Document:

Filed by sedaredgar.com - Trimex Exploration Inc. - Exhibit 10.3

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE “ACT”), AND ARE PROPOSED TO BE ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. UPON ANY SALE, SUCH
SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT. 

REGULATION S SUBSCRIPTION AGREEMENT 

THIS AGREEMENT is made effective as of the _______ day of
_______________, 2008. 

BETWEEN: 

  
    
      
        THE SUBSCRIBER LISTED ON THE EXECUTION PAGE TO THIS
          AGREEMENT 

        (hereinafter called the “Subscriber”)
        

      

    

  

OF THE FIRST PART 

AND: 

  
    
      
        TRIMEX EXPLORATION INC., a Nevada corporation
        

        (hereinafter called the “Company”)
        

      

    

  

OF THE SECOND PART 

NOW THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows: 

ARTICLE 1
 DEFINITIONS 

	1.1 	
      Definitions

	 	 	 
		
      The following terms will have the following meanings for
      all purposes of this Agreement.

	 	 	 
		(a) 	
      “Agreement” means this Agreement and all schedules
      and amendments to this Agreement.

	 	 	 
		(b) 	
      “Common Stock” means the Common Stock of the
      Company with a par value of $0.001 per share.

	 	 	 
		(c) 	
      “Disclosure Statement” means the Disclosure
      Statement prepared by the Company with respect to the Offering and
      delivered by the Company to the Subscriber.

- 2 - 

	 	(d) 	
      “Exchange Act” means the United States Securities
      Exchange Act of 1934, as amended.

	 	 	 
	 	(e) 	
      “Offering” means the offering of up to 1,500,000
      shares of Common Stock by the Company.

	 	 	 
	 	(f) 	
      “Purchase Price” means the purchase price payable
      by the Subscriber to the Company in consideration for the purchase and
      sale of the Shares in accordance with Section 2.1 of this
  Agreement.

	 	 	 
	 	(g) 	
      “SEC” means the United States Securities and
      Exchange Commission.

	 	 	 
	 	(h) 	
      “Securities Act” means the United States
      Securities Act of 1933, as amended.

	 	 	 
	 	(i) 	
      “Shares’’ means the shares of Common Stock to be
      purchased by the Subscriber, as indicated on the signature page to this
      Agreement.

	 	 	 
	 	(j) 	
      “Subscriber” means the Subscriber executing the
      signature page to this Agreement.

	1.2 	
      Schedules

	 	 
		
      The following schedules are attached to and form part of
      this Agreement:

	 	Schedule A 	- 	Definition of U.S. Person 
	 	Schedule B 	- 	Investor Certificate
  

	1.3 	
      Currency

	 	 
		
      All monetary amounts referred to in this Agreement are in
      United States dollars, unless expressly stated
otherwise.

ARTICLE 2 
PURCHASE AND SALE OF SHARES 

	2.1 	
      Agreement to Subscribe

	 	 
		
      Subject to the terms and conditions of this Agreement,
      the Subscriber hereby subscribes for and agrees to purchase from the
      Company such number of Shares as is set forth upon the signature page
      hereof at a price equal to $0.10 per Share. Upon execution, the
      subscription by the Subscriber will be irrevocable.

	 	 
	2.2 	
      Payment of Purchase Price

	 	 
		
      The Purchase Price for the Shares is payable by the
      Subscriber contemporaneously with the execution and delivery of this
      Agreement and will be advanced to the Company or its solicitors. The
      Subscriber acknowledges that if the funds are advanced to the Company’s
      solicitors. the solicitors shall release such funds to the Company on
      confirmation by the Company that it will accept the
  subscription.

- 3 - 

	2.3 	
      Acceptance by Company

	 	 
		
      Upon execution of this Agreement by the Company, the
      Company agrees to sell such Shares to the Subscriber for the Purchase
      Price subject to the Company’s right to sell to the Subscriber such lesser
      number of Shares as it may, in its sole discretion, deem necessary or
      desirable.

	 	 
	2.4 	
      Compliance with Securities Laws

	 	 
		
      The acceptance by the Company of this subscription by the
      Subscriber is conditional upon compliance by the Subscriber with all
      securities and other applicable laws of the jurisdiction in which the
      Subscriber is resident and any other applicable jurisdiction. The
      Subscriber shall deliver to the Company all further documentation,
      agreements, representations and requisite government forms requested by
      the solicitors for the Company as in their discretion may be required to
      comply with such laws.

	 	 
	2.5 	
      Loan Pending Subscription

	 	 
		
      Pending acceptance of this subscription by the Company,
      all funds paid by the Subscriber hereunder shall be deposited by the
      Company and immediately available to the Company for its corporate
      purposes. In the event this subscription is not accepted, the subscription
      funds will constitute a non-interest bearing demand loan of the Subscriber
      to the Company.

	 	 
	2.6 	
      Delivery of Certificates

	 	 
		
      The Subscriber hereby authorizes and directs the Company
      to deliver the securities to be issued to the Subscriber pursuant to this
      Agreement to the Subscriber’s address indicated on the signature page of
      this Agreement.

	 	 
	2.7 	
      No Minimum Subscription

	 	 
		
      The Subscriber acknowledges and agrees that the
      subscription by the Subscriber for the Shares and the Company’s acceptance
      of the subscription is not subject to any minimum subscription for the
      Offering.

ARTICLE 3 
AGREEMENTS, REPRESENTATIONS AND
WARRANTIES OF THE SUBSCRIBER 

	3.1 	
      Exemption from Registration

	 	 
		
      The Subscriber acknowledges and agrees that the Shares
      will be offered and sold to the Subscriber without such offering being
      registered under the Securities Act and that the Shares will be
      issued to the Subscriber in an offshore transaction outside of the United
      States in accordance with a safe harbour from the registration
      requirements of the Securities Act provided by Rule 903 of
      Regulation S under the Securities Act based on the representations
      and warranties of the Subscriber set forth in this Agreement. The
      Subscriber acknowledges and agrees that all Shares will, upon issuance,
      constitute “restricted securities” within the meaning of Rule 144
      under the Securities Act.

- 4 - 

	3.2 	
      Resales of Securities

	 	 
		
      The Subscriber acknowledges that the Shares purchased by
      the Subscriber hereunder may not be offered, sold, pledged or otherwise
      transferred by the Subscriber except pursuant to an exemption from the
      registration requirements of the Securities Act or pursuant to an
      effective registration Statement under the Securities Act and in
      accordance with all applicable state securities laws and the laws of any
      other applicable jurisdiction. The Subscriber agrees to resell the Shares
      only in accordance with the provisions of Regulation S of the
      Securities Act, pursuant to an effective registration statement
      under the Securities Act, or pursuant to an available exemption
      from the registration requirements of the Securities Act and that
      the Company shall refuse to register any transfer of the Shares not made
      accordingly. The Subscriber agrees that the Company may require the
      opinion of legal counsel reasonably satisfactory to the Company in the
      event of any offer, sale, pledge or transfer of any of the Shares by the
      Subscriber made pursuant to an exemption from the registration
      requirements of the Securities Act.

	 	 
	3.3 	
      No Requirement to Register

	 	 
		
      The Subscriber acknowledges and agrees that the Company
      has no obligation to register the resale of the Shares under the
      Securities Act or to otherwise qualify the Shares for resale under
      any federal, state or provincial securities laws.

	 	 
	3.4 	
      Hedging Transactions

	 	 
		
      The Subscriber agrees not to engage in hedging
      transactions with regard to the Shares unless in compliance with the
      Securities Act.

	 	 
	3.5 	
      Share Certificates

	 	 
		
      The Subscriber acknowledges and agrees that all
      certificates representing the Shares will be endorsed with the following
      legend, or such similar legend as deemed necessary or advisable by legal
      counsel for the Company, to ensure compliance with Regulation S under the
      Securities Act and to reflect the status of the Shares as
      restricted securities:

  
    
      
        “THE SECURITIES REPRESENTED BY THIS CERTIFICATE
          HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”),
          AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
          REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE
          ACT. THESE SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE
          TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S,
          PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT
          TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS
          INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
          THE ACT.” 

      

    

  

- 5 - 

	3.6 	
      Transfer of Shares

	 	 	 
		
      The Subscriber agrees that any transfer of the Shares
      will be subject to the prior approval of the directors of the Company
      until such time as the Company either:

	 	 	 
		(a) 	
      files an effective registration statement with the SEC to
      register the Shares for resale; or

	 	 	 
		(b) 	
      the Company’s Common Stock is registered pursuant to the
      Exchange Act.

