EXHIBIT 10.9

               FARMOUT AGREEMENT BETWEEN DAMASCUS ENERGY INC. AND
                BOUNTY DEVELOPMENTS LTD. DATED NOVEMBER 30, 2006








<PAGE>


BOUNTY DEVELOPMENTS LTD.                                1250, 340 - 12 Ave. S.W.
                                                                     Calgary, AB
                                                                         T2R 1L5
--------------------------------------------------------------------------------
                                                              Tel (403) 264-4994
                                                              Fax (403) 266-6031
                                                            PCLARK@BOUNTYDEV.COM

                                                               November 30, 2006


DAMASCUS ENERGY INC.
22 Barclay Walk S.W.,
Calgary, Alberta T2P 4V9

ATTENTION: MICHAEL VANDALE


RE:     FARMOUT AGREEMENT
        SECTIONS 2-5, 8-11 AND 14-17, TWP 96-15 W4M
        SECTIONS 25-27, 35, 36 TWP 93 RGE 14 W4M;
        SECTIONS 4-9, TWP 95 RGE 14 W4M;
        SECTIONS 19-21, 28-33, 94-14 W4M
        OIL SANDS BELOW THE TOP OF THE VIKING FM TO BASE WOODBEND GRP
        (COLLECTIVELY "THE FARMOUT LANDS")
        DOVER (ELLS), ALBERTA
        BOUNTY FILES: AM-226-001 & AM-226-002
--------------------------------------------------------------------------------

Bounty Developments Ltd. ("Farmor") is the holder of an undivided 100% Working
Interest in the Title Documents covering the Farmout Lands described in Schedule
"A" and has agreed to farmout its interests in the Farmout Lands to Damascus
Energy Inc. ("Farmee") on the following terms and conditions.

1.   DEFINITIONS

Each capitalized term used in this Head Agreement, except as otherwise
specifically defined herein, will have the meaning given to it in the Farmout &
Royalty Procedure, and, in addition:

(a)  "Agreement" means this agreement contained herein, together with all
Schedules hereto and all documents incorporated by reference;

(b)  "Contract Depth" means a depth of + 240 metres subsea or 15 metres into the
Devonian, whichever first occurs;

(c)  "Farmee" means Damascus Energy Inc. as to a 100% interest;

(d)  "Farmor" means Bounty Developments Ltd.;

(e)  "Mutual Interest Lands" means any interest in any parcel of oilsands or
petroleum and natural gas rights falling within 3 miles of the


<PAGE>

Farmout Lands or any portion thereof; and

()   "Title Documents" mean the title documents described as "Title Documents"
in Schedule "A" and all renewals, extensions, continuations or documents of
titles issued in substitution thereo.;


2.   SCHEDULES

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

(a)  Schedule "A", which describes the Title Documents, the Farmout Lands and
the Encumbrances;

(b)  Schedule "B", which is the election sheet for the 1997 CAPL Farmout &
Royalty Procedure (the "Farmout and Royalty Procedure") which, along with the
elections, is incorporated by reference as fully as if it were attached hereto;

(c)  Schedule "C", which specifies the types of drilling information to be
supplied by the Farmee to the Farmor pursuant to the Farmout & Royalty
Procedure;

(d)  Schedule "D", which is the election sheet for the 1990 CAPL Operating
Procedure (the "Operating Procedure") and the 1996 PASC Accounting Procedure
(the "Accounting Procedure") which, along with the elections, are incorporated
by reference as fully as if they were attached hereto;

(e)  Schedule "E" which is a copy of the Gross Overriding Royalty Agreement with
Diamond Head Investments Ltd.

3.   FARMEE'S CASH PAYMENTS

(a)  In consideration of the Farmee being granted the opportunity to earn an
interest in the Farmout Lands under the terms of this Agreement, the Farmee
shall make the following unconditional, non-refundable payments to the Farmor:

         (i) payment in the amount of $111,500 to be paid immediately (Farmor
         acknowledges that this payment has already been made); and

         (ii) payment in the amount of $500,000 to be made on the execution of
         this Agreement;

(b)  The Farmee shall make a further payment of $7,581,500 to the Farmor on or
before December 15, 2006.

(c)  Further, Farmee shall reimburse the Farmor for all expenditures made or
liabilities incurred to date or in the future in obtaining permits, approvals,
and equipment commitments, and in obtaining land, engineering, geological,
geophysical and other services, reasonably required to allow the Year 1


                                       2
<PAGE>

Evaluation Wells to be drilled and the Seismic Program to be completed. Farmor
shall consult from this date forward with the Farmee prior to incurring such
liabilities and Farmee shall reimburse Farmor within a reasonable period of time
for same after being presented with invoices or other backup.

(d)  If the Farmee fails to make the payment referred to in paragraph 3(b) above
by the due date, then the Farmee's right to earn an interest in the Farmout
Lands shall terminate, it shall forfeit all rights to deposits paid hereunder as
liquidated damages and it shall have no further rights under this Agreement.

4.   SHARES IN PATCH AND DAMASCUS

(a)  On or before December 1, 2006, or on such other date as is necessary to
enable the other transactions referred to herein to occur, Farmee shall issue to
Farmor at least 4,215,266 voting common shares in Farmee.

(b)  On or before the execution of this Agreement, Farmee shall enter into an
agreement with Patch International Inc. ("Patch") ("the Patch Agreement") under
which Patch shall agree to acquire all of the issued and outstanding shares of
Farmee. Farmor shall forthwith be provided with a copy of the Patch Agreement
and this Agreement shall not be effective until and unless the Patch Agreement
is approved by Farmor. Further, any amendments to the Patch Agreement shall be
approved by the Farmor.

(c)  As a consequence of the Patch Agreement, Farmor shall be issued at least
4,215,266 common shares, or a like number of exchangeable shares convertible
into common shares, of Patch which shares shall be known hereinafter as the
"Patch Shares" and shall constitute, as of the Closing Date as defined under the
Patch Agreement, at least 15% of the issued and outstanding shares of Patch
inclusive of any stock options or any other right, privilege or contingent right
or privilege to acquire any of the unissued shares in the capital of Patch.


