   

  	
  $

  	
  2,000.00

  	
   

  
	
  Total
  Cash on Hand

  	
   

  	
  $

  	
  47,354.36

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounts
  Receivable

  	
   

  	
   

  	
   

  
	
  Pertamina
  Working Advance

  	
   

  	
  $

  	
  75,000.00

  	
   

  
	
  Advances
  Made to Employees & Others

  	
   

  	
  $

  	
  —

  	
   

  
	
  Total Accounts
  Receivable

  	
   

  	
  $

  	
  75,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Inventory

  	
   

  	
   

  	
   

  
	
  Warehouse
  Stock - Capital Expenditure Items

  	
   

  	
  $

  	
  —

  	
   

  
	
  Warehouse
  Stock - Non-Capital Expense Items

  	
   

  	
  $

  	
  —

  	
   

  
	
  Inventory in
  Transit

  	
   

  	
  $

  	
  —

  	
   

  
	
  Total
  Inventory

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Prepaid
  Expenses

  	
   

  	
   

  	
   

  
	
  Prepaid Rent
  & Insurance

  	
   

  	
  $

  	
  15,910.62

  	
   

  
	
  Deposits
  & Advance Payments to Vendors/Contractors

  	
   

  	
  $

  	
  16,564.20

  	
   

  
	
  Total
  Prepaid Expenses

  	
   

  	
  $

  	
  32,474.82

  	
   

  
	
  Total Current Assets

  	
   

  	
  $

  	
  154,829.18

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Capitalized
  Property, Plant & Equipment

  	
   

  	
   

  	
   

  
	
  Property
  & Equipment not charged to cost recovery, net

  	
   

  	
   

  	
   

  
	
  Property
  & Equipment charged to cost recovery, net

  	
   

  	
  $

  	
  0.01

  	
   

  
	
  Total
  Capitalized Property, Plant & Equipment

  	
   

  	
  $

  	
  0.01

  	
   

  
	
  TOTAL ASSETS

  	
   

  	
  $

  	
  154,829.19

  	
   

  
	
  LIABILITIES

  	
   

  	
   

  	
   

  
	
  Jamsostek
  Social Insurance Payable

  	
   

  	
  $

  	
  —

  	
   

  
	
  PPh21 -
  Employee Withholding Tax Payable

  	
   

  	
  $

  	
  9,472.24

  	
   

  
	
  PPH23 -
  Vendor Withholding Taxes Payable

  	
   

  	
  $

  	
  —

  	
   

  
	
  Value Added
  Tax Payable

  	
   

  	
  $

  	
  3,506.60

  	
   

  
	
  Accrued
  Liabilities - PSC Operations

  	
   

  	
  $

  	
  —

  	
   

  
	
  Accrued
  Liabilities - PSC Operations-Pertamina

  	
   

  	
  $

  	
  —

  	
   

  
	
  Trade
  Accounts Payable - PSC Operations

  	
   

  	
  $

  	
  8,390.80

  	
   

  
	
  Total Current Liabilities

  	
   

  	
  $

  	
  21,369.64

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Joint
  Venture Contribution from Continental Energy Corp.

  	
   

  	
  $

  	
  3,824,963.10

  	
   

  
	
  Joint
  Venture Contribution from GeoPetro Resources Inc.

  	
   

  	
  $

  	
  2,539,909.26

  	
   

  
	
  Joint
  Venture Contribution from China Wisdom Int’l (HK) Ltd.

  	
   

  	
  $

  	
  —

  	
   

  
	
  Total Long Term Debt

  	
   

  	
  $

  	
  6,364,872.36

  	
   

  
	
  TOTAL LIABILITIES

  	
   

  	
  $

  	
  6,386,242.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EQUITY

  	
   

  	
   

  	
   

  
	
  Capital
  Stock (US$50,000 Fully amortized)

  	
   

  	
  $

  	
  —

  	
   

  
	
  Earnings
  (Deficit) Attributable to No Recoverable Costs

  	
   

  	
  $

  	
  (7,636.68

  	
  )

  
	
  Earnings
  (Deficit) Attributable to PSC Cost Recovery

  	
   

  	
  $

  	
  (6,223,776.88

  	
  )

  
	
  TOTAL EQUITY

  	
   

  	
  $

  	
  (6,231,413.56

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL EQUITY & LIABILITIES

  	
   

  	
  $

  	
  154,828.44

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Check sum

  	
   

  	
  $

  	
  (0.75

  	
  ) 

  
									



 


26

















 


Continental GeoPetro (Bengara-II) Ltd.


Monthly Financial Statements Expressed in US$


Cost Recovery Statement


 


	
   

  	
   

  	
   

  	
   

  	
  As At Month Ended: 31-Aug-06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Since PSC Project Inception - December 4, 1997

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Balance at 

  	
   

  	
  Transactions 

  	
   

  	
  Balance at 

  	
   

  
	
  Description of Account

  	
   

  	
   

  	
   

  	
  Start Month

  	
   

  	
  During Month

  	
   

  	
  End Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Summary of Expenditures Under the Bengara-II PSC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accumulated Recoverable Costs by Category
  of Expenditure

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Geological & Geophysical

  	
   

  	
   

  	
   

  	
  $

  	
  2,457,729.48

  	
   

  	
  $

  	
  13,333.38

  	
   

  	
  $

  	
  2,471,062.86

  	
   

  
	
  Engineering & Development

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  Field Utilities, Camp, & Infrastructure

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  Exploration Administration (Non-AFE Site
  & Field Offices G&A)

  	
   

  	
   

  	
   

  	
  $

  	
  16,459.57

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  16,459.57

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Budget
  AFE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Drilling & Workover

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AFE # 03-0001 Drill Pungit-#1 Well

  	
   

  	
  $

  	
  4,728,877

  	
   

  	
  $

  	
  325,190.41

  	
   

  	
  $

  	
  5,157.47

  	
   

  	
  $

  	
  330,347.88

  	
   

  
	
  AFE # 04-0002 Drill Sebaraba-#1 Well

  	
   

  	
  $

  	
  6,199,474

  	
   

  	
  $

  	
  285,886.69

  	
   

  	
  $

  	
  5,157.47

  	
   

  	
  $

  	
  291,044.16

  	
   

  
	
  AFE # 03-0003 Drill Apung-#1 Well

  	
   

  	
  $

  	
  4,339,008

  	
   

  	
  $

  	
  261,602.64

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  261, 602.64

  	
   

  
	
  AFE # 05-0001 Drill Mulyo-#1 Well

  	
   

  	
  $

  	
  2,844,708

  	
   

  	
  $

  	
  45,609.95

  	
   

  	
  $

  	
  5,157.47

  	
   

  	
  $

  	
  50,767.42

  	
   

  
	
  AFE # 05-0002 Drill Bekawas-#1 Well

  	
   

  	
  $

  	
  2,927,470

  	
   

  	
  $

  	
  45,609.95

  	
   

  	
  $

  	
  5,157.47

  	
   

  	
  $

  	
  50,767.42

  	
   

  
	
  AFE # 04-0001 Drill Salinbatu-#1 Well

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AFE # 04-0002 Drill Mapat-#1 Well

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AFE # 04-0003 Drill Linta-#1 Well

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AFE # 04-0004 Drill Kuju-#1 Well

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  21,039,537

  	
   

  	
  $

  	
  963,899.64

  	
   

  	
  $

  	
  20,629.88

  	
   

  	
  $

  	
  984,529.52

  	
   

  
	
  Production

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  General & Administrative

  	
   

  	
   

  	
   

  	
  $

  	
  2,568,838.62

  	
   

  	
  $

  	
  65,896.13

  	
   

  	
  $

  	
  2,634,734.75

  	
   

  
	
  Warehouse Stock - Capital Expenditure Items

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  Warehouse Stock - Non-Capital Expense Items

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  Depreciation of Capital Assets Placed in
  Service

  	
   

  	
   

  	
   

  	
  $

  	
  14,385.34

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  14,385.34

  	
   

  
	
  Subtotal Accumulated Cost Recovery

  	
   

  	
   

  	
   

  	
  $

  	
  6,021,312.65

  	
   

  	
  $

  	
  99,859.39

  	
   

  	
  $

  	
  6,121,172.04

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capital Assets Not yet Charged to Cost
  Recovery by Depreciation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Inventory of Capital Assets Not Yet Placed
  In Service

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  Inventory of Non-Capital Goods

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  Capitalized Property, Plant and Equipment,
  net of depreciation

  	
   

  	
   

  	
   

  	
  $

  	
  10,377.38

  	
   

  	
  $

  	
  (10,377.37

  	
  ) 

  	
  $

  	
  0.01

  	
   

  
	
  Subtotal Recoverable Expenditure Not Yet
  Charged to Cost Recovery

  	
   

  	
   

  	
   

  	
  $

  	
  10,377.38

  	
   

  	
  $

  	
  (10,377.37

  	
  ) 

  	
  $

  	
  0.01

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Amount of Cost Recoverable
  Expenditures Made by Company and for which Corresponding Full Recovery of
  Such Cost is Expected

  	
   

  	
   

  	
   

  	
  $

  	
  6,031,690.03

  	
   

  	
  $

  	
  89,482.02

  	
   

  	
  $

  	
  6,121,172.05

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capitalized Property, Plant and Equipment,
  net of depreciation, which Company has elected NOT to Charge to Cost Recovery
  but for which expenditure has been made. (See Note: )

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total amount of expenditure made by Company
  on the Bengara -II PSC Exploration Project to date

  	
   

  	
   

  	
   

  	
  $

  	
  6,031,690.03

  	
   

  	
  $

  	
  89,482.02

  	
   

  	
  $

  	
  6,121,172.05

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Costs Recovered From Production

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cost Recovery Limitation by FTP of this
  Month’s Production Revenue Less: Current Period’s Operating Cost’s Recovered
  Excess Available Cost Recovery Proceeds to Apply to Prior Period Costs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accumulated Balance Unrecovered Costs from
  Prior Periods

  	
   

  	
   

  	
   

  	
  $

  	
  5,816,425.17

  	
   

  	
  $

  	
  304,746.87

  	
   

  	
  $

  	
  6,121,172.04

  	
   

  
																		



 


27

















 


Continental GeoPetro (Bengara-II) Ltd.


Monthly Financial Statements Expressed in US$


Profit/Loss Statement


 


	
   

  	
   

  	
   

  	
   

  	
  As At month Ended: 31-Aug-06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Since PSC Project Inception - December 4, 1997

  	
   

  
	
  Reference

  	
   

  	
  Description of Account

  	
   

  	
  Balance at

  Start Month

  	
   

  	
  Transactions

  During Month

  	
   

  	
  Balance at

  End Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REVENUES:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PSC Production Revenues

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Gross Revenue from sales of Crude Oil

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
  Less: Transport Tariffs & Adjustments

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
  Subtotal PSC Revenue

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
  Less: Cost Recovery to Company

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
  Less: Investment Credits to Company

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
  Subtotal Shareable PSC Profit Oil Revenue

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
  Less: Pertamina Production Share:

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  See Note:
  7.a

  	
   

  	
  TOTAL
  Company PROFIT OIL REVENUE

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Company Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total Company Share of Profit Oil Revenue

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
  Total Cost Recovery

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
  Total Investment Credits

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  See Note:
  7.a

  	
   

  	
  TOTAL
  Company INCOME

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXPENDITURES:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Geological & Geophysical

  	
   

  	
  $

  	
  2,457,729.48

  	
   

  	
  $

  	
  13,333.38

  	
   

  	
  $

  	
   2,471,062.86

  	
   

  
	
   

  	
   

  	
  Engineering & Development

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
  Development Administration (Site &
  Field Offices G&A)

  	
   

  	
  $

  	
  16,459.57

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
   16,459.57

  	
   

  
	
   

  	
   

  	
  Drilling & Workover

  	
   

  	
  $

  	
  963,899.64

  	
   

  	
  $

  	
  20,629.88

  	
   

  	
  $

  	
   984,529.52

  	
   

  
	
   

  	
   

  	
  Production

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
  Surface Production Facilities

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
  Marine Production Transport/Storage
  Facilities

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
  General & Administrative

  	
   

  	
  $

  	
  2,568,838.62

  	
   

  	
  $

  	
  65,896.13

  	
   

  	
  $

  	
  2,634,734.75

  	
   

  
	
   

  	
   

  	
  For Warehouse Stock - Non-Capital ltems

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
  For Warehouse Stock - Capital ltems

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
  Depreciation of Capital Assets Placed in
  Service

  	
   

  	
  $

  	
  14,385.34

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  14,385.34

  	
   

  
	
   

  	
   

  	
  Other Costs Company Elects NOT to Charge to
  Cost Recovery

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
  PPh21 - Employee Withholding Tax Paid

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
  PPH23 - Vendor Withholding Tax Paid

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
  Value Added Tax Paid

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
  Income Tax Paid on Profit Oil Revenue

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
  TOTAL
  Company EXPENDITURES

  	
   

  	
  $

  	
  6,021,312.65

  	
   

  	
  $

  	
  99,859.39

  	
   

  	
  $

  	
  6,121,172.04

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Net After Taxes Company Income (Loss):

  	
   

  	
  $

  	
  (6,021,312.65

  	
  )

  	
  $

  	
  (99,859.39

  	
  )

  	
  $

  	
  (6,121,172.04

  	
  )

  



 


28

















 


Continental GeoPetro (Bengara-II) Ltd.


Monthly Financial Statements Expressed in US$


Joint Interest Billing Statement


Contribution
Parity


 


	
   

  	
   

  	
   

  	
   

  	
  As At Month Ended: 31-Aug-06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  JV Accounts Since August 1, 1998

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Since PSC Project Inception - December 4, 1997

  	
   

  
	
  Effective

  Date

  	
   

  	
  Description of Account

  	
   

  	
  Cash

  Contributions

  to JV Ops

  	
   

  	
  Share of 

  Allocated

  Overheads

  	
   

  	
  Total

  Contribution

  to JV

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31-Aug-06

  	
   

  	
  Actual
  Investment Made in Company to Date

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By Continental Energy Corp.

  	
   

  	
  $

  	
  3,311,363.10

  	
   

  	
  $

  	
  513,600.00

  	
   

  	
  $

  	
  3,824,963.10

  	
   

  
	
   

  	
   

  	
  By GeoPetro Resources Inc.

  	
   

  	
  $

  	
  2,197,509.25

  	
   

  	
  $

  	
  342,400.00

  	
   

  	
  $

  	
  2,539,909.25

  	
   

  
	
  See Note
  9.a

  	
   

  	
  Total Joint Venture Contribution Made

  	
   

  	
  $

  	
  5,508,872.35

  	
   

  	
  $

  	
  856,000.00

  	
   

  	
  $

  	
  6,364,872.35

  	
   

  



 


	
  31-Aug-06

  	
   

  	
  Actual Investment Made in Company to Date In %
  Terms

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By Continental Energy Corp

  	
   

  	
  60.10964

  	
  %

  	
  60.00000

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  By GeoPetro Resources Inc.

  	
   

  	
  39.89036

  	
  %

  	
  40.00000

  	
  %

  	
   

  	
   

  
	
  See Note 9.a

  	
   

  	
  Total Joint Venture
  Contributions Made

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
   

  	
   

  



 


	
  31-Aug-06

  	
   

  	
  Over/Under Investment Made In Company to Date in %
  Terms

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  60%

  	
   

  	
  By Continental Energy Corp.

  	
   

  	
  0.10964

  	
  %

  	
  Over paid

  	
   

  	
   

  	
   

  
	
  40%

  	
   

  	
  By
  GeoPetro Resources Inc.

  	
   

  	
  -0.10964

  	
  %

  	
  Short Fall

  	
   

  	
   

  	
   

  



 


	
   

  	
   

  	
  Parity Calculation - If CEC Overpaid

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Continental Energy Has Paid

  	
   

  	
  $

  	
  3,311,363.10

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GeoPetro Should Pay Proportional 40% or 

  	
   

  	
  $

  	
  2,207,575.40

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GeoPetro Has Actually Paid Only

  	
   

  	
  $

  	
  2,197,509.25

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Amount GeoPetro Owes JV to
  Make Up Short Fall

  	
   

  	
  $

  	
  10,066.15

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


	
   

  	
   

  	
  Parity Calculation - If GeoPetro Overpaid

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GeoPetro Resources Has Paid

  	
   

  	
  Not Applicable

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CEC Should Pay Proportional 60% or

  	
   

  	
  Not Applicable

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CEC Has Actually Paid Only

  	
   

  	
  Not Applicable

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Amount CEC Owes JV to Make
  Up Short Fall

  	
   

  	
  Not Applicable

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


29

















 


Continental GeoPetro (Bengara-II) Ltd.


Monthly Financial Statements Expressed in US$


Joint Interest Billing Statement


CONTINENTAL ENERGY CORPORATION


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  As At Month Ended:   31-Aug-06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  JV Accounts Since August 1, 1998

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Since PSC Project Inception - December 4, 1997

  	
   

  
	
  Month of

  transaction

  	
   

  	
  Journal

  Voucher

  	
   

  	
  Detailed Listing of Actual Joint Venture Advances

  Made to Company by Continental Energy Corporation

  	
   

  	
  Cash

  Contributions

  to JV Ops

  	
   

  	
  Share of

  Allocated

  Overheads

  	
   

  	
  Total

  Contribution

  to JV

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  List of Wire Transfers, InterCo Billings &
  Adjustments

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  01-Jan-00

  	
   

  	
   

  	
   

  	
  JV Starting Point
  Contribution as per FOA-2.c at 01-JAN-2000

  	
   

  	
  $

  	
  225,00.00

  	
   

  	
   

  	
   

  	
  $

  	
  225,00.00

  	
   

  
	
  0-Jan-00

  	
   

  	
   

  	
   

  	
  CEC’s Credit to
  JV, Paid by GeoPetro Per FOA-2.a.1 & FOA-5.a on Behalf CEC

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  100,000.00

  	
   

  
	
  0-Mar-00

  	
   

  	
   

  	
   

  	
  Adjustment
  Compensate GeoPetro FOA-2.c Payments to Start Point Balance

  	
   

  	
  $

  	
  (90,000.00

  	
  )

  	
   

  	
   

  	
  $

  	
  (90,000.00

  	
  )

  
	
  0-Mar-00

  	
   

  	
   

  	
   

  	
  CEC’s Credit to
  JV, Paid by GeoPetro Per FOA-2.c on Behalf CEC

  	
   

  	
  $

  	
  75,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  75,000.00

  	
   

  
	
  07-Apr-00

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  300,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  300,000.00

  	
   

  
	
  10-Apr-00

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  100,000.00

  	
   

  
	
  20-Apr-00

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  32,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  32,000.00

  	
   

  
	
  01-Jun-00

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  20-Jul-00

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  90,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  90,000.00

  	
   

  
	
  31-Jul-00

  	
   

  	
   

  	
   

  	
  Adjustment: To
  Actual JV Accounting Records Parity, as Per FOA-2.b

  	
   

  	
  $

  	
  (9,128.86

  	
  )

  	
   

  	
   

  	
  $

  	
  (9,128.86

  	
  )

  
	
  01-Aug-00

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  04-Sep-00

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  60,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  60,000.00

  	
   

  
	
  30-Nov-00

  	
   

  	
   

  	
   

  	
  CEC Direct
  Billing of JV Related Expenses

  	
   

  	
  $

  	
  24,222.00

  	
   

  	
   

  	
   

  	
  $

  	
  24,222.00

  	
   

  
	
  06-Dec-00

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  13-Mar-01

  	
   

  	
   

  	
   

  	
  Adjustment:
  Repayment to CEC From Funds to JV Ops

  	
   

  	
  $

  	
  (4,000.00

  	
  )

  	
   

  	
   

  	
  $

  	
  (4,000.00

  	
  )

  
	
  05-Aug-02

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  31-Aug-02

  	
   

  	
   

  	
   

  	
  CEC Paid JV
  Company Debt

  	
   

  	
  $

  	
  382,505.36

  	
   

  	
   

  	
   

  	
  $

  	
  382,505.36

  	
   

  
	
  31-Aug-02

  	
   

  	
   

  	
   

  	
  Adjustment:
  Transfer InterCo A/R Billing from GATB to Yapen

  	
   

  	
  $

  	
  (36,022.90

  	
  )

  	
   

  	
   

  	
  $

  	
  (36,022.90

  	
  )

  
	
  31-Aug-02

  	
   

  	
   

  	
   

  	
  Adjustment:
  Offset InterCo A/R Billing From Yapen

  	
   

  	
  $

  	
  (46,146.15

  	
  )

  	
   

  	
   

  	
  $

  	
  (46,146.15

  	
  )

  
	
  31-Aug-02

  	
   

  	
   

  	
   

  	
  Adjustment:
  Offset InterCo A/R Billing From GATB Against CEC JV Advances

  	
   

  	
  $

  	
  (58,989.98

  	
  )

  	
   

  	
   

  	
  $

  	
  (58,989.98

  	
  )

  
	
  13-Sep-02

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  30,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  30,000.00

  	
   

  
	
  21-Oct-02

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  30,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  30,000.00

  	
   

  
	
  30-Oct-02

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  35,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  35,000.00

  	
   

  
	
  31-Oct-02

  	
   

  	
   

  	
   

  	
  Adjustment: To
  Offset Yapen JV Parity Shortfall as per Directors

  	
   

  	
  $

  	
  (56,227.37

  	
  )

  	
   

  	
   

  	
  $

  	
  (56,227.37

  	
  )

  
	
  12-Nov-02

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  19-Nov-02

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,045.92

  	
   

  	
   

  	
   

  	
  $

  	
  15,045.92

  	
   

  
	
  02-Dec-02

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  5,510.65

  	
   

  	
   

  	
   

  	
  $

  	
  5,510.65

  	
   

  
	
  12-May-03

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  14-Aug-03

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  100,000.00

  	
   

  
	
  05-Nov-03

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  50,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  50,000.00

  	
   

  
	
  31-Dec-03

  	
   

  	
   

  	
   

  	
  CEC Pays Schell
  Director Fees

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  19-Feb-04

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  30,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  30,000.00

  	
   

  
	
  19-Feb-04

  	
   

  	
   

  	
   

  	
  CEC Pays BVI Fees
  for CGB2

  	
   

  	
  $

  	
  115.75

  	
   

  	
   

  	
   

  	
  $

  	
  115.75

  	
   

  
	
  23-Mar-04

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  30,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  30,000.00

  	
   

  
	
  13-Apr-04

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  24,985.00

  	
   

  	
   

  	
   

  	
  $

  	
  24,985.00

  	
   

  
	
  30-Apr-04

  	
   

  	
   

  	
   

  	
  Adjustment To
  Reallocate Overheads Previously Credited to CWI

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  32,400.00

  	
   

  	
  $

  	
  32,400.00

  	
   

  
	
  30-Apr-04

  	
   

  	
   

  	
   

  	
  Adjustment To
  Reallocate Cash JV Contribution Previously Credited to CWI

  	
   

  	
  $

  	
  431,869.75

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  431,869.75

  	
   

  
	
  30-Apr-04

  	
   

  	
  CEC Accumulated
  Share Overseas Overhead Allocations to end this date

  	
   

  	
   

  	
   

  	
  $

  	
  313,200.00

  	
   

  	
  $

  	
  313,200.00

  	
   

  
	
  31-May-04

  	
   

  	
   

  	
   

  	
  CEC Paid CGB2 BVI
  Agent Annual Fees

  	
   

  	
  $

  	
  600.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  600.00

  	
   

  
	
  01-Jun-04

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  17-Jan-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  12,500.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  12,500.00

  	
   

  
	
  17-Jan-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  12,500.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  12,500.00

  	
   

  
	
  18-Jan-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  12,500.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  12,500.00

  	
   

  
	
  19-Jan-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  2,500.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  2,500.00

  	
   

  
	
  03-Mar-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  04-Mar-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  07-Mar-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  08-Mar-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  4,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  4,000.00

  	
   

  
	
  06-Apr-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  75,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  75,000.00

  	
   

  
	
  11-Apr-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  30,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  30,000.00

  	
   

  
	
  03-May-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  23-May-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  45,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  45,000.00

  	
   

  
	
  05-Jul-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  31-Jul-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  31-Jul-05

  	
   

  	
   

  	
   

  	
  Credit value
  China Wisdom FO finder’s fees paid in shares by CEC on behalf JV

  	
   

  	
  $

  	
  552,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  552,000.00

  	
   

  
	
  31-Jul-05

  	
   

  	
   

  	
   

  	
  Adjust: Zero out
  I/O payable by CGB2 to GATB as Credit CEC JV Contribution

  	
   

  	
  $

  	
  38,716.62

  	
   

  	
   

  	
   

  	
  $

  	
  38,716.62

  	
   

  
	
  31-Jul-05

  	
   

  	
  Correction
  journal decreasing allocated overhead

  	
   

  	
   

  	
   

  	
  $

  	
  (25,200.00

  	
  )

  	
  $

  	
  (25,200.00

  	
  )

  
	
  03-Aug-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  05-Sep-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  30-Sep-05

