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VICEROY EXPLORATION LTD.

STOCK OPTION PLAN

|1.  | PURPOSE OF THE PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company
        hereby establishes a stock option plan for directors, senior officers
        Employees, Management Company Employees and Consultants (as such terms
        are defined below) of the Company and its subsidiaries (collectively "Eligible
        Persons"), to be known as the "Viceroy Exploration Stock Option Plan"
        (the "Plan"). The purpose of the Plan is to give to Eligible Persons,
        as additional compensation, the opportunity to participate in the success
        of the Company by granting to such individuals options, exercisable over
        periods of up to five years as determined by the board of directors of
        the Company, to buy shares of the Company at a price not less than the
        Market Price prevailing on the date the option is granted less applicable
        discount, if any, permitted by the policies of the Exchanges and approved
        by the Board.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.  | DEFINITIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | In this Plan,
        the following terms shall have the following meanings:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.1 | "Associate"
        means an "Associate" as defined in the Exchange Policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.2 | "Board"
        means the Board of Directors of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.3 | "Change
        of Control" means the acquisition by any person or by any person and
        all Joint Actors, whether directly or indirectly, of voting securities
        (as defined in the Securities Act) of the Company, which, when added to
        all other voting securities of the Company at the time held by such person
        or by such person and a Joint Actor, totals for the first time not less
        than fifty percent (50%) of the outstanding voting securities of the Company
        or the votes attached to those securities are sufficient, if exercised,
        to elect a majority of the Board of Directors of the Company.                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.4 | Company"
        means Viceroy Exploration Ltd. and its successors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.5 | "Consultant"
        means a "Consultant" as defined in the TSX Policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.6 | "Consultant
        Company" means a "Consultant Company" as defined in the TSX Policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.7 | "Disability"
        means any disability with respect to an Optionee which the Board, in its
        sole and unfettered discretion, considers likely to prevent permanently
        the Optionee from:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.8 | "Discounted
        Market Price" of Shares means, if the Shares are listed only on the
        TSX Venture Exchange, the Market Price less the maximum discount permitted
        under the TSX Policy applicable to Options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.9 | "Distribution"
        means a "Distribution" as defined in the TSX Policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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|2.10 | "Eligible Persons" has the meaning given
        to that term in paragraph 1 hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|2.11 | "Employee" means an "Employee" as defined
        in the TSX Policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|2.12 | "Exchanges" means the TSX Venture Exchange
        and, if applicable, any other stock exchange on which the Shares are listed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|2.13 | "Expiry Date" means the date set by the Board
        under section 3.1 of the Plan, as the last date on which an Option may
        be exercised.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    
|2.14 | "Grant Date" means the date specified in
        an Option Agreement as the date on which an Option is granted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|2.15 | "Insider" means an "Insider" as defined in
        the TSX Policies, other than a person who is an insider solely by virtue
        of being a director or senior officer of a subsidiary of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                
|    
|2.16 | "Investor Relations Activities" means "Investor
        Relations Activities" as defined in the TSX Policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|2.17 | "Joint Actor" means a person acting "jointly
        or in concert with" another person as that phrase is interpreted in section
        96 of the Securities Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    
|2.18 | "Management Company Employee" means a "Management
        Company Employee" as defined in the TSX Policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    
|2.19 | "Market Price" of Shares at any Grant Date
        means the last closing price per Share on the trading day immediately
        preceding the day on which the Company announces the grant of the option
        or, if the grant is not announced, on the Grant Date, or if the Shares
        are not listed on any stock exchange, "Market Price" of Shares means the
        price per Share on the over-the-counter market determined by dividing
        the aggregate sale price of the Shares sold by the total number of such
        Shares so sold on the applicable market for the last day prior to the
        Grant Date.
|    
|2.20 | "Option" means an option to purchase Shares
        granted pursuant to this Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    
|2.21 | "OptionAgreement" means an agreement, in
        the form attached hereto as Schedule "A", whereby the Company grants to
        an Optionee an Option.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|2.22 | "Optionee" means each of the Eligible Persons
        granted an Option pursuant to this Plan and their heirs, executors and
        administrators.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|2.23 | "Option Price" means the price per Share
        specified in an Option Agreement, adjusted from time to time in accordance
        with the provisions of section 5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|2.24 | "Option Shares" means the aggregate number
        of Shares which an Optionee may purchase under an Option.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|2.25 | "Plan" means this Viceroy Exploration Stock
        Option Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    
|2.26 | "Shares" means the common shares in the capital
        of the Company as constituted on the Grant Date provided that, in the
        event of any adjustment pursuant to section 5, "Shares" shall thereafter
        mean the shares or other property resulting from the events giving rise
        to the adjustment.                                                                                                                                                                                                                                                                                                                