	 	 	 
	3.7 	
      Representations and Warranties of the
      Subscriber

	 	 	 
		
      The Subscriber hereby represents and warrants to the
      Company as follows, and acknowledges that the Company is relying upon such
      representations and warranties in connection with the sale of the Shares
      to the Subscriber:

	 	 	 
		(a) 	
      the Subscriber is not a “U.S. Person” as defined by
      Regulation S of the Securities Act, as set forth in Schedule A of
      this Agreement;

	 	 	 
		(b) 	
      the Subscriber is not acquiring the Shares for the
      account or benefit of a U.S. Person;

	 	 	 
		(c) 	
      the Subscriber was not in the United States at the time
      the offer to purchase the Shares was received or at the time this
      Agreement was executed;

	 	 	 
		(d) 	
      the Subscriber has such knowledge, sophistication and
      experience in business and financial matters such that it is capable of
      evaluating the merits and risks of the investment in the Shares. The
      Subscriber can bear the economic risk of this investment, and is able to
      afford a complete loss of this investment;

	 	 	 
		(e) 	
      the Subscriber acknowledges that the Company is in the
      early stages of development of its business and the Company’s success is
      subject to a number of significant risks, including risks related to the
      ability of the Company to finance its plan of operations and execute its
      business plan. The Subscriber acknow3ledges that any forward-looking
      information provided by the Company to the Subscriber are subject to risks
      and uncertainties and that the Company’s actual results may differ
      materially from the results anticipated thereby;

	 	 	 
		(f) 	
      the Shares are being acquired by the Subscriber for
      investment for the Subscriber’s own account, not as a nominee or agent,
      and not with a view to the resale or distribution of any part thereof, and
      that the Subscriber has no present intention of selling, granting any
      participation in, or otherwise distributing the same. There is no
      contract, undertaking, agreement or arrangement between the Subscriber and
      any other person for the sale, transfer or grant of participation to such
      person or to any other person with respect to any of the Shares;

	 	 	 
		(g) 	
      the Subscriber has received and has had full opportunity
      to review the Disclosure Statement. The Subscriber has had full
      opportunity to ask questions and receive answers from representatives of
      the Company regarding. the Disclosure Statement, the terms and conditions
      of the Offering and the business, properties, prospects and financial
      condition of the Company, each as is necessary to evaluate the merits and
      risks of investing in the Shares. The Subscriber believes he or she has
      received all the information he or she considers necessary or appropriate
      to make an investment decision with respect to
the

- 6 - 

	 		
      Shares. The Subscriber has had full opportunity to
      discuss this information with the Subscriber’s legal and financial
      advisers prior to execution of this Agreement;

	 	 	 	 
	 	(h) 	
      the Subscriber acknowledges that the Shares will be
      offered and sold without registration under the Securities Act in a
      private placement that is exempt from the registration provisions of the
      Securities Act based on the truth and accuracy of the
      representations of the Subscriber. The Subscriber acknowledges that the
      Shares it is purchasing constitute “restricted securities” under
      the Securities Act as they are being acquired from the Company in a
      transaction not involving a public offering and that under applicable laws
      and regulations such Shares may be resold or otherwise transferred in the
      United States without registration under the Securities Act only in
      certain limited circumstances. The Subscriber is familiar with Rule 144
      under the Securities Act, as presently in effect, and understands
      the resale limitations imposed thereby and by the Securities Act.
      The Subscriber further acknowledges that the Offering of the Shares by the
      Company has not been reviewed by the SEC or any state or provincial
      securities regulatory authority;

	 	 	 	 
	 	(i) 	
      the Subscriber has satisfied itself with respect to and
      has fully observed the laws of the Subscriber’s jurisdiction of residence
      in connection with any invitation to subscribe for the Shares or any use
      of this Agreement, including:

	 	 	 	 
	 		(i) 	
      the legal requirements within the Subscriber’s
      jurisdiction relating to the purchase of the Shares;

	 	 	 	 
	 		(ii) 	
      any foreign exchange restrictions applicable to such
      purchase;

	 	 	 	 
	 		(iii) 	
      any required governmental or other consents;

	 	 	 	 
	 		(iv) 	
      the income tax and other tax consequences, if any, that
      may be relevant to an investment in the Shares; and

	 	 	 	 
	 		(v) 	
      any restrictions or transfer applicable to any
      disposition of the Shares imposed by the jurisdiction in which the
      Subscriber is resident;

	 	 	 	 
	 	(j) 	
      the Subscriber has not purchased the Shares as a result
      of any form of general solicitation or general advertising, including
      advertisements, articles, notices or other communications published in any
      newspaper, magazine or similar media or broadcast over radio, television
      or other form of telecommunications, or any seminar or meeting whose
      attendees have been invited by general solicitation or general
      advertising; and

	 	 	 	 
	 	(k) 	
      this Agreement has been duly authorized, validly executed
      and delivered by the Subscriber and constitutes a legal, valid and binding
      obligation of the Subscriber enforceable against the Subscriber in
      accordance with its terms.

	3.8 	
      British Columbia Matters

	 	 
		
      The Subscriber acknowledges that the directors and
      officers of the Company and the head office of the Company are presently
      located in the Province of British Columbia, Canada. For the Company to
      ensure compliance with British Columbia securities law in connection with
      the Offering, the Subscriber will, as a condition of acceptance by the
      Company of its subscription, complete and deliver to the Company the
      Investor certificate attached hereto as Schedule
B.

- 7 - 

The Subscriber acknowledges that the
Shares may not be sold or otherwise disposed of for value in British Columbia,
except pursuant to a prospectus, or statutory exemption available only in
specific and limited circumstances. The Subscriber acknowledges that the Company
is not a reporting issuer in the Province of British Columbia or any other
province in Canada and has no plans to become a reporting issuer in the Province
of British Columbia or any other province in Canada. 

ARTICLE 4 
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY 

	4.1 	
      Representations and Warranties of the
      Company

	 	 	 
		
      The Company represents and warrants to the Subscriber and
      acknowledges that the Subscriber is relying upon such representations and
      warranties in connection with the execution, delivery and performance of
      this Agreement:

	 	 	 
		(a) 	
      The Company is a corporation duly incorporated and in
      good standing under the laws of the State of Nevada, and has the requisite
      corporate power and authority to conduct its business as it is currently
      being conducted, to enter into this Agreement and to sell the Shares to
      the Subscriber.

	 	 	 
		(b) 	
      The execution and delivery by the Company of this
      Agreement has been duly authorized by all necessary action on the part of
      the Company, and no further consent or action is required by the Company,
      its board of directors or its stockholders.

	 	 	 
		(c) 	
      The issuance of the Shares has been duly authorized by
      all necessary corporate action of the Company.

	 	 	 
		(d) 	
      Upon payment of the subscription price and issuance in
      accordance with the terms and conditions of this Agreement, the Shares
      will be validly issued, fully paid and non-assessable shares of the
      Company’s common stock.

	 	 	 
		(e) 	
      The existing stockholders of the Company have no
      pre-emptive or similar rights to purchase shares of Common Stock from the
      Company.

	 	 	 
		(f) 	
      The issue and sale of the Shares by the Company does not,
      and will not, conflict with and does not and will not result in a breach
      of, any of the terms of its Articles of Incorporation or Bylaws or any
      agreement or instrument to which the Company is a
party.

ARTICLE 5 
MISCELLANEOUS PROVISIONS 

	5.1 	
      Effectiveness of Representations;
      Survival

	 	 
		
      Each party is entitled to rely on the representations,
      warranties and agreements of each of the other parties and all such
      representation, warranties and agreements will be effective regardless of
      any investigation that any party has undertaken or failed to undertake.
      The representation, warranties and agreements will survive the purchase
      and sale of the Shares.

- 8 - 

	5.2 	
      Further Assurances

	 	 	 
		
      Each party hereto will co-operate with the other and
      execute and deliver to the other party hereto such other instruments and
      documents and take such other actions as may be reasonably requested from
      time to time by any other party hereto as may be necessary to carry out,
      evidence, and confirm the intended purposes of this Agreement.

	 	 	 
	5.3 	
      Amendment

	 	 	 
		
      This Agreement may not be amended except by an instrument
      in writing signed by each of the parties.

	 	 	 
	5.4 	
      Expenses

	 	 	 
		
      Each party to this Agreement will bear its respective
      expenses incurred in connection with the preparation, execution, and
      performance of this Agreement and the transactions contemplated hereby,
      including all fees and expenses of agents, representatives, counsel, and
      accountants.

	 	 	 
	5.5 	
      Entire Agreement

	 	 	 
		
      This Agreement constitutes the entire agreement between
      the parties with respect to the subject matter hereof and supersedes all
      prior arrangements and understandings, both written and oral, expressed or
      implied, with respect thereto. Any preceding correspondence or offers are
      expressly superseded and terminated by this Agreement.

	 	 	 
	5.6 	
      Severability

	 	 	 
		
      If one or more provisions of this Agreement is held to be
      unenforceable under applicable law, such provision will be excluded from
      this Agreement and the remainder of this Agreement will be enforceable in
      accordance with its terms.

	 	 	 
	5.7 	
      Notices

	 	 	 
		
      All notices and other communications required or
      permitted to be delivered under this Agreement must be in writing and
      will· be deemed given if sent by personal delivery, faxed with electronic
      confirmation of delivery, internationally-recognized express courier or
      registered or certified mail (return receipt requested), postage prepaid,
      to the parties at the following addresses (or at such other address for a
      party as will be specified by like notice):

	 	 	 
		(a) 	
      If to the Investor:

	 	 	 
			
      AT THE ADDRESS SET FORTH ON THE SIGNATURE PAGE TO THIS
      AGREEMENT.

	 	 	 
		(b) 	
      If to the Company:

	 	 	 
			
      2200-1177 West Hastings Street 
Vancouver, BC V6E
      2K3

	 	 	 
		
      All such notices and other communications will be deemed
      to have been received:

	 	 	 
		(a) 	
      in the case of personal delivery, on the date of such
      delivery;

- 9 - 

	 	(b) 	
      in the case of a fax, when the party sending such fax has
      received electronic confirmation of its delivery;

	 	 	 
	 	(c) 	
      in the case of delivery by internationally-recognized
      express courier, on the business day following dispatch; and

	 	 	 
	 	(d) 	
      in the case of mailing, on the fifth business day
      following mailing.

	5.8 	
      Headings

	 	 
		
      The headings contained in this Agreement are for
      convenience only and shall not affect in any way the meaning or
      interpretation of this Agreement.

	 	 
	5.9 	
      Benefits

	 	 
		
      This Agreement is and shall only be construed as for the
      benefit of and shall be enforceable only by the parties hereto.

	 	 
	5.10 	
      Assignment

	 	 
		
      This Agreement may not be assigned by any party without
      the prior written consent of the other party hereto.

	 	 
	5.11 	
      Governing Law

	 	 
		
      This Agreement shall be governed by and construed in
      accordance with the laws of the State of Nevada applicable to contracts
      made and to be performed therein.