5.   EVALUATION WELLS

a) All operations with respect to the Farmout Lands shall be subject to the
provisions of the Operating Procedure as amended by this Agreement. As soon as
the Farmee has capacity, unless the parties agree otherwise on an interim basis,
Farmee shall be appointed initial operator.

b) On or before March 31, 2007 Farmee it shall spud a minimum of 16 Evaluation
Wells (collectively "the Year 1 Evaluation Wells" and individually an
"Evaluation Well") at mutually agreeable locations on the Farmout Lands and
shall then diligently and continuously drill the Evaluation Wells to Contract
Depth and core same throughout that geological formation known as "the McMurray
formation" at its sole cost. In the event surface access to the drill sites
cannot be reasonably obtained by the required date because of surface
conditions, weather conditions, rig availability or regulatory approval, Farmee
shall, before the required date, advise Farmor in writing, of the reasons why
access cannot be obtained. Farmor

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shall, thereupon, grant an extension to the commencement date which shall be
reasonable under the circumstances.


6.   SEISMIC

(a) Farmee shall on or before March 31, 2007 at its sole cost, shoot and
complete a 2D seismic program, at a minimum of cost of $1,500,000, over the
Farmout Lands ("the Seismic Program"). In the event surface access cannot be
reasonably obtained by the required date because of surface conditions, weather
conditions, seismic crew availability or regulatory approval, Farmee shall,
before the required date, advise Farmor in writing, of the reasons why access
cannot be obtained. Farmor shall, thereupon, grant an extension to the
commencement date which shall be reasonable under the circumstances.

b) Upon completion of the Seismic Program, Farmee shall provide Farmor, at no
cost and as soon as available, with a copy of: all field data including survey
information; processed data, including stacked data; interpreted data; and a
copy of shot point base maps and bin overlay maps. Farmor shall hold such data
confidential and for its sole use and benefit.

c) The trading rights and ownership of the Seismic Program shall be shared as
follows:

     Farmor-20%

     Farmee-80%.


7.   EARNING

a) Upon payment and transfer of all of the cash and share consideration, as
described in paragraphs 3 and 4 hereof, the Farmee shall earn a 30% UNDIVIDED
WORKING INTEREST in the Farmout Lands. Farmor agrees, however, after the cash
consideration described in paragraph 3 has been paid but prior to receipt of the
Patch Shares, to transfer to Farmee a 30% Working Interest in the Farmout Lands
and Title Documents upon acceptance or provision of satisfactory trust or or
escrow arrangements by Farmee. Such trust or escrow arrangements shall continue
until such time as the Patch Shares have been issued and transferred to the
Farmor.

b) Upon previously earning the said 30% undivided Working Interest in the
Farmout Lands and completion of its obligations regarding the Year 1 Evaluation
Wells, subject in each of the Evaluation Wells to Article 3.00 of the Farmout &
Royalty Procedure, and completion of its obligations regarding the Seismic
Program, the Farmee shall earn a further 50% UNDIVIDED WORKING INTEREST (80%
undivided Working Interest aggregate) in the Farmout Lands.


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c) Upon Farmee earning each of the Working Interests provided for in the
foregoing sub-clauses of this Article, Farmor shall, at request of Farmee,
transfer to it the interests earned hereunder. Until such time as the Farmee has
received a registrable transfer of its interests earned hereunder, Farmor agrees
to hold the interests earned hereunder in trust for the benefit of the Farmee.



8.   FARMEE FINANCING OF EIGHT FURTHER WELLS

Following the drilling of the Year 1 Evaluation Wells, the parties contemplate,
but are not committed to, the drilling of further exploration, evaluation or
test wells. Farmee, in addition to being responsible for its 80% share, shall
finance Farmor's 20% share of the costs of drilling, coring, evaluating and
equipping or abandoning, as the case may be, the next 8 exploration, evaluation
or test wells ("Option Wells"). Interest shall shall accrue on the Farmor's said
20% share of the costs of the Option Wells at the Bank of Canada's prime
interest rate plus 1% until Farmor repays such costs and interest to Farmee.
Farmor shall reimburse Farmee for such costs and the stated interest upon the
earlier of the sale of the Farmee's interest in the Farmout Lands or 10 years
from the date of abandonment of the Option Wells.


9.   OPERATING PROCEDURE

The Operating Procedure and Accounting Procedure shall govern joint operations
on the Farmout Lands earned under this Agreement, subject to the clause 1007 (a)
be replaced with the following wording:

"Participating parties in any independent operations shall be entitled to
recover 200% of the cost of all such operations from the sale of production or,
in the event of a sale of both parties' interests in the joint lands, from the
sale proceeds therefrom, pro-rated between the parties as per their
proportionate working interests."


10.  AREA OF MUTUAL INTEREST

Except as amended hereby, Article 8.00 of the Farmout and Royalty Procedure will
be in effect from the Effective Date until December 31, 2008. Subject to Article
8.00, the Parties will have the right to participate in an acquisition of Mutual
Interest Lands, as of the date of the purchase of any Mutual Interest Lands, in
the proportion to which they will own working interests in the Farmout Lands
after the Farmee has fulfilled its obligations hereunder.


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<PAGE>

11.  ENCUMBRANCES

The Encumbrances will apply to the Farmout Lands and the Mutual interest Lands
and shall be paid by each of the Parties in proportion to its working interest.


12.  SALE PROVISIONS

Farmee agrees not to assign, transfer, sell or otherwise dispose of all or any
part of its interest under this Agreement, or in the Assets or in the Mutual
Interest Lands, without, within a reasonable period of time prior to any
proposed sale, offering the right to Farmor to assign, transfer, sell or
otherwise dispose of all or part of its interest on the same terms. Farmee
agrees to make the provisions of this clause binding on any third parties
acquiring all or part of Farmee's interest hereunder.


13.  INTERIM EXPLORATION OPERATIONS

After the date hereof, the Farmor and Farmee will work together to take all
steps that are required to ensure that the Year 1 Evaluation Wells are drilled
and the Seismic Program is completed as required. Any costs that are incurred in
this regard will be funded by Farmee. To the extent that the Farmor has incurred
or incurs such costs prior to Farmee assuming full operatorship and related
responsibilities, Farmee shall pay any cash calls in this regard to Farmor
within 15 days of receiving same. If Farmee fails to pay any cash calls as
required, Farmor reserves the right at its sole discretion to halt work on all
or part of Year 1 Evaluation Wells or Seismic Program. The Parties shall enter
into a separate services agreement to compensate Farmor's staff for services
that they, rather than the Farmee or third party contractors, perform in
relation to the Exploration Wells or the Seismic Program as a result of the
failure of the Farmee to acquire full operatorship and related responsibilities
after December 15, 2006 or as a result of the failure of the Farmee to hire
suitable staff to carry out these responsibilities.


