Document:

EXHIBIT 10.12  

CONSULTING AGREEMENT  

THIS AGREEMENT made effective as of
05 April 2005 

BETWEEN: 

Sky Petroleum Inc a body corporate, having
an office at 108 Wild Basin Road Austin Texas 78746 USA, (the “Company”) 

OF THE FIRST PART AND 

Ian Baron whose offices are at Suite
704, Al Moosa Tower 1, Shk Zayed Highway, Dubai, UAE  (the “Consultant”) 

OF THE SECOND PART 

WHEREAS Company desires to retain the
services of the Consultant to perform services to assist Company with evaluating and
developing oil and gas opportunities as further described in Appendix A. 

NOW THEREFORE IN CONSIDERATION of the
covenants and conditions hereinafter contained and the payment provided for herein, it is
agreed by the parties as follows: 

ARTICLE 1 

INTERPRETATION 

	1.1  	  	The
term “Company” as used in this Agreement shall mean the Company, its employees
its authorized agents and its affiliates.  

	1.2  	  	If
any covenant or obligation of either party contained herein or any provision of this
Agreement shall, to any extent, be invalid or unenforceable, the remainder of this
Agreement or the application of such covenant or obligation shall not be affected, and
each provision and each covenant and obligation contained in this Agreement shall be
separately valid and enforceable to the fullest extent permitted by law or equity.  

	1.3  	  	Time
shall in all respects be of the essence in this Agreement. 

	1.4 	  	
No waiver or modification of this Agreement shall be binding unless it is in writing
signed by the parties. No waiver of a breach of this Agreement shall be deemed to
constitute a waiver of a future breach, whether of a similar or dissimilar nature. 

ARTICLE 2 

NATURE OF THE AGREEMENT 

	2.1 	  	
This is an agreement for the services of the Consultant, and no relationship of agency,
partnership, joint venture, employer-employee, or master-servant is created between the
Consultant and Company. 

ARTICLE 3 

TERM OF THE AGREEMENT
AND OBLIGATIONS OF THE CONSULTANT 

	3.1 	  	
Company engages the Consultant to provide, and the Consultant agrees to provide,
consulting services as set out in Appendix A (the “Services”) commencing
6th April 2005 and continuing until terminated by the Company or the Consultant
in accordance with the terms hereof. 

	3.2 	  	
The Consultant shall perform the consulting services in a good and workmanlike manner to
the standard that would be expected from a professional providing similar services under
similar circumstances, and in compliance with all applicable governmental statutes,
regulations and policies. 

ARTICLE 4 

REMUNERATION &
EXPENSES 

	4.1 	  	
Company shall pay the Consultant a fee of US$ one thousand five hundred (US$1,500) per
day, payable within 15 days of receipt of an invoice for fees from the Consultant for each
day services are requested by the Company and are provided. 

	4.2 	  	
Company shall pay to the Consultant all reasonable expenses actually and properly incurred
by the Consultant in connection with the performance of his obligations under this
Agreement. 

	4.3 	  	
Any air travel related to the performance of the services under this agreement shall be
business class using the most economic fare available unless the actual flying time
exceeds 8 hours in which case first class may be utilized. 

	4.4 	  	
The Consultant agrees that the Consultant, in his capacity as such, will not be entitled
to be a participant in any of the employee or other benefit plans of Company. 

ARTICLE 5

TERMINATION 

	5.1  	  	This
Agreement may be terminated on thirty days notice by either party. 

ARTICLE 6 

CONFIDENTIALITY AND
CONFLICT OF INTEREST 

	6.1  	  	Company
consents to the Consultant continuing during the term of this Agreement to act as a
consultant to third parties. 

	6.2 	  	
Notwithstanding 6.1, during the term of this Agreement the Consultant shall not enter into
any contract with any other party to provide consulting services, the requirements of
which would conflict with the Consultant’s duties and obligations under this
Agreement, without first obtaining the written consent of Company. 