	 	 
	5.12 	
      Construction

	 	 
		
      The language used in this Agreement shall be deemed to be
      the language chosen by the parties to express their mutual intent, and no
      rule of strict construction will be applied against any party.

	 	 
	5.13 	
      Counterparts

	 	 
		
      This Agreement may be executed in one or more
      counterparts, all of which will be considered one and the same agreement
      and will become effective when one or more counterparts have been signed
      by each of the parties and delivered to the other party, it being
      understood that all parties need not sign the same counterpart.

	 	 
	5.14 	
      Fax Execution

	 	 
		
      This Agreement may be executed by delivery of executed
      signature pages by fax and such fax execution will be effective for all
      purposes.

	 	 
	5.15 	
      Schedules and Exhibits

	 	 
		
      The schedules and exhibits are attached to this Agreement
      and incorporated herein.

IN WITNESS WHEREOF, this Subscription Agreement is
executed as of the day and year first above written. 

- 10 - 

	Number of Shares Subscribed for: 	 
	 	 
	Subscription Price (per Share): 	 
	 	 
	Total Purchase Price: 	 
	 	 
	Signature of Subscriber or Authorized 	 
	Signatory of Subscriber: 	 
	 	 
	Title of Authorized Signatory of Subscriber 	 
	(if applicable): 	 
	 	 
	Name of Subscriber: 	 
	 	 
	Address of Subscriber: 	 

 

ACCEPTED BY: 

TRIMEX EXPLORATION INC. 

 

	Per:	 	 
	 	Authorized Signatory 	 
	 	 	 
	 	 	 
	 	Name of Authorized Signatory 	 
	 	 	 
	 	 	 
	 	Position of Authorized Signatory 	 
	 	 	 
	 	 	 
	 	Date of Acceptance 	 

SCHEDULE A 

DEFINITION OF U.S. PERSON 

A “U.S. Person” is defined by Regulation S of the Act to
be any person who is: 

	 	(a) 	
      any natural person resident in the United
  States;

	 	 	 	 
	 	(b) 	
      any partnership or corporation organized or incorporated
      under the laws of the United States;

	 	 	 	 
	 	(c) 	
      any estate of which any executor or administrator is a
      U.S. Person;

	 	 	 	 
	 	(d) 	
      any trust of which any trustee is a U.S.
Person;

	 	 	 	 
	 	(e) 	
      any agency or branch of a foreign entity located in the
      United States;

	 	 	 	 
	 	(f) 	
      any non-discretionary account or similar account (other
      than an estate or trust) held by a dealer or other fiduciary organized,
      incorporated, or (if an individual) resident in the United
  States;

	 	 	 	 
	 	(g) 	
      any discretionary account or similar account (other than
      an estate or trust) held by a dealer of other fiduciary organized,
      incorporated, or (if an individual) resident in the United States;
    and

	 	 	 	 
	 	(h) 	
      any partnership or corporation if:

	 	 	 	 
	 		(i) 	
      organized or incorporated under the laws of any foreign
      jurisdiction; and

	 	 	 	 
	 		(ii) 	
      formed by a U.S. Person principally for the purpose of
      investing in securities not registered under the Act, unless it is
      organized or incorporated, and owned, by accredited Subscribers [as
      defined in Section 230.501(a) of the Act] who are not natural persons,
      estates or trusts.

SCHEDULE B 

INVESTOR CERTIFICATE 

TO: T     RIMEX EXPLORATIONS INC.

Certificate 

In connection with the purchase by the undersigned (the
“Subscriber”) of Shares of Trimex Exploration Inc. (the
“Company”), the undersigned hereby represents, warrants, covenants to and
with the Company and certifies to the Company (on behalf of itself or on behalf
of the disclosed principal, as the case may be) that: 

	1. 	
      the Subscriber is (PLEASE CHECK THE APPROPRIATE
    BOX):

	 	
       
	
       

		
      [   ] 
	
      resident in the Province of British Columbia or is
      subject to the laws of the Province of British Columbia;

	 	
       
	
       

		
      [   ] 
	
      resident in the Province of _____________________,
    or

	 	
       
	
       

		
      [   ] 
	
      not a resident of Canada.

	 	
       
	
       

	2. 	
      the Subscriber is (PLEASE CHECK THE APPROPRIATE
    BOX):

	 	
       
	
       

		
      [   ] 
	
      an “accredited investor” within the meaning of
      National Instrument 45-106 of the Canadian Securities Administrators by
      virtue of satisfying the indicated criterion as set out therein.

	 	
       
	
       

		
      [   ] 
	
      a close personal friend of _________________, an officer
      or director of the Company.

	 	
       
	
       

			
      A close personal friend is an individual who
      has known the director, senior officer or control person well
      enough and for a sufficient period of time to be in a position to assess
      the capabilities and trustworthiness of the director, senior officer or
      control person. An individual is not a close personal friend solely
      because the individual is a member of the same organization, association
      or religious group.

	 	
       
	
       

		
      [   ] 
	
      a close business associate of _________________, an
      officer or director of the Company.

	 	
       
	
       

			
      A close business associate is an individual who
      has had sufficient prior business dealings with the director, senior
      officer or control person to be in a position to assess the capabilities
      and trustworthiness of the director, senior officer or control person. A
      casual business associate or a person introduced or solicited for the
      purpose of purchasing securities is not a close business associate. An
      individual is not a close business associate solely because the individual
      is a client or former client. For example, an individual is not a close
      business associate of a registrant or former registrant solely because the
      individual is a client or former client of that registrant or former
      registrant. The relationship between the purchaser and the director,
      senior officer or control person must be direct. For example, the
      exemption is not available for a close business associate of a close
      business associate of a director, senior officer or control
    person.

- 2 - 

	3. 	
      the Subscriber:

	 	 	 	 
		(a) 	
      is hereby notified by the Company

	 	 	 	 
			(i) 	
      of the delivery to the British Columbia Securities
      Commission of the Information (as defined above),

	 	 	 	 
			(ii) 	
      that the Information is being collected indirectly by the
      British Columbia Securities Commission under the authority granted to it
      in securities legislation,

	 	 	 	 
			(iii) 	
      that the Information is being collected for the purposes
      of the administration and enforcement of the securities legislation of
      British Columbia, and

	 	 	 	 
			(iv) 	
      that the Subscriber may contact the British Columbia
      Securities Commission for further information about the collection and use
      of the Information at the following address and telephone and facsimile
      numbers:

British Columbia Securities
Commission 
P.O. Box 10142, Pacific Centre 
701 West Georgia Street

Vancouver, British Columbia V7Y 1L2 
Telephone: 604-899-6500 
Toll
free in British Columbia and Alberta: 1-800-373-6393 
Facsimile: 604-899-6506

	 	(b) 	
      has authorized the indirect collection of the Information
      by the British Columbia Securities Commission;

	4. 	
      The Subscriber acknowledges that:

	 	 	 	 
		(a) 	
      no securities commission or similar regulatory authority
      has reviewed or passed on the merits of the Shares;

	 	 	 	 
		(b) 	
      there is no government or other insurance covering the
      Shares;

	 	 	 	 
		(c) 	
      there are risks associated with the purchase of the
      Shares;

	 	 	 	 
		(d) 	
      the Company has no plans to become a reporting issuer in
      any Canadian province;

	 	 	 	 
		(e) 	
      no person has made any written or oral
      representations:

	 	 	 	 
			(i) 	
      that any person will resell or repurchase the
    Shares;

	 	 	 	 
			(ii) 	
      that any person will refund the purchase price for the
      Shares; or

	 	 	 	 
			(iii) 	
      as to the future price or value of the Shares;

	 	 	 	 
		(f) 	
      no prospectus or other offering document has been filed
      by the Company with a securities commission or other securities regulatory
      authority in any province of Canada, or any other jurisdiction in or
      outside of Canada in connection with the issuance of the Shares, and such
      issuances are exempt from the prospectus requirements otherwise
      applicable

- 3 - 

under the provisions of applicable
Canadian securities laws and, as a result, in connection with its purchase of
the Subscriber’s Shares hereunder, as applicable: 

	 	(i) 	
      the Subscriber will not receive information that may
      otherwise be required to be provided to the Subscriber under applicable
      Canadian securities or contained in a prospectus prepared in accordance
      with applicable Canadian securities laws; and

	 	 	 
	 	(ii) 	
      the Company is relieved from certain obligations that
      would otherwise apply under such applicable Canadian securities laws;
      and

	 	(g) 	
      the Company is relying on exemptions from the
      requirements to provide the Subscriber with a prospectus and to sell
      securities through a person or company registered to sell securities under
      applicable Canadian securities laws or other applicable securities
      legislation and, as a consequence of acquiring the Shares pursuant to this
      exemption, certain protections, rights and remedies provided by applicable
      Canadian securities laws including statutory rights of rescission or
      damages, will not be available to the Subscriber in connection with its
      purchase of the Shares.

	5. 	
      The Subscriber will:

	 	 	 
		(a) 	
      not resell any of the Shares acquired (directly or
      indirectly) hereunder, in whole or in part, directly or indirectly, except
      in accordance with the provisions of applicable securities laws;
  and

	 	 	 
		(b) 	
      execute, deliver, file and otherwise assist the Company
      in filing, such further reports, undertakings, agreements, documents and
      writings, do all acts and things, and provide such further assurances as
      may be required to give effect to this Subscription Agreement as required,
      and, without limiting the generality of the foregoing, will execute and
      deliver all documents, agreements and writings and provide such
      assurances, undertakings, information and investment letters as may be
      required from time to time by all securities commissions, stock exchanges
      or other regulatory authorities having jurisdiction over the Company’s
      affairs or as may be required from time to time under the applicable
      securities laws with respect to the issue and resale of the
  Shares.

