Exhibit 2.1.1

|      |     
|----- | ----
|Dated | 2007

US$ CASH
ADVANCE AGREEMENT

Borrower

AUSTRAL
PACIFIC ENERGY (NZ) LIMITED

Guarantors

KANUKA ENERGY
LIMITED
AUSTRAL PACIFIC ENERGY LTD.
SOURCE ROCK HOLDINGS LIMITED

Agent, arranger and security agentINVESTEC BANK (AUSTRALIA) LIMITED
ABN 55 071 292 594

LendersTHE FINANCIAL INSTITUTIONS NAMED IN THE
SEVENTH SCHEDULE

(LOGO BUDDLE FINDLAY)

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CONTENTS

|                                              |                                               |   
|--------------------------------------------- | --------------------------------------------- | --
|1.                                            | DEFINITIONS
  AND INTERPRETATION              | 1 
|2.                                            | FACILITY                                      | 19
|3.                                            | FEES AND
  OPTIONS                            | 22
|4.                                            | CONDITIONS
  PRECEDENT                        | 22
|PART II 
  TRANCHE A                         | 25                                           
|5.                                            | ADVANCES                                      | 25
|6.                                            | INTEREST                                      | 25
|7.                                            | REPAYMENT                                     | 25
|PART III 
  TRANCHE B                        | 27                                           
|8.                                            | ADVANCES                                      | 27
|9.                                            | INTEREST                                      | 27
|10.                                           | REPAYMENT                                     | 28
|PART IV
  TRANCHE C                          | 29                                           
|11.                                           | GUARANTEE
  FACILITY                          | 29
|PART V 
  GUARANTEE                          | 30                                           
|12.                                           | GUARANTEE                                     | 30
|PART VI 
  PROVISIONS COMMON TO ALL TRANCHES | 34                                           
|13.                                           | PAYMENTS                                      | 34
|14.                                           | CANCELLATION
  AND PREPAYMENTS                | 35
|15.                                           | TAXATION                                      | 36
|16.                                           | CHANGES IN
  LAW                              | 38
|17.                                           | REPRESENTATIONS
  AND WARRANTIES              | 40
|18.                                           | UNDERTAKINGS                                  | 43
|19.                                           | PROJECT
  ACCOUNTS                            | 53
|20.                                           | HEDGING
  ARRANGEMENTS                        | 59
|21.                                           | LENDERS
  CONSULTANTS                        | 59
|22.                                           | EVENTS OF
  DEFAULT                           | 61
|23.                                           | INTEREST ON
  OVERDUE AMOUNTS                 | 65
|24.                                           | PAYMENTS PRO
  RATA AND SUBORDINATION         | 66
|25.                                           | RELATIONSHIP
  OF LENDERS TO AGENT            | 67
|26.                                           | INDEMNITIES                                   | 71
|27.                                           | ACCOUNTS                                      | 72
|28.                                           | EXPENSES                                      | 72
|29.                                           | TAXES AND
  DUTIES                            | 73
|30.                                           | SET-OFF                                       | 73
|31.                                           | WAIVERS,
  REMEDIES CUMULATIVE                | 73
|32.                                           | SEVERABILITY
  OF PROVISIONS                  | 73
|33.                                           | SURVIVAL OF
  REPRESENTATIONS AND INDEMNITIES | 74
|34.                                           | MORATORIUM
  LEGISLATION                      | 74

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|                                |                               |   
|------------------------------- | ----------------------------- | --
|35.                             | CONSENTS AND
  OPINIONS       | 74
|36.                             | ASSIGNMENTS                   | 74
|37.                             | CONFIDENTIALITY               | 75
|38.                             | NOTICES                       | 76
|39.                             | AUTHORISED
  OFFICERS         | 77
|40.                             | GOVERNING
  LAW               | 77
|41.                             | COUNTERPARTS                  | 77
|42.                             | ACKNOWLEDGEMENT
  BY OBLIGORS | 77
|FIRST
  SCHEDULE                | 81                           
|SECOND
  SCHEDULE               | 84                           
|THIRD SCHEDULE                  | 85                           
|FOURTH
  SCHEDULE               | 87                           
|FIFTH
  SCHEDULE                | 90                           
|SIXTH
  SCHEDULE                | 91                           
|SIXTH
  SCHEDULE                | 91                           
|SEVENTH
  SCHEDULE              | 92                           
|EIGHTH SCHEDULE                 | 93                           
|NINTH
  SCHEDULE                | 97                           
|TENTH SCHEDULE                  | 98                           
|ANNEXURE A                      | 99                           
|ANNEXURE B                      | 100                          
|ANNEXURE B                      | 103                          
|PART B                          | 103                          
|ANNEXURE C                      | 104                          
|APPENDIX TO
  RATIO CERTIFICATE | 105                          
|ANNEXURE D                      | 106                          

Page 2

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FACILITY AGREEMENT

|      |     
|----- | ----
|DATED | 2006

PARTIES

|    |                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | AUSTRAL PACIFIC ENERGY (NZ) LIMITED a duly
  incorporated company having its registered office in Wellington, as borrower
  (the Borrower);                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                              
|(2) | KANUKA ENERGY LIMITED a duly incorporated
  company, having its registered office in Wellington, AUSTRAL PACIFIC ENERGY LTD. a duly
  incorporated overseas company having its registered office in Wellington and SOURCE ROCK HOLDINGS LIMITED a duly
  incorporated company having its registered office in Wellington, as
  guarantors (each a Guarantor);
|    |                                                                                                                                                                                                                                                                                                                                                              
|(3) | INVESTEC BANK (AUSTRALIA) LIMITED ABN 55 071 292 594
  in its capacity as agent, arranger and security agent (the Agent); and                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                              
|(4) | THE FINANCIAL INSTITUTIONS NAMED IN THE SEVENTH SCHEDULE
  (together the Lenders and each a
  Lender).                                                                                                                                                                                                                                                       

BACKGROUND

|   |                                                                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A. | The Borrower
  has requested the Agent to arrange a facility under which cash advances and other
  financial accommodation of up to a maximum amount of the aggregate of
  US$23,000,000 and NZ$2,500,000 may be made available to the Borrower to fund,
  amongst other things, the Borrowers interest in the Project.
|   |                                                                                                                                                                                                                                                                                                                         
|B. | The Lenders
  have agreed to make the Facility available upon the terms and subject to the
  conditions contained in this Agreement.                                                                                                                                                                                    

TERMS OF THIS AGREEMENT

PART 1  GENERAL

|    |                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|1.  | DEFINITIONS AND INTERPRETATION                                                                                                                             
|    |                                                                                                                                                            
|1.1 | Definitions                                                                                                                                                
|    |                                                                                                                                                            
|    | The
  following definitions apply unless the context requires otherwise:                                                                                   
|    |                                                                                                                                                            
|    | Account
  Bank means the financial institution with which the Project Accounts are
  opened which, as at the date of this Agreement, is ASB Bank Limited;

Page 1

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Account Bank Agreement means the
  agreement dated on or about the date of this Agreement between the Borrower,
  the Account Bank and the Agent relating to the operation of the Project
  Accounts;                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Accounts means statements of financial
  performance, statements of financial position and cash flow statements
  together with any statements, reports (including, without limitation, any
  directors and auditors reports) and notes attached to or intended to be
  read with any of them;                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Acquisition Agreement means the
  agreement documenting the Borrowers acquisition of all of the shares in
  Arrowhead Energy Limited;                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Advance means each advance or other
  accommodation made or to be made available to or, at the request of, the
  Borrower under the Facility or, as the context may require, the principal
  amount thereof for the time being outstanding;                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Agreement means this agreement together
  with any amendment, extension or variation to or of it in accordance with
  this agreement;                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Approved Issuer Levy has the meaning
  given to that term in section 86F of the Stamp and Cheque Duties Act 1971;                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Authorisation includes:                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                      | any consent,
  authorisation, registration, filing, lodgement, agreement, notarisation,
  certificate, permission, licence, approval, authority or exemption from, by
  or with a Governmental Agency (including, without limitation, any consent
  under the Resource Management Act 1991); or
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                      | in relation
  to anything which will be fully or partly prohibited or restricted by law if
  a Governmental Agency intervenes or acts in any way within a specified period
  after lodgement, filing, registration or notification, the expiry of that
  period without intervention or action;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                
| | Authorised Officer means:                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                      | in respect
  of the Borrower, any director or any person from time to time nominated as an
  Authorised Officer by the Borrower by a notice to the Agent accompanied by
  certified copies of signatures of all new persons so appointed; and                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                      | in respect
  of the Agent or a Lender, any person whose title or acting title includes the
  words Director, Associate Director or Manager or cognate expressions;                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                
| | Availability Period means, in respect of
  each Tranche, the period commencing on the Commencement Date for that Tranche
  and expiring on 31 March 2007;                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Available Cash means at any time the
  amount credited to the Proceeds Account following allocation of all amounts
  then due and payable pursuant to items (i)  (v) of the Cash Flow Sweep less
  any amounts representing the proceeds of amounts set out in the Base Case as
  sources of funds required to meet Project Outgoings and capital expenditure
  required under any Other JV Agreement in respect of any Other Permit;

Page 2

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| |                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Available Facility means, in relation to
  any Tranche on any date, the Tranche Amount for that Tranche less the
  Principal Outstanding under that Tranche and, in relation to the Facility on
  any date, the Facility Limit less the aggregate Principal Outstanding under
  the Facility;                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                              
| | Base Case means the financial cash flow
  model for the Project measuring the Project Companys total cash inflows and
  cash outflows (on a quarterly basis) in US Dollars for a period corresponding
  to that detailed in the Field Development Plan and:                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                              
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                           | before any
  revision by the Agent in accordance with the Third Schedule, means the Base
  Case agreed between the Borrower and the Agent (a copy of which has been
  delivered to the Agent as a condition precedent pursuant to clause 4.1); and
| |                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                   
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                           | after any
  revision by the Agent and the Borrower in accordance with the Third Schedule,
  the Base Case as most recently so revised;                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                   
| | Borrower General Security Agreement
  means the general security agreement dated on or about the date of this
  Agreement between the Borrower and the Agent under which the Borrower grants
  the Agent a first ranking Security Interest in all its assets other than its
  interest in Other Joint Ventures and Other Permits to secure repayment of the
  Secured Indebtedness;                        
| |                                                                                                                                                                                                                                                                                                                                                                                                              
| | Business Day means any day of the week
  other than a Saturday or a Sunday on which registered banks (within the
  meaning of the Reserve Bank of New Zealand Act 1989) generally are open for
  normal business in both Wellington and Auckland;                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                              
| | CADS means, for a period, the aggregate
  of all revenue of the Project for that period received or receivable by the
  Project Companies (or projected in accordance with the Base Case to be
  receivable by the Project Companies in respect of that period) less the
  aggregate of all Project Outgoings incurred (or projected to be incurred in
  accordance with the Base Case) during that period;
| |                                                                                                                                                                                                                                                                                                                                                                                                              
| | Calculation Date means:                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                              
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                           | the
  Completion Date; and                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                   
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                           | each Quarter
  Date during the term of the Facility; and                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                   
| | (c)                                                                                                                                                                                                                                                                                                                                                                                                           | each Special
  Calculation Date;                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                   
| | Capital Costs means, at any time and in respect of any period, all
  costs and expenses of a capital nature properly incurred or to be incurred
  and paid by the Project Companies to the Operator in connection with the
  Project during such period but excluding Operating Costs, depreciation and
  Financing Costs;                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                              
| | Cash Flow Sweep means the operation of
  clause 19.3(f) (Cash Flow Sweep) to determine the manner in which the balance
  of the Proceeds Account is to be applied by the Borrower;                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                              
| | Casualty Occurrence means any event or series of related
  events in relation to the Project or any other asset of the Borrower which
  entitles the Borrower to claim under or to be entitled to receive payment of
  any insurance or any other compensation or payment for physical loss or
  damage in an amount which exceeds $50,000;                                                                

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| |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                        
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Collateral Security means each Security Interest, Guarantee
  or other document or agreement at any time created or entered into as
  security for any Secured Indebtedness in addition to the Borrower General
  Security Agreement, each Guarantor General Security Agreement and each
  Specific Security Agreement;
| |                                                                                                                                                                                                                                                                                                                          
| | Combined Project Life Ratio means, at
  any date, the ratio of:                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                          
| | (a)                                                                                                                                                                                                                                                                                                                       | the Present
  Value of CADS for the period commencing on that date and ending on the Project
  End Date; to                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                        
| | (b)                                                                                                                                                                                                                                                                                                                       | the aggregate
  of the Principal Outstanding of both Tranche A and Tranche B less the balance
  of the Debt Service Reserve Account at that date and, in the event of a
  default (howsoever described) under a GSA which is continuing, plus the
  Principal Outstanding of Tranche C;
| |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                        
| | Commencement Date means:                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                          
| | (a)                                                                                                                                                                                                                                                                                                                       | in respect
  of Tranche A, the later of Financial Close and the date that Tranche B has
  been drawn down in full; and                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                        
| | (b)                                                                                                                                                                                                                                                                                                                       | in respect
  of Tranche B and Tranche C, Financial Close;                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                        
| | Commitment means in relation to each Lender and a Tranche, the amounts set
  out in the Seventh Schedule;                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                          
| | Companies Act means the Companies Act 1993;                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                          
| | Completion Date means the date on which
  the Agent has confirmed that the Completion Test has been satisfied;                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                          
| | Completion Test means the satisfaction
  of each of the requirements set out in the Second Schedule;                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                          
| | Construction Contract means the Cheal A
  Production Facility Construction Site Facilities Agreement to be entered into
  between the Operator and Independent Technology Limited;                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                          
| | Contractors mean Independent Technology Limited and each other
  contractor from time to time under the Construction Contract;                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                          
| | Cost Overruns means, in relation to a
  period, funding requirements of the Borrower or the Project Companies in
  respect of the Project in excess of those allocated for that period in the
  Base Case;                                                                                                             
| |                                                                                                                                                                                                                                                                                                                          
| | Crown has the meaning given to that term
  in the JV Agreement;                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                          
| | Crown Minerals Act means the Crown
  Minerals Act 1991;                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                          
| | Debt Service means, in respect of any period, the aggregate amounts
  paid or payable by the Borrower during that period, under this Agreement or
  any other Financing Document, in respect of:                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                          
| | (a)                                                                                                                                                                                                                                                                                                                       | Financing
  Costs accrued during the period; and                                                                                                                                                                                                                                       

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| |                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                      | payments in
  reduction of the Principal Outstanding;     
|
| | excluding:                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                           
| | (c)                                                                                                                                                                                                                                                                                                                                                                                                                      | any
  voluntary prepayments under this Agreement; and     
| |                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                           
| | (d)                                                                                                                                                                                                                                                                                                                                                                                                                      | any
  Mandatory Prepayments;                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                           
| | Debt Service Reserve Account means the account of that name opened
  and operated in accordance with clause 19.4(a) (Debt Service Reserve
  Account);                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Deed of Subordination means each deed
  entered into from time to time between the Borrower or a Project Company, the
  Agent and any other person subordinating the obligations of the Borrower or
  the Project Company as the case may be in respect of Financial Indebtedness
  owed by the Borrower or the Project Company as the case may be to that
  person;                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Drawdown Date means the date on which any Advance under this Agreement
  is, or is to be, drawn or made;                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Drawdown Notice means a request substantially in the
  form of Annexure A (Drawdown Notice);                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Drilling Contract means the Onshore
  Drilling Rig Contract #746-2006-004 dated 20 January 2006 between the
  Operator and Ensign International Energy Services Pty Limited, as amended
  from time to time;                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Environmental Law means a provision of a
  law or a law, which relates to an aspect of the environment or health;                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Event of Default means any of the events specified in
  clause 22.1 (Events of Default); Event of Review means the events specified
  in clause 22.3 (Event of Review);                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Expiry Date means, in relation to each
  Tranche, the earlier of:                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                      | the date
  four years from the date of this Agreement; and
| |                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                           
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                      | the date the
  relevant Tranche has been repaid in full;  
| |                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                           
| | Facility means the US$ cash advance
  facility and NZ$ guarantee issue facility made available pursuant to this
  Agreement;                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Facility Limit means the aggregate of
  US$23,000,000 and NZ$2,500,000 as this amount may be varied in accordance
  with this Agreement;                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Fees Letter means each fees letter
  between the Borrower and the Agent dated on or about the date of this
  Agreement;                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Field Development Plan means the field
  development plan as prepared (and updated from time to time) by the Operator
  in accordance with the JV Agreement (or, if not prepared by the Operator, the
  Borrower in consultation with the Agent based on all information available to
  the Borrower) and which plan models the expected development and extraction
  of the Petroleum resources from the Permit Area;

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Finance Parties means each of the Agent,
  the Lenders, and the Hedge Counterparty;                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Financial Close means the day on which,
  following execution of this Agreement, all the conditions precedent set out
  in the First Schedule are satisfied or waived by the Agent;                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Financial Indebtedness means, in
  relation to any person:                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                      | indebtedness
  for moneys borrowed by that person;                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                            
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                      | indebtedness
  (actual or contingent) of that person under any guarantee, security or other
  commitment designed to assure any creditor against loss in respect of any
  Financial Indebtedness (as herein defined but excluding this paragraph (b))
  of any third party;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                            
| | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                      | any
  indebtedness under any acceptance credit opened on behalf of that person;                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                            
| | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                      | any
  indebtedness under any debenture, note, bill of exchange or commercial paper
  on which that person is liable as drawer, acceptor, endorser, issuer or
  otherwise;                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                            
| | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                      | any
  indebtedness for money owing in respect of any interest rate swap and/or
  cross currency swap option, cap, collar floor, any futures contract or any
  other derivatives contract entered into by that person; and                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                            
| | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                      | any rental
  payments under any lease entered into primarily for the purpose of raising or
  obtaining finance (whether in respect of land, machinery, equipment or
  otherwise) to which that person may for the time being and from time to time
  be subject;           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                            
| | Financial Undertaking Matrix means the
  financial undertakings matrix set out in the Fifth Schedule;                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Financing Costs means, in respect of any period or as
  at any time, interest, fees, costs, expenses and all other amounts (after
  netting out the effect of any payments made and received under interest rate
  hedging arrangements) paid in that period or due and payable at that time by
  the Borrower under this Agreement or any other Financing Document (other than
  payments in reduction of the Principal Outstanding);
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Financing Documents means this Agreement, the Hedging
  Documents, the Security Documents, the Account Bank Agreement, each Deed of
  Subordination, the Fees Letters and any other document or agreement entered
  into or provided under or in connection with any of the above or which the
  Borrower and the Agent agree to be a Financing Document for the purposes of
  this Agreement;                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Forward Combined Cover Ratio means, at
  any date, in relation to the three month period commencing on that date, the
  ratio of:                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                      | projected
  CADS for that period (as set out in the Base Case); to                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                            
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                      | projected
  Debt Service for that period;                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                            
| | Free Cash Flow means, at any date, the
  balance of the Proceeds Account available for allocation as a Permitted
  Distribution, pursuant to the Cash Flow Sweep after paying or providing for
  all amounts ranking in priority, in accordance with clause 19.3 (Proceeds
  Account);                                                                                                                                                

Page 6

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Gas Prepayment and Sale Agreement means
  the gas prepayment and sale agreement between International Resource
  Management Corporation and Vector Gas Limited (formerly NGC New Zealand
  Limited) dated 4 February 2004, as amended by the Deed of Assignment and
  Assumption Interests in Gas Prepayment and Sale Agreement dated 23 December
  2005 assigning the rights of International Resource Management Corporation to
  Arrowhead Energy Limited;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | General Security Agreements means each
  of the Borrower General Security Agreement and the Guarantor General Security
  Agreements;                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | GSAs means the Gas Sales Agreements that
  have or will be entered into between Arrowhead Energy Limited and Vector Gas
  Limited in respect of the Kahili oil well and the Cheal oil well and
  reference to a GSA means either of them;                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | Governmental Agency means any governmental, local
  government, council or local authority or any governmental,
  semi-governmental, Court or judicial entity or authority. It also includes
  any self-regulatory organisation established under statute or any stock exchange;                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | Guarantee means any guarantee,
  indemnity, letter of credit, legally binding letter of comfort or suretyship,
  or any other obligation or irrevocable offer (whatever called and of whatever
  nature):                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                             | to pay or to
  purchase;                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                   
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                             | to provide
  funds (whether by the advance of money, the purchase of or subscription for
  shares or other securities, the purchase of assets, rights or services, or
  otherwise) for the payment or discharge of;                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                   
| | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                             | to indemnify
  against the consequences of default in the payment of; or                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                   
| | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                             | to be
  responsible otherwise for,                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                   
| | an
  obligation or indebtedness of another person, a dividend, distribution,
  capital or premium on shares, stock or other interests, or the insolvency or
  financial condition of another person;                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | Guarantor means each person party to
  this Agreement as a guarantor at the date of this Agreement and each person
  who becomes a Guarantor pursuant to clause 18.5;                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | Guarantor General Security Agreements
  means the:                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                             | general
  security agreement dated on or about the date of this Agreement between
  Kanuka Energy Limited and the Agent under which that Project Company grants
  the Agent a first ranking Security Interest in all its assets to secure
  repayment of the Secured Indebtedness;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                   
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                             | general
  security agreement between Arrowhead Energy Limited and the Agent under which
  that Project Company grants the Agent a first ranking (unless otherwise
  agreed) Security Interest in all its assets to secure repayment of the Secured
  Indebtedness; and            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                   
| | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                             | general
  security agreement dated on or about the date of this Agreement between the
  Sponsor and the Agent under which the Sponsor grants the Agent a first
  ranking Security Interest in all its assets to secure repayment of the
  Secured Indebtedness,                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                   
| | and
  Guarantor General Security Agreement means any of them;                                                                                                                                                                                                                                                                                                                                                                                                  

Page 7

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| |                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Hedge Counterparty means, at the date of
  this Agreement, Investec Bank (Australia) Limited and any other person
  providing Hedging Arrangements to the Borrower or the Project Company from
  time to time;                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                  
| | Hedging Arrangements means oil hedging
  arrangements described in clause 20.1 (Mandatory Hedging Arrangement) and any
  other foreign exchange or interest rate hedging entered into by the Borrower
  and the Hedge Counterparty from time to time;                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                  
| | Hedging Documents means the ISDA Master
  Agreement dated on or about the date of this Agreement between the Borrower
  and the Hedge Counterparty, each confirmation entered into pursuant to that
  agreement, and each other document or agreement evidencing the Hedging
  Arrangements;                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                  
| | Historic Combined Cover Ratio means, at
  any date, in relation to the three month period ending on that date, the
  ratio of:                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                  
| | (a)                                                                                                                                                                                                                                                                                                                                                                               | CADS for
  that period; to                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  
| | (b)                                                                                                                                                                                                                                                                                                                                                                               | Debt Service
  for that period;                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  
| | Interest Payment Date means, in relation
  to an Interest Period, the last day of that Interest Period;                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                  
| | Interest Period means, in relation to an
  Advance, each period by reference to which interest is calculated and payable
  but so that:                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                  
| | (a)                                                                                                                                                                                                                                                                                                                                                                               | the first
  Interest Period in relation to each Advance shall begin on the Drawdown Date
  for that Advance and each subsequent Interest Period shall begin on the
  expiry of the preceding Interest Period relating thereto;                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  
| | (b)                                                                                                                                                                                                                                                                                                                                                                               | an Interest
  Period which would otherwise end on a day which is not a Business Day shall
  end on the next succeeding Business Day unless the result of such extension
  would be to carry such Interest Period over into another calendar month in
  which event such Interest Period will end on the immediately preceding
  Business Day; and
| |                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  
| | (c)                                                                                                                                                                                                                                                                                                                                                                               | no Interest
  Period may extend beyond the relevant Expiry Date and, if necessary, shall be
  shortened so as to end on the relevant Expiry Date;                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  
| | JV means the joint venture established
  pursuant to the JV Agreement;                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                  
| | JV Account means each account opened and
  maintained by a Project Company with the Account Bank in accordance with
  clause 19.2(a) (JV Account);                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                  
| | JV Account Sweep means the operation of
  clause 19.2(d) (JV Account Sweep) to determine the manner in which the
  balance of each JV Account is to be applied by the Project Companies;                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                  
| | JV Agreement means together the Joint
  Venture Operating Agreement dated 16 December 2002 between PEP 38716 Limited and
  Cheal Petroleum Limited as subsequently amended and varied by a Variation
  Agreement dated 2 July 2004 between Rata Energy Limited, Cheal Petroleum
  Limited, International Resource Management Corporation and the Borrower to
  exclude deep and

Page 8

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| |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | provide for
  shallow interests in the permit area and the Coordination Agreement in
  respect of PEP 38738 dated 2 July 2004 between Rata Energy Limited, Cheal
  Petroleum Limited, International Resource Management Corporation, Cardiff
  Holdings No. 1 Limited, Cardiff Holdings No. 2 Limited and the Borrower;                              
| |                                                                                                                                                                                                                                                                                                                                                      
| | JV Participants means the parties to the
  JV Agreement holding a Participating Interest in the JV and JV Participant
  means any of them;                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                      
| | Land means the land occupied by the
  Project being the land described in the Land Access Agreements and any other
  land from time to time occupied by the Project;                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                      
| | Land Access Agreements means:                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                      
| | (a)                                                                                                                                                                                                                                                                                                                                                   | the Short
  Term Agreement PEP 38738 Cheal B dated 30 December 2005 between the Operator
  and Rex Chapman Taylor, Christine Anne Taylor and Barry Stuart King;                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                       
| | (b)                                                                                                                                                                                                                                                                                                                                                   | any long
  term lease entered into pursuant to clause 6.2 of the Short Term Agreement
  referred to in (a) above;                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                       
| | (c)                                                                                                                                                                                                                                                                                                                                                   | the
  Memorandum of Lease dated 20 May 2005 between James Roy Lightoller, Raewyn
  Phyllis Lightoller and Phillip Jackson Armitstead as Lessors and the Operator
  as Lessee;                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                       
| | Lenders Base Case Auditor means KPMG or such other person as is
  appointed by the Agent in their place from time to time after consultation
  with the Borrower;                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                      
| | Lenders Independent Engineer means
  Sproule International Limited or any other petroleum engineer appointed by
  the Agent from time to time for the purposes of this Agreement;                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                      
| | Lenders Insurance Consultant means any
  insurance consultant appointed by the Agent from time to time for the
  purposes of this Agreement;                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                      
| | LIBOR means, in relation to an Interest
  Period of an Advance:                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                      
| | (a)                                                                                                                                                                                                                                                                                                                                                   | the
  applicable Screen Rate; or                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                       
| | (b)                                                                                                                                                                                                                                                                                                                                                   | if no Screen
  Rate is available for US Dollars or the relevant Interest Period of that
  Advance (or overdue amount), the arithmetic mean (rounded upward to four
  decimal places) of the rates, as supplied to the Agent at its request, quoted
  by three reference banks selected by the Agent to leading banks in the London
  interbank market,
| |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                       
| | at or about
  11.00am (London time) two London Business Days prior to the commencement of
  the relevant Interest Period for the offering of deposits in US Dollars for a
  period comparable to the Interest Period. Rates will be expressed as a yield
  percent per annum to maturity;                                                            
| |                                                                                                                                                                                                                                                                                                                                                      
| | Liquidation includes statutory
  management, receivership, compromise, arrangement, amalgamation,
  administration, reconstruction, winding up, dissolution, assignment for the
  benefit of creditors, arrangement or compromise with creditors, bankruptcy or
  death or the appointment of any trustee, inspector, manager or similar
  officer;

Page 9

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| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                 |                                                                                                                                                                                                                                                                                     
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Loan Life Ratio means, at any date:                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                 
| | (a)                                                                                                                                                                                                                                                                                                              | in the
  period up to and including the Tranche A Expiry Date, the ratio of:                                                   
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                  | (i)                                                                                                                             | the Present
  Value of CADS for the period commencing on that date up to and including the
  Tranche A Expiry Date; to                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                 |                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                  | (ii)                                                                                                                            | the
  aggregate of Principal Outstanding under Tranche A at that date less the
  balance of the Debt Service Reserve Account at that date and, in the event of
  a default (howsoever described) under a GSA which is continuing, plus the
  Principal Outstanding of Tranche C; and
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                 |                                                                                                                                                                                                                                                                                     
| | (b)                                                                                                                                                                                                                                                                                                              | in the
  period commencing the day immediately following the Tranche A Expiry Date and
  at all times thereafter, the ratio of:
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                  | (i)                                                                                                                             | the Present
  Value of CADS for the period commencing on that date up to and including the
  Tranche B Expiry Date; to                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                 |                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                  | (ii)                                                                                                                            | the
  aggregate of the Principal Outstanding under Tranche B at that date less the
  balance of the Debt Service Reserve Account at that date and, in the event of
  a default (howsoever described) under a GSA which is continuing, plus the
  Principal Outstanding of Tranche C;
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                 |                                                                                                                                                                                                                                                                                     
| | London Business Day means a day (other
  than a Saturday or a Sunday) on which banks are open for general business in
  London, England;                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                 
| | Mandatory Prepayment means a mandatory
  prepayment of the Principal Outstanding pursuant to clause 14.5 (Mandatory
  Prepayment);                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                 
| | Mandatory Prepayment Percentage as at
  any Calculation Date means that percentage determined with reference to the
  Financial Undertakings Matrix and the relevant Ratio Certificate delivered in
  respect of that Calculation Date to be applied by the Borrower in Mandatory
  Prepayment;               
| |                                                                                                                                                                                                                                                                                                                 
| | Margin means:                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                 
| | (a)                                                                                                                                                                                                                                                                                                              | for Tranche
  A and Tranche C:                                                                                                 
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                  | (i)                                                                                                                             | for the
  period from Financial Close to the Completion Date, 2.00% per annum; and                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                 |                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                  | (ii)                                                                                                                            | thereafter,
  1.75% per annum; and                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                 |                                                                                                                                                                                                                                                                                     
| | (b)                                                                                                                                                                                                                                                                                                              | for Tranche
  B:                                                                                                               
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                  | (i)                                                                                                                             | for the
  period from Financial Close to the Completion Date, 4.00% per annum; and                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                 |                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                  | (ii)                                                                                                                            | thereafter,
  3.50% per annum;                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                  |                                                                                                                                 |                                                                                                                                                                                                                                                                                     
| | Material Adverse Effect means in respect
  of the Obligors, in the reasonable opinion of the Agent, a material adverse
  effect on the financial condition or business (and/or as applicable, on the
  consolidated financial condition or business of the group of companies of
  which it forms part) of the

Page 10

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| |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------
| | Obligors (as
  a group) and, in respect of any Obligor, in the reasonable opinion of the
  Agent, a material adverse effect on:                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                
| | (a)                                                                                                                                                                                                                                                                                                                                             | the ability
  or willingness of that person to perform its obligations under a Transaction
  Document; or                 
| |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                           
| | (b)                                                                                                                                                                                                                                                                                                                                             | the
  enforceability or priority of any Security Documents or the Security
  Interests created therein; or                
| |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                           
| | (c)                                                                                                                                                                                                                                                                                                                                             | the validity
  or enforceability of any of the Financing Documents or the Project Documents,                              
| |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                           
| | and material adverse change shall be
  construed accordingly;                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                
| | Maturity Date means the date on which
  the last Expiry Date occurs;                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                
| | Minimum Hedging Programme has the
  meaning given to that term in clause 20.1 (Mandatory Hedging Arrangement);                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                
| | Mortgaged Property means all the property subject to a
  Security Interest pursuant to the Security Documents;                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                
| | New Permits means any petroleum
  exploration permit or petroleum mining permit issued under the Crown Minerals
  Act that the Borrower obtains a holding in or in which the Borrower obtains
  an interest after the date of this Agreement;                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                
| | Obligor means each of:                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                
| | (a)                                                                                                                                                                                                                                                                                                                                             | the
  Borrower; and                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                           
| | (b)                                                                                                                                                                                                                                                                                                                                             | the
  Guarantors; and                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                           
| | (c)                                                                                                                                                                                                                                                                                                                                             | any other
  person who gives or creates a Guarantee or Security Interest which secures
  any Secured Indebtedness;        
| |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                           
| | Oil Sale Contracts means each document
  or agreement entered into from time to time by or on behalf of the Borrower
  and/or the Project Companies relating to the processing, transportation
  and/or sale of Petroleum;                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                
| | Operating Costs means, at any time in respect of any
  period, all costs and liabilities incurred and paid (or projected to be paid)
  by the Project Companies to the Operator in connection with the operation,
  management, maintenance and repair of the Project for that period including,
  without limitation payments on account of:
| |                                                                                                                                                                                                                                                                                                                                                
| | (a)                                                                                                                                                                                                                                                                                                                                             | wages and
  salaries, maintenance costs, insurance premiums and deductibles and other
  administration and overhead costs;
| |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                           
| | (b)                                                                                                                                                                                                                                                                                                                                             | payments on
  account of Tax (including income tax);                                                                      
| |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                           
| | (c)                                                                                                                                                                                                                                                                                                                                             | agency fees
  and fees of engineers, consultants and legal or financial advisors; and                                     
| |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                           
| | (d)                                                                                                                                                                                                                                                                                                                                             | other costs
  and expenses that the Borrower and the Agent agree are Operating Costs;                                     