14.  RESTRICTION ON FURTHER JOINT OPERATIONS

No party may propose the drilling of an additional well or other operation on
the Farmout Lands until such times as the Year 1 Evaluation Wells and the
Seismic Program are complete.


15.  AMENDMENT TO THE LIMITATIONS ACT

The two year period for seeking a remedial order under section 3(1)(a) of the
LIMITATIONS ACT, s.a. 1996 c. L-15.1, as amended, for any claim (as defined in
that ACT) arising in connection with this Agreement is extended to:


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<PAGE>

     a) for claims disclosed by an audit, two years after the time this
     Agreement permitted that audit to be performed ; or

     b) for all other claims, four years.


16.  ADDRESSES FOR NOTICES

     The parties' Addresses for notices are:

     BOUNTY DEVELOPMENTS LTD.
     1250, 340 - 12th Avenue S.W.
     Calgary, AB   T2R 1L5

     Attention:  Paul S. Clark

     DAMASCUS ENERGY INC.
     22 Barclay Walk S.W.,
     Calgary, Alberta T2P 4V9

     Attention: Michael Vandale

17.  MISCELLANEOUS

     a)       Each of the parties represents and warrants that it now has or is
              entitled to have good right, full power and absolute authority to
              enter into this Agreement.

     b)       In the event of a conflict between any term or condition of this
              Head Agreement and any Schedule attached hereto, the term or
              condition of this Head Agreement shall prevail.

     c)       Any reference in this Head Agreement to "hereunder", "herein" and
              "hereof" refer to the provision of this Head Agreement and unless
              otherwise stated, any reference to a clause, subclause, or
              Schedule refers to the clauses, subclauses or Schedule of this
              Head Agreement.

     d)       The following clauses of the 1990 CAPL Operating Procedure are
              incorporated into and apply mutatis mutandis to this Head
              Agreement:


                    102      HEADINGS
                    103(b)   REFERENCES
                    2101     PARTIES TO SUPPLY
                    2301     WAIVER OF PARTITION OF SALE
                    2601     LIMITATION ON RIGHT OF ACQUISITION
                    2801     SUPERSEDES PREVIOUS AGREEMENTS
                    2802     TIME OF ESSENCE
                    2803     BINDS SUCCESSORS AND ASSIGNS

                                       7
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                    2804     LAWS OF JURISDICTION TO APPLY


18.  COUNTERPART EXECUTION

This Agreement may be executed in counterpart. All of those executed counterpart
pages when taken together will constitute the Agreement.

If this reflects your understanding of the terms and conditions agreed upon
respecting this Agreement, please sign and return one counterpart execution page
to complete our copy of this Agreement.


Yours very truly,
BOUNTY DEVELOPMENTS LTD.

/s/ Paul S. Clark

PAUL S. CLARK
Land Manager



         Agreed to this________day of_______________, 2006


         DAMASCUS ENERGY INC.

         Per:     /S/ MICHAEL VANDALE














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<PAGE>
                                  SCHEDULE "A"

     ATTACHED TO AN AGREEMENT DATED EFFECTIVE THE 30TH DAY OF NOVEMBER, 2006
            BETWEEN BOUNTY DEVELOPMENTS LTD. AND DAMASCUS ENERGY INC.


<TABLE>
<CAPTION>
FARMOUT LANDS                                         TITLE DOCUMENTS                              ENCUMBRANCES
<S>                                                   <C>                                          <C>

Sections 25-27; 35; 36                                Alberta Crown Oil Sands                      Crown Lessor Royalty
Twp 93 Rge 14 W4M                                     Lease No. 7406070412
Oil Sands below the top of                                                                         1% N/C GORR - Diamond Head
the Viking fm to Base                                                                              Investments Ltd.
Woodbend Grp as more
specifically set forth in
Appendix to Lease


Sections 4-9                                          Alberta Crown Oil Sands                       Crown Lessor Royalty
Twp 95 Rge 14 W4M                                     Lease No. 7406070422
Oil Sands belowe the top of                                                                         1% N/C GORR -
the Viking fm to Base                                                                               Diamond Head
Woodbend Grp as more                                                                                Investments Ltd.
specifically set forth in
Appendix to Lease


Sections 19-21, 28-33, 94-                            Alberta Crown Oil Sands                       Crown Lessory Royalty
14W4M                                                 Lease No. 7406090452
Oil Sands  below the top of the                                                                     1% N/C GORR -
Viking fm to Base                                                                                   Diamond Head
Woodbend Grp as more                                                                                Investments Ltd.
specifically set forth in
Appendix to Lease


Sections 2-5, 8-11 and 14-
17, Twp 96-15 W4M                                     Alberta Crown Oil Sands                       Crown Lessor Royalty
Oil Sands  below the top of                           Lease No. 7406090456
the Viking fm to Base                                                                               1% N/C GORR -
Woodbend Grp as more                                                                                Diamond Head
specifically set forth in                                                                           Investments Ltd.
Appendix to Lease

</TABLE>


                                       9
<PAGE>

                                  SCHEDULE "B"
     ATTACHED TO AN AGREEMENT DATED EFFECTIVE THE 30TH DAY OF NOVEMBER, 2006
            BETWEEN BOUNTY DEVELOPMENTS LTD. AND DAMASCUS ENERGY INC.