  	
   

  	
   

  	
   

  	
  Adjust Zerp pit
  O/O payable by CGB2 to GATB as Credit CEC JV Contribution

  	
   

  	
  $

  	
  2,981.56

  	
   

  	
   

  	
   

  	
  $

  	
  2,981.56

  	
   

  
	
  06-Oct-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  31-Oct-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  22,500.00

  	
   

  	
   

  	
   

  	
  $

  	
  22,500.00

  	
   

  
	
  10-Nov-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  43,800.00

  	
   

  	
   

  	
   

  	
  $

  	
  43,800.00

  	
   

  
	
  15-Nov-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  68,400.00

  	
   

  	
   

  	
   

  	
  $

  	
  68,400.00

  	
   

  
	
  08-Dec-05

  	
   

  	
   

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  31-Dec-05

  	
   

  	
   

  	
   

  	
  CEC Funds CGB2 JV
  Ops: Payment ATE’s salary Nov & Dec 05

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  31-Dec-05

  	
   

  	
  JVLD-011

  	
   

  	
  Adjust To parity
  China Wisdom finder’s Fee Paid by CEC

  	
   

  	
  $

  	
  (220,800.00

  	
  )

  	
   

  	
   

  	
  $

  	
  (220,800.00

  	
  )

  
	
  05-Jan-06

  	
   

  	
  JVAD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  31-Jan-06

  	
   

  	
  JVAD-012

  	
   

  	
  CEC Funds CGB2 JV
  Ops: Cash Advance paid ATE in USA

  	
   

  	
  $

  	
  7,500.00

  	
   

  	
   

  	
   

  	
  $

  	
  7,500.00

  	
   

  
	
  03-Feb-06

  	
   

  	
  JVBD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  09-Feb-06

  	
   

  	
  JVBD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  16-Feb-06

  	
   

  	
  JVBD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  45,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  45,000.00

  	
   

  
	
  28-Feb-06

  	
   

  	
  JVBD-008

  	
   

  	
  Adjust To Parity
  gain realized from zero out GATB I/O payable

  	
   

  	
  $

  	
  (16,679.27

  	
  )

  	
   

  	
   

  	
  $

  	
  (16,679.27

  	
  )

  
	
  02-Mar-06

  	
   

  	
  JVCD-011

  	
   

  	
  CEC Funded CGB2
  JV Ops: Paid ATE outstanding salary catch up thru Jan 06

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  02-Mar-06

  	
   

  	
  JVCD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  17-Mar-06

  	
   

  	
  JVCD-001

  	
   

  	
  CGX Pmt on behalf
  CGB2 . CEC 50% Share: B2 G&G work

  	
   

  	
  $

  	
  7,500.00

  	
   

  	
   

  	
   

  	
  $

  	
  7,500.00

  	
   

  
	
  31-Mar-06

  	
   

  	
  JVCD-009

  	
   

  	
  CGX Pmt on behalf
  CGB2 - CEC 50% Share. seismic reprocessing

  	
   

  	
  $

  	
  7,805.79

  	
   

  	
   

  	
   

  	
  $

  	
  7,805.79

  	
   

  
	
  31-Mar-06

  	
   

  	
  JVCD-010

  	
   

  	
  CEC Funded CGB2
  JV Ops: Paid ATE&RLMc salaries for Feb 06

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  05-Apr-06

  	
   

  	
  JVDD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  4,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  4,000.00

  	
   

  
	
  05-Apr-06

  	
   

  	
  JVDD-008

  	
   

  	
  CEC Funded CGB2
  JV Ops: Paid ATE&RLMc salaries for Mar 06

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  30-Apr-06

  	
   

  	
  JVDD-009

  	
   

  	
  Adjust Parity
  Share Aug 05 May

  	
   

  	
  $

  	
  (18,000.00

  	
  )

  	
   

  	
   

  	
  $

  	
  (18,000.00

  	
  )

  
	
  30-Apr-06

  	
   

  	
  CEC Accumulated
  Share Overseas Overhead Allocation 2 Yrs 1May 04-30Apr 06

  	
   

  	
   

  	
   

  	
  $

  	
  174,000.00

  	
   

  	
  $

  	
  174,000.00

  	
   

  
	
  04-May-06

  	
   

  	
  JVED-001

  	
   

  	
  CEC Cash Funding
  to Joint Vnture for OPs

  	
   

  	
  $

  	
  9,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  9,000.00

  	
   

  
	
  04-May-06

  	
   

  	
  JVED-008

  	
   

  	
  CEC Funded CGB2
  JV OPS: Paid ATE&RLMc salaries for Apr 06

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  23-May-06

  	
   

  	
  JVED-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  2,500.00

  	
   

  	
   

  	
   

  	
  $

  	
  2,500.00

  	
   

  
	
  06-Jun-06

  	
   

  	
  JVFD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  6,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  6,000.00

  	
   

  
	
  06-Jun-06

  	
   

  	
  JVFD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  19,200.00

  	
   

  	
   

  	
   

  	
  $

  	
  19,200.00

  	
   

  
	
  26-Jun-06

  	
   

  	
  JVFD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  96, 000.00

  	
   

  	
   

  	
   

  	
  $

  	
  96, 000.00

  	
   

  
	
  30-Jun-06

  	
   

  	
  JVFD-008

  	
   

  	
  CEC Funded CGB2
  JV Ops: Paid ATE&RKMc salaries for May 06

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  30-Jun-06

  	
   

  	
  JVFD-009

  	
   

  	
  Adjust Parity
  Share May 06

  	
   

  	
  $

  	
  (2,000.00

  	
  )

  	
   

  	
   

  	
  $

  	
  (2,000.00

  	
  )

  
	
  05-Jul-06

  	
   

  	
  JVGD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  21,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  21,000.00

  	
   

  
	
  05-Jul-06

  	
   

  	
  JVGD-001

  	
   

  	
  Repayment loan to
  CGX account

  	
   

  	
  $

  	
  (2,500.00

  	
  )

  	
   

  	
   

  	
  $

  	
  (2,500.00

  	
  )

  
	
  31-Jul-06

  	
   

  	
  JVGD-008

  	
   

  	
  CEC Funded CGB2
  Jv Ops: Paid ATE&RLMc salaries for June 06

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  31-Jul-06

  	
   

  	
  JVGD-010

  	
   

  	
  Adjust: Party
  Share June 06

  	
   

  	
  $

  	
  (2,000.00

  	
  )

  	
   

  	
   

  	
  $

  	
  (2,000.00

  	
  )

  
	
  02-Aug-06

  	
   

  	
  JVHD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  41,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  41,000.00

  	
   

  
	
  29-Aug-06

  	
   

  	
  JVHD-001

  	
   

  	
  CEC Cash Funding
  to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  30-Aug-06

  	
   

  	
  JVHD-001

  	
   

  	
  Proceed sold
  price of GATB Debt

  	
   

  	
  $

  	
  99.23

  	
   

  	
   

  	
   

  	
  $

  	
  99.23

  	
   

  
	
  31-Aug-06

  	
   

  	
  JVHD-008

  	
   

  	
  CEC Funded CGB2
  JV Ops: Paid ATE&RLMc salaries for July 06

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  31-Aug-06

  	
   

  	
  JVHD-010

  	
   

  	
  Adjust Parity
  Share July 06

  	
   

  	
  $

  	
  (2,000.00

  	
  )

  	
   

  	
   

  	
  $

  	
  (2,000.00

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31-Aug-06

  	
   

  	
  CEC Accumulated
  Share Overseas Overhead Allocation Since 1 May 2006

  	
   

  	
   

  	
   

  	
  $

  	
  19,200.00

  	
   

  	
  $

  	
  19,200.00

  	
   

  
	
   

  	
  Total JV Cont Contribution Made by Continental as of
  this Report Date

  	
   

  	
  $

  	
  3,311,363.10

  	
   

  	
  $

  	
  513,600.00

  	
   

  	
  $

  	
  3,824,963.10

  	
   

  



 


30

















 


Continental GeoPetro (Bengara-II) Ltd.


Monthly Financial Statements Expressed in US$


Joint Interest Billing Statement


GeoPetro Resources Company


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  As At Month Ended:   31-Aug-06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  JV Accounts Since August 1, 1998

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Since PSC Project Inception - December 4, 1997

  	
   

  
	
  Month of

  transaction

  	
   

  	
  Journal

  Voucher

  	
   

  	
  Detailed Listing of Actual Joint Venture Advances

  Made to Company by GeoPetro Resources Company

  	
   

  	
  Cash

  Contributions

  to JV Ops

  	
   

  	
  Share of

  Allocated

  Overheads

  	
   

  	
  Total

  Contribution

  to JV

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  List of Wire Transfers, InterCo Billings &
  Adjustments

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  01-Jan-00

  	
   

  	
   

  	
   

  	
  JV
  Starting Point Contributions as per FOA-2.c at 01-JAN-2000

  	
   

  	
  $

  	
  —

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  30-Mar-00

  	
   

  	
   

  	
   

  	
  GeoPetro
  paid CEC as per FOA-2.c to match parity of historical JV Cost

  	
   

  	
  $

  	
  75,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  75,000.00

  	
   

  
	
  18-Jul-00

  	
   

  	
   

  	
   

  	
  GeoPetro
  payment pursuant to FOA-5.a

  	
   

  	
  $

  	
  66,667.00

  	
   

  	
   

  	
   

  	
  $

  	
  66,667.00

  	
   

  
	
  30-Oct-00

  	
   

  	
   

  	
   

  	
  GeoPetro
  Direct Billing of JV Related Expenses

  	
   

  	
  $

  	
  13,799.70

  	
   

  	
   

  	
   

  	
  $

  	
  13,799.70

  	
   

  
	
  30-Oct-00

  	
   

  	
   

  	
   

  	
  GeoPetro
  Direct Billing of JV Related Expenses

  	
   

  	
  $

  	
  8,120.22

  	
   

  	
   

  	
   

  	
  $

  	
  8,120.22

  	
   

  
	
  09-Jan- 01

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  29-Jan- 01

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  26- Feb-01

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  30,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  30,000.00

  	
   

  
	
  29-Mar-01

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  27-Apr-01

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  28-May-01

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  27-Jun-01

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  30-Jun-01

  	
   

  	
   

  	
   

  	
  GeoPetro
  Direct Billing of JV Related Expenses

  	
   

  	
  $

  	
  1,664.95

  	
   

  	
   

  	
   

  	
  $

  	
  1664.95

  	
   

  
	
  30-Jul-01

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  07-Dec-01

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  12,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  12,000.00

  	
   

  
	
  24-Jan-02

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  5,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  5,000.00

  	
   

  
	
  03-Apr-02

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  8,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  8,000.00

  	
   

  
	
  24-May-02

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  5,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  5,000.00

  	
   

  
	
  10-Jun-02 

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  2,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  2,000.00

  	
   

  
	
  31-Aug-02

  	
   

  	
   

  	
   

  	
  GeoPetro
  Paid JV Company Debt

  	
   

  	
  $

  	
  180,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  180,000.00

  	
   

  
	
  31-Aug-02

  	
   

  	
   

  	
   

  	
  GeoPetro
  Paid JV Company Debt

  	
   

  	
  $

  	
  36,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  36,000.00

  	
   

  
	
  31-Aug-02

  	
   

  	
   

  	
   

  	
  Adjustments
  Transfer interCO A/R Billing from GATB to Yapen

  	
   

  	
  $

  	
  (24,015.27

  	
  )

  	
   

  	
   

  	
  $

  	
  (24,015.27

  	
  )

  
	
  31-Aug-02

  	
   

  	
   

  	
   

  	
  Adjustments
  Offset InterCo A/R Billing form Yapen

  	
   

  	
  $

  	
  (30,764.10

  	
  )

  	
   

  	
   

  	
  $

  	
  (30,764.10

  	
  )

  
	
  24-Sep-02

  	
   

  	
   

  	
   

  	
  GeoPetro
  Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  5,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  5,000.00

  	
   

  
	
  25-Oct-02

  	
   

  	
   

  	
   

  	
  GeoPetro
  Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  19-Nov-02

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,030.61

  	
   

  	
   

  	
   

  	
  $

  	
  10,030.61

  	
   

  
	
  02-Dec-02

  	
   

  	
   

  	
   

  	
  GeoPetro
  Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  3,673.76

  	
   

  	
   

  	
   

  	
  $

  	
  3,673.76

  	
   

  
	
  02-Jan-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  15-Jan-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  04-Feb-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  14-Mar-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops 

  	
   

  	
  $

  	
  60,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  60,000.00

  	
   

  
	
  04-Apr-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  17-Apr-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  60,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  60,000.00

  	
   

  
	
  22-May-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  40,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  40,000.00

  	
   

  
	
  25-Jun-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  40,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  40,000.00

  	
   

  
	
  23-Jul-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  40,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  40,000.00

  	
   

  
	
  26-Aug-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops 

  	
   

  	
  $

  	
  22,002.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  22,002.00

  	
   

  
	
  26-Sep-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  13,333.56

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  13,333.56

  	
   

  
	
  11-Nov-13

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  31-Dec-03

  	
   

  	
   

  	
   

  	
  GeoPetro
  Pays Doshi Director Fees

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  29-Jan-04

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  04-Mar-04

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  08-Apr-04

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  30-Apr-04

  	
   

  	
   

  	
   

  	
  Adjustment
  To Reallocate Overheads Previously Credited to CWI

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  21,600.00

  	
   

  	
  $

  	
  21,600.00

  	
   

  
	
  30-Apr-04

  	
   

  	
   

  	
   

  	
  Adjustment
  To Reallocate Cash JV Contribution Previously Credited to CWI

  	
   

  	
  $

  	
  287,913.17

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  287,913.17

  	
   

  
	
  30-Apr-04

  	
   

  	
  GeoPetro
  Accumulated Share Overseas Overhead Allocations to end this date

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  208,800.00

  	
   

  	
  $

  	
  208,800.00

  	
   

  
	
  04-May-04

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  08-Jun-04

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  02-Jul-04

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  03-Aug-04

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  14-Sep-04

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  19-Oct-04

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  10-Dec-04

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  14-Jan-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  20,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  02-Mar-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  15,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  04-Apr-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  03-May-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  03-Jun-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  28,000.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  28,000.00

  	
   

  
	
  04-Jul-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  31-Jul-05

  	
   

  	
  Correction
  journal decreasing allocated overhead

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  (16,800.00

  	
  )

  	
  $

  	
  (16,800.00

  	
  )

  
	
  03-Aug-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  05-Sep-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  05-Oct-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  09-Nov-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  29,200.00

  	
   

  	
   

  	
   

  	
  $

  	
  29,200.00

  	
   

  
	
  16-Nov-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  45,600.00

  	
   

  	
   

  	
   

  	
  $

  	
  45,600.00

  	
   

  
	
  08-Dec-05

  	
   

  	
   

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  31-Dec-05

  	
   

  	
  JVLD-011

  	
   

  	
  Adjust
  To Panty China Wisdom Finder’s Fee Paid by CEC

  	
   

  	
  $

  	
  220,800.00

  	
   

  	
   

  	
   

  	
  $

  	
  220,800.00

  	
   

  
	
  04-Jan-06

  	
   

  	
  JVAD-001

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  02-Feb-06

  	
   

  	
  JVBD-001

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  09-Feb-06

  	
   

  	
  JVBD-001

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  16-Feb-06

  	
   

  	
  JVBD-001

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  30,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  30,000.00

  	
   

  
	
  28-Feb-06

  	
   

  	
  JVBD-008

  	
   

  	
  Adjust
  to Party gain realized from zero out GATB I/C payable

  	
   

  	
  $

  	
  16,679.27

  	
   

  	
   

  	
   

  	
  $

  	
  16,679.27

  	
   

  
	
  17-Mar-06

  	
   

  	
  JVCD-001

  	
   

  	
  CGX
  Pmt on behalf CGB2 - GeoPetro 50% share: B2 G&G work

  	
   

  	
  $

  	
  7,500.00

  	
   

  	
   

  	
   

  	
  $

  	
  7,500.00

  	
   

  
	
  31-Mar-06

  	
   

  	
  JVCD-009

  	
   

  	
  CGX
  Pmt on behalf CGB2 - GeoPetr 50% share: seismic reprocessing

  	
   

  	
  $

  	
  7,805.79

  	
   

  	
   

  	
   

  	
  $

  	
  7,805.79

  	
   

  
	
  07-Apr-06

  	
   

  	
  JVDD-001

  	
   

  	
  Geo
  Petro Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  28,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  18,000.00

  	
   

  
	
  30-Apr-06

  	
   

  	
  JVDD-009

  	
   

  	
  Adjust:
  Parity Share Aug 05-May

  	
   

  	
  $

  	
  18,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  18,000.00

  	
   

  
	
  30-Apr-05

  	
   

  	
  GeoPetro
  Accumulated Share Overseas Overhead Allocation 2 Yrs 1May 04-30 Apr 06

  	
   

  	
   

  	
   

  	
  $

  	
  116,000.00

  	
   

  	
  $

  	
  116,000.00

  	
   

  
	
  16-May-06

  	
   

  	
  JVED-001

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  40,698.59

  	
   

  	
   

  	
   

  	
  $

  	
  40,698.59

  	
   

  
	
  23-May-06

  	
   

  	
  JVED-001

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  2,500.00

  	
   

  	
   

  	
   

  	
  $

  	
  2,500.00

  	
   

  
	
  07-Jun-06

  	
   

  	
  JVFD-001

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  26,800.00

  	
   

  	
   

  	
   

  	
  $

  	
  26,800.00

  	
   

  
	
  26-Jun-06

  	
   

  	
  JVFD-001

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  64,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  64,000.00

  	
   

  
	
  30-Jun-06

  	
   

  	
  JVFD-009

  	
   

  	
  Adjust:
  Parity Share Salary May 06

  	
   

  	
  $

  	
  2,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  2,000.00

  	
   

  
	
  04-Jul-06

  	
   

  	
  JVFD-001

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  24,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  24,000.00

  	
   

  
	
  05-Jul-06

  	
   

  	
  JVFD-001

  	
   

  	
  Loan
  repayment to CGX account

  	
   

  	
  $

  	
  (2,500.00

  	
  )

  	
   

  	
   

  	
  $

  	
  (2,500.00

  	
  )

  
	
  31-Jul-06

  	
   

  	
  JVFD-010

  	
   

  	
  Adjust:
  Parity Share June 06

  	
   

  	
  $

  	
  2,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  2,000.00

  	
   

  
	
  02-Aug-06

  	
   

  	
  JVHD-001

  	
   

  	
  GeoPetro
  Cash Funding to Joint Venture for Ops

  	
   

  	
  $

  	
  34,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  34,000.00

  	
   

  
	
  31-Aug-06

  	
   

  	
  JVHD-010

  	
   

  	
  Adjust:
  Parity Share July 06

  	
   

  	
  $

  	
  2,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  2,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31-Aug-06

  	
   

  	
  GeoPetro
  Accumulated Share Overseas Overhead Allocation Since 1 May 2006

  	
   

  	
   

  	
   

  	
  $

  	
  12,800.00

  	
   

  	
  $

  	
  12,800.00

  	
   

  
	
   

  	
  Total
  JV Contributions Made by GeoPetro as of this Report Date

  	
   

  	
  $

  	
  2,197,509.25

  	
   

  	
  $

  	
  342,400.00

  	
   

  	
  $

  	
  2,539,909.25

  	
   

  



 


31



















 


SCHEDULE-B


MATERIAL CONTRACTS


 


The list and summary of the principle terms
and conditions of Material Contracts in effect between CGB2 and third parties
as of 1 October 2006 in accordance with Section-3 of this Agreement, are set
forth in the following table:


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Contract

  	
   

  	
   

  	
   

  	
  Expiry or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Contract

  	
   

  	
  Covering

  	
   

  	
   

  	
   

  	
  Price or

  	
   

  	
   

  	
   

  	
  Notice to

  	
   

  	
   

  	
   

  
	
  No

  	
   

  	
  Date

  	
   

  	
  Number

  	
   

  	
  To

  	
   

  	
  Period

  	
   

  	
  Description

  	
   

  	
  Rate

  	
   

  	
  Period

  	
   

  	
  Terminate

  	
   

  	
  Remarks

  	
   

  
	
  1

  	
   

  	
  15-Jan-04

  	
   

  	
  GBSA-04-001

  	
   

  	
  PT.Asia Market Inv.

  	
   

  	
  15Jan04 - 14 Jan07

  	
   

  	
  Rent Jakarta Office

  	
   

  	
  47,500,000

  	
   

  	
  Rp/Year

  	
   

  	
  14-Jan-07

  	
   

  	
  Prepaid thru 14-Jan-07

  	
   

  
	
  2

  	
   

  	
  15-Aug-03

  	
   

  	
  Contract

  	
   

  	
  Perusda - Tarakan

  	
   

  	
  15Aug03 - 14 Aug06

  	
   

  	
  Rent Tarakan Office

  	
   

  	
  45,000,000

  	
   

  	
  Rp/Year

  	
   

  	
  14-Aug-06

  	
   

  	
  Prepaid thru 14-Feb-06

  	
   

  
	
  3

  	
   

  	
  26-Mar-05

  	
   

  	
  Contract

  	
   

  	
  Nuryati Siregar

  	
   

  	
  01Apr05- 31Mar07

  	
   

  	
  Rent House for
  Management

  	
   

  	
  $

  	
  830.00

  	
   

  	
  US$/Month

  	
   

  	
  31-Mar-07

  	
   

  	
  Prepaid thru 31-Mar-07

  	
   

  
																					



 


32

















 


SCHEDULE-C


SHAREHOLDERS
AGREEMENT


 


The fully executed original of the
Shareholders Agreement and its exhibits entered into by the Parties upon the
date of the Shares Sale Agreement forms this Schedule-C.


 


33

















 


CONTINENTAL-GEOPETRO
(BENGARA-II) LTD.


 


SHAREHOLDERS  AGREEMENT


 


This
shareholders agreement (the “Agreement”),
is entered into on the    th
September 2006, by and among:


 


CNPCHK
(INDONESIA)  LIMITED (hereinafter
referred to as the “CNPC-HKI”), a
British Virgin Islands company whose registered address is P.O. Box 957,
Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands;


 


CONTINENTAL
ENERGY CORPORATION (hereinafter referred to as “Continental”), a British Columbia, Canada
corporation located at Suite 1200, 14001 Dallas Parkway, Dallas, Texas, 75240,
USA;


 


GEOPETRO
RESOURCES COMPANY (hereinafter referred to as “GeoPetro”), a California, USA. corporation
located at Suite 700, One Maritime Plaza, San Francisco, CA, 94111, USA; and


 


CNPC
(HONG KONG) LIMITED (hereinafter referred to as the “Guarantor”, a Bermuda company located at
39th Floor, 118 Connaught Road West, Hong Kong;


 


hereinafter
referred to individually as “Party”
or collectively, as the context may dictate, as “Parties”.


 


RECITALS;
THAT


 


Whereas;
Continental-GeoPetro (Bengara-II) Ltd.
(hereinafter referred to as the “Company”
or as “CGB2”), is a British Virgin
Islands corporation with registered offices located at 4th Floor Ellen Skelton
Building, 3076 Drake’s Highway, Road Town, Tortola, British Virgin Islands and
principal operational offices located at Jl. R.S. Fatmawati 31A, Cilandak,
Jakarta, 12430, Indonesia;


 


Whereas,
The Parties have entered a separate written Shares Purchase and Sale Agreement
(hereinafter referred to as the “SPA”)
dated even date with this Shareholders Agreement pursuant to which CNPC-HKI
purchased 35,000 common shares of the Company from Continental and GeoPetro.


 


Whereas,
The Parties wish to enter into this Shareholders
Agreement to regulate their respective joint and several rights and obligations
as shareholders of the Company towards the operation and management of the
business and the affairs of the Company in addition to those provided for in
the Memorandum and Articles.


 


Whereas,
the Guarantor wishes to guarantee the performance of CNPC-HKI’s obligations
under this Shareholders Agreement.


 


Now
therefore, in consideration of the mutual covenants and agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties covenant and agree
with each other as follows:


 


34

















 


Article-1:   INTERPRETATION


 


1.1                 DEFINITIONS


In this
Shareholders Agreement, including the premises, schedules and the exhibits
hereto the following defined terms shall have the meaning ascribed thereto as
follows:


 


“Affiliate” means with respect to a party to
this Shareholders Agreement, a company which is, on or at any time after the
date of this Shareholders Agreement, a Subsidiary of such Party, a Parent
company of such Party, or a sister Subsidiary of a company having the same
Parent company; where Subsidiary and Parent have the meaning elsewhere defined
herein.


 


“Applicable Law” means the applicable provisions
of any Law having jurisdiction over CGB2 or any of the Bengara-II Assets, and
includes, without limitation, the applicable provisions of any permit, license
or other governmental or regulatory authorization issued to CGB2 in respect of
the Bengara-II Assets or any of them.


 


“Articles” means the articles of association
of the Company as amended or replaced from time to time.