	6.3 	  	
All information not in the public domain which is provided to the Consultant by the
Company during the term of this Agreement shall be kept confidential along with the
results of any analysis carried out by the Consultant. All such information shall be kept
confidential for two years following the termination of this Agreement. 

	6.4 	  	
Upon termination of this Agreement or the Consultant’s consulting services the
Consultant shall deliver to Company all tangible displays and repositories of proprietary
or confidential information or knowledge including without limitation records of research,
proposals, information, reports, or other materials used or obtained by the Consultant in
connection with the performance of the services under this Agreement. 

ARTICLE 7

NOTICE 

	7.1 	  	
Any notice hereunder shall be effectively given if delivered personally or sent by
facsimile. The addresses for service may be amended by giving notice in writing to the
other party in accordance with this clause. The names and addresses of the authorized
representatives of the parties are as follows: 

	  	
Company:

Sky Petroleum Inc

108 Wild basin Road

Austin Texas 78746

USA 

	  	
Consultant:

Suite 704,

Al Moosa Tower 1,

Shk Zayed Highway,

Dubai, UAE

ARTICLE 8  

GOVERNING LAW 

	8.1 	  	
This Agreement shall be governed by and interpreted in accordance with the laws of
England. The courts of England shall be the sole and proper forum with respect to any
suits brought with respect to this Agreement. 

IN WITNESS WHEREOF the parties hereto
have executed this Agreement the day and year first above written 

On behalf of the CompanyC
OMITTED][GRAPHIC OMITTED]  On behalf of the Consultant 

	
/s/ Donald Cameron

_______________________

Name:    Donald Cameron          

Position: Chief Executive Officer

  	
/s/ Ian Baron 

_______________________

Name: Ian Baron 

APPENDIX “A” 

 

Specific Duties  

Technical advice on a project under
consideration in Sharjah UAE and attendance of related technical meetings with Crescent
Petroleum in Sharjah.EXHIBIT 10.13  

STOCK OPTION AGREEMENT 

        THIS
STOCK OPTION AGREEMENT is entered into as of the 11th day of January, 2006
(“Date of Grant”) between IAN BARON (the
“Optionee”), and SKY PETROLEUM, INC., a Nevada corporation
(“Sky” or “Company”). 

        WHEREAS,
the Optionee and the Company have entered into a Consulting Agreement
(“Consulting Agreement”) and the Company has agreed to
grant the Optionee stock options exercisable to acquire 600,000 shares of the
Company’s Common Stock at $1.00 per share, vesting one-third (1/3) each year,
beginning on November 15, 2006 and expiring on the earlier of November 15, 2013 or 90
days after Optionee ceases to be a consultant to the Company or a Director of the Company
(the “Options”); 

        WHEREAS,
the Board of Directors of the Company (the “Board”) has
determined that it is in the best interest of the Company and its shareholders to enter
into the Consulting Agreement and to grant the Optionee the Options; 

        WHEREAS,
the Board has authorized the grant to the Optionee of Options; 

        WHEREAS, the
Optionee has agreed to accept the Options as partial consideration under the Consulting
Agreement; and 

        WHEREAS,
the Options are intended to be Non-Qualified Stock Options not intended to qualify as
“Incentive Stock Options” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”); 

        NOW,
THEREFORE, the Company and the Optionee agree as follows: 

             1.       
          Option Grant. The Company hereby grants to the Optionee the option to
          purchase, upon the terms and conditions set forth herein, the Option to purchase
          600,000 shares of Common Stock of the Company at an exercise price of US$1.00
          per share. 

             2.       
          Vesting and Termination Schedule. The Options shall vest and shall be
          fully exercisable as follows: 

	  	(a)  	  	Options
exercisable to acquire 200,000 shares of Common Stock of the Company           shall vest
on November 15, 2006 and terminate on the earlier of November 15,           2013 or 90
days after Optionee ceases to be a consultant to or Director of the           Company;  

	  	(b)  	  	Options
exercisable to acquire 200,000 shares of Common Stock of the Company           shall vest
on November 15, 2007 and terminate on the earlier of November 15,           2013 or 90
days after Optionee ceases to be a consultant to or Director of the           Company;
and  

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	  	(c)  	  	Options
exercisable to acquire 200,000 shares of Common Stock of the Company           shall vest
on November 15, 2008 and terminate on the earlier of November 15,           2013 or 90
days after Optionee ceases to be a consultant to or Director of the           Company;.  