         1997 CAPL FARMOUT & ROYALTY PROCEDURE ELECTIONS AND AMENDMENTS

SUBCLAUSE 1.01 (F)         -      Effective Date- November 1, 2006

SUBCLAUSE 1.01 (T)         -      Payout -   Alternate      n/a
                                  (if Article 6.00 applies)

SUBCLAUSE 1.01 (BB)        -      Delete the following from the definition:

                                  "which area will be determined as of the
                                  drilling rig release date of that
                                  Earning Well"

CLAUSE 1.02                -      Incorporation of Provisions from 1990 CAPL
                                  Operating Procedure
                                  (i) Insurance (311) Alternate B

ARTICLE 4.00 (Option Wells)       will      /will not  X  apply.
                                       ----           ---

ARTICLE 5.00 (Overriding Royalty) will     /will not XX apply.
                                      ---

SUBCLAUSE 5.01A, Quantification of Overriding Royalty (if applicable).  N/A
                                  (i)  Crude oil (a) - Alternate n/a
                                  If Alternate 1 applies, N/A  %
                                  If Alternate 2 applies, n/a

                                  (ii) Other (b) - Alternate N/A
                                  If Alternate 1 applies,
                                  If Alternate 2 applies, N/A % in
                                  (i) and N/A % in (ii)


SUBCLAUSE 5.04B, Permitted Deductions (if applicable).        n/a

ARTICLE 6.00 (Conversion of Overriding Royalty) will /will not apply.


ARTICLE 8.00 (Area of Mutual Interest) will X apply.

ARTICLE 11.02 (Reimbursement of Land Maintenance Costs)
will      /will not   X   apply.   If applies, reimbursement of $   N/A
     ----           -----                                         --------




                                       10
<PAGE>
                                  SCHEDULE "C"
     ATTACHED TO AN AGREEMENT DATED EFFECTIVE THE 30TH DAY OF NOVEMBER, 2006
            BETWEEN BOUNTY DEVELOPMENTS LTD. AND DAMASCUS ENERGY INC.

BOUNTY DEVELOPMENTS LTD.
                                                        1250, 340 - 12 Ave. S.W.
                                                                     Calgary, AB
                                                                         T2R 1L5
--------------------------------------------------------------------------------
                                                              Tel (403) 264-4994
                                                              Fax (403) 266-6031
                                                            BOUNTY@BOUNTYDEV.COM

WELL REQUIREMENT SHEET    LOCATION:_________________

PRIOR TO SPUDDING:                      AFTER DRILLING:

24 hr. Notice of Spud                   Digital Logs (sonic log -
Survey Plat                             LAS format)
Application for License                 Initial & Final Prints of Logs
Well License                            Final Fluid Analyses
AFE or Well Cost Est.                   DST Summary & Analysis
Geological Prognosis                    End of Well Report incl.
Drilling Program                        Drilling WR Forms
Directional Program

DURING DRILLING:                        DURING COMPLETION:

Daily Drilling Reports                  24 hr. Notice of Intention
Preliminary Fluid Analyses              to Complete
Field Prints of Logs                    Completion Program
Daily Geologic Report                   Daily Completion Reports
Directional Surveys                     Production Tests
24 hr. Notice of Intention to           End of Well Report, incl.
Case /Abandon                           Completion WR Forms
                                        Samples: access to Operator's Set

Mail to Bounty at address above, unless time-sensitive, then courier or email to
BOUNTY@BOUNTYDEV.COM and JONCLARK@BOUNTYDEV.COM


DAILY DRILLING, GEOLOGICAL AND COMPLETION REPORTS:
Emailed daily (incl. week-ends) to:  bounty@bountydev.com
Weekend or night reports to Julie Atkins at 243-8415 (h), 807-9330 (c)
OR Jon Clark 243-5214 (h), 616-6124 (c)

NOTICE OF INTENTION TO ABANDON MAY BE DIRECTED TO:
Jon Clark or Kelly Adams, telephone:  264-4994

ALL WELL DATA MAY BE FORWARDED TO: Mary Schumann

AFTER HOURS CONTACTS:
Jon Clark (Geology)       (403) 243-5214 (h) or 616-6124 (cell)
Julie Atkins (Geology     (403) 243-8415 (h) or 807-9330 (cell)
Kelly Adams (Engineering) (403) 650-2645 (cell)
Paul Clark (Land)         (403) 804-8715 (cell)


                                       11
<PAGE>

                                  SCHEDULE "D"
     ATTACHED TO AN AGREEMENT DATED EFFECTIVE THE 30TH DAY OF NOVEMBER, 2006
            BETWEEN BOUNTY DEVELOPMENTS LTD. AND DAMASCUS ENERGY INC.
CAPL OPERATING PROCEDURE - 1990

Clause 311                                  Insurance Election:        A

Clause 604                                  Marketing Fee:             deleted

Clause 903                                  Casing Point Election:     A

Clause 1007                                 Penalty for Independent Operations:
                                            200% on all
                                            Independent operations

Clause 1010                                 Exceptions to Clause 1007: (iv) 180
                                            days

Clause 2401                                 Disposition of Interests:  A

Clause 2404                                 Recognition Upon Assignment:
                                            CAPL Assignment Procedure to take
                                            precedence

1996 PASC ACCOUNTING PROCEDURE
Clause 105.                                 Operating Fund     10%

Clause 110. Approvals                       Clause N/A; 2 ;  75%

Clause 112. Expenditure Limitations         (a)     excess of $25,000.00
                                            (c)      excess of $25,000.00

Clause 202. Employee Benefits               (b)      exceed 25%

Clause 213. Camp & Housing                  (b)     shall _____/shall not X

Clause 216. Warehouse Handling              10%

Clause 221. Allocation Options              N/A

Clause 302. Overhead Rates:                 (a)      Exploration Project: N/A
                                                     percent OR
                                                     1. 5% ; $50,000.
                                                     2. 3% ; $100,000.
                                                     3. 1%
                                            (b)      Drilling of a Well: N/A
                                                     percent OR
                                                     1. 3%; $ 50,000.
                                                     2. 2%; $l00,000.
                                                     3. 1%
                                            (c)      Initial Construction
                                                     Project: N/A percent OR
                                                     1. 3%; $ 50,000.
                                                     2. 2%; $100,000.
                                                     3. 1%
                                            (d)      Construction Project: N/A
                                                     percent OR
                                                     1. 5% of the first $50,000.
                                                     2. 3% of the next $100,000.
                                                     3. 1%
                                            (e)      Operation and Maintenance:
                                                     1. n/a ;
                                                     2. $250. per Producing well
                                                        per month; or
                                                     3. n/a
                                            Subclause 302(e)(2) and 302(e)(3)
                                            hereof SHALL NOT

Clause 406. Dispositions                    $10,000.00


                                       12
<PAGE>

                                  SCHECULE "E"

    ATTACHED TO AN AGREEMENT DATED EFFECTIVE THE 30TH DAY OF NOVEMBER, 2006
           BETWEEN BOUNTY DEVELOPMENTS LTD. AND DAMASCUS ENERGY INC.