	 	 	 
	6. 	
      The Subscriber acknowledges that:

	 	 	 
		(a) 	
      the Shares are subject to resale restrictions imposed
      under applicable Canadian securities laws and, as a consequence, the
      Subscriber may not be able to resell the Shares, except in accordance with
      resale restrictions and limited exemptions under applicable Canadian
      securities laws;

	 	 	 
		(b) 	
      the Subscriber has the sole responsibility to determine
      and comply with restrictions on resale before reselling any of the Shares
      and has been independently advised as to applicable hold periods and
      restrictions with respect to trading in the Shares imposed by applicable
      Canadian securities laws and regulatory policy including applicable
      securities laws in the jurisdiction in which it resides or the
      jurisdiction in which such Shares will come to rest, and confirms that no
      representation has been made to it by or on behalf of the Company with
      respect thereto; and

	 	 	 
		(c) 	
      the certificates evidencing the Shares will bear a legend
      regarding restrictions on transfer as required pursuant to applicable
      Canadian securities laws, as well as the
legend

- 4 - 

restricting transfer without
registration under the U.S. Securities Act and applicable state securities laws.

	7. 	
      The foregoing agreements, representations, warranties and
      covenants are made by the undersigned with the intent that they be relied
      upon in determining the suitability of the undersigned as a Subscriber of
      the Shares and the eligibility of the Subscriber to purchase the Shares
      under applicable Canadian securities laws and the undersigned undertakes
      to immediately notify the Company of any change in any statement or other
      information relating to the Subscriber west forth herein which takes place
      prior to the closing time.

DATED: ________________, 2008. 

 

	 	 	 
	 	Print Name of Subscriber 
	 	 	 
	 	 	 
	 	 	
	 	 	 
	 	By: 	 
	 	 	Signature 
	 	 	 
	 	 	 
	 	 	Print name of Signatory 
	 	 	(if different from Subscriber) 
	 	 	 
	 	 	 
	 	 	Title 
	 	 	 
	 	 	 
	 	 	Social Security Number 
	 	 	 
	 	 	 
	 	 	Subscriber Address 
	 	 	 
	 	 	 
	 	 	Phone NumberFiled by sedaredgar.com - Nation Energy Inc. - Exhibit 10.1

PETROLEUM, NATURAL GAS AND RELATED RIGHTS CONVEYANCE

THIS AGREEMENT MADE this 18th day of
September, 2008.

BETWEEN:

Nation Energy Inc.,
A body corporate having an office
and carrying on business 
in the City of Vancouver, in the Province of
British Columbia 
("Nation")

- and -

Netco Energy Inc.,
A body corporate having an office
and carrying on business 
in the City of Vancouver, in the Province of
British Columbia 
("Netco")

(Nation and Netco hereinafter referred to as “Vendor”)

- and -

EnCana Oil & Gas Partnership, 
a general
partnership, having an office in the 
City of Calgary, in the Province of
Alberta 
(hereinafter referred to as "Purchaser")

     NOW THEREFORE in
consideration of the premises and the mutual covenants, warranties,
representations, agreements and payments herein set forth and provided for, the
parties agree as follows:

ARTICLE 1 
INTERPRETATION

	1.1 	
      In this Agreement, including the recitals and Schedules
      the words and phrases set forth below shall have the meaning ascribed
      thereto below, namely:

	 	 	 
		(a) 	
      "Assets" means the Petroleum and Natural Gas
      Rights underlying the Lands, granted by the title documents including
      without limitation, the Tangibles and the Miscellaneous
  Interests;

	 	 	 
		(b) 	
      "Closing" means the transfer by Vendor to
      Purchaser of the Assets and the payment by Purchaser to Vendor of the
      purchase consideration therefore and the completion of all matters
      incidental thereto;

	 	 	 
		(c) 	
      "Closing Time" means 2:00 p.m. local time at
      Calgary, Alberta, on September 30, 2008 or such other date as mutually
      agreed by Vendor and Purchaser;

	 	 	 
		(d) 	
      "Effective Time" means 8:01 a.m. local time at
      Calgary, Alberta on June 1, 2008;

	 	 	 
		(e) 	
      “Environmental Damages” has the meaning given
      thereto in Article 9.1;

	 	(f) 	
      “Facilities” means the facilities set forth and
      described in Schedule “B” and used or useful in the production,
      processing, transmission or treatment of Petroleum Substances, including,
      without limitation, pipelines, flow lines, dehydrators, gathering systems,
      batteries, and plants;

	 	 	 	 
	 	(g) 	
      "Lands" means the lands set forth and described in
      Schedule "A" and includes the Petroleum Substances within, upon or under
      such lands, together with the right to explore for and recover same
      insofar as such are granted by Leases to such lands;

	 	 	 	 
	 	(h) 	
      "Leases" means collectively the leases,
      reservations, permits, licenses or other documents of title by virtue of
      which the holder thereof is entitled to drill for, win, take, own or
      remove the Petroleum Substances underlying all or any part of the Lands
      and any lands with which the Lands may be pooled or unitized and any
      document of title issued in substitution for amendment of or in addition
      to any of them;

	 	 	 	 
	 	(i) 	
      "Miscellaneous Interests" means the interest of
      Vendor in and to all property, assets and rights, other than Petroleum and
      Natural Gas Rights and Tangibles, to the extent they pertain to the
      Petroleum and Natural Gas Rights, the Lands, the Leases or the Tangibles
      and to which Vendor is entitled at the Effective Time, including, but not
      in limitation of the generality of the foregoing, the entire interest of
      Vendor in:

	 	 	 	 
	 		(i) 	
      all contracts, agreements, documents, production sales
      contracts, books and records of Vendor, relating to the Petroleum and
      Natural Gas Rights, the Lands or any lands with which the Lands have been
      pooled or unitized, or the Tangibles and any and all rights in relation
      thereto excluding any of the foregoing that pertain to seismic, geological
      or geophysical matters, Vendor’s tax and financial records and economic
      evaluation;

	 	 	 	 
	 		(ii) 	
      all subsisting rights to enter upon, use and occupy the
      surface of any of the Lands or any lands with which the same have been
      pooled or unitized and any Lands upon which the Tangibles are located or
      any lands which are used to gain access to any of the foregoing;
  and

	 	 	 	 
	 		(iii) 	
      the Wells, including the existing wellbores and downhole
      casing related thereto.

	 	 	 	 
	 	(j) 	
      “Nation Payable” means the amounts owed by Nation
      to EnCana, as successor in interest to Olympia, pursuant to a
      Participation Agreement dated November 21, 2001 between Nation Energy Inc.
      and Olympia Energy Inc. and further defined in Schedule “E”;

	 	 	 	 
	 	(k) 	
      "Permitted Encumbrances" means:

	 	 	 	 
	 		(i) 	
      any encumbrances, overriding royalties, reduction in
      interest and other burdens identified in Schedule “A”;

	 	 	 	 
	 		(ii) 	
      easements, rights of way, servitudes or other similar
      rights in land including, without limiting the generality of the
      foregoing, rights of way and servitudes for railways, sewers, drains, gas
      and oil pipelines, gas and

2

	 	 	 	water mains, electric light, power, telephone, telegraph
    or cable television conduits, poles, wires and cables;
	 	 	 	 
	 		(iii) 	
      the right reserved to or vested in any government or
      other public authority by the term of any Lease or by any statutory
      provision to terminate any Leases or to require annual or other periodic
      payments as a condition of the continuance thereof;

	 	 	 	 
	 		(iv) 	
      taxes on Petroleum Substances or the income or revenue
      therefrom and governmental requirements as to production rates on the
      operations of any property or otherwise affecting the value of any
      property;

	 	 	 	 
	 		(v) 	
      contracts for the sale of Petroleum Substances comprising
      part of the Assets as identified in Schedule “C”;

	 	 	 	 
	 		(vi) 	
      the terms and conditions of the Leases;

	 	 	 	 
	 		(vii) 	
      rights reserved to or vested in any municipality or
      governmental, statutory or public authority to control or regulate any of
      the Assets in any manner, and all applicable laws, rules and orders of any
      governmental authority;

	 	 	 	 
	 		(viii) 	
      undetermined or inchoate liens incurred or created as
      security in favour of the person conducting the operation of any of the
      Assets for Vendor’s proportion of the costs and expenses of such
      operations which costs and expenses are not delinquent as of the Closing
      Time;

	 	 	 	 
	 		(ix) 	
      the reservations, limitations, provisos and conditions in
      any original grants from the Crown of any of the Lands or interests
      therein and statutory exceptions to title;

	 	 	 	 
	 		(x) 	
      agreements and plans relating to pooling or
      unitization;

	 	 	 	 
	 		(xi) 	
      provisions for penalties and forfeitures under agreements
      as a consequence of non-participation in operations; and

	 	 	 	 
	 		(xii) 	
      liens granted in the ordinary course of business to a
      public utility, municipality or governmental authority in connection with
      operations conducted with respect to the Assets for which payment is not
      due.

