EXHIBIT 10.18  






SEPARATION AGREEMENT  





        This
Separation Agreement (“Agreement”) dated August 14, 2006 and effective May 30,
2006, is by and between DANIEL MEYER, on his own behalf, and on behalf of BOHM MEYER
CONSULING INC., a body corporate duly incorporated pursuant to the laws of the province of
Alberta, (“Contractor” or “you”), and SKY PETROLEUM, INC., a Nevada
corporation (“Sky” or “Company”) (collectively referred to herein as
the “Parties). This Agreement shall be effective as of seven (7) days following its
execution by Contractor (the “Effective Date”) unless Contractor exercises his
right of revocation pursuant to Paragraph 13 of this Agreement. 



R E C I T A L S:  



        WHEREAS,
the Company and the Contractor have agreed that it is in the best interest of the Company
that the Contractor’s Independent Contractor Service Agreement (“Contractor
Agreement”) with the Company be terminated; and 



        WHEREAS,
the Parties have agreed to terminate the Contractor Agreement and facilitate the
Contractor’s separation on the terms and conditions set forth below. 



        NOW,
THEREFORE, in consideration of the mutual promises and agreements herein contained,
including the recitals above, the receipt and sufficiency of which is hereby acknowledged,
the Parties agree as follows: 



             
1.    Termination. Contractor will resign from all offices and
positions of employment with the Company effective May 30, 2006, thereby
discontinuing any relationship between the Contractor and the Company.  



        
2.    Consultancy.  



	  	        a.
        Payment. The Company agrees to pay
all accrued compensation due under the                Corporation’s Contractor
Agreement, accrued prior to the Effective Date of                this Agreement. Upon
such payment, no future payments shall be paid to                Contractor under this
Agreement or the Contractor Agreement.  







	  	        b.
        Benefits. There are no benefits
payable to Contractor. The Company will                reimburse Contractor for
reasonable expenses in accordance with past practices                under the Contractor
Agreement.  







	  	        c.
        Options. Contractor shall retain
all options previously granted to                Contractor in his capacity as a
Contractor, officer and/or director of the                Company.  







	  	        d.
        Termination of Severance.
Contractor acknowledges and agrees that if he                breaches any of his
obligations under this Agreement, the Company shall have the                right to (i)
recover from Contractor any amounts previously paid or Stock                Options
exercised to Contractor hereunder, and (ii) pursue any other remedies
               available to the Company for such breach.  











	
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        3.
    Release.  



	  	        a.                      Contractor
hereby knowingly and voluntarily releases and forever discharges the
               Company, its parents, affiliates, predecessors, successors and assigns,
and each                of its officers, directors, agents, and contractors (collectively
referred to                herein as the “Releasees”) from any and all claims,
liabilities,                costs, and damages of any nature whatsoever, both known and
unknown, under                federal, state, provincial or local laws, which he has or
may have against the                Releasees for any alleged act or omission which
occurred on or at any time prior                to the date of Contractor’s
execution of this Agreement including, but not                limited to, any claims
related to: (1) breach of contract, personal injury, or                tort including,
but not limited to, claims of wrongful discharge, fraud,                promissory
estoppel, intentional infliction of emotional distress, defamation,                and
assault; (2) claims, if any, arising out of or in connection with the
               initiation, termination, or existence of Contractor’s employment
               relationship with Sky, or any services performed on behalf of Sky; (3)
claims,                if any, regarding leave, vacation, bonuses, commissions, stock
options, or any                other form of payment or benefits attributable to his
employment with Sky; and                (4) employment discrimination on the basis of
race, color, gender, disability,                religion, national origin, age, or any
other status protected by law. Contractor                acknowledges and agrees that
except as otherwise provided in this Agreement, any                and all rights to
compensation, reimbursement, benefits, stock options or other
               consideration under the Contractor Agreement shall terminate.  







	  	        b.                      Contractor
warrants that he has not filed any claims, complaints, charges, or
               lawsuits against Sky with any governmental agency or any court, and agrees
never                to institute, directly or indirectly, any action or proceeding of
any kind                whatsoever against the Releasees based on or arising out of, and
alleged to have                been suffered as a consequence of Contractor’s
employment, discontinuation                of employment, or Contractor’s
relationship to date including, but not                limited to, any with the Company.
Excluded from this Agreement are any claims,                which cannot be waived by
law. Contractor does waive, however, his right to any                monetary recovery
should any agency pursue any claims on Contractor’s                behalf.  







