EXHIBIT 4.5

FARM-OUT AGREEMENT (PEP 38753)

FARMOUT AGREEMENT

Dated 2003

BETWEEN:    INDO-PACIFIC ENERGY (NZ) LIMITED,
  of 284 Karori Rd, Karori, Wellington, New

Zealand
  (IPENZ)

(
  the Assignor)

AND:     KRYSTAL CORPORATION PTE LTD,of #4 Adina Rd, City Beach, WA 6015 (the Assignee)

INTRODUCTION:

|A. | The Assignor is a registered holder of a 50% Participating Interest in
      Petroleum Exploration Permit PEP 38753, Taranaki, North Island, New Zealand
      and in the Joint Venture.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                         
|B. | The Assignor has agreed to farmout a 20% interest
        in the Permit and the Joint Venture to the Assignee on the conditions
        set out in this Agreement.                      

IT IS AGREED:

|1.  | DEFINITIONS AND INTERPRETATION                                                                                                                                                                                            
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                           
|1.1 | In this Agreement (including the Recitals), unless
        the context otherwise requires:                                                                                                                                
|    |                                                                                                                                                                                                                           
|    | Act means the Crown Minerals
        Act 1991 of New Zealand;                                                                                                                                                           
|    |                                                                                                                                                                                                                           
|    | Agreementmeans
        this agreement, the Introduction and attached schedules which the parties
        agree are binding on them;                                                                                     
|    |                                                                                                                                                                                                                           
|    | Assigned Interest means
        the 20% Participating Interest to be assigned by the Assignor to the Assignee,
        as set out in Schedule 1;                                                                        
|    |                                                                                                                                                                                                                           
|    | Condition means the condition
        precedent set out in clause 2.1.1;                                                                                                                                                
|    |                                                                                                                                                                                                                           
|    | Deed of Assignment means
        a deed of Assignment and Assumption relating to this farmout transaction,
        substantially in the form attached as Schedule 3;                                                    
|    |                                                                                                                                                                                                                           
|    | Dollar or$
        means New Zealand dollars;                                                                                                                                                                         
|    |                                                                                                                                                                                                                           
|    | Effective Date means 30
        May 2003;                                                                                                                                                                               
|    |                                                                                                                                                                                                                           
|    | Earning Obligationmeans
        the consideration for the Assigned Interest to be paid or otherwise provided
        by the Assignee to the Assignors;                                                                  
|    |                                                                                                                                                                                                                           
|    | Joint Venture means the
        joint undertaking of the Permit Holders (together with the Assignee after
        the assignment of the Assigned Interest) to conduct the Joint Operations
        pursuant to the JVOA;
|    |                                                                                                                                                                                                                           
|    | JVOA means that certain
        Joint Operating Agreement between the then Permit Holders dated 3 February
        2003, relating to the Permit Area;                                                                   
|    |                                                                                                                                                                                                                           
|    | Ministermeans
        the Minister of Energy for New Zealand or any other person for the time
        being authorised to administer the Act;                                                                           

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|    | Parties means the named
        parties to this Agreement and their permitted successors and assigns,
        and Party has a corresponding meaning;                                       
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                
|    | Permit Area means
        the area the subject of the Permit at any time;                                                                                                                    
|    |                                                                                                                                                                                                
|    | Permit Holders means the
        holders of the Permit, being at the time of this agreement Tap Oil (New
        Zealand) Pty Limited, Magellan Petroleum (NZ) Limited and the Assignor;     
|    |                                                                                                                                                                                                
|    | working day means a day
        other than a Saturday, a Sunday or a public holiday in the place in which
        the act, matter or thing is to be done or is deemed to be done or received.
|    |                                                                                                                                                                                                
|1.2 | In interpreting this Agreement, unless the context
        otherwise requires:                                                                                                                 