                          OVERRIDING ROYALTY AGREEMENT

THIS AGREEMENT made as of the 3rd day of November, 2006

BETWEEN:

          DIAMOND HEAD  INVESTMENTS  LTD. a body corporate,  having an office at
          the City of Calgary, in the Province of Alberta
          (hereinafter referred to as the "Royalty Owner")

                                                          OF THE FIRST PART

                                                - and -

          BOUNTY  DEVELOPMENTS  LTD., a body corporate,  having an office at the
          City of Calgary, in the Province of Alberta
          (hereinafter referred to as the "Grantor")

                                                          OF THE SECOND PART

         WHEREAS the Grantor  holds an interest in the Royalty  Lands and Leases
as hereinafter defined; and

         WHEREAS, in consideration of good and valuable consideration  received,
the Grantor has agreed to grant and to pay to the  Royalty  Owner an  Overriding
Royalty  effective as of the date hereof,  the terms and conditions of which are
provided for in this agreement.

         NOW THEREFORE this Agreement  witnesseth that in  consideration  of the
mutual  covenants and  agreements  set forth and contained  herein,  the parties
agree as follows:

1.       DEFINITIONS

In this Agreement, including this clause, unless the context otherwise requires:

(a)      "Condensate"   means  a  mixture  of  mainly   pentanes   and   heavier
         hydrocarbons that may be contaminated with sulphur  compounds,  that is
         recovered or is recoverable at a Well from an underground reservoir and
         that may be gaseous in its virgin  reservoir state but is liquid at the
         condition under which its volume is measured or estimated;

(b)      "Crude Oil" means a mixture mainly of pentanes and heavier hydrocarbons
         that may be contaminated with sulphur  compounds,  that is recovered or
         is  recoverable  at a Well from an  underground  reservoir  and that is
         liquid  at the  conditions  under  which  its  volume  is  measured  or
         estimated,  and includes bitumen and all other hydrocarbon  mixtures so
         recovered or recoverable except natural gas or Condensate;

(c)      "Current  Market Value" means the price at which  Petroleum  Substances
         are sold by the Grantor calculated at the Royalty  Determination Point,
         which  price is not  unreasonable  having  regard to market  conditions
         applicable to similar  production in arm's length  transactions  at the
         time of such disposition including,  without restricting the generality
         of the foregoing,  such factors as the volumes available,  the kind and
         quality of Petroleum  Substances to be sold,  the effective date of the
         sale,  the  term  of the  sale  agreement,  the  point  of  sale of the
         Petroleum  Substances and the type of transportation  service available
         for the delivery of the Petroleum Substances to be sold;

(d)      "Leases" means the  respective  documents of title and any extension or
         renewal  of such  documents  pursuant  to which  the  Grantor  holds an
         interest in the Royalty Lands;


<PAGE>
                                       2

(e)      "Overriding  Royalty" means the overriding  royalty granted pursuant to
         Clause 2 hereof;

(f)      "Petroleum  Substances"  means Crude Oil,  Condensate,  natural gas and
         related  hydrocarbons and all other substances  produced in association
         therewith,  but only to the  extent  that the same are  granted  by the
         Leases;

(g)      "Raw Gas" has the meaning prescribed by the Regulations;

(h)      "Regulations" means all statutes,  laws, rules, orders,  regulations or
         directives  in effect  from  time to time and made by any  governmental
         authority having jurisdiction over the Royalty Lands and the operations
         to be conducted thereon;

(i)      "Royalty  Determination  Point"  means the first  point of  measurement
         downstream  from  the  wellhead  after  the  initial  treatment  of the
         produced  substances  for the  separation and removal of basic sediment
         and water from the Petroleum Substances;

(j)      "Royalty Lands" means the specified  undivided  working  interest(s) in
         the lands set forth in Schedule "A";

(k)      "Spacing  Unit" means the area  allocated  to a Well (or the area which
         would be allocated to a well, but for a plan of  unitization)  pursuant
         to the Regulations for the purpose of producing Petroleum Substances;

(l)      "Title  Documents" means the documents more  particularly  described in
         Schedule  "A"  insofar  as same  relate  to the  Royalty  Lands and all
         renewals,  extensions,  continuations or amendments  thereto or further
         Title Documents issued pursuant thereto.

(m)      "Well" means any well on the Royalty  Lands or on lands pooled with the
         Royalty Lands.


2.       GRANT OF OVERRIDING ROYALTY

Grantor  hereby  grants to the  Royalty  Owner an  interest  in  respect  of the
Petroleum  Substances within,  upon or under the Royalty Lands equal to one (1%)
percent of the gross monthly production produced from the Royalty Lands.

3.       QUANTIFICATION OF OVERRIDING ROYALTY

If Royalty Owner does not take possession of and separately dispose of its share
of Petroleum Substances,  the Overriding Royalty shall be quantified and paid on
the  gross  proceeds  of the  sale  of such  Petroleum  Substances  without  any
deductions, except the following, namely:

(a)      with respect to Crude Oil and Condensate,  a proportionate share of the
         actual costs of transportation from the Royalty  Determination Point to
         market connection;

(b)      with  respect  to  Petroleum   Substances  other  than  Crude  Oil  and
         Condensate,  a  proportionate  share  of the  cost  of  transportation,
         gathering and processing, providing that such costs are no greater than
         those  allowed  from  time to time by the  Crown  in the  right  of the
         Province of Alberta in calculating its royalty.