Page 11

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| |                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                   
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Operator has the meaning given to that
  term in the JV Agreement;                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                       
| | Optional Prepayments means a prepayment
  of any part of the Principal Outstanding in accordance with clauses 14.3
  (Optional Prepayment) and 19.3(f)(viii) (Proceeds Account);                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                       
| | Other Joint Ventures means any joint
  venture relating to any Other Permit;                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                       
| | Other Permits means petroleum
  exploration permits 38738-02, 38741, 38745, 38746, 38748, 38765, 38766, 38524
  and 38258 and petroleum mining permits 38156-02 and 38153 issued under the
  Crown Minerals Act and petroleum exploration permits PRL4, PRL5 and PPL235
  issued under the laws of Papua New Guinea held by the Borrower or in which
  the Borrower has an interest;
| |                                                                                                                                                                                                                                                                                                                                                                                       
| | Outstanding Money means, on any date, in
  relation to all or any part of the Facility, as the case may be, the
  Principal Outstanding, interest (including default interest), fees, costs and
  all other amounts payable by the Borrower to the Lenders under the Financing
  Documents on such date;                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                       
| | Participating Interest has the meaning
  given to that term in the JV Agreement; Permits has the meaning given to
  that term in the JV Agreement; Permit Area means the area covered by any
  Permit;                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                       
| | Permitted Distributions means all
  amounts permitted to be withdrawn from the Proceeds Account to make a
  distribution pursuant to clause 19.5;                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                       
| | Permitted Distributions Percentage
  means, as at any Calculation Date, the percentage of Permitted Distributions
  determined with reference to the Financial Undertakings Matrix and the
  relevant Ratio Certificate delivered in respect of that Calculation Date;                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                       
| | Permitted Security Interest means:                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                       
| | (a)                                                                                                                                                                                                                                                                                                                                                                                    | a Security
  Interest created by a Project Company in favour of the other JV Participants
  under the JV Agreement;                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                   
| | (b)                                                                                                                                                                                                                                                                                                                                                                                    | a Security
  Interest in favour of a party to a joint venture agreement in relation to one
  of the Other Permits;                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                   
| | (c)                                                                                                                                                                                                                                                                                                                                                                                    | a Security
  Interest not securing Financial Indebtedness and which arises solely by
  operation of law or in the ordinary course of ordinary business so long as
  the indebtedness secured is not in default or is being contested in good
  faith and is not outstanding for more than 90 days;
| |                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                   
| | (d)                                                                                                                                                                                                                                                                                                                                                                                    | a Security
  Interest consented to in writing by the Agent; and                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                   
| | (e)                                                                                                                                                                                                                                                                                                                                                                                    | a Security
  Interest arising under section 17(1)(b) of the PPSA provided that such
  Security Interest does not secure indebtedness or obligations;                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                   
| | Petroleum has the meaning given to that
  term in the JV Agreement;                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                       
| | Potential Event of Default means anything which with the giving of
  notice or passage of time or both, would become an Event of Default;                                                                                                                                                                                                                                           

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------
| | PPSA means the Personal Property
  Securities Act 1999;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Present Value of CADS means, at any date
  (the calculation date) and for any period, CADS for that period discounted
  back to the calculation date at the rate of interest which would be payable
  in relation to an Advance for that period in accordance with clauses 6.3 or
  9.3. For the purpose of calculating the Present Value of CADS for the
  Combined Project Life Ratio the relevant interest rate shall be the rate of
  interest applicable to Tranche A and for any other calculation the relevant interest
  rate shall be the rate of interest applicable to either Tranche A or Tranche
  B, the Principal Outstanding under which is to be included in the denominator
  in the calculation of the relevant ratio;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Principal Amount means the principal
  amount of any Advance;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Principal Outstanding means, as at any date in respect of a
  Tranche, the total Principal Amount of all outstanding Advances owing by the
  Borrower to a Lender under that Tranche or, in respect of Tranche C, the
  Maximum Guaranteed Amount (as defined in clause 11.1) as at that date and, in
  respect of the Facility, means the total Principal Amount of all outstanding
  Advances under the Facility as at that date;                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Proceeds Account means the account opened and maintained
  by the Borrower with the Account Bank in accordance with clause 19.3(a)
  (Proceeds Account);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Project means the Cheal Oil and Gas
  production joint venture pursuant to the JV Agreement located onshore
  Taranaki Basin, New Zealand;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Project Accounts means each of the bank accounts opened
  and maintained by the Borrower and the Project Company (where applicable)
  pursuant to clause 19 (Project Accounts);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Project Companies means Kanuka Energy
  Limited and, following completion of the acquisition contemplated by the
  Acquisition Agreement, Arrowhead Energy Limited, and Project Company means
  each of them;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Project Documents means each of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the JV
  Agreement;                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                             
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the Oil Sale
  Contracts;                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                             
| | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the
  Construction Contract;                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                             
| | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the Drilling
  Contract;                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                             
| | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the
  Acquisition Agreement;                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                             
| | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the Permits;                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                             
| | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the Land
  Access Agreements;                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                             
| | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | all material
  Authorisations required to conduct the Project (including Resource Consents);

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| |                                                                                                                                                                          |                                                                                                                                                             |                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)                                                                                                                                                                      | any other
  material agreement, deed or document in connection with the Project to which
  the Borrower or the Project Company becomes a party;            
| |                                                                                                                                                                          |                                                                                                                                                            
| | (j)                                                                                                                                                                      | any other
  contract or document which the Borrower and the Agent agree in writing to
  treat as a Project Document for the purposes of this Agreement; and
| |                                                                                                                                                                          |                                                                                                                                                            
| | (k)                                                                                                                                                                      | each
  document or agreement entered into for the purpose of amending or novating
  any of the above;                                                      
| |                                                                                                                                                                          |                                                                                                                                                            
| | Project End Date means the date on which
  the last unit of recoverable oil of the Reserves (at P90 as set out in the
  Base Case) will be extracted from the Project;
| |                                                                                                                                                                         
| | Project Life Ratio means, at any time:                                                                                                                                
| |                                                                                                                                                                         
| | (a)                                                                                                                                                                      | in the
  period up to and including the Tranche A Expiry Date, the ratio of:                                                                               
| |                                                                                                                                                                          |                                                                                                                                                            
| |                                                                                                                                                                          | (i)                                                                                                                                                         | the Present
  Value of CADS for the period commencing on that date up to and including the
  Project End Date; to                                                                                                                                                                       
| |                                                                                                                                                                          |                                                                                                                                                             |                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                          | (ii)                                                                                                                                                        | the
  aggregate of the Principal Outstanding under Tranche A at that date less the
  balance of the Debt Service Reserve Account at that date and, in the event of
  a default (howsoever described) under a GSA which is continuing, plus the
  Principal Outstanding of Tranche C; and
| |                                                                                                                                                                          |                                                                                                                                                             |                                                                                                                                                                                                                                                                                         
| | (b)                                                                                                                                                                      | in the
  period commencing the day immediately following the Tranche A Expiry Date and
  at all times thereafter, the ratio of:                            
| |                                                                                                                                                                          |                                                                                                                                                            
| |                                                                                                                                                                          | (i)                                                                                                                                                         | the Present
  Value of CADS for the period commencing on that date up to and including the
  Project End Date; to                                                                                                                                                                       
| |                                                                                                                                                                          |                                                                                                                                                             |                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                          | (ii)                                                                                                                                                        | the
  aggregate of the Principal Outstanding under Tranche B at that date less the
  balance of the Debt Service Reserve Account at that date and, in the event of
  a default (howsoever described) under a GSA which is continuing, plus the
  Principal Outstanding of Tranche C;    
| |                                                                                                                                                                          |                                                                                                                                                             |                                                                                                                                                                                                                                                                                         
| | Project Outgoings means, in any period, the aggregate of
  the Project Companies costs relating to the Project in that period in respect
  of (without duplication): 
| |                                                                                                                                                                         
| | (a)                                                                                                                                                                      | Operating
  Costs;                                                                                                                                         
| |                                                                                                                                                                          |                                                                                                                                                            
| | (b)                                                                                                                                                                      | Capital
  Costs;                                                                                                                                           
| |                                                                                                                                                                          |                                                                                                                                                            
| | (c)                                                                                                                                                                      | Royalties,
  commissions and other accounts payable in respect of Petroleum produced by
  the Project;                                                     
| |                                                                                                                                                                          |                                                                                                                                                            
| | (d)                                                                                                                                                                      | all Taxes
  paid or payable in connection with the Project;                                                                                                
| |                                                                                                                                                                          |                                                                                                                                                            
| | (e)                                                                                                                                                                      | all
  exploration and drilling costs payable in connection with the Project;                                                                               
| |                                                                                                                                                                          |                                                                                                                                                            
| | (f)                                                                                                                                                                      | any other
  amount payable in connection with the Project; and                                                                                             

Page 14

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| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                      |                                                                                                                                            
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------
| | (g)                                                                                                                                                                                                                                                                                                                                              | any other
  expenditures agreed between the Borrower and the Agent to be Project
  Outgoings;                                       
| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                     
| | Quarter Date means each of 31 March, 30
  June, 30 September and 31 December in any year;                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                 
| | Ratio Certificate means a certificate in
  the form outlined in Annexure C (Ratio Certificate) signed by two directors
  of the Borrower and each Project Company certifying as to the matters set out
  therein together with supporting calculations as appropriate;                                                                        
| |                                                                                                                                                                                                                                                                                                                                                 
| | Related Company has the meaning given to the term Related Company in the
Companies Act,
  but on the basis that Subsidiary
  has the meaning given in this Agreement and that company includes any entity or a trust;                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                 
| | Repayment Date means:                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                 
| | (a)                                                                                                                                                                                                                                                                                                                                              | in relation
  to Tranche A, each Quarter Date from and including 30 June 2007;                                                      
| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                     
| | (b)                                                                                                                                                                                                                                                                                                                                              | in relation
  to Tranche B, each Quarter Date from and including 31 December 2009; and                                              
| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                     
| | (c)                                                                                                                                                                                                                                                                                                                                              | the Expiry
  Date for the relevant Tranche;                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                     
| | Repayment Schedule means the indicative
  repayment schedule set out in the Sixth Schedule and as may be amended from
  time to time pursuant to this Agreement or to reflect agreed changes to the
  Base Case;                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                 
| | Reserves means the reserves as defined
  by Lenders Independent Engineer to be P90 reserves of the Permit Area (as
  set out in the initial Base Case);                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                 
| | Reserve Tail means:                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                 
| | (a)                                                                                                                                                                                                                                                                                                                                              | in the
  period up to and including the Tranche A Expiry Date, the percentage of:                                                   
| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                  | (i)                                                                                                                                  | the
  recoverable oil to be produced by the Reserves during the period from the
  Tranche A Expiry Date to the Project End Date; divided by
| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                      |                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                  | (ii)                                                                                                                                 | the total
  recoverable oil to be produced from the Reserves to the Project End Date (as
  set out in the Base Case); and                  
| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                      |                                                                                                                                            
| | (b)                                                                                                                                                                                                                                                                                                                                              | in the
  period commencing the day immediately following the Tranche A Expiry Date and
  at all times thereafter, the percentage of:
| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                  | (i)                                                                                                                                  | the
  recoverable oil to be produced by the Reserves during the period from the
  Tranche B Expiry Date to the Project End Date; divided by
| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                      |                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                  | (ii)                                                                                                                                 | the total
  recoverable oil to be produced from the Reserves to the Project End Date (as
  set out in the Base Case);                      
| |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                      |                                                                                                                                            
| | Resource Consents means all consents and Authorisations
  under the Resource Management Act obtained and/or held by the JV relating to
  the Project except that, for the purposes of clause 18.3 (Undertakings
  Relating to the Project) only, Resource Consent has the meaning given to it
  by Section 2 of the Resource Management Act;

Page 15

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                  
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Resource Management Act means the Resource Management Act 1991;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Royalties means all royalties payable to
  the Crown under the Permit and the Crown Minerals Act in respect of Petroleum
  produced by the Project;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Scheduled Repayment means, in respect of a Tranche, the
  amount (or amounts) required to be repaid on a Repayment Date as set out in
  the Repayment Schedule;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Screen Rate means the British Bankers
  Association Interest Settlement Rate (if any) for US Dollars and the Interest
  Period displayed on the appropriate page of the Telerate screen selected by
  the Finance Parties. If the relevant page is replaced or the service ceases to
  be available, the Agent (after consultation with the Borrower) may specify
  another page or service displaying the appropriate rate;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Secured Indebtedness means all money
  which the Obligors (whether alone or with another person) is or at any time
  may become actually or contingently liable to pay to or for the account of
  the Finance Parties or any of them for any reason whatever under or in
  connection with a Financing Document. It includes, without limitation, money
  by way of principal, interest, fees, costs, indemnities, charges, duties or
  expenses or payment of liquidated or unliquidated damages under or in
  connection with a Financing Document, or as a result of a breach of or
  default under or in connection with a Financing Document. Where the Borrower
  or any other person would have been liable but for its Liquidation, it will
  be taken still to be liable;                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Security Documents means each of the General Security
  Agreements, the Specific Security Agreements and any Collateral Security;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Security Interest means any mortgage, pledge, lien or
  charge (whether fixed or floating) encumbrance, financial lease, deferred
  purchase sale and repurchase, sale or leasehold, or any security interest
  (including a security interest as that term is defined in the PPSA) or
  preferential interest or arrangement of any kind or any other right of, or
  arrangement with, any creditor to have or which has the commercial effect of
  having its claims satisfied in priority to other creditors with, or from the
  proceeds of, any asset. Without limitation it includes retention of title and
  a deposit of money by way of security but it excludes a charge or lien
  arising in favour of a Governmental Agency by operation of statute (unless
  there is default in payment of moneys secured by that charge or lien) and
  rights or obligations of, or in the nature of, set off, netting, contribution
  or consolidation, bankers lien or analogous rights or obligations;
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Special Calculation Date has the meaning
  given to that term in clause 18.2(a)(iv) (Ratio Certificate);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Specific Security Agreements means:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the specific
  security agreement over Source Rock Holdings Limiteds shares in the Borrower
  granted by Source Rock Holdings Limited in favour of the Agent dated on or
  about the date of this Agreement; and
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                  
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the specific
  security agreement over the Borrowers shares in each of the Project
  Companies granted by the Borrower in favour of the Agent dated on or about
  the date of this Agreement;                   

Page 16

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| |                                                                                                                                                                                                                                         |                                                                                                                                
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------
| | and Specific Security Agreement means any of
  them;                                                                                                                                                                                 
| |                                                                                                                                                                                                                                        
| | Specified Percentage means the
  percentage amount corresponding to each Project Companys Participating
  Interest;                                                                                                                 
| |                                                                                                                                                                                                                                        
| | Sponsor means Austral Pacific Energy
  Ltd.;                                                                                                                                                                                         
| |                                                                                                                                                                                                                                        
| | Subordinated Debt means all Financial
  Indebtedness of the Borrower that is subordinated to all Secured Indebtedness
  on terms and conditions satisfactory to the Agent;                                                           
| |                                                                                                                                                                                                                                        
| | Subsidiary has the meaning given in sections 5 and 6 of the
  Companies Act but so that:                                                                                                                                             
| |                                                                                                                                                                                                                                        
| | (a)                                                                                                                                                                                                                                     | a trust may
  be a Subsidiary, for the purposes of which a unit or other beneficial
  interest will be regarded as a share; and
| |                                                                                                                                                                                                                                         |                                                                                                                                
| | (b)                                                                                                                                                                                                                                     | a company or
  trust may be a Subsidiary of a trust if it would have been a Subsidiary if
  that trust were a company;         
| |                                                                                                                                                                                                                                         |                                                                                                                                
| | Substitution Certificate means a
  certificate in the form outlined in the Eighth Schedule;                                                                                                                                          
| |                                                                                                                                                                                                                                        
| | Tax includes
  any tax, levy, impost, deduction, charge, rate, duty, Royalty, compulsory
  loan or withholding which is levied or imposed by a Governmental Agency, and
  any related interest, penalty, charge, fee or other amount;
| |                                                                                                                                                                                                                                        
| | Total Cost to Complete means the
  aggregate amount of all expenditure required to be incurred by the Borrower
  so that the Completion Test is able to be satisfied;                                                                
| |                                                                                                                                                                                                                                        
| | Tranche means Tranche A, Tranche B, and
  Tranche C (as the context requires) and Tranches means all of them;                                                                                                                      
| |                                                                                                                                                                                                                                        
| | Tranche A means the cash advance
  facility described in Part II;                                                                                                                                                                    
| |                                                                                                                                                                                                                                        
| | Tranche Amount means:                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                        
| | (a)                                                                                                                                                                                                                                     | in relation
  to Tranche A, US$18,000,000;                                                                                     
| |                                                                                                                                                                                                                                         |                                                                                                                                
| | (b)                                                                                                                                                                                                                                     | in relation
  to Tranche B, US$5,000,000;                                                                                      
| |                                                                                                                                                                                                                                         |                                                                                                                                
| | (c)                                                                                                                                                                                                                                     | in relation
  to Tranche C, NZ$2,500,000;                                                                                      
| |                                                                                                                                                                                                                                         |                                                                                                                                
| | in each case
  as reduced from time to time by prepayment or cancellation in accordance with
  this Agreement;                                                                                                                         
| |                                                                                                                                                                                                                                        
| | Tranche B means the cash advance
  facility described in Part III;                                                                                                                                                                   
| |                                                                                                                                                                                                                                        
| | Tranche C means the guarantee facility
  described in Part IV;                                                                                                                                                                       
| |                                                                                                                                                                                                                                        
| | Transaction Document means each Project Document and each
  Financing Document;                                                                                                                                                      
| |                                                                                                                                                                                                                                        
| | US$ and US Dollars means the lawful currency of the United States
  of America;                                                                                                                                                    
| |                                                                                                                                                                                                                                         |                                                                                                                                
| | Warrant means an option to acquire one
  fully paid ordinary share in the capital of the Sponsor granted by the
  Sponsor to the Agent pursuant to clause 3.4 (Warrants); and                                                        

Page 17

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|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Warrant
  Certificate means the warrant certificate in respect of the
  Warrants substantially in the form set out in the Ninth Schedule.             
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|1.2 | Interpretation: Headings are for convenience
  only and do not affect interpretation. The following rules apply unless the
  context requires otherwise:
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (a)                                                                                                                                                      | The singular
  includes the plural and the converse.                                                                                                                                                                                                                            
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (b)                                                                                                                                                      | A gender
  includes all genders.                                                                                                                                                                                                                                                
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (c)                                                                                                                                                      | Where a word
  or phrase is defined, its other grammatical forms have a corresponding
  meaning.                                                                                                                                                                                
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (d)                                                                                                                                                      | A reference
  to a person, company, trust, partnership, unincorporated body or other entity
  includes any of the foregoing.                                                                                                                                                    
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (e)                                                                                                                                                      | A reference
  to a clause, Part, Annexure or Schedule is a reference to a clause of, a part
  of, or annexure or schedule to, this Agreement.                                                                                                                                   
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (f)                                                                                                                                                      | A reference
  to a party to this Agreement or another agreement or document includes the
  partys successors and permitted substitutes or assigns.                                                                                                                             
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (g)                                                                                                                                                      | A reference
  to an agreement or document is to the agreement or document as amended,
  novated, supplemented or replaced from time to time, except to the extent
  prohibited by this Agreement.                                                                               
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (h)                                                                                                                                                      | A reference
  to legislation or to a provision of legislation includes a modification or
  re-enactment of it, a legislative provision substituted for it and a
  regulation or statutory instrument issued under it.                                                           
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (i)                                                                                                                                                      | A reference
  to writing
  includes a facsimile transmission and any means of reproducing words in a
  tangible and permanently visible form.                                                                                                                                   
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (j)                                                                                                                                                      | A reference
  to conduct includes, without limitation, an omission, statement or
  undertaking, whether or not in writing.                                                                                                                                                      
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (k)                                                                                                                                                      | A reference
  to an asset
  includes any real or personal, present or future, tangible or intangible
  property or asset (including, without limitation, intellectual property) and
  any right, interest, revenue or benefit in, under or derived from the
  property or asset.
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (l)                                                                                                                                                      | An Event of
  Default subsists
  until it has been waived in writing by the Agent.                                                                                                                                                                                              
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (m)                                                                                                                                                      | A reference
  to an amount for which a person is contingently liable includes, without
  limitation, an amount which that person may become actually or contingently
  liable to pay if a contingency occurs, whether or not that liability will
  actually arise.              
|    |                                                                                                                                                          |                                                                                                                                                                                                                                                                                 
|    | (n)                                                                                                                                                      | A reference
  to dollars
  or to $ is
  a reference to US Dollars or its equivalent in any other relevant currency.                                                                                                                                                             

Page 18

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|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | (o)                                                                                                                                                                                                                                                                                                                                                     | A reference
  to generally accepted accounting practice has the meaning given to that term
  in section 3 of the Financial Reporting Act 1993. A reference to an
  accounting term is to be interpreted according to those principles and
  practices.
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|    | (p)                                                                                                                                                                                                                                                                                                                                                     | A reference
  to a lease means:                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                         | (i)                                                                                                                                                                                                                                                    | any lease,
  charter, hire purchase or hiring arrangement of any property (including
  without limitation, a right to use intellectual property or a franchise);                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                         | (ii)                                                                                                                                                                                                                                                   | an agreement
  under which property is or may be used or operated by a person other than the
  owner; or                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                         | (iii)                                                                                                                                                                                                                                                  | an agreement
  or arrangement under which property is or may be managed or operated by a
  person other than the owner, and the operator or manager or its Related
  Company (whether in the same or another agreement or arrangement) is required
  to make or assure minimum, fixed and/or floating rate payments of a periodic
  nature.
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|    | (q)                                                                                                                                                                                                                                                                                                                                                     | A reference
  to a time of day is a reference to New Zealand time unless otherwise stated.                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|    | (r)                                                                                                                                                                                                                                                                                                                                                     | Except where
  inconsistent with the context, the expression at any time also means from
  time to time.                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|1.3 | Determination, statement and certificate conclusive:
  Except where otherwise provided in this Agreement any determination,
  statement or certificate by the Agent or a Lender or an Authorised Officer of
  the Agent or a Lender provided for in this Agreement is, in the absence of
  manifest error, prima facie evidence of such on the parties.
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|1.4 | Document or agreement: A reference to an agreement includes a Security
Interest, Guarantee, undertaking, deed,
  agreement or legally enforceable arrangement whether or not in writing. A
  reference to a document
  includes an agreement (as so defined) in writing or a certificate, notice,
  instrument or document.                        
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|1.5 | Listing requirements included as law: A
  listing rule or business rule of a stock exchange including, without
  limitation, the New Zealand Exchange Limited will be regarded as a law.                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|1.6 | Inconsistency: In the event of any conflict
  or inconsistency between any provision of this Agreement and any provision of
  any other Financing Documents, this Agreement shall, to the extent of the
  inconsistency, prevail.                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|1.7 | Borrower: A reference to the Borrower does
  not (unless expressly stated) include Austral Pacific Energy (NZ) Limited in
  its capacity as Operator, or as operator under any of the Other JV
  Agreements.                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|2.  | FACILITY                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                            
|2.1 | Grant of Facility:
  The Lenders agree to make the Facility available to the Borrower on the terms
  and conditions contained in this Agreement.                                                                                                                                                                                                       

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.2 | Participation:
  Each Lender agrees to make its Commitment available to the Borrower on the
  terms of this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2.3 | Purpose:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | The Borrower
  shall apply the proceeds of any Advance under Tranches A and B:                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (i)                                                                                                                                                                                                                                                         | to fund the
  acquisition under the Acquisition Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (ii)                                                                                                                                                                                                                                                        | to finance
  the development of the Borrowers and the Project Companies interest in the
  Project and any contingencies;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (iii)                                                                                                                                                                                                                                                       | to fund the
  Debt Service Reserve Account to the required balance pursuant to clause 19.4
  (Debt Service Reserve Account);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (iv)                                                                                                                                                                                                                                                        | to fund the
  pre-Financial Close costs, fees, expenses incurred by the Borrower associated
  with the establishment of the Facility; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (v)                                                                                                                                                                                                                                                         | for such
  other purposes approved by the Agent, including, if there are undrawn amounts
  available under the Facility after funding or projected to be for the
  purposes listed above, funding for the Borrowers interest in any Other Joint
  Ventures as may be agreed between the Borrower and the Agent provided that,
  no amounts may be drawn down and no proceeds of any Advance may be applied
  for any such purpose until after the Completion Date other than for capital
  expenditure in relation to any Other Joint Venture not exceeding US$1,000,000
  in aggregate (which is agreed); and
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | The Borrower
  may only request the issue of a guarantee under Tranche C to be granted
  by the Tranche C Lender in favour of Vector Gas Limited in respect of the
  obligations of Arrowhead Energy Limited under the Gas Prepayment and Sale
  Agreement.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2.4 | Lenders obligations several:
  The obligations of each Lender under this Agreement are several. The failure
  of any Lender to carry out its obligations hereunder shall not relieve any
  other party to this Agreement of any of its or their respective obligations
  to the parties hereto. None of the Agent or the Lenders shall be responsible
  for the obligations of any other party hereunder.                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2.5 | Lenders rights several:
  Notwithstanding any other term of this Agreement the interests of each Lender
  are several and the aggregate of the amounts outstanding at any time under
  this Agreement from the Borrower to the Agent for its own account or to or
  for the account of any Lender shall be a separate and independent debt from
  the amount owing to any other party. The Agent and each Lender shall have the
  right to protect and enforce its rights arising out of, but subject to, this
  Agreement and it shall not be necessary for any Lender or the Agent to be
  joined as an additional party in any proceedings to this end.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2.6 | Security: The
  Lenders acknowledge and agree that, subject to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | there being
  no Event of Default, Potential Event of Default or Event of Review subsisting
  at the relevant time;                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the
  Completion Date having occurred; and                                                                                                                                                                                                                 

Page 20

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | the Agent
  having received evidence (in a form and substance satisfactory to it) that:
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (i)                                                                                     | any right
  claimed by Tag Oil (NZ) Limited or its subsidiaries or related companies to
  acquire a further or greater Participating Interest in the JV as a result of
  any default by Arrowhead Energy Limited under the JV Agreement or in relation
  to the acquisition of Arrowhead Energy Limited by the Borrower as set out in
  the Acquisition Agreement:                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         | (1)                                                                                                                                                                                                                                                                                                                                                                                  | has been
  irrevocably surrendered and waived by Tag Oil (NZ) Limited or it has been
  judicially determined that such right does not exist; or
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         | (2)                                                                                                                                                                                                                                                                                                                                                                                  | the right
  has been exercised and the Mandatory Prepayment in accordance with clause
  14.5(c) has been made; and                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (ii)                                                                                    | all consents
  required to the creation by Arrowhead Energy Limited of security over its
  Participating Interest in the JV have been obtained and such security has
  been granted;                                                                                                                                                                                                
|   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the Agent
  will, at the request of the Borrower, release and discharge:               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (iii)                                                                                   | the Security
  Interest created by the Borrower General Security Agreement over the
  Borrowers shareholdings in other companies owning assets other than
  Participating Interests in the JV;                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (iv)                                                                                    | the Security
  Interest created by the Guarantor General Security Agreement granted by
  Arrowhead Energy Limited over the Other Permits and Arrowhead Energy
  Limiteds interest in any Other Joint Ventures;                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (v)                                                                                     | the Security
  Interest created by the Specific Security Agreement over Source Rock Holdings
  Limiteds shares in the Borrower;                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (vi)                                                                                    | Source Rock
  Holdings Limited, as a Guarantor under this Agreement; and                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (vii)                                                                                   | the Sponsor
  as a Guarantor under this Agreement and the Security Interest created by the
  Guarantor General Security Agreement granted by the Sponsor over all of the
  Sponsors present and after acquired personal property, provided that such
  release and discharge shall not in any way affect the obligations of the
  Sponsor to the Agent in relation to the Warrants,
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|    | provided
  that, if the events set out in clauses 2.6(a) and (b) have occurred but not
  the events set out in clause 2.6(c) the Agent agrees that the guarantee
  granted by the Sponsor to the Agent in clause 12 shall be amended so that the
  maximum liability of the Sponsor to the Agent shall be for the amount
  determined by the Agent (after consultation with the Borrower) by which the
  Mandatory Prepayment set out in clause 14.5(c) which would be payable exceeds
  the estimated purchase price paid or which may be payable by Tag Oil (NZ)
  Limited for the acquisition referred to in 2.6(c).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                
|2.7 | Arrowhead Security:
  Until such time as the Agent has received (in a form and substance
  satisfactory to it) the evidence required under clause 2.6(c)(i) or (ii), and
  consents required under clause 2.6(c)(ii) the property secured by the
  Guarantor General Security Agreement granted by Arrowhead Energy Limited
  shall be all Arrowhead Energy Limiteds present and after acquired personal
  property excluding Arrowhead Energy Limiteds Participating Interest in the
  JV                                                                                                                           

Page 21

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|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------- | 
|    | Agreement.
  The Borrower and, upon accession to this Agreement as Guarantor, Arrowhead
  Energy Limited shall each use its best endeavours to obtain the consent of
  Tag Oil (NZ) Limited and each other JV Participant required under the JV
  Agreement to grant full security over its Participating Interest in the JV as
  soon as practicable.
|    |                                                                                                                                                                                                                                                                                                                                                       
|3.  | FEES AND OPTIONS                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|3.1 | Establishment fee: The Borrower shall pay to the Agent, for the account of each
  Lender, not later than the date of this Agreement an establishment fee, in
  USD, as set out in the Fees Letter.                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|3.2 | Commitment fee: The Borrower shall pay to the Agent, for the account of each
  Lender, a commitment fee equal to 1.50% per annum of the Available Facility
  of each Tranche, which fee shall be payable in arrears on each Quarter Date
  in the period from the date of this Agreement up to the end of the relevant
  Availability Period.         
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|3.3 | Arrangement fee:
  The Borrower shall pay to the Agent for the account of each Lender an
  arrangement fee as set out in the Fees Letter.                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|3.4 | Warrants: In consideration of the Tranche B Lenders providing
  the Facility, the Sponsor agrees to issue to the Agent on behalf of the Tranche B Lenders 2,500,000 Warrants on
  the terms set out in Warrant Certificate scheduled to this Agreement as the
  Ninth Schedule.                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|4.  | CONDITIONS PRECEDENT                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|4.1 | Conditions precedent to all Tranches:
  No Drawdown Notice may be given under any Tranche until the Agent has
  confirmed to the Borrower that it has received and found, in its sole
  discretion, to be in a form and substance satisfactory to it, the documents
  and evidence specified in the First Schedule.                                   
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|4.2 | Right to waive:
  The conditions precedent referred to in clause 4.1 are inserted for the sole
  benefit of the Lenders. Only the Agent, with the consent of the Lenders, may
  waive any obligations under clause 4.1.                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|4.3 | Conditions precedent to Tranche A:
  No Drawdown Notice may be given under any Tranche A until the Agent has
  confirmed to the Borrower that Tranche B has been drawn down in full.                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|4.4 | Conditions precedent to each Advance:
  The obligations of the Lenders to make available each Advance are subject to
  the further conditions being satisfied that:                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|    | (a)                                                                                                                                                                                                                                                                                                                                                    | Drawdown Date: the
  Drawdown Date is a Business Day during the relevant Availability Period;                                                       
|    |                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                      | 
|    | (b)                                                                                                                                                                                                                                                                                                                                                    | Amount of Advance:
  the amount of the Advance under Tranche A or Tranche B is a minimum of
  US$1,000,000 and an integral multiple of US$1,000,000;

Page 22

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|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ----------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | (c)                                                                                                   | Available Facility:                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                       | (i)                                                                                                                                                                                                                                                                                                                                         | the amount
  of the Advance, when aggregated with all other Advances (if any) intended to
  be made on the same day under the same Tranche, does not exceed the Available
  Facility;                                                                                                                                                                                                          
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                       | (ii)                                                                                                                                                                                                                                                                                                                                        | in the event
  that the acquisition pursuant to the Acquisition Agreement is not complete on
  or before Financial Close, or expected to be complete with the proceeds of
  the first drawdown, the Borrower may request a drawdown of an amount reduced
  in proportion to the Borrowers existing Participating Interest in the JV and
  as agreed by the Agent (in its sole discretion); and
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                       | (iii)                                                                                                                                                                                                                                                                                                                                       | until such
  time as the Construction Contract and the Oil Sales Contracts have been
  completed and executed to the satisfaction of the Agent, the maximum
  Available Facility under Tranche A will be US$13,000,000;                                                                                                                                                                        
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    | (d)                                                                                                   | Representations and Warranties:
  the representations and warranties by each Obligor in the Financing Documents
  are true and correct as at the date of the relevant Drawdown Notice and the
  relevant Drawdown Date as though they had been made at that date in respect
  of the facts and circumstances then subsisting;              
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    | (e)                                                                                                   | No Event of Default or Potential Event of
  Default: no Event of Default or Potential Event of
  Default has occurred or is subsisting at the date of the relevant Drawdown
  Notice and the relevant Drawdown Date nor will result from the provision of
  the Advance; and                                                               
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    | (f)                                                                                                   | All Necessary Authorisations:
  all necessary Authorisations required by the Borrower for the borrowing of
  that Advance have been obtained.                                                                                                                                                                                              
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|4.5 | Conditions Subsequent:
  The obligation of the Lenders to make available any Advances are subject to:
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    | (a)                                                                                                   | the Borrower
  and the Sponsor procuring that Arrowhead Energy Limited accede to this
  Agreement pursuant to clause 18.5 and providing a Guarantor General Security
  Agreement and each other document required pursuant to clause 18.5 no later
  than the Business Day following the completion date under the Acquisition
  Agreement;
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    | (b)                                                                                                   | the Borrower
  completing and executing the Construction Contract in a form and substance
  consistent with the terms of such contract provided to the Agent prior to the
  date of this Agreement and otherwise agreed by the Agent no later than 31
  January 2007;                                                                      
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    | (c)                                                                                                   | the Borrower
  completing and executing the Oil Sale Contracts in a form and substance
  consistent with the terms of such contracts provided to the Agent prior to
  the date of this Agreement and otherwise agreed by the Agent no later than 28
  February 2007;                                                                       
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    | (d)                                                                                                   | receipt of a
  copy of the notice of assignment addressed to the Contractors under the
  Construction Contract pursuant to the Borrower General Security Agreement,
  duly acknowledged by the relevant counterparties no later than 31 January
  2007;                                                                                    
|    |                                                                                                       |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                
|    | (e)                                                                                                   | confirmation
  from the Lenders Insurance Consultant of insurances implemented by the
  Borrower in its capacity as Operator in relation to the Project and
  confirming that all                                                                                                                                                         

Page 23

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| |                                                                                            |                                                                                                                                                                                                                                                                                                              | 
| | ------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
| |                                                                                            | insurance
  required by clause 18.4(a) (Insurance) is in place, such confirmation to be
  received no later than 28 February 2007;                                                                                                                                                                          
| |                                                                                            |                                                                                                                                                                                                                                                                                                              | 
| | (f)                                                                                        | evidence
  satisfactory to the Agent that, no later than 31 January 2007 the Security
  Interest granted by Arrowhead Energy Limited in favour of Vector Gas Limited
  has been subordinated to the Security Interest granted by Arrowhead Energy
  Limited in favour of the Agent on behalf of the Lenders;
| |                                                                                            |                                                                                                                                                                                                                                                                                                              | 
| | (g)                                                                                        | verification
  that the details of the capital cost budget and construction schedule for the
  Project are acceptable to the Agent by a consultant appointed by the Agent;
  and                                                                                                                            
| |                                                                                            |                                                                                                                                                                                                                                                                                                              | 
| | (h)                                                                                        | receipt of a
  warrant certificate for the Warrants to be issued by the Sponsor to the Agent
  together with a legal opinion from Lang Michener LLP confirming the validity
  and enforceability of the Warrants no later than 31 January 2007.                                                             
| |                                                                                            |                                                                                                                                                                                                                                                                                                              | 
| | Failure to
  satisfy the above conditions subsequent shall constitute an Event of Default.

