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EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT made effective as of the 2nd day of January,
2007.

BETWEEN:

> MEGAWEST ENERGY CORP., a body corporate duly
>           incorporated under the laws of the Province of British Columbia with
>           an office in the City of Calgary, in the Province of Alberta (hereinafter
>           called the Corporation)

- and -

> F. GEORGE ORR, a resident of the City of Surrey,
>           in the Province of British Columbia (hereinafter called the Chief
>           Financial Officer of the Corporation and/or the Executive)

WHEREAS
the Corporation wishes to employ the Executive and the Executive wishes to be
employed by the Corporation as the Chief Financial Officer of the Corporation;
and

AND
WHEREAS the Corporation and the Executive wish to clarify the terms of the
Executives employment with the Corporation.

NOW
THEREFORE, THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants herein contained, and for other good valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), the parties hereto
agree as follows:

ARTICLE 1 DEFINITIONS AND INTERPRETATION

**1.1**     **Definitions**

In this Agreement, unless there is
something in the context or subject matter inconsistent therewith, the following
defined terms shall have the meanings hereinafter set forth:

| | (a) | Affiliate has the meaning set forth in the
      Business Corporations Act(British Columbia); provided that the
      Corporation and each of its Affiliates shall at all times be deemed to be
      Affiliates of the Corporation;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                       
| | (b) | Annual Salary means the annual salary of the
      Executive as defined in Schedule A;                                                                                                                                            
| |     |                                                                                                                                                                                                                                       
| | (c) | Associate has the meaning set forth in the
      Business Corporations Act(British Columbia);                                                                                                                                       
| |     |                                                                                                                                                                                                                                       
| | (d) | Benefits means the benefits and entitlements set
      out in Schedule B;                                                                                                                                                         
| |     |                                                                                                                                                                                                                                       
| | (e) | Board of Directors means the Board of Directors
      of the Corporation;                                                                                                                                                           
| |     |                                                                                                                                                                                                                                       
| | (f) | Change of Control means the occurrence of any
      of:                                                                                                                                                                             

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| | (i)  | the purchase or acquisition of Common Shares of the
      Corporation and/or securities convertible into Common Shares of the
      Corporation or carrying the right to acquire Common Shares of the
      Corporation (Convertible Securities) as a result of which a
      Person, group of Persons or Persons acting jointly or in concert, or any
      Affiliates or Associates of any such Person, group of Persons or any of
      such Persons acting jointly or in concert (collectively the
      Holders) beneficially own or exercise control or direction over
      Common Shares and/or Convertible Securities of the Corporation such that,
      assuming after the conversion of the Convertible Securities beneficially
      owned by the Holders thereof, would have the right to cast more than 50%
      of the votes attached to all Common Shares of the Corporation; provided
      that, the acquisition of Common Shares or Convertible Securities of the
      Corporation pursuant to the issuance of securities from treasury which
      results in a Holder beneficially owning or exercising control or direction
      over 50% of the votes attached to all Common Shares of the Corporation
      (assuming conversion of the Convertible Securities beneficially owned by
      Holders thereof) where the Board of Directors continues to be supportive
      of the direction of the Corporation under the management of the Chief
      Executive Officer shall not constitute a Change of
  Control;
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (ii) | approval by the shareholders of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (A)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (B)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (C)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (D)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |      | (E)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | (g) | Common Shares means the common shares of the
      Corporation;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (h) | Confidential Information means information,
      data, technology, material or other property, of any kind and in whatever
      form, that is confidential or proprietary to the Corporation or any
      Affiliate or Associate, including without limitation: engineering reports,
      geological information, maps, well data, prospect data and seismic
      information or any other information, the disclosure of which could be
      reasonably expected to materially adversely affect the Corporation or any
      Affiliate or Associate or which the

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| |     | Corporation or any Affiliate or Associate is obliged by
      contract or law to treat as confidential. Confidential
      Information does not include information which is or becomes
      generally available to the public, other than as a result of a disclosure
      in violation of this Agreement, information which the Executive can
      conclusively establish was already lawfully in the possession of the
      Executive prior to the Executives employment with the Corporation or
      information, the disclosure of which is required by regulation or
    law;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (i) | Constructive Dismissal shall mean the occurrence
      of any of the following events:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| | (i)  | a material change (other than those which are clearly
      consistent with a promotion) in the Executives position or duties, title
      or office, which includes any removal of the Executive from or any failure
      to re-elect or re-appoint the Executive to any such positions or offices,
      provided that, such term shall not include a change consistent with the
      Corporation splitting a position into one or more positions in conjunction
      with a corporate reorganization based on the demands of such position so
      long as there is no reduction in the Executives Annual Salary or a
      material reduction in Benefits or other remuneration or responsibilities
      taken as a whole; or
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (ii) | a reduction by the Corporation in the Executives Annual
      Salary or any material change in the basis upon which the Executives
      Annual Salary is determined, provided however it is understood there may
      be economic circumstances wherein the Executive and the Corporation agree
      that it would be in the best interest of the Corporation to temporarily
      reduce the Executives Annual Salary and the annual salary of other
      executives of the Corporation on a pro rata basis, conditional on
      reinstatement at some agreed time in the future and that such an event
      will not be considered as a Constructive
Dismissal.                                                              