4.       OVERRIDING ROYALTY TAKEN IN KIND

(a)      The  Royalty  Owner  shall  have the right to take in kind the  Royalty
         Owner's  share of  Petroleum  Substances.  Such right may be  exercised
         separately  with  respect to  Condensate,  Crude Oil,  Raw Gas, and any
         other  individual  Petroleum  Substance.  In the case of Crude  Oil and
         Condensate,  such  right when  exercised  shall be done on a minimum of
         thirty  (30)  days  notice  to the  Grantor.  In

<PAGE>
                                       3




         the case of all other  Petroleum  Substances  such right when exercised
         shall be done on a minimum of six (6) months notice to the Grantor.  If
         the Royalty  Owner,  however,  signifies  in writing its consent to the
         sale of any of the Royalty Owner's share of Petroleum  Substances under
         a contract  made by the Grantor  providing for a minimum term in excess
         of the said  respective  notice  periods,  the Royalty Owner's right to
         take in kind any Petroleum Substances subject to such contract shall be
         suspended during the term of such contract. The Royalty Owner may cease
         to take in kind any  Petroleum  Substances  upon giving the Grantor the
         same  minimum  notice as provided  above for the Royalty  Owner to take
         such  Petroleum  Substances in kind as aforesaid.  The right to take in
         kind or to  cease to take in kind may be  exercised  from  time to time
         subject only to the foregoing provisions of this Subclause.

(b)      When the Royalty  Owner is taking in kind the Royalty  Owner's share of
         any Petroleum  Substances,  the Grantor shall at no cost to the Royalty
         Owner remove basic sediment and water therefrom in accordance with good
         oilfield practice, and:

                  (i) in respect to Crude Oil and Condensate:  the Grantor shall
                  deliver the Royalty Owner's share to the Royalty Owner, or its
                  nominee, at the tank outlets, or comparable delivery point, in
                  accordance  with usual and  customary  pipeline  and  shipping
                  practice,  free and clear of all charges  whatsoever except to
                  the extent that the Royalty  Determination Point is an earlier
                  point in which  case the  costs  of  moving  product  from the
                  Royalty  Determination  Point to the  delivery  point  will be
                  deductible  by the Grantor from the  Overriding  Royalty.  The
                  Royalty  Owner  shall  have the  right to use free of charge a
                  share of the Grantor's lease tankage and storage facilities to
                  store a maximum of ten (10) days  accumulation  of the Royalty
                  Owner's share of Crude Oil and Condensate; and

                  (ii) in respect to Raw Gas:  the  Grantor  shall  deliver  the
                  Royalty Owner's share to the Royalty Owner, or its nominee, at
                  the Royalty Determination Point of the relevant well, provided
                  that to the extent the Royalty Owner so requests on reasonable
                  notice to the Grantor and the  Grantor can  reasonably  comply
                  with  such  request,  the  Grantor  shall  gather,   compress,
                  transport,  treat and process such share of Raw Gas along with
                  the  Grantor's  share of Raw Gas from the  applicable  well or
                  wells and deliver to the Royalty Owner at their relevant plant
                  outlet,  the  Royalty  Owner's  Overriding  Royalty  share  of
                  marketable gas and other  Petroleum  Substances  obtained from
                  such share of Raw Gas, in which event, the Royalty Owner shall
                  be responsible for:

                  A.       its  proportionate  share of the costs of  gathering,
                           compressing,  transporting,  treating and  processing
                           such  Raw  Gas  where  the  Grantor  or an  Affiliate
                           thereof does not own such facilities; or

                  B.       where the Grantor or an  Affiliate  thereof owns such
                           facilities,  such  fee as may be  agreed  upon by the
                           Grantor  and the  Royalty  Owner  for the use of such
                           facilities  to make  marketable  the Royalty  Owner's
                           Overriding Royalty share of Raw Gas.

5.       CONDUCT OF OPERATIONS

(a)      Grantor shall be entitled to use a  proportionate  share of the Royalty
         Owner's share of Petroleum  Substances  as may be reasonably  necessary
         for its drilling and production  operations with respect to the Royalty
         Lands,  excluding  Petroleum  Substances  used  for  tertiary  recovery
         operations.  Grantor shall not be liable to Royalty Owner for Petroleum
         Substances which are unavoidably lost.  Petroleum Substances so used or
         lost shall be excluded when quantifying the Overriding Royalty.

(b)      The  Grantor  shall have the right to  commingle  Petroleum  Substances
         produced from the Royalty Lands with Petroleum Substances produced from
         other lands,  provided  reasonable  methods are used to  determine  the
         proper  measurement  of  production  of Petroleum  Substances  from the
         Royalty Lands.

<PAGE>
                                       4

(c)      Nothing  contained  in this  Agreement  shall  be a deemed  or  implied
         covenant by the Grantor to develop the Royalty Lands.

(d)      The Grantor  shall carry on (or cause to be carried on) all  operations
         on the Royalty Lands  diligently and in a good and  workmanlike  manner
         consistent with good oilfield practice.


6.       MAINTENANCE OF LEASES

Grantor  shall comply with all the  covenants  and  conditions  contained in the
Leases  insofar  as they  relate to the  Royalty  Lands and shall do all  things
necessary  to  maintain  the Leases in full force and effect  during the term of
this Agreement including, without limitation, timely payment of all rentals, all
renewal and extension fees, all taxes, all payments in lieu of actual production
and  royalties  due or  becoming  due in  respect of the  Royalty  Lands and the
Leases.

7.       POOLING

The Grantor shall have the authority to pool the Petroleum  Substances in a zone
underlying all or a portion of the Royalty Lands to the extent  required to form
a Spacing Unit in such zone, but only if such pooling  allocates to that portion
of the Royalty Lands  included in the Spacing Unit that  proportion of the total
production of Petroleum  Substances from the Spacing Unit which the surface area
of that  portion of the Royalty  Lands  placed in the Spacing  Unit bears to the
total  surface  area of the Spacing  Unit.  The Grantor  shall  thereafter  give
written  notice to the Royalty Owner  describing the extent to which the Royalty
Lands are being  pooled and  describing  the Spacing  Unit with respect to which
they are so pooled.

8.       UNITIZATION

The Grantor  shall not include the Royalty Lands or any part or parts thereof in
a Unit  Agreement or a Unit  Operating  Agreement  for the unitized  development
and/or  operation  thereof  with other lands  without the consent of the Royalty
Owner, which shall not be unreasonably withheld. Upon any such unitization,  the
Overriding Royalty shall be quantified on the basis of the production  allocated
to each Spacing Unit on the Royalty Lands under the plan of unitization  and not
upon the  basis of actual  production  from the  Royalty  Lands.  Further,  each
Spacing Unit for which  production is allocated  shall be deemed to have on Well
thereon, regardless of the actual number of Wells.