Page 24

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PART II  TRANCHE A

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5.  | ADVANCES                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|5.1 | Advances:                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Availability:
  Subject to compliance with clause 4 (Conditions Precedent), the Tranche A
  Lenders shall make an Advance under Tranche A available to the Borrower if,
  no later than 10.30am two Business Days before the relevant Drawdown Date,
  the Agent has received from the Borrower a duly completed Drawdown Notice for
  the Advance such notice shall be irrevocable.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Drawdown: Subject
  to the provisions of this Agreement, the Tranche A Lenders shall, on the
  Drawdown Date for an Advance under Tranche A, make available to the Borrower
  the relevant Advance by credit to the Proceeds Account in immediately
  available funds by 2.00pm on the relevant Drawdown Date.                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|6.  | INTEREST                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|6.1 | Interest Period: The
  Borrower shall pay interest on each Advance under Tranche A by reference to
  successive Interest Periods. The duration of the first Interest Period in
  respect of each Advance shall commence on its Drawdown Date and end on the
  next Quarter Date and each subsequent Interest Period shall commence on the
  day following that Quarter Date and end on the next following Quarter Date
  or, if earlier, the Tranche A Expiry Date.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|6.2 | Interest Payment:
  On each Interest Payment Date, the Borrower shall pay the unpaid interest
  accrued on each Advance since the previous Interest Payment Date (or, in the
  case of the first Interest Payment Date, since the Drawdown Date) at the
  applicable rate of interest for each applicable Interest Period relating to
  that Advance.                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|6.3 | Interest Payment Dates: The
  Borrower shall ensure that Advances having a principal amount not less than
  the amount required to be repaid on each Repayment Date shall have an
  Interest Period that ends on that Repayment Date.                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|6.4 | Interest Rate: The
  rate of interest payable in respect of each Advance under Tranche A will be
  the sum of the Margin and LIBOR for the relevant Interest Period.                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|6.5 | Calculation:
  Interest will accrue daily and will be calculated on the basis of a year of
  360 days and the actual number of days elapsed.                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|7.  | REPAYMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|7.1 | Repayment: Subject
  to clause 14.5 (Mandatory Payments), the Borrower shall repay the Tranche A
  Principal Outstanding by repaying on each Repayment Date the amount
  corresponding to that date in the Repayment Schedule.                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                     
|7.2 | Final Repayment: The
  Borrower shall repay by no later than 4.00pm on the Tranche A Expiry Date all
  Outstanding Money relating to Tranche A which is then unpaid.                                                                                                                                                                                                                                                                                               

Page 25

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|    |                                                                                                                                                                                                                                                             | 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|7.3 | No reborrowing:
  Amounts repaid under clause 7.1 (Repayment), clause 7.2 (Final Repayment) or
  clause 14.5 (Mandatory Repayment) will not be available for redrawing and the
  Tranche A Tranche Amount will be permanently reduced by the amount repaid.

Page 26

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PART III  TRANCHE B

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|8.  | ADVANCES                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|8.1 | Advances:                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Availability:
  Subject to compliance with clause 4 (Conditions Precedent), the
  Tranche B Lenders shall make an Advance under Tranche B available to the
  Borrower if, no later than 10.30am two Business Days before the relevant
  Drawdown Date, the Agent has received from the Borrower a duly completed
  Drawdown Notice for that Advance such notice shall be irrevocable.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Drawdown: Subject
  to the provisions of this Agreement, the Tranche B Lenders shall on the
  Drawdown Date for an Advance under Tranche B, make available to the Borrower
  the amount of the Advance by credit to the Proceeds Account in immediately
  available funds by 2:00pm on the relevant Drawdown Date.                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Debt Service
  Reserve Account: The Borrower shall ensure that the Debt Service Reserve Account is
  funded to the amount required by clause 19.4 (Debt Service Reserve Account)
  from the proceeds of the first Advance under Tranche B.                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|9.  | INTEREST                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|9.1 | Interest Period:
  The Borrower shall pay interest on each Advance under Tranche B by reference
  to successive Interest Periods. The duration of the first Interest Period in
  respect of each Advance shall commence on its Drawdown Date and end on the
  next Quarter Date and each subsequent Interest Period shall commence on the
  day following that Quarter Date and end on the next following Quarter Date
  or, if earlier, the Tranche B Expiry Date.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|9.2 | Interest Payment:
  On each Interest Payment Date, the Borrower shall pay the unpaid interest
  accrued on each Advance since the previous Interest Payment Date (or, in the
  case of the first Interest Payment Date, since the Drawdown Date) at the
  applicable rate of interest for each applicable Interest Period relating to
  that Advance.                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|9.3 | Interest Payment Dates:
  The Borrower shall ensure that Advances having a principal amount not less
  than the amount requiring to be repaid on each Repayment Date shall have an
  Interest Period that ends on that Repayment Date.                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|9.4 | Interest Rate: The
  rate of interest payable in respect of each Advance under Tranche B will be
  the sum of the Margin and LIBOR for the relevant Interest Period.                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                      
|9.5 | Calculation:
  Interest will accrue daily and will be calculated on the basis of a year of
  360 days and the actual number of days elapsed.                                                                                                                                                                                                                                                                                                                       

Page 27

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|     |                                                                                                                                                                                                                                                                                             | 
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|10.  | REPAYMENT                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                             | 
|10.1 | Repayment: Subject
  to clause 14.5 (Mandatory Prepayment) and clause 14.8 (Warrants) the Borrower
  shall repay the Tranche B Principal Outstanding by paying on each Repayment
  Date the amount corresponding to that date in the Repayment Schedule.                                   
|     |                                                                                                                                                                                                                                                                                             | 
|10.2 | Final Repayment: The
  Borrower shall repay by no later than 4.00pm on the Tranche B Expiry Date all
  Outstanding Money relating to Tranche B which is then unpaid.                                                                                                                       
|     |                                                                                                                                                                                                                                                                                             | 
|10.3 | No reborrowing:
  Amounts repaid under clause 10.1 (Repayment) and clause 10.2 (Final
  Repayment), clause 14.5 (Mandatory Prepayment) or clause 14.8 (Warrants) will
  not be available for redrawing and the Tranche B Tranche Amount will be
  permanently reduced by the amount repaid.

Page 28

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PART IV  TRANCHE C

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11.  | GUARANTEE FACILITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|11.1 | Availability:
  Subject to compliance with clause 4 (Conditions Precedent), the Tranche C
  Lender shall at the request of the Borrower issue a single guarantee in a
  maximum amount of NZ$2,500,000 (as such amount may be reduced from time to
  time on delivery of a certificate to the Agent from Arrowhead Energy Limited
  certifying a reduction in the principal amount of the gas prepayment
  outstanding under the Gas Prepayment and Sale Agreement) to Vector Gas
  Limited on the terms set out in the Tenth Schedule (the Maximum Guaranteed Amount).                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|11.2 | Fees: In
  consideration of the issue of the guarantee under Tranche C the Borrower
  shall pay to the Agent a guarantee fee in the amount of the Margin calculated
  on the basis of a percentage per annum on the Maximum Guaranteed Amount, such
  fee to be calculated on a daily basis and payable in arrears on each Quarter
  Date.                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|11.3 | Indemnity: The
  Borrower hereby indemnifies the Tranche C Lender for any payments and any
  losses arising therefrom that the Tranche C Lender is required to make under
  the guarantee to Vector Gas Limited and shall, upon demand, pay to the
  Tranche C Lender any amount which the Tranche C Lender is obliged or
  permitted to pay to Vector Gas Limited thereunder.                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|11.4 | Expiry Date: The
  guarantee provided under this Tranche C will expire automatically on the
  earlier of such time as the Agent confirms to the Borrower that all of the
  Secured Indebtedness has been repaid or such time on which the Maximum
  Guaranteed Amount reduces to zero.                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|11.5 | Event of Default:
  Upon the occurrence of an Event of Default the Tranche C Lender may, by
  notice to the Borrower require the Borrower to immediately pay to the Tranche
  C Lender the maximum amount of the guarantee at that time. All such amounts
  paid by the Borrower will be held by the Tranche C Lender and may be applied
  in meeting any amount payable by the Borrower under clause 11.3 above. The
  balance of any amounts paid by the Borrower under this clause 11.5 will be
  refunded to the Borrower on the guarantees expiry in accordance with its
  terms or pursuant to clause 11.4.

Page 29

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PART V  GUARANTEE

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|12.  | GUARANTEE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|     | Each Obligor jointly and severally unconditionally and irrevocably
  guarantees to the Finance Parties the due and punctual payment of the Secured
  Indebtedness as and when the same shall become due and payable (whether on
  the normal due date, on acceleration or otherwise) and the due observance and
  punctual performance of, and the compliance by each other Obligor with its
  obligations to the Finance Parties under the Secured Indebtedness and each
  Obligor hereby agrees as follows:                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|12.1 | Payment: If, for any reason, any Obligor
  defaults in the due and punctual payment to the Finance Parties of all or any
  of the Secured Indebtedness, each Obligor jointly and severally undertakes,
  upon demand in writing, to pay the relevant amount to the Finance Parties
  without any deduction and without claiming the benefit of any right of
  set-off.                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|12.2 | Guarantor as Principal Debtor: The liability of each Obligor to
  the Finance Parties under the guarantee given under this clause 12 (this guarantee) is deemed to be the
  liability of a principal debtor and not merely a surety and such liability
  will not be affected or diminished, nor will any security or guarantee
  provided by any Obligor be
  released or discharged, by any act, indulgence, omission or matter which but
  for this clause would have operated to release any Obligor wholly or partly
  from its liability to the Finance Parties, including (without limitation):
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Granting of Time: the granting of any time,
  credit, indulgence, waiver or other concession to any person whether by the
  Finance Parties or any other person (whether or not at the request of any
  such person);                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Insolvency: the dissolution of any Obligor
  or any other person or the appointment of any receiver, manager, inspector,
  trustee, administrator, judicial manager, statutory manager or other similar
  person in respect of any Obligor or any other person over the whole or any
  part of its or their respective assets or any step being taken in respect of
  such dissolution or appointment;                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Change in Position: any Obligor or any other
  person is or becomes a party to an amalgamation, assignment for the benefit
  of creditors, scheme of arrangement, composition of debts, scheme of
  reconstruction or change in constitution, composition, status or control in
  each case however arising, including by reason of a change in constitutive
  documents or by incorporation or the death, incapacity, retirement,
  appointment or admission of any partner, trustee or other person;
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Liability Ceasing: the liability of any
  Obligor or any other person (other than the relevant Obligor) ceasing or
  being reduced from any cause whatever (including any release or discharge by
  the Finance Parties or by operation of law);                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|     | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Other Deeds: any other person providing or
  joining in providing any Transaction Document or other agreement, guarantee
  or security or the failure by any Obligor or any other person to provide, or
  being incompetent to give, any Transaction Document or any other agreement,
  guarantee or security required by the Finance Parties;                                                                                                                                                        

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|     | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Other Obligations: any Transaction Document
  or any other agreement, guarantee, security or right held by or available to
  the Finance Parties at any time being or becoming in whole or in part void,
  voidable, defective or unenforceable for any reason or being released,
  discharged or varied in whole or in part;                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|     | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Variation: any amendment, variation, waiver,
  compounding, compromise, release, abandonment, relinquishment or renewal of
  any Transaction Document or any other agreement, guarantee, security, or any
  of the rights of the Finance Parties against any Obligor (other than the
  relevant Obligor) or any other person (change
  in circumstance) or any failure to notify any Obligor or such
  person of such change in circumstance; or                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|     | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Enforcement: the enforcement of, or failure
  to enforce (including, without limitation, the failure to make a valid
  demand), any rights under any Transaction Document or any other agreement,
  guarantee or security or any law.                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|12.3 | Independent Obligation: This guarantee is in addition to
  and independent of and not in substitution for any other guarantee, security
  or right which the Finance Parties may have at any time, and will not merge
  with or in any way be prejudiced or affected by, or prejudice or affect, any
  such guarantee, security or right. The Finance Parties may enforce this
  guarantee without first taking steps or proceedings against any Obligor or
  any other person.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|12.4 | Finance Parties Discretion: The Finance Parties may
  determine at any time whether to enforce or refrain from enforcing this
  guarantee or any other Transaction Document or any other guarantee, security
  or right and may at any time make any arrangement or compromise with any
  Obligor or any other person which the Finance Parties consider expedient.                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|12.5 | Continuing: This guarantee is to be a continuing
  guarantee and will remain in full force and effect by way of continuing
  security until the whole of the Secured Indebtedness has been fully paid
  and/or satisfied and no sum remains to be made available to any Obligor under
  any Transaction Document and will not be considered as wholly or partially
  satisfied, discharged or affected by any intermediate payment or settlement
  of account.                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|12.6 | Additional Accounts: The Finance Parties may continue
  any existing account or, at any time, open any new account of any Obligor and
  the liability of any Obligor under this guarantee shall not be reduced or
  affected in any way by any subsequent transactions, receipts or payments into
  or out of any such account.                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|12.7 | Exercise of Obligors Rights: So long as any sum remains to be
  lent or there remains any moneys payable under any Transaction Document:                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | No Competition: any right of any Obligor, by
  reason of the performance of any of its obligations under this guarantee, to
  be indemnified by any other Obligor or any other person, to directly or
  indirectly prove in the dissolution of any Obligor or any other person, to
  take the benefit of or enforce any security or other guarantee or exercise
  any other right it may have to receive the benefit of any distribution or
  payment shall be exercised and enforced only in such manner and on such terms
  as the Finance Parties may require; and
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Moneys on Trust: any amount received or
  recovered by any Obligor:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (i)                                                                                                                                                                                | as a result
  of any exercise of any such right; or     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (ii)                                                                                                                                                                               | in the
  dissolution of any Obligor or any other person,
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | shall be
  held in trust for and immediately paid to the Agent on account of the Finance
  Parties.                                                                               
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|12.8  | Payments in Gross: Any dividend, distribution,
  payment or other money whatever received at any time by the Finance Parties
  which may be applied in reduction of the Secured Indebtedness will be
  regarded as a payment in gross so that in the event of the dissolution of any
  Obligor or any other person the Finance Parties may prove against it for the
  whole of the Secured Indebtedness.                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|12.9  | Suspense Account: The Finance Parties may retain
  in a suspense account and appropriate (subject to the provisions of this
  Agreement) at its discretion, any amount received from any Obligor in respect
  of the Secured Indebtedness until the Finance Parties have received one
  hundred cents in the dollar in respect of the Secured Indebtedness.                                                                                                                                                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|12.10 | Indemnity: If all or any of the Secured
  Indebtedness (or any sum which, if recoverable, would have formed part of the
  Secured Indebtedness) is or may be irrecoverable from any Obligor, or if all
  or any of such moneys are not recoverable from any Obligor by the Finance
  Parties under this guarantee, then and in each such case:                                                                                                                                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|      | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Indemnity: each
  Obligor as a separate and additional liability under this Agreement
  indemnifies and will keep indemnified the Finance Parties in respect of such
  moneys; and
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|      | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Payment: each
  Obligor, as a principal debtor will, on demand, pay to the Finance Parties a
  sum equal to the amount of such moneys.                                            
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|      | The terms of this Agreement shall (with all necessary modifications)
  apply so far as possible to this indemnity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|12.11 | Not Affected: The indemnity in clause 12.10
  (Indemnity) shall apply to all or any of the Secured Indebtedness (or any sum
  which, if recoverable, would have formed part of the Secured Indebtedness)
  which is or may be irrecoverable for any reason (whether or not within the
  knowledge of the Finance Parties) including, without limitation, any legal or
  equitable limitation, disability or incapacity of or affecting any Obligor or
  any other person, any transaction relating to such moneys being or becoming
  at any time void, voidable, defective or otherwise unenforceable and any
  other circumstances which allow any Obligor to avoid paying such sums, in
  whole or in part.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|12.12 | Marshalling: The Finance Parties shall not be
  under any obligation to marshal or appropriate in favour of any Obligor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                    |                                                         
|12.13 | Guarantee Continues After Amalgamation: Each Obligor acknowledges that
  following the amalgamation of any of the Finance Parties with any other
  person (to form an amalgamated entity),
  and without prejudice to any liability of any Obligor under this guarantee
  arising prior to such amalgamation, the benefit of this guarantee will be
  extended to the amalgamated entity and this guarantee will remain a
  continuing guarantee, on the same terms, except that the
amalgamated entity will be substituted for the relevant Finance
  Parties from the date of the                                                                                                                         

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|      |                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                      | 
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|      | amalgamation. Each Obligor agrees that if any
  further action or consent is required by the Finance Parties in order to give
  better effect to this clause 12 it will promptly, at the cost of the Finance
  Parties (as the case may be), take any such action or give any such consents
  as the relevant Finance Parties may require.
|      |                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                      | 
|12.14 | Right to
  Prove:
  Each Obligor irrevocably appoints the Agent on behalf of the Finance Parties
  as its attorney and agrees to formally approve all action taken by an
  attorney under this clause 12. The attorney:                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                      | 
|      | (a)                                                                                                                                                                                                                                                                                                                                        | may do
  anything which a Obligor may lawfully do to exercise its right of proof after
  an Event of Default occurs. These actions may be taken in the Obligors name
  or the attorneys name and they include signing and delivering documents,
  taking part in legal proceedings and receiving any dividend arising out of
  the right of proof;
|      |                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                      | 
|      | (b)                                                                                                                                                                                                                                                                                                                                        | may delegate
  its powers (including this power) and may revoke a delegation;                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                      | 
|      | (c)                                                                                                                                                                                                                                                                                                                                        | may exercise
  its powers even if this involves a conflict of duty and even if it has a
  personal interest in doing so; and                                                                                                                                                                                                                        
|      |                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     
|      | (d)                                                                                                                                                                                                                                                                                                                                        | need not
  account to a Obligor for any dividend received on exercising the right of
  proof under paragraph (a) except to the extent that any dividend remains
  after the Agent has received all of the Secured Indebtedness and all other
  amounts payable under the Transaction Documents.                                                     

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PART VI  PROVISIONS COMMON TO ALL TRANCHES

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                        
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|13.  | PAYMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                        
|13.1 | Manner:
  Unless otherwise provided, the Borrower shall make all payments under
  this Agreement by transfer by SWIFT of immediately available funds to the
  account and in the manner specified by the Agent from time to time, by 3:00pm
  (NZ time) on the due date. Contemporaneously with making such payment the
  Borrower shall deliver to the Agent by SWIFT an MT 103 customer receipt
  advice, confirming payment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                        
|13.2 | Distribution to Lenders:  The Agent shall pay to each Lender
  promptly upon receipt, each Lenders proportionate share of any amount paid
  to the Agent for the account of the Lenders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                        
|13.3 | Payment to be made on Business Day:  If any payment is due on a day which is
  not a Business Day, the due date will be the next Business Day in the same
  calendar month or, if none, the preceding Business Day.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                        
|13.4 | Payments to be Free and Clear:  All sums payable by the Borrower under the
  Financing Documents shall be paid:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                        
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | free and
  clear of any restriction or condition;                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                        
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | free and
  clear of and (except to the extent required by law) without any deduction or
  withholding on account of any Tax; and                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                        
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | without any
  deduction or withholding (except to the extent required by law) on account of
  any other amount, whether by way of set-off or otherwise.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                        
|13.5 | Reinstatement:  If any payment to a Finance Party under any Financing Document
  is avoided by law, the Borrowers obligation to make such payment will be
  deemed not to have been affected or discharged and the Borrower shall on
  demand indemnify that Finance Party against any costs, claim, loss, expenses
  or liability (together with any Taxes thereon) sustained or incurred by that
  Finance Party as a result of it being required for any reason to refund all
  or part of any amount received or recovered by it in respect of such payment
  and in any event pay to that Finance Party on demand the amount so refunded
  by it.  That Finance Party and the
  Borrower will, in any such case, be deemed to be restored to the position in
  which each would have been, and will be entitled to exercise the rights they
  respectively would have had, if that payment had not been made.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                        
|13.6 | Appropriation where insufficient moneys available:  Amounts received by each Lender will be
  appropriated as that Lender determines between principal, interest and other
  amounts then due and payable by any Obligor to that Lender.  This appropriation will override any appropriation
  made by the Borrower.  Without
  limitation a Lender may appropriate amounts first in payment of amounts then
  due and payable to it by way of indemnity or reimbursement.                                                                                                                                                                                                                                                                                                                                                                                                                                         

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------
|14.  | CANCELLATION AND PREPAYMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|14.1 | Cancellation:  Any part of a Tranche Amount which remains undrawn at the end
  of the relevant Availability Period shall be cancelled and the Tranche Amount
  of that Tranche and the Facility Limit shall be reduced by the undrawn
  amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|14.2 | Cancellation by the Borrower:  The Borrower may cancel the Facility Limit
  up to an amount not exceeding the Available Facility at the time of the
  cancellation, in whole or in part (and if in part, a minimum cancellation of
  US$500,000 and in integral multiples of US$250,000 on giving 10 Business
  Days irrevocable written notice to the Agent provided that the Agent shall
  have first confirmed to the Borrower that it is satisfied that the Available
  Facility after such cancellation exceeds the Total Cost to Complete.  Any amount so cancelled shall reduce the
  Facility Limit accordingly and shall not be capable of being reinstated.                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|14.3 | Optional Prepayments:  The Borrower may, from funds available for
  Permitted Distributions pursuant to clause 19.3(f)(viii) in accordance with
  the Cash Flow Sweep, prepay all or part of any Advance made to it provided
  that such prepayment occurs on a Calculation Date.  Prepayment of Advances made under Tranche B cannot be made
  prior to the Tranche A Expiry Date.
  Unless the Agent agrees otherwise, prepayment of part only of an
  Advance may only be made in a minimum of US$500,000 and a whole multiple of
  US$250,000.  On the date on which the
  Borrower prepays any Advance it shall also pay all accrued but unpaid
  interest and other amounts payable in respect of that Advance.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|14.4 | Application of prepayments:  Prepayments of a Tranches Principal
  Outstanding under clause 14.3 (Optional Prepayments) and clause 14.5
  (Mandatory Prepayment) will be applied, against the obligation of the
  Borrower to make repayments pursuant to clause 7.1 (Repayment) or clause 10.1
  (Repayment) (as applicable), in inverse order of maturity.                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|14.5 | Mandatory Prepayment:  The Borrower shall:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | during the
  period from 1 April 2007 up to the Completion Date, pay to the Agent on each
  Quarter Date all Available Cash on that date by way of Mandatory Prepayment
  of:                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | (i)                                                                                                                                                                                                                                                     | at all times
  up to and including the Tranche A Expiry Date, the Tranche A Principal
  Outstanding; and
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | (ii)                                                                                                                                                                                                                                                    | at all times
  thereafter, the Tranche B Principal Outstanding;                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | on and from
  the Completion Date, pay to the Agent on the day which is 10 Business Days
  after each Calculation Date, the Mandatory Prepayment Percentage of Available
  Cash on the most recent Calculation Date, by way of Mandatory Prepayment of:
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | (i)                                                                                                                                                                                                                                                     | at all times
  up to and including the Tranche A Expiry Date, the Tranche A Principal
  Outstanding; and
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | (ii)                                                                                                                                                                                                                                                    | at all times
  thereafter, the Tranche B Principal Outstanding; and                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                         |                                                                                                         
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | procure
  that, in the event TAG Oil (NZ) Limited or its subsidiary exercises any right
  to purchase a percentage of Arrowhead Energy Limiteds Participating Interest
  arising as a                                                                 

Page 35

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | result of
  any breach by Arrowhead Energy Limited of the terms of the JV Agreement prior
  to the date of this Agreement, an amount equal to 21.6% (the Adjusted
  Percentage) of the Principal Outstanding under Tranche A and Tranche B shall
  be immediately applied by way of Mandatory Prepayment of the Adjusted
  Percentage of Tranche A and Tranche B Tranche Amounts respectively outstanding
  at such time the option is exercised and the Repayment Schedule shall be
  adjusted accordingly.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|14.6 | Prepayment following receipt of Ratio Certificate:  The amount of Mandatory Prepayments under
  clause 14.5(b) (Mandatory Prepayment) shall be calculated by reference to the
  Ratio Certificate relating to the relevant Calculation Date.  Pending prepayment of amounts under clause
  14.5(b) (Mandatory Prepayment), the Borrower shall ensure that an amount
  sufficient to meet the relevant Mandatory Prepayment amount remains in the
  Proceeds Account from the relevant Calculation Date.  If the Borrower fails to provide a duly
  completed Ratio Certificate on or before the due date pursuant to clause
  18.2(a)(iv) (Ratio Certificate), the Agent may, but shall not be obliged to,
  debit the Proceeds Account and make payment of any Mandatory Prepayment
  pursuant to clause 14.5 based on calculation by the Agent (acting reasonably)
  of the relevant ratios using such information as is available to the Agent at
  that time.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|14.7 | Limitation of prepayments:  The Borrower may not prepay all or any
  part of the Principal Outstanding except in accordance with this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|14.8 | Warrants:
  Where the Tranche B Lender exercises the Warrants issued to the Agent
  by the Sponsor, the purchase consideration for the underlying shares (being
  the exercise price of the Warrants times the number of Warrants exercised)
  paid to the Sponsor will, immediately upon receipt, be advanced to the
  Borrower as Subordinated Debt or paid to the Borrower by way of the
  subscription price for shares issued by the Borrower and the Borrower must,
  immediately upon receipt of such monies apply them as follows:                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | first in
  prepayment of the Tranche B Tranche Amount; and                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | on
  prepayment in full of the Tranche B Tranche Amount any remaining balance is
  to be paid to the Sponsor.                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|15.  | TAXATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|15.1 | Gross Up:
  If:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | any Obligor
  is required by law to make any deduction or withholding from any amount paid
  or payable by it under any Financing Document; or                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | a Finance
  Party is required by law to make any payment, on account of Tax (other than
  Tax on overall net income of that Finance Party) or otherwise, on or in
  relation to any amount received or receivable by it under any Financing
  Document,                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     | then the
  amount payable by the relevant Obligor in respect of which such deduction,
  withholding or payment is required to be made will be increased to the extent
  necessary to ensure that, after the making of such deduction, withholding or
  payment, that Finance Party, receives and retains (free from any liability in
  respect of any deduction, withholding or payment) a net amount equal to the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                        
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | amount which
  it would have received and so retained had no such deduction, withholding or
  payment been made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                        
|15.2 | Punctual Payment:  The relevant Obligor will pay any amount referred to in clause
  15.1(a) (Gross Up) to the relevant taxation or other authority before the
  date on which penalties attach thereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                        
|15.3 | Tax Receipts:  Within 30 days (or such further period as the relevant Finance
  Party may allow) after any deduction, or withholding referred to in clause
  15.1(a) (Gross Up) is required to be made, the relevant Obligor shall deliver
  to that Finance Party a receipt issued by the applicable taxing or other
  authority or other evidence satisfactory to that Finance Party showing that
  such deduction or withholding has been made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                        
|15.4 | Negotiation:  Without affecting the Obligors obligations to make any payments
  under clause 15.1 (Gross Up), if any such payment is required to be made, the
  Borrower and the relevant Finance Party will for a period of 30 days
  commencing on the date such payments first become due (or such longer period
  as that Finance Party may agree), acting reasonably, discuss whether there
  are any mutually satisfactory alternative means by which the facility might
  be made or continued (not involving that Finance Party in any increased cost
  or liability or reduced return) which would avoid or minimise the
  circumstances giving rise to such a payment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                        
|15.5 | Approved issuer status:  The Borrower:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                        
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | shall obtain
  and maintain its status as an approved issuer as defined in section OB1 of
  the Income Tax Act 2004 and ensure the Agreement is registered with the
  Commissioner of Inland Revenue under section 86H of the Stamp and Cheque
  Duties Act 1971; and
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                        
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | shall,
  without prejudice to its obligations under clause 15.1 (Gross Up), make all
  payments of Approved Issuer Levy in respect of all interest paid to each
  Finance Party under this Agreement in accordance with section 86K of that
  Act.                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                        
|15.6 | Tax Credit: If an Obligor makes an
  additional payment pursuant to clause 15.1 (Gross Up) and the relevant
  Finance Party subsequently actually receives and is able to identify (in the
  normal course of its business and operations and without being under any
  obligation to do so) any Tax credit or refund in respect of any deduction,
  withholding or payment in respect of which any additional amounts have been
  paid by an Obligor pursuant to this clause, that Finance Party will, but only
  if and to the extent that in that Finance Partys sole opinion it is able to
  do so without otherwise affecting its liability to taxation and to the extent
  only that it determines that a payment to the relevant Obligor can be made
  without prejudice to the retention of that Tax credit, refund or relief,
  account to the relevant Obligor for the amount of such Tax credit or
  refund.  Nothing in this clause
  imposes any obligation whatever on the Finance Party to disclose any
  information about its own tax affairs and the Finance Party may arrange such
  affairs however it thinks fit.  In
  particular, the Finance Party need not claim any relief in respect of the
  amount of any additional payment paid by an Obligor under this clause 15
  (Taxation) in priority to any other relief available to it.