Provided, however, Constructive
Dismissal shall expressly be deemed not to include the following:

| | (i)  | the occurrence of any of the aforesaid events with the
      consent of the Executive; or                                                
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                          
| | (ii) | termination of the employment of the Executive for Just
      Cause, Death or Disability or for the reasons described in Section
    4.5;

| | (j) | Date of Termination shall mean the date of
      cessation of the Executives employment with the Corporation, regardless
      of the reason for cessation of employment;                                                                                                                       
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                    
| | (k) | Disability shall mean the Executives inability
      to perform the material and substantial duties of his employment on a
      full-time basis for a period of six (6) cumulative months out of any
      18-month period where such inability arises as a result of sickness or
      injury;
| |     |                                                                                                                                                                                                                                                                                                    
| | (l) | Effective Date shall be the effective date of a
      Change of Control;                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                    
| | (m) | Just Cause means any act or course of conduct
      which at law constitutes just cause and shall include, without
      limitation:                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                    
| |     | (i)                                                                                                                                                                                                                                                                                                

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| |       | from the Executives Disability) after the Corporation
      has given the Executive reasonable notice of such failure and a reasonable
      opportunity to correct it;                                                           
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                    
| | (ii)  | a breach of any provision in Article 5 (provided that the
      Corporation acts in good faith in determining that such a breach
      constitutes Just Cause) or a material breach of any other provision of
      this Agreement;
| |       |                                                                                                                                                                                                                                    
| | (iii) | the conviction of the Executive of an indictable offence
      or fraud; or                                                                                                                                                        
| |       |                                                                                                                                                                                                                                    
| | (iv)  | fraud, theft or wilful misconduct by the Executive that
      relates to or affects the Corporation or the Executives employment with
      the Corporation;                                                                      

| |     | The Executives employment shall not be considered as
      being terminated for Just Cause unless and until there shall have been
      delivered to the Executive a copy of a resolution duly adopted by the
      affirmative vote of not less than two-thirds of the entire membership of
      the Board (not counting the Executive, if the Executive shall then be a
      member of the Board) at a meeting of the Board called and held for the
      purpose (after reasonable notice to the Executive and an opportunity for
      the Executive, together with his counsel, to be heard before the Board),
      finding that in the good faith opinion of the Board the Executive was
      guilty of the conduct constituting Just Cause and specifying the
      particulars thereof. Once the Executive receives notice of a meeting of
      the Board of Directors to remove him for Just Cause he may at any time
      prior to the Date of Termination elect to terminate his employment Without
      Constructive Dismissal pursuant to Section 4.3. Should the Executive
      dispute the Board of Directors decision that Just Cause existed for a
      termination, the Executive shall have the right to have the matter
      resolved by arbitration, as set forth in Article 6, by delivering written
      notice to the Corporation within seven (7) days of the Board of Directors
      decision. The Corporation and the Executive agree that should the
      Executive dispute whether Just Cause existed for the termination, that the
      employment shall not be considered terminated until resolved by
      arbitration as set forth in Article 6. The Corporation and the Executive
      agree to use their best efforts to expedite any such arbitration. In the
      event an arbitrator determines that Just Cause did not exist for a
      termination purportedly for Just Cause, the termination will be deemed to
      have been a termination without Just Cause and the Executive will be
      entitled to receive any payments he would have received had his
      termination been specified as one without Just Cause under Section
    4.3.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | Perquisites means the perquisites set out in
      Schedule C;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (n) | Person means any individual, corporation,
      limited liability corporation, limited or general partnership, joint
      venture, association, joint-stock corporation, trust, plan, unincorporated
      organization or government or any agency or political subdivisions
      thereof;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (o) | Stock Option Plan means the Corporations stock
      option plan (the Plan) which was made effective on the 28thday of September, 2004 and received shareholder approval for
      reconfirmation on the 20thday of October, 2006, Amended and
      Restated on February 19, 2007 by way of a resolution of the disinterested
      shareholders of the Corporation adopting and reconfirming the
  Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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ARTICLE 2 EMPLOYMENT

**2.1**     **Engagement**

Subject to the terms and conditions hereof, the Corporation
shall employ the Executive as the Chief Financial Officer of the Corporation,
its Affiliates and Associates (as requested). The Executive hereby accepts such
employment in accordance with the terms and conditions of this Agreement. The
Executive agrees to perform those duties and functions and have those
responsibilities which are normally associated with his position, in addition to
carrying out such other duties and responsibilities as are assigned to him from
time to time by the Board of Directors.

**2.2**     **Performance**

The Executive shall devote the necessary energy, skill and best
commercial efforts to the performance of his duties hereunder, in a manner which
will faithfully and diligently further the business and interests of the
Corporation. The Executive shall at all times comply with all applicable laws
and all policies and instructions of the Corporation in effect from time to time
unless any such policies are in direct conflict with the terms of this
Agreement, in which case, the terms of this Agreement shall govern to the extent
of the conflict.

**2.3**     **Term**

This Agreement shall be for an indefinite period and may be
terminated by the Executive or the Corporation in accordance with Article 4
hereof.

ARTICLE 3 REMUNERATION AND BENEFITS

**3.1**     **Annual
Salary**

As consideration for the services provided herein, the
Corporation shall pay to the Executive his Annual Salary, as defined in Schedule
A, (less all applicable statutory withholdings and deductions) in arrears by
semi-monthly instalments during the term of this Agreement.