|      | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | a term used in this Agreement,
        which is defined in the JVOA, has the meaning ascribed to it in the JVOA;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | the headings to this Agreement are for
        reference only and are not to be used in construing the Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | words importing the singular include
        the plural and vice versa and words importing a gender include any other
        gender;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | references to a clause, Schedule or
        Attachment is to a clause, schedule or attachment to this Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | other grammatical forms of a word or
        phrase defined in this Agreement have a corresponding meaning;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | if any inconsistency between the terms
        of this Agreement and the terms and provisions of the JVOA arise, the
        terms and provisions of this Agreement shall prevail as between the Assignor
        and the Assignee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.    | CONDITION PRECEDENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.1   | Consent to Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.1.1 | This Agreement, the Deed
        of Assignment and the Parties rights and obligations under it are
        conditional upon the Minister granting consent to the assignment of the
        Assigned Interest in accordance with the Act.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.1.2 | IPENZ must, immediately
        after the execution of this Agreement and the Deed of Assignment by all
        Parties, make an application in accordance with the Act to seek the consent
        referred to in clause 2.1.1. Each Party must use its best endeavours to
        execute all documents and do and procure to be done all acts and things
        as are reasonably within its powers to ensure that the Condition is satisfied
        as soon as is reasonably practicable after the execution of this Agreement.
        Immediately upon a Party becoming aware that the Condition is satisfied,
        it must notify the other Parties of such satisfaction.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.2   | Consequences of Non-Satisfaction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.2.1 | If the Condition in clause
        2.1.1 has not been satisfied within 6 months after the date of this Agreement
        or such later date as the Parties may agree in writing, then either Party
        may, at any time thereafter and for so long as the Minister's consent
        remains outstanding, terminate this Agreement by giving not less than
        30 days prior notice to the other Party.                                                                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.2.2 | If this Agreement is terminated
        under clause 2.2.1:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | each Party must do and procure to be
        done all acts and things and execute and deliver and procure the execution
        and delivery of all documents as may be reasonably necessary to place
        all Parties in the positions they would have been in if this Agreement
        and the Deed of Assignment had not been signed. In particular (but without
        limitation), within 30 days after the date of termination, the Assignor
        must reimburse to the Assignee that proportion of the amounts referred
        to in clause 3 that relate to the Earning Obligation or otherwise to the
        Assigned Interest already paid by the Assignee and the Assignee must reimburse
        to the Assignor any revenue received relating to the Assigned Interest;
        and

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|      | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | except as otherwise expressly
        provided in this Agreement, no Party will have any further rights or obligations
        under this Agreement, and will not be liable to any other Party in respect
        of any damages, costs or expenses except such as may arise or have arisen
        as a result of a breach of this Agreement prior to termination under this
        clause.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.3   | Effective Date                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      | Upon satisfaction of the
        Condition, the assignment from the Assignors to the Assignee of the Assigned
        Interest is deemed to have effect from the Effective Date.                                                                                                                                                                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3.    | EARNING OBLIGATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3.1   | Drilling Obligation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      | In consideration of the
        transfer of the Assigned Interest, the Assignee will meet its Earning
        Obligation as set out in Schedule 2.                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3.2   | Payment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      | The Assignee shall pay all
        money required under this clause 3 to the Joint Account in accordance
        with the provisions of the JVOA, except for past costs (# 3, Schedule
        2) which may be paid into IPENZ account .                                                                                                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.    | ASSIGNEE RIGHTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.1   | Assigned Interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      | As soon as practicable after
        the date of this Agreement, the Parties will execute and deliver a Deed
        of Assignment to effect the formal assignment of the Assigned Interest
        to the Assignee, and the Assignee will have the right to seek specific
        performance of the execution and delivery of the Deed of Assignment in
        a court of equity having jurisdiction.                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.2   | Participation in Joint Venture                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      | From the Effective Date, the
        Assignee has the right to be represented on the Operating Committee and
        to vote in accordance with its Assigned Interest as set out in Schedule
        1, subject to continued compliance with its obligations under this Agreement
        and the JVOA.                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.3   | Other Assignments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      | Assignments and pre-emptive
        rights will be in accordance with the JVOA. However, if either party wishes
        to farmout its interest they will consult with the other with a view to
        enhancing the prospects for all parties of completing successful farmout
        arrangements.                                                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5.    | DEFAULT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5.1   | Default by Assignee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5.1.1 | If the Assignee defaults
        in the payment of any money required to be paid by it under clause 3.1
        or fails to complete any other obligation under this Agreement and that
        default is not remedied within 21 days after it receives a notice from
        the Assignor to remedy the default then, in addition to all other rights
        of the Assignor under this Agreement and at law, the Assignor has the
        right to terminate this Agreement, by giving notice to the Assignee and
        to require the Assignee to:
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (a)                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (b)                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (c)                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5.1.2 | On termination, each Party
        must execute and deliver all documents and use its best endeavours to
        do and procure to be done all acts, matters and things as may be necessary
        or desirable to fulfil the obligations under this clause 5.1. Such obligations
        are without                                                                                                                                                                                                                                                   