 


“Bengara-II Assets” means collectively (i)
an undivided 100% participating interest in Contractor’s contract rights and
interests in the Bengara-II PSC; (ii) any permits, approvals, licenses,
endorsements or other authorizations issued to CGB2 by a governmental authority
in respect of activities under or related to the Bengara-II PSC; (iii) all of
CGB2’s rights and interests under its third party contracts including any oil
and gas sales contracts, gas processing agreements and product offtake
agreements; (iv) Company Accounts; (v) Company Property; and (vi) all seismic,
geological and well reports and other assessment materials and technical data
within and pertaining to the Bengara-II PSC contract area or arising as a
result of the Company’s Activities.


 


“Bengara-II PSC” means the Bengara-II
Production Sharing Contract entered into by CGB2 and Pertamina and approved by
the Minister of Mines and Energy of the Republic of Indonesia on 4 December
1997, including any amendments thereto or extensions thereof.


 


“BP Migas” means Badan Pelaksana Kegiatan
Usaha Hulu Minyak Dan Gas Bumi, a state oil and gas regulatory body established
under the Directorate General of Oil and Natural Gas of The Ministry of Mines
and Energy (MIGAS) of the Republic of Indonesia; and the successor in authority
to Pertamina in relation to the Bengara-II PSC.


 


“Board” means the board of Directors of the
Company for the time being and from time to time.


 


“Business  Day”
means any day other than a Saturday or Sunday or public holiday in Hong Kong,
USA or Indonesia.


 


“CGB2” means the Company.


 


“CNPC-HKI” means CNPCHK (Indonesia) Limited,
a Party to this Shareholders Agreement and a Shareholder of the Company.


 


“Company” means Continental-GeoPetro
(Bengara-II) Ltd.


 


“Company Account(s)” means all accounts
owned or kept by the Company including bank accounts, cash accounts, and the
EJA; together with the financial books, accounting related Records and
statements pertaining to them and expenditures made in satisfaction of Company
Costs incurred in performing Company’s Activities.


 


35

















 


“Company’s Activities” means without limitation
any and all activities carried out by the Company in respect of the Company,
the Bengara-II PSC and the Bengara-II Assets or matters provided for in the
SPA, this Shareholders Agreement, the Memorandum, the Articles or otherwise
pertaining to the general business affairs of the Company.


 


“Company Costs” means any and all costs
incurred by the Company while carrying out Company’s Activities.


 


“Company Property” shall mean property owned
by the Company or under the custody and control of the Company as provided for
in the Bengara-II PSC.


 


“Continental” means Continental Energy
Corporation, a Party to this Shareholders Agreement and a Shareholder of the
Company.


 


“Contractor” refers to CGB2 in the context
of being a production sharing “Contractor” as the term is used in the
Bengara-II PSC.


 


“Consent Resolution” shall have the meaning
ascribed thereto in the Company’s Articles, specifically Paragraph-1 thereof,
and shall apply as therein defined to either a Consent Resolution of Directors
and to a Consent Resolution of Members.


 


“Corporate Records” means, without
limitation of the generality thereof, all, and each and every, corporate
register, minute book, Directors resolution, Members resolution maintained by
the Company or in the possession of the Company pertaining to the corporate
governance of the Company.


 


“Director” means a director and member of
the Board for the time being and from time to time of the Company including,
where applicable, any designated alternate Director, and “Directors” shall be construed accordingly.


 


“Earn-In Joint Account” or the “EJA” means the CGB2 owned multicurrency
bank account number 808-215644-838 established at Hongkong and Shanghai Banking
Corporation Limited, Hong Kong main office, 1 Queen’s Road Central, and
operated as provided for in Article-4 hereof.


 


“Encumbrance” means a mortgage, charge,
pledge, lien, option, restriction, right of first refusal, right of pre-emption,
third-party right or interest, other encumbrance or security interest of any
kind, or another type of preferential arrangement (including, without
limitation, a title transfer or retention arrangement) having similar effect.


 


“Guarantor” means CNPC (Hong Kong) Limited.


 


“GeoPetro” means GeoPetro Resources Company,
a Party to this Shareholders Agreement and a Shareholder of the Company.


 


“Hong Kong” means the Hong Kong Special
Administrative Region of the PRC.


 


“Laws” shall mean:


a)              all constitutions,
treaties, laws, statutes, codes, ordinances, orders, decrees, rules,
regulations, and municipal by-laws, whether domestic, foreign or international;


b)             all judgments,
orders, writs, injunctions, decisions, rulings, decrees, and awards of any
governmental authority or body; and


c)              all policies,
practices and guidelines or any governmental authority or body which, although
not actually having the force of law, are considered by such governmental
authority or body as requiring compliance as if having the force of law;


 


36

















 


in each case
binding on or affecting the Company and the Company’s Activities; and “Law”
shall mean any one of them.


 


“Memorandum” means the Memorandum and
Articles of Association of the Company for the time being as amended from time
to time.


 


“Officer” means a corporate officer and
senior executive manager for the time being and from time to time of the
Company, and “Officers” shall be
construed accordingly.


 


“Ordinary Resolution” shall have the meaning
ascribed thereto in the Company’s Articles, specifically Paragraph-1 thereof,
and shall apply as therein defined to either a Ordinary Resolution of Directors
and to a Ordinary Resolution of Members.


 


“Parent” means owning or controlling a
Subsidiary company with more than 50% of the voting rights in general meeting.


 


“Parties” shall mean Continental Energy
Corporation, GeoPetro Resources Company, CNPCHK (Indonesia) Limited and CNPC
(Hong Kong) Limited; and “Party” shall mean any one of them.


 


“Pertamina” means P.T. Pertamina (Persero)
(f/k/a Perusahaan Pertambangan Minyak dan Gas Bumi Negara), a state enterprise
established under the laws of the Republic of Indonesia; and a party to the
Bengara-II PSC.


 


“Petroleum” has the same meaning as in the
Bengara-II PSC, and includes naturally occurring hydrocarbons commonly produced
from wells including crude oil, condensate, natural gas and natural gas
liquids.


 


“POD” means the official plan of development
for a commercial discovery or exploitation of a Petroleum accumulation prepared
by the Company and submitted to BP Migas for its approval.


 


“PRC” means the People’s Republic of China
and for the purpose of this Shareholders Agreement excludes Hong Kong, Macau
and Taiwan.


 


“Shareholder” means holders of Shares of the
Company; expressly CNPC-HKI, Continental, and GeoPetro and their respective
successors and permitted transferees.


 


“Shares” means common shares of the Company.


 


“Shares Holding” means in respect of each
Shareholder the total number of Shares held by that Shareholder at the relevant
time.


 


“Shares Percentage” means in respect of each
Shareholder the percentage of the total Shares of the Company held by that
Shareholder at the relevant time.


 


“SPA” means the Shares Purchase and Sale
Agreement amongst the Parties referred to in the recitals of this Shareholders
Agreement.


 


“Special Resolution” shall have the meaning
ascribed thereto in the Company’s Articles, specifically Paragraph-1 thereof,
and shall apply as therein defined to a Special Resolution of Members.


 


“Subsidiary” means, with respect to a
person, any corporation or other entity in which more than 50% of the voting
rights in general meeting or the composition of a majority of its board of
directors are controlled by the Parent.


 


37

















 


“Taxes” means any federal, state,
provincial, municipal or other governmental taxes or assessments in the nature
of taxes of any nature whatsoever (including, without limitation, income taxes,
capital taxes, sales taxes, property taxes, goods and services taxes, stamp
taxes, value added taxes and use taxes and withholding tax of whatsoever
nature), and includes any interest, penalty or other additional obligation
associated therewith.


 


“US$” means United States Dollars, the
lawful currency of the United States.


 


1.2                 ANNEX


The following
additional agreements, annexes, exhibits, schedules (collectively referred to
hereinafter as “Annexes”) are
annexed and attached to this Shareholders Agreement and form a part hereof and
have the same force and effect as if set out in the body of this Shareholders
Agreement:


 


Annex-A                                               -                                            Form
Deed of Adherence


 


1.3                 CONSTRUCTION


In this
Shareholders Agreement, including the premises, schedules and exhibits hereto,
unless otherwise expressly stated:


 


a)        References to a “Party” or
“Parties” are references to a Party or Parties to this Shareholders Agreement
and include their respective successors and permitted assigns.


 


b)       References to “herein”,
“hereby”, “hereto”, “hereunder”, “hereof” and similar expressions are
references to this Shareholders Agreement and not to any particular section,
subsection or schedule.


 


c)        References to a statutory
provision includes a reference to the statutory provision as modified or
re-enacted or both from time to time before the date of this Shareholders
Agreement and any subordinate legislation made under the statutory provision
(as so modified or re-enacted) before the
date of this Shareholders Agreement.


 


d)       References to an “Article”,
“Section”, “subsection”, or “clause” are references to an Article, Section,
subsection, or clause of this Shareholders Agreement.


 


e)        References to an “Annex”
are references to an Annex to this Shareholders Agreement as described in
Section-1.2


 


f)          References to dollar
amounts are references to US dollar amounts.


 


g)       Words importing the
singular shall include the plural and vice versa.


 


h)       Words importing gender
shall include the masculine, feminine and neuter genders.


 


i)           References to a
“person” or “persons” shall include individuals, corporations, partnerships,
associations, bodies politic and other entities, all as may be applicable in
the context.


 


j)           The use of headings is
for convenience of reference only and shall not affect the construction or
interpretation hereof.


 


38

















 


1.4                 ENTIRE
AGREEMENT


This
Shareholders Agreement together with its Annexes, the SPA, the Memorandum, and
the Articles, constitute the entire agreement between the Parties pertaining to
CGB2, the Company’s Activities and the Bengara-II Assets and supersede all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties in connection with the subject matter of this
Shareholders Agreement. This Shareholders Agreement may be amended only by
written instrument executed by no less than all of the Parties hereto.


 


Article-2:    BUSINESS
OF THE COMPANY


 


2.1                               The Company was
incorporated under the name Apex (Bengara-II) Ltd. as an International Business
Company in the British Virgin Islands under the International Business
Companies Act on September 9, 1997 registration number 247888. Apex
(Bengara-II) Ltd. changed its name to Continental-Wisdom-GeoPetro (Bengara-II)
Ltd. on 5 June 2003. Continental-Wisdom-GeoPetro (Bengara-II) Ltd. changed its
name to Continental-GeoPetro (Bengara-II) Ltd. on 17 December 2003.


 


2.2                               The Company was originally
incorporated with an authorized share capital of US$ 50,000 consisting of
50,000 common shares of US$ 1.00 par value each, all of which are issued,
outstanding and fully paid up as of the date of this Shareholders Agreement.


 


2.3                               The Company was
formed expressly for the sole purpose of entering into, holding and operating
the Bengara-II Production Sharing Contract which it signed with Pertamina, the
state owned oil enterprise of the Republic of Indonesia, on December 4, 1997
(together with any amendments thereto, the “Bengara-II
PSC”). The Company owns an undivided 100% participating interest in
Contractor’s contract rights in the Bengara-II PSC.


 


2.4                               The Bengara-II PSC
covers a 3,650 square kilometers contract area (reduced from 4,867 square kilometers
in a June 2001 Bengara-II PSC mandated relinquishment) located partially
onshore and partially offshore in the province of East Kalimantan, Indonesia (“Bengara-II Block”). In accordance with the
terms and conditions of the Bengara-II PSC, the Company has the exclusive
authority to conduct, along with BP Migas, petroleum exploration and production
operations within the Bengara-II PSC contract area for up to 30 years from 4
December 1997.


 


2.5                               The Company has no
business interests, property or assets other than those directly pertaining to
the Bengara-II PSC and the “Bengara-II Assets”
as defined in Article-1.1.


 


Article-3:    THE
SHAREHOLDERS


 


3.1                               The Company has only
three Shareholders or Members and all three are Parties to this Shareholders
Agreement. The Guarantor is a Party to this Shareholders Agreement but is not a
Shareholder.


 


3.2                               Each Shareholder
owns a number of “Shares” of the
Company, its “Shares Holding”, in
the proportions to the total  “Shares Percentage” as these terms are
defined in Article-1.1 and in the amounts as are set forth in the following
table:


 


39

















 


Table-3.2


 


	
  Shareholder

  	
   

  	
  Shares Holding

  	
   

  	
  Shares Percentage

  	
   

  
	
  CNPC-HKI

  	
   

  	
  35,000

  	
   

  	
  70

  	
  %

  
	
  Continental

  	
   

  	
  9,000

  	
   

  	
  18

  	
  %

  
	
  GeoPetro

  	
   

  	
  6,000

  	
   

  	
  12

  	
  %

  
	
  Total
  Shares

  	
   

  	
  50,000

  	
   

  	
  100

  	
  %

  



 


3.3                               As used in this
Shareholders Agreement, each Shareholder’s Shares Holding represents the total
number of the Company’s Shares owned by that Shareholder and each Shareholders
respective Shares Percentage refers to the percentage that the said
Shareholder’s Shares Holding represents to the total number of Shares of the
Company, equal to the percentages set forth in Table-3.2.


 


3.4                               Each Shareholder’s
respective Shares Percentage set forth in Table-3.2 represents the proportional
percentage that each respective Shareholder owns in the Company, in the
contractors rights and obligations under the Bengara-II PSC, and in the
Bengara-II Assets.


 


3.5                               Each Shareholder’s
respective Shares Percentage set forth in Table-3.2 represents the proportional
percentage that each respective Shareholder’s several rights, entitlements,
commitments, obligations, responsibilities and liabilities in respect of the
Company’s Activities under this Shareholders Agreement, the Memorandum and the
Articles.


 


3.6                               Each Shareholder’s
respective Shares Percentage set forth in Table-3.2 represents the proportional
percentage that each respective Shareholder is entitled to participate and
share in Dividends distributed by the Company as provided for as provided for
in Article-13 of this Shareholders Agreement.


 


3.7                               Each Shareholder’s
respective Shares Holding set forth in Table-3.2 represents the number of
Shares that respective Shareholder is entitled to vote at meetings of the
Members of the Company and which shall count as votes to pass Ordinary, Special
or Consent Resolutions of the Members as provided for in this Shareholders
Agreement and as further provided for and defined in the Memorandum and
Articles of the Company


 


3.8                               Each Shareholder
shall equally be entitled to inspect, and the Board of Directors shall provide
all reasonable access to each Shareholder for the inspection of any one or all
of the Corporate Records (as defined in Article-1.1) in the Company’s premises
in normal business hours provided 10-days prior written request from any
Shareholder has been given to the Company’s Secretary.


 


3.9                               The Shareholders and
the Directors shall at all times cause the Company to conduct the Company’s
Activities in accordance with prudent and good oil field practices to an
international standard.


 


Article-4:    EARN-IN
JOINT ACCOUNT & THE EARNING OBLIGATION


 


4.1                               In accordance with
its obligations under the provisions of Section-2.2.3 of the SPA CNPC-HKI, a
Party to this Shareholders Agreement, advanced eighteen million seven hundred
thousand US dollars (US$18,700,000)
to the Company (referred to in the SPA and hereinafter as the “Earning Obligation”) into CGB2’s
multicurrency bank account number 808-215644-838 (referred to in the SPA and
hereinafter as the “Earn-In Joint Account”
or the “EJA”) established at
Hongkong and Shanghai Banking Corporation Limited, Hong Kong main office, 1
Queen’s Road Central (hereinafter referred to as “HSBC-HK”).


 


40

















 


4.2                               The Board shall ensure
that the Company shall provide HSBC-HK clear, written, irrevocable instructions
dated even date herewith mandating that the EJA shall always require two
signatures to authorize any disbursements and any transactions from or within
the EJA. Of the two mandatory signatures so required, one signature must be
from a group of duly authorized representatives of Continental and GeoPetro and
one signature must be from a group of duly authorized representatives of
CNPC-HKI.


 


4.3                               The Board shall
ensure that the Company shall also provide HSBC-HK clear, written, irrevocable
instructions dated even date herewith mandating that any amendment, alteration
or change to the operating instructions set forth in the preceding Article-4.2
shall first require a unanimous Consent Resolution of the Members, such consent
shall not be unreasonably withheld or delayed.


 


4.4                               Notwithstanding any
provisions in the Shareholders Agreement and the Memorandum:-


 


a) in the
event that the duly authorized signatories of Continental and GeoPetro
unreasonably withhold or delay the authorization of disbursement or any
transactions from or within the EJA, resulting in the termination of the
Bengara-II PSC, then the EJA account shall be closed immediately and all money
standing to the credit of the EJA account immediately after the said
termination shall be disbursed to CNPC-HKI.


 


b) in the
event that the duly authorized signatories of CNPC-HKI unreasonably withhold or
delay the authorization of disbursement or any transactions from or within the
EJA, resulting in the termination of the Bengara-II PSC, then the EJA account
shall be closed immediately. An amount of up to US$ 6.3 million (or any lower
credit balance) standing to the credit of the EJA account immediately after the
said termination shall be disbursed in the proportions of 60% to Continental
and 40% to GeoPetro. Any remaining credit balance in the EJA account shall be
disbursed to CNPC-HKI.


 


4.5                               The Parties may by
written notice to the other Parties, from time to time, designate a replacement
authorized signatory to their respective group as provided for in the preceding
paragraph.


 


4.6                               Any interest earned
on Earning Obligation funds deposited in the EJA shall remain in the EJA for
Company use and shall be credited as advances to the Company by CNPC-HKI
pursuant to the Development Loans (where applicable).


 


4.7                               The entire amount of
the Earning Obligation deposited by CNPC-HKI into the EJA shall, in the manner
provided for in this Shareholders Agreement, be exclusively used to pay for all
the Company’s expenditures and costs incurred in the exploration, drilling and
development operations on the Bengara-II Assets under Work Programs and Budgets
approved by BPMigas including, without limitation, the 4 exploration wells
already approved for drilling during 2006, namely Seberaba-1, Pungit-1, Mulyo-1
and Bekawas-1.


 


4.8                               The Company shall
utilize and expend all Earning Obligation funds from the EJA strictly in
accordance with all procurement regulations, tendering procedures and other
applicable regulations of BPMigas, Applicable Laws, and other Indonesian
governmental authorities having jurisdiction, to ensure that all funds are
recoverable under the Bengara-II PSC.


 


4.9                               In the event that
CNPC-HKI refuses to utilize and expend the Earning Obligations funds in the
exploration, drilling and development operations on the Bengara-II Assets under
Work Programs and Budgets from time to time approved by BPMigas resulting in a
termination of the Bengara-II PSC, then the EJA account shall be closed
immediately. All moneys standing to the credit of the EJA account shall be
utilized in the following priority: firstly, to pay off all the Company’s
outstanding third party obligations (other than those withholding tax penalty
or fine obligations referred to in Article 5.3 hereto in which Continental and
GeoPetro shall bear full responsibility for the settlement thereof);


 


41

















 


secondly an
amount of up to US$ 6.3 million (or any lower credit balance) shall be
disbursed in the proportions of 60% to Continental and 40% to GeoPetro. Any
remaining credit balance in the EJA account shall be disbursed to CNPC-HKI.


 


Article-5:    PAST
COSTS, PARITY & COST RECOVERY


 


5.1                               The Earning
Obligation amount is intended by the Parties to be, and is hereby deemed to be,
a parity matching contribution to the Company from and by CNPC-HKI to bring
it’s 70% Shares Percentage contribution to the Company into parity with funds
already sunk in the Company by Continental and GeoPetro’s combined 30% Shares
Percentage contribution to the Company.


 


5.2                               The Parties agree
that at 30 September 2006 the Company shall have actually contributed a total
of US$ 6,300,000 (including the Company’s working capital needs to be
contributed by Continental and GeoPetro in accordance with Section 3.6 of the
SPA (hereinafter referred to as the “CG-Sunk
Cost”)) toward the Bengara-II PSC minimum work commitment which is
cost-recoverable by the Company under the terms and conditions of the
Bengara-II PSC. The CG-Sunk Cost was contributed to the Company in the
proportions of 60% from Continental and 40% from GeoPetro.


 


5.3                               Each of Continental
and GeoPetro further agrees to pay or settle, and to indemnify and hold the
Company or CNPC-HKI or the Guarantor harmless of at their respective cost of,
in the proportions of 60% from Continental and 40% from GeoPetro, any claim of
penalty or fine by any Indonesian authority against the Company or CNPC-HKI or
the Guarantor in connection with any accrued outstanding withholding tax liability
of any consultants or officer or part time staff of the Company that were or
are incurred at any time before 30 September 2006. For the avoidance of doubt,
each of Continental and GeoPetro, and not the Company or CNPC-HKI or the
Guarantor, shall, bear full responsibility for the prompt settlement of the
foregoing penalty or fine obligations in all circumstances. Where required,
each of Continental and GeoPetro expressly agrees and authorises the Company to
set off such indemnity obligations against any payment or distributions owed by
the Company to Continental and GeoPetro under this Agreement.


 


5.4                               From 1 October 2006
CNPC-HKI shall commence funding 100% of the Company’s working capital needs in
accordance with the terms and conditions of the SPA and this Shareholders
Agreement by advancing funds to the Company from the EJA until the Earning
Obligation funds together with accumulated interest, if any, thereon are
entirely expended.


 


5.5                               The Company shall
utilize and expend all Earning Obligation funds and Development Loans (where
applicable) strictly in accordance with all procurement regulations, tendering
procedures and other applicable regulations of BPMigas, Applicable Laws, and
other Indonesian governmental authorities having jurisdiction, to ensure that
all funds are recoverable under the Bengara-II PSC.


 


Article-6:    THE
DEVELOPMENT LOANS


 


6.1                               In accordance with
Section-2.2.4 of the SPA, as and from the date the Earning Obligation funds
have been entirely expended and conditional on the receipt of BP Migas approval
of the first POD by the Company, CNPC-HKI shall become obliged to make advances
from time to time required by the Company to fund the working capital required
for appraisal and development of any successful Petroleum discovery of up to a
total,


 


42

















 


maximum amount of forty one million three hundred thousand US dollars (US$41,300,000) (the “Development Loans”).


 


6.2                               The Development
Loans, as and when advanced, shall be utilized to satisfy and discharge any and
all of the Company’s obligations, liabilities, payables, and commitments as and
from the date the Earning Obligation funds have been entirely expended.


 


6.3                               For the purposes of
calculating interest on the Development Loans, a rate equivalent to the London
Interbank Offering Rate for 90-day funds in effect at the time the Development
Loans are advanced to the Company shall apply.


 


6.4                               In the event that
for whatever reason the Bengara-II PSC is terminated or relinquished in its
entirety back to the Indonesian government at any time before the full amount
of the Development Loans are expended, then:


 


a)                     the Parties
shall immediately commence the winding up of the Company and as from the
termination of the Bengara-II PSC, CNPC-HKI shall be relieved of any further
obligation to provide the Development Loans, and further provided that;


 


b)                    if any money
is left standing to the credit of
the Company’s account after satisfaction of all costs relating to the winding
up, such sum shall be applied towards
repayment of portion of the
Development Loans already advanced together with the accumulated interest (if any) prior to the date of such winding
up.


 


Article-7:    FINANCING
CGB2 ACTIVITIES


 


Except for the
Earning Obligation funds and the Development Loans (where applicable) the
Company’s Board of Directors shall seek external finance to fund all further
Company working capital requirements.


 


Article-8:    MANAGEMENT


 


8.1                               Notwithstanding the
provisions of Paragraph-72 of the Company’s Articles the Parties hereby agree
that for so long as the Earning Obligation funds are not entirely expended or
CNPC-HKI continue to make advances to the Company pursuant to the Development
Loans as provided in Article-6.1 then; then the number of Directors on the
Company’s Board shall remain fixed at three (3) Directors. Additionally, of
these three (3), any two Directors shall be elected to the Board at the sole
direction of CNPC-HKI and one Director shall be elected to the Board at the
sole direction of Continental. GeoPetro shall have the right to have a
non-voting observer present at Board meetings to participate in discussions
until such time as the provisions of Article 8.2 apply.


 


8.2                               Notwithstanding the provisions
of the foregoing paragraph, the Parties hereby agree that immediately upon such
time as the Development Loans as provided for in Article-6.1 have been fully
expended or such obligation is released in accordance with the provisions of
Article-6.4 then the number of Directors on the Company’s Board shall thereupon
be increased to and fixed at five (5) Directors. Additionally, of these five
(5), any three Directors shall be elected to the Board at the sole direction of
CNPC-HKI, one Director shall be elected to the Board at the sole direction of
Continental, and one Director shall be elected to the Board at the sole
direction of GeoPetro.


 


8.3                               Notwithstanding the provisions
of Paragraph-98 of the Company’s Articles the Parties hereby agree that the
quorum of two (2) Directors required to validly constitute a meeting of the
Board shall only apply provided that of the two (2) Directors needed to
constitute a


 


43

















 


quorum, one of the
Directors making up the quorum is a Director duly elected to the Board at the
direction of CNPC-HKI and the other Director making up the quorum is a Director
duly elected to the Board at the direction of either Continental or GeoPetro.