        The
vesting of one or more outstanding Options may be accelerated by the Board at such times
and in such amounts as it shall determine in its sole discretion. The vesting of Options
also shall be accelerated under the circumstances described in Sections 5 and 7 below. 

             3.       
          Options not Transferable. Unless otherwise specified in this Agreement or
          by the Board, this Option and the rights and privileges conferred by this
          Agreement may not be transferred, assigned, pledged or hypothecated in any
          manner (whether by operation of law or otherwise) other than by will or by
          applicable laws of descent and distribution and shall not be subject to
          execution, attachment or similar process. Upon any attempt to transfer, pledge,
          hypothecate or otherwise dispose of any Option or of any right or privilege
          conferred by this Agreement contrary to the provisions hereof, or upon the sale,
          levy or attachment or similar process upon the rights and privileges conferred
          by this Agreement, such Option shall thereupon terminate and become null and
          void. 

             4.       
          Termination of Advisory Efforts and Options. Vested Options shall
          terminate and be null and void, to the extent not previously exercised, on the
          earlier of November 15, 2013 or 90 days after Optionee ceases to be a consultant
          to or Director of the Company. 

             5.       
          Distributions, Reorganization or Liquidation. In the case of any unit
          distribution, unit split, liquidation or like change in the nature of Common
          Stock covered by this Agreement, the number of Common Stock and exercise price
          shall be proportionately adjusted as set forth below. 

             (a)       
          If (i) the Company shall at any time be involved in a transaction described in
          Section 424(a) of the Code (or any successor provision) or any “corporate
          transaction” described in the regulations thereunder; (ii) the Company
          shall declare a distribution payable in, or shall subdivide or combine, its
          Common Stock or (iii) any other event with substantially the same effect shall
          occur, the Board shall, with respect to each outstanding Option, proportionately
          adjust the number of shares of Common Stock and/or the exercise price per Common
          Stock so as to preserve the rights of the Optionee substantially proportionate
          to the rights of the Optionee prior to such event, and to the extent such action
          shall include an increase or decrease in the number of Common Stock subject to
          outstanding options, the number of Common Stock available under this Agreement
          shall automatically be increased or decreased, as the case may be,
          proportionately, without further action on the part of the Board, the Company or
          the Company’s shareholders. 

             (b)       
          If the Company is liquidated or dissolved, the Board shall allow the Optionee to
          exercise all or any part of the unvested portion of the Options held by him;
          provided, however, that such Options must be exercised prior to the
          effective date of such liquidation or dissolution. If the Optionee does not
          exercise his Options prior to such effective date, each outstanding option shall
          terminate as of the effective date of the liquidation or dissolution. 

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             6.       
          Exercise of Option. The Options shall be exercisable, in whole or in
          part, at any time after vesting, until termination; provided, however, if
          the Optionee is subject to the reporting and liability provisions of Section 16
          of the Securities Exchange Act of 1934 (the “Exchange
          Act”) with respect to the Common Stock, he shall be
          precluded from selling or transferring any Common Stock or other security
          underlying an Option during the six (6) months immediately following the grant
          of that Option. If less than all of the shares of Common Stock included in the
          vested portion of the Options are purchased, the remainder may be purchased at
          any subsequent time prior to the expiration of the Option term. 

        Each
exercise of the Option shall be by means of delivery of a notice of election to exercise
(which may be in the form attached hereto as Exhibit A) to the Chief Executive
Officer of the Company at its principal executive office, specifying the number of Common
Stock to be purchased and accompanied by payment in cash by certified check or
cashier’s check in the amount of the full exercise price for the Common Stock to be
purchased. During the lifetime of the Optionee, the Options are exercisable only by the
Optionee. 