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|2.27 | "Securities Act" means the Securities Act,
        R.S.B.C. 1996, c.418, as amended, as at the date hereof.                                                                                                                                                                                                                     
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|    
|2.28 | "TSX Policies" means the policies included
        in the TSX Venture Exchange Corporate Finance Manual and "TSX Policy"
        means any one of them.                                                                                                                                                                         
|    
|2.29 | "Unissued Option Shares" means the number
        of Shares, at a particular time, which have been reserved for issuance
        upon the exercise of an Option but which have not been issued, as adjusted
        from time to time in accordance with the provisions of section 5, such
        adjustments to be cumulative.
|    
|2.30 | "Vested" means that an Option has become
        exercisable in respect of a number of Option Shares by the Optionee pursuant
        to the terms of the Option Agreement.                                                                                                                                                     
|    
|3.   | GRANT OF OPTIONS                                                                                                                                                                                                                                                                                                                
|    
|3.1  | Option Terms                                                                                                                                                                                                                                                                                                                    

|    | The Board may
        from time to time authorize the issue of Options to Eligible Persons.
        The Option Price under each Option shall be not less than the Discounted
        Market Price on the Grant Date. The Expiry Date for each Option shall
        be set by the Board at the time of issue of the Option and shall not be
        more than five years after the Grant Date. Options shall not be assignable
        (or transferable) by the Optionee.
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3.2 | Limits on
        Shares Issuable on Exercise of Options                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The number of
        Shares reserved for issuance under the Plan and all of the Company's other
        previously established or proposed share compensation arrangements:                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The number of Shares which
        may be issuable under the Plan and all of the Company's other previously
        established or proposed share compensation arrangements, within a one-year
        period:                                                                                                                                                                                                                                                          

| | (a) | to any one Optionee, shall not exceed 5% of the
        total number of issued and outstanding Shares on the Grant Date on a non-diluted
        basis;                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | to Insiders as a group shall not exceed 10% of the
        total number of issued and outstanding Shares on the Grant Date on a non-diluted
        basis;                                                          
|
| | (c) | to any one Consultant shall not exceed 2% in the
        aggregate of the total number of issued and outstanding Shares on the
        Grant Date on a non-diluted basis; and                                       
|
| | (d) | all Eligible Persons who undertake Investor Relations
        Activities shall not exceed 2% in the aggregate of the total number of
        issued and outstanding Shares on the Grant Date on a non-diluted basis.