 


8.4                               Notwithstanding the provisions
of the previous Article-8.3, If within two hours from the time appointed for
the Board meeting a quorum is not present, the meeting, if convened upon the
requisition of Members, shall be dissolved; in any other case it shall stand
adjourned to the next business day at the same time and place or to such other
time and place as those Directors present may determine, and if at the
adjourned meeting there are present within one hour from the time appointed for
the meeting in person or by proxy not less than any two directors, those two
Directors present shall constitute a quorum but otherwise the meeting shall be
dissolved.


 


Article-9:    DEALING
IN SHARES & PERMITTED TRANSFERS


 


9.1                               Each of the Parties may transfer
or dispose of all or any of its Shares to any of its Affiliates (each a “Permitted Transfer”). A Permitted Transfer may be
made on the following conditions:


 


a)                     the
transferee shall execute a Deed of Adherence in such form attached hereto as
Annex-A confirming to the other Shareholders that it shall be bound by this
Shareholders Agreement as a Shareholder in respect of the Shares transferred to
it;


 


b)                    in the event
that the transferee ceases to be an Affiliate of the transferring Shareholder
(which expression shall not include a second or subsequent transferor in a
series of transfers), then the transferee shall forthwith transfer all its
Shares to the transferring Shareholder or an Affiliate of the transferring
Shareholder.


 


9.2                               Each of the Parties may transfer
or dispose of its Shares or any interest therein to a third party if the
provisions set out in the following paragraph and Article-10 are complied with.


 


9.3                               A transfer of any Share by a
Shareholder in accordance with Article-10 shall be on the following conditions:


 


a)                     the
Shareholder may give a “Transfer Notice”
(as defined in Article-10) in respect of all or part of the Shares held by it;
and


 


b)                    if
the Shareholder wishes to transfer any Share to a person that is not already a
Shareholder, it shall require the transferee as a condition of the transfer to
execute a Deed of Adherence in the form attached hereto as Annex-A confirming
to the other Shareholders that it shall be bound by this Shareholders Agreement
as a Shareholder in respect of each Share transferred.


 


9.4                               Each Shareholder shall oblige
its Directors to the Board to ensure that the Board only approves for
registration a transfer of Shares carried out in accordance with this
Shareholders Agreement and the Articles.


 


Article-10:    SHARE
TRANSFER RESTRICTIONS


 


10.1                        The restriction on transfer
contained in this Article shall not apply to a Permitted Transfer as defined in
Article-9 or to any transfer with the prior written consent of the other
Shareholders.


 


44

















 


10.2                        Save as provided in the
preceding paragraph, no Shares (or any interest therein) shall be transferred
or disposed of to any person unless and until the rights of pre-emption
conferred by this Article have been exhausted and only then as permitted herein
below.


 


10.3                        If a Shareholder wishes to
transfer its Shares, the Shareholder (“Seller”) shall give all of the other Shareholders (“Offerees”) notice (“Transfer Notice”) stating:


 


a)                     the number of
Shares proposed to be transferred (“Sale
Shares”);


 


b)                    the cash price
per Sale Share (“Specified Price”);


 


c)                     the name of
the transferee (if known); and


 


d)                    any other
terms of the transfer.


 


10.4                        Within 20 Business Days after
receiving a Transfer Notice (“Offer Period”),
the Offerees shall give the Seller notice (“Offeree Notice”) stating whether it accepts or rejects in full the offer
made in the Transfer Notice. The Offerees shall also give the Board a copy of
its notice to the Seller. Failure of an Offeree to respond within the 20
Business Days period is agreed to mean no acceptance.


 


10.5                        If the Offeree accepts the offer
made in the Transfer Notice, the transfer of the Sale Shares shall be completed
on the tenth Business Day after the expiry of the Offer Period or such other
date as the Seller and the Offeree may agree in writing, when the Offeree shall
buy and the Seller shall sell the Sale Shares at the Specified Price.


 


10.6                        If the Offeree does not accept
the offer made in the Transfer Notice before the expiry of the Offer Period,
the Seller may sell the Sale Shares to a third party (“Purchaser”) provided that:


 


a)                     the transfer
shall be completed within 60 Business Days after giving the Transfer Notice to
the Offeree;


 


b)                    the transfer
shall be at a price per Sale Share not less than the Specified Price;


 


c)                     the transfer
shall be made on terms no more favorable to the Purchase than those offered to
the Offeree; and


 


d)                    the Purchaser
being approved by the Parties hereof, which approval shall not be unreasonably
withheld, and executing a Deed of Adherence as set out in Annex-A on the date
of the completion of the Transfer.


 


Article-11:    COMPLIANCE


 


11.1                        If any provision of the
Memorandum or of the Articles at any time conflicts with any provision of this
Shareholders Agreement, this Shareholders Agreement shall prevail and the
parties shall whenever necessary exercise all voting and other rights and
powers available to them to procure the amendment, waiver or suspension of the
relevant provision of the Memorandum and/or the Articles to the extent
necessary to permit the Company and its affairs to be administered as provided
in this Shareholders Agreement.


 


Article-12:    TERMINATION


 


12.1                        This Shareholders Agreement
shall continue in full force and effect until terminated.


 


12.2                        This Shareholders Agreement may
only be terminated by a separate written termination agreement signed by all
the Parties and then only after a unanimous Consent Resolution of the Members
agreeing to the termination has been made.


 


45

















 


Article-13:    DIVIDEND
POLICY


 


13.1                        The Company shall determine, not
less frequently than semi-annually, upon 31 December and 30 June, the amount of
Distributable Cash (as defined in Article 13.4 (g) below) then available for
distribution to the Shareholders. Unless the Shareholders otherwise unanimously
agree, all Distributable Cash, if any, so then determined to be available shall
be distributed promptly to the Shareholders, as “Dividends” in proportion to their shareholding in the Company.


 


13.2                        Notwithstanding any provision of
this Shareholders Agreement to the contrary, the Company shall not make any
Dividend distributions pursuant to this Shareholders Agreement except to the
extent permitted under Applicable Law.


 


13.3                        Promptly upon learning of any
requirement under any provision of applicable law requiring the Company to
withhold any sum from a Dividend distribution to a Shareholder or to make any
payment to any taxing authority in respect of such Shareholder, the Company
shall give written notice to such Shareholder of such requirement. The Company
is authorized to withhold from such Dividend distributions to the Shareholders
and to pay over to any taxing authority any amounts which it reasonably
determines may be required to be so withheld pursuant to any provision of
Applicable Law. All amounts withheld pursuant to any provision of Applicable
Law with respect to any distribution to any Shareholder shall be treated as
Dividend distributed to such Shareholder pursuant to this Clause for all
purposes under this Shareholders Agreement.


 


13.4                        For the purposes of this
Article, subject to Article 13.2, surplus cash at any time available to the
Company (excluding amounts that are borrowed from the Shareholders or under any
external credit facility of the Company) for distribution to the Shareholders
including a 15% cushion of such surplus cash shall be applied in the following
priority before it becomes distributable:


 


a)                     In first
priority, by the Company to conduct its business as set forth in the business
plan and the annual budget as approved the Board which shall take into account
factors such as the then cash flow and working capital requirements of the
Company;


 


b)                    In second
priority, to be retained by the Company under applicable laws;


 


c)                     In third
priority, to repay external finance or loans due third party creditors by the
Company;


 


d)                    In fourth
priority, to repay the CG-Sunk Costs to Continental and GeoPetro as provided
for in Article-5;


 


e)                     In fifth
priority, to repay the Earning Obligation funds advanced by CNPC-HKI as
provided for in Article-4;


 


f)                       In sixth
priority, to repay any Development Loans advanced by CNPC-HKI as provided for
in Article-6; and


 


g)                    Any remaining
surplus cash thereafter shall become the “Distributable Cash”.


 


Article-14:    PARENT
COMPANY GUARANTEE


 


14.1                        The Guarantor hereby
unconditionally and irrevocably guarantees to Continental and to GeoPetro the
due and punctual performance by CNPC-HKI of its obligations under this


 


46

















 


Shareholders
Agreement and undertakes to indemnify and keep indemnified Continental and
GeoPetro, severally, against all losses, damages, costs and expenses of
whatsoever nature which it may suffer or incur by reason of any default or
unreasonable delay on the part of CNPC-HKI in the performance of the said
obligations.


 


14.2                        If any of the obligations of
CNPC-HKI that are the subject of the guarantee contained in this Article cease
to be valid or enforceable (in whole or in part) on any ground whatsoever
(including, but not limited to, any defect in or want of powers of the relevant
party or irregular exercise thereof or any lack of authority on the part of any
person purporting to act on behalf of the relevant party or any legal or other
limitation, disability or incapacity, or any change in the constitution of, or
any amalgamation or reconstruction of, or the liquidation receivership or
insolvency of the relevant party) the Guarantor shall nevertheless be liable to
Continental and GeoPetro, severally, in respect of the purported obligation or
liability as if the same were fully valid and enforceable and the Guarantor was
the principal obligor in respect thereof.


 


Article-15:    GENERAL


 


15.1          CONFIDENTIAL INFORMATION


For so long as
this Shareholders Agreement is in full force and effect the Parties shall
maintain confidential the content of this Shareholders Agreement except as
provided for in Section-15.2. Also for so long as this Shareholders Agreement
is in full force and effect the Parties shall maintain the confidentiality of
the Evaluation Information as defined in, and as provided for in the Data
Confidentiality Agreement (as defined in Article-1.1) and as otherwise required
under Applicable Law and pursuant to the Bengara-II PSC and prevailing BPMigas
regulations therefore.


 


15.2          CONFIDENTIALITY AND PUBLIC ANNOUNCEMENTS


Each
Shareholder acknowledges and agrees to be abided by the confidentiality
obligations as may from time to time be required by BP Migas in respect of the
information relating to the Bengara-II PSC and the Bengara-II Assets.


 


Any press
release or filing required of a Party by securities regulatory authorities
having jurisdiction with respect to the transaction contemplated in this
Shareholders Agreement shall be made by each of the Parties exerting its best
efforts to cooperate and coordinate with the other Parties such disclosure as
to its form, nature and extent.


 


15.3          COMMUNICATIONS


All notices
and other communications given in connection with this Shareholders Agreement
shall be in writing, and the respective addresses of the Parties for the
service of any such notices or other communications shall be as follows:


 


CNPCHK
(INDONESIA) LIMITED  &  CNPC (HONG KONG) LIMITED


39th Floor,
118 Connaught Road West, Hong Kong


Attention:  President, 
Fax No:  (852) 2868-1741


 


CONTINENTAL
ENERGY CORPORATION


Suite 1200,
14001 Dallas Parkway, Dallas, Texas, 75240


Attention:  President, 
Fax No:  (1-972) 934-6718


 


47

















 


GEOPETRO
RESOURCES COMPANY


Suite 700, One
Maritime Plaza, San Francisco, California 94111


Attention:  President, Fax No:  (1-415) 398-9227


 


Unless there is
evidence that it was received earlier, all notices and communications given in
connection with this Shareholders Agreement shall be deemed to be sufficiently
given if delivered by courier upon the date of signature of the courier’s
delivery ticket. A Party may change its address for service by giving written
notice thereof to the other Parties.


 


15.4          GOVERNING LAW


This
Shareholders Agreement shall be governed by and construed in accordance with
the laws of Hong Kong. The courts of Hong Kong shall have non-exclusive
jurisdiction to hear and determine any suit, action or proceedings (“Proceedings”), and to settle any disputes,
which may arise out of or in connection with this Shareholders Agreement and,
for such purposes, the parties hereto irrevocably submit to the jurisdiction of
the courts of Hong Kong.


 


Each party
irrevocably waives any objection which it might at any time have to the courts
of Hong Kong being  nominated as the
forum to hear and determine any proceedings and to settle any disputes and agrees
not to claim that the courts of Hong Kong are not a convenient or appropriate
forum.


 


15.5          TRANSACTION EXPENSES


Each party
shall pay its own costs and expenses of and incidental to the negotiation,
preparation, execution and implementation by it of this Shareholders Agreement
and of all other documents referred to in it.


 


15.6          ASSIGNMENT, SUCCESSIONS IN INTEREST


This
Shareholders Agreement and the provisions hereof shall inure to the benefit of
and be binding upon the Parties and their respective successors and permitted
assigns. No Party may assign its rights or transfer all or any portion of its
Shares Holding unless as provided for in this Shareholders Agreement and
particularly as provided for in Article-9, Article-10, and Annex-A.


 


15.7          FURTHER ASSURANCES


Each of the
Parties shall from time to time and at all times on and after the Closing Date,
without further consideration, do and perform all such further acts and things,
and execute and deliver all such further agreements, assurances, notices, releases
and other documents and instruments, as may reasonably be required to more
fully assure the performance of any Party of its obligations under this
Shareholders Agreement and the carrying out of the intent and purpose of this
Shareholders Agreement.


 


15.8          WAIVER


The failure to
exercise or delay in exercising a right or remedy provided by this Shareholders
Agreement or by law does not impair or constitute a waiver of the right or
remedy or an impairment of or a waiver of other rights or remedies. No single
or partial exercise of a right or remedy provided by this Shareholders
Agreement or by law prevents further exercise of the right or remedy or the
exercise of another right or remedy. No waiver by any Party shall be effective
unless in writing, and a waiver shall affect only the matter, and the
occurrence thereof, specifically identified in the writing granting such waiver
and shall not extend to any other matter or occurrence.


 


48

















 


15.9          SEVERABILITY


If any
provision of this Shareholders Agreement shall be held to be invalid, illegal
or unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


 


15.10   RIGHTS CUMULATIVE


Each Party’s
rights and remedies contained in this Shareholders Agreement are cumulative and
not exclusive of rights or remedies provided by Applicable Law.


 


15.11   MUTUAL DRAFTING


This
Shareholders Agreement is the joint product of the Parties and each provision
hereof and thereof has been subject to the mutual consideration, negotiation
and agreement of all of the Parties and shall not be construed for or against
any Party.


 


15.12   TIME OF ESSENCE


Time shall be
of the essence in this Shareholders Agreement.


 


15.13   COUNTERPARTS


This
Shareholders Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be an original, but all the
counterparts together shall constitute one and the same instrument and have the
same force and effect as if all of the Parties had executed the same
instrument.


 


49

















 


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


 


 


	
  The
  GUARANTOR

  	
   

  	
  CNPCHK
  (Indonesia) Limited

  
	
  CNPC
  (HONG KONG) Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wang
  Mingcai

  	
   

  	
  Wang
  Mingcai

  
	
  Chairman

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
  GEOPETRO
  RESOURCES COMPANY

  	
   

  	
  CONTINENTAL
  ENERGY

  
	
   

  	
   

  	
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  S. J.
  Doshi

  	
   

  	
  Richard
  L. McAdoo

  
	
  President
  and CEO

  	
   

  	
  President
  and CEO

  
						



 


50

















 


Annex
to the Continental-GeoPetro (Bengara-II) Ltd.


 


Shareholders
Agreement September 2006


 


 


ANNEX-A


FORM OF
DEED OF ADHERENCE


 


The following
draft form of a Deed of Adherence required by permitted Shares Transfers in the
form required as provided for in the Shareholders Agreement Article-9 and
Article-10, forms this Annex-A as follows:


 


FORM OF DEED OF ADHERENCE


 


THIS DEED is made the         day of           
20   by           
of address             
(the “New Shareholder”) and is
supplemental to the Shareholders Agreement dated    September  2006 
made between the CNPCHK (Indonesia) Limited, CNPC (Hong Kong) Limited,
Continental Energy Corporation and GeoPetro Resources Company (such agreement
as from time to time supplemented, varied and amended, the “Shareholders Agreement”).


 


WITNESSETH  as follows:


 


1. The New Shareholder
confirms that it has been supplied with a copy of the Shareholders Agreement
and of all supplements, variations and amendments thereto and hereby covenants
with the CNPCHK (Indonesia) Limited, Continental Energy Corporation and
GeoPetro Resources Company to observe, perform and be bound by all the terms
and conditions of the Shareholders Agreement which are capable of applying to
the New Shareholder to the intent and effect that the New Shareholder shall be
deemed as and with effect from the date hereof to be a party to the
Shareholders Agreement and to be a Shareholder (as defined in the Shareholders
Agreement).


 


2. The address, telephone
and facsimile number at which notices are to be served on the New Shareholder
under the Shareholders Agreement and the person for whose attention notices are
to be addressed are as follows: [•]


 


3. Words and expressions
defined in the Shareholders Agreement shall have the same meaning in this Deed.
This Deed shall be governed by and construed in accordance with the laws of
Hong Kong and the parties hereto respectively submit to the non- exclusive
jurisdiction of the Hong Kong courts.


 


IN WITNESS  whereof the New Shareholder has executed this
Deed the day and year first above written.


 


THE COMMON SEAL of        
was hereunto affixed      in the presence of                :


 


For and on behalf of the New
Shareholder by  its duly authorized
representatives undersigned.


 


	
   

  
	
   

  	
   

  
	
  (CEO/Director)

  
	
   

  
	
   

  
	
   

  	
   

  
	
  (Director/Secretary)

  



 


—oOo—


 


51

















 


SCHEDULE-D


RESTATED MEMORANDUM &
ARTICLES OF CGB2


 


The fully executed
Restated Memorandum and Articles of CGB2 as signed by the Parties and dated
upon the signature date of this Agreement forms this Schedule-D.


 


52

















 





 


No.: 247888


 


British Virgin Islands


 


The BVI Business Companies Act, 2004


 


(No. 16 of 2004)


 


Memorandum of Association


and


Articles of Association


of


 


CONTINENTAL-GEOPETRO (BENGARA-II) LTD.


 


Incorporated the 9th day of September, 1997 Under the IBC Act (Cap.
291)


 


These Memorandum and Articles Amended and Restated


under the BVI BC Act 2004 on the 9th day of September 2006


 


 


	
  

  	
  Registered
  Agent

  Portcullis TrustNet (BVI) Limited

  Portcullis TrustNet Chambers, P.O. Box 3444

  Road Town, Tortola, British Virgin Islands

  Telephone: (284) 494 5296 Fax: (284) 494 5283

  



 


53

















 


TERRITORY OF THE BRITISH VIRGIN
ISLANDS


THE BVI BUSINESS COMPANIES ACT,
2004


(No. 16 of 2004)


 


MEMORANDUM
OF ASSOCIATION


 


OF


 


Continental-GeoPetro
(Bengara-II) Ltd.


 


NAME


1.                                      The name of the Company is Continental-GeoPetro (Bengara-II) Ltd.


 


TYPE OF COMPANY


2.                                      The Company is a company limited by shares.


 


REGISTERED OFFICE


3.                                      The Registered Office of the Company is the
offices of Portcullis TrustNet (BVI) Limited,
Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin
Islands, the office of the Registered Agent.


 


REGISTERED AGENT


4.                                      The Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis
TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,  British Virgin Islands.


 


ISSUED SHARES


5.                                      The Company is authorized to issue no more
than 50,000 shares.


 


CLASSES, NUMBER AND PAR VALUE OF SHARES


6.                                      The shares issued by the Company shall be
made up of one class and one series of shares divided into 50,000 common
shares, each share having One US Dollar (US$ 1.00) par value.


 


FRACTIONAL SHARES


7.                                      The Company may issue fractions of a share
and a fractional share shall have the same corresponding fractional
liabilities, limitations, preferences, privileges, qualifications,
restrictions, rights and other attributes of a whole share of the same class or
series of shares.


 


RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES


8.                                      All shares shall have;


 


(a)          the right
to one vote at a meeting of the Members of the Company or on any resolution of
Members;


 


(b)         the right
to an equal share in any distribution by way of dividend paid by the Company;
and


 


(c)          the right
to an equal share in the distribution of the surplus assets of the Company on
its liquidation.


 


54

















 


VARIATION OF CLASS RIGHTS


9.                                      If at any time the issued shares are divided
into different classes or series of shares, the rights attached to any class or
series (unless otherwise provided by the terms of issue of the shares of that
class or series) may, whether or not the Company is being wound up, be varied
with the consent in writing of the holders of not less than three-fourths of
the issued shares of that class or series and of the holders of not less than
three-fourths of the issued shares of any other class or series of shares which
may be affected by such variation.


 


RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU


10.                                The rights conferred upon the holders of the
shares of any class issued with preferred or other rights shall not, unless
otherwise expressly provided by the terms of issue of the shares of that class,
be deemed to be varied by the creation or issue of further shares ranking pari
passu therewith.


 


CAPACITY AND POWERS


11.                                Subject to the Act, any other British Virgin
Islands legislation and paragraph 12 below the Company has, irrespective of
corporate benefit:


 


(a)          full
capacity to carry on or undertake any business or activity, do any act or enter
into any transaction;


 


(b)         for
the purposes of paragraph (a), full rights, powers and privileges; and


 


(c)          full
powers to issue shares with pre-emptive rights, subject to the Articles.


 


LIMITATIONS ON THE COMPANY’S BUSINESS


12.                                For the purposes of section 9(4)  of the Act the Company may not;


 


(a)          carry
on banking or trust business, unless it is licensed to do so under the Banks
and Trust Companies Act, 1990;


 


(b)         carry
on business as an insurance or reinsurance company, insurance agent or
insurance broker, unless it is licensed under the Insurance Act 1994;


 


(c)          carry
on business of company management, unless it is licensed under the Company
Management Act, 1990;


 


(d)         carry
on the business of providing the registered office or the Registered Agent for
companies incorporated in the British Virgin Islands;


 


(e)          carry
on the business as a mutual fund, manager of mutual funds or administrator of
mutual funds unless it is recognized or licensed as the case may be under the
Mutual Funds Act 1996; or


 


(f)            carry
on any other business that gives rise to a licensing requirement under any law
for the time being in force in the British Virgin Islands unless it is
licensed, regulated, recognized or otherwise approved pursuant to such law.


 


13.                                The Company is established for the purposes
of owning and operating the Bengara-II production sharing contract signed by
the Company with Pertamina, the state oil company of the Republic of Indonesia
on 4 December 1997 and the Company may not engage in any business not directly
or indirectly pertaining thereto unless by express written Consent Resolution
of the Members.


 


14.                                The Members of the Company may from time to
time enter into separate written Shareholders Agreements containing terms,
conditions and provisions governing the relationships of the Members to one
another in addition to those provided for in this Memorandum and in the
Articles.


 


REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES


15.                                Shares in the Company may only be issued as
registered shares. The issue of shares to bearer is prohibited.


 


PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER
SHARES


16.                                The exchange or conversion of registered shares to bearer shares is
prohibited.


 


55

















 


TRANSFER OF REGISTERED SHARES


17.                                Subject to the provisions of the Articles the
Company may upon receipt of an instrument of transfer enter the name of the
transferee in the register of Members subject to the prior or simultaneous
approval of the Company as evidenced by a Special Resolution of Members
provided that no Member may unreasonably withhold such approval.


 


AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION


18.                                The Company may amend its Memorandum or its
Articles only by a Consent Resolution of Members.


 


DEFINITIONS


19.                                The meanings of words in this Memorandum are as defined in the
Articles.


 


---


 


Whereas:
An original memorandum of association of the Company dated the 9th day of
September 1997 was made to incorporate the Company as Number 247888 in the name
Apex (Bengara-II) Ltd. under the International Business Corporations Act
(Cap.291) of the British Virgin Islands.


 


Whereas:
Apex (Bengara-II) Ltd. changed its name to Continental-Wisdom-GeoPetro
(Bengara-II) Ltd. on 5 June 2003. Continental-Wisdom-GeoPetro (Bengara-II) Ltd.
changed its name to Continental-GeoPetro (Bengara-II) Ltd. on 17 December 2003.


 


We, the undersigned Member shareholders of the
Company, owning and representing 100% of
the Company’s authorized, issued and fully paid up share capital, hereby sign this amended,
replacement Memorandum of Association the    th day of September, 2006
and indicate our unanimous consent that from said date this Memorandum of
Association amends, replaces and supersedes all others; for the purposes of
governing the Company in accordance with the Members’ wishes and also for the
purposes of conforming the Company’s Memorandum of Association to the BVI
Business Corporations Act, 2004 (Act 16 of 2004).


 


 


	
  On
  Behalf of Member

  	
   

  	
  On
  Behalf of Member

  	
   

  	
  On
  Behalf of Member

  
	
  CNPCHK
  (Indonesia) Limited

  	
   

  	
  Continental
  Energy Corporation

  	
   

  	
  GeoPetro
  Resources Company

  
	
  Shareholder
  and owner of 35,000 common shares of the Company representing 70% of the
  Company’s share capital

  	
   

  	
  Shareholder
  and owner of 9,000 common shares of the Company representing 18% of the
  Company’s share capital

  	
   

  	
  Shareholder
  and owner of 6,000 common shares of the Company representing 12% of the
  Company’s share capital

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  by
  its Director

  Mr. Wang Mingcai

  	
   

  	
  by
  its President & CEO

  Mr. Richard L. McAdoo

  	
   

  	
  by
  its President & CEO

  Mr. S.J. Doshi

  
								



 


56

















 


TERRITORY OF THE BRITISH VIRGIN
ISLANDS


THE BVI BUSINESS COMPANIES ACT,
2004


(No. 16 of 2004)


 


ARTICLES OF ASSOCIATION


 


OF


 


Continental-GeoPetro (Bengara-II)
Ltd.