9.       BOOKS AND RECORDS

(a)      The Grantor  shall keep true and current  books,  records and  accounts
         showing the quantity of Petroleum Substances produced from or allocated
         to the Royalty  Lands and the sales and  disposition  made thereof from
         time to time. The books,  records,  vouchers and accounts maintained by
         the Grantor shall be open to inspection at all reasonable  times during
         business  hours  by  any  officer,   agent  or  employee  appointed  or
         authorized by the Royalty Owner,  in writing,  to examine the same. All
         information obtained by the Royalty Owner pursuant to this clause shall
         be treated as confidential  and shall not be disclosed to third persons
         without the prior written consent of the Grantor.

(b)      By the last day of each month, beginning with the first month following
         the month in which production of Petroleum  Substances from the Royalty
         Lands is  obtained  after  the date  hereof,  Grantor  shall  submit to
         Royalty  Owner a statement  showing the  quantity and kind of Petroleum
         Substances  produced,  deemed to be produced or allocated to, saved and
         sold from or used off the Royalty  Lands in the  immediately  preceding
         calendar month, together with a quantification of Royalty Owner's share
         of Petroleum Substances for such immediately  preceding calendar month.
         When Royalty Owner does not take and separately dispose of its share of
         Petroleum  Substances,  the said statement  shall also include the sale
         price for such Petroleum  Substances  and the gross  proceeds  received
         therefrom,  accompanied  by a cheque  payable to Royalty  Owner for its
         share of such  proceeds.  A copy of Grantor's  governmental  production
         statement for the

<PAGE>
                                       5

         month for which the  Overriding  Royalty is quantified as aforesaid and
         also,  with respect to Crown Leases,  a copy of the government  royalty
         statement  with  respect to the Leases,  shall  accompany  each royalty
         statement  to  Royalty  Owner.   Any  information   contained  in  such
         governmental  production  statement  or royalty  statement  need not be
         repeated in the statement to Royalty Owner.

(c)      Royalty  Owner,  upon notice to Grantor,  shall have the right to audit
         Grantor's  accounts and records for any given calendar year, insofar as
         they relate to any matter or item relating to this Agreement bearing on
         the  Overriding  Royalty,  within the  twenty-four  (24)  month  period
         following the end of that calendar  year. any payment made or statement
         rendered by Grantor hereunder which is not disputed by Royalty Owner on
         or before the last day of the  twenty-sixth  (26th) month following the
         end of the calendar year shall be deemed to be correct.

10.      ASSIGNMENT BY GRANTOR

The Grantor may assign any legal or equitable  interest in this  Agreement,  the
Royalty Lands, the Leases or any portion or portions thereof and in the event of
such assignment, the Grantor shall continue to be bound by all of the conditions
and provisions of this  Agreement as if there had been no assignment  until such
time as the Royalty Owner shall have been served with a written  undertaking  by
the  assignee (or  assignees)  directly  enforceable  by the Royalty  Owner,  to
perform  and be bound  thereafter  by all of the  terms and  provisions  of this
Agreement to the same extent and degree with  respect to the interest  which has
been assigned to it, as it would have been if such assignee (or  assignees)  had
been a party to this Agreement instead of the Grantor.

11.      ASSIGNMENT BY ROYALTY OWNER

The Royalty Owner may at any time assign its interest in the Overriding  Royalty
upon notice thereof to the Grantor,  provided that if at any time the Overriding
Royalty  should become owned by more than one party,  the Grantor shall have the
right to require the assignees of the  Overriding  Royalty to appoint in writing
an agent to  represent  all of the  assignees of the  Overriding  Royalty and to
receive all statements and payments (if any) of the Overriding  Royalty.  If the
assignees of the Overriding  Royalty fail to appoint an agent  hereunder  within
thirty (30) days of any request to do so by Grantor,  Grantor may  withhold  the
Overriding Royalty until such time as an agent is appointed.

12.      ASSIGNMENT PROCEDURE

The 1993  CAPL  Assignment  Procedure  is  incorporated  by  reference  into the
Agreement,  and will be deemed to apply as if it has been included as a schedule
to the Agreement.

13.      ROYALTY OWNER'S LIEN

(a)      The  Royalty  Owner  shall be  entitled  to and shall  have a first and
         paramount  lien upon the Grantor's  share of all  Petroleum  Substances
         from time to time produced from the Royalty Lands to secure the payment
         of the Overriding  Royalty.  Such lien shall not operate to release the
         Grantor from personal  liability  for monies due to the Royalty  Owner.
         Such  lien  shall  not  attach  to the  Grantor's  share  of  Petroleum
         Substances  sold or otherwise  disposed of from the Royalty Lands,  but
         immediately upon default  occurring in payment by the Grantor of monies
         payable to the Royalty  Owner such lien shall  operate as an assignment
         to the Royalty  Owner of the  consideration  thereafter  payable to the
         Royalty Owner for the Petroleum  Substances sold, up to the amount owed
         to the Royalty Owner and not so paid by the Grantor.

(b)      Service of a copy of this  agreement  upon any  purchaser  of Petroleum
         Substances  together  with written  notice from the Royalty Owner shall
         constitute  written  authorization  on the part of the Grantor for such
         purchaser to pay the Royalty  Owner the proceeds from any sale or sales
         of the Grantor's share of Petroleum Substances up to the amount owed to
         the Royalty Owner by the

<PAGE>
                                       6

         Grantor,  and such  purchaser  is  authorized  to rely  solely upon the
         statement  of the  Royalty  Owner as to the amount  owed to the Royalty
         Owner by the Grantor.