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|3.3 | Option Agreements
      Each Option shall be confirmed by the execution of an
        Option Agreement. Each Optionee shall have the option to purchase from
        the Company the Option Shares at the time and in the manner set out in
        the Plan and in the Option Agreement applicable to that Optionee. For
        stock options to Employees, Consultants, Consultant Companies or Management
        Company Employees, the Company is representing herein and in the applicable
        Stock Option Agreement that the Optionee is a bona fide Employee, Consultant,
        Consultant Company or Management Company Employee, as the case may be,
        of the Company or its subsidiary. The execution of an Option Agreement
        shall constitute conclusive evidence that it has been completed in compliance
        with this Plan.
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.  | EXERCISE OF OPTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.1 | When Options May be Exercised
      Subject to sections 4.3 and 4.4, an Option may be exercised
        to purchase any number of Shares up to the number of Vested Unissued Option
        Shares at any time after the Grant Date up to 4:00 p.m. local time on
        the Expiry Date and shall not be exercisable thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.2 | Manner of Exercise
      The Option shall be exercisable by delivering to the
        Company a notice specifying the number of Shares in respect of which the
        Option is exercised together with payment in full of the Option Price
        for each such Share. Upon notice and payment there will be a binding contract
        for the issue of the Shares in respect of which the Option is exercised,
        upon and subject to the provisions of the Plan. Delivery of the Optionee's
        cheque payable to the Company in the amount of the Option Price shall
        constitute payment of the Option Price unless the cheque is not honoured
        upon presentation in which case the Option shall not have been validly
        exercised.                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.3 | Vesting of Option Shares
      The Directors, subject to the policies of the Exchanges,
        may determine and impose terms upon which each Option shall become Vested
        in respect of Option Shares. Unless otherwise specified by the Board at
        time of granting an Option, and subject to the other limits on Option
        grants set out in Section 3.2 hereof, all Options granted under the Plan
        shall vest and become exercisable in full upon grant, except Options granted
        to Consultants performing investor relations activities, which Options
        must vest in stages over twelve months with no more than one-quarter of
        the Options vesting in any three month period.                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.4 | Termination of Employment
      If an Optionee ceases to be an Eligible Person, his
        or her Option shall be exercisable as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | (a) | Death or Disability                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     | If the Optionee ceases to be an Eligible
        Person, due to his or her death or Disability or, in the case of an Optionee
        that is a company, the death or Disability of the person who provides
        management or consulting services to the Company or to any entity controlled
        by the Company, the Option then held by the Optionee shall be exercisable
        to acquire Vested Unissued Option Shares at any time up to but not after
        the earlier of:
|
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | the Expiry Date;
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|   
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Termination For Cause                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | If the Optionee, or in the case of a
        Management Company Employee or a Consultant Company, the Optionee's employer,
        ceases to be an Eligible Person as a result of termination for cause,
        as that term is interpreted by the courts of the jurisdiction in which
        the Optionee, or, in the case of a Management Company Employee or a Consultant
        Company, of the Optionee's employer, is employed or engaged; any outstanding
        Option held by such Optionee on the date of such termination, whether
        in respect of Option Shares that are Vested or not, shall be cancelled
        as of that date.                                                                                                                                                                                                                                                                                                                                                              
|   
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Early Retirement,
        Voluntary Resignation or Termination Other than For Cause                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | If the Optionee or, in the case of a
        Management Company Employee or a Consultant Company, the Optionee's employer,
        ceases to be an Eligible Person due to his or her retirement at the request
        of his or her employer earlier than the normal retirement date under the
        Company's retirement policy then in force, or due to his or her termination
        by the Company other than for cause, or due to his or her voluntary resignation,
        the Option then held by the Optionee shall be exercisable to acquire Vested
        Unissued Option Shares at any time up to but not after the earlier of
        the Expiry Date and the date which is 365 days (unless the Issuer is a
        Tier 2 in which 90 days) or (30 days if the Optionee was engaged in Investor
        Relations Activities) after the Optionee or, in the case of a Management
        Company Employee or a Consultant Company, the Optionee's employer, ceases
        to be an Eligible Person.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | For greater certainty, an Option that
        had not become Vested in respect of certain Unissued Option Shares at
        the time that the relevant event referred to in this paragraph 4.4 occurred,
        shall not be or become vested or exercisable in respect of such Unissued
        Option Shares and shall be cancelled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.5 | Effect of a Take-Over Bid
      If a bona fide offer ( an "Offer") for Shares
        is made to the Optionee or to shareholders of the Company generally or
        to a class of shareholders which includes the Optionee, which Offer, if
        accepted in whole or in part, would result in the offeror becoming a control
        person of the Company, within the meaning of subsection 1(1) of the Securities
        Act, the Company shall, immediately upon receipt of notice of the Offer,
        notify each Optionee of full particulars of the Offer, whereupon (subject
        to the approval of the Exchanges) all Option Shares subject to such Option
        will become Vested and the Option may be exercised in whole or in part
        by the Optionee so as to permit the Optionee to tender the Option Shares
        received upon such exercise, pursuant to the Offer. However, if:

| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | the Offer is not completed within the time specified
        therein; or                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | all of the Option Shares tendered by the Optionee
        pursuant to the Offer are not taken up or paid for by the offeror in respect
        thereof,
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                        
| | then the Option Shares received
        upon such exercise, or in the case of clause (b) above, the Option Shares
        that are not taken up and paid for, may be returned by the Optionee to
        the Company and reinstated as authorized but unissued Shares and with
        respect to such returned Option Shares, the Option shall be reinstated
        as if it had not been exercised and the terms upon which such Option Shares
        were to become Vested pursuant to paragraph 4.3 shall be reinstated. If
        any Option Shares are returned to the Company