	  	        c.                      This
Agreement specifically includes, but not by way of limitation, all claims
               which might be asserted by or on behalf of Contractor in any suit or claim
               against the Releasees, for or on account of any matter whatsoever, up to
and                including the present time. Contractor represents and warrants that to
the best                of his knowledge, no other person or entity, other than
Contractor, is entitled                to assert any claims of any kind or character
based on or arising out of, and                alleged to have been suffered by, in, or
as a consequence of Contractor’s                employment, separation from
employment, and Contractor’s relationship to                date with the Company.  







	  	        d.                      Except
as otherwise prohibited by law, Company hereby knowingly and voluntarily
               releases and forever discharges the Contractor, his successors and
assigns,                (collectively referred to herein as the “Releasees”)
from any and all                claims, liabilities, costs, and damages of any nature
whatsoever, both known and                unknown, under federal, state, provincial or
local laws, which it has or may                have against the Releasees for any alleged
act or omission which occurred on or                at any time prior to the date of
Contractor’s  















	
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        execution of this  Agreement  including,  but not limited to, any claims  relatedto:
(1) breach of contract, personal injury, or tort including, but not limited to, claims of
wrongful discharge, fraud, promissory estoppel, intentional infliction of emotional
distress, defamation, and assault; (2) claims, if any, arising out of or in connection
with the initiation, termination, or existence of Contractor’s employment
relationship with Sky, or any services performed on behalf of Sky. 






	  	        e.                      Company
warrants that it has not filed any claims, complaints, charges, or
               lawsuits against Contractor with any governmental agency or any court, and
               agrees never to institute, directly or indirectly, any action or
proceeding of                any kind whatsoever against the Releasees based on or
arising out of, and                alleged to have been suffered as a consequence of
Contractor’s employment,                discontinuation of employment, or Contractor’s
relationship to date                including, but not limited to, any with the Company.
Excluded from this                Agreement are any claims, which cannot be waived by
law. Company does waive,                however, its right to any monetary recovery
should any agency pursue any claims                on Company’s behalf.  







	  	        f.                      This
Agreement specifically includes, but not by way of limitation, all claims
               which might be asserted by or on behalf of Company in any suit or claim
against                the Releasees, for or on account of any matter whatsoever, up to
and including                the present time. Company represents and warrants that to
the best of its                knowledge, no other person or entity, other than Company,
is entitled to assert                any claims of any kind or character based on or
arising out of, and alleged to                have been suffered by, in, or as a
consequence of Contractor’s employment,                separation from employment,
and Contractor’s relationship to date with the                Company.  









        4.
    Confidential Information.  



	  	        a.       Definition.
“Confidential Information” means information: (1)                disclosed to
or known by Contractor as a consequence of or through his                employment with
Sky; (2) not generally known outside Sky; and (3) which relates                to any
aspect of Sky or its business, prospective business, research, or
               development. By example and without limitation, Confidential Information
               includes, but is not limited to, any and all information of the following
or                similar nature, whether transmitted verbally, electronically or in
writing:                copyright, service mark and trademark registrations and
applications; patents                and patent applications; licenses; agreements;
unique and special methods;                techniques; procedures; processes; routines;
formulas; know-how; trade secrets;                innovations; inventions; discoveries;
improvements; research proposals,                development, test results or papers;
specifications; technical data and/or                information; software; quality
control and manufacturing procedures; formats;                sketches; drawings; models;
sales figures; files; marketing plans; strategies;                business plans and
forecasts; customer, pricing, and financial information;                investor
information; budgets; methodologies; computer code and programs;
               compilations of information; reports; records; compensation and benefit
               information; customer, vendor, and supplier identities and
characteristics;                information provided to Sky by a third party under
restrictions against                disclosure or use by Sky or others; information
designated secret or                confidential by Sky; and information of which  











	
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unauthorized
 disclosure would be detrimental to the interests of Sky, whether or not such
information is identified as confidential information by Sky.  