 


PRELIMINARY


 


1.                   In these Articles, if not inconsistent with
the subject or context, the words and expressions standing in the first column
of the following table shall bear the meanings set opposite them respectively
in the second column thereof.


 


	
  Words

  	
   

  	
  Meaning

  
	
   

  	
   

  	
   

  
	
  Act

  	
   

  	
  the BVI Business Companies Act 2004 (No 16 of 2004) including any
  modification, extension, re-enactment or renewal thereof and any regulations
  made thereunder.

  
	
   

  	
   

  	
   

  
	
  Articles

  	
   

  	
  these Articles of Association as originally framed or as from time to
  time amended.

  
	
   

  	
   

  	
   

  
	
  distribution

  	
   

  	
  in relation to a distribution by a company to a Member, means

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)          the direct or indirect transfer of an
  asset, other than the Company’s own shares, to or for the benefit of the Member
  or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)         the incurring of a debt to or for the benefit of a Member,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  in relation to shares held by a Member, and whether by means of a
  purchase of an asset, the purchase, redemption or other acquisition of
  shares, a transfer of indebtedness or otherwise, and includes a dividend.

  
	
   

  	
   

  	
   

  
	
  Consent Resolution

  of Members

  	
   

  	
  A Consent Resolution of Members is any resolution approved by the
  affirmative unanimous vote of one hundred percent (100%) of the shares of the
  Company at a meeting where all duly registered Members entitled to vote under
  the Shareholders Agreement are represented and present or by a resolution
  consented to in writing by all duly registered Members.

  
	
   

  	
   

  	
   

  
	
  Consent Resolution

  of Directors

  	
   

  	
  A Consent Resolution of Directors is any resolution approved by the
  affirmative unanimous vote of one hundred percent (100%) of the duly elected
  or appointed Directors at a duly convened and constituted meeting of the
  Board or by a resolution consented to in writing by all of the duly elected
  or appointed Directors.

  
	
   

  	
   

  	
   

  
	
  Member

  	
   

  	
  in relation to the Company, means a person whose name is entered in
  the register of Members as the holder of one or more shares, or fractional
  shares, in the Company.

  
	
   

  	
   

  	
   

  
	
  Memorandum

  	
   

  	
  the Memorandum of Association of the Company as originally framed or
  as from time to time amended.

  
	
   

  	
   

  	
   

  
	
  person

  	
   

  	
  An individual, a corporation, a trust, trustee, the estate of a
  deceased individual, a partnership or an unincorporated association of
  persons.

  



 


57

















 


	
  Ordinary Resolution

  of Directors

  	
   

  	
  An Ordinary Resolution of Directors is any resolution approved at a
  duly convened and constituted meeting of the Board of Directors of the
  Company by the affirmative vote of an absolute majority in excess of fifty
  percent (50%) of the Directors who are entitled to vote under the
  Shareholders Agreement and did not abstain; or a resolution consented to in
  writing by all duly elected or appointed Directors. Unless otherwise provided
  for in these Articles or in any Shareholders Agreement in effect an Ordinary
  Resolution of Directors shall prevail in decisions of the Board of Directors.

  
	
   

  	
   

  	
   

  
	
  Ordinary Resolution

  of Members

  	
   

  	
  An Ordinary Resolution of Members is any resolution approved at a
  duly convened and constituted meeting of the Members of the Company or by a
  resolution consented to in writing by the affirmative vote of an absolute
  majority of in excess of fifty percent (50%) of the votes of the authorized,
  issued and outstanding shares of the Company that are entitled to vote under
  the Shareholders Agreement.

  
	
   

  	
   

  	
   

  
	
  Seal

  	
   

  	
  Any Seal which has been duly adopted as the common seal of the
  Company.

  
	
   

  	
   

  	
   

  
	
  securities

  	
   

  	
  shares and debt obligations of every kind, and options, warrants and
  rights to acquire shares, or debt obligations.

  
	
   

  	
   

  	
   

  
	
  solvency test

  	
   

  	
  a company satisfies the solvency test if; the value of the company’s
  assets exceeds its liabilities, and the company is able to pay its debts as
  they fall due.

  
	
   

  	
   

  	
   

  
	
  Shareholders Agreement

  	
   

  	
  A separate written agreement amongst all the Members of the Company,
  which from time to time may be entered into by the Members to provide certain
  additional terms, conditions and or procedures for governing the Company and
  the relationships of the Members.

  
	
   

  	
   

  	
   

  
	
  Special Resolution

  of Members

  	
   

  	
  A Special Resolution of Members is any resolution approved at a duly
  convened and constituted meeting of the Members of the Company or by a
  resolution consented to in writing by the affirmative vote of a majority of
  in excess of seventy five percent (75%) of the votes of the authorized,
  issued and outstanding shares of the Company that are entitled to vote under
  the Shareholders Agreement.

  
	
   

  	
   

  	
   

  
	
  treasury shares

  	
   

  	
  shares in the Company that were previously issued but were
  repurchased, redeemed or otherwise acquired by the Company and not cancelled.

  



 


2.                   “Written” or any term of like import includes
words typewritten, printed, painted, engraved, lithographed, photographed or
represented or reproduced by any mode of 
reproducing words in a visible form, including telex, facsimile,
telegram, cable or other form of writing produced by electronic communication.


 


3.                   Save as aforesaid any words or expressions
defined in the Act shall bear the same meaning in these Articles.


 


4.                   Whenever the singular or plural number, or
the masculine, feminine or neuter gender is used in these Articles, it shall
equally, where the context admits, include the others.


 


5.                   A reference in these Articles to voting in
relation to shares shall be construed as a reference to voting by Members
holding the shares except that it is the votes allocated to the shares that
shall be counted and not the number of Members who actually voted and a
reference to shares being present at a meeting shall be given a corresponding
construction.


 


6.                   A reference to money in these Articles is,
unless otherwise stated, a reference to the currency in which shares in the
Company shall be issued according to the provisions of the Memorandum.


 


58

















 


REGISTERED SHARES


 


7.                   Every Member holding registered shares in the
Company shall be entitled to a certificate signed by a Director or Officer of
the Company or such other person who may be authorized from time to time by
Ordinary Resolution of Directors or under the Seal, with or without the
signature of any Director of the Company, specifying the share or shares held
by him and the signature of the Director or Officer or person so authorized and
the Seal may be facsimiles.


 


8.                   Any Member receiving a share certificate for
registered shares shall indemnify and hold the Company and its Directors and
Officers harmless from any loss or liability which it or they may incur by
reason of any wrongful or fraudulent use or representation made by any person
by virtue of the possession thereof. If a share certificate for registered
shares is worn out or lost it may be renewed on production of the worn out
certificate or on satisfactory proof of its loss together with such indemnity
as may be required by an Ordinary Resolution of Directors.


 


9.                   If several persons are registered as joint
holders of any shares, any one of such persons may give an effectual receipt
for any distribution payable in respect of such shares.


 


SHARES AND ISSUED SHARES


 


10.             Subject to the provisions of these Articles,
the Members of the Company may, by Consent Resolution of the Members without
limiting or affecting any rights previously conferred on the holders of any
existing shares or class or series of shares; offer, allot, grant options over
or otherwise dispose of shares to such persons, at such times and upon such
terms and conditions as the Company may by Consent Resolution of the Members
determine. In such case the Company shall not issue more shares than the
maximum number provided for in the Memorandum.


 


11.             The Company may issue fully paid, partly paid
or nil paid shares as well as bonus shares. A partly paid or nil paid share or
a share issued for a promissory note or other written obligation for payment of
a debt may be issued subject to forfeiture in the manner prescribed in these
Articles.


 


12.             Shares in the Company may be issued for
consideration in any form, including money, a promissory note or other
obligation to contribute money or property, real property, personal property
(including goodwill and know-how) services rendered or a contract for future
services  and the amount of such
consideration shall be determined by Consent Resolution of the Members, except
that in the case of shares with par value, the amount shall not be less than
the par value, and in the absence of fraud the decision of the Consent
Resolution of the Members as to the value of the consideration received by the
Company in respect of the issue is conclusive unless a question of law is
involved.


 


13.             Before issuing shares for a consideration other
than money, the Directors shall pass a resolution stating;


 


(a)          the amount to be credited for the issue of the shares;


 


(b)         their determination of the reasonable present cash value of the
non-money consideration for the issue; and


 


(c)          that, in their opinion, the present cash value of the non-money
consideration for the issue is not less than the amount to be credited for the
issue of the shares.


 


14.             A share issued by the Company upon conversion
of, or in exchange for, another share or a debt obligation or other security in
the Company, shall be treated for all purposes as having been issued for money
equal to the consideration received or deemed to have been received by the
Company in respect of the other share, debt obligation or security.


 


15.             Treasury shares may be disposed of by the
Company on such terms and conditions (not otherwise inconsistent with these
Articles) as the Company may by Consent Resolution of the Members determine.


 


16.             Subject to these Articles, the Company may
purchase, redeem or otherwise acquire and hold its own shares save that the
Company may not purchase, redeem or otherwise acquire its own shares without
the consent of the Member whose shares are to be purchased, redeemed or
otherwise acquired unless the Company is permitted by the Act or any other
provision in the Memorandum or Articles to purchase, redeem or otherwise
acquire the shares without their consent.


 


17.             No purchase, redemption or other acquisition
of shares shall be made unless the Directors determine by resolution of the
Directors that immediately after the purchase, redemption or other acquisition
the value of the  Company’s assets will
exceed its liabilities and the Company will be able to pay its debts as they
fall due.


 


59

















 


18.             Sections 60 (Process
for acquisition of own shares), 61 (Offer
to one or more shareholders) and 62 (Shares redeemed otherwise than at the option of company) of
the Act shall not apply to the Company.


 


19.             A determination by the Directors under
Article 17 is not required;


 


(a)          the Company redeems a share or shares pursuant to  a 
right  of  a Member to have his shares redeemed or to
have his shares exchanged for money or other property of the Company; or


 


(b)         by virtue of the provisions of Section 179 of the Act.


 


20.             Shares that the Company purchases, redeems or
otherwise acquires pursuant to Article 17 may be cancelled or held as treasury
shares except to the extent that such shares are in excess of 80 percent of the
issued shares of the Company in which case they shall be cancelled but they
shall be available for reissue.


 


21.             Shares in the Company shall only be held as
treasury shares where the Directors of the Company resolve as such and the
number of shares acquired, when aggregated with shares of the same class
already held by the Company as treasury shares, does not exceed 50% of the
shares of that class previously issued by the Company, excluding shares that
have been cancelled. All rights and obligations attaching to a treasury share are
suspended and shall not be exercised by or against the Company while it holds
the share as a treasury share. Treasury shares may be reissued by the Company
as new shares.


 


22.             The Company shall keep a register of Members
containing;


 


(a)          the names and addresses of the persons who hold registered shares in
the Company;


 


(b)         the number of each class and series of registered shares held by each
Member;


 


(c)          the date on which the name of each Member was entered in the register
of Members;


 


(d)         the date on which any person ceased to be a Member; and


 


(e)          such other information as may be prescribed pursuant to the Act.


 


23.             The register of Members may be in any such
form as the Directors may approve but if it is in magnetic, electronic or other
data storage form, the company must be able to produce legible evidence of its
contents.


 


24.             The original or a copy of the register of
Members shall be kept at the registered office of the Company or at the office
of the Registered Agent of the Company.


 


25.             A share is deemed to be issued when the name
of the Member is entered in the register of Members.


 


MORTGAGES AND CHARGES OF
REGISTERED SHARES


 


26.             Members may mortgage or charge their
registered shares in the Company with such mortgage or charge being evidenced
in writing and signed by, or with the authority of the registered holder of a
registered share to which the mortgage or charge relates. The Company shall
give effect to the terms of any valid mortgage or charge except insofar as it
may conflict with any requirements herein contained for consent to the transfer
of shares.


 


27.             In the case of the mortgage or charge of
registered shares there may be entered in the share register of the Company at
the request of the registered holder of such shares


 


(a)          a statement that the shares are mortgaged or charged;


 


(b)         the name of the mortgagee or chargee; and


 


(c)          the date on which the aforesaid particulars are entered in the share
register.


 


28.             Where particulars of a mortgage or charge are
entered in the register of Members, such particulars shall be cancelled


 


(a)          with the written consent of the named mortgagee or chargee or anyone
authorized to act on his behalf; or


 


(b)         upon evidence satisfactory to the Directors of the discharge of the
liability secured by the mortgage or charge and the issue of such indemnities
as the Directors shall consider necessary or desirable.


 


60

















 


29.             Whilst particulars of a mortgage or charge
over registered shares are entered in the register of Members pursuant to the
preceding articles no transfer of any share comprised therein shall be effected
without the written consent of the named mortgagee or chargee or anyone
authorized to act on his behalf.


 


FORFEITURE


 


30.             When shares not fully paid on issue or issued
for a promissory note or other written obligation for payment of a debt have
been issued subject to forfeiture, the following provisions shall apply.


 


31.             Written notice specifying a date for payment
to be made and the shares in respect of which payment is to be made shall be
served on the Member who defaults in making payment pursuant to a promissory
note or other written obligations to pay a debt.


 


32.             The written notice specifying a date for
payment shall


 


(a)          name a further date not earlier than the expiration of 14 days from the
date of service of the notice on or before which payment required by the notice
is to be made; and


 


(b)         contain a statement that in the event of non-payment at or before the
time named in the notice the shares, or any of them, in respect of which
payment is not made will be liable to be forfeited.


 


33.             Where a written notice has been issued and
the requirements of the notice have not been complied with within the
prescribed time, the Directors may at any time before tender of payment forfeit
and cancel the shares to which the notice relates.


 


34.             The Company is under no obligation to refund
any moneys to the Member whose shares have been forfeited and cancelled
pursuant to these provisions. Upon forfeiture and cancellation of the shares
the Member is discharged from any further obligation to the Company with
respect to the shares forfeited and cancelled.


 


LIEN


 


35.             The Company shall have a first and paramount
lien on every share issued for a promissory note or for any other binding
obligation to contribute money or property or any combination thereof to the
Company, and the Company shall also have a first and paramount lien on every
share standing registered in the name of a Member, whether singly or jointly
with any other person or persons, for all the debts and liabilities of such
Member or his estate to the Company, whether the same shall have been incurred
before or after notice to the Company of any interest of any person other than
such Member, and whether the time for the payment or discharge of the same
shall have actually arrived or not, and notwithstanding  that 
the  same are joint debts or liabilities
of such Member or his estate and any other person, whether a Member of the
Company or not. The Company’s lien on a share shall extend to all distributions
payable thereon. The Directors may at any time either generally, or in any
particular case, waive any lien that has arisen or declare any share to be
wholly or in part exempt from the provisions of this Article.


 


36.             In the absence of express provisions
regarding sale in the promissory note or other binding obligation to contribute
money or property, the Company may sell, in such manner as the Directors may by
Consent Resolution of Directors determine, any share on which the Company has
a  lien, but no sale shall be made unless
some sum in respect of which the lien exists is presently payable nor until the
expiration of twenty-one days after a notice in writing, stating and demanding
payment of the sum presently payable and giving notice of the intention to sell
in default of such payment, has been served on the holder for the time being of
the share.


 


37.             The net proceeds of the sale by the Company
of any shares on which it has a lien shall be applied in or towards payment of
discharge of the promissory note or other binding obligation to contribute
money or property or any combination thereof in respect of which the lien
exists so far as the same is presently payable and any residue shall (subject
to a like lien for debts or liabilities not presently payable as existed upon
the share prior to the sale) be paid to the holder of the share immediately
before such sale. For giving effect to any such sale the Directors may
authorize some person to transfer the share sold to the purchaser thereof. The
purchaser shall be registered as the holder of the share and he shall not be
bound to see to the application of the purchase money, nor shall his title to
the share be affected by any irregularity or invalidity in the proceedings in
reference to the sale.


 


61

















 


TRANSFER OF SHARES


 


38.             Registered shares in the Company are
transferred by a written instrument of transfer signed by the transferor and
containing the name and address of the transferee. The instrument of transfer
shall be signed by the transferee if registration as a holder of the share
shall impose a liability to the Company on the transferee. The instrument of
transfer of a registered share shall be sent to the Company for registration.
The instrument of transfer shall include provisions obliging any transferee to
become party to any Shareholder Agreement in effect at the time of transfer.


 


39.             The transfer of a registered share is
effective when the name of the transferee is entered on the register of
Members.


 


40.             If the Directors of the Company are satisfied
that an instrument of transfer relating to shares has been signed but that the
instrument has been lost or destroyed, they may resolve;


 


(a)          to accept such evidence of the transfer of the shares as they consider
appropriate; and


 


(b)         that the transferee’s name should be entered in the register of Members
notwithstanding the absence of the instrument of transfer.


 


41.             The Company must on the receipt of an
instrument of transfer from the transferor or transferee of a registered share
in the Company enter the name of the transferee of the share in the register of
Members and in the register of shares transfers without delay.


 


TRANSMISSION OF SHARES


 


42.             The personal representative of a deceased
Member may transfer a share even though the personal representative is not a
Member at the time of the transfer.


 


43.             The personal representative, executor or
administrator of a deceased Member, the guardian of an incompetent Member or
the trustee of a bankrupt Member shall be the only person recognized by the
Company as having any title to his share but they shall not be entitled to
exercise any rights as a Member of the Company until they have proceeded as set
forth in the next following three Articles.


 


44.             The production to the Company of any document
which is evidence of probate of the will, or letters of administration of the
estate, or confirmation as executor, of a deceased Member or of the appointment
of a guardian of an incompetent Member or the trustee of a bankrupt Member
shall be accepted by the Company even if the deceased, incompetent or bankrupt
Member is domiciled outside the 
British  Virgin Islands if the
document evidencing the grant of probate or letters of administration,
confirmation as executor, appointment as guardian or trustee in bankruptcy is
issued by a foreign court which had competent jurisdiction in the matter. For
the purpose of establishing whether or not a foreign court had competent
jurisdiction in such a matter the Directors may obtain appropriate legal advice.
The Directors may also require an indemnity to be given by the executor,
administrator, guardian or trustee in bankruptcy.


 


45.             The Company may enter in the register of
Members the name of any person becoming entitled by operation of law or
otherwise to a share or shares in consequence of the death, incompetence or
bankruptcy upon such evidence being produced as may reasonably be required by
the Directors.


 


46.             Any person who has become entitled to a share
or shares in consequence of the death, incompetence or bankruptcy of any Member
may, instead of being registered himself, request in writing that some person
to be named by him be registered as the transferee of such share or shares and
such request shall likewise be treated as if it were a transfer.


 


47.             What amounts to incompetence on the part of a
person is a matter to be determined by the court having regard to all the
relevant evidence and the circumstances of the case.


 


62

















 


REDUCTION OR INCREASE IN
AUTHORISED AND UNISSUED SHARES


 


48.             Only by Consent Resolution of the Members,
the Company may amend the Memorandum to increase the maximum number of shares
the Company is authorized to issue and may in respect of any unissued shares
increase or reduce the number of such shares, increase or reduce the par value
of any such shares or effect any combination of the foregoing.


 


49.             Only by Consent Resolution of the Members,
the Company may amend the Memorandum to


 


(a)          divide the shares, including issued shares, of a class or series into a
larger number of shares of the same class or series; or


 


(b)         combine the shares, including issued shares, of a class or series into
a smaller number of shares of the same class or series,


 


provided, however, that;


 


(i)           where shares are divided or combined under
(a) or (b) of this Article, the aggregate par value of the new shares on issue
that have a par value must be equal to the aggregate par value of the original
issued shares that had a par value prior to the division or combination under
(a) or (b) of this Article; and


 


(ii)        the Company shall not divide its shares if it
would cause the maximum number of shares that the Company is authorized to
issue by its Memorandum to be exceeded.


 


MEETINGS AND CONSENTS OF MEMBERS


 


50.             The Directors of the Company may convene
meetings of the Members of the Company at such times and in such manner and
places within or outside the British Virgin Islands as the Directors consider
necessary or desirable.


 


51.             Upon the written request of Members holding
ten percent (10%) or more of the outstanding voting shares in the Company the
Directors shall convene a meeting of Members.


 


52.             The Directors shall give not less than 7 days
notice of meetings of Members to those persons whose names on the date the
notice is given appear as Members in the share register of the Company and are
entitled to vote at the meeting.


 


53.             The Directors may fix the date notice is
given of a meeting of Members as the record date for determining those shares
that are entitled to vote at the meeting.


 


54.             A meeting of Members may be called on short
notice:


 


(a)          if Members holding not less than 90 percent of the total number of
shares entitled to vote on all matters to be considered at the meeting, or 90
percent of the votes of each class or series of shares where Members are
entitled to vote thereon as a class or series together with not less than a 90
percent majority of the remaining votes, have agreed to short notice of the
meeting, or


 


(b)         if all Members holding shares entitled to vote on all or any matters to
be considered at the meeting have waived notice of the meeting and for this
purpose presence at the meeting shall be deemed to constitute waiver.


 


55.             Failure of the Directors to give notice of a
meeting to a Member invalidates a meeting of Members.


 


56.             A Member may be represented at a meeting of
Members by a proxy who may speak and vote on behalf of the Member.


 


57.             The instrument appointing a proxy shall be
produced at the place appointed for the meeting before the time for holding the
meeting at which the person named in such instrument proposes to vote.


 


63

















 


58.             An instrument appointing a proxy shall be in
substantially the following form or such other form as the Chairman of the
meeting shall accept as properly evidencing the wishes of the Member appointing
the proxy.


 


(Name of Company)


 


I/We        being a
Member of the above Company with        shares
HEREBY APPOINT     of     or failing him,     
of     to be my/our proxy to
vote for me/us at the meeting of Members to be held on the    
day of     and at any adjournment thereof. (Any restrictions on
voting to be inserted here.) Signed this        
day of     .


                             
(Member)


 


59.             The following shall apply in respect of joint
ownership of shares:


 


(a)          if two or more persons hold shares jointly each of them may be present
in person or by proxy at a meeting of Members and may speak as a Member;


 


(b)         if only one of the joint owners is present in person or by proxy he may
vote on behalf of all joint owners, and


 


(c)          if two or more of the joint owners are present in person or by proxy
they must vote as one.


 


60.             A Member shall be deemed to be present at a
meeting of Members if he participates by telephone or other electronic means
and all Members participating in the meeting are able to hear each other.


 


61.             A meeting of Members is duly constituted if,
at the commencement of the meeting, there are present in person or by proxy not
less than seventy five percent (75%) of the votes of the shares or class or
series of shares entitled to vote on resolutions of Members to be considered at
the meeting. If a quorum be present, notwithstanding the fact that such quorum
may be represented by only one person then such person may resolve any matter
and a certificate signed by such person accompanied where such person be a
proxy by a copy of the proxy form shall constitute a valid resolution of
Members.


 


62.             If within two hours from the time appointed
for the meeting a quorum is not present, the meeting, if convened upon the
requisition of Members, shall be dissolved; in any other case it shall stand
adjourned to the next business day at the same time and place or to such other
time and place as the Directors may determine, and if at the adjourned meeting
there are present within one hour from the time appointed for the meeting in
person or by proxy not less than fifty percent (50%) of the votes of the  shares or each class or series of shares
entitled to vote on the resolutions to be considered by the meeting, those
present shall constitute a quorum but otherwise the meeting shall be dissolved.


 


63.             At every meeting of Members, the Chairman of
the Board of Directors shall preside as chairman of the meeting. If there is no
Chairman of the Board of Directors or if the Chairman of the Board of Directors
is not present at the meeting, the Members present shall choose some one of
their number to be the chairman. If the Members are unable to choose a chairman
for any reason, then the person representing the greatest number of voting
shares present in person or by prescribed form of proxy at the meeting shall
preside as chairman failing which the oldest individual Member or
representative of a Member present shall take the chair.


 


64.             The chairman may, with the consent of the
meeting, adjourn any meeting from time to time, and from place to place, but no
business shall be transacted at any adjourned meeting other than the business
left unfinished at the meeting from which the adjournment took place.


 


65.             At any meeting of the Members the chairman
shall be responsible for deciding in such manner as he shall consider
appropriate whether any resolution has been carried or not and the result of
his decision shall be announced to the meeting and recorded in the minutes
thereof. If the chairman shall have any doubt as to the outcome of any
resolution put to the vote, he shall cause a poll to be taken of all votes cast
upon such resolution, but if the chairman shall fail to take a poll then any
Member present in person or by proxy who disputes the announcement by the
chairman of the result of any vote may immediately following such announcement
demand that a poll be taken and the chairman shall thereupon cause a poll to be
taken. If a poll is taken at any meeting, the result thereof shall be duly
recorded in the minutes of that meeting by the chairman.