        7.
 Change in Control.  

        (a)
                Any and all Options that are outstanding hereunder for at least six
(6) months                at the time of occurrence of any of the events (a “Change
in                Control”) described in Subparagraphs (i), (ii), and
(iii)                below (each an “Eligible Option”)
shall become                immediately vested and fully exercisable for the periods
indicated (each such                exercise period referred to as an “Acceleration
               Window”):  

	  	(i)  	  	For
a period of forty-five (45) days beginning on the day on which any                “Person” as
such term is used in Sections 13(d) and 14(d) of the                Exchange Act (other
than a shareholder of the Company on the date of this                Agreement, the
Company, any subsidiary or employee benefit plan of the Company                including
any trustee of such plan acting as trustee) together with all                Affiliates
and Associates of such Person, becomes, after the date of this                Agreement,
the Beneficial Owner (as defined in Rule 13d-3 under the Exchange                Act) of
fifty percent (50%) or more of the limited liability company interests
               then outstanding;  

	  	(ii)  	  	Beginning
on the date that a tender or exchange offer for all of the Common                Stock of
the Company by any Person (other than the Company, any subsidiary of                the
Company, any employee benefit plan of the Company or of any subsidiary of
               the Company, or any Person or entity organized, appointed or established
by the                Company for or pursuant to the terms of any such employee benefit
plan) is first                published or sent or given within the meaning of Rule 14d-2
under the Exchange                Act and continuing so long as such offer remains open
(including any extensions                or renewals of such offer), unless by the terms
of such offer the offeror, upon                consummation thereof, would be the
Beneficial Owner of less than fifty percent                (50%) of the limited liability
company interests then outstanding;  

	  	(iii)  	  	For
a period of twenty (20) days beginning on the day on which the shareholders
               of the Company duly approve any merger, consolidation, reorganization or
other                transaction providing for the conversion or exchange of more than
fifty percent                (50%) of the outstanding shares of Common Stock into
securities of any entity,                or  

-3- 

	  	
cash,
or property, or a combination of any of the foregoing; provided, that the holder
has agreed in writing to waive his rights, if any, arising under Section 5 above in
connection with the completion of the any of the transactions described in this clause. 

Provided, however, that with
respect to the event specified in Subparagraph (i) above, such accelerated vesting shall
not occur if the event that would trigger the accelerated vesting of Eligible Options has
received the prior approval by the affirmative vote of a majority of all of the members of
the Board, excluding for such purposes the votes of managers who are managers or officers
of, or have a material financial interest in, any entity (other than the Company) who is
party to the event specified in Subparagraph (ii) above. 

             (b)       
          The exercisability of any Eligible Option that remains unexercised following
          expiration of an Acceleration Window shall be governed by the vesting schedule
          and other terms of this Agreement. 

             8.       
          Professional Advice. The acceptance of the Options and the sale of Common
          Stock issued pursuant to the exercise of Options may have consequences under
          federal and state tax and securities laws which may vary depending upon the
          individual circumstances of the Optionee. Accordingly, the Optionee acknowledges
          that he has been advised to consult his personal legal and tax advisor in
          connection with this Agreement and his dealings with respect to the Options for
          the Common Stock. 

             9.       
          No Rights as a Stockholder. The Optionee shall have no rights as a
          stockholder with respect to any units covered by the Options until the Optionee
          becomes a record holder of such units, irrespective of whether the Optionee has
          given notice of exercise. Subject to the provisions of Sections 6 and 8 hereof,
          no rights shall accrue to the Optionee and no adjustments shall be made on
          account of dividends (ordinary or extraordinary, whether in cash, securities or
          other property) or distributions or other rights declared on, or created in, the
          Common Stock for which the record date is prior to the date the Optionee becomes
          a record holder of the shares of Common Stock covered by the Option,
          irrespective of whether the Optionee has given notice of exercise. 