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|      | prejudice to any claim any Party may have under this
        Agreement or the JVOA, or at law, for losses, damages or expenses incurred
        due to the termination or the default.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|5.2   | Power of Attorney                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|      | The Assignee irrevocably grants to the Assignor a power
        of attorney, exercisable at any time after termination of this Agreement
        under clause 2.2.2 or 5.1, whereby the Assignor as attorney shall have
        power in the Assignees name and on its behalf to carry out, execute,
        sign, seal and deliver all deeds, instruments, acts and things that in
        the opinion of the Assignor are reasonably necessary to carry out, execute,
        sign, seal, deliver or do in order to retransfer the Assigned Interest
        to the Assignor in accordance with the provisions of this Agreement. Any
        act or thing done by the attorney on behalf of the Assignee in accordance
        with this clause binds the Assignee absolutely. The Assignee must, at
        all times, indemnify and hold harmless the attorney and its directors,
        officers, employees and representatives from and against any and all claims,
        damages and liabilities arising out of any act or thing reasonably done,
        and any obligation or responsibility reasonably assumed by the attorney
        on behalf of the Assignee.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6.    | REPRESENTATIONS, WARRANTIES AND COVENANTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6.1   | Assignors Warranties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6.1.1 | The Assignor represents and warrants in respect of
        the Assigned Interest that, at the date of this Agreement:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| | (a) | no act, event or omission has occurred
        which (or which with the passage of time) would render it liable to be
        struck off the register of the place in which it is incorporated;                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (b) | it has full power and authority to enter
        this Agreement and to perform and observe the terms and conditions of
        this Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | it is not in liquidation nor has it
        passed any resolution for its winding up, no receiver or receiver and
        manager has been appointed over all or any part of its property or undertaking,
        no petition has been presented for its winding up and no writ of execution
        has been issued against it or any of its property and, to the best of
        its knowledge, information and belief, no such action is threatened or
        contemplated and no act, event or omission has occurred which (or which
        with the passage of time) might result in any such event or action;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (d) | it is the legal and beneficial owner of its Participating
      Interest;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (e) | it has clear and marketable title to its Participating Interest and
          that interest is free and clear of any and all encumbrances, overrides
          or carries or rights or interests of third parties of any nature other
          than:
        i. rights or interests created by the
          Act or the Permit; or 
              ii. rights or interests created under the JVOA;                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (f) | to the best of its knowledge, information
        and belief, after having made due enquiry, the Permit is in full force
        and effect and not subject to forfeiture or any other related process
        of any kind which may affect the title or good standing of the Permit
        for any reason;                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (g) | it is not engaged in any litigation
        or arbitration proceedings or other dispute in respect of the Permit,
        nor is it aware, to the best of its knowledge, information and belief,
        after having made due enquiry, of any pending or threatened litigation
        or arbitration proceedings or other dispute in respect of the Permit;                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (h) | it is not aware of any outstanding
        breach of any lawful obligation that will materially adversely affect
        the Permit;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (i) | it is not aware of any material circumstances
        which have not been disclosed in writing to the Assignee prior to the
        date of this Agreement and which might reasonably be expected materially
        and adversely to affect the Permit or the value of the Assigned Interest
        or which might otherwise be material to the Assignee;                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (j) | the JVOA remains in force; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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|     | (k)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | it is not in breach of the JVOA and
        there are no subsisting breaches of the JVOA by any other party to the
        JVOA that have not been disclosed in writing to the Assignee.                                                                                                                                                                                                                                                                                                                                                                                                                             
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6.2  | Assignees Warranties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | The Assignee represents and
        warrants to the Assignor that, as at the date of this Agreement:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | no act, event or omission has occurred
        which (or which with the passage of time) would render it liable to be
        struck off the register of the place in which it is incorporated;                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | it has full power and authority to enter
        this Agreement and to perform and observe the terms and conditions of
        this Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | it is not in liquidation nor has passed
        any resolution for its winding up, no receiver or receiver and manager
        has been appointed over all or any part of its properties or undertakings,
        no petition has been presented for its winding up and no writ of execution
        has been issued against it or any of its property and, to the best of
        its knowledge, information and belief, no such action is threatened or
        contemplated and no act, event or omission has occurred which (or which
        with the passage of time) might result in any such event or action.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6.3  | No Merger                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | The warranties given in clauses 6.1 and 6.2
        will not merge on the satisfaction of the Condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|7.   | RECORDS AND DATA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | The Assignor must deliver