 


66.             Any person other than an individual shall be
regarded as one Member and subject to the specific provisions hereinafter
contained for the appointment of representatives of such persons the right of
any individual to speak for or represent such Member shall be determined by the
law of the jurisdiction where, and by the documents by which, the person is
constituted or derives its existence. In case of doubt, the Directors may in
good faith seek legal advice from any qualified person and unless and until a
court of competent jurisdiction shall otherwise rule, the Directors may rely
and act upon such advice without incurring any liability to any Member.


 


64

















 


67.             Any person other than an individual which is
a Member of the Company may by resolution of its Directors or other governing
body authorize such person as it thinks fit to act as its representative at any
meeting of the Company or of any class of Members of the Company, and the
person so authorized shall be entitled to exercise the same powers on behalf of
the person which he represents as that person could exercise if it were an
individual Member of the Company.


 


68.             The chairman of any meeting at which a vote
is cast by proxy or on behalf of any person other than an individual may call
for a notarially certified copy of such proxy or authority which shall be
produced within 7 days of being so requested or the votes cast by such proxy or
on behalf of such person shall be disregarded.


 


69.             Directors of the Company may attend and speak
at any meeting of Members of the Company and at any separate meeting of the
holders of any class or series of shares in the Company.


 


70.             An action that may be taken by the Members at
a meeting may also be taken by a resolution of Members consented to in writing
or by telex, telegram, cable, facsimile or other written electronic
communication, without the need for any notice, provided the said Consent
Resolution of Members is adopted by the unanimous written consent of all
Members. Consent Resolutions shall satisfy the requirements of a Special
Resolution of Members as provided for in these Articles and the Memorandum. The
Consent Resolution may be in the form of counterparts, each counterpart being
signed by one or more Members.


 


DIRECTORS


 


71.             The Directors of the Company shall be elected
or appointed in accordance with the provisions hereof. A person shall not be
appointed as a Director unless he has consented in writing to be a Director and
is qualified to act as a Director under the Act.


 


72.             The number of Directors of the Company shall
be not less than three (3) and not more than five (5) as further provided for
in the Shareholders Agreement.


 


73.             Each Director shall hold office for the term
fixed by the Member who appointed such Director as provided for in article-72;
or until his earlier death, resignation or removal.


 


74.             Directors shall not be entitled to nominate a
reserve Director.


 


75.             A Director may be removed from office, with
or without cause, by the Member who appointed such Director as provided for in
article-72.


 


76.             A Director may resign his office by giving
written notice of his resignation to the Company and the resignation shall have
effect from the date the notice is received by the Company or from such later
date as may be specified in the notice.


 


77.             A Director of the Company shall resign
forthwith if he is, or becomes, disqualified to act as a Director under the
Act.


 


78.             The Members may at any time, in accordance
with the provisions of article-72, appoint any person to replace a Director or
to fill a vacancy. There is a vacancy if a Director dies, resigns or otherwise
ceases to hold office as a Director prior to the expiration of his term of
office. The Directors may not appoint a Director to fill a vacancy.


 


79.             The Company shall keep a register of
Directors containing:


 


(a)          the names and addresses of the persons who are Directors of the
Company;


 


(b)         the date on which each person whose name is entered in the register was
appointed as a Director of the Company;


 


(c)          the date on which each person named as a Director ceased to be a Director
of the Company; and


 


(d)         such other information as may be prescribed pursuant to the Act.


 


80.             The original or a copy of any register of
Directors shall be kept at the office of the Registered Agent of the Company.


 


81.             The register of Directors may be in any such
form as the Directors may approve but if it is in magnetic, electronic or other
data storage form, the Company and the Registered Agent of the Company must be
able to produce legible evidence of its contents.


 


65

















 


82.             The Members may at any time by Consent
Resolution of Members made in accordance with the provisions therefore, if any,
of any Shareholder Agreement in effect, fix the emoluments of Directors with
respect to services to be rendered in any capacity to the Company.


 


83.             A Director shall not require a share
qualification and may be an individual or a company.


 


POWERS OF DIRECTORS


 


84.             The business and affairs of the Company shall
be managed by the Directors who may exercise all such powers of the Company as
are not by the Act or by the Memorandum or by these Articles or by any
Shareholders Agreement in effect; required to be exercised by the Members of
the Company, subject to any delegation of such powers as may be authorized by
these Articles and to such requirements as may be prescribed by a Special
Resolution of Members; provided that no such requirement shall invalidate any
prior act of the Directors which would have been valid if such requirement had
not been made. Notwithstanding anything in Section 175 of the Act the Directors
shall NOT have the power to sell, transfer, lease, exchange or otherwise
dispose of more than fifty percent (50%) of the assets of the Company without
first obtaining the consent of the Members by Special Resolution of Members of
the Company.


 


85.             If a Director is appointed by a corporate
Member in accordance with the provisions therefore, if any, of any Shareholder
Agreement in effect, then such Director may, and in some cases may be obliged,
when exercising powers or performing duties as a Director to act in a manner
which he believes is in the best interests of the corporate Member appointing
him even though it may not be in the best interests of the Company. Any
Director which is a body corporate may appoint any person its duly authorized
representative for the purpose of representing it at meetings of the Board of
Directors or with respect to unanimous written consents.


 


86.             The Directors may, by an Ordinary Resolution
of Directors made in accordance with the provisions therefore, if any, of any
Shareholder Agreement in effect, appoint any person, including a person who is
a Director, to be an Officer or Agent of the Company.


 


87.             Every Officer or Agent of the Company has
such powers and authority of the Directors, only as and strictly limited to
those conferred upon him in the Ordinary Resolution of Directors appointing the
Officer or Agent.


 


88.             Save as specifically required to be approved
by way of Special Resolution or Consent Resolution of Directors in the
Memorandum, these Articles, or any Shareholders Agreement in effect, the
Directors may, by Ordinary Resolution of Directors, exercise all the powers of
the Company.


 


89.             No Director, nor any committee of Directors,
nor the Board of Directors has any power or authority with respect to the
following without the prior, express, written Consent Resolution of the
Members;


 


(a)          to amend the memorandum or articles;


 


(b)         to amend any shareholder agreements;


 


(c)          to amend, terminate or relinquish the Bengara-II production sharing
contract including an assignment of interest thereof;


 


(d)         to open or close the Earn-In Obligation Joint Account at HSBC Hong Kong
Branch account number 808-215644-838 established as provided for in the
Shareholders Agreement;


 


(e)          to change the operating instructions and authorized signers on the
Earn-In Obligation Joint Account at HSBC Hong Kong Branch account number
808-215644-838 established except as provided for in the Shareholders
Agreement;


 


(f)            to approve a plan of merger, consolidation or
arrangement;


 


(g)         to authorize the Company to continue as a company incorporated under
the laws of a jurisdiction outside the British Virgin Islands; and


 


(h)         to delegate any of the aforesaid power and authority to Officers or
Agents.


 


90.             The Directors may, by Ordinary Resolution of
Directors made in accordance with the provisions therefore, if any, of any
Shareholder Agreement in effect, exercise all the powers of the Company,
whether to borrow money and to mortgage or charge its undertakings and property
or any part thereof, to issue debentures, debenture stock and other securities
whenever money is borrowed or as security for any debt, liability or obligation
of the Company or of any third party or otherwise.


 


66

















 


91.             Except as provided for in articles 89.d and
89.e above, all cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments and all receipts for moneys paid to  the 
Company, shall be signed, drawn, accepted, endorsed or otherwise
executed, as the case may be, in such manner as shall from time to time be
determined by Ordinary Resolution of Directors made in accordance with the
provisions therefore, if any, of any Shareholder Agreement in effect.


 


92.             The Company shall keep a register of all
relevant charges created by the Company showing:


 


(a)          if the charge is a charge created by the Company, the date of its
creation or if the charge is existing on property acquired by the Company, the
date on which the property was acquired;


 


(b)         a short description of the liability secured by the charge;


 


(c)          a short description of the property charged;


 


(d)         the name and address of the trustee for the security, or if there is no
such trustee the name and address of the chargee;


 


(e)          unless the charge is a security to bearer, the name and address of the
holder of the charge;


 


(f)            details of any prohibition or restriction ,
if any, contained in the instrument creating the charge on the power of the
company to create any future charge ranking in priority to or equally with the
charge; and


 


(g)         such other information as may be prescribed pursuant to the Act; and


 


the original or a copy of the register of charges
shall be kept at the registered office of the Company or at the office of the
Registered Agent of the Company.


 


93.             Each Director shall be obliged to familiarize
himself with the special terms and conditions of any Shareholders Agreement
which may be from time to time entered into by the Members. Each Director shall
also be obliged to act in his capacity as a Director in compliance with the
terms, procedures and conditions imposed on actions of Company Directors in
accordance with the provisions therefore of any Shareholders Agreement in
effect.


 


PROCEEDINGS OF DIRECTORS


 


94.             The Directors of the Company may meet at such
times and in such manner and places within or outside the British Virgin
Islands as the Directors may determine to be necessary or desirable. Any one or
more Directors may convene a meeting of Directors.


 


95.             A Director shall be deemed to be present at a
meeting of Directors if he participates by telephone or other electronic means
and all Directors participating in the meeting are able to hear each other.


 


96.             A Director shall be given not less than 3
days notice of meetings of Directors, but a meeting of Directors held without 3
days notice having been given to all Directors shall be valid if all the
Directors entitled to vote at the meeting who do not attend, waive notice of
the meeting and for this purpose, the presence of a Director at a meeting shall
constitute waiver on his part. The inadvertent failure to give notice of a
meeting to a Director invalidates the meeting.


 


97.             A Director may by a written instrument
appoint an alternate who need not be a Director and an alternate is entitled to
attend meetings in the absence of the Director who appointed him and to vote or
consent in place of the Director.


 


98.             A meeting of Directors is duly constituted
for all purposes if at the commencement of the meeting there are present in
person, or by alternate, a quorum of not less than two (2) directors as further
provided for in the Shareholders Agreement.


 


99.             If the Company shall have only one Director
the provisions herein contained for meetings of the Directors shall not apply
but such sole Director shall have full power to represent and act for the
Company in all matters as are not by the Act or the Memorandum or these
Articles required to be exercised by the Members of the Company and in lieu of
minutes of a meeting shall record in writing and sign a note or memorandum of
all matters requiring a resolution of Directors. Such a note or memorandum
shall constitute sufficient evidence of such resolution for all purposes.


 


100.       At every meeting of the Directors the Chairman of the Board of
Directors shall preside as chairman of the meeting. If there is no Chairman of
the Board of Directors or if the Chairman of the Board of Directors is not
present at the meeting the Vice Chairman of the Board of Directors shall
preside. If there is no Vice Chairman of the Board of Directors or if the Vice
Chairman of the Board of Directors is not present at the meeting the Directors
present shall choose some one of their number to be chairman of the meeting.


 


67

















 


101.       An action that may be taken by the Board of Directors at a meeting may
also be taken by a resolution consented to in writing or by email, telex,
telegram, cable, facsimile or other written electronic communication by all
Directors on the Board, without the need for any notice, provided the said
resolution is adopted by the unanimous written consent of all the Directors on
the Board. Written Consent Resolutions shall satisfy the requirements of a
Consent Resolution of Directors as provided for in these Articles and the
Memorandum. The Consent Resolution may be in the form of counterparts, each
counterpart being signed by one or more Directors.


 


102.       The Directors shall cause permanent records to be kept of minutes of
all meetings of the Board of Directors, the Members, and committees; and copies of all resolutions consented to by
Directors and by Members.


 


103.       The resolutions, records and minutes referred to in the preceding
Article shall be kept at the registered office of the Company, its principal
place of business or at such other place as the Directors determine.


 


104.       The Directors may, by Ordinary Resolution of Directors, designate one
or more committees to advise the Board of Directors, each such committee may
consist of one or more Directors, Officers or Members.


 


105.       Any committee established by the Board of Directors shall not have any
of the powers or authority of a Director of the Board of Directors and shall
have power and authority only to investigate and advise the Board of Directors
on specific issues for which the committee was established.


 


106.       The Directors have no power to delegate any of the powers of a Director
or of the Board of Directors to a committee of Directors.


 


107.       The meetings and proceedings of each committee established by the
Directors shall be recorded in minutes which shall be provided to the Board of
Directors for the Company’s records.


 


OFFICERS


 


108.       The Company may by Ordinary Resolution of Directors made in accordance
with the provisions therefore, if any, of any Shareholder Agreement in effect,
appoint Officers of the Company at such times as shall be considered necessary
or expedient. Such Officers shall consist of a Chairman, a CEO (Chief Executive
Officer), a COO (Chief Operating Officer), a CXO (Chief Exploration Officer), a
CFO (Chief Financial Officer), a Secretary and such other Officers as may from
time to time be deemed desirable. Any number of offices may be held by the same
person.


 


109.       The Officers shall perform such duties as shall be prescribed at the
time of their appointment as provided for in article-86, but in the absence of
any specific allocation of duties it shall be the responsibility of the
Chairman to preside at meetings of Directors and Members, the CEO to manage the
day to day affairs of the Company, the COO to act in order of seniority in the
absence of the Chairman but otherwise to perform such duties as may be
delegated to them by the CEO or by the Board of Directors, the Secretary to
maintain the share register, minute books and records (other than financial
records) of the Company and to ensure compliance with all procedural
requirements imposed on the Company by applicable law, and the CFO to be
responsible for the financial affairs of the Company.


 


110.       The emoluments of all Officers shall be fixed by Ordinary Resolution of
Directors made in accordance with the provisions therefore, if any, of any
Shareholder Agreement in effect.


 


111.       The Officers of the Company shall hold office until their successors
are duly elected and qualified, but any Officer elected or appointed by the
Directors may be removed at any time, with or without cause, by Ordinary
Resolution of Directors made in accordance with the provisions therefore, if
any, of any Shareholder Agreement in effect. Any vacancy occurring in any
office of the Company may be filled by Ordinary Resolution of Directors made in
accordance with the provisions therefore, if any, of any Shareholder Agreement
in effect.


 


CONFLICT OF INTERESTS


 


112.       A Director of the Company shall, forthwith after becoming aware of the
fact that he is interested in a transaction entered into or to be entered into
by the Company, disclose the interest to all other Directors of the Company.


 


68

















 


113.       A Director of the Company is not required to comply with Article 112
if;


 


(a)          the transaction or proposed
transaction is between the Director and the Company; and


 


(b)         the
transaction or proposed transaction is or is to be entered into in the ordinary
course of the company’s business and on usual terms and conditions.


 


114.       For the purposes of Article 112 a disclosure to all other Directors to
the effect that a Director is a Member, Director or Officer of another named
entity or has a fiduciary relationship with respect to the entity or a named
individual and is to be regarded as interested in any transaction which may,
after the date of the entry or disclosure, be entered into with that entity or
individual, is a sufficient disclosure of interest in relation to that
transaction.


 


115.       A Director of the Company who is interested in a transaction entered
into or to be entered into by the Company may:


 


(a)          not vote on a matter relating to the transaction;


 


(b)         attend a
meeting of Directors at which a matter relating to the transaction arises and
be included among the Directors present at the meeting for the purposes of a
quorum; and


 


(c)          not sign a document on behalf of the Company, or do any other thing in his
capacity as a Director, that relates to the transaction,


 


and, subject to compliance with the Act shall
not, by reason of his office be accountable to the Company for any benefit
which he derives from such transaction and no such transaction shall be liable
to be avoided on the grounds of any such interest or benefit.


 


INDEMNIFICATION


 


116.       Subject to the limitations hereinafter provided the Company may
indemnify against all expenses, including legal fees, and against all
judgments, fines and amounts paid in settlement and reasonably incurred in
connection with legal, administrative or 
investigative proceedings any person who;


 


(a)          is or was a party or is threatened to be made a party to any
threatened, pending or completed proceedings, whether civil, criminal,
administrative or investigative, by reason of the fact that the person is or
was a Director, an Officer or a liquidator of the Company; or


 


(b)         is or was, at the request of the Company, serving as a Director of, or
in any other capacity is or was acting for, another body corporate or a
partnership, joint venture, trust or other enterprise.


 


117.       The Company may only indemnify a person if the person acted honestly
and in good faith in what he believed to be in the best interests of the
Company and, in the case of criminal proceedings, the person had no reasonable
cause to believe that his conduct was unlawful.


 


118.       For the purposes of the preceding Article, a Director acts in the best
interests of the Company if he acts in the best interests of;


 


(a)          the Company’s holding company; or


 


(b)         a shareholder or shareholders of the Company;


 


in
either case, in the circumstances specified in Article 85.


 


119.       The decision of the Directors as to whether the person acted honestly
and in good faith and with a view to the best interests of the Company and as
to whether the person had no reasonable cause to believe that his conduct was
unlawful is, in the absence of fraud, sufficient for the purposes of these
Articles, unless a question of law is involved.


 


120.       The termination of any proceedings by any judgment, order, settlement,
conviction or the entering of a nolle prosequi does not, by itself, create a
presumption that the person did not act honestly and in good faith and with a
view to the best interests of the Company or that the person had reasonable
cause to believe that his conduct was unlawful.


 


69

















 


121.       Expenses, including legal fees, incurred by a Director in defending any
legal, administrative or investigative proceedings may be paid by the Company
in advance of the final disposition of such proceedings upon receipt of an
undertaking by or on behalf of the Director to repay the amount if it shall
ultimately be determined that the Director is not entitled to be indemnified by
the Company in accordance with these Articles.


 


122.       Expenses, including legal fees, incurred by a former Director in
defending any legal, administrative or investigative proceedings may be paid by
the Company in advance of the final disposition of such proceedings upon
receipt of an undertaking by or on behalf of the former Director to repay the
amount if it shall ultimately be determined that the Director is not entitled
to be indemnified by the Company in accordance with these Articles.


 


123.       The indemnification and advancement of expenses provided by, or granted
pursuant to, these Articles is not exclusive of any other rights to which the
person seeking indemnification of advancement of expenses may be entitled under
any agreement, resolution of Members, resolution of disinterested Directors or
otherwise, both as to acting in the person’s official capacity and as to acting
in another capacity while serving as a Director of the Company.


 


124.       If a person to be indemnified has been successful in defense of any
proceedings referred to above the person is entitled to be indemnified against
all expenses, including legal fees, and against all judgments, fines and
amounts paid in settlement and reasonably incurred by the person in connection
with the proceedings.


 


125.       The Company may purchase and maintain insurance in relation to any
person who is or was a Director, an Officer or a liquidator of the Company, or
who at the request of the Company is or was serving as a Director, an Officer
or a liquidator of, or in any other capacity is or was acting for, another body
corporate or a  partnership, joint  venture, trust or other enterprise, against
any liability  asserted against the person
and incurred by the person in that capacity, whether or not the Company has or
would have had the power to indemnify the person against the liability as
provided in these Articles.


 


SEAL


 


126.       The Company shall have a Seal and may have more than one Seal.
References herein to the Seal shall be references to every Seal which shall
have been duly adopted by Ordinary Resolution of Directors. The Directors shall
provide for the safe custody of the Seal and for an imprint thereof to be kept
at the office of the Registered Agent of the Company. Except as otherwise
expressly provided herein, the Seal when affixed to any written instrument,
shall be witnessed and attested to by the signature of a Director or any other
person so authorized from time to time by Ordinary Resolution of Directors. Such
authorization may be before or after the Seal is affixed, may be general or specific
and may refer to any number of sealings. The Directors may provide for a
facsimile of the Seal and of the signature of any Director or authorized person
which may be reproduced by printing or other means on any instrument and it
shall have the same force and validity as if the Seal had been affixed to such
instrument and the same had been signed as hereinbefore described.


 


DISTRIBUTIONS


 


127.       The Directors of the Company may 
by Ordinary Resolution authorize a distribution by the Company at any
time and of any amount and to any Members they think fit if they are satisfied
on reasonable grounds that immediately after the distribution;


 


(a)          the value of the Company’s assets will exceed its liabilities, and


 


(b)         the Company will be able to pay its debts as they fall due.


 


128.       A resolution of the Directors passed under the preceding Article shall
contain a statement that, in the opinion of the Directors, immediately after
the distribution the value of the Company’s assets will exceed its liabilities,
and the Company will be able to pay its debts as they fall due.


 


129.       If, after a distribution is authorized and before it is made, the
Directors cease to be satisfied on reasonable grounds that the Company will,
immediately after the distribution satisfy the solvency test, any distribution
made by the Company is deemed not to have been authorized.


 


130.       If, by virtue of the preceding Article, a distribution is deemed not to
have been authorized, a Director who;


 


(a)          ceased, after authorization but before the making of the distribution,
to be satisfied on reasonable grounds for believing that the company would
satisfy the solvency test immediately after the distribution is made; and


 


70

















 


(b)         failed to take reasonable steps to prevent the distribution being made;


 


is personally liable to the company to repay to the
company so much of the distribution as is not able to be recovered from
Members.


 


131.       A distribution made to a Member at a time when the company did not,
immediately after the distribution, satisfy the solvency test may be recovered
by the company from the Member unless;


 


(a)          the Member received the distribution in good faith and without
knowledge of the company’s failure to satisfy the solvency test;


 


(b)         the Member has altered his position in reliance on the validity of the
distribution; and


 


(c)          it would be unfair to require repayment in full or at all.


 


DISTRIBUTIONS BY WAY OF DIVIDEND


 


132.       The Company may by a Ordinary Resolution of Directors declare a
distribution by way of dividend and pay such distribution in money, shares or
other property. In the event that distributions by way of dividend are paid in
specie the Directors shall have responsibility for establishing and recording
in the Ordinary Resolution of Directors authorizing the distribution by way of
dividend, a fair and proper value for the assets to be so distributed.


 


133.       The Directors may from time to time pay to the Members such interim
distributions by way of dividend as appear to the Directors to be justified by
the profits of the Company.


 


134.       The Directors may, before declaring any distribution by way of
dividend, set aside out of the profits of the Company such sum as they think
proper as a reserve fund, and may invest the sum so set aside as a reserve fund
upon such securities as they may select.


 


135.       Notice of any distribution by way of dividend that may have been
declared shall be given to each Member in the manner hereinafter mentioned and
all distributions by way of dividend unclaimed for 3 years after having been
declared may be forfeited by Ordinary Resolution of Directors for the benefit
of the Company.


 


136.       No distribution by way of dividend shall bear interest as against the
Company and no distribution by way of dividend shall be paid on treasury shares
or shares held by another company of which the Company holds, directly or
indirectly, shares having more than 50 percent of the vote in electing
Directors.


 


137.       A share issued as a distribution by way of dividend by the Company
shall be treated for all purposes as having been issued for money equal to the
value determined by resolution of the Directors. In the absence of fraud the
decision of the Directors as to the value of the share is conclusive unless a
question of law is involved.


 


138.       A division of the issued and outstanding shares of a class or series of
shares into a larger number of shares of the same class or series having a
proportionately smaller par value does not constitute a distribution by way of
dividend of shares.


 


ACCOUNTS AND AUDIT


 


139.       The Directors shall prepare, not less than quarterly, a profit and loss
account and a balance sheet and distribute them to all Members. The profit and
loss account and balance sheet shall be drawn up so as to give respectively a
true and fair view of the profit and loss of the Company for the financial
period and a true and fair view of the state of affairs of the Company as at
the end of the financial period.


 


140.       The accounts of the Company shall be examined by internationally
recognized auditors not less than annually.


 


141.       Auditors shall be appointed by a Ordinary Resolution of Members.


 


142.       The auditors may not be Members of the Company and no Director or other
Officer shall be eligible to be an auditor of the Company during his
continuance in office.


 


71

















 


143.       The remuneration of the auditors of the Company shall be fixed as
determined by Ordinary Resolution of Directors.


 


144.       The auditors shall examine each profit and loss account and balance
sheet required to be served on every Member of the Company or laid before a
meeting of the Members of the Company and shall state in a written report
whether or not


 


(a)          in their opinion the profit and loss account and balance sheet give a
true and fair view respectively of the profit and loss for the period covered
by the accounts, and of the state of affairs of the Company at the end of that
period; and


 


(b)         all the information and explanations required by the auditors have been
obtained.


 


145.       The report of the auditors shall be annexed to the accounts and shall
be read at the meeting of Members at which the accounts are laid before the
Company or shall be served on the Members.


 


146.       Every auditor of the Company shall have a right of access at all times
to the books of account and vouchers of the Company, and shall be entitled to
require from the Directors and Officers of the Company such information and
explanations as he thinks necessary for the performance of the duties of the
auditors.


 


147.       The auditors of the Company shall be entitled to receive notice of, and
to attend any meetings of Members of the Company at which the Company’s profit
and loss account and balance sheet are to be presented.


 


NOTICES


 


148.       Any notice, information or written statement to be given by the Company
to Members may be served in any way by which it can reasonably be expected to
reach each Member or by mail addressed to each Member at the address shown in
the share register.