**3.2**     **Discretionary
Bonus**

During the term of this Agreement and at the discretion of the
Board of Directors, the Executive may also be paid a discretionary bonus, cash
or otherwise, as additional remuneration for his services under this Agreement
with the discretionary bonus entitlement to be determined at such a time as
bonuses are scheduled for determination consistent with the Corporations bonus
program or policy.

**3.3**     **Stock
Options**

| | (a) | The Corporation shall issue 1,000,000 Common Share
      options to the Executive in his capacity as Chief Financial Officer with
      an exercise price of $0.50 per Common Share under the terms and conditions
      of the Corporations Stock Option Plan, to be issued upon commencement of
      employment, and shall be fully vested and may be exercised at any time by
      the both before and after termination by the Executive or his legal heirs
      until January 5, 2011. The options may also at the Executives or his
      legal heirs election be exercised on a cashless basis. Upon written
      request by the Executive the Corporation
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |     | agrees to register for resale the shares underlying the
      options or shares issued pursuant to the options at its
expense.;                                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (b) | During the term of this Agreement and at the discretion
      of the Board of Directors acting on the recommendations of the Human
      Resources Committee (or any replacement committee), the Executive may be
      granted additional options to purchase Common Shares in accordance with
      the Corporations Stock Option Plan, as additional remuneration for his
      services under this Agreement.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (c) | All issuances set out above shall be subject to
      applicable stock exchange approvals and shall be made in accordance with
      applicable securities legislation.                                                                                                                                                                                                                                           

**3.4**     **Expenses**

The Corporation shall reimburse the Executive for all
reasonable travelling and other expenses actually and properly incurred by him
in connection with his duties hereunder in accordance with the Corporations
policies, provided that such expenses shall be subject to annual tabling before
the Board of Directors, and such expenses may be subject to further verification
by the Audit Committee of the Board of Directors. For all such expenses, the
Executive shall furnish the Corporation with such statements, receipts or other
reasonable documentation and within the applicable time period as may be
reasonably required by the Corporation.

**3.5**     **Benefits**

The Executive shall participate in all Benefits that the
Corporation provides for its executives, unless such Benefits are relinquished
by the Executive. The Corporation shall provide Benefits in accordance with the
formal plan documents or policies, and any issues with respect to entitlement or
payment of Benefits shall be governed by the terms of such documents or policies
establishing the Benefit in issue.

**3.6**     **Perquisites**

The Executive shall be entitled to participate in and receive
the perquisites set out in Schedule C to this Agreement.

ARTICLE 4 TERMINATION OF EMPLOYMENT

**4.1**     **Death**

The Executives employment and this Agreement shall be deemed
terminated on death, at which time the Executives personal representatives
shall be entitled to receive the amount of unpaid Annual Salary to and including
the date of death, any bonus declared but not yet paid, plus all expense
reimbursements (in each case less applicable withholdings and deductions). Any
options to purchase Common Shares shall be treated in the manner set forth in
Section 3.3 (a) except that the options shall expire on the earlier of their
expiry date or eighteen months after the death of the Executive.

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**4.2**     **Disability**

| | (a) | The Executive shall cooperate in all respects with the
      Corporation if a question arises as to whether the Executive has a
      Disability. The Executive shall, as reasonably requested by the
      Corporation, submit to an examination by a medical doctor or other health
      care specialist mutually selected by the Corporation and the Executive
      (or, if they cannot agree on the selection of the doctor or specialist, a
      doctor or specialist appointed by the Court of Queens Bench in Calgary,
      Alberta). If the Corporation and the Executive are unable to agree on
      whether a Disability exists, the determination of the specialist selected
      pursuant hereto shall be determinative.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (b) | In the event of a Disability of the Executive, the
      Executives employment with the Corporation shall be deemed to be
      frustrated and, unless the Board of Directors determines otherwise, shall
      automatically terminate. If the Executives employment is terminated by
      reason of Disability, then:                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

**4.3**     **Termination
by the Corporation for Just Cause and Termination by the Executive Without
Constructive Dismissal**

| | (a) | The Corporation may terminate the Executives employment
      for Just Cause. The Executive may terminate his employment with the
      Corporation Without Constructive Dismissal for any reason upon the earlier
      of thirty (30) days written notice and immediately upon delivery of
      written notice should the Board of Directors call a meeting to remove the
      Executive for Just Cause.                                                                                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (b) | If the Executives employment is terminated either by the
      Corporation for Just Cause or by the Executive Without Constructive
      Dismissal, the Corporation shall pay to the Executive, within five (5)
      business days following the Date of Termination, the amount of unpaid
      Annual Salary to and including the Date of Termination, any declared but
      unpaid bonus, and expense reimbursements (in each case less applicable
      statutory withholdings and deductions). Any vested options to purchase
      common shares shall be treated in the manner set forth in Section 3.3 (a)
      except that in the case of termination for Just Cause they shall expire as
      at the date of Date of Termination.