        to the Assignee a copy of all records, financial information, data and
        information of a technical nature relating to its proportion of the Assigned
        Interest reasonably requested by the Assignee as soon as practicable after
        the request is made. If this Agreement is terminated for any reason, the
        Assignee must immediately return all records, data and information provided
        to it, and all copies made by it or its employees, contractors, consultants
        or other agents, to the relevant Assignor.                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|8.   | CONFIDENTIALITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | Clause 18 of the JVOA shall
        apply to this Agreement and all of its provisions and other information
        provided pursuant to this Agreement by the Assignor to the Assignee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|9.   | ASSIGNMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | A Party may not assign its
        rights or novate its obligations under this Agreement unless it first
        complies with the provisions of the JVOA regarding assignments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.  | RISK
        The Assignor retains all risk and liability connected with ownership of
        and operations undertaken in connection with the Assigned Interest on
        or prior to the Effective Date, and the Assignor must, to the extent of
        the Assigned Interest, indemnify, defend and hold the Assignee harmless
        from all costs, liabilities, penalties, claims, causes of action, demands,
        lawsuits and expenses (including without limitation, court costs and legal
        fees) associated with ownership of the Assigned Interest or arising out
        of any operation, accident, act, event or circumstance occurring in connection
        with the Assigned Interest, on or prior to the Effective Date. After the
        Effective Date, the Assignee assumes all risk and liability connected
        with ownership of and operations undertaken in connection with the Assigned
        Interest.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|11.  | COSTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|11.1 | Subject to clause 11.2, any
        consent fee payable under the Act in respect of this Agreement and the
        Deed of Assignment or any reassignment of the Assigned Interest will be
        borne and paid by the Assignee, and the Assignee indemnifies the Assignor
        against liability to pay any such fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|11.2 | Each Party will bear its own
        costs, including legal costs, associated with the negotiation,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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|     | preparation and execution of this Agreement and
      the Deed of Assignment.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|12.  | FURTHER ASSURANCES
        Each Party must execute and deliver all documents and use its best endeavours
        to do and procure to be done all acts, matters and things necessary or
        desirable to satisfy the Condition and to carry out and give full force
        and effect to the terms of this Agreement and the terms of the Act.                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|13.  | NOTICE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|13.1 | Method and Addresses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | All notices or other communications
        permitted or required to be given must be in writing and are deemed to
        have been received:                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(a)  | in the case of posting, on the third
        (tenth, if posting to another country) working day after it is posted;                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(b)  | in the case of delivery by hand, at
        the time of such delivery on a working day;                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(c)  | in the case of a facsimile transmission,
        at the time and date of dispatch shown in a report issued by the senders
        facsimile machine which confirms transmission to the recipient of the
        number of pages in the notice. If the time of dispatch is not on a working
        day or is after 4.00 pm on a working day, then it will be deemed received
        at the commencement of business on the next working day; and is to be
        delivered or sent to the relevant address as set out in Schedule 4.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|13.2 | Substitute Address
      A Party may at any time and from time to time designate
        a substitute address for the purpose of clause 13.1 by giving notice to
        the other Parties.                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|14.  | WAIVER AND VARIATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|14.1 | Waiver
        No waiver of any provision of this Agreement nor consent to any departure
        from it by any of the Parties will be effective unless it is in writing
        signed by a duly authorised representative of the relevant Party. Such
        waiver or consent will be effective only for the specific instance and
        for the specific purpose for which it has been given.                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|14.2 | Default or Delay Not Waiver
      No default or delay on the part of any Party in exercising
        any rights, powers or privileges under this Agreement will operate as
        a waiver thereof nor will a single or partial exercise thereof preclude
        any other or further exercise thereof or the exercise of any other right,
        power or privilege.                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|14.3 | Variation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | No variation of this Agreement will be
        effective as between the Parties unless made in writing and signed by
        a duly authorised representative of each of the Parties.                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|15.  | BINDING EFFECT
      This Agreement is to be binding upon and shall enure
        to the benefit of the Parties and their lawful permitted assigns.                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|16.  | SEVERANCE
      If a provision of this Agreement is held to be illegal,
        void or unenforceable by any Court or administrative body having jurisdiction,
        such determination will not affect the remaining parts of this Agreement
        which shall remain in full force and effect as if such illegal or unenforceable
        provision had not been included.                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|17.  | RIGHTS OF PARTIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|17.1 | All remedies, rights, undertakings,
        obligations or agreements of the Parties arising by law, this Agreement
        or otherwise are cumulative and are not in limitation of any other right,
        remedy, undertaking, obligation or agreement of such Party. Each Party
        may follow any                                                                                                                                                                                                                            