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|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|---- | -------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|16.  | CHANGES IN LAW      
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|16.1 | Additional payments:
|     |                     
|     | (a)                  | If:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                      | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | the
  effective cost to a Finance Party of making, funding or maintaining any
  Advance or the Facility is increased in any way;                                                                                                                                                                                                                                                                           
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                      | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | any amount
  paid or payable to a Finance Party or received or receivable by a Finance
  Party, or the effective return to a Finance Party, under or in respect of any
  Financing Document is reduced in any way;                                                                                                                                                                                         
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                      | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | the return
  on the capital to a Finance Party which is or becomes directly or indirectly
  allocated by that Finance Party to any Advance or the Facility is reduced in
  any way; or                                                                                                                                                                                                                     
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                      | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | a Finance
  Party makes any payment (except on account of Tax on the overall net income
  of that Finance Party) or foregoes any return on or calculated by reference
  to the amount of any sum secured or receivable by it under any Financing
  Document,                                                                                                                                               
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                      | (including,
  in each such case, but without limitation, any diminished yield to a Finance
  Party arising from any imposition of or increase or other change in any
  capital adequacy, risk weighting, reserve asset, balance sheet, or other
  requirement or ratio) as a direct or indirect result of any change in, any
  making of, or any change in the interpretation or application by any
  Governmental Agency of, any law, official directive or request in each case
  taking effect after the date of this Agreement, (including in each such case
  but without limitation any law or directive relating to Taxes) then:
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                      | (v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (when it has
  calculated the effect of the above and the amount to be charged to the
  Borrower under this clause) a Finance Party shall notify the Borrower upon becoming
  aware of the above, setting out in the notice in reasonable detail (but
  excluding confidential information) the basis for requesting the amount from
  the Borrower and the basis which the amount has been calculated; and
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                      | (vi)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | on demand
  from time to time the Borrower shall pay for the account of that Finance
  Party the amount certified by an Authorised Officer of that Finance Party to
  be necessary to compensate that Finance Party for the increased cost or the
  reduction.                                                                                                                                             
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|     | (b)                  | Without
  limiting the above in any way, this clause applies to any law, official
  directive or request with respect to Taxation (except a Tax imposed on the
  overall net income of a party or any amount payable under clause 15.1 (Gross
  Up)) or reserve, liquidity, capital adequacy, special deposit or similar
  requirements.                                                                                                                                                                                                                                                                                               
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|16.2 | Minimisation:       
|     |                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                            
|     | (a)                  | It will not
  be a defence that any cost, reduction or payment referred to in this clause
  could have been avoided.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (b)                                                                                                                                                                                                | Without
  affecting the Borrowers obligations to make any payments under clause 16.1
  (Additional payments), if any such payment is required to be made, the
  Borrower and the relevant Finance Party will for a period of 30 days (or such
  longer period as that Finance Party may agree), acting reasonably, discuss
  whether there are any mutually satisfactory alternative means by which the
  relevant facility might be made or continued (not involving that Finance
  Party in any increased cost or liability or reduced return) which would avoid
  or minimise the circumstances giving rise to such a payment.
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|16.3 | Survival of obligations:  The Borrowers obligations under clause 15
  (Taxation) or this clause 16 (Changes in Law) survive the repayment of any
  Advance and the termination of this Agreement.
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|16.4 | Prepayment on increased costs:                                                                                                                                                                    
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|     | (a)                                                                                                                                                                                                | Within 90
  days after:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | the Borrower
  receives a notice under clause 16.1(a)(v) (Additional payments); or                                                                                                                                                                   
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                    | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | the Borrower
  becomes aware that it will be or will become obliged to make any additional
  payment under clause 15.1 (Gross Up),                                                                                                                   
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                    | the Borrower
  may notify the Agent that it wishes to prepay any Advance affected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|     | (b)                                                                                                                                                                                                | The
  notification in clause 16.4(a) will be irrevocable.  The Borrower shall prepay in accordance with it on the last day
  of the relevant Interest Period(s) current when the notification is given.                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|16.5 | Illegality:                                                                                                                                                                                       
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|     | (a)                                                                                                                                                                                                | If the
  making of, or a change in the interpretation or application by any
  Governmental Agency of, any law or treaty in each case taking effect after
  the date of this Agreement makes it unlawful for a Finance Party to make,
  fund or maintain the advances or accommodation required under this Agreement:                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | that Finance
  Party may terminate its commitment under the Facility by sending a notice to
  the Borrower;                                                                                                                                          
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                    | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | if required
  by the law or treaty, or if necessary to prevent or remedy a breach of the
  law or treaty, the Borrower shall prepay all Outstanding Money, under this
  Agreement; and                                                               
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                    | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | the Borrower
  shall make the prepayment immediately or, if in the reasonable opinion of
  that Finance Party delay in prepayment is permitted by or will not cause a
  breach of the law or treaty, on the last day permitted by such law or treaty.
|     |                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                      
|     | (b)                                                                                                                                                                                                | At the
  request of the Borrower, that Finance Party shall, acting reasonably,
  negotiate with the Borrower with a view to finding a means by which the
  effect of any unlawfulness can be avoided or minimised without incurring any
  additional cost or expense.                                                                                                                                                                                                                                                                                                                                                             

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|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|17.  | REPRESENTATIONS AND WARRANTIES                                                                                                                                 
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|17.1 | Representations and Warranties:  Each Obligor makes the following
  representations and warranties in respect of itself to the Agent and the
  Finance Parties:
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     | (a)                                                                                                                                                             | Status:
  It is duly incorporated under and is a company validly existing under
  the laws of its place of incorporation;                                                                                                                                                     
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     | (b)                                                                                                                                                             | Power:
  It has the power to enter into and perform its obligations under the
  Transaction Documents to which it is expressed to be a party, to carry out
  the transactions contemplated by those documents and to carry on its business
  as now conducted or contemplated;
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     | (c)                                                                                                                                                             | Corporate authorisations:  It has taken all necessary corporate
  action to authorise the entry into and performance of the Transaction
  Documents to which it is expressed to be a party, and to carry out the
  transactions contemplated by those documents;              
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     | (d)                                                                                                                                                             | Documents binding:  Each Transaction Document to which it is expressed to be a
  party is its valid and binding obligation enforceable in accordance with its
  terms;                                                                                                        
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     | (e)                                                                                                                                                             | Charge:
  Each of the Security Documents is, save for any Permitted Security
  Interests, effective first ranking security over the Mortgaged Property;                                                                                                                       
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     | (f)                                                                                                                                                             | Transactions permitted:  The execution and performance by it of the
  Transaction  Documents to which it is
  expressed to be a party and each transaction contemplated under those
  documents did not and will not violate in any respect a provision of:                   
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                 | (i)                                                                                                                                                                                                                                                                            | a law or
  treaty or a judgment, ruling, order or decree of a Governmental Agency
  binding on it;                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                 | (ii)                                                                                                                                                                                                                                                                           | its
  constitution or other constituent documents; or                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                 | (iii)                                                                                                                                                                                                                                                                          | any other
  document or agreement which is binding on it or its assets,                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                 | and, except
  as provided by the Transaction Documents, did not and will not:                                                                                                                                                                                                 
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                 | (iv)                                                                                                                                                                                                                                                                           | create or
  impose or oblige it to create or impose a Security Interest on any of its
  assets; or                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                 | (v)                                                                                                                                                                                                                                                                            | allow a
  person to accelerate or cancel an obligation with respect to Financial
  Indebtedness, or constitute an event of default, cancellation event,
  prepayment event or similar event (whatever called) under an agreement
  relating to Financial Indebtedness, whether immediately or after notice or
  lapse of time or both;                      
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     | (g)                                                                                                                                                             | Accounts:                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                 |                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                 | (i)                                                                                                                                                                                                                                                                            | Its most
  recent consolidated and unconsolidated audited Accounts give a true and fair
  view of the matters with which they deal and include all material liabilities
  (contingent or otherwise), and there has been no subsequent material adverse
  change in its financial position or the operation of the Project from the
  date of this Agreement;

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| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | (ii)                                                                                                                                                                                                                                                                                                          | Those
  Accounts comply with generally accepted accounting practice in New Zealand
  or, if the Accounts are for a company incorporated outside New Zealand, and
  not registered in New Zealand as an overseas company, such Accounts comply
  with generally accepted accounting practice in its place of incorporation
  except in each case to the extent disclosed in them and with all applicable
  laws;                                   
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (h) | No litigation:  Except as notified in writing to the Agent, no litigation,
  arbitration, Tax claim, dispute or administrative or other proceeding against
  it is current or pending or, to its knowledge, threatened which, if
  determined adversely to the Obligor, would have a Material Adverse Effect;
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (i) | No immunity:  It will not be entitled to claim for itself or any of its
  assets immunity from suit, execution, attachment or other legal process;                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (j) | No dissolution:                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (i)                                                                                                                                                                                                                                                                                                           | No order has
  been made, resolution passed or legal proceedings issued and no corporate
  action has been taken, notice given or other step taken or (to the best of
  its knowledge and belief) threatened against it for the dissolution or
  re-organisation of, or for the appointment of a receiver, manager, inspector,
  trustee, statutory manager or other similar person in respect of it or the
  whole or any part of its assets; and
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (ii)                                                                                                                                                                                                                                                                                                          | It has not
  made, nor intends to make, any assignment, arrangement or composition for the
  benefit of its creditors generally nor has any moratorium been agreed or
  declared in respect of or affecting all or any material part of its
  indebtedness;                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (k) | No default:                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (i)                                                                                                                                                                                                                                                                                                           | It is not in
  default under any Transaction Document or any other document or agreement
  (including, without limitation, an Authorisation) binding on it or its assets
  that would have a Material Adverse Effect; and                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (ii)                                                                                                                                                                                                                                                                                                          | Nothing has
  occurred which constitutes a Potential Event of Default under this Agreement
  which has not been disclosed in writing to the Agent;                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (l) | Authorisations:  Each Authorisation which is required at the date the
  representation is given or deemed to be repeated in relation to:                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (i)                                                                                                                                                                                                                                                                                                           | the
  execution, delivery and performance by it of the Transaction Documents to
  which it is expressed to be a party and the transactions contemplated by
  those documents;                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (ii)                                                                                                                                                                                                                                                                                                          | the validity
  and enforceability of those documents and, the effectiveness or priority of
  the Security Documents; and                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (iii)                                                                                                                                                                                                                                                                                                         | its business
  as now conducted or contemplated and which is material (including, without
  limitation, under the Resource Management Act and other Environmental Law or
  the Permit or the Crown Minerals Act),                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | has been
  obtained or effected.  Each is in full
  force and effect.  It has complied
  with each of them.  It has paid all
  applicable fees for each of them;                                                                                                                                             

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                  
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (m) | No misrepresentation:  All written information provided by it to
  the Agent or the Lenders (or, in respect of any Resource Consent or Permit, to
  the applicable Governmental Agency) in connection with the Project and its
  business and operations was true in all material respects when provided.  Neither that information nor, to the best
  of its knowledge and belief, (in relation to the Financing Documents and the
  financing of the Project) its conduct or anyone on its or their behalf in
  relation to the transactions contemplated by the Transaction Documents, was
  misleading in any material respect, by omission or otherwise at the time the
  information was provided or the conduct occurred.  The opinions, projections and forecasts of it delivered to the
  Agent and the Lenders in connection with the Project and the assumptions on
  which they are based were arrived at after due and careful consideration and
  enquiry, as far as it is aware, and genuinely represented the views of the
  person providing that information.  It
  is not aware of any material facts or circumstances which have not been
  disclosed to the Agent and the Lenders and which could make any of such opinions,
  projections, forecasts, assumptions or other information untrue, incomplete,
  inaccurate or misleading in any material respect;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                  
| | (n) | Disclosure:
  All facts and relevant information, each document or agreement which
  in each case is material to the Transaction Documents or to the Lenders
  assessment of the nature and amount of risk undertaken thereby in entering
  into the Transaction Documents (to which they are party) or which has the
  effect of varying a Transaction Document has been disclosed to the Agent and
  the Lenders in writing;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                  
| | (o) | Copies of documents:  All copies of documents (including,
  without limitation, its latest audited Accounts and all Authorisations) given
  by it or on its behalf to the Agent or the Lenders are true and complete
  copies at the date provided;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                  
| | (p) | Title:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                  
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Each Obligor
  is the sole beneficial owner of the Mortgaged Property free of any other
  third party right or interest whatever (including without limitation caveats,
  land claims, Waitangi Tribunal claims, sacred site applicants or claims of
  any nature whatsoever), other than as permitted by clause 18.1(d) (Negative
  pledge); and
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                  
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | None of the
  Mortgaged Property of any Obligor is subject to a Security Interest which is
  not permitted by clause 18.1(d) (Negative pledge);                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                  
| | (q) | Law: All
  laws (including, without limitation, any Environmental Law, the Crown
  Minerals Act and the conditions imposed on the Resource Consents and the
  Permit), to the extent binding on it or the JV, have been complied with in
  all material respects;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                  
| | (r) | Taxes:
  It has complied with all laws in all jurisdictions in which it is
  subject to taxation and has paid all Taxes due and payable by it, where
  failure to comply or pay would have a Material Adverse Effect;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                  
| | (s) | Notices: It has not and nor is it likely to
  receive, to the best of its knowledge, notices under or in connection with
  the Transaction Documents or any other documents or contracts or from any
  Governmental Agency which would, if the acts or omissions referred to therein                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | occur or
  continue unremedied, be likely to result in a Material Adverse Effect in
  relation to any Obligor;
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (t)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Trust:
  It does not hold any assets as the trustee of any trust or settlement;                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (u)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Subsidiaries:  It has no Subsidiaries other than those notified in writing to
  the Agent; and                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Solvency:
  It is able to pay its debts as they become due in the normal course of
  business.                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|17.2 | Borrower
  Representations and Warranties:  The
  Borrower represents and warrants in respect of itself to the Agent and the
  Finance Parties that it has conducted its due diligence investigations in
  relation to the acquisition of the shares in Arrowhead Energy Limited in
  accordance with the scope of the documentation provided by the Borrower to
  the Agent and that no material fact or circumstance was discovered which
  would be relevant to a person providing finance to the Borrower to fund the
  acquisition of Arrowhead Energy Limited which has not been disclosed to the
  Agent prior to the date of this Agreement.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|17.3 | Reliance on
  and repetition of representations and warranties:  Each Obligor acknowledges that the Agent and the Finance
  Parties have entered the Financing Documents in reliance on the
  representations and warranties it has given in this clause 17
  (Representations and Warranties).                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|17.4 | Repetition:
  Each Obligor acknowledges that the representations and warranties it
  gives in this clause 17 (Representations and Warranties) are deemed to be
  repeated on each Drawdown Date, each Interest Payment Date, and each
  Calculation Date.                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|18.  | UNDERTAKINGS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|18.1 | General Undertakings:  Each Obligor undertakes to the Agent and
  the Lenders that it will:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Corporate
  reporting and information:  provide to
  the Agent:                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (i)                                                                                                            | annual and semi-annual Accounts:  as soon as they are available but in any
  event within 120 days after the end of each financial year or half-year, in
  respect of each such financial year or half-year, its statements of financial
  performance and statement of financial position and statement of changes in
  financial position/statement of cash flows, audited in the case of its annual
  Accounts, together with a summary operating and financial forecast for the following
  12 months which, in the case of the Borrower shall be consolidated financial
  statements for the Borrower and its Subsidiaries;
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (ii)                                                                                                           | documents issued to creditors:  promptly, all documents provided by it to
  its creditors generally and in the case of the Sponsor to its shareholders;                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (iii)                                                                                                          | litigation:
  promptly, written particulars of any litigation, arbitration, Tax or
  other claim, dispute or administrative or other proceeding in relation to it,
  the Mortgaged Property or the Project which if adversely determined would
  have a Material Adverse Effect;                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (iv)                                                                                                           | Governmental Agency:  promptly, any material notice, material
  order or material correspondence from or with a Governmental Agency relating
  to the Project or its business or assets;                                                                                                                                                                                                                                                                                                                                                                                                                                        

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| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | (v)                                                                                                                                                                                                                                                                                                    | other information:  promptly, any other information in relation to the Mortgaged
  Property, the Project, the Borrower, a Guarantor or their financial condition
  or business which the Agent may reasonably request from time to time;                                                                 
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| | (b) | Accounting principles:  It will ensure that its Accounts provided
  to the Agent under clauses 18.1(a) and 18.2(a) (Corporate reporting and
  information):                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (i)                                                                                                                                                                                                                                                                                                    | comply with
  generally accepted accounting practice except to the extent disclosed in the
  notes thereto and with all applicable laws;                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (ii)                                                                                                                                                                                                                                                                                                   | together
  with the notes to the Accounts give a true and fair view of the matters with
  which they deal; and                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (iii)                                                                                                                                                                                                                                                                                                  | together
  with those notes disclose or reserve against all liabilities (contingent or
  otherwise) of the Borrower and the other Obligors as at that date and all
  unrealised or anticipated losses from any commitment entered into and which
  existed at that date;                                 
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| | (c) | Authorisations:  It will ensure that each Authorisation required by it for:                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (i)                                                                                                                                                                                                                                                                                                    | the
  execution, delivery and performance by it of the Transaction Documents to
  which it is expressed to be a party;                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (ii)                                                                                                                                                                                                                                                                                                   | the validity
  and enforceability of those documents and the effectiveness and priority of
  the Security Documents;                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (iii)                                                                                                                                                                                                                                                                                                  | its
  obligations under the JV Agreement and each other Project Document; and                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (iv)                                                                                                                                                                                                                                                                                                   | carrying on
  by it of its business now conducted or contemplated,                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | is obtained
  and promptly renewed and maintained in full force and effect.  It will pay all applicable fees for them
  and will comply with any and all conditions attached to those
  Authorisations.  On request, it will
  provide copies promptly to the Agent when they are obtained or renewed;
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| | (d) | Negative pledge:  It will not create or allow to subsist a Security Interest over
  its assets other than:                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (i)                                                                                                                                                                                                                                                                                                    | pursuant to
  the Security Documents; or                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (ii)                                                                                                                                                                                                                                                                                                   | a Permitted
  Security Interest;                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| | (e) | Notice to Agent:  It will notify the Agent as soon as it becomes aware of:                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (i)                                                                                                                                                                                                                                                                                                    | the
  occurrence any Event of Default, Potential Event of Default or Event of
  Review or any material breach or default by any party under any Transaction
  Document, which notice shall include complete details of the nature of the
  relevant occurrence and the measures being taken to remedy it;
| |     |                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                          
| |     | (ii)                                                                                                                                                                                                                                                                                                   | any claim
  made to or recommendation made by any Governmental Agency which materially
  affects the Mortgaged Property, the Permit, the Project or the rights of any
  party under the Transaction Documents;                                                                                           

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| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                       | any proposal
  by a Governmental Agency to acquire compulsorily any of the Mortgaged
  Property;                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (iv)                                                                                                                                                                                                                                                                                                                                                                        | any dispute
  between it and a Governmental Agency in relation to the Project or a Transaction
  Document;                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (v)                                                                                                                                                                                                                                                                                                                                                                         | any dispute
  between it and a party to, or any default by any party under or in respect
  of, a Project Document (other than the Lenders);                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (vi)                                                                                                                                                                                                                                                                                                                                                                        | any pending
  or threatened action, claim or proceeding against it which if adversely
  determined would have a Material Adverse Effect;                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (vii)                                                                                                                                                                                                                                                                                                                                                                       | any event or
  occurrence which would be likely to have a Material Adverse Effect on any
  Obligor;                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (viii)                                                                                                                                                                                                                                                                                                                                                                      | any Casualty
  Occurrence;                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (ix)                                                                                                                                                                                                                                                                                                                                                                        | any demand
  under a Guarantee given by the Borrower or a Guarantor for an amount greater
  than US$250,000;                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (x)                                                                                                                                                                                                                                                                                                                                                                         | any event or
  thing that would to its knowledge allow a party to avoid, terminate, rescind,
  discharge or repudiate any Project Document;                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (xi)                                                                                                                                                                                                                                                                                                                                                                        | any event or
  circumstance which would be likely to give rise to:                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                             | (1)                                                                                                                                                                                                                                    | a claim
  against the Borrower, the Project Companies, or the JV in relation to the
  Project or to a requirement of expenditure in excess of US$250,000 by the
  Borrower or a Project Company in relation to the Project; or
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                             | (2)                                                                                                                                                                                                                                    | a material
  alteration of the Project or any part of it;                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (xii)                                                                                                                                                                                                                                                                                                                                                                       | any change
  in its Authorised Officers, giving specimen signatures of any new Authorised
  Officer appointed, and, where requested by the Agent, evidence satisfactory
  to the Agent of the authority of any Authorised Officer; and
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (xiii)                                                                                                                                                                                                                                                                                                                                                                      | any
  representation, action or warranty made or taken to be made that is found to
  be incorrect or misleading;                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| | (f) | Disposal of assets:  It will not sell or otherwise dispose of,
  part with possession of, or create an interest in, any of the Mortgaged
  Property or agree or attempt to do so (whether in one or more related or
  unrelated transactions) except (and in the case of the Mortgaged Property,
  subject to the General Security Agreements and any Collateral Security):
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                         | in the
  ordinary course of business or on arms length commercial terms; or                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                        | as permitted
  by a Transaction Document or pursuant to any Other Joint Venture; or                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                       | with the
  prior written consent of the Agent; and                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                        |                                                                                                                                                                                                                               
| | (g) | Corporate existence:  It will do everything necessary to
  maintain its corporate existence in good standing.  It will not transfer its jurisdiction of incorporation or,
  without the prior written                                                                                                                                                                      

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|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|---- | ------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|     |                                                                                                                                      | consent of
  the Agent, enter any amalgamation, merger or consolidation with any other
  person other than another Obligor (such consent not to be unreasonably
  withheld).                                                                                                                      
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|18.2 | Undertakings of the Borrower and the Project Companies:  The Borrower and each Project Company
  undertakes to the Agent as follows:
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|     | (a)                                                                                                                                  | Corporate reporting and information:  It will provide to the Agent:                                                                                                                                                                                                                               
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|     |                                                                                                                                      | (i)                                                                                                                                                                                                                                                                                                | monthly management report:  promptly, all monthly management and
  operating reports issued by the Operator to the Project Companies under the
  JV Agreement;                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|     |                                                                                                                                      | (ii)                                                                                                                                                                                                                                                                                               | project accounts: subject to the
  confidentiality obligations in the JV Agreement, promptly upon becoming
  available, all Accounts of and relating to the JV;                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|     |                                                                                                                                      | (iii)                                                                                                                                                                                                                                                                                              | information:  subject to the confidentiality obligations in the JV Agreement
  or any Other Joint Venture, as soon as available but in any event no later
  than five Business Days of service, sending or receipt as the case may be,
  copies of all material circulars and notices sent or received by the Borrower
  or the Project Companies under or in connection with the Project Documents,
  the Resource Consents, the Permit and the insurances, including without
  limitation sent by the Operator to the Project Companies;
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|     |                                                                                                                                      | (iv)                                                                                                                                                                                                                                                                                               | Ratio Certificate:  within 10 Business Days of each Calculation Date and of a
  Special Calculation Date, a Ratio Certificate from each of the Borrower and
  each Project Company.  For the
  purposes of this clause 18.2(a)(iv), each of the Borrower and the Agent,
  acting on the direction of all the Lenders, may at any time (acting
  reasonably), by written notice to the other, designate any date to be a
  special calculation date (Special
  Calculation Date);                                                        
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|     |                                                                                                                                      | (v)                                                                                                                                                                                                                                                                                                | Tax return:
  within five Business Days of the lodgement of any income tax return
  copies of the relevant return;                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|     | (b)                                                                                                                                  | Base Case: It will provide to the Agent an
  updated Base Case for review and approval by the Lender at the times
  specified and otherwise in compliance with the provisions of the Third
  Schedule (Base Case);                                                                                
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|     | (c)                                                                                                                                  | Project:
  It will not and will ensure that neither the Borrower nor the Project
  Companies will engage in any business or activity other than those directly
  related to the Project, the Transaction Documents, the Other Permits or New
  Permits or incidental to such business or activity;
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|     | (d)                                                                                                                                  | Notice and record of meetings:  It will subject to the confidentiality
  obligations in the JV Agreement or any Other Joint Venture, promptly:                                                                                                                                                    
|     |                                                                                                                                      |                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                      | (i)                                                                                                                                                                                                                                                                                                | notify the
  Agent of each meeting between parties to the Project Documents and their
  representatives under any Project Document or of which it receives notice and
  in respect of which it is entitled to receive a copy of the minutes of the
  meeting, and provide (or, if it does not attend such meeting it will use its
  best endeavours to provide) full details to the Agent of the results and the
  outcome of each such meeting; and                                                                                      

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| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | (ii)                                                                                                                                                                                                                                                                                                                                            | provide the
  Agent with copies of the minutes of any meeting referred to in sub-paragraph
  (i) and copies of any reports and notices in connection with any such
  meeting;
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | (e) | Partnership and joint ventures:  It will not enter into a partnership or
  joint venture with another person other than as contemplated by the
  Transaction Documents, the Other Joint Ventures or in relation to any New
  Permits;                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | (f) | Security deposit:  It will not provide any financial accommodation or deposit or
  lend money on terms that it will not be repaid until its or another persons
  obligations or indebtedness are performed or discharged and it will not
  deposit money with a person other than the Agent, the Account Bank or another
  Obligor other than:
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| |     | (1)                                                                                                                                                                                                                                                                                                                                             | a deposit of
  money made in the ordinary course of business to secure goods and services
  for an amount not exceeding US$500,000; or                                       
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| |     | (2)                                                                                                                                                                                                                                                                                                                                             | with the
  prior written consent of the Agent;                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | (g) | Compliance with law:  It will duly and punctually comply fully
  with all laws binding on it failure to comply with which could have a
  Material Adverse Effect;                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | (h) | Constitution:  It will ensure that its constitution is not materially altered;                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | (i) | Subsidiaries:  It will not create or acquire any Subsidiaries other than in
  respect of any New Permits;                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | (j) | Shares:
  It will not issue shares or agree to grant a person a right to take up
  shares, whether exercisable now or in the future other than the Sponsor;                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | (k) | Variation of Authorisations:  It will not amend or vary, or seek to
  amend or vary, or consent to any amendment or variation of, any material
  Authorisation relating to the Project or its business or assets without the
  prior written consent of the Agent;                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | (l) | Commercial dealings:  It will not deal in any way with any
  person except at arms length in the ordinary course of business for valuable
  commercial consideration;                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | (m) | Financial assistance:  It will not (without the prior written
  consent of the Agent) give a Guarantee or Security Interest in connection
  with an obligation or liability of, a person, but it may give a
  Guarantee:                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| |     | (i)                                                                                                                                                                                                                                                                                                                                             | in the
  ordinary course of business;                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| |     | (ii)                                                                                                                                                                                                                                                                                                                                            | in
  compliance with its obligations and rights under and in accordance with the
  Transaction Documents; or                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| |     | (iii)                                                                                                                                                                                                                                                                                                                                           | with the
  prior written consent of the Agent;                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                              
| | (n) | Distributions:  It will not pay or distribute any money or other asset
  (including any fee, interest, dividend, return of capital, repayment or
  redemption) to or for the benefit of a shareholder except on or after Completion
  Date:                                                                                                    

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|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                          | (i)                                                                                                                                                                                                                                 | a payment
  made exclusively from funds available for Permitted Distributions; and                                                      
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (ii)                                                                                                                                                                                                                                | where the
  payment would not lead to an Event of Default or any other breach of or
  default under the Financing Documents; and        
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (iii)                                                                                                                                                                                                                               | while there
  is no Event of Default, Potential Event of Default or Event of Review
  subsisting;                                       
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     | (o)                                                                                                                                                      | Financial Indebtedness:  It will not incur or allow to exist any
  Financial Indebtedness in relation to it except:                                                                                                                
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (i)                                                                                                                                                                                                                                 | under and in
  accordance with the provisions of the Transaction Documents;                                                             
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (ii)                                                                                                                                                                                                                                | under and in
  accordance with the provisions of the JV Agreement;                                                                      
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (iii)                                                                                                                                                                                                                               | existing
  Financial Indebtedness at the date of this Agreement, the existence of which
  has been approved in writing by the Agent;    
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (iv)                                                                                                                                                                                                                                | inter-company
  indebtedness to the Sponsor or the Borrower subordinated to the satisfaction
  of the Agent;                            
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (v)                                                                                                                                                                                                                                 | any
  Financial Indebtedness that is subordinated to all Secured Indebtedness on
  terms and conditions satisfactory to the Agent;      
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (vi)                                                                                                                                                                                                                                | any
  Financial Indebtedness, the proceeds of which are to be immediately applied
  in repayment in full of all Secured Indebtedness; or
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (vii)                                                                                                                                                                                                                               | with the
  prior written consent of the Agent; and                                                                                      
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     | (p)                                                                                                                                                      | Major Transaction:  It will not enter into any major transaction (as defined in
  section 129 of the Companies Act) other than the transactions being entered
  into pursuant to the Project Documents and the Financing Documents.
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|18.3 | Undertakings Relating to the Project:  The Borrower undertakes to the Agent that
  it will, and will procure that each Project Company will, as follows:
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     | (a)                                                                                                                                                      | Compliance and enforcement of documents:  It will:                                                                                                                                                                                 
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (i)                                                                                                                                                                                                                                 | comply fully
  with its obligations under the Project Documents where non-compliance would
  have a Material Adverse Effect;            
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          | (ii)                                                                                                                                                                                                                                | following
  the occurrence of an Event of Default or a Potential Event of Default:                                                      
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     | (1)                                                                                                                                      | exercise its
  rights, authorities and discretions under each Project Document to which it
  is a party, in accordance with the reasonable directions (if any) of the
  Agent (such directions, if sought by the Borrower not to be unreasonably
  delayed);
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     |                                                                                                                                          |                                                                                                                                                                                                                                                             
|     |                                                                                                                                                          |                                                                                                                                                                                                                                     | (2)                                                                                                                                      | the Agent
  shall not give any directions referred to in sub-paragraph (ii) if their
  implementation would cause the Borrower or the relevant Project Company
  to                                                                                         

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| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | be in breach
  of the Project Documents unless such breach would have occurred in any event;
  and                                                                                                                                                                 
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                 | (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | in relation
  to enforcement, enforce each Project Document to which it is a party, and
  exercise its rights, authorities and discretions in relation to enforcement
  under those documents in accordance with the reasonable directions of the
  Agent (if any);
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     | (iii)                                                                                                                                           | keep the
  Project Documents valid and enforceable and preserve its rights under them;
  and                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     | (iv)                                                                                                                                            | in relation
  to all payments made or services provided by the Borrower and each Project
  Company to the JV (and vice-versa) under the Project Documents, ensure that
  such payments are on arms length commercial terms;                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| | (b) | Variation of documents:  Except to the extent required by law or
  under existing contractual obligations, it will not:                        
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     | (i)                                                                                                                                             | amend or
  vary, or consent to any amendment or variation of; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     | (ii)                                                                                                                                            | avoid,
  release, surrender, terminate, rescind, discharge (other than by performance)
  or accept the repudiation of; or                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     | (iii)                                                                                                                                           | expressly or
  impliedly waive, or extend or grant time or indulgence in respect of, any
  provision of or obligation under; or                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     | (iv)                                                                                                                                            | knowingly do
  or permit anything which would enable or give grounds to another party to do
  anything referred to in sub-paragraphs (i), (ii) or (iii) in relation to,                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     | any of the
  Project Documents (except with the prior written consent of the Agent, such
  consent not to be unreasonably withheld or delayed);
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| | (c) | Field Development Plan:  It will:                                                                                                              
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     | (i)                                                                                                                                             | immediately
  provide to the Agent a certified copy of the latest Field Development Plan
  after it has been updated each year;                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     | (ii)                                                                                                                                            | not vary the
  Field Development Plan in any year without the prior written consent of the
  Agent if such variation could reduce CADS for the relevant year or any future
  year by more than 10%; and                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                    
| |     | (iii)                                                                                                                                           | if the
  Operator does not provide an updated Field Development Plan, the Borrower
  shall ensure that the Field Development Plan is updated using all available
  information and provided to the Agent each year by the date which is no later
  than 30 days prior to the anniversary of the date of this Agreement.  Each updated Field Development Plan
  (whether prepared by the Borrower or the Operator) shall be in form and
  substance satisfactory to the Agent (acting on the advice of the Lenders
  Independent Engineer);

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| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (d) | Environmental
  Law:                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| |     | (i)                                                                                                                                                                                                                                                                                                                                                         | It will
  obtain, maintain in full force and effect and comply in all material respects
  with all consents and other requirements (including without limitation,
  Resource Consents, the Permit, certificates of compliance, warrants of
  fitness, building consents and orders) under all Environmental Laws or the
  Crown Minerals Act or any Authorisations which may be necessary in relation
  to the Project, its business and operations;
| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                        | It will
  maintain procedures which in the reasonable opinion of the Agent are adequate
  to monitor:                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                             | (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                  | its
  compliance with Environmental Law, the Permit and all Authorisations relating
  to the Project; and                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                             | (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                  | circumstances
  which may give rise to a claim or to a requirement of substantial expenditure
  by the Borrower or of cessation or material alteration of the activity of the
  JV relating to the Project (Perilous Circumstances);
| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                       | Where the
  Agent reasonably suspects that the Borrower or a Project Company is not
  complying with sub-paragraph (i) or with such an Environment Law, the Permit
  or Authorisation, the Agent may have an audit conducted of the Borrowers or
  the Project Companys procedures, compliance and any Perilous Circumstances.  The Borrower will do everything reasonably
  necessary to facilitate that audit;                                  
| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| |     | (iv)                                                                                                                                                                                                                                                                                                                                                        | Where the
  procedures or the audit referred to in paragraph (d)(iii) reveal any
  non-compliance with such an Environmental Law, the Permit or Authorisation,
  or reveal any Perilous Circumstances, the Borrower will promptly consult with
  the Agent following which the Borrower will promptly take such steps to
  remedy them as the Agent reasonably directs;                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| |     | (v)                                                                                                                                                                                                                                                                                                                                                         | It will
  regularly, at such intervals reasonably required by the Agent, obtain and
  promptly copy to the Agent, copies of all documents and correspondence
  evidencing compliance with Environmental Laws, the Permit and Authorisations
  relating to the Project or its other businesses (including, without
  limitation, any conditions attached to any Resource Consents or the Permit);
  and                                              
| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| |     | (vi)                                                                                                                                                                                                                                                                                                                                                        | Immediately
  on receipt of any notice, direction, order or other enforcement or review
  document from a Governmental Agency, or any other person, that relates to the
  use of land, air or water in any way making up the Project or the Mortgaged
  Property), provide a copy to the Agent;                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| | (e) | Consents:  Subject to the confidentiality provisions
  of the JV Agreement and without limiting the generality of any other
  provision in this Agreement, where the Borrower or a Project Company has an
  interest in the Resource Consents or Permits of the JV (or any permits held
  in respect of the Mortgaged Property as the case may be) it will:
| |     |                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       
| |     | (i)                                                                                                                                                                                                                                                                                                                                                         | deliver to
  the Agent a copy of that Permit or Resource Consent;                                                                                                                                                                                                                                                                                                                                                                                   