	 	 	 	 
	 	(l) 	
      "Petroleum and Natural Gas Rights" means the
      entire interests of Vendor in and to the Leases and the Lands, including
      without limitation, the interests set out in Schedule “A”;

	 	 	 	 
	 	(m) 	
      “Petroleum Substances” means petroleum, natural
      gas and related hydrocarbons and all substances associated therewith or
      any of them insofar as the same are granted by the Leases;

	 	 	 	 
	 	(n) 	
      "Place of Closing" means the offices of
    Vendor;

	 	 	 	 
	 	(o) 	
      "Take or Pay Obligations" means the outstanding
      obligations of Vendor arising in connection with payments made to Vendor,
      or its predecessors in interest, under or in respect of gas purchase
      contracts or other contracts for the sale of Petroleum Substances, which
      payments were made in lieu of or in consequence of the buyers under such
      contracts not taking delivery of Petroleum
Substances

3

	 	 	or in consideration of future deliveries of Petroleum
      Substances and which obligations include obligations to deliver Petroleum
      Substances after the Effective Time or to repay such payments after the
    Effective Time;
	 	 	 
		(p) 	
      "Tangibles" means the Facilities and any and all
      tangible depreciable property and assets other than the Facilities which
      are located within or upon the Lands and which are used or are intended to
      be used to produce, process, gather, treat, measure, make marketable or
      inject Petroleum Substances or any of them or in connection with water
      injection or removal operations that pertain to the Petroleum and Natural
      Gas Rights, including without limitation any and all buildings, production
      equipment, pipeline connections, meters, generators, motors, compressors,
      treaters, dehydrators, scrubbers, separators, pumps, tanks, boilers and
      communication equipment; and

	 	 	 
		(q) 	
      "Wells" means all wells located on the Lands or on
      lands with which the Lands have been pooled or unitized including well
      bore and all equipment appurtenant thereto and including without
      limitation those Wells, all as set forth in Schedule "A" under the heading
      “Wells”.

	 	 	 
	1.2 	
      Appended hereto is:

	 	 	 
		
      Schedule "A" Description of Lands, Leases, Vendor's
      Interests, Encumbrances and

	 	 	 
			
      Wells

	 	 	 
			
      Schedule “B” Facilities

	 	 	 
			
      Schedule “C” Land Dedication Agreements, Transportation
      Agreements and Production Sale Contracts

	 	 	 
			
      Schedule "D" Authorization for Expenditures

	 	 	 
			
      Schedule “E” Nation Payable Assignment

	 	 	 
			
      The Schedules hereto are incorporated into and made part
      of this Agreement by this reference as fully as though contained in the
      body of this Agreement.

	 	 	 
	1.3 	
      The headings of Articles herein are inserted for
      convenience or reference only and shall not affect or be considered to
      affect the construction of the provisions hereof.

ARTICLE 2 
CONVEYANCE

	2.1 	
      Vendor does hereby sell, assign, transfer, convey and set
      over unto Purchaser, its entire right, title, estate and interest in and
      to the Assets on the terms and conditions set forth in this Agreement
      effective as of the Closing Time, and Purchaser hereby purchases and
      accepts directly from Vendor the Assets, to have and to hold the same
      together with all benefits and advantages to be derived therefrom,
      absolutely, subject to the terms and conditions of the Leases and any
      other agreements relating thereto.

4

ARTICLE 3 
PRICE

	3.1 	
      Subject to adjustment as herein provided for, the
      Purchase Price to be paid by Purchaser to Vendor for the Assets shall be
      the sum of $1,600,000.00 (the "Purchase Price") which sum shall be paid by
      Purchaser to Vendor immediately upon execution of this Agreement by cheque
      or bank draft. Nation’s GST registration number is 100272806 RT, Netco’s
      GST registration number is 897814661 RT and Purchaser’s GST registration
      number is 896761046 RT.

	 	 
	3.2 	
      The Purchase Price shall be allocated amongst the Assets
      as follows:

	 	  	  	 	 	Nation Share 	 	 	Netco Share 	 
	 	  	
      
	 	 	  	 	 	  	 
	 	(a) 	
      Petroleum and Natural Gas Rights 
	 	$	 657,000.00 	 	$	 303,000.00 	 
	 	(b) 	
      Tangibles 
	 	$	 437,999.00 	 	$	 201,999.00 	 
	 	(c) 	
      Miscellaneous Interests 
	 	$	 1.00 	 	$	 1.00 	 
	 	(d) 	
      Tax 
	 	$	 21,899.95 	 	$	 10,099.95 	 
	 	  	
      
	 	 	  	 	 	  	 
	 	  	
      TOTAL 
	 	$	 1,116,899.95 	 	$	 515,099.95 	 

	3.3 	
      No Interest shall accrue on the Purchase Price.

	 	 
	3.4 	
      The outstanding Nation Payable, as further defined in
      Schedule “E”, shall be terminated as part of the consideration paid to the
      Vendor.

ARTICLE 4 
CLOSING TIME AND PLACE

	4.1 	
      Closing shall take place at the Place of Closing at the
      Closing Time.

ARTICLE 5 
RENTALS

	5.1 	
      Rentals, lease payments, related taxes and any similar
      payments made by Vendor to preserve any of the Leases shall not be
      apportioned between Vendor and Purchaser. After Closing all rentals and
      similar payments required to preserve any of the Leases which relate to
      the Lands shall be paid by Purchaser.

ARTICLE 6 
ADJUSTMENTS

	6.1 	
      All benefits and obligations of every kind and nature
      accruing, payable, paid, received or Payable with respect to the Assets
      (including, without limitation, maintenance, development, capital and
      operating costs, advances, proceeds from the sale of production, accounts
      receivable and incentives accruing pursuant to the Regulations) shall be
      apportioned between Purchaser and Vendor, as of the Effective Time, in
      accordance with generally accepted accounting principles, subject to the
      provisions of this Agreement, including without limitation, Article 9. All
      costs of whatever nature pertaining to work performed or to be performed
      or goods or services provided with respect to the Assets prior to
      Effective Time shall be borne by Vendor, notwithstanding that such costs
      may be due and payable in whole or in part after Effective
  Time.

5

	6.2 	
      Petroleum Substances which were produced, but not sold as
      of the Effective Time shall be credited to Vendor.

	 	 
	6.3 	
      An interim accounting and adjustment shall be conducted
      for Closing, based on Vendor’s and Purchaser’s good faith estimate of all
      adjustments to be made for the transactions herein pursuant to this
      Article, and a final accounting and adjustment shall be conducted within
      90 days of the Closing Time. The Parties shall not be obligated to make
      any adjustments after such 90 day period unless such adjustment has been
      specifically requested, by notice, within such period. All adjustments
      shall be settled by payment by the party required to make payment
      hereunder within 15 days of being notified of the determination of the
      amount owing.

	 	 
	6.4 	
      During the 90 day period following the Closing Time,
      Purchaser may audit the books, records and accounts of Vendor respecting
      the Assets, for the purpose of effecting adjustments pursuant to this
      Article. Such audit shall be conducted upon reasonable notice to Vendor at
      Vendor’s offices during Vendor’s normal business hours, and shall be
      conducted at the sole expense of Purchaser. Any claims of discrepancies
      disclosed by such audit shall be made in writing to Vendor within 60 days
      following the completion of such audit, and Vendor shall respond in
      writing to any claims of discrepancies within 90 days of the receipt of
      such claims. To the extent that the Parties are unable to resolve any
      outstanding claims of discrepancies disclosed by such audit within 60 days
      of Vendor’s response thereto, then such party may serve the other party
      written notice that it wishes such matter referred to
  arbitration.

	 	 
	6.5 	
      No adjustment shall be made pursuant to this Article 6
      more than 12 months after the Closing Time, except for adjustments arising
      from crown royalty audits or, joint venture audits, provided that written
      notice in respect of any such adjustment is promptly served by the party
      requesting an adjustment upon the other party hereto.

	 	 
	6.6 	
      At any time in the next 4 years, should Purchaser require
      an audited operating statement with respect to the Assets, pursuant to
      Securities Act disclosure requirements, for a period during
      which the Assets were owned by Vendor, Vendor shall provide access to the
      records of Vendor relevant to preparation of such an operating statement
      during such period. Such access shall be provided by Vendor to an
      independent auditing firm selected by Purchaser subject to the entering by
      the auditing firm of a confidentiality agreement reasonably required by
      Vendor. Vendor shall not be required to provide direct access to Vendor's
      records to Purchaser or any employees, consultants or other
      representatives of Purchaser. If the independent auditors require the
      assistance of Vendor's personnel to find, collect or interpret the
      necessary information from Vendor's records, Vendor shall cause such
      assistance to be provided and Purchaser shall pay reasonable hourly costs
      to Vendor as compensation for the time devoted by such
  personnel.

ARTICLE 7 
VENDOR'S REPRESENTATIONS

	7.1 	
      Subject in all cases to Permitted Encumbrances the Vendor
      hereby represents, warrants and covenants to and with Purchaser
    that:

	 	 	 
		(a) 	
      Vendor is a general partnership or a body corporate, duly
      organized and validly existing under the laws of its jurisdiction of
      formation, and duly registered and authorized to carry on business in the
      jurisdiction(s) in which the Lands are located;

	 	 	 
		(b) 	
      Vendor has all requisite power and authority to enter
      into this Agreement and to perform Vendor's obligations under this
      Agreement;

6

	 	(c) 	
      the execution and delivery of this Agreement and each and
      every agreement or document to be executed and delivered hereunder and the
      consummation of the transactions contemplated herein will not violate, nor
      be in conflict with, any provision of any agreement or instrument to which
      Vendor is a party or is bound, or any judgement, decree, order, statute,
      rule or regulation applicable to Vendor or of the constating documents or
      by-laws of Vendor;

	 	 	 
	 	(d) 	
      Vendor does not warrant title to the Assets but does
      represent and warrant that it has done no act or thing, nor is aware of
      any act or thing having been done, whereby any of its interest in and to
      the Assets may be reduced, cancelled or determined, nor has it encumbered
      or alienated the Assets or any interest therein, other than those more
      specifically set out as encumbrances in Schedule "A";

	 	 	 
	 	(e) 	
      subject to the rents, covenants, conditions and
      stipulations in the Leases and any agreements pertaining to the Assets and
      on the lessee's or holder's part thereunder to be paid, performed and
      observed, Purchaser may enter into and upon, hold and enjoy the Assets for
      the residue of their respective terms and all renewals or extensions
      thereof for Purchaser's own use and benefit without any interruption of or
      by Vendor or any other person whomsoever claiming or to claim by, through
      or under Vendor, and Vendor binds itself to warrant and defend all and
      singular the Assets against all persons whomsoever claiming or to claim
      the same or any part thereof or any interest therein by, through or under
      Vendor;