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|    | under this paragraph 4.5,
        the Company shall immediately refund the exercise price to the Optionee
        for such Option Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.6 | Acceleration of Expiry
        Date                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | If at any time when an Option
        granted under the Plan remains unexercised with respect to any Unissued
        Option Shares, an Offer is made by an offeror, the Directors may, upon
        notifying each Optionee of full particulars of the Offer, declare all
        Option Shares issuable upon the exercise of Options granted under the
        Plan, Vested, and declare that the Expiry Date for the exercise of all
        unexercised Options granted under the Plan is accelerated so that all
        Options will either be exercised or will expire prior to the date upon
        which Shares must be tendered pursuant to the Offer. The Directors shall
        give each Optionee as much notice as possible of the acceleration of the
        Options under this section, except that not less than 5 business days
        notice is required and more than 30 days notice is not required.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.7 | Effect of a Change of Control
      If a Change of Control occurs, all Option Shares subject
        to each outstanding Option will become Vested, whereupon such Option may
        be exercised in whole or in part by the Optionee, subject to the approval
        of the Exchanges, if necessary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.8 | Exclusion From Severance
        Allowance, Retirement Allowance or Termination Settlement
      If the Optionee, or, in the case of a Management Company
        Employee or a Consultant Company, the Optionee's employer, retires, resigns
        or is terminated from employment or engagement with the Company or any
        subsidiary of the Company, the loss or limitation, if any, pursuant to
        the Option Agreement with respect to the right to purchase Option Shares
        which were not Vested at that time or which, if Vested, were cancelled,
        shall not give rise to any right to damages and shall not be included
        in the calculation of nor form any part of any severance allowance, retiring
        allowance or termination settlement of any kind whatsoever in respect
        of such Optionee.                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.9 | Shares Not Acquired
      Any Unissued Option Shares not acquired by an Optionee
        under an Option which has expired may be made the subject of a further
        Option pursuant to the provisions of the Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5.  | ADJUSTMENT OF OPTION
        PRICE AND NUMBER OF OPTION SHARES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5.1 | Share Reorganization
      Whenever the Company issues Shares to all or substantially
        all holders of Shares by way of a stock dividend or other distribution,
        or subdivides all outstanding Shares into a greater number of Shares,
        or combines or consolidates all outstanding Shares into a lesser number
        of Shares (each of such events being herein called a "Share Reorganization")
        then effective immediately after the record date for such dividend or
        other distribution or the effective date of such subdivision, combination
        or consolidation, for each Option:                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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7

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | (ii)                                                                                                                                                                                                                                                                                    | a fraction, the numerator of which is the total
        number of Shares outstanding on that effective date or record date before
        giving effect to the Share Reorganization, and the denominator of which
        is the total number of Shares that are or would be outstanding immediately
        after such effective date or record date after giving effect to the Share
        Reorganization; and
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | the number of Unissued Option Shares will
        be adjusted by multiplying (i) the number of Unissued Option Shares immediately
        before such effective date or record date by (ii) a fraction which is
        the reciprocal of the fraction described in subsection (a)(ii).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                        
|5.2 | Special Distribution
      Subject to the prior approval of the Exchanges, whenever
        the Company issues by way of a dividend or otherwise distributes to all
        or substantially all holders of Shares;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | shares of the Company, other than the Shares;                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                        
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | evidences of indebtedness;                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                        
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | any cash or other assets, excluding cash
        dividends (other than cash dividends which the Board of Directors of the
        Company has determined to be outside the normal course); or                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                        
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | rights, options or warrants;                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                        
|    | then to the extent that such dividend or
        distribution does not constitute a Share Reorganization (any of such non-excluded
        events being herein called a "Special Distribution"), and effective immediately
        after the record date at which holders of Shares are determined for purposes
        of the Special Distribution, for each Option the Option Price will be
        reduced, and the number of Unissued Option Shares will be correspondingly
        increased, by such amount, if any, as is determined by the Board in its
        sole and unfettered discretion to be appropriate in order to properly
        reflect any diminution in value of the Option Shares as a result of such
        Special Distribution.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                        
|5.3 | Corporate Organization
      Whenever there is:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                        
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | a reclassification of outstanding Shares,
        a change of Shares into other shares or securities, or any other capital
        reorganization of the Company, other than as described in sections 5.1
        or 5.2;                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                        
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | a consolidation, merger or amalgamation
        of the Company with or into another corporation resulting in a reclassification
        of outstanding Shares into other shares or securities or a change of Shares
        into other shares or securities; or                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                        
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | a transaction whereby all or substantially
        all of the Company's undertaking and assets become the property of another
        corporation;                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                        
|    | (any such event being herein called a "Corporate
        Reorganization") the Optionee will have an option to purchase (at the
        times, for the consideration, and subject to the terms and conditions
        set out in the Plan) and will accept on the exercise of such option, in
        lieu of the Unissued Option Shares which he would otherwise have been
        entitled to purchase, the kind and amount of shares or other securities
        or property                                                                                                                                                                                                                                                                              