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**4.4**     **Termination
by the Corporation Without Just Cause or**Termination by the
Executive for Constructive Dismissal

| | (a) | The Corporation may, in its absolute discretion,
      immediately terminate the Executives employment at any time without Just
      Cause for any reason provided that such termination without just cause is
      approved beforehand by a majority of the Board of Directors. At any time
      within 30 days following an event that constitutes a Constructive
      Dismissal hereunder, the Executive may terminate his employment with the
      Corporation upon thirty (30) days written notice.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (b) | If the Executives employment is terminated either by the
      Corporation without Just Cause or by the Executive for Constructive
      Dismissal, then the Corporation shall pay to the
  Executive:                                                                                                                                                                                                                                                                                                       

| | (i)   | the amount of unpaid Annual Salary to and including the
      Date of Termination;                                                                                                                                                                                                                       
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                          
| | (ii)  | all expense reimbursements;                                                                                                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                          
| | (iii) | any bonus that has been declared by the Board of
      Directors but not yet paid; and                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                          
| | (iv)  | within five (5) business days of receipt of an executed
      release in the form of the Release attached as Schedule D to this
      Agreement, payment of the following, in each case less all applicable
      statutory withholdings and deductions (collectively, the Termination
      Amount):
| |       |                                                                                                                                                                                                                                                                                                          
| |       | (A)                                                                                                                                                                                                                                                                                                      
| |       |                                                                                                                                                                                                                                                                                                          
| |       | (B)                                                                                                                                                                                                                                                                                                      

| | (c) | If the Executives employment is terminated either by the
      Corporation without Just Cause or by the Executive for Constructive
      Dismissal, then any options to purchase Common Shares shall be treated in
      the manner set forth in Section 3.3 (a).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

**4.5**     **Change
of Control**

| | (a) | In the event of a Change of Control of the
      Corporation:                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                       
| |     | (i)                                                                                                                                   
| |     |                                                                                                                                       
| |     | (ii)                                                                                                                                  
| |     |                                                                                                                                       
| | (b) | If the Executives employment is terminated by either the
      Corporation or the Executive pursuant to Section 4.5(a) above,
  then:

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| | (i)  | the Corporation shall pay to the Executive, upon receipt
      of an executed release in the form of the Release attached as Schedule D
      to this Agreement, the Termination Amount payable to the Executive
      pursuant to Section 4.4(b); and
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                         
| | (ii) | any outstanding options to purchase Common Shares shall
      be governed in the manner set forth in Section 3.3
(a)..                                                                                                                                  

| | (c) | If neither the Corporation nor the Executive elects to
      exercise the option to terminate the Executives employment pursuant to
      Section 4.5(a) above, the Executives employment shall continue in
      accordance with the terms of this Agreement, or on such other terms as
      mutually agreed by the Corporation and the
Executive.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

**4.6**     **Payment of Termination Amount**

| | (a) | The Termination Amounts payable to the Executive pursuant
      to Sections 4.4(b) or 4.5(b) shall not be reduced in any respect in the
      event that the Executive shall secure or shall not reasonably pursue
      alternative employment following the termination of the Executives
      employment.                                                                                   
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| | (b) | The Executive will be entitled to elect to contribute a
      portion of the Termination Amount payable to the Executive pursuant to
      Sections 4.4(b) or 4.5(b) to a registered retirement savings plan as
      permitted under the Income Tax Act (Canada) and the Corporation shall
      cooperate in the payment of such contributions, subject to applicable
      eligibility limits.

**4.7**     **Resignation
from Offices and Directorships**

Unless otherwise requested by the Corporation, effective on the
Date of Termination, the Executive shall resign from all offices and
directorships in the Corporation and its Affiliates or Associates, save and
except directorships of the Corporation or Affiliates and Associates that are
public companies, and the Executive shall not be entitled to receive any payment
or compensation for loss of office or directorship or otherwise by reason of the
resignation except as noted to in this agreement. If the Executive fails to
resign as aforesaid, the Corporation is irrevocably authorized to remove him
from all offices and directorships held, save and except Directorships of the
Corporation or Affiliates or Associates which are public companies, and to sign
any documents on his behalf and do any things necessary or requisite to give
effect to such documents or resignation

**4.8**     **Options to Purchase Common Shares**

Subject to the provisions of this Article 4 providing for
accelerated vesting of the Executives options to purchase Common Shares in
certain circumstances, in the event of termination of the Executives
employment, any options to purchase Common Shares must be exercised in
accordance with conditions set forth in Section 3.3 (a).

**4.9**     **Return
of Property**

On the Date of Termination, the Executive shall promptly
surrender to the Corporation all information in whatever form (including all
Confidential Information) and any other documents, materials, data, property,
information and equipment belonging to the Corporation or relating to the
Corporations business in his possession, custody or control, and the Executive
shall not thereafter retain or deliver to any other Person any of the foregoing
or any summary or memorandum thereof.