	 	 	 
	 	(f) 	
      this Agreement has been duly executed and delivered by
      Vendor and all documents required hereunder to be executed and delivered
      by Vendor have been duly executed and delivered and this Agreement and
      such documents constitute legal, valid and binding obligations of Vendor
      enforceable in accordance with their respective terms;

	 	 	 
	 	(g) 	
      Vendor has not incurred any obligation or liability
      contingent or otherwise, for brokers' or finders' fees in respect of this
      transaction for which Purchaser shall have any obligation or
    liability;

	 	 	 
	 	(h) 	
      Vendor is not a non-resident of Canada within the meaning
      of the Income Tax Act (Canada);

	 	 	 
	 	(i) 	
      to the best of Vendor’s information, Vendor is in good
      standing under all material agreements and instruments having application
      to the Assets to which Vendor is a party or is bound;

	 	 	 
	 	(j) 	
      to the best of Vendor's information, there are no claims,
      proceedings, actions or lawsuits in existence, threatened or asserted
      against or with respect to the Assets or the interests of Vendor therein
      which would have material adverse effect on the Assets or the value
      thereof;

	 	 	 
	 	(k) 	
      all ad valorem, property, production, severance and
      similar taxes and assessments based on or measured by the ownership of the
      Assets or the production of Petroleum Substances from the Lands or the
      receipt of proceeds therefrom payable by it to the Closing Time and for
      all prior years have been properly paid and discharged;

	 	 	 
	 	(l) 	
      other than as set forth in Schedule "D" there are no
      AFE's received by Vendor with respect to the Assets where the obligation
      of Vendor is greater than $10,000.00;

7

	 	(m) 	
      to the best of Vendor's information, the Wells have been
      drilled and, if completed, completed and operated in accordance with good
      oil and gas industry practices and in compliance with all applicable rules
      and regulations;

	 	 	 	 
	 	(n) 	
      the interests of Vendor in the Wells are not presently
      subject to independent operations penalties due to the failure of Vendor
      to participate in an independent operation;

	 	 	 	 
	 	(o) 	
      except as otherwise expressly noted in Schedule "A", the
      Assets are not subject to reduction by virtue of the conversion or other
      alteration of the interest of any third party under existing agreements
      created by, through or under Vendor;

	 	 	 	 
	 	(p) 	
      other than as set forth in Schedule "C" there are no
      production sales agreements under which Vendor, or any party acting on its
      behalf, is obligated to sell or deliver to any party, any Petroleum
      Substances allocable to the Petroleum and Natural Gas Rights, except for
      agreements terminable by the seller without penalty on less than ninety
      (90) days' notice;;

	 	 	 	 
	 	(q) 	
      there are no outstanding Take or Pay Obligations binding
      on the Assets;

	 	 	 	 
	 	(r) 	
      no tangible depreciable property and assets which are
      used, were used or are intended to be used in producing, processing,
      gathering, treating, measuring, making marketable or injecting the
      Petroleum Substances or any of them or in connection with water injection
      or removal operations that pertain to the Petroleum and Natural Gas
      Rights, has been removed from its location since the Effective Time, nor
      has Vendor alienated or encumbered any such tangible depreciable property
      and assets since such date;

	 	 	 	 
	 	(s) 	
      Vendor has not received notice from any Third Party
      claiming an interest in and to the Assets adverse to the interest of
      Vendor and Vendor has no reason to believe that any such claim may be
      made;

	 	 	 	 
	 	(t) 	
      Vendor has not received notice of default and is not, to
      the knowledge, information and belief of Vendor, in any default under any
      obligation, agreement, document, order, writ, injunction or decree of any
      court or of any commission or administrative agency, which might result in
      impairment or loss of the interest of Vendor in and to the Assets or which
      might otherwise adversely affect the Assets;

	 	 	 	 
	 	(u) 	
      in respect of the Assets that are operated by Vendor, if
      any, Vendor holds all valid licenses, permits and similar rights and
      privileges that are required and necessary under applicable law to operate
      the Assets as presently operated;

	 	 	 	 
	 	(v) 	
      the Tangibles operated by Vendor, if any, are in good and
      operable condition, reasonable wear and tear excepted, and the Tangibles
      operated by Third Parties, if any, are in good and operable condition,
      reasonable wear and tear excepted, to the knowledge, information and
      belief of Vendor;

	 	 	 	 
	 	(w) 	
      Vendor is not aware of and has not received:

	 	 	 	 
	 		(i) 	
      any orders or directives which relate to environmental
      matters and which require any work, repairs, construction or capital
      expenditures with respect to the Assets, where such orders or directives
      have not been complied with in all material respects;
or

8

	 		(ii) 	
      any demand or notice issued with respect to the breach of
      any environmental, health or safety law applicable to the Assets,
      including without limitation, respecting the use, storage, treatment,
      transportation or disposition of environmental contaminants, which demand
      or notice remains outstanding on the date hereof; and

	 	 	 	 
	 	(x) 	
      Vendor has made available to Purchaser all information in
      the possession of Vendor or to which Vendor has access relevant to
      environmental damage or contamination or other environmental problems
      pertaining to the Assets and any other agreements and documents to which
      the Assets are subject that are in possession of Vendor or to which Vendor
      has access.

Vendor makes no representations or
warranties except as expressly set forth in this Article 7.1 and, in particular,
and without limitation, Vendor hereby expressly negates any representation or
warranties by it (except those contained hereto), whether contained in any
information memorandum or otherwise, with respect to:

	 	(a) 	
      any data or information supplied by Vendor in connection
      therewith;

	 	 	 
	 	(b) 	
      the quality, quantity or recoverability of Petroleum
      Substances within or under the Lands or any lands pooled
  therewith;

	 	 	 
	 	(c) 	
      the value of the Assets or the future cash flow
      therefrom; and

	 	 	 
	 	(d) 	
      the quality, condition, fitness or merchantability of any
      tangible depreciable equipment or property, interests in which are
      comprised in the Assets.

Except to the extent that it has relied
upon the representations and warranties contained in Article 7.1, Purchaser
acknowledges and confirms that it has performed its own due diligence and it has
not relied on any data, information or advise from Vendor with respect to any or
all of the matters specifically enumerated in this paragraph in connection with
the purchase of the Assets pursuant hereto. In addition, Purchaser specifically
acknowledges and confirms that in agreeing to enter into and to consummate the
transactions contemplated herein, it has relied, and will continue to rely, upon
its own engineering and other evaluations and projections as the same relate to
the Assets and on its own inspection of all other physical property and assets
which comprise the Assets.

ARTICLE 8 
PURCHASER'S REPRESENTATIONS

	8.1 	
      Purchaser hereby represents, warrants and covenants to
      and with Vendor that:

	 	 	 
		(a) 	
      Purchaser is a general partnership duly organized and
      validly existing under the laws of its jurisdiction of formation, and duly
      registered and authorized to carry on business in the jurisdiction(s) in
      which the Lands are located;

	 	 	 
		(b) 	
      Purchaser has all requisite power and authority to enter
      into this Agreement and to purchase and pay for the Assets on the terms
      described herein and to perform its other obligations under this
      Agreement;

	 	 	 
		(c) 	
      the execution and delivery of this Agreement and each and
      every agreement or document to be executed and delivered hereunder and the
      consummation of the transactions contemplated herein will not violate, nor
      be in conflict with, any provision of any agreement or instrument to which
      Purchaser is a party or is

9

	 		
      bound, or any judgement, decree, order, statute, rule or
      regulation applicable to Purchaser or of the constating documents or
      by-laws of Purchaser;

	 	 	 
	 	(d) 	
      this Agreement has been duly executed and delivered by
      Purchaser and all documents required hereunder to be executed and
      delivered by Purchaser shall have been duly executed and delivered and
      this Agreement does, and such documents will, constitute legal, valid and
      binding obligations of Purchaser enforceable in accordance with their
      respective terms;

	 	 	 
	 	(e) 	
      Alberta Energy & Utilities Board (“AEUB”) will not
      reject the transfer by the Vendor to the Purchaser of any of the well
      licences held by Vendor pertaining to the Assets due to the Vendor failing
      the AEUB’s Licences Liability Rating criteria in effect.

	 	 	 
	 	(f) 	
      Purchaser has not incurred any obligation or liability,
      contingent or otherwise, for brokers' or finders' fees in respect of this
      transaction for which Vendor shall have any obligation or liability;
      and

	 	 	 
	 	(g) 	
      Purchaser is not a "non-Canadian person" within the
      meaning of the Investment Canada
  Act.

ARTICLE 9 
INDEMNITY

	9.1 	
      Purchaser shall indemnify and hold Vendor harmless from
      all liabilities, losses, claims and damages (including those arising
      directly and indirectly, those comprising fees on a solicitor and client
      basis and future profits) to which Vendor may become subject both before
      and after the Effective Time relating to Environmental Damages, except for
      any claims which Purchaser may have for the breach of a representation or
      warranty made by Vendor pursuant to Article 7.1. It is acknowledged that
      Purchaser has been provided with the right and the opportunity to conduct
      due diligence investigations with respect to Environmental
  Damages.

	 	 	 
		
      “Environmental Damages” shall mean any of the following
      operations and/or circumstances, irrespective of whether or not that
      operation or circumstance occurred or was conducted before or after the
      Effective Time:

	 	 	 
		(a) 	
      surface, underground, air, groundwater and surface
      contamination;

	 	 	 
		(b) 	
      abandonment and site restoration conducted for any
      well;

	 	 	 
		(c) 	
      general restoration and reclamation;

	 	 	 
		(d) 	
      breach of, or failure to comply with any governmental
      requirements governing the ownership and operation of the
Assets;

	 	 	 
		(e) 	
      removal or omission to remove any foundations, structures
      and equipment from and in the area of the Assets.