- 102 -

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|     | remedy to which such Party
        is entitled by law, this Agreement or otherwise concurrently or successively
        at that Partys option.                                                                                                                                                                                                                                                                                                                                                                                                 
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|17.2 | The rights, duties and obligations
        of the Parties are several and not joint nor joint and several.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|17.3 | Those clauses which by their
        nature are intended to survive termination of this Agreement (including
        without limitation clauses 7 and 8) shall so survive termination.                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|18.  | ENTIRE AGREEMENT
        This Agreement constitutes the entire agreement between the Parties with
        respect to the subject matter of this Agreement and supersedes and extinguishes
        any covenants, agreements, representations and warranties previously given
        or made. No oral or written warranties or representations not contained
        in this Agreement will be of any force or effect unless reduced to writing
        and signed by all Parties and expressed to be in modification of this
        Agreement.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|19.  | GOVERNING LAW
        This Agreement is to be governed and interpreted in accordance with the
        law of New Zealand. Each Party submits to the exclusive jurisdiction of
        the Courts of that country.                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|20.  | COUNTERPART EXECUTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|20.1 | This Agreement may be executed
        in counterparts, each of which is to be deemed an original but all of
        which will constitute one and the same instrument. Any signature page
        of a counterpart may be detached from it without impairing the legal effect
        of the signatures on it and attached to another counterpart identical
        in form but having attached to it one or more additional signature pages
        signed by the other Parties.                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|20.2 | Upon execution by it of
        a counterpart of this Agreement, each Party will cause a facsimile copy
        of the signature page of the counterpart to be transmitted to each of
        the other Parties and each Party will:                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