 


149.       Any summons, notice, order, document, process, information or written
statement to be served on the Company may be served by leaving it, or by
sending it by registered mail addressed to the Company, at its registered
office, or by leaving it with, or by sending it by registered mail to, the
Registered Agent of the Company.


 


150.       Service of any summons, notice, order, document, process, information
or written statement to be served on the Company may be proved by showing that
the summons, notice, order, document, process, information or written statement
was delivered to the registered office or the Registered Agent of the Company
or that it was mailed in such time as to admit to its being delivered to the
registered office or the Registered Agent of the Company in the normal course
of delivery within the period prescribed for service and was correctly
addressed and the postage was prepaid.


 


PENSION AND SUPERANNUATION FUNDS


 


151.       The Directors may establish and maintain or procure the establishment
and maintenance of any non-contributory or contributory pension or
superannuation funds for the benefit of, and give or procure the giving of
donations, gratuities, pensions, allowances or emoluments to, any persons who
are or were at any time in the employment or service of the Company or any
company which is a subsidiary of the Company or is allied to or associated with
the Company or with any such subsidiary, or who are or were at any time
Directors or Officers of the Company or of any such other company as aforesaid
or who hold or held any salaried employment or office in the Company or such
other company, or any persons in whose welfare the Company or any such other
company as aforesaid is or has been at any time interested, and to the wives,
widows, families and dependents of any such person, and may make payments for
or towards the insurance of any such persons as aforesaid, and may do any of
the matters aforesaid either alone or in conjunction with any such other  company as aforesaid. Subject always to the
proposal being approved by Special Resolution of Members, a Director holding
any such employment or office shall be entitled to participate in and retain
for his own benefit any such donation, gratuity, pension allowance or
emolument.


 


VOLUNTARY WINDING UP AND
DISSOLUTION


 


152.       The Company may voluntarily commence to wind up and dissolve by a
Consent Resolution of Members.


 


72

















 


CONTINUATION


 


153.       The Company may by a Consent Resolution of Members continue as a
company incorporated under the laws of a jurisdiction outside the British
Virgin Islands in the manner provided under those laws.


 


ARBITRATION


 


154.       Whenever any difference arises between the Company on the one hand and
any of the Members or their executors, administrators or assigns on the other
hand, touching the true intent and construction or the incidence or
consequences of these Articles or of the Act, touching anything done or
executed, omitted or suffered in pursuance of the Act or touching any breach or
alleged breach or otherwise relating to the premises or to these Articles, or
to any Act or Ordinance affecting the Company or to any of the affairs of the
Company such difference shall, unless the parties agree to refer the same to a
single arbitrator, be referred to 2 arbitrators one to be chosen by each of the
parties to the difference and the arbitrators shall before entering on the
reference appoint an umpire.


 


155.       If either party to the reference makes default in appointing an
arbitrator either originally or by way of substitution (in the event that an
appointed arbitrator shall die, be incapable of acting or refuse to act) for 10
days after the other party has given him notice to appoint the same, such other
party may appoint an arbitrator to act in the place of the arbitrator of the
defaulting party.


 


---


 


Whereas:
An original articles of association of the Company dated the 9th day of
September 1997 was made to incorporate the Company as Number 247888 in the name
Apex (Bengara-II) Ltd. under the International Business Corporations Act
(Cap.291) of the British Virgin Islands.


 


Whereas:
Apex (Bengara-II) Ltd. changed its name to Continental-Wisdom-GeoPetro
(Bengara-II) Ltd. on 5 June 2003. Continental-Wisdom-GeoPetro (Bengara-II) Ltd.
changed its name to Continental-GeoPetro (Bengara-II) Ltd. on 17 December 2003.


 


We, the undersigned Member shareholders of the
Company, owning and representing 100% of
the Company’s authorized, issued and fully paid up share capital, hereby sign this amended,
replacement Articles of Association the    th day of September, 2006
and indicate our unanimous consent that from said date this Articles of
Association amends, replaces and supersedes all others; for the purposes of
governing the Company in accordance with the Members’ wishes and also for the
purposes of conforming the Company’s Articles of Association to the BVI
Business Corporations Act, 2004 (Act 16 of 2004).


 


 


	
  On
  Behalf of Member

  	
   

  	
  On
  Behalf of Member

  	
   

  	
  On
  Behalf of Member

  
	
  CNPCHK
  (Indonesia) Limited

  	
   

  	
  Continental
  Energy Corporation

  	
   

  	
  GeoPetro
  Resources Company

  
	
  Shareholder
  and owner of 35,000 common shares of the Company representing 70% of the
  Company’s share capital

  	
   

  	
  Shareholder
  and owner of 9,000 common shares of the Company representing 18% of the
  Company’s share capital

  	
   

  	
  Shareholder
  and owner of 6,000 common shares of the Company representing 12% of the
  Company’s share capital

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  by
  its Director

  Mr. Li Hualin

  	
   

  	
  by
  its President & CEO

  Mr. Richard L. McAdoo

  	
   

  	
  by
  its President & CEO

  Mr. S.J. Doshi

  
								



 


73

















 


SCHEDULE-E


COMPLETION RESOLUTIONS


 


The fully executed and
completed original resolutions of members and Directors required to Close and
complete the transactions contemplated in this Agreement forms this Schedule-E
and include:


 


1.               Completion Resolutions-1: Unanimous
consent resolutions of the Directors of CGB2, dated even date with this
Agreement, recognizing, confirming, ratifying and implementing Sellers’ Closing
deliverables and matters (where applicable) set out in Sections 4.2.a, 4.2.d,
4.2.e, 4.2.f, and 4.2.g. and Buyer’s Closing deliverables and matters (where
applicable) set out in Sections 4.3.a and 4.3.g.


 


2.               Completion Resolutions-2: Unanimous
consent resolutions of the Members of CGB2, dated even date with this
Agreement, recognizing, confirming, ratifying and implementing Sellers’ Closing
deliverables and matters (where applicable) set out in Sections 4.2.b and 4.2.c
and Buyer’s Closing deliverables and matters (where applicable) set out in
Sections 4.3.b and 4.3.c.


 


3.               Completion Resolutions-3: Unanimous
consent resolutions of the Members of CGB2, dated even date with this
Agreement, recognizing, confirming, ratifying and implementing Sellers’ Closing
deliverables and matters (where applicable) set out in Sections-4.2.h and
Buyer’s Closing deliverables and matters (where applicable) set out in
Section-4.3.f.


 


4.               Completion Resolutions-4:
Intentionally leave blank.


 


5.               Completion Resolutions-5: Unanimous
consent resolutions of the Directors of CGB2, dated even date with this
Agreement, ratifying and implementing the post Closing filing and registration
of the Restated Memorandum and Articles and the Shareholders Agreement with the
British Virgin Islands Companies Registrar and Portcullis TrustNet (BVI) Limited,
the Company’s Registered Agent.


 


6.               Completion Resolutions-6: Unanimous
consent resolutions of the Directors of CGB2, dated even date with this
Agreement, appointing first Officers and first employees of the Company in
accordance with the provisions of this Agreement and with those of the
Shareholders Agreement and Buyer’s Closing deliverables and matters (where
applicable) set out in Sections 4.3.g.


 


74

















 


	
  

  	
  Continental-GeoPetro (Bengara-Il) Ltd.

  
	
  BVI IBC Company 247888 c/o Portcullis
  TrustNet Chambers

  
	
   

  	
  4th Floor, Ellen Skelton Building, 3076
  Drake’s Highway

  
	
  

  	
  Road Town, Tortola, British Virgin Islands

  The “Company”

  





 





 


 


UNANIMOUS CONSENT RESOLUTIONS OF THE
DIRECTORS


SPA Closing Completion Resolutions #1


 


Shares Transfers, New Secretary, Terminate
Old JOA, Director Resigns


 


These unanimous Consent Resolutions of the Directors are hereby
unanimously consented to and adopted in writing by the undersigned, being all
the directors of the Company as of the date last below written. These
resolutions may be signed by the directors in any number of counterparts and
may be delivered by facsimile to the Secretary, each of which when delivered
shall be deemed to be an original and all of which together shall constitute
one and the same document and notwithstanding the date of execution shall be
deemed to bear the date as last set forth below.


 


IT WAS NOTED THAT THE COMPANY HAS RECEIVED THE FOLLOWING, A COPY OF
EACH OF WHICH IS ATTACHED TO AND MADE A PART OF THIS RESOLUTION:


 


a.               A copy of a duly executed Shares
Purchase and Sales Agreement dated the same date as these resolutions amongst
CNPC (Hong Kong) Limited, CNPCHK (Indonesia) Limited, Continental Energy
Corporation, and GeoPetro Resources Company involving sale of Company shares by
Continental and by GeoPetro to CNPCHK (Indonesia) Limited which is hereinafter
referred to as the “Shares Purchase Agreement”.


 


b.              A copy of a duly executed shares transfer
authorization dated the same date as these resolutions by Continental Energy
Corporation as “Transferor” and CNPCHK (Indonesia) Limited as “Transferee” in
the amount of 21,000 common shares of the Company which is hereinafter referred
to as the “Continental Transfer Authorization”.


 


c.               A copy of a duly executed shares
transfer authorization dated the same date as these resolutions by GeoPetro
Resources Company as “Transferor” and CNPCHK (Indonesia) Limited as “Transferee”
in the amount of 14,000 common shares of the Company which is hereinafter
referred to as the “GeoPetro Transfer
Authorization”.


 


d.              A copy of a duly executed agreement dated
the same date as these resolutions amongst Continental Energy Corporation, the
Company and GeoPetro Resources Company terminating in its entirety the joint
operating agreement amongst them dated 1 January 2000, which is hereinafter
referred to as the “JOA Termination
Agreement”.


 


e.               A consent to serve as Company Secretary
dated the same date as these resolutions had been received from Mr. Lau Hak Woon Patrick.


 


f.                 The resignation of Director of the
Company Mr. Suresh J. Doshi dated the same date as these resolutions.


 


NOW THEREFORE IT WAS RESOLVED THAT: the Directors do hereby unanimously
pass the following resolutions:


 


1.               Mr. Lau Hak Woon Patrick be and is
hereby appointed as the Secretary of the Company with effect from the close of
meeting.


 


2.               On behalf of the Company the Directors
hereby recognize and confirm the Shares Purchase Agreement amongst CNPC (Hong
Kong) Ltd., CNPCHK (Indonesia) Limited, Continental Energy Corporation, and
GeoPetro Resources Company involving sale of Company shares by Continental and
by GeoPetro to CNPCHK (Indonesia) Limited.


 


3.               The Continental Transfer Authorization
is hereby recognized and approved and the Secretary is instructed and
authorized, in accordance with the instructions of the Continental Transfer
Authorization to cancel old share certificates held by Continental as
Transferor and issue new share certificates to CNPCHK (Indonesia) Limited as Transferee
and balance certificates dated the date of this resolution as follows:


 


75

















 


•                  Transferor’s
Share Certificate Number -10- in the amount of 18,000 common shares shall be
cancelled.


•                  Transferor’s Share
Certificate Number -14- in the amount of 12,000 common shares shall be
cancelled.


•                  Share
Certificate Number -15- in the amount of 9,000 common shares shall be issued to
Transferor.


•                  Share
Certificate Number -16- in the amount of 21,000 common shares shall be issued
to Transferee.


 


and, the Secretary is further authorized and instructed to immediately
update and amend the Company’s permanent records and the Register of Share
Transfers and the Register of Members as of the date of this resolution to reflect
the aforesaid share holding changes as provided for in the Continental Transfer
Authorization.


 


4.               The GeoPetro Transfer Authorization is
hereby recognized and approved and the Secretary is instructed and authorized,
in accordance with the instructions of the GeoPetro Transfer Authorization to
cancel old share certificates held by GeoPetro and issue new share certificates
to CNPCHK (Indonesia) Limited as transferee and balance certificate to
GeoPetro, each dated the date of this resolution as follows:


 


•                  Transferor’s
Share Certificate Number -11- in the amount of 12,000 common shares shall be
cancelled.


•                  Transferor’s
Share Certificate Number -13- in the amount of 8,000 common shares shall be
cancelled.


•                  Share
Certificate Number -17- in the amount of 14,000 common shares shall be issued
to Transferee.


•                  Share
Certificate Number -18- in the amount of 6,000 common shares shall be issued to
Transferor.


 


and, the Secretary is further authorized and instructed to immediately
update and amend the Company’s permanent records and the Register of Share
Transfers and the Register of Members as of the date of this resolution to
reflect the aforesaid share holding changes as provided for in the GeoPetro
Transfer Authorization.


 


5.               On behalf of the Company the Directors
hereby confirm, ratify and approve the termination of the joint operating
agreement among the Company and Continental Energy Corporation and GeoPetro
Resources Company dated 1 January 2000 in accordance with the provisions of the
JOA Termination Agreement attached. The Continental and GeoPetro releases of
the Company under the JOA termination Agreement are hereby acknowledged.


 


6                  Lastly, the resignation of Mr. Suresh
J. Doshi from his post of Director is hereby accepted as of the date and time
of this resolution last indicated below. The Board thanks him for his valuable
service on behalf of the Company.


 


7.               These resolutions together with
appropriately amended registers of share transfers, members and directors shall
forthwith be filed by the Secretary in the Company’s permanent record of
resolutions and minutes and appropriate copies shall also be formally
registered as required with all applicable authorities having jurisdiction
including the British Virgin Islands Companies Registrar and Portcullis TrustNet
(BVI) Limited, the Company’s Registered Agent.


 


	
  By the Unanimous Consent of the Board of Directors

  	
   

  	
  Dated:     September 2006 09:00
  Hours Jakarta Time

  



 


 


	
   

  	
   

  	
   

  	
   

  
	
  Richard L. McAdoo

  	
   

  	
  S.J. Doshi

  	
   

  
	
  Director & President

  	
   

  	
  Director

  	
   

  



 


76

















 


Continental Share Transfer Authorization


CONTINENTAL-GEOPETRO (BENGARA-II) LTD., THE
COMPANY


Incorporated 9-September-97 Under International
Business Companies Act (cap.291)


of the Territory of the British Virgin Islands
as IBC#-247888


Nominal Capital is US$50,000 Divided into
Common Shares of Par Value US$ 1.00 Each


 


We, Continental Energy Corporation,
the undersigned corporation and duly registered owner of 30,000
(Thirty Thousand) Common Shares, each of Par Value US$ 1.00, of
Continental-GeoPetro (Bengara-II) Ltd., consisting of:


 


1.               share certificate number -8-,
representing 18,000 Common Shares each Common Share numbered consecutively
beginning with the serial number -1- and continuing through until ending with
serial number -18,000- and


 


2.               share certificate number -14-,
representing 12,000 Common Shares each Common Share numbered consecutively
beginning with the serial number -30,001- continuing through until ending with
serial number -42,000-;


 


hereinafter called the TRANSFEROR, of
address Suite 1200, 14001 Dallas Parkway, Dallas, Texas, 75240, USA, in
consideration of good and valuable compensation paid, promised and provided to
us pursuant to a Share Sale & Purchase Agreement dated even date herewith,


 


DO HEREBY TRANSFER to,


 


CNPCHK (Indonesia) Limited, hereinafter called
the TRANSFEREE, a corporation of address
39th Floor, 118 Connaught Road West, Hong Kong, an amount of 21,000 (Twenty One Thousand) Common Shares each of Par Value
US$ 1.00, of Continental-GeoPetro (Bengara-II) Ltd., consisting of


 


1.               12,000 (Twelve Thousand)
Common Shares each Common Share numbered consecutively beginning
with the serial number -30,001- continuing through until ending with
serial number -42,000-; and


 


2.               9,000 (Nine Thousand)
Common Shares each Common Share numbered consecutively beginning
with the serial number -9,001-continuing through until ending with serial
number -18,000-;


 


TO HOLD unto the said TRANSFEREE, his heirs, executors, administrators,
successors, and assigns subject to the same joint and several conditions on
which the TRANSFEROR held these same Common Shares upon the date of execution
hereof, including without limitation the conditions and share transfer
restrictions imposed by the Company’s Memorandum of Association and Articles of
Association and those certain shareholder agreements to which TRANSFEREE is or
may become a party; the undersigned said TRANSFEREE do hereby agree to take the
said Common Shares subject to the same conditions and restrictions.


 


We the TRANSFEROR retain, keep and do not transfer under this agreement
an amount of 9,000 (Nine Thousand) Common Shares,
each of Par Value US$ 1.00, of Continental-GeoPetro (Bengara-II) Ltd. each
numbered consecutively beginning with the serial number -1- and continuing through
until ending with serial number -9,000-.


 


AS WITNESS, our hands here below this date:    September 2006.


 


 


	
   

  	
   

  	
   

  	
   

  
	
  Richard L. McAdoo, President & CEO

  	
   

  	
  Li Hualin, Director

  	
   

  
	
  On behalf of the TRANSFEROR

  	
   

  	
  On behalf of the TRANSFEREE

  	
   

  
	
  Continental Energy Corporation

  	
   

  	
  CNPCHK (Indonesia) Limited

  	
   

  



 


	
  Company Use Only - Transfer Recorded to
  Registers 2 and 3

  
	
   

  Date:     September 2006 

  	
  by

  	
   

  
	
   

  	
   

  	
  Patrick Lau, the Company Secretary

  
				



 


No transfer of the shares recorded hereon
will be registered by the Company until this Share Transfer Agreement


has been properly and legibly completed and
the original delivered to the Company Secretary.


 


77

















 


GeoPetro Share Transfer Authorization


CONTINENTAL-GEOPETRO (BENGARA-II) LTD., THE COMPANY


Incorporated 9-September-97 Under International
Business Companies Act (cap.291)


of the Territory of the British Virgin Islands
as IBC#-247888


Nominal Capital is US$50,000 Divided into
Common Shares of Par Value US$ 1.00 Each


 


We, GeoPetro Resources  Company, the undersigned corporation and duly registered
owner of 20,000 (Twenty Thousand) Common Shares,
each of Par Value US$ 1.00, of Continental-GeoPetro (Bengara-II) Ltd.,
consisting of:


 


3.               share certificate number -11-,
representing 12,000 Common Shares each Common Share numbered consecutively
beginning with the serial number -18,001- and continuing through until ending
with serial number -30,000- and 


 


4.               share certificate number -13-,
representing 8,000 Common Shares each Common Share numbered consecutively
beginning with the serial number -42,001- continuing through until ending with
serial number -50,000-;


 


hereinafter called the TRANSFEROR, of
address Suite 700, One Maritime Plaza, San Francisco, California, 94111, USA,
in consideration of good and valuable compensation paid, promised and provided
to us pursuant to a Share Sale & Purchase Agreement dated even date
herewith,


 


DO HEREBY TRANSFER to,


 


CNPCHK (Indonesia) Limited, hereinafter called
the TRANSFEREE, a corporation of address
39th Floor, 118 Connaught Road West, Hong Kong, an amount of 14,000 (Fourteen Thousand) Common Shares each of Par Value
US$ 1.00, of Continental-GeoPetro (Bengara-II) Ltd., consisting of


 


3.               12,000 (Twelve Thousand)
Common Shares each Common Share numbered consecutively beginning
with the serial number -18,001- continuing through until ending with
serial number -30,000-; and


 


4.               2,000 (Two Thousand)
Common Shares each Common Share numbered consecutively beginning
with the serial number -42,001- continuing through until ending with
serial number -44,000-;


 


TO HOLD unto the said TRANSFEREE, his heirs, executors, administrators,
successors, and assigns subject to the same joint and several conditions on
which the TRANSFEROR held these same Common Shares upon the date of execution
hereof, including without limitation the conditions and share transfer
restrictions imposed by the Company’s Memorandum of Association and Articles of
Association and those certain shareholder agreements to which TRANSFEREE is or
may become a party; the undersigned said TRANSFEREE do hereby agree to take the
said Common Shares subject to the same conditions and restrictions.


 


We the TRANSFEROR retain, keep and do not transfer under this agreement
an amount of 6,000 (Six Thousand) Common Shares,
each of Par Value US$ 1.00, of Continental-GeoPetro (Bengara-II) Ltd. each
numbered consecutively beginning with the serial number -44,001- and continuing
through until ending with serial number -50,000-.


 


AS WITNESS, our hands here below this date:      September 2006.


 


 


	
   

  	
   

  	
   

  	
   

  
	
  Suresh J. Doshi, President & CEO

  	
   

  	
  Li Hualin, Director

  	
   

  
	
  On behalf of the TRANSFEROR

  	
   

  	
  On behalf of the TRANSFEREE

  	
   

  
	
  GeoPetro Resources Company

  	
   

  	
  CNPCHK (Indonesia) Limited

  	
   

  



 


Company Use Only - Transfer Recorded to
Registers 2 and 3


 


	
  Date:     September 2006

  	
  by

  	
   

  
	
   

  	
   

  	
  Patrick
  Lau, the Company Secretary

  
				



 


No transfer of the shares recorded hereon
will be registered by the Company until this Share Transfer Agreement 


has been properly and legibly completed and
the original delivered to the Company Secretary.


 


78

















 


Suresh J. Doshi


 


The Board of Directors


Continental-GeoPetro (Bengara-II) Ltd.


JI. R.S. Fatmawati 31A, Cilandak, Jakarta, 125430


INDONESIA


 


Gentlemen,


 


I, Suresh J. Doshi, hereby tender my immediate resignation as a
director of Continental-GeoPetro (Bengara-II) Ltd. with effect from the date
last below written.


 


I, Suresh J. Doshi, resign my office as director of the Company with
immediate effect from the date last below written and acknowledge and declare
that I have no claim whatsoever against the Company or any of its subsidiaries
for breach of contract, compensation for loss of office, redundancy, unfair
dismissal or retirement or on any other account whatsoever and there is no
agreement or arrangement outstanding under which the Company has or could have
any obligation to me whether now or in the future.


 


This confirmation of resignation and release shall be governed by the
laws of the British Virgin Islands.


 


Dated this           day
of                       
2006


 


 


	
   

  	
   

  
	
  Suresh J. Doshi

  



 


79

















 


	
  

  	
  Continental-GeoPetro (Bengara-Il) Ltd.

  
	
  BVI IBC Company 247888 c/o Portcullis
  TrustNet Chambers

  
	
   

  	
  4th Floor, Ellen Skelton Building, 3076
  Drake’s Highway

  
	
  

  	
  Road Town, Tortola, British Virgin Islands

  The “Company”

  





 





 


UNANIMOUS CONSENT RESOLUTIONS OF THE MEMBERS


SPA Closing Completion Resolutions #2


 


Adoption Memorandum & Articles &
Shareholders Agreement


 


These unanimous Consent Resolutions of the Members are hereby
unanimously consented to and adopted in writing by all of the undersigned
shareholders of the Company as of the date and time last below written. The
undersigned shareholders represent 100% of the Company’s authorized, issued,
outstanding and fully paid up share capital. These resolutions may be signed by
the Members authorized representatives in any number of counterparts and may be
delivered by facsimile to the Secretary, each of which when delivered shall be
deemed to be an original and all of which together shall constitute one and the
same document and notwithstanding the date of execution shall be deemed to bear
the date as last set forth below.


 


IT WAS NOTED BY THE MEMBERS THAT:


 


a.               A copy of the new and restated “Memorandum of Association” of the Company dated the same
date as these resolutions, in its entirety, is attached to and made a part of
this resolution.


 


b.              A copy of the new and restated “Articles of Association” of the Company dated the same date
as these resolutions, in its entirety, is attached to and made a part of this
resolution.


 


c.               A copy of an agreement amongst all of
the undersigned Members of the Company dated the same date as these
resolutions, which is hereinafter referred to as the “Shareholders
Agreement”, is, in its entirety, attached to and made a part of this
resolution.


 


IT WAS ALSO DULY NOTED BY THE MEMBERS THAT:


 


A)          Restatement of the Company’s Memorandum of
Association and Memorandum of Articles is required by the British Virgin
Islands, BVI Business Companies Act 2004 (No 16 of 2004) including the
amendments thereto made by the British Virgin Islands Statue Revision Act 2005
(No 25 of 2005), hereinafter referred to as the “Act”,
on or before 1 January 2007.


 


B)            The Shareholders Agreement provides for
terms, conditions and procedures under which the Company shall be governed and
the relationships amongst its Members shall be governed in addition to those
expressed in the aforesaid restated Memorandum of Association and Articles of
Association.


 


NOW THEREFORE IT IS HEREBY RESOLVED BY A UNANIMOUS VOTE OF 100% OF THE
COMPANY’S AUTHORIZED, ISSUED, OUTSTANDING AND FULLY PAID UP SHARES DULY HELD BY
THE UNDERSIGNED MEMBERS THAT THE MEMBERS DO HEREBY PASS AND ADOPT THE FOLLOWING
RESOLUTIONS:


 


1.               The attached Memorandum of Association
is hereby adopted, ratified and confirmed and from its date shall replace and
supersede all others as the Memorandum of Association of the Company and is
signed by all of the Members of the Company simultaneously with signature of
these resolutions.