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8

|    | that he would have been entitled to receive as a
        result of the Corporate Reorganization if, on the effective date thereof,
        he had been the holder of all Unissued Option Shares or if appropriate,
        as otherwise determined by the Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|5.4 | Determination of Option Price and Number of Unissued
        Option Shares
      If any questions arise at any time with respect to the
        Option Price or number of Unissued Option Shares deliverable upon exercise
        of an Option following a Share Reorganization, Special Distribution or
        Corporate Reorganization, such questions shall be conclusively determined
        by the Company's auditor, or, if they decline to so act, any other firm
        of Chartered Accountants in Vancouver, British Columbia, that the Directors
        may designate and who will have access to all appropriate records and
        such determination will be binding upon the Company and all Optionees.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|5.5 | Regulatory Approval
      Any adjustment to the Option Price or the number of
        Unissued Option Shares purchasable under the Plan pursuant to the operation
        of any one of paragraphs 5.1, 5.2 or 5.3 is subject to the approval of
        the Exchanges and any other governmental authority having jurisdiction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6.  | MISCELLANEOUS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6.1 | Right to Employment
      Neither this Plan nor any of the provisions hereof shall
        confer upon any Optionee any right with respect to employment or continued
        employment with the Company or any subsidiary of the Company or interfere
        in any way with the right of the Company or any subsidiary of the Company
        to terminate such employment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6.2 | Necessary Approvals
      The Plan shall be effective only upon the approval of
        the shareholders of the Company given by way of an ordinary resolution.
        Any Options granted under this Plan prior to such approval shall only
        be exercised upon the receipt of such approval. Disinterested shareholder
        approval (as required by the Exchanges) will be obtained for any reduction
        in the exercise price of any Option granted under this Plan if the Optionee
        is an Insider of the Company at the time of the proposed amendment. The
        obligation of the Company to sell and deliver Shares in accordance with
        the Plan is subject to the approval of the Exchanges and any governmental
        authority having jurisdiction. If any Shares cannot be issued to any Optionee
        for any reason, including, without limitation, the failure to obtain such
        approval, then the obligation of the Company to issue such Shares shall
        terminate and any Option Price paid by an Optionee to the Company shall
        be immediately refunded to the Optionee by the Company.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6.3 | Administration of the Plan
      The Directors shall, without limitation, have full and
        final authority in their discretion, but subject to the express provisions
        of the Plan, to interpret the Plan, to prescribe, amend and rescind rules
        and regulations relating to the Plan and to make all other determinations
        deemed necessary or advisable in respect of the Plan. Except as set forth
        in section 5.4, the interpretation and construction of any provision of
        the Plan by the Directors shall be final and conclusive. Administration
        of the Plan shall be the responsibility of the appropriate officers of
        the Company and all costs in respect thereof shall be paid by the Company.                                                                                                                                                                                                                                                                                                                                                                                              