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- 10 -

ARTICLE 5COMPETING INTERESTS, CONFIDENTIALITY AND
NON-SOLICITATION

**5.1**     **No
Breach of Proprietary Rights of Third Parties**

| | (a) | The Executive represents and warrants to the Corporation
      that (i) the Executives employment with the Corporation and his
      performance of this Agreement will not breach any agreement or other
      obligation with respect to the confidential or proprietary information of
      a third party; and (ii) the Executive is not bound by any written or oral
      agreement with any third party that conflicts with the Executives
      employment with the Corporation or his obligations hereunder.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (b) | The Executive agrees that, during his employment with the
      Corporation and in the performance of his obligations hereunder, he shall
      not improperly bring to the Corporation or use any trade secrets or
      confidential or proprietary information of any third party or otherwise
      knowingly infringe on the proprietary rights of any third
  party.                                                                                                                                             

**5.2**     **Non-Solicitation and Other Prohibited Actions**

During the Executives employment with the Corporation or if a
resolution duly adopted by the affirmative vote of not less than two-thirds of
the entire membership of the Board (not counting the Executive, if the Executive
shall then be a member of the Board) at a meeting of the Board called and held
for the purpose (after reasonable notice to the Executive and an opportunity for
the Executive, together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Executive was guilty of the
conduct constituting Just Cause then for a period of twelve (12) months after
thereafter, the Executive shall not, without the prior written consent of the
Board of Directors of the Corporation (i) directly or (ii) knowingly and
indirectly:

| | (a) | commence an offer of any nature or kind whatsoever for
      any securities or property or assets of the Corporation or any of its
      Affiliates or Associates, including without limitation a tender or
      exchange offer;                                                                                                                                                                                                                                                                                                                                                                      
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (b) | solicit proxies from holders of securities of the
      Corporation or form, join or in any way participate with a control
      person (as such term is defined under the Securities Act(Alberta)) with respect to the equity of the Corporation or any of its
      Affiliates or Associates;                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (c) | engage in any discussions or negotiations, conclude any
      understandings or enter into any agreement, or otherwise act in concert,
      with any third party to propose or effect any takeover bid, amalgamation,
      merger, arrangement or other business combination with respect to the
      Corporation or any of its Affiliates or Associates or substantially all of
      the assets of the Corporation or any of its Affiliates or Associates or to
      propose or effect any acquisition or purchase of any assets of the
      Corporation or any of its Affiliates or Associates;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (d) | institute any shareholder proposal in respect of the
      Corporation or otherwise attempt to influence or control the conduct of
      the security holders of the Corporation; or                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (e) | take any action in furtherance of any of the
      foregoing,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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- 11 -

whether for or on his behalf or for any
entity in which he shall have a direct or indirect interest (or any Affiliate or
Associate of any such entity) whether as a proprietor, partner, co-venturer,
financier, investor or stockholder, director, officer, employer, employee,
servant, agent, representative or otherwise

**5.3**     **Confidentiality**

| | (a) | During the period of his employment with the Corporation
      and at any time thereafter, the Executive shall receive and hold all
      Confidential Information absolutely secret, undisclosed, in trust and in
      confidence, and shall comply with the Corporations policies and
      guidelines and use his best efforts for the protection of Confidential
      Information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (b) | The Executive shall not reveal or disclose to any Person
      outside the Corporation or use for his own benefit, whether by private
      communication or by public address or publication or otherwise, any
      Confidential Information without the Corporations specific written
      authorization or except as required by a mandatory provision of applicable
      law, provided however, thatprior to any unauthorized use or
      disclosure of Confidential Information that is required by law, the
      Executive shall give the Corporation reasonable prior notice of any
      disclosure of Confidential Information required by law and, if requested
      by the Corporation, shall use reasonable efforts to obtain a protective
      order or similar protection for the Corporation and shall permit and
      cooperate with any effort by the Corporation to obtain such an order. The
      Executive shall take such action as is reasonably necessary to ensure that
      no other employee, agent, contractor or associate of the Corporation, or
      any family member of the Executive or other person discloses or permits
      the disclosure of any Confidential Information.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (c) | All originals, copies and other forms of Confidential
      Information, however and whenever produced, shall be the sole property of
      the Corporation, not to be removed from the premises or custody of the
      Corporation, except in the normal course of business, without in each
      instance first obtaining written consent or authorization of the
      Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (d) | This Agreement and all information and documents
      concerning the substance and terms of this Agreement shall be Confidential
      Information and shall be maintained in confidence and shall not be
      disclosed to any other Person without the Corporations specific written
      authorization or as required by law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

**5.4**     **Acknowledgement**

The
Executive acknowledges and agrees that:

| | (a) | he will receive or will become eligible to receive
      substantial benefits and compensation as a result of his employment by the
      Corporation and its subsidiaries under this Agreement, which benefits and
      compensation are offered to him only because and on condition of his
      willingness to commit his commercial best efforts and loyalty to the
      Corporation, including abiding by the terms and restrictions in this
      Article 5;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (b) | as a result of the acquisition of Confidential
      Information, the Executive will occupy a position of trust and confidence
      with the Corporation and its Affiliates and Associates;                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | the Executives position of trust and knowledge of
      Confidential Information would enable the Executive to put the Corporation
      at a significant competitive disadvantage if the Executive breaches the
      restrictions in this Article 5;                                                                                                                                                                                                              

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- 12 -

| | (d) | irreparable damage would result to the Corporation if the
      provisions of this Article 5 hereof are not specifically enforced, and the
      Executive waives all defences to the strict enforcement thereof by the
      Corporation;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                           
| | (e) | the Corporation shall be entitled to any appropriate
      legal, equitable, or other remedy, including injunctive relief, in respect
      of any failure or continuing failure on his part to comply with Article
      5;              
| |     |                                                                                                                                                                                                                                           
| | (f) | the restrictions contained in this Article 5 are
      reasonable and valid based on the nature of the Executives position with
      the Corporation; and                                                                               
| |     |                                                                                                                                                                                                                                           
| | (g) | any breach of this Article 5 shall constitute grounds for
      termination of the Executives employment for Just
Cause.                                                                                                                 

**5.5**     **Survival**

Notwithstanding the termination of this Agreement and the
Executives employment, the provisions of this Article 5 shall survive such
termination and be continuing obligations.