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| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (ii)   | immediately
  on receipt by the Borrower or the relevant Project Company deliver to the
  Agent a copy of any enforcement order, abatement notice or notice of breach
  of any conditions relating to that Permit or Resource Consent;                                                                                                                             
| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | (iii)  | immediately
  on receipt by the Borrower or the relevant Project Company, deliver to the
  Agent a copy of any notice issued by the Governmental Agency that granted
  that Permit or Resource Consent, which gives notice of its intention to
  review the conditions of that Permit or Resource Consent or cancels that
  Permit or Resource Consent;            
| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | (iv)   | immediately
  on receipt by the Borrower or the relevant Project Company, deliver to the
  Agent a copy of any other material notice, direction, order, or other
  enforcement or review document issued by a Governmental Agency or any other
  person that relates to that Permit or Resource Consent;                                                           
| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | (v)    | on request
  deliver to the Agent copies of all data within the Borrowers or the Project
  Companys possession or control that records monitoring by the Borrower, the
  Project Company, a Governmental Agency or any other person of the Borrowers
  or the Project Companys or the JVs compliance with the conditions of that
  Permit or Resource Consent;
| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | (vi)   | deliver to
  the Agent a copy of any application for a new Permit or Resource Consent or
  new Resource Consents relating to the Project;                                                                                                                                                                                                                          
| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | (vii)  | not act or
  omit to act so as to surrender that Permit or Resource Consent or allow that
  Permit or Resource Consent to lapse;                                                                                                                                                                                                                                   
| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | (viii) | not act or
  omit to act so as to give grounds for the Governmental Agency that granted
  that Permit or Resource Consent to review the conditions of, or cancel, that
  Permit or Resource Consent;                                                                                                                                                               
| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | (ix)   | not less
  than six months before the expiry of that Permit or Resource Consent (the
  original Consent) either:                                                                                                                                                                                                                                                 
| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  |        | (1)                                                                                                                                                                                                                                                                                                                                                                 | apply to the
  appropriate Governmental Agency for a new Consent for the same activity, and
  use all reasonable endeavours to obtain that new Consent on consent
  conditions no less favourable than those of the original Consent; or                                                                                                                                                                        
| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  |        | (2)                                                                                                                                                                                                                                                                                                                                                                 | apply to the
  appropriate Governmental Agency for whatever new Consent is, or new Consents
  are, necessary to enable the lawful continuation of those of the Borrowers
  or JVs activities that are allowed by the original Consent, and use all
  reasonable endeavours to obtain that new Consent or those new Consents on
  consent conditions no less favourable than those of the original Consent; and
| |  |        |                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | (x)    | ensure that
  all information the Borrower or the Project Company makes available to the
  Governmental Agency in support of any Consent application is, to the best of
  the Borrowers knowledge and belief, accurate in all material respects;                                                                                                                  

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                        
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (f) | Documents:
  It will not enter into any material agreement or document relating to
  the Project except as contemplated in the Transaction Documents;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                        
| | (g) | Hedging Arrangements:  It will at all times maintain Hedging
  Arrangements as required by clause 20.1 (Mandatory Hedging Arrangements);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                        
| | (h) | Assignment:
  Except to the extent required to do so by law or under any existing
  contractual obligations, it will not consent or agree to any other party to
  the Project Documents assigning any of its interests or transferring any of
  its obligations (whether by way of novation, release or otherwise and whether
  or not in accordance with the terms of the relevant Project Document) under
  the Project Documents except with the prior written consent of the Agent,
  such consent not to be unreasonably withheld or delayed;                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                        
| | (i) | Inspection:
  It will permit the Agent, the Lenders Independent Engineer or persons
  authorised by them in writing, at any time (before the occurrence of an Event
  of Default or Potential Event of Default at reasonable times, after giving
  reasonable notice and so as not to cause disruption) to inspect and require
  the provision of copies of the operational records in relation to the
  Project, and have access to the premises of the Borrower to inspect the
  records and, inspect the Project site and the Mortgaged Property.  The Borrower will do everything reasonably
  within its power to assist that inspection and provide those copies and will ensure
  that its agents, contractors, employees and officers do the same;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                        
| | (j) | Budgets:
  It will not approve any AFE under and as defined in the JV Agreement
  in relation to any Work Obligation, and shall not approve any budget or
  programme under clause 8 of the JV Agreement, which includes any item of
  expenditure in excess of US$250,000 which is not provided for in the Base
  Case;                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                        
| | (k) | Operator:
  In its capacity as Operator under the JV Agreement the Borrower will:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                        
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | open and
  operate separate bank accounts in the name of the JV as may be necessary
  pursuant to the JV Agreement and keep all funds of the JV separate and
  segregated from funds of the Borrower;                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                        
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | make
  payments of any funds paid to it as Operator for or on behalf of the JV
  Participants strictly in accordance with the JV Agreement and solely in or
  towards expenditure directly related to the Project and identified in an
  approved budget or AFE under the JV Agreement;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                        
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | promptly and
  regularly account to each JV Participant for all money received by it as
  Operator for and on behalf of the JV Participants; and                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                        
| | (l) | Construction Contract:  It will not permit the Operator to approve
  any variations, extension of time, waivers or amendments under the
  Construction Contract or the Drilling Contract without the prior written
  consent of the Agent, the effect of which will be to require expenditure by
  the JV Participants in excess of the amounts contemplated in the Base Case or
  which will extend the projected time for completion under the Construction
  Contract beyond 31 March 2007.                                                                                                                                                                                                                                                             

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|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|18.4 | Undertakings Related to Mortgaged Property:  Each Obligor undertakes to the Agent that
  except to the extent that the Agent consents in writing:
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     | (a)                                                                                                                                               | Insurance:
  It will comply fully with the provisions of the Fourth Schedule
  (Insurance);                                                                                                                                                                                                                                                     
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     | (b)                                                                                                                                               | Preservation and protection of security:                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     |                                                                                                                                                   | (i)                                                                                                                                                                                                                                                                                                                                              | It will
  promptly do everything necessary or reasonably required by the Agent to
  protect and enforce its title and the title of the Agent as mortgagee to the
  Mortgaged Property; and                                                                                             
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     |                                                                                                                                                   | (ii)                                                                                                                                                                                                                                                                                                                                             | Without
  limiting the generality of sub-paragraph (i), it will not consent to, or do
  anything to facilitate, the lodgement of a caveat forbidding the recording of
  an interest of it or the Agent in the Mortgaged Property; and                                                  
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     | (c)                                                                                                                                               | Pay Outgoings:It will promptly
  pay all outgoings payable by it in respect of the Mortgaged Property
  (including rent, Taxes and Royalties).                                                                                                                                                                                                  
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|18.5 | Undertakings of the Sponsor:  The Sponsor undertakes to the Agent that:                                                                          
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     | (a)                                                                                                                                               | Arrowhead Energy Limited:  it will procure that immediately following
  completion of the acquisition of the shares in Arrowhead Energy Limited
  pursuant to the Acquisition Agreement, Arrowhead Energy Limited will execute
  and deliver to the Agent:                                                                                      
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     |                                                                                                                                                   | (i)                                                                                                                                                                                                                                                                                                                                              | a deed of
  accession in the form set out in Annexure D;                                                                                                                                                                                                                               
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     |                                                                                                                                                   | (ii)                                                                                                                                                                                                                                                                                                                                             | a General
  Security Agreement granted by Arrowhead Energy Limited in favour of the Agent
  in a form and substance satisfactory to the Agent;                                                                                                                                         
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     |                                                                                                                                                   | (iii)                                                                                                                                                                                                                                                                                                                                            | a certificate
  of the directors of Arrowhead Energy Limited in the form set out in Annexure
  B; and                                                                                                                                                                                  
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     |                                                                                                                                                   | (iv)                                                                                                                                                                                                                                                                                                                                             | a legal
  opinion from solicitors to Arrowhead Energy Limited in form and substance
  satisfactory to the Agent confirming that the obligations of Arrowhead Energy
  Limited under this Agreement and each other Transaction Document are legal,
  valid, binding and enforceable; and
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     | (b)                                                                                                                                               | Warrants:
  it has complied with and will continue at all times to comply with the
  rules of any relevant exchange, its constituent documents and any other
  applicable laws or regulations in relation to the issue of the Warrants
  (including by obtaining shareholder approval for the issue of Warrants if
  such approval is required).
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|19.  | PROJECT ACCOUNTS                                                                                                                                 
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|19.1 | Project Accounts:  The Borrower undertakes to the Agent as follows:                                                                              
|     |                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                         | 
|     | (a)                                                                                                                                               | Establish Project Accounts:  The Borrower shall establish in the name
  of the Borrower or the Project Companies (as applicable) each of the accounts
  referred to in this clause 19 (Project Accounts) at the times required by
  this clause 19 (Project Accounts) in each case, with the Account Bank.                                      

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|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|---- | ------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (b)          | Agent to authorise withdrawals:  Except as provided herein an Authorised
  Officer of the Agent must authorise all withdrawals or transfers from the
  Debt Service Reserve Account and, following the occurrence of an Event of
  Default or Potential Event of Default, the Proceeds Account.                                                                                                                                                                                                                                                            
|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|     | (c)          | Agent not responsible:  Neither the Agent nor the Account Bank is
  responsible for the performance by the Borrower of its obligations in
  relation to the Project Accounts, nor is it under any obligation to take any
  action in relation to the Project Accounts which may be contrary to any law
  or official directive.                                                                                                                                                                                                                            
|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|     | (d)          | Duties of Agent:  The Agent has no duties in relation to the Project Accounts
  except as specified in this Agreement.
  In that regard, the Agent shall not be liable for any error of
  judgement or any mistake of fact or law except where such error or mistake
  arises due to negligence or wilful default.                                                                                                                                                                                                                                         
|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|     | (e)          | Payments to Agent:  None of the restrictions contained in this clause 19 (Project
  Accounts) on the withdrawal of funds from any Project Account shall affect
  the obligations of the Borrower or the Project Companies (as applicable) to
  make any payments of any nature required to be made to the Agent on the due
  date for payment thereof in accordance with any of the Financing Documents.                                                                                                                                                   
|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|     | (f)          | Accounts not to be overdrawn:  No Project Account may ever be overdrawn.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|     | (g)          | Agent may take control:  Without limiting its rights under the
  Borrower or Guarantor General Security Agreement, at any time while an Event
  of Default or Potential Event of Default subsists the Agent may, by notice to
  the Borrower or the Project Companies (where applicable) and the Account
  Bank, take control to the exclusion of the Borrower of the operation of all
  or any of the Project Accounts and the Borrower or the Project Companies
  (where applicable) shall take all steps required by the Agent to give effect
  to this.
|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|19.2 | JV Accounts:
|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|     | (a)          | JV Account:
  Prior to Financial Close, or immediately upon such company becoming a
  Project Company, the Borrower will procure that each Project Company will
  establish in its name an account styled Kanuka Energy Limited  JV Account
  and Arrowhead Energy Limited - JV Account respectively and maintain that
  account in accordance with the terms of this Agreement until the Maturity
  Date.                                                                                                                                            
|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|     | (b)          | Sub-Accounts:  The JV Accounts may have sub-accounts denominated in NZ Dollars
  and US Dollars respectively.  Balances
  denominated in currencies other than US Dollars will for the purposes of any
  calculation under this Agreement be deemed to be converted to US Dollars at
  the spot rate advised by the Agent on the date of such calculation.                                                                                                                                                                                                 
|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|     | (c)          | Payments into JV Accounts:  The Borrower will procure that each
  Project Company will ensure that:                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                             
|     |              | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | all revenue
  received, receivables, interest and all other moneys whatever it receives
  from or in relation to the Project or under the Project Documents;

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|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|---- | ----------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | all moneys
  received by the Project Company in respect of any insurance claim (including
  without limitation insurance proceeds and lump sum compensation payments);                                                                                                                                              
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     |                   | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | any other
  revenues of the Project Company,                                                                                                                                                                                                                                                                        
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     |                   | are paid
  into the JV Account, and will use its best endeavours to ensure that in each
  case payment is made directly into that account.  Subject to the terms of the JV Agreement, it will ensure that
  any amounts held by the Operator on behalf of the Project Company and which
  are not held by the Operator for the purposes of meeting Project Outgoings
  which have become due and payable or which are projected to become due and
  payable in the then current calendar month, shall be promptly paid to the
  Project Company and deposited directly to the credit of the JV Account.
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     | (d)               | Project Outgoings:  Each Project Company may withdraw funds from its JV Account
  from time to time to meet Project Outgoings and Taxes payable by the Project
  Company (and not included in Project Outgoings).                                                                                                                                                                                                                                                                                                                                                                                      
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     | (e)               | JV Account Sweep:  On each Calculation Date the balance remaining in each JV
  Account will be transferred to the Proceeds Account after Project Outgoings
  and any Taxes paid or payable by each Project Company (and not included in
  Project Outgoings) have been paid on the date such payment becomes due.                                                                                                                                                                                                                                                                                      
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     | (f)               | Reconciliation:  The Borrower shall within 10 Business Days after each Quarter
  Date, provide the Agent with a detailed reconciliation of the inflows to,
  outflows from, the JV Accounts in respect of the quarter ending on the
  Quarter Date.                                                                                                                                                                                                                                                                                                                                                    
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|19.3 | Proceeds Account:
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     | (a)               | Proceeds Account:  Prior to Financial Close, the Borrower will establish in its
  name an account styled Austral Pacific Energy (NZ) Limited - Proceeds
  Account and maintain that account in accordance with the provisions of this
  Agreement until the Maturity Date.                                                                                                                                                                                                                                                                                                                           
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     | (b)               | Sub-Accounts:  The Proceeds Account may have sub-accounts denominated in NZ Dollars
  and US Dollars respectively.  Balances
  denominated in currencies other than US Dollars will for the purposes of any
  calculation under this Agreement be deemed to be converted to US Dollars at
  the spot rate advised by the Agent on the date of such calculation.                                                                                                                                                                                                                                        
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     | (c)               | Payments into Proceeds Account and Minimum Balance:
  The Borrower will ensure that:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     |                   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | The amount
  of US$3,500,000 is paid to the credit of the Proceeds Account prior to
  Financial Close;                                                                                                                                                                                                              
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     |                   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | The proceeds
  of each Advance under Tranche A and Tranche B are paid directly to the credit
  of the Proceeds Account on the Drawdown Date of each such Advance;                                                                                                                                                   
|     |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                     
|     |                   | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | An amount
  US$1,000,000 is paid to the credit of the Proceeds Account immediately upon
  receipt by the Borrower (or any other related company of the Borrower) of the
  proceeds of sale of the oil rig as contemplated by the condition precedent in
  paragraph (p)(ii) of the First Schedule and the Base Case;

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |     | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                               | All other
  revenue received, receivables, interest and all other moneys whatever it
  receives from or in relation to the Project or under the Project Documents
  (other than in its capacity as Operator) shall be paid to the credit of the
  Proceeds Account  upon receipt;
  and
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (v)                                                                                                                                                                                                                                                                                                                                                                                                                                | The minimum
  balance to be maintained in the Proceeds Account shall at all times be
  US$250,000.                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| | (d) | Transfer to/from Debt Service Reserve Account:  On each Calculation Date, the Borrower
  will (if required) transfer an amount either to the Debt Service Reserve
  Account from the Proceeds Account or to the Proceeds Account from the Debt
  Service Reserve Account in order to ensure that the Debt Service Reserve
  Account is funded up to, but no more than, the required minimum balance
  specified in clause 19.4(c).
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| | (e) | Payments:
  Subject to clause 19.3(d), prior to 1 April 2007 the Borrower may make
  withdrawals or transfers from the Proceeds Account for:                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                | any of the
  payments referred to in clause 19.3(f)(i)(v) below;                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                               | to pay
  amounts set out in the uses of funds table in the Assumptions worksheet of
  the Base Case including, without limitation, in respect of capital
  expenditure due and payable in respect of any Other Joint Ventures up to a
  maximum aggregate amount of US$1,000,000; and
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                              | the
  Sponsors corporate overheads up to the amount specified in the Base Case in
  respect of that period,                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | provided
  that no withdrawal may be made for any such purposes which would result in
  any funds identified in the sources of funds in the Base Case being applied
  for a purpose other than the permitted uses of funds in the Base Case.                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| | (f) | Cash Flow Sweep:  Subject to clauses 19.3(d) and clause19.3(g), at all times
  following 1 April 2007 the Borrower may only make withdrawals or transfers
  from the Proceeds Accounts for application against the following in the order
  set out below:                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                | amounts
  payable under the Hedging Arrangements;                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                               | Scheduled
  Repayments of Advances outstanding in respect of Tranche A, repayment of
  Tranche A under clause 16.4(b) and repayment of Tranche B under clause 14.8;                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                              | pari passu,
  interest payment obligations in respect of Tranches A and B;                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                               | any other
  Financing Costs not paid pursuant to (i)  (iii) above;                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (v)                                                                                                                                                                                                                                                                                                                                                                                                                                | amounts
  required to be paid into the Debt Service Reserve Account pursuant to clause
  19.3(d) (Transfer to/from Debt Service Reserve Account);                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (vi)                                                                                                                                                                                                                                                                                                                                                                                                                               | Mandatory
  Prepayments of the Principal Outstanding pursuant to clause 14.5 (Mandatory
  Prepayment);                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                         | 
| |     | (vii)                                                                                                                                                                                                                                                                                                                                                                                                                              | Scheduled
  Repayments of Advances outstanding in respect of Tranche B; and                                                                                                                                                                                                            

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | (viii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Prepayments
  pursuant to clause 16.4 and 16.5 and subject to clause 19.5, Optional
  Prepayments, payments of Subordinated Debt and Permitted Distributions.                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                             
| |     | Amounts
  payable pursuant to sub-paragraphs (i) - (iv) and, subject as provided below,
  (vi) above may be made on the date such payments become due.  After the Completion Date, the transfer of
  Mandatory Prepayments (pursuant to sub-paragraph (vi) and clause 14.5
  (Mandatory Prepayment)) and payments pursuant to sub-paragraph (viii) may
  only be made on the date which is 10 Business Days after a Calculation Date
  and following receipt by the Agent of the Ratio Certificate relating to that
  Calculation Date.  Payments of the
  nature referred to in sub-paragraph (v) shall be made on a Calculation
  Date.  No payment may be made on any
  date unless all amounts ranking in priority to that payment and which are
  then due and payable or which are projected to become due and payable on or
  prior to the next Calculation Date have been paid in full or two directors of
  the Borrower certify that the remaining balance in the Proceeds Account after
  making such payments will be sufficient to meet any such projected payments.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                             
| | (g) | Project Outgoings and Excess Funds:
  Following the Completion Date, the Borrower may withdraw from the Proceeds
  Account on a day other than a Calculation Date:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                             
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | any balance
  standing to the credit of the Proceeds Account as at the Completion Date
  representing the excess of amounts received by the Borrower and corresponding
  to the sources of funds set out in the Assumptions worksheet in the Base
  Case over the uses of funds set out in the Assumptions worksheet in the
  Base Case and apply those amounts towards capital expenditure in relation to
  Other Joint Ventures which is then due and payable;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                             
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | any balance
  then standing to the credit of the Proceeds Account for payment of Project Outgoings
  and working capital requirements to the extent attributable to the Project
  (but not any Other Joint Venture or any other operations of the Borrower or a
  Project Company) provided that:                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | no more than
  5 withdrawals for that purpose may be made per calendar month;                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | the
  aggregate amount of withdrawals for that purpose in any calendar month does
  not exceed the amount forecast in the Base Case; and                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | the Agent
  has received, in form and substance satisfactory to it a detailed
  reconciliation of the outflows from the relevant accounts in respect of
  Project Outgoings for the previous calendar month.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                             
| | (h) | Reconciliation:  The Borrower shall within 10 Business Days of the end of each
  Calculation Date, provide the Agent with a detailed reconciliation of the
  inflows to and outflows from, the Proceeds Account in respect of the quarter
  ending on the Calculation Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                             
| | (i) | Subordinated Debt Payments:  Payments of Subordinated Debt are not
  permitted to be made from the Proceeds Account at any time without the prior
  written consent of the Agent other than from Free Cash Flow not exceeding the
  amount available for Permitted Distributions and in accordance with the terms
  of the relevant subordination arrangements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (j)                                                                                                                                                                                                                                                                                                                             | Insurance:  Insurance proceeds deposited to a JV
  Account or the Proceeds Account are to be dealt with in accordance with the
  Fourth Schedule.                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|19.4 | Debt Service Reserve Account                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     | (a)                                                                                                                                                                                                                                                                                                                             | Debt Service Reserve Account:  Prior to Financial Close, the Borrower
  will establish in its name an account styled Austral Pacific Energy (NZ)
  Limited - Debt Service Reserve Account and will maintain that account in
  accordance with the terms of this Agreement until the Maturity Date.                     
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     | (b)                                                                                                                                                                                                                                                                                                                             | Tranche B Advance:  The Debt Service Reserve Account shall be initially funded from
  the proceeds of the first Advance made under Tranche B in accordance with
  clause 8.2.                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     | (c)                                                                                                                                                                                                                                                                                                                             | Minimum balance:  The minimum balance to be maintained in the Debt Service
  Reserve Account shall, at all times following the first Advance made under
  Tranche B up to and including the Tranche A Expiry Date, be
  US$3,000,000.  Thereafter the balance
  in the Debt Service Reserve shall reduce to US$1,500,000.
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     | (d)                                                                                                                                                                                                                                                                                                                             | Application of Debt Service Reserve Account:                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                 | (i)                                                                                                                                                                                                                                                                                                                       | The balance
  in the Debt Service Reserve Account may at any time be applied by the Agent
  to meet Debt Service then due and payable to the extent that there are
  insufficient moneys in the Proceeds Account; and              
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                 | (ii)                                                                                                                                                                                                                                                                                                                      | On reduction
  in the balance of the Debt Service Reserve Account on the Tranche A Expiry
  Date the US$1,500,000 reduction shall be applied as a prepayment to the
  Tranche B Principal Outstanding in inverse order of maturity.
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     | (e)                                                                                                                                                                                                                                                                                                                             | Interest:
  Interest on amounts standing to the credit of the Debt Service Reserve
  Account shall accrue at the Account Banks prevailing interest rate for
  deposits.  Any interest accrued
  pursuant to this clause 19.4(e) (Interest) will be credited to the Proceeds
  Account on a quarterly basis.             
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|19.5 | Permitted Distributions:  Withdrawals from the Proceeds Account for
  the purpose of distributions to the shareholders of the Borrower, transfers
  to another account of the Borrower (other than the Debt Service Reserve Account),
  payments of the Subordinated Debt and Optional Prepayments will be permitted
  only if:
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     | (a)                                                                                                                                                                                                                                                                                                                             | the
  Completion Date has occurred;                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     | (b)                                                                                                                                                                                                                                                                                                                             | all payments
  set out in paragraphs (i)  (vii) in clause 19.3(f) due on that date have
  been satisfied by the Borrower;                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     | (c)                                                                                                                                                                                                                                                                                                                             | the amount
  of the payment when aggregated with all other such payments to be made on the
  same date does not exceed the amounts permitted in the Financial Undertakings
  Matrix;                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                    
|     | (d)                                                                                                                                                                                                                                                                                                                             | no Event of
  Default, Potential Event of Default or Event of Review has occurred and is
  subsisting or would be caused by the distribution or payment; and                                                                                                                                                             

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | a director
  or the chief financial officer or chief executive officer of the Borrower
  certifies in writing to the Agent that the items in paragraphs (a) to (d)
  above have been satisfied.                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|19.6 | Replacement of Account Bank:  The Borrower may not replace the Account
  Bank without the prior written consent of the Agent.  The Agent may by notice to the Borrower,
  require the Borrower to replace the Account Bank with another registered bank
  in New Zealand acceptable to the Agent.
  If the Agent gives notice requiring a change to the Account Bank the
  Borrower must within the time required by the Agent (which shall not be less
  than 30 days) use its best endeavours to arrange for the new Account Bank to
  execute an Account Bank Agreement in form and substance satisfactory to the
  Agent and transfer all Project Accounts to the new Account Bank.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|20.  | HEDGING ARRANGEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|20.1 | Mandatory Hedging Arrangements:  The Borrower undertakes that it will,
  prior to Financial Close execute the Hedging Documents and enter into hedging
  transactions for a term of 4 years following Financial Close which mitigate
  its exposure to US Dollar oil prices by way of providing downside
  protection for future production of the P90 oil reserves (Minimum Hedging
  Programme)as projected in the
  cash flow model in the Base Case.                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|20.2 | Hedging Generally:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Optional Hedging:  The Lenders may from time to time at the request of the
  Borrower provide interest rate and foreign exchange hedging transactions.                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Receipts and Payments:  Receipts pursuant to US Dollar oil price
  hedging under clause 20.1 (Mandatory Hedging Arrangements) will be treated as
  revenue and payments pursuant to any other Hedging Arrangements will be
  treated as Financing Costs.           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Pricing:
  Pricing of hedging will be provided by the Lenders in accordance with
  market rates (to the extent that this is possible).  The Lenders will provide market information to the Borrower to
  allow it to assess the reasonableness of pricing provided.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Payments:
  Payments due under the Hedging Arrangements will be secured so as to
  rank pari passu with amounts payable under any other Financing Document and
  hedging liabilities will be treated as part of the Secured Indebtedness.                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|     | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Hedging Documents:  All hedging transactions must be transacted under the Hedging
  Documents.                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|21.  | LENDERS CONSULTANTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                    
|21.1 | Reports: The Lenders Independent
  Engineer shall be instructed by the Agent, at the cost of the Borrower (such
  costs to be in accordance with budgets submitted to, and approved by, the
  Borrower (acting reasonably)), to provide independent technical advice to the
  Agent as contemplated in this Agreement.
  The Lenders Independent Engineer shall review and advise the Agent on
  each update of the Field Development Plan and shall prepare and deliver to
  the Agent annually prior to the review of the Base Case pursuant to the Third
  Schedule and at such other                                                                                             

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                     
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------
|     | times as the
  Agent may reasonably require a report on technical matters relating to the
  Project including without limitation in relation to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                     
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | proved and
  probable Reserves;                                                                                     
|    
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Field Development Plan;                                                                                             
|    
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | production rates;                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                     
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Operating
  Costs and Capital Costs forecasts;                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                     
|     | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | the
  reasonableness of assumptions and inputs used in the preparation of the Base
  Case;                          
|    
|     | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | the environment plan;                                                                                               
|    
|     | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | occupational, health and safety plan; and                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                     
|     | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | such other
  matters of a technical or operational nature as the Lenders Independent
  Engineer considers relevant.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                     
|     | The Lenders
  Independent Engineer will consult with the Borrower and the Borrowers
  technical advisors on the preparation of the relevant reports.  The reports of the Lenders Independent
  Engineer may include recommendations thereby as to modifications or
  alterations to the operating procedures or practices and the Borrower agrees
  in such circumstances it will enter into discussions with the Agent in good
  faith with a view to agreeing methods for implementing such
  recommendations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                     
|21.2 | Insurance: The Agent may each year and, if
  it reasonably considers that there has been any material change in the
  insurance markets in which the insurance maintained by the Borrower or the
  Project Companies is in place, the risks affecting the Project, the insurers
  providing any of the insurances or the terms of the policies of the
  insurances, conduct or arrange to be conducted by the Lenders Insurance
  Consultant a review of the insurances in respect of the Project or any part
  thereof and the Borrower shall reimburse the Agent on demand for all
  reasonable costs and expenses incurred in connection with any such review.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                     
|21.3 | Access:Subject to any restrictions in
  the JV Agreement, the Borrower shall, and the Borrower will procure that each
  Project Company shall at all times during business hours upon receipt of
  reasonable notice (other than where an Event of Default subsists where no notice
  shall be required) allow the Lenders Independent Engineer and the Lenders
  Insurance Consultant and any other agents or persons authorised by the Agent
  free and unlimited access to the Project site, and all books, records,
  documents and information of the Borrower as they may require to conduct
  their investigations for the purpose of preparing reports referred to in this
  Agreement.  The Borrower and each
  Project Company will at all times, and to the extent necessary, co-operate
  and give such assistance as may be reasonably requested by the Lenders
  Insurance Consultant, the Lenders Independent Engineer and any other agent
  or employee or person authorised by or on behalf of the Agent and in each
  case their officers, employees and agents for these purposes.

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|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|---- | ------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|22.  | EVENTS OF DEFAULT                                                 
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|22.1 | Events of Default: Each of the following is
  an Event of Default:
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     | (a)                                                                | Obligations under Financing Documents: Any
  Obligor fails:                                                                                                                                                                                                             
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                    | (i)                                                                                                                                                                                                                                                                      | to pay an
  amount payable by it under a Financing Document when due and, where that
  failure is capable of remedy, does not remedy the failure within three
  Business Days;                                                                                                                                                                     
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                    | (ii)                                                                                                                                                                                                                                                                     | to comply
  with any of its other obligations under a Financing Document and, if in the
  reasonable opinion of the Agent that failure can be remedied within 10
  Business Days (commencing on the day on which the Agent gives the Borrower a
  notice requiring the failure to be remedied) does not remedy the failure
  within that period; or
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                    | (iii)                                                                                                                                                                                                                                                                    | to satisfy
  within the time stipulated anything which the Agent made a condition of its
  waiving compliance with a condition precedent or an undertaking in a
  Financing Document;                                                                                                                                                              
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     | (b)                                                                | Misrepresentation: A representation,
  warranty or statement by or on behalf of an Obligor in a Financing Document,
  or in a document provided under a Financing Document, is not true or is
  misleading, in each case, in any material respect when made or repeated;
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     | (c)                                                                | Default under Project Documents:                                                                                                                                                                                                                                        
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                    | (i)                                                                                                                                                                                                                                                                      | an event of
  default (however defined) in a Project Document occurs and, if capable of
  being cured is not remedied or waived within the specified cure period in the
  relevant Project Document;                                                                                                                                               
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                    | (ii)                                                                                                                                                                                                                                                                     | an Obligor
  fails to satisfy within the time stipulated anything which is made a
  condition of waiving a default described in sub-paragraph (i);                                                                                                                                                                                                 
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     | (d)                                                                | Cross Default: Any Financial Indebtedness of
  any Obligor in excess of US$250,000 (or its equivalent in other currencies):                                                                                                                                             
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                    | (i)                                                                                                                                                                                                                                                                      | is not paid
  within 10 Business Days of becoming due and payable (or within any applicable
  grace period); or                                                                                                                                                                                                                                    
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                    | (ii)                                                                                                                                                                                                                                                                     | is declared
  due and payable before its stated maturity or expiry by reason of any default
  and such declaration is not withdrawn within 10 Business Days;                                                                                                                                                                                       
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     | (e)                                                                | Other acceleration: Any:                                                                                                                                                                                                                                                
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                    | (i)                                                                                                                                                                                                                                                                      | stock or
  share issued by any Obligor with a value in excess of US$250,000 is validly
  required to be redeemed or repurchased in advance of its stated maturity
  (other than at the relevant Obligors option); or                                                                                                                              
|     |                                                                    |                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                    | (ii)                                                                                                                                                                                                                                                                     | demand under
  a Guarantee given by any Obligor in excess of US$250,000 is not paid within
  10 Business Days of a demand thereunder;                                                                                                                                                                                                              

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| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (f) | Administration, winding up, arrangements, insolvency etc:
  Any of the following occurs:                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (i)                                                                                                                                                                                                                                                                                | any order is
  made, resolution is passed, any legal proceeding is issued (other than a
  vexatious or frivolous proceeding) or any corporate action is taken, notice
  is given or other step is taken for the dissolution or reorganisation of an
  Obligor except for the purpose of and followed by a reconstruction,
  reorganisation, amalgamation, merger or consolidation on terms previously
  approved by the Agent;                             
| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (ii)                                                                                                                                                                                                                                                                               | any Obligor
  ceases, suspends or threatens to cease or suspend the conduct of all or any
  material part of its business or disposes of or threatens to dispose of a
  material part of its business or assets;                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (iii)                                                                                                                                                                                                                                                                              | any Obligor
  is unable to pay its debts as they become due in the normal course of
  business or stops or suspends or threatens to stop or suspend payment of all
  or a class of its debts other than as contemplated by the terms of such debt
  or the Transaction Documents;                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (iv)                                                                                                                                                                                                                                                                               | an
  encumbrancer takes possession of the whole or any material part of the assets
  of any Obligor or a receiver, manager, inspector, trustee or other similar
  person is appointed or any application or recommendation is made for such
  appointment in respect of any Obligor or the whole or any material part of
  its assets;                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (v)                                                                                                                                                                                                                                                                                | any
  distress, attachment, execution, judgement or other legal process for a sum exceeding
  US$250,000 (or its equivalent in other currencies) is levied, issued,
  enforced or obtained on or against any of the assets of an Obligor;                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (vi)                                                                                                                                                                                                                                                                               | any Obligor
  commences negotiations or takes any proceedings with a view to the general
  deferral, readjustment or rescheduling of its indebtedness or a material part
  of its indebtedness;                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (vii)                                                                                                                                                                                                                                                                              | any Obligor
  makes or proposes to make any assignment, arrangement or composition for the
  benefit of its creditors generally or a moratorium is agreed or declared in
  respect of or affecting all or any material part of its indebtedness;                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (viii)                                                                                                                                                                                                                                                                             | any Obligor
  is declared at risk pursuant to the Corporations (Investigation and
  Management) Act 1989 or any associated person (as that term is defined in the
  Corporations (Investigation and Management) Act 1989) becomes subject to a
  recommendation made by the Securities Commission to the Minister of Justice
  or, as the case may be, the Minister of Finance supporting the appointment of
  a statutory manager pursuant to that Act; or
| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (ix)                                                                                                                                                                                                                                                                               | an
  administrator, receiver or statutory manager is appointed over all or any of
  the assets of an Obligor, or any step is taken (other than as referred to in
  subparagraph (viii)) with a view to the appointment of such a statutory
  manager in either case under the Corporations (Investigation and Management)
  Act 1989;                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (g) | Investigation: An investigation commences
  into all or part of the affairs of an Obligor by any Governmental Agency
  unless the Borrower demonstrates to the satisfaction of the Agent that such
  investigation will not have, or be likely to have, a Material Adverse Effect;