- 103 -

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EXECUTED AS AN AGREEMENT by the Parties on the date set out above.

|Signed for and on behalf of       | ) |          | 
|--------------------------------- | - | -------- | 
|INDO-PACIFIC ENERGY (NZ) LIMITED  | ) |          | 
|by its authorised representative: | ) |          | 
|                                  | ) |          | 
|                                  | ) |          | 
|                                  | ) | Director | 
|                                  | ) |          | 
|                                  |   |          | 
|Signed for and on behalf of       | ) |          | 
|KRYSTAL CORPORATION PTE LTD       | ) |          | 
|by its authorised representative: | ) |          | 
|                                  | ) |          | 
|                                  | ) |          | 
|                                  | ) | Director | 
|                                  | ) |          | 



- 104 -

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SCHEDULE1

PARTICIPATING INTERESTS IN PEP 38753

|Permit Holder                                                           | Current Interest    | Interest to Assign | Interests after
      Farmin
|----------------------------------------------------------------------- | ------------------- | ------------------ | ----------------------------
|Indo-Pacific Energy (NZ) Limited                                        | 50.00%              | 20%               
|30%                                                                    
|Tap Oil (New Zealand) Pty Limited
      Magellan Petroleum (NZ) Limited | 25.00%
      25.00% | 0%
      0%        | 25%
      25%               
|Krystal Corporation Pte Ltd                                             | 00.00%              | ____               | 20%                         
|TOTALS                                                                  | 100.00%             | 20%                | 100.00%                     



- 105 -

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SCHEDULE 2

EARNING OBLIGATION

|1.  | The Earning Obligation is 26.4% of all authorised
        expenditure of planning and executing the Wawiri-1 well (or other agreed
        shallow well) including any sidetrack required to meet the objective,
        and completion and testing, in accordance with AFEs under the JVOA, or,
        if it is decided to abandon the well then 26.4% of AFEs up to and
        including that operation. and                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|and |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2.  | 26.4% of all authorised dry hole expenditure of planning
        and drilling the Akama-1 well (or other deep well agreed to be drilled
        by Tap, Magellan and Indo by majority vote excluding Krystal) including
        any sidetrack required to meet the objective, in accordance with AFEs
        under the JVOA, or, if it is decided to abandon the well then 26.4% of
        AFEs up to and including that operation.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|and |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3.  | 20% of (approximately $250,000-$300,000) past costs plus GST                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4.  | The Assigned Interest shall also bear its pro rata
        share of all contributions, costs and payments payable under the JVOA,
        on and from the Effective Date.                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                       



- 106 -

---

SCHEDULE 3

Dated                                  2003

______________________________________________ _

INDO-PACIFIC ENERGY (NZ) LIMITED

AND

TAP OIL (NEW ZEALAND) PTY LIMITED

AND

MAGELLAN PETROLEUM (NZ) LIMITED

AND

KRYSTAL CORPORATION PTE LTD

DEED OF ASSIGNMENT AND ASSUMPTION - PEP38753



- 107 -

---

THIS DEEDis made 30 May 2003

|BETWEEN:     INDO-PACIFIC ENERGY (NZ)
      LIMITED, of 284 Karori Rd, Karori, Wellington, New
|----------------------------------------------------------------------------------------------
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|(together the Continuing
      Parties)                                                     
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              