             10.       
          Securities Regulation and Withholding. 

             (a)       
          Neither the Options nor the shares of Common Stock issuable upon exercise of the
          Options have been or will be registered under the Securities Act of 1933, as
          amended (the “Securities Act”), and the offer and
          sale of such securities is being made pursuant to an exemption from the
          registration requirements of the Securities Act. The Common Stock shall not be
          issued with respect to the Options unless the exercise of the Options and the
          issuance and delivery of such Common Stock shall comply with all relevant
          provisions of law, including, without limitation, any applicable state
          securities laws, the Securities Act, the Exchange Act, the rules and regulations
          thereunder and the requirements of any stock exchange upon which such shares may
          then be listed, and such issuance shall be further subject to the approval of
          counsel for the Company with respect to such compliance, including the
          availability of an exemption from registration for the issuance and sale of such
          units. The inability of the Company to obtain from any regulatory body the
          authority deemed by the Company to be necessary for the lawful issuance and sale
          of any shares under this Agreement, or the unavailability of an exemption from
          registration for the issuance and sale of any units under this 

-4- 

Agreement, shall relieve the Company
from any liability with respect to the non-issuance or sale of such units. 

        As
a condition to the exercise of the Options, the Board may require the Optionee to
represent and warrant in writing at the time of such exercise that the units are being
purchased only for investment and without any then-present intention to sell or distribute
such Common Stock. The Common Stock issuable upon exercise of the Options will be
restricted securities (as defined under Rule 144 of the Securities Act) and the
certificates representing such securities shall bear a legend indicating that the stock
may not be pledged, sold or otherwise transferred unless an opinion of counsel is provided
stating that such transfer is not in violation of any applicable law or regulation. 

             (b)       
          As a condition to the exercise of the Options, the Optionee shall make such
          arrangements as the Board may require for the satisfaction of any federal,
          provincial, state or local withholding tax obligations that may arise in
          connection with such exercise. 

             11.       
          Entire Agreement. This Agreement is the only agreement between the
          Optionee and the Company with respect to the Options, and this Agreement
          supersede all prior and contemporaneous oral and written statements and
          representations and contain the entire agreement between the parties with
          respect to the Options. 

             12.       
          Notices. Any notice required or permitted to be made or given hereunder
          shall be mailed or delivered personally to the addresses set forth below, or as
          changed from time to time by written notice to the other: 

	  	The Company:	
SKY PETROLEUM, INC.

________________________

                        

________________________
 

	  	The Optionee:	
IAN BARON

________________________

                        

________________________
 

SKY PETROLEUM, INC. 

	
By:   /s/ Daniel Meyer

_____________________________

Its:  President

_____________________________ 	
/s/ Ian Baron

_____________________________

Optionee
 

-5- 

        THE
COMMON STOCK ISSUED PURSUANT TO THE EXERCISE OF OPTIONS WILL BE “RESTRICTED
SECURITIES” AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF 1933 AND WILL BEAR A
LEGEND RESTRICTING RESALE UNLESS THEY ARE REGISTERED UNDER STATE AND FEDERAL SECURITIES
LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THE COMPANY IS NOT OBLIGATED TO
REGISTER THE COMMON STOCK OR TO MAKE AVAILABLE ANY EXEMPTION FROM REGISTRATION. 

-6- 

EXHIBIT A  

Notice of Election to
Exercise  

        This
Notice of Election to Exercise shall constitute proper notice pursuant to Section 6 of
that certain Stock Option Agreement (the “Agreement”) dated as of the ____ day
of ___________, _____ between SKY PETROLEUM, INC. (the “Company”) and the
undersigned. 

        The
undersigned hereby elects to exercise Optionee’s option to purchase __________ Common
Stock of the Company at a price of [$___] per share, for aggregate consideration of
$______, on the terms and conditions set forth in the Agreement. Such aggregate
consideration, in the form specified in Section 6 of the Agreement, accompanies this
notice. 

        The
undersigned has executed this Notice this ____ day of __________, 200__. 

_____________________________________

Signature 

_____________________________________

Name (typed or printed)

-7-

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