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (h) | Analogous process: Anything analogous to
  anything referred to in paragraphs (f) to (g) inclusive, or having substantially
  similar effect, occurs with respect to an Obligor, under any overseas law or
  any law which commences or is amended after the date of this Agreement;                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (i) | Vitiation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | all or any
  material part of a Transaction Document is terminated or is or becomes void,
  illegal, invalid, unenforceable or of limited force and effect (in each case
  prior to its stated maturity);                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | a party
  (other than the Agent or the Lenders) becomes entitled to terminate, rescind
  or avoid all or material part of a Transaction Document; or                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | a party
  (other than the Agent or the Lenders) alleges or claims in writing that an
  event described in subparagraph (i) has occurred or that it is entitled as
  described in subparagraph (ii);                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (j) | Amendment of constitution: The constitution,
  or other constituent documents of any Obligor is materially amended without
  the prior consent of the Agent;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (k) | Change of Control:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | a Project
  Company ceases to be wholly owned and controlled by the Borrower; or                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | the Borrower
  ceases to be wholly owned and controlled by the Sponsor; or                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | the
  aggregate Participating Interest of the Project Companies following the
  completion of the acquisition of Arrowhead Energy Limited detailed in the
  Acquisition Agreement is at any time less than 69.5% or such other
  Participating Interest percentage as the Project Companies may be entitled to
  following the resolution of the claim by TAG Oil (NZ) Limited as described in
  clause 14.5(c);
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (l) | Revocation of Authorisation: Any material
  Authorisation which it is required to obtain or which it is required to
  ensure is obtained or which is material to the performance by an Obligor of a
  Transaction Document, or to the validity and enforceability of a Transaction
  Document or to the security of the Agent, is repealed, revoked or terminated
  or expires, or is modified or amended or conditions are attached to it in a
  manner materially prejudicial to the interests of the Finance Parties, and is
  not replaced within 30 days or such longer period as the Agent may agree by
  another Authorisation acceptable to the Agent;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (m) | Loan Life Ratio: On any Calculation Date the
  Loan Life Ratio is less than 1.15:1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (n) | Project Life Ratio: On any Calculation Date
  the Project Life Ratio is less than 1.25:1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (o) | Combined Project Life Ratio: On any
  Calculation Date the Combined Project Life Ratio is less than 1.15:1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (p) | Historic Combined Cover Ratio: On any
  Calculation Date other than the Calculation Date falling on the Completion
  Date the Historic Combined Cover Ratio is less than 1.10:1;                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------
|     | (q)                                                                                                                                                                                      | Forward Combined Cover Ratio: On any
  Calculation Date the Forward Combined Cover Ratio is less than 1.10:1;                                                                                                                                                                                                                              
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (r)                                                                                                                                                                                      | Reserve Tail: On any Calculation Date the
  Reserve Tail is less than 15%;                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (s)                                                                                                                                                                                      | Compulsory acquisition:                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     |                                                                                                                                                                                          | (i)                                                                                                                                                                                                                                                                                                                                         | all or any
  material part of the Mortgaged Property is compulsorily acquired by, or by
  order of a Governmental Agency or under law;
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     |                                                                                                                                                                                          | (ii)                                                                                                                                                                                                                                                                                                                                        | a
  Governmental Agency orders the sale, vesting or divesting of all or any
  material part of the Mortgaged Property; or             
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     |                                                                                                                                                                                          | (iii)                                                                                                                                                                                                                                                                                                                                       | a
  Governmental Agency takes a step for the purpose of any of the above or
  proposes or threatens to do any of the above;           
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (t)                                                                                                                                                                                      | Governmental interference: A law or anything
  done by a Governmental Agency wholly or partially to a material extent
  renders illegal, prevents or restricts the performance or effectiveness of a
  Transaction Document or the operation of the Project;                                                                               
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (u)                                                                                                                                                                                      | Abandonment: The Project (or any material
  part thereof) is abandoned by the JV or is placed on a care and maintenance
  basis;                                                                                                                                                                                                           
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (v)                                                                                                                                                                                      | Environmental Event: Any person takes
  action, or there is any claim or there is a requirement of expenditure or of
  cessation or alteration of activity, under any Environmental Law unless the
  Borrower demonstrates to the satisfaction of the Agent that such event will
  not have or be likely to have a Material Adverse Effect;
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (w)                                                                                                                                                                                      | Breach of Undertaking: Any undertaking given
  to the Agent (or its legal counsel) by or on behalf of the Borrower in
  connection with a Transaction Document is, in the sole opinion of the Agent,
  breached or not performed or carried out in full;                                                                                   
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (x)                                                                                                                                                                                      | Material Adverse Effect: An event occurs or
  circumstances arise or exist which, in the reasonable opinion of the Agent,
  is likely to have a Material Adverse Effect;                                                                                                                                                                   
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (y)                                                                                                                                                                                      | Mortgaged Property: All or any material part
  of the Mortgaged Property is destroyed, lost or damaged beyond repair or, in
  the opinion of the Agent is materially defective and is not fully covered by
  the Borrowers insurance; and                                                                                                 
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (z)                                                                                                                                                                                      | Completion: The Completion Date has not
  occurred by 30 June 2007.                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|22.2 | Consequences: In addition to any other rights
  provided by law or any Financing Document, at any time when an Event of
  Default subsists the Agent may do all or any of the following:
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (a)                                                                                                                                                                                      | by notice to
  the Borrower declare all sums actually or contingently owing under this
  Agreement immediately due and payable, and the Borrower shall immediately pay
  the Principal Outstanding together with accrued interest and fees and all
  such other sums; and/or                                                               
|     |                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                       
|     | (b)                                                                                                                                                                                      | by notice to
  the Borrower cancel the Facility; and/or                                                                                                                                                                                                                                                                                    

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|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------
|     | (c)                                                                                                                                                                                                                                                                                                        | at the cost
  of the Borrower, appoint a firm of independent consultants or other experts
  to review and report to the Agent on the affairs, financial condition and
  business of the Borrower. The Borrower will do everything in its power to
  ensure such review and report can be carried out promptly, completely and
  accurately. Without limitation, it will co-operate fully with the review and
  ensure that the consultants and experts are given access to all premises and
  records of the Borrower and are given all information concerning the Borrower
  which they require from time to time. It will ensure that all officers and
  employees of the Borrower do the same.
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|22.3 | Event of Review:                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|     | (a)                                                                                                                                                                                                                                                                                                        | It shall be
  an event of review if any single person or group of persons acting in
  concert, not entitled to hold 20% or more of the voting capital of the
  Sponsor as at the date of this Agreement, acquires or becomes entitled to 20%
  or more of the voting capital of the Sponsor.                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|     | (b)                                                                                                                                                                                                                                                                                                        | If the event
  described in (a) above occurs, the Agent may (in its sole discretion) conduct
  a review of the Facility. If the Agent, following the review, declares that
  event described at (a) above will negatively affect the Obligors ability to
  meet their respective obligations under the Finance Documents (the
  declaration), the Agent may require that the Facility be:                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                            | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | immediately
  restructured in a manner acceptable to the Agent; or                                                      
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                            | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | refinanced
  in whole or in part within 90 days from the declaration.                                                   
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|23.  | INTEREST ON OVERDUE AMOUNTS                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|23.1 | Accrual: Interest accrues on each unpaid
  amount which is due and payable by the Borrower to the Finance Parties under
  or in respect of any Financing Document (including, without limitation,
  interest payable under this clause):                                                                  
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|     | (a)                                                                                                                                                                                                                                                                                                        | on a daily
  basis up to the date of actual payment from (and including) the due date or,
  in the case of an amount payable by way of reimbursement or indemnity, the
  date of disbursement or loss, if earlier;                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|     | (b)                                                                                                                                                                                                                                                                                                        | both before
  and after judgment (as a separate and independent obligation); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|     | (c)                                                                                                                                                                                                                                                                                                        | at the rate
  determined by the Agent to be the sum of 2% per annum plus:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                            | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | the rate (if
  any) applicable to the amount under the relevant Financing Document
  immediately before the due date; or
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                            | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | if no such
  rate is applicable, LIBOR (for a 30 day term if no Interest Period is
  applicable) and the Margin.        
|     |                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                         
|23.2 | Payment: The Borrower shall pay interest
  accrued under this clause on demand by the Agent and on the last Business Day
  of each Interest Period. If no Interest Period is applicable, interest will
  be assumed to be paid on the basis of a 30 day period as specified in clause
  23.1(c) (Accrual).

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                    | 
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|24.  | PAYMENTS PRO RATA AND SUBORDINATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                    | 
|24.1 | Proportionate sharing: Subject to clause
  24.2 and clause 24.5 and except to the extent that this Agreement expressly
  provides for the direct payment to that Lender of such amount whenever any
  Lender receives or recovers (whether by way of set-off, bankers lien or otherwise)
  all or part of any amount due from the Borrower or any other Obligor under
  this Agreement otherwise than by way of a distribution by the Agent, then:                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                    | 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | that Lender
  shall promptly pay the amount received or recovered to the Agent; and                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                    | 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | that amount
  shall be deemed to have been a payment to the Agent for the account of all
  the Lenders and not a payment to that Lender for its own account, and to that
  extent the liability of the Borrower to that Lender shall not be reduced by
  that amount, other than to the extent of any distribution received by that
  Lender under this Agreement.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                    | 
|24.2 | Repayment: If all or part of the amount
  referred to in clause 24.1 received or recovered by the relevant Lender is
  subsequently rescinded or shall otherwise by restored to the Borrower or any
  Obligor, the Lenders shall repay to the Agent for the account of the relevant
  Lender the amount necessary to ensure that all the Lenders share rateably (in
  accordance with their Commitment) in the amount received or recovered and
  retained by the relevant Lender and clause 24.1(b) shall apply only to the
  retained amount.                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                    | 
|24.3 | Co-operation: Each Lender shall co-operate
  with the Agent in:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                    | 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | giving
  effect to the spirit and intentions of the parties as evidenced by this
  Agreement and the other Transaction Documents; and                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                    | 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | the
  protection of their mutual interests insofar as that is not inconsistent with
  its own interests.                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                    | 
|24.4 | Refusal to join in action: If any Lender
  fails or refuses to join in any action with the other Lenders against the
  Borrower or any other Obligor, or does not pay its share of the costs of any
  such action, in each case having been given a reasonable opportunity and
  being legally entitled to do so, its failure shall be taken in to account
  when determining its rateable sharing and that Lender shall not be entitled
  to share in any amount recovered as a result of any such action.                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                    | 
|24.5 | Postponement: Notwithstanding anything else
  in this Agreement, at any time after the occurrence of an Event of Default,
  as between the Lenders no amount of Principal Outstanding under Tranche B
  shall be paid or payable to the Tranche B Lenders, unless and until all
  amounts of Principal Outstanding under Tranche A and Tranche C have been
  repaid in full. If any Tranche B Lender receives any amount of the Tranche B
  Principal Outstanding in breach of this clause 24.5 it shall hold such amount
  in trust and shall pay such amount to the Agent on account of the Tranche A
  Lenders and the Tranche C Lenders.

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|25.  | RELATIONSHIP OF LENDERS TO AGENT                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|25.1 | Authority:                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                            | Each Lender
  irrevocably appoints and authorises the Agent to act as its agent under the
  Transaction Documents with the powers expressly given to the Agent under the
  Transaction Documents together with any other powers which are reasonably
  incidental to those powers.                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                            | Any action
  taken by the Agent (acting, where required, in accordance with instructions
  from the appropriate Lenders) in accordance with this clause 25 shall bind
  all the Lenders.                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                            | The Agent
  shall have no duties or responsibilities except those expressly agreed to in
  the Transaction Documents.                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|25.2 | Instructions and extent of discretion:                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                            | In the
  exercise of any of its rights, powers and discretions, the Agent shall act in
  accordance with the instructions (if any) of all of the Lenders. The Agent
  shall not be obliged to seek instructions except where expressly required by
  the relevant Transaction Document.                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                            | In the
  absence of any such instructions, the Agent may act as it thinks fit in the
  best interests of the Lenders as a whole or may, notwithstanding anything in
  this clause 25, refrain from acting until receipt of instructions.                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                            | Except where
  otherwise expressly provided, the Agent shall not be obliged to consult with
  the Lenders before giving any consent, approval or agreement or making any
  determination unless it is practicable to do so or except where the
  determination shall not, in the opinion of the Agent, prejudice the interests
  of the Lenders as a whole.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                            | The Agent
  may refrain from doing anything which would or might in its opinion be
  contrary to any law or official directive, or render it liable to any person.                                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|     | (e)                                                                                                                                                                                                                                                                                                                                                                                                            | Notwithstanding
  any other provision in this clause 25, the Agent shall not be obliged to take
  any action until it is first secured or indemnified to its satisfaction,
  whether pursuant to clause 25.12 or otherwise.                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|25.3 | No obligation to investigate:                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                            | The Obligors
  shall not be concerned to enquire as to whether any instructions have been
  given to the Agent or as to the terms of any such instructions.                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                            | As between
  the Obligors on the one hand and the Agent and the Lenders on the other hand,
  all actions taken by the Agent under a Transaction Document shall be deemed
  to be authorised.                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                             | 
|25.4 | Agent as security agent: Each Lender
  irrevocably appoints and authorises the Agent to act under the Security
  Documents with the powers expressly given to the Agent under, and on the
  terms and conditions, and subject to the indemnities, limitations and other
  provisions set out in this Agreement and the Security Documents, together
  with any other powers which are reasonably incidental to

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|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|      | these powers
  and each Lender acknowledges and agrees to be bound by the provisions of the
  Security Documents which provide the basis on which the Agent is permitted to
  act.                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|25.5  | Agent not a trustee: The Agent shall not be
  deemed to be a trustee for the benefit of any Lender (except to the minimum
  extent, if any, required by law) or the Borrower or to have any fiduciary
  duty other than as expressly provided in this Agreement. The Agent shall not
  in any respect be the agent of the Borrower by virtue of this Agreement.
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|25.6  | Exoneration: In the absence of any wilful
  misconduct, gross negligence or fraud, neither the Agent, nor any of its
  respective directors, officers, employees, agents, attorneys, subsidiaries or
  successors, shall be responsible to any Lender or the Borrower for:                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|      | (a)                                                                                                                                                                                                                                                                                                                                                             | any
  statement, representation or warranty provided to them in any Transaction
  Document, or in any document or agreement referred to or provided for in or
  received under the Transaction Document; or                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|      | (b)                                                                                                                                                                                                                                                                                                                                                             | the value,
  validity, effectiveness, genuineness, enforceability or sufficiency of any
  Transaction Document or any other such document or agreement; or                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|      | (c)                                                                                                                                                                                                                                                                                                                                                             | any failure
  by any Obligor or any Lender to perform is obligations; or                                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|      | (d)                                                                                                                                                                                                                                                                                                                                                             | any action
  taken or omitted to be taken by it or them under any Transaction Document; or                                                                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|      | (e)                                                                                                                                                                                                                                                                                                                                                             | any action
  taken or omitted to be taken by it or them under any Transaction Document
  acting on instructions from the Lenders.                                                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|25.7  | Delegation: The Agent may delegate to any
  person any of the rights, powers and discretions vested in the Agent by this
  Agreement which cannot conveniently be exercised by it or though its
  employees, and may appoint attorneys, upon such terms and conditions as the
  Agent thinks fit.                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|25.8  | Reliance on documents and experts: The Agent
  may rely on:                                                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|      | (a)                                                                                                                                                                                                                                                                                                                                                             | any
  communication or document reasonably believed by it to be genuine and
  correct; and                                                                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|      | (b)                                                                                                                                                                                                                                                                                                                                                             | advice and
  statements of lawyers, accountants and other experts selected by the Agent.                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|25.9  | Notice of assignment: The Agent may treat
  each Lender as the holder of the benefit of that Lenders rights under the
  Transaction Documents unless and until the Agent has received a Substitution
  Certificate or notice of assignment of that Lenders rights in a form
  satisfactory to the Agent.                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|25.10 | Knowledge of default:                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|      | (a)                                                                                                                                                                                                                                                                                                                                                             | The Agent
  shall not be required to keep itself informed as to the observance or
  performance by any Obligor of any of its obligations under any Transaction
  Document or any other document or agreement, or to inspect the assets or
  records of any Obligor, or to investigate whether or not any Event of Default
  or Potential Event of Default has occurred or might occur.
|      |                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                        | 
|      | (b)                                                                                                                                                                                                                                                                                                                                                             | The Agent
  may assume that the Borrower and each other party to the Transaction
  Documents is observing and performing its obligations, and shall be deemed
  not to have                                                                                                                                                                                                           

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|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|      |                                                                                                                                                                                                                                                              | knowledge of
  the occurrence of any Event of Default or Potential Event of Default or
  similar event (whatever called) under any Transaction Document until it has
  received actual notice from the Borrower or a Lender stating expressly that
  such an event has occurred and describing it.                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|25.11 | Agent as Lender and banker:                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      | (a)                                                                                                                                                                                                                                                          | The Agent, if
  a Lender, shall have the same rights and powers under the Transaction
  Documents as the other Lenders and may exercise those rights and powers as if
  it were not acting as the Agent.                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      | (b)                                                                                                                                                                                                                                                          | The Agent
  may (without having to account to any Lender) engage in any kind of business
  with any Obligor their related parties as if it were not the Agent and may
  accept fees or other consideration for services without having to account to
  the Lenders.                                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|25.12 | Indemnity to Agent:                                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      | (a)                                                                                                                                                                                                                                                          | The Lenders
  shall indemnify the Agent and shall hold it harmless (to the extent not
  reimbursed by the Borrower) rateably in accordance with their respective
  Commitments against all costs, losses expenses and liabilities of any kind
  which may be sustained or incurred by or asserted against the Agent in its
  capacity as such relating to or arising out of the Transaction Documents.
  Each Lender shall, upon demand, pay to the Agent is proportionate share of
  all amounts payable under this indemnity.
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      | (b)                                                                                                                                                                                                                                                          | No Lender
  shall be liable under clause 25.12(a) for any of the foregoing to the extent
  that they arise from the Agents wilful misconduct, gross negligence or
  fraud.                                                                                                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|25.13 | Independent investigation: Each Lender
  agrees that it has made and shall continue to make, independently and without
  reliance on the Agent or any other Lender and based on such documents and
  agreements and information as it considers appropriate:
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      | (a)                                                                                                                                                                                                                                                          | its own
  investigation into the financial condition and affairs of the Obligors;                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      | (b)                                                                                                                                                                                                                                                          | its own
  analyses and decisions as to whether or not to take action under any
  Transaction Document.                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|25.14 | Information:                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      | (a)                                                                                                                                                                                                                                                          | The Agent
  shall furnish to the Lenders as soon as practicable copies of all notices,
  reports and other documents furnished to the Agent in its capacity as such
  under this Agreement and copies of all documents comprising the conditions
  precedent to this Agreement.                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      | (b)                                                                                                                                                                                                                                                          | The Agent
  shall not otherwise have any duty or responsibility (but is authorised by the
  Borrower) to provide any Lender with any information concerning the affairs,
  financial condition or business of any Obligor which may come into the
  possession of the Agent.                                                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|      | (c)                                                                                                                                                                                                                                                          | Nothing in
  any Transaction Document shall oblige the Agent to disclose any information
  relating to any Obligor if that disclosure would or might, in the opinion of
  the Agent on the basis of the advice of its legal advisors, constitute a
  breach of any law or duty of secrecy or confidence.                                                                                                                                                                                                                       

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|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|----- | ------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|25.15 | Replacement of Agent:                                                                                                                     
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      | (a)                                                                                                                                        | Subject to
  the appointment and acceptance of a successor Agent as provided in this
  clause 25.15 the Agent may resign at any time by giving not less than 30
  days notice to the Lenders and the Borrower.                                                                                                                                    
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      | (b)                                                                                                                                        | Upon any
  notice of resignation being given the Lenders (which for this purpose shall
  be determined after excluding any Lender which is also the Agent) shall have
  the right to appoint a successor Agent approved by the Borrower, provided
  that:                                                                                          
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      |                                                                                                                                            | (i)                                                                                                                                                                                                                                                                                                                                                 | the Borrower
  may not unreasonably withhold its consent; and                                                                                                                                             
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      |                                                                                                                                            | (ii)                                                                                                                                                                                                                                                                                                                                                | no consent
  shall be required where the proposed successor Agent is a Lender or a related
  party of a Lender.                                                                                           
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      | (c)                                                                                                                                        | If no
  successor Agent has been appointed by the Lenders or has accepted an
  appointment within 30 days after any such notice, the retiring Agent may on
  behalf of the Lenders appoint a successor Agent.                                                                                                                                      
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      | (d)                                                                                                                                        | Upon the
  acceptance of any appointment under this clause 25.15 by a successor Agent,
  the successor Agent will succeed to and become vested with all the rights,
  powers and obligations of the retiring Agent under the Transaction Documents
  and as from that time the Agent shall be discharged from its rights, powers
  and obligations.
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      | (e)                                                                                                                                        | After any
  retiring Agents resignation or removal, the provisions of this clause 25.15
  shall continue in effect in respect of any actions taken or omitted to be
  taken by it while it was acting as the Agent.                                                                                                                               
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|25.16 | Amendment: Each Lender authorises the Agent
  to agree to any amendment, waiver or release in respect of to any Transaction
  Document if:
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      | (a)                                                                                                                                        | that Lender
  has notified the Agent in writing of its agreement to the amendment; or                                                                                                                                                                                                                                                              
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      | (b)                                                                                                                                        | the
  amendment will not increase the Tranche Amounts, the Commitments of any
  Lender or other obligations of the Lenders or any particular Lender, change
  the interest rate or fees or times or amounts or currency of payment of any
  moneys payable under a Transaction Document or amend this clause 25.16 and:                            
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      |                                                                                                                                            | (i)                                                                                                                                                                                                                                                                                                                                                 | the Agent is
  satisfied that the amendment is made, or the waiver is granted, to correct a
  manifest error or that the amendment, waiver or release is of a minor, formal
  or technical nature only; or
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      |                                                                                                                                            | (ii)                                                                                                                                                                                                                                                                                                                                                | the Lenders
  have, at the request of the Agent, notified the Agent, of their agreement to
  the amendment.                                                                                               
|      |                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                           
|      | Each Lender
  shall be bound by any such amendment, waiver or release so agreed to by the
  Agent.                                        

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|26.  | INDEMNITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|26.1 | Borrowers indemnities: On demand, the
  Borrower shall indemnify the Agent and the Lenders against any loss, cost,
  charge, liability or expense the Agent and the Lenders (or any officer or
  employee of the Agent or the Lenders) may sustain or incur arising out of or
  in relation to the Project or any Transaction Document including, without
  limitation, as a consequence of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | the
  occurrence of any Event of Default; or                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | an Advance
  requested in a Drawdown Notice not being provided because of a failure by the
  Borrower to fulfil any condition precedent but excluding any default by the
  Agent or the Lender; or                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | any amount
  payable by the Borrower under any Financing Document not being paid when due
  (whether by prepayment, acceleration or otherwise) other than pursuant to
  clauses 16.4 or 16.5, but with credit given for any default interest payable;
  or
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|     | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | all or any
  part of any Advance being repaid or becoming repayable other than on the last
  day of an Interest Period applicable to that Advance,                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|     | Subject to
  paragraph (d) above, without limitation the indemnity will cover any amount
  determined by the Agent or the Lenders as the case may be to be incurred by
  reason of the liquidation or re-employment of deposits or other funds
  acquired or contracted for by the Agent or the Lenders to fund or maintain
  any Advance or other amount, and by reason of the reversing or termination of
  any agreement or arrangement entered into by the Agent or the Lenders to
  hedge, fix or limit its effective cost of funding or maintaining any Advance
  or other amount.                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|26.2 | Environmental Indemnity: Without limiting
  any other indemnities on its part, the Borrower will indemnify and hold the
  Agent and the Lenders harmless against all costs which it may sustain or
  incur directly or indirectly as a result of (i) non-compliance with any
  Environmental Law or directive by any Obligor (ii) any obligation under any
  such Environmental Law or directive being imposed on the Agent and the
  Lenders and/or (iii) the Agent and the Lenders doing (or instructing any
  person to do) any act which the Borrower or a Project Company is obliged to
  do but has failed to do to ensure compliance with any such Environmental Law
  or directive or to avoid, mitigate or remedy any actual or likely adverse
  effect upon the environment caused by or on behalf of any Obligor except in
  each case where such costs arise due to the Agent or the Lenders fraud,
  negligence or wilful default.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|26.3 | Currency Indemnity: If any amount due from
  the Borrower or any other Obligor under a Financing Document or under a suit,
  action or proceeding has to be converted to the currency (the first
  currency) in which is it payable under that Financing Document or under the
  suit, action or proceeding from another currency (the second currency) as a
  result of or for the purpose of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | making or filing
  a claim or proof against the Borrower; or                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                            | 
|     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | obtaining or
  enforcing an order or judgment,                                                                                                                                                                                                            

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|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | then the
  Borrower will indemnify and hold the Agent and the Lenders harmless against
  all costs which any of them may sustain or incur directly or indirectly as a
  result of any discrepancy between:                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                 | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | the rate of
  exchange used to convert the amount in question to the first currency from
  the second currency; and                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                 | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | the rate of
  exchange at which the Agent and the Lenders may in the ordinary course of
  business purchase the first currency with the second currency upon receipt
  (or as soon as is reasonably practicable thereafter) of the amount paid to it
  in satisfaction, in whole or in part, of that claim, proof, order or judgment,
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|     | by payment
  on demand by the Agent of the amount (and in such currency) as the Agent may
  stipulate as being required to so indemnify it.                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|26.4 | Independent Obligations: Each of the
  indemnities contained in this Agreement constitutes a separate and
  independent obligation from the other obligations in this Agreement giving
  rise to an independent cause of action irrespective of any time, credit or
  other indulgence on the part of the Agent or the Lenders.
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|27.  | ACCOUNTS                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|27.1 | The accounts
  kept by the Agent and the Lenders constitute sufficient evidence, unless
  proven wrong, of the amount at any time due from the Borrower under this
  Agreement.                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|28.  | EXPENSES                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|28.1 | On demand
  the Borrower shall reimburse:                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|     | (a)                                                                                                                                                                                                                                                                                                                             | the Agent
  for all reasonable expenses of the Agent and the Lenders in relation to the
  preparation, negotiation, execution and completion of the Financing Documents
  and any subsequent consent, approval, waiver or amendment;                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|     | (b)                                                                                                                                                                                                                                                                                                                             | the Agent
  for the reasonable expenses of the Agent and the Lenders in relation to any
  inquiry by a Governmental Agency concerning any Obligor or the Mortgaged
  Property or a transaction or activity for which, or in connection with which,
  financial accommodation or funds raised under a Financing Document are used
  or provided, including without limitation, any expenses incurred in any
  review or environmental audit or in retaining consultants to evaluate matters
  of material concern to the Agent and the Lenders (including, without limitation,
  the Lenders Independent Engineer, the Lenders Insurance Consultant and the
  Lenders Base Case Auditor); and
|     |                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                      
|     | (c)                                                                                                                                                                                                                                                                                                                             | the Agent
  for its expenses in relation to the enforcement of the Transaction Documents,
  or the exercise, preservation or consideration of any rights, powers or
  remedies under the Transaction Documents or in relation to the Mortgaged
  Property, including, without limitation, any expenses incurred by the Agent
  and the Lenders in any review or environmental audit or in retaining consultants
  to evaluate matters of material concern to the Agent and the Lenders
  (including, without limitation, the Lenders Independent Engineer, the
  Lenders Insurance                                                                                                           

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Consultant
  and the Lenders Base Case Auditor). At any time prior to an Event of Default
  occurring, the Borrower shall only be responsible to reimburse expenses
  incurred as expressly provided for in the Agreement. At all times thereafter,
  the Borrower must reimburse the Agent for all such expenses incurred,
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|     | including in
  each case reasonable travelling and out-of-pocket expenses and reasonable
  legal costs and expenses (on solicitor and own client basis) and any goods
  and services tax (or other similar tax) thereon on a full indemnity basis
  provided however that, in relation to paragraph (a) above, the Agent shall
  obtain the Borrowers approval to estimates of any such costs prior to
  incurring such.                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|29.  | TAXES AND DUTIES                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|29.1 | The Borrower
  shall pay all stamp, transaction, registration and similar Taxes (including fines
  and penalties) which may be payable or determined to be payable in relation
  to the execution, delivery, performance or enforcement of any Financing
  Document or any payment or receipt or any other transaction contemplated by
  any Financing Document.                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|29.2 | On demand
  the Borrower shall indemnify the Agent and the Lenders against any liability
  resulting from delay or omission to pay those Taxes except to the extent the
  liability results from failure by the Agent or the Lenders to pay any Tax
  after having been put in funds to do so by the Borrower.                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|30.  | SET-OFF                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|30.1 | At any time
  following the occurrence of an Event of Default which is, in each case,
  continuing the Borrower irrevocably authorises the Agent to apply any credit
  balance in any currency (whether or not matured) in any of its accounts with
  any branch of the Agent towards satisfaction of any sum at any time due and
  payable by it to the Agent under or in relation to any Financing Document.
  The Agent is not obliged to make the application.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|30.2 | The Agent
  may effect currency exchanges appropriate to implement that application.                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|31.  | WAIVERS, REMEDIES CUMULATIVE                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|31.1 | No failure
  to exercise and no delay in exercising any right, power or remedy under any
  Financing Document operates as a waiver. Nor does any single or partial
  exercise of any right, power or remedy preclude any other or further exercise
  of that or any other right, power or remedy.                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|31.2 | The rights,
  powers and remedies provided to the Agent and the Lenders in the Financing
  Documents are in addition to, and do not exclude or limit, any right, power
  or remedy provided by law.                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|32.  | SEVERABILITY OF PROVISIONS                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                             
|32.1 | Any
  provision of any Financing Document which is prohibited or unenforceable in
  any jurisdiction is ineffective as to that jurisdiction to the extent of the
  prohibition or unenforceability. That does not                                                                                                                                                                                                                                                 

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|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | invalidate
  the remaining provisions of that Financing Document nor affect the validity
  or enforceability of that provision in any other jurisdiction.                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|33.  | SURVIVAL OF REPRESENTATIONS AND INDEMNITIES                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|33.1 | All
  representations and warranties in any Financing Document survive the
  execution and delivery of the Financing Documents and the provision of
  advances and accommodation.                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|33.2 | Each
  indemnity in any Financing Document:                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                   
|     | (a)                                                                                                                                                                                                                                                                                                | is a
  continuing obligation;                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|     | (b)                                                                                                                                                                                                                                                                                                | is a
  separate and independent obligation; and                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|     | (c)                                                                                                                                                                                                                                                                                                | survives
  termination or discharge of the relevant Financing Document.                                                                                                               
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|34.  | MORATORIUM LEGISLATION                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|34.1 | To the
  fullest extent permitted by law all legislation which at any time directly or
  indirectly:                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|     | (a)                                                                                                                                                                                                                                                                                                | lessens,
  varies or affects in favour of any Obligor any obligation under a Financing
  Document; or                                                                                 
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|     | (b)                                                                                                                                                                                                                                                                                                | delays,
  prevents or prejudicially affects the exercise by the Agent or the Lenders of
  any right, power or remedy conferred by any Financing Document,                             
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|     | is excluded
  from the Financing Documents.                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|35.  | CONSENTS AND OPINIONS                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|35.1 | Except where
  expressly stated, the Agent may give or withhold, or give conditionally,
  approvals and consents, may be satisfied or unsatisfied, may form opinions,
  and may exercise rights, powers and remedies, under or in relation to any
  Financing Document at its absolute discretion.
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|36.  | ASSIGNMENTS                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|36.1 | Assignment by Borrower: The Borrower may not
  assign or transfer any of its rights or obligations under this Agreement or
  any other Financing Document without the prior written consent of the Agent.                                                                                         
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|36.2 | Assignment by a Lender: A Lender may assign
  or transfer all or any of its rights or obligations under the Transaction
  Documents at any time if:                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|     | (a)                                                                                                                                                                                                                                                                                                | it complies
  with the requirements set out in clause 25.9;                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|     | (b)                                                                                                                                                                                                                                                                                                | any
  necessary prior Authorisation is obtained; and                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                       
|     | (c)                                                                                                                                                                                                                                                                                                | the Borrower
  has given its prior consent, which shall not be unreasonably withheld or
  delayed, which will be deemed to have been given if no response is received
  within 30 days

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|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                         | of the request
  for consent and which shall not be required if an Event of Default has
  occurred and is subsisting.                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|36.3 | Substitution:                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     | (a)                                                                                                                                                                                                                                                                                                                                                                     | If a Lender
  wishes to transfer all or any of its rights and obligations under the
  Transaction Documents to a bank or financial institution, it and the proposed
  transferee shall execute and deliver to the Agent four counterparts of the
  Substitution Certificate.                                
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     | (b)                                                                                                                                                                                                                                                                                                                                                                     | On receipt
  of a Substitution Certificate the Agent shall (if it is satisfied that the
  substitution complies with clause 36.2) promptly:                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                         | (i)                                                                                                                                                                                                                                                                                                          | notify the
  Borrower and each other Lender;                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                         | (ii)                                                                                                                                                                                                                                                                                                         | countersign
  the counterparts on behalf of all other parties to this Agreement;                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                         | (iii)                                                                                                                                                                                                                                                                                                        | enter the
  transfer in a register kept by it (which shall be conclusive); and                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                         | (iv)                                                                                                                                                                                                                                                                                                         | retain one
  counterpart and deliver one counterpart to each of the relevant transferor
  and transferee and to the Borrower.                      
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     | (c)                                                                                                                                                                                                                                                                                                                                                                     | On any such
  certificate being countersigned by the Agent the transferor shall be relieved
  of its obligations to the extent and from the date specified in such
  certificate and the transferee shall be bound by the Transaction Documents to
  the extent and from the date stated in the certificate.
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     | (d)                                                                                                                                                                                                                                                                                                                                                                     | Each other
  party to this Agreement irrevocably authorises the Agent to sign each such
  certificate on its behalf and acknowledges that:                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                         | (i)                                                                                                                                                                                                                                                                                                          | upon such a
  certificate being signed by the Agent it shall be deemed for all purposes to
  have consented to the contents of the certificate; and
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                         | (ii)                                                                                                                                                                                                                                                                                                         | it will
  continue to be bound by the provisions of the Transaction Documents
  accordingly.                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|     | (e)                                                                                                                                                                                                                                                                                                                                                                     | Unless the
  Agent otherwise agrees, no transfer of a Lenders obligations may be affected
  while any Drawdown Notice is current.                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|36.4 | Disclosure: A Lender may disclose to a proposed
  assignee, transferee or sub-participant information which relates to any
  Obligor or was furnished in connection with the Financing Documents provided
  that the relevant Lender first obtains an undertaking from such proposed
  assignee, transferee or sub-participant to keep that information
  confidential.
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|37.  | CONFIDENTIALITY                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                              |                                                                                                                                                    
|37.1 | Confidentiality: Subject to clause 37.2
  (Permitted Disclosure), the Agent and Lenders shall not disclose any
  unpublished information or documents supplied by any Obligor in connection
  with the Transaction Documents which are not in the public domain.                                                                                                       

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|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|37.2 | Permitted disclosure: The Agent and the
  Lenders may disclose any confidential information or documents:                                                                                                                                               
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | (a)                                                                                                                                                                                                                                                      | in enforcing
  a Financing Document or in a proceeding arising out of or in connection with
  a Financing Document or to the extent that disclosure is regarded by the
  Agent and the Lenders as necessary to protect its interests;                                                                                                                            
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | (b)                                                                                                                                                                                                                                                      | if required
  under a binding order of a Governmental Agency or any procedure for discovery
  in any proceedings;                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | (c)                                                                                                                                                                                                                                                      | if required
  under, or necessary to in order to be in compliance with, any law or any
  administrative guideline, directive, request or policy whether or not having
  the force of law and, if not having the force of law, the observance of which
  is in accordance with the practice of responsible bankers or financial
  institutions similarly situated;
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | (d)                                                                                                                                                                                                                                                      | as required
  or permitted by any Financing Document;                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | (e)                                                                                                                                                                                                                                                      | to its legal
  advisors and its consultants;                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | (f)                                                                                                                                                                                                                                                      | if required
  in connection with any legal or court action; or                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | (g)                                                                                                                                                                                                                                                      | with the
  prior written consent of the Borrower.                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|37.3 | Survival of obligation: This clause 37
  (Confidentiality) survives the termination of this Agreement.                                                                                                                                                  
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|38.  | NOTICES                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | All notices,
  requests, demands, consents, approvals, agreements or other communications to
  or by a party to this Agreement:                                                                                                                         
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | (a)                                                                                                                                                                                                                                                      | must be in
  writing (including facsimile);                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | (b)                                                                                                                                                                                                                                                      | must be
  signed by an Authorised Officer of the sender; and                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | (c)                                                                                                                                                                                                                                                      | will be
  taken to be duly given or made:                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                          | (i)                                                                                                                                                                                                                                                                                                                                                               | in the case
  of delivery in person or by post when delivered, or left at the address of
  the recipient shown in this Agreement or to any other address which it may have
  notified the sender for the purposes of this Agreement; and                                                                                                     
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                          | (ii)                                                                                                                                                                                                                                                                                                                                                              | in the case
  of facsimile transmission, when transmitted to the facsimile number of the
  recipient shown in this Agreement or to any other number which the recipient
  has notified to the sender for the purposes of this Agreement and a
  confirmation of successful transmission is produced by the facsimile machine
  of the sender,
|     |                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                              
|     | but if
  delivery or transmission is or is later than 4.00pm (local time) in that
  place, it will be taken to have been duly given or made at the commencement
  of business on the next day on which business is generally carried on in that
  place.