RECITALS

|A. | As at the date of this Deed, the Assignor and the Continuing Parties are
      the parties to an unincorporated joint venture (the Joint Venture) for the
      purpose of holding their respective interests in PEP 38753 in the percentages
      set out as follows:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | IPENZ
        Tap
        Magellan | 50.00%
        25.00%
        25.00% | 
| | ---------------------------------- | ------------------------------------ | 
| |                                    |                                      | 

|B. | The Assignor has agreed to assign to the Assignee the Assigned Interest
      and in order to comply with the terms of the Joint Venture the Parties have
      entered into this Deed.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

AGREEMENT

|1.1 | DEFINITIONS AND INTERPRETATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Definitions: In this Deed (including the Recitals), unless the
        context otherwise requires:
      Act means the Crown Minerals Act 1991 of New Zealand;
      Assigned Interest means the 20 % Participating Interest
        to be assigned by the Assignor to the Assignee;
      Deed means this deed between the Parties;
      Effective Datemeans [date of Farmout Agreement];
      Minister means the Minister of Energy as defined
        under the Act who administers the approval and registration procedure
        under the Act;
      Parties means each of the Assignors and the Assignee;

- 108 -

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|1.2 | Interpretation:In this Deed, unless a
      contrary intention appears:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.  | APPROVAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.1 | This Deed and the assignments provided for by it are
        conditional upon the consent of the Minister being given to this Deed
        and the assignment pursuant to the Act. The assignment evidenced by this
        Deed will, when approved in accordance with the Act, take effect on and
        from the Effective Date.                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.2 | The Parties must use all
        reasonable endeavours to have all dealings evidenced by this Deed approved
        as contemplated by clause 2.1 as expeditiously as possible.                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.3 | If Ministerial consent to
        the assignments evidenced by this Deed is not received in accordance with
        clause 2.1 within 6 months from the Effective Date (or such other date
        as the Parties may agree), either Party may terminate this Deed by at
        least 30 days notice to the other Parties.                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.4 | On termination of this Deed
        under clause 2.3, the Parties must execute all documents and do all other
        things necessary or desirable to place each other in the same position
        as they would have been had this Deed not been executed or acted upon.                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3.  | ASSIGNEES OBLIGATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3.1 | With effect on and from
        the Effective Date, the Assignor assigns to the Assignee and the Assignee
        assumes the obligations and liabilities in respect of the Assigned Interest
        arising on and from the Effective Date (excluding liabilities and obligations
        arising prior to the Effective Date) and shall be entitled to the full
        benefit and advantage of the Assigned Interest and all rights thereunder
        to the same extent to which the Assignor would have been so entitled had
        the Assigned Interest not been assigned to the Assignee.

- 109 -

---

|3.2 | The Assignee will indemnify and keep indemnified
        the Assignor and the Continuing Parties against all liability which the
        Assignor may incur by reason of any breach or non-observance by the Assignee
        of any of the provisions of this Deed.                                                                                                                                                                             
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3.3 | With effect on and from the Effective Date, the Assignor
        and the Continuing Parties each accepts the commitment of the Assignee
        as set out in clauses 3.1 and 3.2.                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.  | ASSIGNOR                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.1 | The Assignor covenants and agrees with the Assignee
        to duly and punctually discharge all liabilities and perform all obligations
        incurred in respect of the Assigned Interest prior to the Effective Date
        (excluding liabilities and obligations scheduled for performance on or
        after the Effective Date) regardless of whether such liability and obligations
        arise before or after the Effective Date.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.2 | The Assignor shall indemnify and hold the Assignee
        harmless from and against all liability to the extent of the Assigned
        Interest which it may incur by reason of any breach or non-observance
        by that Assignor of this Deed.                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|5.  | PARTICIPATING INTERESTS                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|5.1 | The Parties agree that on and from the Effective
        Date their respective Participating Interests shall be as set out below:                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | IPENZ    | 30.00% | 
| | -------- | ------ | 
| | Tap      | 25.00% | 
| | Magellan | 25.00% | 
| | Assignee | 20.00% | 