	 	 	 
			
      Purchaser acknowledges and agrees that it shall not be
      entitled to any rights or remedies under the common law, equity or statute
      pertaining to such Environmental Damages relative to Vendor including,
      without limitation, the right to name Vendor as a third party to any
      action commenced by any person against Purchaser and that it shall be
      solely and completely responsible for any and all losses (both direct and
      indirect), costs, claims,

10

		
      damages, expenses or liabilities (including future
      profits) relating to and arising out of Environmental Damages pertaining
      to the Assets. Nothing herein contained shall prejudice any claims or
      remedies that Vendor may have against Purchaser in relation to such claim
      or remedy outside this contract including rights and remedies under the
      common law or statute.

	 	 	 
	9.2 	
      Purchaser acknowledges that it is acquiring the Assets on
      an “as is” basis, as of the Effective Date. Purchaser acknowledges that it
      is familiar with the condition of the Assets, including the past and
      present use of the Lands and the Tangibles, that Vendor has provided
      Purchaser with a reasonable opportunity to inspect the Assets at the sole
      cost, risk and expense of Purchaser (insofar as Vendor could reasonably
      provide such access) and that Purchaser is not relying upon any
      representation or warranty of Vendor as to the condition, environmental or
      otherwise, of the Assets, except as is specifically made pursuant to
      Article 7.1. Provided that Closing has occurred, Purchaser further agrees
      that, as of the Effective Date, it shall:

	 	 	 
		i. 	
      be solely liable and responsible for any and all losses,
      costs, damages and expenses which Vendor may suffer, sustain, pay or
      incur; and

	 	 	 
		ii. 	
      indemnify and save Vendor and its directors, officers,
      servants, agents and employees harmless from any and all claims,
      liabilities, actions, proceedings, demands, losses, costs, damages and
      expenses whatsoever which may be brought against or suffered by Vendor,
      its directors, officers, servants, agents or employees or which they may
      sustain, pay or incur;

	 	 	 
		
      as a direct result of any matter or thing arising out of,
      resulting from, attributable to or connected with any liabilities
      pertaining to the Environmental Damages for the Assets, including, without
      limitation, damage from or removal of hazardous or toxic substances,
      clean-up, well abandonment and reclamation. Purchaser shall be solely
      responsible for all environmental liabilities respecting the Lands, the
      abandonment of all wells on the Lands and the reclamation of the Lands as
      between Vendor and Purchaser, and hereby releases Vendor from any claims
      Purchaser may have against Vendor with respect to all such liabilities and
      responsibilities, except for any claims which Purchaser may have for the
      breach of a representation or warranty made by Vendor pursuant to Article
      7.1.

ARTICLE 10 
NO MERGER AND SURVIVAL

	10.1 	
      The covenants, representations and warranties set forth
      in Articles 7 and 8 shall be deemed to apply to all assignments,
      conveyances, transfers and documents conveying any of the Assets from
      Vendor to Purchaser and there shall not be any merger of any covenant,
      representation or warranty in such assignments, transfers or documents
      notwithstanding any rule of law, equity or statute to the contrary and all
      such rules are hereby waived.

	 	 
	10.2 	
      Notwithstanding anything to the contrary herein expressed
      or implied, it is expressly agreed and understood that the covenants,
      representations and warranties set forth in Articles 7 and 8 are true on
      the date hereof and at the Effective Time and notwithstanding the Closing
      or deliveries of covenants, representations and warranties in any other
      agreements at Closing or prior or subsequent thereto or investigations by
      the parties hereto or their counsel, the covenants, representations and
      warranties set forth in Articles 7 and 8 shall survive Closing for the
      benefit of the parties hereto for a period of two years from the Effective
      Time.

11

	10.3 	
      No claim for breach of covenants, representations and
      warranties set forth in Articles 7 and 8 or for misrepresentation herein
      or for indemnification pursuant hereto shall be made or be enforceable by
      legal proceedings or otherwise unless written notice of the claim setting
      out reasonable details of the claim is given by the claimant to the other
      party within a period of two years from the Effective
  Time.

ARTICLE 11 
FURTHER ASSURANCES

	11.1 	
      At Closing and thereafter as may be necessary or
      desirable, and without further consideration, the parties hereto shall
      execute, acknowledge and deliver such other instruments and shall take
      such other action as may be necessary to carry out their respective
      obligations under this Agreement.

ARTICLE 12 
MISCELLANEOUS

	12.1 	
      The Agreement herein shall, in all respects, be subject
      to and be interpreted, construed and enforced in accordance with the laws
      in effect in the Province of Alberta. Each party hereto irrevocably
      attorns to the exclusive jurisdiction of the courts of the Province of
      Alberta and all courts of appeal therefrom.

	 	 
	12.2 	
      Any arbitration conducted hereunder shall be conducted in
      accordance with the Alberta Arbitration Act.

	 	 
	12.3 	
      Time shall be of the essence of this Agreement.

	 	 
	12.4 	
      Except with respect to those matters where it may be
      specifically otherwise provided hereunder, the two-year period for seeking
      a remedial order under section 3(1)(a) of the Limitations Act, R.S.A. 2000
      c. L-12, as amended, for any claim (as defined in that Act) arising in
      connection with this Agreement is extended to four years.

	 	 
	12.5 	
      The address for notices of each of the parties hereto
      shall be as follows:

	Purchaser: 	EnCana Oil & Gas
      Partnership 	 	Vendor: 	Nation Energy Inc. 	 
	  	150 - 9th Avenue S.W. 	 	  	1100 – 609 West Hastings
      Street 	 
	  	Calgary, Alberta T2P 2S5 	 	  	Vancouver, BC V6B 4W4 	 
	  	Attention: 	Land Department 	 	  	Attention: 	Land Manager 
	 
	  	Fax: 	(403) 645-3033 	 	  	Fax: 	
      (604) 688-4712 
	 
	  	  	  	 	  	  	
       
	 
	  	  	  	 	Vendor: 	Netco Energy Inc. 	
       
	 
	  	  	  	 	  	1100 – 609 West Hastings
      Street 	  
	  	  	  	 	  	Vancouver, BC V6B 4W4 	 
	  	  	  	 	  	Attention: 	Land Manager 
	 
	  	  	  	 	  	Fax: 	
      (604) 688-4712 
	 

Any of the parties hereto may from time
to time change its address for service herein by giving written notice to the
other party hereto. Any notice may be served by personal service upon a party
hereto or by fax. Any notice given by service upon a party hereto shall be
deemed to be given on the date of such service.

12

	12.6 	
      This Agreement shall supersede and replace any and all
      prior agreements between the parties hereto relating to the sale and
      purchase of the Assets and may be amended only by written instrument
      signed by all parties hereto.

	 	 
	12.7 	
      This instrument states the entire agreement between the
      parties hereto.

	 	 
	12.8 	
      This Agreement shall be binding upon and shall enure to
      the benefit of the parties hereto and their respective successors,
      receivers, receiver-managers, trustees and permitted assigns.

	 	 
	12.9 	
      The assignment and conveyance effected by this Agreement
      is made with full right of substitution and subrogation of Purchaser in
      and to all covenants, representations, warranties and indemnities
      previously given or made by others in respect of the Assets or any part or
      portion thereof.

	 	 
	12.10 	
      This Agreement may be executed in as many counterparts as
      are necessary and when a counterpart has been executed by each party, all
      counterparts together shall constitute one
agreement.

     IN WITNESS WHEREOF the
parties hereto have executed this Agreement as of the date first above
written.

	EnCana Oil & Gas
      Partnership 	 	Nation Energy
      Inc. 
	 	 	 	 	 
	Per:		 	Per: 	
	 	 	 	 	 
	 	  	 	Netco Energy
      Inc. 
	 	 	 	 	 
	 	  	 	Per: 	

	Name 	Responsibility 	Initials 	Date 
	James Hall 	Contracts Landman 	  	  
	Jeff Collins 	Area Landman (PRA) 	  	  
	Doug Guild 	Joint Interest (Med Hat) 	  	  
	Heather Telasky 	Area Landman )Mikwan) 	  	  
	Danielle Parrotta 	Legal 	  	  
	  	Accounting 	  	  
	Harold D’Adamo 	Tax 	  	  
	Steve Roberts 	Joint Interest 	  	  
	Eileen Picco 	Marketing 	  	  
	Stephen Skarstol 	Environmental 	  	  
	Kevin George 
	Primary Responsibility 
(BU Group Lead,
      Land) 	
	

13

SCHEDULE "A" 
attached to and forming part of a
Petroleum, Natural Gas and Related Rights Conveyance dated the 22nd
day of August, 2008 between EnCana Oil & Gas Partnership, Netco Energy
Inc. and Nation Energy Inc.