Page 76

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|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|39. | AUTHORISED OFFICERS                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|    | The Borrower
  irrevocably authorises the Agent to rely on a certificate by any person
  purporting to be its director as to the identity and signatures of its
  Authorised Officers. The Borrower warrants that those persons have been
  authorised to give notices and communications on behalf of the Obligors under
  or in connection with the Financing Documents.
|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|40. | GOVERNING LAW                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|    | This
  Agreement is governed by the laws of New Zealand.                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|41. | COUNTERPARTS                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|    | This
  Agreement may be executed in any number of counterparts. All counterparts
  together will be taken to constitute one instrument.                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|42. | ACKNOWLEDGEMENT BY OBLIGORS                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|    | The Borrower
  and each Obligor confirms that:                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|    | (a)                                                                                                                                                                                                                                                                                                                                                                        | it has not
  entered into the Financing Documents in reliance on, or as a result of, any
  conduct of any kind of or on behalf of the Agent or the Lenders or any
  Related Company of the Agent or the Lenders (including, without limitation,
  any advice, warranty, representation or undertaking); and
|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|    | (b)                                                                                                                                                                                                                                                                                                                                                                        | neither the
  Agent or the Lenders nor any Related Company of the Agent or the Lenders is
  obliged to do anything (including, without limitation, disclose anything or
  give advice),                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                             | 
|    | except as
  expressly set out in the Financing Documents or in writing duly signed by or
  on behalf of the Agent, Lenders or Related Company.                                                                                                                                                                                                                            

EXECUTED

Each attorney
executing this Agreement states that he has no notice of revocation or
suspension of his power of attorney.

Page 77

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|                             |   |          |  |                                
|---------------------------- | - | -------- |  | -------------------------------
|Borrower                     |   |          |  |                                
|SIGNEDfor and on
  behalf of | ) |          |  |                                
|AUSTRAL PACIFIC ENERGY (NZ)  | ) |          |  |                                
|LIMITED                      | ) |          |  |                                
|                             |   |          |  |                                
|in the presence of:          | ) | Director |  | Director/Authorised
  Signatory
|                             |   |          |  |                                
|                             |   |          |  |                                
|Signature                    |   |          |  |                                
|                             |   |          |  |                                
|                             |   |          |  |                                
|Full Name                    |   |          |  |                                
|                             |   |          |  |                                
|                             |   |          |  |                                
|Address                      |   |          |  |                                
|                             |   |          |  |                                
|                             |   |          |  |                                
|Occupation                   |   |          |  |                                

|      |                                                                                                                                                                                                                                              
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note: | If two directors sign, no
  witness is necessary. If a director and secretary sign, both signatures are
  to be witnessed. If the director and secretary are not signing together, a
  separate witness will be necessary for each signature.

|                             |   |          |  |                                
|---------------------------- | - | -------- |  | -------------------------------
|Guarantors                   |   |          |  |                                
|SIGNEDfor and on
  behalf of | ) |          |  |                                
|KANUKA ENERGY LIMITED        | ) |          |  |                                
|                             | ) |          |  |                                
|                             |   |          |  |                                
|in the presence of:          | ) | Director |  | Director/Authorised
  Signatory
|                             |   |          |  |                                
|                             |   |          |  |                                
|Signature                    |   |          |  |                                
|                             |   |          |  |                                
|                             |   |          |  |                                
|Full Name                    |   |          |  |                                
|                             |   |          |  |                                
|                             |   |          |  |                                
|Address                      |   |          |  |                                
|                             |   |          |  |                                
|                             |   |          |  |                                
|Occupation                   |   |          |  |                                

|      |                                                                                                                                                                                                                                              
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note: | If two directors sign, no
  witness is necessary. If a director and secretary sign, both signatures are
  to be witnessed. If the director and secretary are not signing together, a
  separate witness will be necessary for each signature.

|                                   |   |           |  | 
|---------------------------------- | - | --------- |  | 
|EXECUTEDas a DEEDfor and on
behalf | ) |           |  | 
|of                                 | ) |           |  | 
|AUSTRAL PACIFIC ENERGY LTD.        | ) |           |  | 
|                                   |   |           | 
|by its Director/Officer            | ) | Signature |  | 
|                                   | ) |           |  | 
|                                   |   |           |  | 
|                                   |   |           |  | 

Page 78

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|                             |   |          |  |                                
|---------------------------- | - | -------- |  | -------------------------------
|SIGNEDfor and on
  behalf of | ) |          |  |                                
|SOURCE ROCK HOLDINGS LIMITED | ) |          |  |                                
|                             | ) |          |  |                                
|                             |   |          |  |                                
|in the presence of:          | ) | Director |  | Director/Authorised
  Signatory
|                             |   |          |  |                                
|                             |   |          |  |                                
|Signature                    |   |          |  |                                
|                             |   |          |  |                                
|                             |   |          |  |                                
|Full Name                    |   |          |  |                                
|                             |   |          |  |                                
|                             |   |          |  |                                
|Address                      |   |          |  |                                
|                             |   |          |  |                                
|                             |   |          |  |                                
|Occupation                   |   |          |  |                                

|      |                                                                                                                                                                                                                                              
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note: | If two directors sign, no
  witness is necessary. If a director and secretary sign, both signatures are
  to be witnessed. If the director and secretary are not signing together, a
  separate witness will be necessary for each signature.

|                             |   |          |  | 
|---------------------------- | - | -------- |  | 
|The Lenders                  |   |          |  | 
|SIGNEDfor and on
  behalf of | ) |          |  | 
|INVESTEC BANK (AUSTRALIA)    | ) |          |  | 
|LIMITED                      | ) |          |  | 
|                             |   |          |  | 
|by its attorney              | ) | Attorney |  | 
|in the presence of:          | ) |          |  | 
|                             |   |          |  | 
|                             |   |          |  | 
|Signature                    |   |          |  | 
|                             |   |          |  | 
|                             |   |          |  | 
|Full Name                    |   |          |  | 
|                             |   |          |  | 
|                             |   |          |  | 
|Address                      |   |          |  | 
|                             |   |          |  | 
|                             |   |          |  | 
|Occupation                   |   |          |  | 

Page 79

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|                             |   |          |  | 
|---------------------------- | - | -------- |  | 
|The Agent                    |   |          |  | 
|SIGNEDfor and on
  behalf of | ) |          |  | 
|INVESTEC BANK (AUSTRALIA)    | ) |          |  | 
|LIMITED                      | ) |          |  | 
|                             |   |          |  | 
|by its attorney              | ) | Attorney |  | 
|in the presence of:          | ) |          |  | 
|                             |   |          |  | 
|                             |   |          |  | 
|Signature                    |   |          |  | 
|                             |   |          |  | 
|                             |   |          |  | 
|Full Name                    |   |          |  | 
|                             |   |          |  | 
|                             |   |          |  | 
|Address                      |   |          |  | 
|                             |   |          |  | 
|                             |   |          |  | 
|Occupation                   |   |          |  | 

Page 80

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FIRST SCHEDULE

CONDITIONS PRECEDENT TO ALL TRANCHES

| |     |                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                             
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | Completion of Acquisition: Evidence that all
  conditions precedent to the acquisition by the Borrower of all the shares in
  Arrowhead Energy Limited (the Acquisition) have been satisfied and all
  other actions required to complete such acquisition (other than payment of
  the purchase price) have been taken.
| |     |                                                                                                                                                                                                                                                                                                                           
| | (b) | Directors Certificates: Directors
  certificates from directors of the Borrower and each Guarantor (substantially
  in the form set out in Annexure B, Part A) other than the Sponsor who shall
  provide an Officers Certificate (substantially in the form set out in
  Annexure B, Part B).                         
| |     |                                                                                                                                                                                                                                                                                                                           
| | (c) | Transaction Documents:                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                           
| |     | (i)                                                                                                                                                                                                                                                                                                                        | duly
  executed original counterparts of each Financing Document (in registrable
  form where necessary or desirable) together with, in the case of each of the
  Security Documents, such other documents and certificates as the Agent may
  require to ensure registration and perfection of such Security Documents and
  the Security Interests created thereunder; and
| |     |                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                             
| |     | (ii)                                                                                                                                                                                                                                                                                                                       | certification
  by a director of the Borrower that all other Project Documents are in full
  force and effect and there have been no amendments which have not been
  notified to the Agent.                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                             
| | (d) | Notices of Assignment: a copy of a notice of
  assignment addressed to the drilling contractor under the Drilling Contract
  pursuant to the General Security Agreements duly acknowledged by the relevant
  counterparties.                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                           
| | (e) | Project Accounts:                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                           
| |     | (i)                                                                                                                                                                                                                                                                                                                        | evidence
  that the Borrower and each Project Company have established the Project
  Accounts with the Account Bank in accordance with clause 19 (Project
  Accounts) of the Agreement and that the Debt Service Reserve Account will be
  funded on the date of the first Drawdown under the Agreement;                                                                    
| |     |                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                             
| |     | (ii)                                                                                                                                                                                                                                                                                                                       | duly
  executed Account Bank Agreement; and                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                             
| |     | (iii)                                                                                                                                                                                                                                                                                                                      | evidence
  that US$3,500,000.00 has been deposited in the Proceeds Account.                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                             
| | (f) | Base Case: evidence that the Base Case has
  been finalised and agreed to the satisfaction of the Agent.                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                           
| | (g) | Lenders Independent Engineer: technical
  review of the Project and the Field Development Plan satisfactory to the
  Agent.                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                           
| | (h) | Legal Opinion - Financing Documents:                                                                                                                                                                                                                                                                                      

Page 81

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| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | (i)                                                                                                                                                                                                           | a legal
  opinion of Buddle Findlay, legal advisors to the Agent, addressed to the
  Agent relating to the validity and enforceability of the Financing Documents;
  and   
| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| |     | (ii)                                                                                                                                                                                                          | a legal
  opinion of Stikeman Elliot LLP, legal advisors to the Agent addressed to the
  Agent relating to the execution of the Financing Documents by the Sponsor.        
| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| | (i) | Due Diligence Report: a due diligence report
  from Buddle Findlay confirming inter alia:                                                                                                                    
| |     |                                                                                                                                                                                                              
| |     | (i)                                                                                                                                                                                                           | that each
  Project Company has or will have good title to its interest in the JV;                                                                                         
| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| |     | (ii)                                                                                                                                                                                                          | that the JV
  has good title to the assets of the Project including without limitation the
  Permit;                                                                       
| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| |     | (iii)                                                                                                                                                                                                         | that the
  Borrower, each Project Company and the JV are in compliance with
  Environmental Law and other regulatory compliance; and                                       
| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| |     | (iv)                                                                                                                                                                                                          | that all
  Authorisations necessary for the carrying out of the Project have been
  obtained and are in full force and effect.                                             
| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| | (j) | Approved Issuer Status: that the Borrower
  has obtained approved issuer status (in accordance with clause 15.5 (Approved
  issuer status)).                                                               
| |     |                                                                                                                                                                                                              
| | (k) | Tax and Accountancy: receipt of:                                                                                                                                                                             
| |     |                                                                                                                                                                                                              
| |     | (i)                                                                                                                                                                                                           | audited
  accounts for the Borrower and the Guarantors for the year ending 31 December
  2005;                                                                             
| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| |     | (ii)                                                                                                                                                                                                          | management
  accounts for the Borrower and the Guarantors for the quarter ending 30 June
  2006; and                                                                       
| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| |     | (iii)                                                                                                                                                                                                         | satisfactory
  confirmation by the auditor of tax loss benefits set out in the Base Case.                                                                                  
| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| | (l) | Registry Searches: satisfactory results of
  searches, enquiries and requisitions in relation to the Borrower, each
  Guarantor and the Mortgaged Property.                                                  
| |     |                                                                                                                                                                                                              
| | (m) | Insurance: evidence satisfactory to the
  Agent confirming that all insurance required by clause 18.4(a) (Insurance) is
  in place.                                                                          
| |     |                                                                                                                                                                                                              
| | (n) | Fees: evidence of the payment of all fees
  and expenses owing or payable (including the Agent and the Lenders legal
  fees) upon the initial Drawdown Date, to the Agent.                                  
| |     |                                                                                                                                                                                                              
| | (o) | Hedging Arrangements: a copy of the
  Borrowers board approved hedging policy in a form approved by the Agent and
  evidence that the Mandatory Hedging Arrangements pursuant to clause 20.1 are
  in place.
| |     |                                                                                                                                                                                                              
| | (p) | Cost to Complete: a certificate from a
  director of the Borrower confirming:                                                                                                                                
| |     |                                                                                                                                                                                                              
| |     | (i)                                                                                                                                                                                                           | details of
  the capital cost budget and construction schedule for the Project in a form
  satisfactory to the Agent;                                                      
| |     |                                                                                                                                                                                                               |                                                                                                                                                                            
| |     | (ii)                                                                                                                                                                                                          | evidence
  satisfactory to the Agent that all sources of funds (other than the Tranche A
  Amount and Tranche B Amount and Tranche C Amount) described in the
  assumptions

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| |     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                         
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                              | worksheet
  detailed in the cash flow model in the Base Case have been expended or are
  available to be expended for the uses described in such worksheet (including
  proceeds of US$1,000,000 from the rig sale); and
| |     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                         
| |     | (iii)                                                                                                                                                                                                                                                                                                                                        | details of
  expenditure already incurred for the Project.                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                         
| | (q) | Oil Sales Arrangement: receipt of a letter
  from the board of the Sponsor (in a form and substance satisfactory to the
  Agent) outlining the status of arrangements in respect of Petroleum sales.                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (r) | Construction Contract: confirmation in the
  form of a heads of agreement or letter of intent that the Construction
  Contract has been or will be entered into in respect of the Project in a form
  satisfactory to the Agent.                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (s) | Minimum Ratios: confirmation that the
  Project Life Ratio and the Combined Project Life Ratio as demonstrated in the
  cash flow model in the Base Case (incorporating the hedged oil price) is at
  least 2.00 and 1.65 respectively.                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (t) | Subordination: confirmation that all
  intercompany loans between the Sponsor and any of the Sponsors Related
  Companies, and the Borrower or a Project Company have been subordinated to
  the Secured Indebtedness.                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (u) | NonCheal Capex: a certificate of a director
  of the Borrower setting out details of all mandatory non-Cheal capital
  expenditure due and payable or projected to become payable prior to the
  Completion Date.                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (v) | Vector Gas Subordination: evidence
  satisfactory to the Agent that Vector Gas Limited agreed in writing that,
  subject to formal documentation, the Vector Gas Limited security interest
  over Arrowhead Energy Limited will be subordinated to the interests of the
  Agent.                                                            
| |     |                                                                                                                                                                                                                                                                                                                                             
| | (w) | Warrants: confirmation from Lang Michener
  LLP, solicitors for the Borrower, that all authorisations, consents,
  approvals and waivers of pre-emptive rights required to enable the Sponsor to
  validly issue the Warrants and for the Agent to exercise the Warrants at any
  time during the period of the Warrants have been obtained.

Page 83

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SECOND SCHEDULE

COMPLETION TEST

|                                                                                                                                                         |                                                                                                                                                                                                                                     |       |                                                                                                                                                                                                                                                                                                                                     
|-------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The
  Completion Test shall be satisfied and, accordingly, Completion shall occur
  upon the Agent receiving (in form and substance satisfactory to it):
|                                                                                                                                                        
|(a)                                                                                                                                                      | A copy of
  the Certificate of Practical Completion (as defined in the Construction
  Contract) issued pursuant to the Construction Contract;                                                                                      
|                                                                                                                                                         |                                                                                                                                                                                                                                    
|(b)                                                                                                                                                      | Evidence of
  completion of all drilling of Cheal B under the drilling programme disclosed
  by the Borrower and agreed by the Agent prior to the date of this Agreement;                                                          
|                                                                                                                                                         |                                                                                                                                                                                                                                    
|(c)                                                                                                                                                      | Certificates: a certificate from the
  Lenders Independent Engineer certifying that:                                                                                                                                              
|                                                                                                                                                         |                                                                                                                                                                                                                                    
|                                                                                                                                                         |                                                                                                                                                                                                                                     | (i)   | the proven
  (P90) and probable (P50) Reserves are not less than those set out in the Base
  Case;                                                                                                                                                                                                                                  
|                                                                                                                                                         |                                                                                                                                                                                                                                     |       |                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                         |                                                                                                                                                                                                                                     | (ii)  | the Project
  is capable of production rates (via existing wells and completions at the
  time of certification) not less than those forecast in the Base Case;                                                                                                                                                                     
|                                                                                                                                                         |                                                                                                                                                                                                                                     |       |                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                         |                                                                                                                                                                                                                                     | (iii) | the Project
  infrastructure at the time of certification is sufficient and capable of oil
  production to at least the levels set out in the Base Case; and                                                                                                                                                                        
|                                                                                                                                                         |                                                                                                                                                                                                                                     |       |                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                         |                                                                                                                                                                                                                                     | (iv)  | the Project
  plans and costs for the provision of the requisite additional development
  infrastructure to enable production to continue at not less than the Base
  Case cash-flow until the Project End Date are consistent with those set out
  in the Base Case;                                                               
|                                                                                                                                                         |                                                                                                                                                                                                                                     |       |                                                                                                                                                                                                                                                                                                                                     
|(d)                                                                                                                                                      | Base Case: an updated Base Case in
  accordance with the Third Schedule;                                                                                                                                                           
|                                                                                                                                                         |                                                                                                                                                                                                                                    
|(e)                                                                                                                                                      | Ratio Certificate: a Ratio Certificate
  confirming that as at the proposed Completion Date the Borrower has satisfied
  each of the ratios agreed in the Base Case cash-flow model other than the
  Historic Combined Cover Ratio;
|                                                                                                                                                         |                                                                                                                                                                                                                                    
|(f)                                                                                                                                                      | Event of Default: confirmation that no Event of Default, Potential Event of
  Default or Event of Review has occurred and is continuing;                                                                                           
|                                                                                                                                                         |                                                                                                                                                                                                                                    
|(g)                                                                                                                                                      | Insurance: confirmation from the Lenders
  Insurance Consultant that all necessary insurance policies are in place and
  continuing to a level and on terms acceptable to the Lender;                                             
|                                                                                                                                                         |                                                                                                                                                                                                                                    
|(h)                                                                                                                                                      | Land Access: confirmation that:                                                                                                                                                                                                    
|                                                                                                                                                         |                                                                                                                                                                                                                                    
|                                                                                                                                                         |                                                                                                                                                                                                                                     | (i)   | the Land
  Access Agreement for the Cheal A site has been amended to extend the scope of
  the agreement to ensure sufficient access agreements are in place for any
  production facilities and that any easements required in respect thereof have
  been granted by the landowners and all documentation has been registered; and
|                                                                                                                                                         |                                                                                                                                                                                                                                     |       |                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                         |                                                                                                                                                                                                                                     | (ii)  | a long term
  lease has been entered into and registered in respect of the Land Access
  Agreement for the Cheal B site.                                                                                                                                                                                                            

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THIRD SCHEDULE

BASE CASE

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Revision:                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Compulsory: the Agent and the Borrower
  shall, on or about the Completion Date and in each year, within 30 days of
  receipt of the Project Field Development Plan by the Agent (in accordance
  with clause 18.3(c)), revise the Base Case with regard to the contents of
  that updated plan;                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Voluntary: the Agent may revise the Base
  Case:                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (i)                                                                                                                                                                                                                                                                                                                                                 | on the
  expiration of at least 10 Business Days notice to the Borrower; or                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (ii)                                                                                                                                                                                                                                                                                                                                                | if the Agent
  reasonably considers it necessary or desirable to do so in order to enable or
  facilitate more effective use of the Base Case in the manner contemplated by
  this Agreement, after consultation with the Borrower,
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                    
|   | and so long
  as the revised Base Case is consistent with the principles underlying the
  Base Case at Financial Close provided that no revision of the Base Case shall
  be made (other than pursuant to paragraph (a)) if such revision could vary
  CADS for the year in which such revision is made or any subsequent year by
  more than 10%. The Agent and the Borrower shall consult before any change is
  made to the software format used in the preparation of the Base Case.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2. | Provision of information: The Borrower
  shall, not less than 15 days before any date on which the Base Case is to be
  revised pursuant to paragraph 1(a) of this schedule and promptly upon
  receiving notice pursuant to paragraph 1(b) of this schedule (the Revision
  Date), provide to the Agent:                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | information
  which the Agent reasonably considers necessary in order to revise the Base
  Case; and                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | such other
  information as the Borrower and the Agent may agree is necessary to revise
  the Base Case.                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|3. | Representations as to information: The
  provision of information by or on behalf of the Borrower under paragraph 2
  will be taken to constitute a representation and warranty by it, at the date
  that information is so provided, that the information:                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (to the
  extent that it comprises estimates or forecasts) has been prepared with due
  care and skill, is based on all information known to it which could
  reasonably have been considered to be relevant at the time it was provided
  and is subject only to such assumptions as were reasonable to have been made
  in the circumstances; and
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                    
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (in any
  other case) is true and correct in all material respects at the date it is
  provided and is not misleading in any material respect, by omission or otherwise.                                                                                                                                                                           

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|   |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | Disputes:
|   |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (a)       | If the Agent
  disputes the accuracy, applicability or appropriateness of any information
  provided under paragraph 2 of this schedule, it shall advise the Borrower of
  the nature of that dispute no later than 15 days before the relevant Revision
  Date. The Borrower and the Agent shall then endeavour, in good faith, to
  resolve the dispute. If they do so, that resolution shall bind the parties.
  If they do not resolve that dispute on or before the tenth Day before the
  relevant Revision Date, then the matter shall be determined by the Lenders
  Independent Engineer whose determination shall be final and binding on the
  parties and shall be used for the purposes of the relevant revision of the
  Base Case.
|   |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (b)       | If information
  is provided to the Agent under paragraph 2 of this schedule later than 15
  days before the Revision Date and the Agent considers it to be (or to be
  likely to be) irrelevant, inaccurate or misleading, that information may be
  disregarded in whole or in part by the Agent when revising the Base Case.                                                                                                                                                                                                                                                                                                                                                                                                                   

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FOURTH SCHEDULE

INSURANCE

|    |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | General obligation: In its name and in the
  name of the Agent, the Borrower will and will ensure that each Project
  Company will:                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                    
|    | (i)                                                                                                                                                                                                                                                                                                                                                 | insure and
  keep insured the Mortgaged Property which is of an insurable nature to the
  full replacement or re-instatement value; and                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                             
|    | (ii)                                                                                                                                                                                                                                                                                                                                                | ensure that
  the Operator takes out and keeps in force insurance with respect to the
  Project (including public risk, contract works, marine transit, material
  damage, electrical or mechanical breakdown, business interruption insurance
  and any other insurance reasonably requested by the Agent),
|    |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                             
|    | in the
  manner and to the extent which the Agent determines is reasonable and
  customary for the Mortgaged Property and the Project save that the Borrower
  and the Project Companies will not be obliged to maintain insurance which, to
  the Agents satisfaction, is not available on commercially reasonable terms.                        
|    |                                                                                                                                                                                                                                                                                                                                                    
|(b) | Payment of premiums: The Borrower and each
  Project Company will pay when due all premiums, commissions, levies, stamp
  duties, charges and other expenses necessary for taking out those insurance
  policies and keeping them in force.                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                    
|(c) | Insurers: The Borrower and each Project
  Company will take out each insurance policy with independent and reputable
  insurers approved by the Agent located in jurisdictions approved by the
  Agent. The Agent will not unreasonably withhold that approval.                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                    
|(d) | Information: On request the Borrower and each
  Project Company will provide to the Agent certificates of currency in respect
  of all insurance policies, and other details of the insurance policies which
  the Agent reasonably requires.                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                    
|(e) | Annual report: On or about each anniversary
  of the date of this Agreement the Borrower and the Project Companies will
  provide to the Agent a report on all insurance policies relevant to the
  Project at the date of the report and on claims and other material events
  with respect to those insurances during the previous twelve months.
|    |                                                                                                                                                                                                                                                                                                                                                    
|(f) | No prejudicial action: The Borrower and each
  Project Company will not do, permit, or omit to do, anything which is
  reasonably likely to materially prejudice an insurance policy relevant to the
  Project.                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                    
|(g) | Contents of policy: Without limiting
  paragraph (a), the Borrower and each Project Company will ensure that each
  insurance policy is on terms and conditions reasonably satisfactory to the
  Agent and, without limitation, provides that:                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                    
|    | (i)                                                                                                                                                                                                                                                                                                                                                 | the Agent is
  named co-insured and as loss payee (other than under a public liability
  policy);                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                             
|    | (ii)                                                                                                                                                                                                                                                                                                                                                | the proceeds
  resulting from a claim under the policy (other than a public liability
  policy) will be paid to the Agent;                                                                                                                                                                                  

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | the amount
  of any excess or deductible payable by the insured in respect of a claim will
  not exceed the amount which the Agent determines is customary for similar
  policies;                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | the insurer
  waives its right to set off or counter claim or to make any other deduction
  or withholding against the Agent and each person claiming under the Agent;                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | (v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | all claims
  for insurance premiums, levies, stamp duties, charges or commissions against
  the Agent and each person claiming under the Agent are waived;                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | (vi)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | the insurer
  will not terminate the policy unless the relevant default or breach remains
  unremedied for at least 30 days after notice by the insurer to the Agent
  specifying the default or breach;             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | (vii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | to the
  extent that the policy covers the interest of the Agent the insurer will not
  refuse or reduce a claim or cancel or avoid the policy except where the right
  to do so results from the fraud of the Agent;
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | (viii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | a claim for
  replacement or re-instatement value will be paid even though the relevant
  asset is not replaced or re-instated; and                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | (ix)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | there is no
  averaging provision.                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|(h) | Remedy of default: If:                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | the Borrower
  or a Project Company fails to take out or keep in force an insurance policy;                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | the insurer
  becomes entitled to cancel or avoid an insurance policy; or                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | the Agent
  reasonably determines that the insurer under a policy will not be capable of
  meeting a claim,                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | the Agent
  may (but in the case of paragraph (iii), only after giving the Borrower five
  Business Days notice) do anything which it reasonably determines is
  advisable or necessary to take out or keep in force that policy or to take
  out a new policy complying with this clause at the cost of the Borrower and
  in the name of the Borrower or the Project Company as the case may be or the
  Agent or both. The Agent is not obliged to do anything under this paragraph.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(i) | Enforcement by Agent: On request by the
  Agent following an Event of Default the Borrower will do everything
  (including providing documents, evidence and information) necessary or
  desirable in the reasonable opinion of the Agent to enable the Agent to claim
  and to collect or recover money due, under or in respect of, an insurance
  policy.                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(j) | Notice of claims: As soon as possible the
  Borrower will notify:                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | the Agent;
  and                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (when it is
  required or it is advisable to do so) the relevant insurer,                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      
|    | of any event
  which does or may give rise to a claim of US$100,000 or more under an
  insurance policy or which causes the Project to cease operation for a period
  in excess of 48 hours; and                                                                                                                                                                                                                                                                                        

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|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                            |                                                                                                                            |                                                                                                                                                                                                     
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | (iii)                                                                                                                                                                                                                                                                      | a
  cancellation, change or reduction in an insurance policy;                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (iv)                                                                                                                                                                                                                                                                       | an insurance
  policy becoming void or voidable; or                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (v)                                                                                                                                                                                                                                                                        | any other
  material circumstance relating to an insurance policy.                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(k) | Use of insurance proceeds and other amounts:
  The Borrower and the Project Company will use the proceeds of all insurance
  policies, and other payments arising out of a Casualty Occurrence, received
  by it as follows:                                              
|    |                                                                                                                                                                                                                                                                           
|    | (i)                                                                                                                                                                                                                                                                        | in the case
  of a public liability policy, to discharge the relevant liability covered by
  the policy;                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (ii)                                                                                                                                                                                                                                                                       | if the Agent
  has given a notice under clause 22.2 (Consequences), towards payment of the
  Secured Indebtedness (subject to sub-paragraph (i));                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (iii)                                                                                                                                                                                                                                                                      | subject to
  sub-paragraphs (i) and (ii), if a Casualty Occurrence for an aggregate amount
  not more than US$100,000 (excluding public liability insurance) occurs, then
  payments arising out of that Casualty Occurrence (other than business interruption
  insurance) will be used to the extent necessary towards reinstatement of the
  relevant asset;                                                                                   
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (iv)                                                                                                                                                                                                                                                                       | subject to
  sub-paragraphs (i) and (ii), if a Casualty Occurrence for an aggregate amount
  in excess of US$100,000 (excluding public liability insurance) occurs, then
  payments arising out of that Casualty Occurrence (other than business
  interruption insurance) will be applied towards payment of the Secured
  Indebtedness unless, within 6 months after the Casualty Occurrence, each of
  the following requirements is satisfied:
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                            | (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                | the Lenders
  Independent Engineer certifies to the Agent that:                                          
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                           
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    | A.                                                                                                         | it is
  economically viable to reinstate the relevant asset having regard to the
  circumstances existing at the time; and
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                            |                                                                                                                           
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    | B.                                                                                                         | the relevant
  asset can be reinstated:                                                                                   
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                            |                                                                                                                           
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                            | (i)                                                                                                                        | within the
  period that the Borrower and the Project Company has available to it business
  interruption insurance sufficient to pay when due interest and fees payable
  under this Agreement; and
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                            |                                                                                                                            |                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                            | (ii)                                                                                                                       | for a total
  cost not exceeding the amount of those payments arising out of the Casualty
  Occurrence;                                                                                             
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                            |                                                                                                                            |                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                            | (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                | the Agent is
  satisfied that the Secured Indebtedness will be repaid in accordance with
  this Agreement.
|    |                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                           
|(l) | In the case
  of business interruption insurance, towards payment of the Secured
  Indebtedness which are due and payable or other liability covered by the
  policy, provided that those Secured Indebtedness are discharged first (and
  subject to sub-paragraph (ii)).
|    |                                                                                                                                                                                                                                                                           
|(m) | The Agent
  and the Borrower will pay all proceeds received by them into the Proceeds
  Account to be applied as set out above. The Borrower will apply any surplus
  in excess of the amounts referred to above towards payment of the Secured
  Indebtedness.           