|    |                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6.  | MISCELLANEOUS                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                    
|6.1 | This Deed will be binding upon and enure to the benefit
        of the Parties, their respective successors and each person who derives
        from them title to a Participating Interest.                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                    
|6.2 | This Deed will be governed by and construed in accordance
        with laws of New Zealand for the time being in force.                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                    
|6.3 | The Parties submit to the non-exclusive jurisdiction
        of the Courts of New Zealand and all courts competent to hear appeals
        therefrom.                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                    
|6.4 | The Parties will bear their own legal costs arising
        out of the preparation of this Deed, and the Assignee will bear all consent
        fees payable on this Deed and any document directly related to or consequential
        upon this Deed.                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                    
|6.5 | Each of the Parties must take all such steps, execute
        all such documents and do all such acts and things as may be reasonably
        required by any other Party to give effect to the intent of this Deed.                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                    
|6.6 | If any Party executes this Deed by means of an attorney
        then such attorney states that he or she has no notice of the revocation
        of that power of attorney.                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                    
|6.7 | If any of the provisions of this Deed are invalid
        or unenforceable, the invalidity or unenforceability shall not, affect
        the operation, construction or interpretation of any other provision of
        this Deed with the intent that the invalid or unenforceable provision
        shall be treated for all purposes as severed from this Deed.

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|EXECUTED by the parties as a Deed.                                                                                        |  |                                
|------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------
|                                                                                                                          |  |                                
|Executed for and on behalf of INDO-PACIFIC ENERGY (NZ) LIMITED
      by its Directors:                                    |  |                                
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|_______________________________                                                                                           |  | _______________________________
|Signature of Director                                                                                                     |  | Signature of Director          
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|_______________________________                                                                                           |  | _______________________________
|Name of Director                                                                                                          |  | Name of Director               
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|Executed for and on behalf of TAP OIL (NEW ZEALAND) PTY LIMITED
      by its Directors:                                   |  |                                
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|_______________________________                                                                                           |  | _______________________________
|Signature of Director                                                                                                     |  | Signature of Director          
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|_______________________________                                                                                           |  | _______________________________
|Name of Director                                                                                                          |  | Name of Director               
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|Executed for and on behalf of MAGELLANPETROLEUM(NZ)LIMITEDby its Directors:                                               |  |                                
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|_______________________________                                                                                           |  | _______________________________
|Signature of Director                                                                                                     |  | Signature of Director          
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|_______________________________                                                                                           |  | _______________________________
|Name of Director                                                                                                          |  | Name of Director               
|                                                                                                                          |  |                                
|                                                                                                                          |  |                                
|Executed for and on behalf ofKRYSTAL CORPORATION PTE LTD by its
      duly authorised representatives in the presence of: |  |                                
|                                                                                                                          |  |                                

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|_______________________________ | _______________________________
|------------------------------- | -------------------------------
|Signature of witness            | Signature of representative    
|                                |                                
|                                |                                
|                                |                                
|_______________________________ | _______________________________
|Name of witness                 | Name of representative         

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SCHEDULE4

ADDRESSES OF PARTIES

|Party    | Street Address                                                               | Postal Address                              | Attention of                     | Facsimile              
|-------- | ---------------------------------------------------------------------------- | ------------------------------------------- | -------------------------------- | -----------------------
|IPENZ    | 284 Karori Road,
          Karori
          Wellington
          New Zealand | PO Box 17-258
      Karori
      Wellington | Manager,
      Corporate Affairs | +64 4 476 0120         
|TAP      | Level 1,
      47 Collins St,
      West Perth,WA,
      6005, Australia     |                                             | Managing
      Director          | +61 89 485
        1060
|MAGELLAN | 10thFloor,
      145 EagleSt,
      Brisbane,
      Australia                |                                             | General Manager                  | +61738326400           
|ASSIGNEE | #4 Adina Rd,
      CityBeach, WA 6015                                        |                                             | Chairman                         | +61893857349           

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