Description of Lands, Leases, Vendor's Interests,
Encumbrances and Wells

	Leases 
	Lands 
	Vendor’s 
Working Interest
    	Encumbrances 

	CR Licence 
5403040483 
Expiry: April 3, 
2012
      
(M087718A) 	T59 R2 W6M: Sec 4, 5, 8, 9 

P&NG To
      Base CARDIUM 

	Nation 15% 

	LOR CR SS 

Well: 100/08-09

	CR Licence 
5403040483 
Expiry: April 3, 
2012
      
(M087718A) 	T59 R2 W6M: Sec 16 

P&NG To Base
      CARDIUM 

	Nation 0% BPPO, 
15% APPO 

	LOR CR SS 

Well: 102/01-16

	CR Licence 
5498010029 
Cont: Section 15
      

(M043725D) 	T59 R2 W6M: Sec 9 

P&NG Below Base
      CARDIUM 
To Base BLUESKY- 
BULLHEAD 	Nation 25% BPO, 
15% APO 

	LOR CR SS 

Well: 100/09-09

	CR Licence 
5498010029 
Cont: Section 15
      

(M043725A) 	T59 R2 W6M: Sec 16 

P&NG Below Base
      CARDIUM 
To Base BLUESKY- 
BULLHEAD 	Nation 0% BPO, 
6% APO 
Netco 15% BPO,
      
9% APO 
	LOR CR SS 

Well: 100/01-16

	CR Licence 
5497110012 
Cont: Section 15
      

(M043378B) 	T59 R2 W6M: Sec 11 

P&NG Below Base
      CARDIUM 
To Base BLUESKY- 
BULLHEAD 	15% 

	LOR CR SS 

Well: 100/07-11

	CR Licence 
5497110012 
Cont: Section 15
      

(M043378C,K) 	T59 R2 W6M: Sec 10, 15 

P&NG Below
      Base CARDIUM 
To Base SPIRIT RIVER 
	Nation 0% BPO, 
6% APO 
Netco 15% BPO,
      
9% APO, 
	LOR CR SS 

Well: 100/13-10

	CR Licence 
5497110012 
Expiry: 
November 13,
      
2008 
(M043378D,L) 	T59 R2 W6M: Sec 10, 15 

P&NG Below
      Base SPIRIT 
RIVER To Base BLUESKY- 
BULLHEAD 
	Nation 6%, 
Netco 9% 

	LOR CR SS

	Wells: 	100/08-09-059-02W6/02 	Aband Cardium Gas 
	  	100/08-09-059-02W6/03 	Capable Cardium Gas 
	  	102/08-09-059-02W6/00 	Cardium Gas 
	  	100/09-09-059-02W6/03 	Cadomin Gas 
	  	100/09-09-059-02W6/04 	Dunvegan Gas 
	  	100/01-16-059-02W6/00 	Nikanassin Gas 
	  	100/01-16-059-02W6/02 	Cadomin Gas 
	  	100/01-16-059-02W6/03 	Gething Gas 
	  	100/01-16-059-02W6/04 	Bluesky Gas 
	  	100/01-16-059-02W6/05 	Dunvegan Gas 
	  	100/01-16-059-02W6/06 	Cardium Gas 
	  	102/01-16-059-02W6/00 	Potential Cardium Gas 
	  	100/13-10-059-02W6/00 	Falher Gas 
	  	100/13-10-059-02W6/02 	Dunvegan Gas 
	  	100/13-10-059-02W6/03 	Gething Gas 

SCHEDULE "B" 

  attached to and forming part of a Petroleum, Natural Gas and Related Rights
  Conveyance dated the 22nd day of August, 2008 between EnCana Oil
  & Gas Partnership, Netco Energy Inc. and Nation Energy Inc.

Facilities

	7-36 Compressor Station (Nation 0%, BPO, 7.6%
      APO, Netco 19% BPO, 11.4% APO) 
	1. 	1500 BHP Compressor Package 
	2. 	400 barrel condensate tank 
	3. 	400 barrel water tank 
	4. 	10mmcfd inset separator/dehydrator 
	5. 	Flare stack 
	6. 	Cathodic protection on all pipelines 
	7. 	Pig launchers/receivers on pipelines 
	8. 	MCC building 
	  	  
	
      Wellsites 

	1. 	10mmcfd inlet separator at 9-9-59-2W6M 
	2. 	10mmcfd inlet separator at 13-10-59-2W6M 
	3. 	2mmcfd inlet separator at 13-10-59-2W6M 
	4. 	10mmcfd inlet separator at 1-16-59-2W6M
  

SCHEDULE "C" 
attached to and forming part of a
Petroleum, Natural Gas and Related Rights Conveyance dated the 22nd
day of August, 2008 between EnCana Oil & Gas Partnership, Netco Energy Inc.
and Nation Energy Inc.

LAND DEDICATION AGREEMENTS, TRANSPORTATION AGREEMENTS AND
PRODUCTION SALES CONTRACTS

None

SCHEDULE "D" 
attached to and forming part of a
Petroleum, Natural Gas and Related Rights Conveyance dated the 22nd
day of August, 2008 between EnCana Oil & Gas Partnership, Netco Energy Inc.
and Nation Energy Inc.

AUTHORIZATION FOR EXPENDITURES

None

SCHEDULE "E" 
attached to and forming part of a
Petroleum, Natural Gas and Related Rights Conveyance dated the 22nd
day of August, 2008 between EnCana Oil & Gas Partnership, Netco Energy Inc.
and Nation Energy Inc.

NATION PAYABLE ASSIGNMENT

	 NATION PAYABLE ASSIGNMENT 
	Party: 	
      EnCana Oil & Gas Partnership ("EnCana")
  

	Party: 	
      Churchill Energy Inc. ("Churchill") 

	Re: 	
      Purchase and Sale Agreement Bolton (Smoky) Area, Alberta
      between Churchill, as vendor, and EnCana, as purchaser (the "Sale
      Agreement") 

	And Re: 	
      Participation Agreement dated November 21, 2001 between
      Nation Energy, Inc. ("Nation") and Olympia Energy Inc. (predecessor
      in interest to Churchill) (the "Participation Agreement"),
      together with the 1990 CAPL Operating Procedure attached as a schedule
      thereto (the "Applicable Operating Procedure") 

	And Re: 	
      Amounts owing by Nation to Churchill as of May 30, 2008
      on account of operations conducted prior to the date hereof under the
      Participation Agreement in relation to the wells located at 1-16-59-2 W6M
      well, 13-10-59-2 W6M and 9-9-59-2 W6M (the "Nation Payable")
      

	Date: 	
      May 30, 2008 

     WHEREAS the Nation Payable
is due and owing by Nation to Churchill as a result of operations conducted by
Churchill, as operator, and Nation, as joint-operator, under the Participation
Agreement in relation to the wells located at 1-16-59-2 W6M, 13-10-59-2 W6M and
9-9-59-2 W6M.

     AND WHEREAS, prior to
entering into the Sale Agreement, Churchill, in its capacity as operator and as
a joint-operator subrogated to the operator's rights, as contemplated in Article
506 of the Applicable Operating Procedure, has treated Nation's failure to pay
the Nation Payable as an immediate and automatic assignment to Churchill of the
proceeds of the sale of Nation's share of petroleum substances produced from the
lands governed by the Participation Agreement, as contemplated in Article
505(b)(v) of the Applicable Operating Procedure. 

     AND WHEREAS pursuant to
the Sale Agreement, EnCana has acquired the interest of Churchill in and to the
Participation Agreement and the interest of Churchill in the lands governed
thereby.

     AND WHEREAS Churchill
wishes to assign the Nation Payable to EnCana, and EnCana has agreed to accept
the Nation Payable in order to recover all amounts owing thereunder, as a
subrogated claimant of such amount for the purposes of Article 506 of the
Applicable Operating Procedure.

     NOW THEREFORE THIS AGREEMENT
WITNESSES and the Parties hereto agree as follows:

	1. 	
      Churchill hereby acknowledges it has, prior to the
      execution of the Sale Agreement, provided notice to Nation of Churchill's
      election, as operator, to treat Nation's failure to pay the Nation Payable
      as an immediate and automatic assignment to Churchill of the proceeds of
      the sale of Nation's share of petroleum substances produced from the lands
      governed by the Participation Agreement that it is exercising the right
      granted in Article 505(b)(v) of the Applicable Operating
  Procedure.

	 	 
	2. 	
      Churchill hereby assigns and conveys the Nation Payable
      to EnCana and EnCana hereby takes and accepts the Nation Payable from
      Churchill, upon and subject to the terms of this assignment.

	 	 
	3. 	
      As consideration for the Nation Payable, EnCana hereby
      agrees to pay to Churchill, all proceeds of the sale of Nation's petroleum
      substances from the lands governed by the Participation Agreement
      recovered by EnCana from Nation from time to time, not to exceed the
      amount of the Nation Payable as of the date hereof (the "Nation Payable
      Recovery Amounts").

	 	 
	4. 	
      EnCana agrees that as long as one or more of the wells
      located on the lands (or lands pooled or unitized therewith) governed by
      the Participation Agreement are producing in paying quantifies, EnCana
      will use all reasonable commercial efforts to recover the Nation Payable
      pursuant to the provisions of Article
505(b)(v).

	5. 	
      EnCana shall pay any Nation Payable Recovery Amounts
      received by it from time to time to Churchill within fifteen (15) days of
      receipt thereof by EnCana.

	 	 
	6. 	
      For the accounting period ending March 31, 2008, the
      amount of the Nation Payable was $396,545.32. Churchill will work with
      EnCana to determine the amount of the Nation Payable as at May 30, 2008 to
      account for accrued interest and lease rentals for the April, 2008 and
      May, 2008 accounting months, as well amounts recovered by Churchill for
      the April, 2008 and May, 2008 accounting months.

	 	 
	7. 	
      Churchill will have the right, until full payment of the
      Nation Payable by Nation to EnCana, at its sole cost and expense, on
      reasonable notice to EnCana and during normal business office hours, to
      audit the records of EnCana for the purpose of verifying any Nation
      Payable Recovery Amounts. Any claims of discrepancies disclosed by the
      audit that the parties are unable to resolve will be resolved pursuant to
      Article 9.00 of the Property Transfer Procedure incorporated by reference
      into the Sale Agreement, and such clause is incorporated by reference
      herein and modified, as necessary, for that
purpose.

     IN WITNESS WHEREOF the
Parties have executed this Agreement as of the date and time first set out
above.

	CHURCHILL ENERGY INC. 	 	ENCANA OIL & GAS
      PARTNERSHIP 
	 	  	 
	Per: 		  	Per:

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