Page 89

---



FIFTH SCHEDULE

FINANCIAL UNDERTAKINGS MATRIX

|                              |  |            |  |                   |  |           
|----------------------------- |  | ---------- |  | ----------------- |  | ----------
|                              |  | Schedule A |  | Schedule B        |  | Schedule C
|                              |  |            |  |                   |  |           
|Loan Life Ratio               |  | <1.35:1    |  | 1.35:1 -
  1.50:1 |  | >1.50:1   
|                              |  |            |  |                   |  |           
|Project Life Ratio            |  | <1.50:1    |  | 1.50:1 
  2.00:1 |  | >2.00:1   
|                              |  |            |  |                   |  |           
|Combined Project Life Ratio   |  | <1.35:1    |  | 1.35:1 - 1.75:1   |  | >1.75:1   
|                              |  |            |  |                   |  |           
|Historic Combined Cover Ratio |  | <1.20:1    |  | 1.20:1 -
  1.50:1 |  | >1.50:1   
|                              |  |            |  |                   |  |           
|Forward Combined Cover Ratio  |  | <1.20:1    |  | 1.20:1 
  1.50:1 |  | >1.50:1   
|                              |  |            |  |                   |  |           
|Reserve Tail                  |  | <20%       |  | 20% - 30%         |  | >30%      
|                             
|                              |  |            |  |                   |  |           
|                             
|Mandatory Prepayment          |  | 100%       |  | 50%               |  | 25%       
|                              |  |            |  |                   |  |           
|Permitted
  Distributions*    |  | 0%         |  | 50%               |  | 75%       

* The
Mandatory Prepayment and Permitted Distributions percentages will be calculated
by reference to the weakest performance by the Borrower in relation to the
above ratios as set out in the relevant Ratio Certificate.

Page 90

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SIXTH SCHEDULE

REPAYMENT SCHEDULE

Repayment Schedule

|                                    |  |                                 |  |                                 |       |    
|----------------------------------- |  | ------------------------------- |  | ------------------------------- | ----- | ---
|Repayment
  Date
  (Quarter Ending) |  | Tranche A Repayment
  (US$000) |  | Tranche B Repayment
  (US$000)
|                                    |  |                                 |  |                                
|                                    |  |                                 |  |                                 |       |    
|31
  December 2006                  |  | 0                               |  |                                 |       |    
|31
  March 2007                     |  | 0                               |  |                                 |       |    
|30
  June 2007                      |  | 2,300                           |  |                                 |       |    
|30
  September 2007                 |  | 2,050                           |  |                                 |       |    
|31
  December 2007                  |  | 2,200                           |  |                                 |       |    
|31
  March 2008                     |  | 2,050                           |  |                                 |       |    
|30
  June 2008                      |  | 1,900                           |  |                                 |       |    
|30
  September 2008                 |  | 1,800                           |  |                                 |       |    
|31
  December 2008                  |  | 1,650                           |  |                                 |       |    
|31
  March 2009                     |  | 1,450                           |  |                                 |       |    
|30
  June 2009                      |  | 1,350                           |  |                                 |       |    
|30
  September 2009                 |  | 1,250                           |  |                                 |       |    
|31
  December 2009                  |  |                                 |  |                                 | 1,000 |    
|31
  March 2010                     |  |                                 |  |                                 | 800   |    
|30
  June 2010                      |  |                                 |  |                                 | 3,200 | (*)
|                                    |  |                                 |  |                                 |       |    
|                                    |  |                                 |  |                                 |       |    
|                                    |  | 18,000                          |  |                                 | 5,000 |    
|                                    |  |                                 |  |                                 |       |    

* Debt Service
Reserve Account balance of US$3,000,000 to be applied

Page 91

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SEVENTH SCHEDULE

LENDERS COMMITMENTS

|                                    |  |               |  |              |  |             
|----------------------------------- |  | ------------- |  | ------------ |  | ------------
|Name                                |  | Tranche A     |  | Tranche B    |  | Tranche C   
|                                    |  |               |  |              |  |             
|Investec
  Bank (Australia) Limited |  | US$18,000,000 |  | US$5,000,000 |  | NZ$2,500,000
|                                    |  |               |  |              |  |             

Page 92

---



EIGHTH SCHEDULE

SUBSTITUTION CERTIFICATE

Substitution
Certificate relating to a Facility Agreement dated on or about
[          ] 2006 between,
among others, Austral Pacific Energy (NZ) Limited and Investec Bank (Australia)
Limited (the Agreement).

1. [     ]
(Transferee) whose address,
facsimile number and designated person are set out below;

2.
[     ] (Transferring
Lender) being a Lender for the purposes of the Agreement; and

3. Investec
Bank (Australia) Limited (Agent).

IT IS AGREED

|    |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                      
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.  | DEFINITIONS                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                      
|1.1 | Terms
  defined in the Agreement have the same meaning in this certificate.                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                      
|1.2 | In this
  certificate:                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                      
|    | Transfer Date means the date this
  certificate is countersigned by the Agent.                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                      
|    | Transferred Advances means that part of
  the Advances of the Transferring Lender as shall be assumed by the Transferee
  hereunder as specified in Schedule One to this Substitution Certificate.                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                      
|    | Transferred Commitment means that part
  of the Commitment in respect of each Tranche of the Transferring Lender as
  shall be assumed by the Transferee hereunder, namely:                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                      
|    | (a)                                                                                                                                                                                                                                                                                                                                                   | $[      ]
  in respect of Tranche A; and                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                      
|    | (b)                                                                                                                                                                                                                                                                                                                                                   | $[      ]
  in respect of Tranche B.                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                      
|    | Transferred Rights and Obligations means
  the rights of, and the obligations to be performed by, the Transferring
  Lender under the Transaction Documents in respect of the Transferred
  Commitment and Transferred Advances, which rights and obligations cease under
  clause 2.1 of this certificate and are to be assumed by the Transferee.
|    |                                                                                                                                                                                                                                                                                                                                                      
|2.  | TRANSFER                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                      
|2.1 | The
  Transferring Lender shall cease to be entitled to, and to be bound by, its
  Transferred Rights and Obligations relating to the Transferred Commitment and
  Transferred Advances with effect from the Transfer Date, but shall remain
  entitled to those rights and bound by those obligations which have accrued up
  to the Transfer Date. 
|    |                                                                                                                                                                                                                                                                                                                                                      
|2.2 | With effect
  from the Transfer Date:                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                      
|    | (a)                                                                                                                                                                                                                                                                                                                                                   | the
  Transferee and each of the parties to the Agreement shall assume obligations
  towards each other and acquire rights against each other which are identical
  to the Transferred Rights and Obligations except in so far as the obligations
  so assumed and rights so acquired

Page 93

---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | relate to
  the identity of or location of the Transferee and not to the identity of or
  location of the Transferring Lender;                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                    
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | the
  Transferee shall be deemed to be a party to the Transaction Documents which
  shall apply as if it were a Lender, with the Transferred Rights and
  Obligations; and                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                    
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | The Seventh
  Schedule of the Agreement shall be deemed to be amended accordingly.                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                    
|3.  | INDEPENDENT INVESTIGATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.1 | The
  Transferee acknowledges that:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | it has
  received a copy of the Agreement and the other Transaction Documents together
  with such other documents and information as it has required in connection
  with this transaction;                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                    
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | it has not
  relied, and shall not in the future rely, on the Transferring Lender or the
  Agent or any other party to the Agreement to check or enquire on its behalf into
  the legality, validity, effectiveness, adequacy, accuracy or completeness of
  any such documents or information; and
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                    
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | it has not
  relied, and shall not in the future rely, on the Transferring Lender or the
  Agent or any other Lender to assess or keep under review on its behalf the
  financial condition, creditworthiness, condition, affairs, status or nature
  of any Borrower or of any Obligor.           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                    
|3.2 | The
  Transferring Lender makes no representation or warranty and assumes no
  responsibility with respect to the legality, validity, effectiveness,
  adequacy or enforceability of the Transaction Documents or any document
  relating thereto and assumes no responsibility for the financial condition of
  any Obligor or for the performance and observance by any Obligor of any of
  their respective obligations under the Transaction Documents or any document
  relating thereto and any and all such representations and warranties, and all
  conditions, whether express or implied by law or otherwise, are expressly
  excluded.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.  | PAYMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The
  Transferring Lender and the Transferee acknowledge and confirm that they
  shall make directly between themselves such payments and adjustments agreed
  amongst themselves with respect to accrued interest, costs and other amounts
  attributable to the Transferred Commitment, Transferred Advances and
  Transferred Rights and Obligations prior to the Transfer Date.                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|5.  | GOVERNING LAW                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | This
  certificate shall be governed by and construed in accordance with the laws of
  New Zealand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Page 94

---



Signed by the authorised
representatives of the parties.

|                                                                                                                              |  |  | 
|----------------------------------------------------------------------------------------------------------------------------- |  |  | 
|SIGNED by

[                    ]                                                                                             |  |  | 
|                                                                                                                              |  |  | 
|in the
  presence of:                                                                                                         |  |  | 
|                                                                                                                              |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|Signature of
  witness                                                                                                        |  |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|Name of
  witness                                                                                                             |  |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|Occupation                                                                                                                    |  |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|City/town of
  residence                                                                                                      |  |  | 
|                                                                                                                              |  |  | 
|SIGNED by

[                    ]                                                                                             |  |  | 
|                                                                                                                              |  |  | 
|in the
  presence of:                                                                                                         |  |  | 
|                                                                                                                              |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|Signature of
  witness                                                                                                        |  |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|Name of
  witness                                                                                                             |  |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|Occupation                                                                                                                    |  |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|City/town of
  residence                                                                                                      |  |  | 
|                                                                                                                              |  |  | 
|Countersigned
  by the Agent on behalf of the other parties to the Agreement (but without any
  responsibility or liability):
|                                                                                                                              |  |  | 
|SIGNED by INVESTEC BANK (AUSTRALIA) LIMITED                                                                                   |  |  | 
|                                                                                                                              |  |  | 
|in the
  presence of:                                                                                                         |  |  | 
|                                                                                                                              |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|Signature of
  witness                                                                                                        |  |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|Name of
  witness                                                                                                             |  |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|Occupation                                                                                                                    |  |  | 
|                                                                                                                              |  |  | 
|                                                                                                                              |  | 
|City/town of
  residence                                                                                                      |  |  | 

Page 95

---



Schedule One To Substitution Certificate

Transferred Advances

[Details,
including relevant Tranche, to be completed]

Page 96

---



NINTH SCHEDULE

Terms of Warrants

Form of
Warrant Certificate attached. [see Exhibit 2.1.2]

Page 97

---



TENTH SCHEDULE

Bank Guarantee

To VECTOR GAS LIMITED (VGL)

In respect of AUSTRAL PACIFIC ENERGY (NZ)
LIMITED (Austral)

At the request
of Austral and in consideration of VGL at the request of the Investec Bank
(Australia) Limited (ABN 55 071 292 594) (Investec) agreeing to execute a
deed of priority of security interests, Investec unconditionally undertakes to
pay on written demand any sum which may from time to time become payable to VGL
under clause 10.3 of the Gas Prepayment and Sale Agreement (the GPSA) between International Resource
Management Corporation and VGL dated 4 February 2004 (as amended by the Deed of
Assignment and Assumption Interests in Gas Prepayment and Sale Agreement dated
23 December 2005 assigning the rights of International Resource Management
Corporation to Arrowhead Energy Limited) up to a maximum aggregate sum of NZ$2,500,000 (Maximum Guaranteed Amount)as such amount may be reduced from time to time on delivery to Investec of a
certificate from a director of Austral certifying the reduction in the Maximum
Guaranteed Amount in accordance with:

|                                                                         |                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                             
|------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                         | (a)                                                                                                                                                                                                                                                                                                      | the monthly
  invoices rendered under the Kahili GSA (as defined in the GPSA) effectively
  deducting an amount proportionate to Australs interest in the Kahili Gas
  Field; and                                                                                          
|                                                                         |                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                             
|                                                                         | (b)                                                                                                                                                                                                                                                                                                      | to the
  extent that the total payments made under the Kahili GSA are less than the
  Prepayment, the monthly invoices rendered under the Cheal GSA (as defined in
  the GPSA) effectively deducting an amount proportionate to Australs interest
  in the Cheal Gas Field.
|                                                                         |                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                             
|This
  guarantee is to continue until one of the following events occur:
|                                                                        
|                                                                        | Investec
  receives written notification from VGL that this guarantee is no longer
  required;                                                                                                                                                                                                          
|                                                                         |                                                                                                                                                                                                                                                                                                         
|                                                                        | the return
  of this guarantee to Investec;                                                                                                                                                                                                                                                             
|                                                                         |                                                                                                                                                                                                                                                                                                         
|                                                                        | payment to
  VGL by Investec of the whole of the said sum or such lesser sum as may be
  required by VGL;                                                                                                                                                                                               
|                                                                         |                                                                                                                                                                                                                                                                                                         
|                                                                        | Investec
  advises VGL in writing that it has received final payment of all Secured
  Indebtedness (as that term is defined in the US$ Cash Advance Facility
  Agreement between, among others, Investec and Austral, dated on or about the
  date of this Bank Guarantee (the Facility
  Agreement)).

Should VGL
certify to Investec that such an amount is due and owing by Austral to VGL
under clause 10.3 of the GPSA it is unconditionally agreed that such payment or
payments will be made to VGL forthwith without further reference to Austral and
notwithstanding any notice given by Austral to Investec not to pay same.

Provided
always that Investec may at any time there is an Event of Default continuing
under the Facility Agreement without being required to do so, pay to VGL the
Maximum Guaranteed Amount less any amount it may have already paid hereunder
and thereupon Investecs liability under this Bank Guarantee shall immediately
cease and determine.

The benefit of
this Bank Guarantee is personal and not capable of assignment.

Dated
this                    day
of
                    200

For Investec
Bank (Australia) Limited

|         | 
|-------- | 
|         | 
|Attorney | 

Page 98

---



ANNEXURE A

DRAWDOWN NOTICE

To:                    [Agent]

[*]- DRAWDOWN NOTICE NO. [*]

We refer to
the US$ Cash Advance Facility Agreement (the Facility
Agreement) dated [*]
2006 between, among others, Austral Pacific Energy (NZ) Limited as Borrower and
Investec Bank (Australia) Limited as Agent, Arranger and Security Agent.
Definitions in the Facility Agreement have the same meaning when used in this
Certificate.

Under clause
[5.1/8.1] of the Agreement:

|    |                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | we give you
  irrevocable notice that we wish to draw on [*] 20[*] (the Drawdown Date)
  under Tranche [insert Tranche]; [NOTE:Date
  is to be a Business Day.]                        
|    |                                                                                                                                                                                        
|(2) | the total
  Principal Amount to be drawn is [*];                                                                                                                                       
|    |                                                                                                                                                                                        
|(3) | particulars
  of each Advance are as follows:                                                                                                                                          
|    |                                                                                                                                                                                        
|    | Principal
Amount                    Interest
  Period                                                                                                                                  
|    |                                                                                                                                                                                        
|(4) | the proceeds
  will be automatically remitted to the [Proceeds Account/Debt Service Reserve
  Account] [the latter only to be used in
  relation to the first Advance under Tranche B];

We hereby
certify, after making due enquiry, that no unremedied Event of Default,
Potential Event of Default or Event of Review exists.

On behalf of

AUSTRAL PACIFIC ENERGY (NZ) LIMITED

|                       | 
|---------------------- | 
|                       | 
|                       | 
|By:                    | 
|                       | 
|[Authorised
  Officer] | 

Page 99

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ANNEXURE B

PART A

FORM OF DIRECTORS CERTIFICATE

TO: [Agent]

We, [] and [], being directors of [ insert
name ] (the Company)
certify as follows:

|    |                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.  | BOARD RESOLUTIONS                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                    
|1.1 | The board of
  directors of the Company has, by all necessary resolutions duly passed:                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                    
|    | (a)                                                                                                                                                                                                                                                                                 | approved the
  transactions contemplated by the documents listed in the schedule below (the
  Transactions), and the
  documents themselves (the Documents);                                         
|    |                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|    | (b)                                                                                                                                                                                                                                                                                 | authorised
  execution of the Documents by the Company; and                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|    | (c)                                                                                                                                                                                                                                                                                 | authorised
  the persons specified in paragraph 8 to give any notices and other
  communications and take any other action required under or in connection with
  the Documents on behalf of the Company.
|    |                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|1.2 | The relevant
  board resolutions were passed by way of resolutions in writing signed by all
  of the directors of the Company entitled to receive notice of a meeting of
  the board of directors.                                                                                 
|    |                                                                                                                                                                                                                                                                                    
|OR  |                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|1.2 | The relevant
  board resolutions were duly passed at a meeting of the board of directors:                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|    | (a)                                                                                                                                                                                                                                                                                 | which was properly convened; and                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|    | (b)                                                                                                                                                                                                                                                                                 | in respect of which all quorum
  requirements were duly observed.                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                    
|1.3 | The board
  resolutions remain in full force and effect.                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                    
|2.  | DIRECTORS SELF-INTERESTED TRANSACTIONS                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                    
|2.1 | After making
  due enquiry, it has been determined that one or more of the Companys directors
  is, or may be, interested (as that term is defined in section 139 of the
  Companies Act 1993 (the Act)) in the transactions contemplated by the
  Documents.                   
|    |                                                                                                                                                                                                                                                                                    
|2.2 | In approving
  the Documents and the Transactions, the board of directors, after taking into
  account all relevant factors, has resolved that the Company is receiving fair
  value under them.                                                                                   
|    |                                                                                                                                                                                                                                                                                    
|OR  |                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                          
|2.2 | All of the
  Companys entitled persons have agreed in writing (pursuant to section 107(3)
  of the Act) to the Companys entry into and performance of the Documents and
  the Transactions (so that nothing in sections 140 and 141 of the Act will
  apply to the Transactions).

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------
|3.  | CORPORATE BENEFIT                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | In approving
  the Documents and the Transactions, the board of directors has resolved
  (after taking into account all relevant factors) that the Companys entry
  into and performance of the Documents and the Transactions is, in each case,
  in the best interests of the Company.                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|OR  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                
|    | In approving
  the Documents and the Transactions, the board of directors has resolved
  (pursuant to an express provision in the constitution of Company) and after
  taking into account all relevant factors, that the Companys entry into and
  performance of the Documents and the Transactions is, in each case, in the
  best interests of the Companys holding company.                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4.  | MAJOR TRANSACTION                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4.1 | It has been
  determined that the Transactions contemplated by the Documents constitute a
  major transaction for the purpose of section 129 of the Act.                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4.2 | All the
  shareholders of the Company have by special resolution:                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                            | approved the
  Documents and the Transactions; and                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                            | confirmed,
  approved and ratified the Board resolutions referred to above.                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                
|5.  | DUE EXECUTION                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Each of the
  Documents has been properly executed by the Company.                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|6.  | SOLVENCY                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|6.1 | We are not
  aware of any liquidation proceedings which have been commenced by any person
  against the Company or which are intended or anticipated by the Company.                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|6.2 | Having taken
  into account all relevant factors (including in the case of a guarantee all
  rights of contribution and subrogation to which the Company would be entitled
  if called upon to perform its obligations and the solvency of the guaranteed
  parties) the directors have expressed the view that the value of the
  consideration or benefit received by the Company is not less than the value
  of the consideration provided by the Company.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|6.3 | The Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                            | is able to
  pay its due debts; and                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                            | is not
  engaged or about to engage in business for which its financial resources are
  unreasonably small; and
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                            | in our
  opinion (after due inquiry made and legal advice obtained):                                           

| |     |                                                                                                                                      
| | --- | -------------------------------------------------------------------------------------------------------------------------------------
| | (i) | will be able
  to perform its obligations under the Documents and the transactions
  contemplated by them when required to do so; and

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| |      |                                                                                                                        
| | ---- | -----------------------------------------------------------------------------------------------------------------------
| | (ii) | will not
  become unable to pay its due debts as a result of the Documents and the
  transactions contemplated by them.

|   |                                                                                                                                                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. | FINANCIAL ASSISTANCE                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                
|   | The
  Transactions do not include or involve the provision by the Company of
  financial assistance in connection with the purchase of a share issued or to
  be issued by it or by its holding company.                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                
|8. | AUTHORISED SIGNATURES                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                
|   | The
  following are the true signatures of the persons who have been authorised
  ([any one of them acting alone/any two of them acting together]) to give any
  notices and other communications, and to take any other action required,
  under or in connection with the Documents on behalf of the Company.

|                                                                                        |          |  |           | 
|--------------------------------------------------------------------------------------- | -------- |  | --------- | 
|Name                                                                                    | Position |  | Signature | 
|                                                                                        |          |  |          
|Given this
  [          ] day of

[                                    ]
  [          ]
|                                                                                        |          |  |           | 
|                                                                                        |          |  |          
|Director                                                                                |          |  | Director  | 

SCHEDULE (TO DIRECTORS CERTIFICATE)

DOCUMENTS

[                                                          ]

Page 102

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ANNEXURE B

PART B

FORM OF OFFICERS CERTIFICATE

AUSTRAL PACIFIC ENERGY LTD.

|    |                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Re: | US$ Cash Advance Facility Agreement among (i) Austral Pacific Energy
  (NZ) Limited as borrower, (ii) Kanuka Energy Limited, the Company, and Source
  Rock Holdings Limited, as guarantors, (iii) Investec Bank (Australia)
  Limited, in its capacity as agent, arranger and security agent, and (iv) the
  financial institutions named in the seventh schedule thereto; which agreement

The
undersigned officer of the above company (the Company) certifies for and on
behalf of the Company, without personal liability, intending that same may be
relied upon without further inquiry by the Finance Parties as defined in the
above-mentioned agreement, as follows:

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Directors and Officers. Attached hereto is
  List of Directors and Officers of the Company, and each person listed therein
  as a director is a director of the Company and is duly elected/appointing,
  acting and qualified, and there are no other directors of the Company, and
  each person listed therein as holding an office holds such office in the
  Company and is duly appointed, and each signature set out therein opposite
  the name of a person is a genuine signature of that person                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | Directors Resolution.Attached hereto is a
true and complete copy of a resolution of the directors of the Company
authorizing inter aliathe
above-mentioned agreement, and such resolution has been duly passed or
adopted in writing and remains in full force and effect and no resolution has
been passed nor any proceeding taken to amend, surrender or cancel the same.                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3. | Charter Documents. Attached hereto is a true
  and complete copy of the certificate of continuation, notice of articles, and
  articles of the Company and all amendments thereto, and the same remain in
  full force and effect, and no resolution has been passed nor any proceeding
  taken to amend, surrender or cancel the same.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4. | No Receivership, Insolvency or Dissolution.
  No receiver, receiver-manager, receiver and manager, liquidator or similar
  official has been appointed in respect of the Company or any of its assets.
  The Company has not filed a proposal, a notice of intention to file a
  proposal, or an assignment for the benefit of creditors under applicable
  bankruptcy or similar legislation, and the Company is not insolvent and has
  not committed any other act of bankruptcy. No petition has been filed, no
  order has been made, no resolution has been passed, nor has any other step
  been taken for the bankruptcy, liquidation, dissolution, winding-up or
  reorganization of the Company or for the arrangement or composition of the
  Companys debts.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|      |                       |        |            |  | 
|----- | --------------------- | ------ | ---------- |  | 
|Date: | December_____,
  2006 |        | Signature: |  | 
|      |                       |        |            |  | 
|      |                       | Title: |            | 

Page 103

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ANNEXURE C

RATIO CERTIFICATE

(clause 18.2(a)(iv))

|    |        
|--- | -------
|TO: | [Agent]

This
certificate is given to you pursuant to clause 18.2(a)(iv) (Ratio Certificate)
of the Facility Agreement (the Facility Agreement) between, among others,
Austral Pacific Energy (NZ) Limited as borrower, the Guarantors named therein
and [insert Lenders] dated [   ]. All terms used in this
certificate which are defined in the Facility Agreement have the same meaning
in this certificate.

We certify on
behalf of the directors of Austral Pacific Energy (NZ) Limited (Borrower) and
Kanuka Energy Limited as at
[                    ]
(the Calculation Date) that to the best of our knowledge and belief, having
made due enquiry:

|   |                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | The balances
  of the Project Accounts as at the Calculation Date and after making all
  transfers required by clause 19.3 are as set out in the Appendix to this
  certificate.                         
|   |                                                                                                                                                                                                          
|2. | The amounts
  and ratios detailed in the Appendix to this certificate are shown in, or
  derived from, the financial statements of the Borrower as at and for the
  period ended on the Calculation Date.
|   |                                                                                                                                                                                                          
|3. | The Borrower
  is not in breach, in any material respect, of any of the covenants in the
  Facility Agreement [or, if there is a
  breach, detailing that breach].                                       

DATED:          [                    ]

For and on
behalf of the directors of AUSTRAL PACIFIC ENERGY (NZ) LIMITED

by:

|         |  |          | 
|-------- |  | -------- | 
|         |  |          | 
|Director |  | Director | 

For and on
behalf of the directors of KANUKA ENERGY LIMITEDby:

|         |  |          | 
|-------- |  | -------- | 
|         |  |          | 
|Director |  | Director | 

Page 104

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APPENDIX TO RATIO CERTIFICATE

|                                                         |                                                                                            
|-------------------------------------------------------- | -------------------------------------------------------------------------------------------
|Project
Account Balances as at the Calculation Date (CD)
|                                                        
|                                                         | Proceeds
  Account balance     $[]                                                        
|                                                         |                                                                                            
|                                                         | Debt Service
  Reserve Account balance (X)$[]                                             
|                                                         |                                                                                            
|                                                         | Minimum Debt
  Service Reserve Account balance
  required     [US$3,000,000]/[US$1,500,000]
|                                                         |                                                                                            
|                                                         | Amount
  available for [distribution]     $[]                                             
|                                                         |                                                                                            
|Loan Life Ratio as at Calculation Date                  
|                                                        
|                                                         | Present
  Value of CADS to the relevant Tranche Expiry Date (A) $                          
|                                                         |                                                                                            
|                                                         | Aggregate of
  Principal Outstanding under the relevant Tranche                            
|                                                         |                                                                                            
|                                                         | Less (X) (B) $                                                                             
|                                                         |                                                                                            
|                                                         | Ratio of (A)
  to (B) [ : ]                                                                
|                                                         |                                                                                            
|Project Life Ratio as at Calculation Date               
|                                                        
|                                                         | Present
  Value of CADS to the Project End Date (C)
  $                                    
|                                                         |                                                                                            
|                                                         | Ratio of (C)
  to (B) [ : ]                                                                
|                                                         |                                                                                            
|Combined Project Life Ratio as at
  Calculation Date    
|                                                        
|                                                         | Aggregate of
  Principal Outstanding under Tranche A and Tranche B (D) $                   
|                                                         |                                                                                            
|                                                         | Ratio of (C)
  to (D) [ : ]                                                                
|                                                         |                                                                                            
|Historic Combined Cover Ratio as at
  Calculation Date  
|                                                        
|                                                         | Actual CADS
for the three month period up to the CD (E) $                                  
|                                                         |                                                                                            
|                                                         | Debt Service
  for that three month period (F)
  $                                         
|                                                         |                                                                                            
|                                                         | Ratio of (E)
  to (F) [ : ]                                                                
|                                                         |                                                                                            
|Forward Combined Cover Ratio as at
  Calculation Date   
|                                                        
|                                                         | Projected
  CADS for the three month period following the CD (G) $                         
|                                                         |                                                                                            
|                                                         | Debt Service
  for that three month period (H)
  $                                         
|                                                         |                                                                                            
|                                                         | Ratio of (G)
  to (H) [ : ]                                                                

Page 105

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ANNEXURE D

FORM OF ACCESSION DEED

(Clause 18.5)

DEED dated []

made by:

[Insert
name(s) of new Guarantor(s)](the New
Guarantor)

in favour of:

Investec Bank (Australia) Limited
as agent for the Finance Parties (the Agent)

INTRODUCTION

|             |                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                              
|------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A)          | The New
  Guarantor is a Subsidiary of Austral Pacific Energy (NZ) Limited (the Borrower).                                                                                                                                                                                                                                                                                                                             
|             |                                                                                                                                                                                                                                                                                                                                                                                                                         
|(B)          | The Borrower
is party to a US$ Cash Advance Facility Agreement dated [] 2006 (the
Facility Agreement) under or pursuant to which it has given guarantees and
other undertakings for the benefit of the Agent.                                                                                                                                                                                                        
|             |                                                                                                                                                                                                                                                                                                                                                                                                                         
|(C)          | At the
  request of the Borrower, the New Guarantor wishes to execute this deed (being
  a deed supplemental to the Facility Agreement) and in or to the effect of the
  form prescribed in Annexure D to the Facility Agreement in order to become a
  Guarantor under that agreement.                                                                                                                                 
|             |                                                                                                                                                                                                                                                                                                                                                                                                                         
|(D)          | The New
  Guarantor has resolved that it is in the New Guarantors interest that the
  New Guarantor:                                                                                                                                                                                                                                                                                                                   
|             |                                                                                                                                                                                                                                                                                                                                                                                                                         
|             | (i)                                                                                                                                                                                                                                                                                                                                                                                                                      | guarantee
  the due payment by each other Obligor of all Secured Indebtedness (as defined
  in the Facility Agreement) from time to time owing or payable to the Finance
  Parties by each other Obligor; and
|             |                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                              
|             | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                     | guarantee
  the other obligations of each other Obligor in respect of Secured
  Indebtedness;                                                                                                                
|             |                                                                                                                                                                                                                                                                                                                                                                                                                         
|             | and that this deed be executed by the New Guarantor.                                                                                                                                                                                                                                                                                                                                                                    
|             |                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                              
|IT IS AGREED
|            
|1.           | Definitions: To the extent to which the same
  are applicable the definitions and provisions contained in clause 1 of the
  Facility Agreement shall apply to and be incorporated in this deed.                                                                                                                                                                                                                         
|             |                                                                                                                                                                                                                                                                                                                                                                                                                         
|2.           | Acknowledgement: The New Guarantor
  acknowledges that credit or other financial accommodation has been and will
  hereafter be provided by one or more of the Finance Parties to the Borrower
  on the condition and in part consideration that the New Guarantor will give,
  or has given, to the Agent the guarantee created by this deed and the other
  covenants contained in the Facility Agreement on its part.
|             |                                                                                                                                                                                                                                                                                                                                                                                                                         
|3.           | Agreement: The New Guarantor acknowledges
  and agrees that, with effect from the date of this deed, it is and will be a
  Guarantor for the purposes of the Facility Agreement.                                                                                                                                                                                                                                        

Page 106

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | Implied provisions: Pursuant to Section 8 of
  the Property Law Act 1952 of New Zealand it is hereby declared that there
  shall be deemed to be incorporated in this deed all the covenants,
  representations, warranties and provisions of the Facility Agreement in the
  same manner and to the same extent as if those covenants, representations,
  warranties and other provisions had been set out in full in this deed (with
  all necessary modifications) and made applicable to the New Guarantor as
  though it were a Guarantor and the New Guarantor accordingly covenants and
  agrees, jointly and severally, with each other Obligor, to perform, observe
  and be bound by those covenants, representations, warranties and other
  provisions.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | Guarantee: Without limiting the effect of
  clause 4, the New Guarantor unconditionally and irrevocably guarantees to the
  Agent and the Finance Parties, jointly and severally with each other Obligor,
  the due and punctual payment by each other Obligor of the Secured
  Indebtedness as and when the same shall become due and payable and the due
  observance and performance by each other Obligor of all its obligations under
  the Facility Agreement. This guarantee is deemed for the purposes of the
  Facility Agreement as having been given pursuant to clause 12 of the Facility
  Agreement.                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6. | Governing law and jurisdiction: This deed
  shall be governed by, and construed in accordance with, the laws of New
  Zealand and the subsidiary hereby submits to the non-exclusive jurisdiction
  of the laws of New Zealand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

SIGNED AS A
DEED

[New Guarantor]

Page 107

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