	  	        b.
 Value of Confidential Information. Contractor acknowledges that all
               Confidential Information is valuable, proprietary and the exclusive
property of                Sky. All business records, papers and documents kept or made
by Contractor                relating to the business of Sky shall be and remain the
property of Sky.  







	  	        c.
 Non-Disclosure. Contractor agrees that in performance of work for Sky, he
               has been privy to Confidential Information of considerable value to Sky,
its                stockholders, partners and customers. Contractor will hold in
strictest                confidence and shall not, directly or indirectly, use or reveal,
divulge, make                known to or permit the use of by third parties, any
Confidential Information,                unless required to do so by law. Contractor
agrees that the fact that Contractor                and the Company have reached this
Agreement and its terms, specifically                including, but not limited to, the
amount paid hereunder, will be treated as a                strictly confidential matter
between the Parties, and will not be disclosed by                Contractor to any third
party or entity, save and except (a) Contractor’s                attorneys, tax
advisors, and immediate family; provided each of the foregoing                are advised
by Contractor of this confidentiality requirement, and each agrees                to
maintain full confidentiality; (b) governmental agencies; and (c) pursuant to
               a lawfully issued subpoena from a court of competent jurisdiction. This
               Non-Disclosure provision is a material and substantial term of this
Agreement.                Contractor and the Company agree, however, that this Agreement
may be used as                evidence in a subsequent proceeding in which any of the
Parties allege a breach                of this Agreement.  







	  	        d.
 Return of Company Property. Contractor acknowledges and warrants that he
               or his personal representative has returned to Sky: (a) all keys, entry
cards,                identification badges, credit cards, vehicles and other property of
Sky; and (b)                Confidential Information in Contractor’s possession or
control. Contractor                acknowledges and warrants that he has not kept any
copies, nor made or retained                any abstracts or notes, of any Confidential
Information.  







        
5.   Non-Disparagement. Contractor
agrees that he will not in                any way disparage, defame, deprecate,
denigrate, defame, vilify, libel, slander,                place in a negative light, or
in any other way harm or attempt to harm the                reputation, good will, or
commercial interest of Sky or any of Sky’s other                Releasees.
Contractor also agrees that he will instruct his attorney(s) and                immediate
family members to abide by the non-disparagement obligations contained                in
this Agreement. In the event that Contractor breaches the promises contained
               in this paragraph, Sky’s obligation to make payment of any sums
otherwise                due under this Agreement will terminate; Contractor agrees to
promptly return                all monies already paid pursuant to this Agreement; and
Contractor agrees to be                liable for any additional damages, including any
attorneys’ fees and costs                incurred.  



        Sky
agrees that none of its officers, directors, agents, or contractors will in any way
disparage, defame, deprecate, denigrate, defame, vilify, libel, slander, place in a
negative light, or in any other way harm or attempt to harm the reputation, good will, or
commercial interest of Contractor or any of Contractor’s other Releasees. Sky also
agrees that it will instruct its 











	
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     attorney(s)
          and other representatives or persons not at arm’s length therewith (as
          defined in the Income Tax Act (Canada)) to abide by the non-disparagement
          obligations contained in this Agreement. In the event that Sky breaches the
          promises contained in this paragraph, Sky agrees to be liable for any additional
          damages, including any attorneys’ fees and costs incurred. 



        6.    Continued
Cooperation. Subject to reimbursement of reasonable           out-of-pocket
travel costs and expenses, Contractor agrees to cooperate fully           with Sky and
its counsel with respect to any litigation, investigation,           administrative,
governmental, or corporate proceeding which relates to matters           with which
Contractor was involved during the term of his employment with Sky.           Such
cooperation may include appearing from time to time at the offices of Sky           or
its counsel for conferences and interviews, ratifying corporate documents           and,
in general, providing the officers of Sky and its counsel with the full           benefit
of Contractor’s knowledge with respect to any such matter.           Contractor
agrees to render such cooperation in a timely fashion and at such           times as may
be mutually agreeable to the parties concerned; provided that such           obligation
of the Contractor shall terminate on (one year from date of           agreement), 2007.  