 


2.               The attached Articles of Association is
hereby adopted, ratified and confirmed and from its date shall replace and
supersede all others as the Articles of Association of the Company and is
signed by all of the Members of the Company simultaneously with signature of
these resolutions.


 


80

















 


3.               The attached Shareholders Agreement is
hereby adopted, ratified and confirmed and from the date last below written
shall replace and supersede all others as the Shareholders Agreement of the
Company and is dated and signed by all of the Members of the Company
simultaneously with signature of these resolutions.


 


4.               The attached Memorandum of Association,
Articles of Association and the Shareholders Agreement together with past and
future duly executed and validly made Members resolutions shall constitute the “Constating Documents of the Company”.


 


5.               All directors, officers and agents of
the Company shall be and are hereby instructed and obliged by the Members to at
all times act in their respective capacities on behalf of the Company strictly
in accordance with and as provided for in the Constating Documents of the
Company and as provided for in the Act and other applicable law. Further, any
and all appointments, engagements or contracts entered into by the Company with
any and all directors, officers and agents shall contain specific provisions to
strictly so oblige the subject director, officer or agent to comply with and at
all times act in accordance with the Constating Documents of the Company.


 


6.               The said new and restated Memorandum of
Association and Articles of Association are intended by the Members to conform
to and comply with the Act and any modifications needed thereto which may be
expressed by the British Virgin Islands Companies Registrar or other authority
having jurisdiction shall be promptly made by similar unanimous resolution of
the Members upon the Members being advised such revision is required.


 


7.               These resolutions together with the
restated Memorandum of Association and the restated Articles of Association and
the Shareholders Agreement shall forthwith be filed in the Company’s permanent
record of resolutions and minutes and appropriate originals or certified true
copies shall also be formally be filed with and registered as may be required
with all applicable authorities having jurisdiction including, without
limitation, the British Virgin Islands Companies Registrar and Portcullis
TrustNet (BVI) Limited, the Company’s Registered Agent in the British Virgin
Islands.


 


8.               The Company’s Secretary, and failing
him, any one director or the Company’s President are hereby authorized and
instructed to sign and/or take whatever action is required for the benefit of
and on behalf of the Company and of the Members to register, record and
otherwise act as needed to give full force and effect to the actions and
intentions stated in the aforesaid resolutions.


 


	
  BY THE UNANIMOUS CONSENT OF THE MEMBERS

  	
   

  	
  Dated: Upon     September 2006 09:10 Hours Jakarta
  Time

  



 


 


	
  On Behalf of Member

  	
   

  	
  On Behalf of Member

  	
   

  	
  On Behalf of Member

  
	
  CNPCHK (Indonesia) Limited

  	
   

  	
  Continental Energy Corporation

  	
   

  	
  GeoPetro Resources Company

  
	
  Shareholder and owner of 35,000 common shares of the Company
  representing 70% of the Company’s share capital.

  	
   

  	
  Shareholder and owner of 9,000 shares of the Company representing 18%
  of the Company’s share capital

  	
   

  	
  Shareholder and owner of 6,000 common shares of the Company
  representing 12% of the Company’s share capital.

  
	
  /s/ Wang Mingcai

  	
   

  	
   

  	
   

  	
   

  
	
  by its Director

  	
   

  	
  by its President & CEO

  	
   

  	
  by its President & CEO

  
	
  Mr. Wang Mingcai

  	
   

  	
  Mr. Richard L. McAdoo

  	
   

  	
  Mr. S.J. Doshi

  



 


81

















 


	
  

  	
  Continental-GeoPetro (Bengara-Il) Ltd.

  
	
  BVI IBC Company 247888 c/o Portcullis
  TrustNet Chambers

  
	
   

  	
  4th Floor, Ellen Skelton Building, 3076
  Drake’s Highway

  
	
  

  	
  Road Town, Tortola, British Virgin Islands

  The “Company”

  





 





 


UNANIMOUS CONSENT RESOLUTIONS OF THE MEMBERS


SPA Closing Completion Resolutions #3


 


Election of New Directors


 


These unanimous Consent Resolutions of the Members are hereby
unanimously consented to and adopted in writing by all of the undersigned
shareholders of the Company as of the date and time last below written. The
undersigned shareholders represent 100% of the Company’s authorized, issued,
outstanding and fully paid up share capital. These resolutions may be signed by
the Members authorized representatives in any number of counterparts and may be
delivered by facsimile to the Secretary, each of which when delivered shall be
deemed to be an original and all of which together shall constitute one and the
same document and notwithstanding the date of execution shall be deemed to bear
the date as last set forth below.


 


IT WAS NOTED BY THE MEMBERS THAT THE COMPANY HAS RECEIVED THE FOLLOWING,
A COPY OF EACH OF WHICH IS ATTACHED TO AND MADE A PART OF THIS RESOLUTION:


 


a.               A consent to serve as a Director of the
Company dated     September 2006 has been received from Mr. Li
Hualin.


 


b.              A consent to serve as a Director of the
Company dated     September 2006 has been received from Mr.
Cheng Cheng.


 


c.               A consent to continue to serve as a
Director of the Company dated     September 2006 had been
received from

Mr. Richard L. McAdoo.


 


IT WAS ALSO DULY NOTED BY THE MEMBERS THAT:


 


A)          The agreement dated    
September 2006 amongst all of the undersigned Members of the Company which is hereinafter
referred to as the “Shareholders Agreement”
provides certain terms and conditions pertaining to the election of Directors
of the Company and, among others, fixing the number of directors on the Board
of Directors of the Company at this time at three (3) Directors.


 


B)            The undersigned Member, Continental Energy
Corporation, exercising its rights under the Shareholders Agreement has
designated the re-election of Mr. Richard L. McAdoo, a current duly registered
Director of the Company.


 


C)            The undersigned Member, CNPCHK (Indonesia)
Limited, exercising its rights there under has designated the election of

Mr. Li Hualin and Mr. Cheng Cheng as Directors of the Company.


 


NOW THEREFORE IT IS HEREBY RESOLVED BY A UNANIMOUS VOTE OF 100% OF THE
COMPANY’S AUTHORIZED, ISSUED, OUTSTANDING AND FULLY PAID UP SHARES DULY HELD BY
THE UNDERSIGNED MEMBERS THAT THE MEMBERS DO HEREBY PASS AND ADOPT THE FOLLOWING
RESOLUTIONS:


 


1.               Mr. Li Hualin, nominated to the post by
Company shareholder CNPCHK (Indonesia) Limited is hereby duly elected and
appointed a Director of the Company and Chairman of the Board of Directors by
the unanimous consent of the undersigned shareholders to serve for a term until
his death, resignation or removal in accordance with the Company’s Memorandum
and Articles of Association and with the applicable provisions of the
Shareholders Agreement amongst the Members of the Company as it may from time
to time be amended.


 


82

















 


2.               Mr. Cheng Cheng, nominated to the post
by Company shareholder CNPCHK (Indonesia) Limited is hereby duly elected and
appointed a Director of the Company by the unanimous consent of the undersigned
shareholders to serve for a term until his death, resignation or removal in
accordance with the Company’s Memorandum and Articles of Association and with
the applicable provisions of the Shareholders Agreement amongst the Members of
the Company as it may from time to time be amended.


 


3.               Mr. Richard L. McAdoo, nominated to the
post by Company shareholder Continental Energy Corporation, is hereby duly
re-elected and re-appointed a Director of the Company by the unanimous consent
of the undersigned shareholders to serve for a term until his death,
resignation or removal in accordance with the Company’s Memorandum and Articles
of Association and with the applicable provisions of the Shareholders Agreement
amongst the Members of the Company as it may from time to time be amended.


 


4.               The aforementioned elected Directors
shall at all times exercise their power and authority in their capacities as Directors
of the Company in the best interests of the Company, strictly subject to and in
accordance with the applicable provisions on Directors duties, powers, meetings
and authority as set forth in the Company’s Memorandum and Articles of
Association and with the additional applicable provisions of the Shareholders Agreement
amongst the Members of the Company as it may from time to time be amended.


 


5.               These resolutions together with
appropriately amended registers of directors shall forthwith be filed in the
Company’s permanent record of resolutions and minutes and appropriate copies
shall also be formally registered as required with all applicable authorities
having jurisdiction including the British Virgin Islands Companies Registrar
and with Portcullis TrustNet (BVI) Limited, the Company’s Registered Agent.


 


6.               The Company’s Secretary, and failing
him, any one director and/or the Company’s President are hereby authorized and
instructed to sign and/or take whatever action is required for the benefit of
and on behalf of the Company and of the Members to register, record and
otherwise as needed to give full force and effect to the actions and intentions
stated in the aforesaid resolutions.


 


	
  By the Unanimous Consent of the Members

  	
   

  	
  Dated:     September 2006 09:20 Hours Jakarta Time

  



 


 


	
  On Behalf of Member

  	
   

  	
  On Behalf of Member

  	
   

  	
  On Behalf of Member

  
	
  CNPCHK (Indonesia) Limited

  	
   

  	
  Continental Energy Corporation

  	
   

  	
  GeoPetro Resources Company

  
	
  Shareholder and owener of 35,000

  	
   

  	
  Shareholder and owner of 9,000 common

  	
   

  	
  Shareholder and owner of 6,000 

  
	
  common shares of the Company

  	
   

  	
  shares of the Company representing 18%

  	
   

  	
  common shares of the Company 

  
	
  representing 70% of the Company’s

  	
   

  	
  of the Company’s share capital

  	
   

  	
  representing 12% of the Company’s 

  
	
  share capital.

  	
   

  	
   

  	
   

  	
  share capital

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Wang Mingcai

  	
   

  	
   

  	
   

  	
   

  
	
  by its Director

  	
   

  	
  by its President & CEO

  	
   

  	
  by its President & CEO

  
	
  Mr. Wang Mingcai

  	
   

  	
  Mr. Richard L McAdoo

  	
   

  	
  Mr. S.J. Doshi

  



 


83

















 


Richard L. McAdoo


 


	
  THE BOARD OF DIRECTORS

  	
   

  	
  19-September-2006

  
	
  Continental-GeoPetro (Bengara-II) Ltd.

  	
   

  	
   

  
	
  JI. R.S. Fatmawati 31A, Cilandak

  	
   

  	
   

  
	
  Jakarta, 124300, Indonesia

  	
   

  	
   

  
	
  By Fax to 62-21-765-8293

  	
   

  	
   

  
	
  Original Delivered by Hand

  	
   

  	
   

  



 


Subject:         Consent to Serve as a Director


 


Gentlemen,


 


This is to confirm my acceptance of continuation of service as a
director on the board of Continental GeoPetro (Bengara-II) Ltd. as the
designated director appointee for and on behalf of Continental Energy Corporation
as provided for in the Shareholders Agreement and in the Shares Sale and
Purchase Agreements both dated 19 September 2006 between CNPCHK (Indonesia)
Limited, Continental Energy Corporation, GeoPetro Resources Company, and CNPC
(Hong Kong) Limited.


 


I shall familiarize myself with the duties of a director as required by
the Memorandum and Articles of Continental-GeoPetro (Bengara-II) Ltd. including
the additional duties and procedures required under the said Shareholders
Agreement and Shares Sale and Purchase Agreements and agree to abide by and act
in my capacity as director in accordance with their provisions.


 


I am a citizen of the USA and a resident of Indonesia. My residential
contact address is JI. Bumipratama Timur BHP Blok R25, Jakarta, 13550,
Indonesia. My residence phone number is 62-21-841-2784. My cell phone number is
62-81-694-0853.


 


I am a director and officer of the Continental Energy Corporation. My
office address is at Continental Energy Corporation, Suite 1200, 14001 Dallas
Parkway, Dallas, Texas, USA, phone 1-972-934-6774, fax 1-972-934-6718, email
rlmcadoo@continentalenergy.com.


 


I am the holder of USA passport number 206537367 issued by USA at NPC
expiring on date 13 June 2010 and my date of birth was 10 May 1954 and my place
of birth was Higgins, Texas, USA.


 


I am also the holder of Oregon drivers license number 5845224 issued by
State of Oregon, USA, expiring on date 10 May 2010.


 


Attached please find a color copy of my passport picture page and of my
Oregon drivers license.


 


	
  Sincerely Yours,

  
	
   

  
	
   

  
	
  /s/ Richard L. McAdoo

  	
   

  
	
  Richard L. McAdoo

  



 


84

















 


	
  

  	
  Continental-GeoPetro (Bengara-Il) Ltd.

  
	
  BVI IBC Company 247888 c/o Portcullis
  TrustNet Chambers

  
	
   

  	
  4th Floor, Ellen Skelton Building, 3076
  Drake’s Highway

  
	
  

  	
  Road Town, Tortola, British Virgin Islands

  The “Company”

  





 





 


UNANIMOUS CONSENT RESOLUTIONS OF THE
DIRECTORS


SPA Closing Completion Resolutions #5


 


Ratify Memorandum, Articles &
Shareholders Agreement


 


These unanimous Consent Resolutions of the Directors are hereby
unanimously consented to and adopted in writing by the undersigned, being all
the directors of the Company as of the date last below written. These resolutions
may be signed by the directors in any number of counterparts and may be
delivered by facsimile to the Secretary, each of which when delivered shall be
deemed to be an original and all of which together shall constitute one and the
same document and notwithstanding the date of execution shall be deemed to bear
the date as last set forth below.


 


IT WAS NOTED THAT: The Company has received a
copy of a unanimous consent resolution of the Members dated the same date as
these resolutions adopting a new restated Memorandum and Articles of
Incorporation for the Company together with adoption by the Members of a
Shareholders Agreement amongst the Members.


 


NOW THEREFORE IT WAS RESOLVED THAT: the Directors do hereby unanimously
pass the following resolutions:


 


1.               Mr. Li Hualin is hereby elected Chairman
of the Board of Directors of the Company to serve in such capacity until
replaced by action of the Directors.


 


2.               On behalf of the Company the Directors
hereby confirm, ratify and approve the Restated Memorandum and Articles of the
Company dated the same date as these resolutions adopted by the Members in
their unanimous consent resolution dated 9:00 AM Jakarta time the same date as
these resolutions and hereby direct, authorize and empower any one director plus
the Secretary to take all necessary action to appropriately file and register
and give full force and effect to the new Memorandum and Articles with both the
British Virgin Islands Companies Registrar and Portcullis TrustNet (BVI)
Limited, the Company’s Registered Agent.


 


3.               On behalf of the Company the Directors
hereby confirm, ratify and recognize the Shareholders Agreement amongst the
Members of the Company dated the same date as these resolutions adopted by the
Members in their unanimous consent resolution dated 9:00 AM Jakarta time the
same date as these resolutions and hereby direct, authorize and empower any one
director plus the Secretary to take all necessary action to appropriately file
and register and give full force and effect to the new Memorandum and Articles
with Portcullis TrustNet (BVI) Limited, the Company’s Registered Agent.


 


4.               These resolutions together with
appropriately amended registers of share transfers, members and directors shall
forthwith be filed by the Secretary in the Company’s permanent record of
resolutions and minutes and appropriate copies shall also be formally
registered as required with all applicable authorities having jurisdiction
including the British Virgin Islands Companies Registrar and Portcullis
TrustNet (BVI) Limited, the Company’s Registered Agent.


 


	
  By the Unanimous Consent of the Board of Directors

  	
   

  	
  Dated:     September 2006 09:40 Hours Jakarta Time

  



 


 


	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Li Hualin

  	
   

  	
  Cheng Cheng

  	
   

  	
  Richard L. McAdoo

  
	
  Director & Chairman

  	
   

  	
  Director

  	
   

  	
  Director

  



 


85

















 


UNANIMOUS CONSENT RESOLUTIONS OF THE
DIRECTORS


SPA Closing Completion Resolutions #6


 


Appointment of First Officers


 


These unanimous Consent Resolutions of the Directors are hereby
unanimously consented to and adopted in writing by the undersigned, being all
the directors of the Company as of the date last below written. These
resolutions may be signed by the directors in any number of counterparts and
may be delivered by facsimile to the Secretary, each of which when delivered
shall be deemed to be an original and all of which together shall constitute
one and the same document and notwithstanding the date of execution shall be
deemed to bear the date as last set forth below.


 


IT WAS NOTED THAT: The Shareholders Agreement dated
the same date as these resolutions amongst the Members of the Company imposes
certain obligations on the directors to appoint officers and senior management
of the Company.


 


IT WAS NOTED THAT: In accordance with the
Shares Sale and Purchase Agreement and the Shareholders Agreement both dated
the same date as these resolutions amongst the Members of the Company the
resignation of Mr. Richard L. McAdoo as President and CEO of the Company has
been received, a copy of which is attached to these resolutions.


 


NOW THEREFORE IT WAS RESOLVED THAT: the Directors do hereby unanimously
pass the following resolutions:


 


1.               The resignation of Mr. Richard L. McAdoo
as CEO of the Company is hereby accepted and the Board thanks him for past
services in such capacity.


 


2.               Mr. Li Hualin is hereby made an
Executive Director and Chairman of the Company to serve in accordance with the
Shareholders Agreement.


 


3.               Mr. Cheng Cheng is hereby made an
Executive Director of the Company to serve in accordance with the Shareholders
Agreement.


 


4.               Mr. Richard L. McAdoo is hereby made an
Executive Director and is also hereby appointed to the position of Chief
Exploration Officer (CXO) of the Company based in Jakarta to serve in
accordance with the Shareholders Agreement.


 


5.               Mr. Lau Wak Hoon Patrick is hereby
reconfirmed as Secretary of the Company to serve in accordance with the
Shareholders Agreement.


 


6.               These resolutions shall forthwith be
filed by the Secretary in the Company’s permanent record of resolutions and
minutes and appropriate copies shall also be formally registered as required
with all applicable authorities having jurisdiction including Portcullis
TrustNet (BVI) Limited, the Company’s Registered Agent.


 


	
  By the Unanimous Consent of the Board of Directors

  	
   

  	
  Dated:     September 2006

  



 


 


	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Li Hualin

  	
   

  	
  Cheng Cheng

  	
   

  	
  Richard L. McAdoo

  
	
  Director & Chairman

  	
   

  	
  Director

  	
   

  	
  Director

  



 


86

















 


Richard L. McAdoo


 


The Board of Directors


Continental-GeoPetro (Bengara-II) Ltd. (the “Company”)


JI. R.S. Fatmawati 31A, Cilandak, Jakarta, 125430


INDONESIA


 


Resignation


 


Gentlemen,


 


I, Richard L. McAdoo, hereby resign my office as President and CEO of
the Company with effect from the date last below written.


 


In such event that this resignation actually does become effective as
provided for above then at such time I acknowledge and declare that I have no
claim whatsoever against the Company or any of its subsidiaries for breach of
contract, compensation for loss of office, redundancy, unfair dismissal or
retirement or on any other account whatsoever accruing on or before and
applicable to my tenure as President and CEO during periods prior to the date
hereof.


 


Date:     September 2006


 


	
  Yours faithfully

  
	
   

  
	
   

  	
   

  
	
  Richard L. McAdoo

  



 


87

















 


SCHEDULE-F


CONTRACTUAL OBLIGATIONS TO BE
TERMINATED PRIOR TO 30 SEPTEMBER 2006


 


A list and summary of the
principle terms and conditions of contractual commitment between CGB2 and third
parties a to be terminated prior to 30 September 2006 are set forth in the
following table:


 


Expatriate
Management Consulting & Related Contracts


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Contract

  	
   

  	
   

  	
   

  	
  Expiry or

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Contract

  	
   

  	
  Covering

  	
   

  	
   

  	
   

  	
  Price or

  	
   

  	
   

  	
   

  	
  Notice to

  	
   

  	
   

  	
   

  
	
  No

  	
   

  	
  Date

  	
   

  	
  Number

  	
   

  	
  To

  	
   

  	
  Period

  	
   

  	
  Description

  	
   

  	
  Rate

  	
   

  	
  Period

  	
   

  	
  Terminate

  	
   

  	
  Remarks

  	
   

  
	
  1

  	
   

  	
  28-Nov-05

  	
   

  	
  B2SA-099/05

  	
   

  	
  Susila Waryi

  	
   

  	
  1Dec05- 31Dec07

  	
   

  	
  Rent Car for Staff Toyota Harrier

  	
   

  	
  20,000,000

  	
   

  	
  Rp/Month

  	
   

  	
  31-Dec-07

  	
   

  	
  Paid monthly

  	
   

  
	
  2

  	
   

  	
  31-Dec-05

  	
   

  	
  B2SA-06-004

  	
   

  	
  Susila Waryi

  	
   

  	
  1Dec04 - 30 Nov07

  	
   

  	
  Rent House for Senior Management

  	
   

  	
  $

  	
  3,000.00

  	
   

  	
  US$/Month

  	
   

  	
  30-Nov-07

  	
   

  	
  Prepaid thru 30-Nov-06

  	
   

  
	
  3

  	
   

  	
  20-Jul-06

  	
   

  	
  B2SA-121/06

  	
   

  	
  AT Eriksson

  	
   

  	
  01Aug06 - 31July07

  	
   

  	
  Rent House for Expatriate Staff

  	
   

  	
  $

  	
  1,000.00

  	
   

  	
  US$/Month

  	
   

  	
  31-Jul-07

  	
   

  	
  Paid monthly

  	
   

  
	
  4

  	
   

  	
  20-Jul-06

  	
   

  	
  B2SA-122/06

  	
   

  	
  AT Eriksson

  	
   

  	
  01Aug06 - 31July07

  	
   

  	
  Rent Car for Staff KIA Sportage

  	
   

  	
  $

  	
  1,500.00

  	
   

  	
  US$/Month

  	
   

  	
  31-Jul-07

  	
   

  	
  Paid monthly

  	
   

  
	
  5.

  	
   

  	
  20-Mar-06

  	
   

  	
  B2SA-06-007

  	
   

  	
  Rita Mardalina

  	
   

  	
  20 Mar06-Open

  	
   

  	
  Consultant: Geophysicist

  	
   

  	
  400,000

  	
   

  	
  Rp/Day

  	
   

  	
  90 Days

  	
   

  	
  Part Time Temporary

  	
   

  
	
  6.

  	
   

  	
  4-Jul-06

  	
   

  	
  B2SA-114/06

  	
   

  	
  Iin Hendriana

  	
   

  	
  01Jul06 - 30 Sep06

  	
   

  	
  Consultant: Tarakan Office Manager

  	
   

  	
  2,000,000

  	
   

  	
  Rp/Month

  	
   

  	
  3 Days

  	
   

  	
  Full Time Staff

  	
   

  
	
  7.

  	
   

  	
  24-Jul-06

  	
   

  	
  B2SA-123/06

  	
   

  	
  D.R. Wibowo

  	
   

  	
  01Aug06 - 31July07

  	
   

  	
  Consultant: IT Supervisor

  	
   

  	
  250,000

  	
   

  	
  Rp/Day

  	
   

  	
  90 Days

  	
   

  	
  Full Time Staff

  	
   

  
	
  8.

  	
   

  	
  24-Jul-06

  	
   

  	
  B2SA-124/06

  	
   

  	
  R.M. Budijarto

  	
   

  	
  01Aug06 - 31July07

  	
   

  	
  Consultant: Senior Geophysicist

  	
   

  	
  625,000

  	
   

  	
  Rp/Day

  	
   

  	
  90 Days

  	
   

  	
  Full Time Staff

  	
   

  
	
  9.

  	
   

  	
  20-Jul-06

  	
   

  	
  B2SA-117/06

  	
   

  	
  Richard L. McAdoo

  	
   

  	
  01Aug06 - 31July07

  	
   

  	
  Consultant: Exploration Management

  	
   

  	
  $

  	
  12,500.00

  	
   

  	
  US$/Month

  	
   

  	
  90 Days

  	
   

  	
  Full Time Staff

  	
   

  
	
  10.

  	
   

  	
  20-Jul-06

  	
   

  	
  B2SA-118/06

  	
   

  	
  Andrew T. Eriksson

  	
   

  	
  01Aug06 - 31July07

  	
   

  	
  Consultant: Geological Management

  	
   

  	
  $

  	
  7,500.00

  	
   

  	
  US$/Month

  	
   

  	
  90 Days

  	
   

  	
  Full Time Staff

  	
   

  
	
  11.

  	
   

  	
  20-Jul-06

  	
   

  	
  B2SA-119/06

  	
   

  	
  B. Dorpi Parlindungan

  	
   

  	
  01Aug06 - 31July07

  	
   

  	
  Consultant: Management Advisor

  	
   

  	
  $

  	
  5,000.00

  	
   

  	
  US$/Month

  	
   

  	
  90 Days

  	
   

  	
  Full Time Staff

  	
   

  
	
  12.

  	
   

  	
  20-Jul-06

  	
   

  	
  B2SA-120/06

  	
   

  	
  Maridjo Utomo

  	
   

  	
  01Aug06 - 31July07

  	
   

  	
  Consultant: Accounting Management

  	
   

  	
  $

  	
  3,000.00

  	
   

  	
  US$/Month

  	
   

  	
  90 Days

  	
   

  	
  Full Time Staff

  	
   

  



 


88