ARTICLE 6ARBITRATION

**6.1**     **Definition**

Any controversy, dispute, or claim arising out of, relating to,
or concerning this Agreement, the breach of this Agreement, the employment of
the Executive, or the termination of the Executives employment will be resolved
pursuant to this Article 6. Without limiting the generality of the foregoing,
this includes all claims, whether arising in respect of contractual or
extra-contractual liability. Any such controversy, dispute, or claim will be
referred to a single arbitrator pursuant to the British Columbia Commercial
Arbitration Act (the "Commercial Arbitration Act"), which arbitration will
occur in Vancouver, British Columbia. This Article 6 will be deemed to be a
submission to arbitration by the parties hereto in accordance with the
Commercial Arbitration Act,provided that, if the provisions of the
Commercial Arbitration Act differ from in this Article 6, the provisions of this
Article 6 will prevail. Any demand for resolution of such a matter must be
served on the other party within the period covered by the applicable statute of
limitations.

**6.2**     **Enforcement**

This Article 6 will be specifically enforceable. Judgment upon
any award rendered by the arbitrator may be entered in any court having
jurisdiction.

**6.3**     **Authority**

The arbitrator will have no authority to extend, modify, or
suspend any of the terms of this Agreement. The arbitrator must make his award
in writing and must accompany it with an opinion discussing the evidence and
setting forth the reasons for the award.

**6.4**     **Decision**

The decision of arbitrator within the scope of the submission
will be final and binding on both parties, and any right to judicial action on
any matter subject to resolution by arbitration hereunder hereby is waived
unless otherwise required by applicable law, except suit to enforce an

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- 13 -

award by the arbitrator or in the event resolution by an
arbitrator is not available for any reason.

**6.5**     **Expenses**

The Corporation shall pay the arbitrators fees and charges;
however, each party shall bear its or his own costs and expenses with respect to
the arbitration of any controversy, dispute, or claim under this Article 6,
including, but not limited to, any legal fees or expenses. Notwithstanding the
foregoing, in the event that the Corporation is the losing party (as determined
by the arbitrator), the Corporation shall bear both its costs and expenses and
the costs and expenses of the Executive with respect to the arbitration of any
controversy, dispute, or claim under this Article 6, including, but not limited
to, any legal fees or expenses.

ARTICLE 7GENERAL

**7.1**     **Enurement**

This Agreement shall enure to the benefit of and be binding
upon the Corporation, its successors and permitted assigns, and the Executive
and his executors, administrators, personal representatives and assigns. Neither
the Executive nor the Corporation may assign its rights hereunder to another
Person without the consent of the other party.

**7.2**     **Notices**

Any notice required or permitted to be given under this
Agreement shall be in writing and shall be properly given if delivered
personally, by telecopy, by prepaid courier service or by certified or prepaid
registered mail, addressed as follows (or to such other address provided by one
party to the other party):

|Executive:    | 15276  83 rd Ave.             
|------------- | -------------------------------
|              |                                
|              | Surrey, B.C. V3S-8M7           
|              |                                
|              | Telecopy; 604-606-7980         
|              |                                
|With Copy To: | Monita Faris                   
|              |                                
|              | Suite 1010 West Pender         
|              |                                
|              | Vancouver, B.C. V6C-1H2        
|              |                                
|              | Telecopy; 604-606-7980         
|              |                                
|Corporation:  | MegaWest Energy Corp.          
|              | 10thFloor,
      815-8thAve. SW
|              | Calgary, Alberta, T2P 3P2      
|              |                                
|              | Attn:      David Sealock       
|              |                                
|              | Telecopy; 403-984-6343         

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- 14 -

|With Copy To: | Clark Wilson LLP                         
|------------- | -----------------------------------------
|              | Barristers and Solicitors                
|              | Patent & Trade-mark Agents               
|              | 800  855 West Georgia Street            
|              | Vancouver, British Columbia V6C
      3H1
|              |                                          
|              | Attn:       Virgil Hlus                  
|              |                                          
|              | Telecopy; 604-687-6314                   

Any such notice shall be deemed to be received (i) on the date
of delivery, if delivered by hand, (ii) one (1) business day after delivery, if
delivered by courier, (iii) one (1) business day following receipt of an
appropriate electronic confirmation, if sent by telecopy, and (iv) five (5)
business days following the date of mailing, if mailed.

**7.3**     **Governing Law**

This Agreement shall be governed by and construed in accordance
with the laws in force in the Province of Alberta.

**7.4**     **Entire
Agreement**

This Agreement shall constitute the entire agreement between
the Executive and the Corporation in respect of the matters set forth herein.
Except as otherwise specified herein or in writing by the Corporation after the
date hereof, to the extent of any conflict or inconsistency between the terms of
this Agreement and any other agreement or document between the Executive and the
Corporation or otherwise related to the Executives employment with the
Corporation, this Agreement shall govern to the extent of such inconsistency or
conflict.