        7.    No
Admissions. The terms of this Agreement are a compromise and           settlement
of any disputed claims, the validity, existence, or occurrence of           which are
expressly denied by the Parties. This Agreement does not constitute,           and shall
not be construed as, an admission by any Party of any breach of           contract or
other violation of any right of the other, or any harm to of any           kind
whatsoever, or of any violation of any federal, state, provincial or local
          statute, law, or regulation. To the contrary, each Party denies any liability
          whatsoever to the other.  



        8.    Multiple
Originals. This Agreement may be executed in a number of           identical
counterparts, each of which shall be deemed an original for all           purposes.  



        9.    Entire
Agreement. Contractor acknowledges that in deciding to sign           this
Agreement he has not relied on any promises or commitments, whether spoken           or
in writing, made to him by any Company representative, except for what is
          expressly stated in this Agreement. This Agreement constitutes the entire
          understanding and agreement between the Parties hereto concerning the subject
          matter contained herein, and supersedes any prior contract or similar
agreements           between the Parties, the terms and conditions of which expressly
survive this           Agreement.  



        10.    Governing
Law. This Agreement shall in all respects be           interpreted, enforced, and
governed by the internal laws of the Province of           Alberta. The language of this
Agreement shall be construed as a whole, according           to its fair meaning, and
shall not be construed strictly for or against either           of the Parties.  



        11.    Severability. If
any provision of this Agreement is held by final           judgment to be invalid,
illegal, or unenforceable, such invalid, illegal, or           unenforceable provision
shall be severed from the remainder of this Agreement,           and the remainder of
this Agreement shall be enforced. In addition, the invalid,           illegal, or
unenforceable provision shall be deemed to be automatically modified           and, as so
modified, to be included in this Agreement, such modification being           made to the
minimum extent necessary to render the provision valid, legal and           enforceable.
Notwithstanding the foregoing, however, if the severed or modified           provision
concerns all or a portion of the essential consideration to be           delivered under
this Agreement by one party to the  











	
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other, the remaining provisions of
this Agreement shall also be modified to the extent necessary to equitably adjust the
Parties’ respective rights and obligations hereunder. 



        12.    Modification
in Writing. Sky and Contractor agree that the           covenants and/or
provisions of this Agreement may not be modified by any           subsequent agreement
unless the modifying agreement is in writing and signed by           both Parties.  



        13.    Waiver
of Rights. Contractor acknowledges that:  



	  	 
       a. The
terms of this Agreement not only are understandable, but they are also fully
          understood by Contractor;  







	  	        b.
                This Agreement specifically refers to Contractor’s rights and
claims under                the laws of the Province of Alberta prohibiting age
discrimination, and                Contractor understands that such rights and claims are
irrevocably being waived                by Contractor;  







	  	        c.
                The consideration recited in this Agreement is adequate to make it
final and                binding, and is in addition to payments or benefits to which
Contractor would                otherwise be entitled as a former Contractor of the
Company;  







	  	        d.
                Contractor has been advised of the right to consult with an attorney
before                entering this Agreement, and has exercised such right to the extent
Contractor                wishes to do so; and  







	  	        e.
                Contractor has been given adequate time, up to fifteen (15) days if
he so                desires, to consider this Agreement, and Contractor understands and
acknowledges                that any changes made to this Agreement, whether material or
immaterial, will                not re-start this 15-day period.  















	
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        14.    Voluntary
Agreement. CONTRACTOR FURTHER STATES THAT HE HAS           CAREFULLY READ THE
FOREGOING “SEPARATION AGREEMENT AND FULL AND FINAL           RELEASE OF CLAIMS,” AND
THAT HE KNOWS AND UNDERSTANDS THE CONTENTS THEREOF,           AND THAT HE EXECUTES THE
SAME AS HIS OWN FREE ACT AND DEED.  





	
AGREED TO: 



/s/ Daniel Meyer

_________________________________

DANIEL MEYER, 

individually and as authorized signatory of 

Bohm Meyer Consulting Inc. 



Date:  August 14, 2006
 
	
SKY PETROLEUM, INC. 



By:  /s/ Michael D. Noonan

       _______________________________

Name:     MICHAEL D. NOONAN 

Title:      V.P Corporate 




Date:  August 14, 2006
  


















	
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