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9

|6.4  | Income Taxes
      As a condition of and prior to participation in the
        Plan any Optionee shall on request authorize the Company in writing to
        withhold from any remuneration otherwise payable to him or her any amounts
        required by any taxing authority to be withheld for taxes of any kind
        as a consequence of his or her participation in the Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6.5  | Amendments to the Plan
      The Directors may from time to time, subject to applicable
        law and to the prior approval, if required, of the Exchanges or any other
        regulatory body having authority over the Company or the Plan, suspend,
        terminate or discontinue the Plan at any time, or amend or revise the
        terms of the Plan or of any Option granted under the Plan and the Option
        Agreement relating thereto, provided that no such amendment, revision,
        suspension, termination or discontinuance shall in any manner adversely
        affect any Option previously granted to an Optionee under the Plan without
        the consent of that Optionee. Any amendments to the Plan or options granted
        thereunder will be subject to the approval of the shareholders.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6.6  | Form of Notice
      A notice given to the Company shall be in writing, signed
        by the Optionee and delivered to the head business office of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6.7  | No Representation or Warranty
      The Company makes no representation or warranty as to
        the future market value of any Shares issued in accordance with the provisions
        of the Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6.8  | Compliance with Applicable Law
      If any provision of the Plan or any Option Agreement
        contravenes any law or any order, policy, by-law or regulation of any
        regulatory body or Exchange having authority over the Company or the Plan,
        then such provision shall be deemed to be amended to the extent required
        to bring such provision into compliance therewith.                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6.9  | No Assignment
      No Optionee may assign any of his or her rights under
        the Plan or any option granted thereunder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6.10 | Rights of Optionees
      An Optionee shall have no rights whatsoever as a shareholder
        of the Company in respect of any of the Unissued Option Shares (including,
        without limitation, voting rights or any right to receive dividends, warrants
        or rights under any rights offering).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6.11 | Conflict
      In the event of any conflict between the provisions
        of this Plan and an Option Agreement, the provisions of this Plan shall
        govern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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10

|6.12 | Governing Law
      The Plan and each Option Agreement issued pursuant to
        the Plan shall be governed by the laws of the province of British Columbia.                                                                                                                             
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                           
|6.13 | Time of Essence
      Time is of the essence of this Plan and of each Option
        Agreement. No extension of time will be deemed to be or to operate as
        a waiver of the essentiality of time.                                                                                  
|     |                                                                                                                                                                                                                                                                                           
|6.14 | Entire Agreement
      This Plan and the Option Agreement sets out the entire
        agreement between the Company and the Optionees relative to the subject
        matter hereof and supersedes all prior agreements, undertakings and understandings,
        whether oral or written.

Approved by the Board of Directors on September 12, 2003

Approved by the Shareholders of the Company on April 29, 2004

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SCHEDULE "A"

VICEROY EXPLORATION LTD.

STOCK OPTION PLAN

OPTION AGREEMENT

If the Company is: (a) A Tier 2 Issuer or (b) a Tier
  1 Issuer granting options at the Discounted Market Price the following legend
  will be applicable:

Without prior written approval of the TSX Venture Exchange
  and compliance with all applicable securities legislation, the securities represented
  by this agreement and any securities issued upon exercise thereof may not be
  sold, transferred, hypothecated or otherwise traded on or through the facilities
  of the TSX Venture Exchange or otherwise in Canada or to or for the benefit
  of a Canadian resident until•, 200•four months and
  one day after the date of grant.

This
  Option Agreement is entered into between • ("the Company") and
  the Optionee named below pursuant to the Company Stock Option Plan (the "Plan"),
  a copy of which is attached hereto, and confirms that:

|1. | on •, 200• (the "Grant Date");                                                                                
|-- | --------------------------------------------------------------------------------------------------------------
|  
|2. | • (the "Optionee");                                                                                           
|  
|3. | was granted the option (the "Option") to purchase• »Common
      »Shares (the "Option Shares") of the Company;
|  
|4. | for the price (the "Option Price") of $• per share;                                                           
|  
|5. | which shall be exercisable in full upon approval;                                                             
|  
|6. | terminating on the •, 200• (the "Expiry Date");                                                               

all on the terms and subject to the conditions set out in
  the Plan. For greater certainty, Option Shares continue to be exercisable until
  the termination or cancellation thereof as provided in this Option Agreement
  and the Plan.

By
  signing this Option Agreement, the Optionee acknowledges that the Optionee has
  read and understands the Plan and agrees to the terms and conditions of the
  Plan and this Option Agreement.

IN
  WITNESS WHEREOF the parties hereto have executed this Option Agreement as of
  the • day of •, 200•.

|         |  | VICEROY EXPLORATION LTD.
|-------- |  | ------------------------
|         |  |                         
|         |  | Per:                    
|OPTIONEE |  |                         

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