**7.5**     **Severability**

The provisions of this Agreement shall be deemed severable. If
any provision of this Agreement shall be held unenforceable by any court of
competent jurisdiction, such provision shall be modified to the extent necessary
to be enforceable, and the remaining provisions shall remain in full force and
effect.

**7.6**     **Amendments
and Waivers**

All modifications, amendments and supplements to this Agreement
must be made in writing and signed by both parties. No waiver by any party
hereto of any provision hereof or of any breach of this Agreement shall be
effective or binding unless such waiver is in writing, and any such waiver shall
not limit or affect such partys rights with respect to any future breach.

**7.7**     **Counterparts**

This Agreement may be signed in two (2) counterparts, each of
which shall be deemed an original and both of which shall together constitute
the same instrument.

**7.8**     **Legal Advice**

The Executive acknowledges having had the opportunity to seek
independent legal advice in connection with negotiation and execution of this
Agreement.

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- 15 -

IN WITNESS WHEREOF this Agreement has been executed by the
parties hereto.

| |     | **MEGAWEST
      ENERGY CORP.**
| | --- | -------------------------------
| |     |                                
| | By: | /s/ George Stapleton, II       
| |     | (Authorized Signatory)         
| |     |                                
| |     |                                
| |     |                                
| |     | /s/ George Orr                 
| |     | **F. GEORGE
      ORR**        

---

SCHEDULE A

ANNUAL SALARY AND REMUNERATION



|1. | The Annual Salary of the Executive shall be Cdn. $138,000
      (statutory vacation pay included) commencing as at January 2, 2007, paid
      semi-monthly, less all applicable statutory deductions; and
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                           
|2. | Participation in the corporate executive level bonus
      program as promulgated by the board of directors from time to
  time.                                                                          

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SCHEDULE B

BENEFITS

The Executive shall be entitled to receive the following
Benefits during the term of his employment under this Agreement, unless such
Benefits are relinquished by the Executive with his consent:

|1. . | Any other benefits which may be made available to
      employees or other executives of the Corporation from time to time during
      the term of this Agreement, including but not limited to life or
      disability insurance and directors and officers liability and errors and
      omissions insurance;
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

SCHEDULE C

PERQUISITES

The Executive shall be entitled to receive the following
Perquisites during the term of his employment under this Agreement:

|1. | Reimbursement of all reasonable expenses incurred by the
      Executive in carrying out his duties including but not limited to travel
      expenses (accommodation and meals) and entertainment expenses. Travel
      shall be reimbursed on the basis of business class (or equivalent) for
      flights over 4 hours and accommodation at suitable hotels;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                  
|3. | As required, laptop, cell phone, Blackberry, all to be
      provided by the Corporation to the Executive at the Corporations expense;
      and                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                  
|4. | Directors and Officers Liability Insurance and Errors and
      Omissions Insurance with a minimum coverage of up to $2,000,000.00 per
      occurrence.                                                                                                                                                                                                         

---

SCHEDULE D

RELEASE

1.      RELEASE

From and after the Effective Date (defined below) and in
consideration of the sum of __________________________Dollars $
___________________, less amounts withheld and paid to the Canada Revenue Agency
pursuant to the provisions of the Income Tax Act (Canada) (the Severance
Amount), and other good and valuable consideration, the receipt of which is
hereby acknowledged, I,____________________________________________ , do for
myself and my heirs, executors, administrators, personal representatives and
assigns (hereinafter collectively referred to as I) forever release, remise
and discharge MegaWest Energy Corp. and its subsidiaries, successors,
predecessor companies (collectively the Corporation) and the Corporations
directors, shareholders, employees, agents, insurers and assigns from any and
all actions, causes of actions, contracts (whether express or implied), claims
and demands for damages, suits, debts, sums of money, indemnity, expenses,
interest, costs and claims of any and every kind and nature whatsoever, at law
or in equity, which I ever had or now have, or which I or my heirs, successors
or personal representatives may hereafter have, by reason of or existing out of
any causes whatsoever existing up to and inclusive of the date of this Release,
including but without limiting the generality of the foregoing:

| | (a) | my employment with the Corporation;                                                                                                                                                                                                                                                     
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                         
| | (b) | the termination of my employment with the
    Corporation;                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                         
| | (c) | the Executive Employment Agreement dated effective
      January 2, 2007 between the Corporation and me (the Executive Employment
      Agreement);                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                         
| | (d) | any claims which I may have arising under or relating to
      the Alberta Employment Standards Codeor the Alberta Human
      Rights, Citizenship and Multiculturalism Actor similar Codes or Acts
      in British Columbia, including the Human Rights Codeof British
      Columbia;
| |     |                                                                                                                                                                                                                                                                                         
| | (e) | any and all claims for damages, salary, wages,
      termination pay, severance pay, , bonuses, expenses, allowances, ,
      insurance or any other benefits (or loss thereof) arising out of my
      employment with the Corporation; and                                            
| |     |                                                                                                                                                                                                                                                                                         
| | (f) | all such further costs, expenses or damages which may
      properly be alleged to arise in respect of the cessation of my employment
      with the Corporation.                                                                                                                       