14.      NOTICES

(a)      Whether  or not so  stipulated  herein,  delivery  of all  notices  and
         communications  (hereinafter  called  "notices")  required or permitted
         hereunder shall be in writing. Notices may be given:

                  (i)      personally,  by delivering the notice to the party on
                           whom it is to be served at that  Party's  address for
                           service, which notice shall be deemed received by the
                           addressee  when  actually  delivered  as aforesaid if
                           such  delivery  is  during  normal   business   hours
                           provided that if a notice is not delivered during the
                           addressee's  normal business hours, such notice shall
                           be deemed to have been  received by such party at the
                           commencement   of  the  next  ensuing   business  day
                           following the date of delivery; or

                  (ii)     by facsimile  (or by any other like method by which a
                           written or recorded  message may be sent) directed to
                           the party on whom it is to be served at that  party's
                           address for  service,  which  notice  shall be deemed
                           received by the respective  addressees  thereof:  (i)
                           when  actually  received  by it, if  received  within
                           normal business hours; or (ii) at the commencement of
                           the next ensuing business day following  transmission
                           thereof,  if such notice is not received  during such
                           normal business hours; or

                  (iii)    by mailing  them first  class mail (air mail if to or
                           from a location  outside  Canada)  double  registered
                           post, postage prepaid,  directed to the party on whom
                           it is to be  served,  at  that  party's  address  for
                           service,  which notice shall be deemed to be received
                           by the addressee at noon,  local time, on the earlier
                           of the actual date of receipt or the fourth (4th) day
                           (excluding Saturdays, Sundays and statutory holidays)
                           following  the mailing  thereof;  provided  that,  if
                           postal  service  is  interrupted  or  operating  with
                           unusual or imminent delay, notice shall not be served
                           by such means during such  interruption  or period of
                           delay.

(b)      Where, in this Agreement,  a time period is established  within which a
         party must respond,  elect or otherwise  communicate  with respect to a
         notice so  received  the time shall  commence to run when the notice is
         deemed to be received as hereinbefore  provided.  Any time period which
         expires on a Saturday, Sunday or statutory holiday shall be extended to
         expire on the next normal business day.

(c)      The  address  of  each  of  the  respective  parties hereto shall be as
         follows:

                  DIAMOND HEAD INVESTMENTS LTD.
                  1250, 340 - 12th Avenue S.W.
                  Calgary, Alberta
                  T2R 1L5

                  BOUNTY DEVELOPMENTS LTD.
                  1250, 340 - 12 Avenue S.W.
                  Calgary, Alberta
                  T2R 1L5

(d)      Any  party  may  change  its address for service by notice to the other
         parties.

<PAGE>
                                       7

15.      TERM

This  Agreement  shall  remain in force and effect so long as the Grantor or any
successor in interest retains an interest in the Royalty Lands.


16.      GENERAL

(a)      The parties will from time to time and at all times hereafter,  without
         further  consideration,  do such  further  acts  and  deliver  all such
         further assurances, deeds and documents as shall reasonably be required
         in order to fully perform and carry out the terms of this Agreement.

(b)      This Agreement  constitutes  the entire  agreement  between the parties
         with respect to the subject matter of this Agreement and supersedes all
         prior contracts,  agreements and understandings  between the parties in
         this regard.  No  modification or alteration of this Agreement shall be
         binding  unless  executed  in  writing by these  parties.  There are no
         representations,   warranties,   collateral  agreements  or  conditions
         affecting this  transaction  other than as are expressed or referred to
         herein in writing.

(c)      The terms and  conditions of this  Agreement  shall be binding upon and
         shall enure to the benefit of the parties  hereto and their  respective
         successors and assigns.

(d)      Time is of the essence of this Agreement.

(e)      The headings  contained in this Agreement are intended for  convenience
         of reference only and shall form no part of this Agreement.

(f)      The words herein  contained  which  impart the  singular  number or the
         masculine  gender shall be read and construed as applying to the plural
         and each and every  corporate,  male or female party thereto and to its
         and their heirs, executors, administrators,  successors and assigns, as
         the case or context requires.

(g)      This Agreement  shall be governed by and interpreted in accordance with
         the laws of the  Province of Alberta.  The parties  hereby  irrevocably
         attorn to the jurisdiction of the Courts of the Province of Alberta for
         the determination of all matters arising hereunder.

(h)      The Schedules  attached to this Agreement are incorporated by reference
         as fully as though  contained in the body hereof.  Wherever any term or
         condition,  expressed or implied,  of such Schedules conflicts or is at
         variance with any terms or conditions of this  Agreement,  such term or
         condition of this Agreement shall prevail.


IN WITNESS WHEREOF the parties have executed this Agreement as of the date first
above written.


DIAMOND HEAD INVESTMENTS LTD.                  BOUNTY DEVELOPMENTS LTD.


/s/ PAUL S. CLARK                              /s/ PAUL S. CLARK
--------------------------------               ---------------------------------

<PAGE>
                                       8



                                  SCHEDULE "A"
                ATTACHED TO AND FORMING PART OF GROSS OVERRIDING
                    ROYALTY AGREEMENT DATED NOVEMBER 3, 2006
       BETWEEN DIAMOND HEAD INVESTMENTS LTD. AND BOUNTY DEVELOPMENTS LTD.



<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FILE NO             TITLE DOCUMENTS                                  LANDS/ RIGHTS                                        INTEREST

------------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                              <C>                                                  <C>
AM-226-001          AB CROWN OIL SANDS LEASE NO. 7406070412          TWP 93 RGE 14 W4M                                    100.00%
                                                                     SECTIONS: 25-27; 35; 36
                                                                     OIL SANDS FROM TOP VIKING TO
                                                                     BASE WOODBEND GROUP
------------------------------------------------------------------------------------------------------------------------------------
AM-226-002          AB CROWN OIL SANDS LEASE NO. 7406070422          TWP 95 RGE 14 W4M                                    100.00%
                                                                     SECTIONS: 4-9
                                                                     OIL SANDS FROM TOP VIKING TO
                                                                     BASE WOODBEND GROUP
------------------------------------------------------------------------------------------------------------------------------------
AM-226-003          AB CROWN OIL SANDS LEASE NO. 7406090452          TWP 94 RGE 14 W4M                                    100.00%
                                                                     SECTIONS: 19-21; 28-33
                                                                     OIL SANDS FROM TOP VIKING TO
                                                                     BASE WOODBEND GROUP
------------------------------------------------------------------------------------------------------------------------------------
AM-226-005          AB CROWN OIL SANDS LEASE NO. 7406070456          TWP 96 RGE 15 W4M                                    100.00%
                                                                     SECTIONS: 2-5; 8-11; 14-17
                                                                     OIL SANDS FROM TOP VIKING TO
                                                                     BASE WOODBEND GROUP
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>