Notwithstanding anything contained herein, this Release shall
not extend to or affect, or constitute a release of any right that I may have in
respect of:

| | (a) | any corporate indemnity existing by statute, contract or
      pursuant to any of the constating documents of the Corporation provided in
      my favour in respect of my having acted at any time as a director or
      officer of the Corporation;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                       
| | (b) | my entitlement to any insurance maintained for the
      benefit or protection of the directors and/or officers of the Corporation,
      including without limitation, any directors and officers liability
      insurance; or                    

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- 2 -

| | (c) | my entitlement to any amounts pursuant to Article 4 of
      the Executive Employment Agreement.
| | --- | ------------------------------------------------------------------------------------------------

2.        NO
ADMISSION

I acknowledge that the payment of the Severance Amount to me
pursuant to the above paragraph does not constitute any admission of liability
by or on behalf of the Corporation.

3.        INDEMNITY FOR
TAXES

I further agree that, for the aforesaid payment, I will save
harmless and indemnify the Corporation from and against all claims, taxes or
penalties and demands which may be made by the Minister of National Revenue
requiring the Corporation to pay income tax under the Income Tax Act
(Canada) (or by any other government authority under any similar legislation in
any country or subdivision thereof), in respect of income tax payable in excess
of the income tax previously withheld; and in respect of any and all claims,
charges, taxes or penalties and demands which may be made on behalf of or
related to the Employment Insurance Commission or the Canada Pension Commission
(or by any other similar government authority in any country or subdivision
thereof) under the applicable statutes and regulations, with respect to any
amount which may, in the future, be found to be payable by the Corporation on my
behalf.

4.        EMPLOYMENT
STANDARDS CODE

I acknowledge receipt of all wages, , general holiday pay,
bonuses, benefits, pay in lieu of notice of termination of employment, severance
and other compensation that I am entitled to by virtue of the Alberta Employment
Standards Code (or under any similar legislation in any country or subdivision
thereof) or pursuant to any other labour standards legislation or common law,
and I further confirm that there are no entitlements, overtime pay or wages due
and owing to myself by the Corporation.

5.        BENEFITS AND
INSURANCE CLAIMS

I acknowledge and agree that all of my employment benefits will
cease on _______________ and I further acknowledge and agree that I have no
further claim against the Corporation for benefits or damages arising from the
cessation of benefits. I fully accept sole responsibility to replace those
benefits that I wish to continue and to exercise conversion privileges where
applicable with respect to benefits. In the event that I become disabled, I
covenant not to sue the Corporation for insurance or other benefits, or for loss
of benefits. I hereby release the Corporation from any further obligations or
liabilities arising from my employment benefits.

6.        HUMAN
RIGHTS

I acknowledge that I have not been discriminated against on any
grounds under the Alberta Human Rights, Citizenship and Multiculturalism Actor the Human Rights Code of British Columbia (or under any similar
legislation in any country or subdivision thereof). I agree not to file a human
rights complaint against the Corporation arising from my employment or
termination of employment. If a human rights complaint involving my employment
or termination of employment with the Corporation is filed, I agree to instruct
the applicable Human Rights Commission (or any other similar government
authority in any country or subdivision thereof) to stay or withdraw the
complaint.

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- 3 -

7.       
NON-DISCLOSURE

I agree that I will not divulge or disclose, directly or
indirectly, the contents of this Release or the terms of settlement relating to
my ceasing to be employed with the Corporation to any person, including but
without limiting the generality of the foregoing, to employees or former
employees of the Corporation, except my legal and financial advisors and my
immediate family, on the condition that they maintain the confidentiality
thereof, except as may be required by law.

8.        COMPLIANCE WITH
EMPLOYMENT AGREEMENT

I continue to be bound by the provisions of Article 5 of my
Employment Agreement notwithstanding the termination of my employment and the
Employment Agreement. I agree that I will comply with the restrictions set forth
in Article 5 of my Employment Agreement for the applicable time periods set
forth therein. I acknowledge and agree that such restrictions are reasonable and
properly required for the adequate protection of the business of the Corporation
and in the event that the time limit is deemed to be unreasonable by a court of
competent jurisdiction, I agree to the reduction of the time limit to a period
as the court shall deem to be reasonable.

9.        FURTHER
CLAIMS

I agree that I will not make claim or take proceedings against
any other person or entity that might claim contribution or indemnity under the
provisions of any statute or otherwise against the Corporation or any individual
or entity discharged through this Release.

10.       UNDERSTANDING

I hereby declare that I have had the opportunity to seek
independent legal advice with respect to the matters addressed in this Release
and the terms of settlement which have been agreed to by the Corporation and me,
and I fully understand this Release and the terms of settlement. I hereby
voluntarily accept the terms for the purpose of making full and final
compromise, adjustment and settlement of all claims as aforesaid.

11.       COMPLETE
AGREEMENT

I understand and agree that this Release contains the entire
agreement between the Corporation and me regarding my termination and that the
terms of this Release are contractual and not a mere recital.

DATED at Calgary, Alberta this _____ day of , 200____.



|        |  |              
|------- |  | -------------
|Witness |  | F. GEORGE ORR

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SCHEDULE E

CURRENT STOCK OPTION PLAN OF THE CORPORATION



(See Attached)

---