Document:

Exhibit
      10.2

    ROYALTY
      AGREEMENT

     

    This
      Agreement dated this 12th day of December, 2003

    

    BETWEEN:

    

    MIKWEC
      ENERGY CANADA LTD.,
      a body
      corporate, having an office in the City of
      Edmonton, in the Province of Alberta (hereinafter referred to as
“Grantor”)

     

    OF
      THE
      FIRST PART

    and

     

    NEARSHORE
      PETROLEUM CORPORATION,
      a body
      corporate, having an office in the City of Calgary, in the Province of Alberta
      (hereinafter referred to as “Grantee”)

     

    OF
      THE
      SECOND PART

     

    WHEREAS
      Grantee
      provided Grantor with certain technical information with respect to the said
      Lands; and

    

    WHEREAS
      Grantor
      has agreed to grant to Grantee an overriding royalty on its interest in the
      Lease(s) and said Lands; and

    

    AND
      WHEREAS
      the
      parties desire to document the gross overriding royalty.

    

    NOW
      THEREFORE THIS AGREEMENT WITNESSETH
      that the
      parties hereto agree as follows:

     

    
      	
              1.

            	
              DEFINITIONS

            
	 	 
	
              In
                this Agreement, including the recitals and the Schedules, unless
                the
                context otherwise requires, the following words shall have the meanings
                ascribed thereto, namely:

            
	 	 
	
              (a)

            	
              “Assignment
                Procedure”shall
                mean the 1993 CAPL Assignment Procedure attached hereto as Schedule
                “B”;

            
	 	 
	
              (b)

            	
              “Current
                Market Value”shall
                mean the price received by the Grantor at the point of measurement
                for its
                share of Petroleum Substances produced and marketed from or pursuant
                to a
                scheme of pooling or unitization allocated to the said Lands which
                price
                shall not be less than that which the Grantor would have received
                at the
                wellhead if acting as a reasonably prudent operator having regard
                to the
                current market prices, availability to market and economic conditions
                of
                the petroleum industry generally;

            
	 	 
	
              (c)

            	
              “Effective
                Date”shall
                mean December 12, 2003;

            
	 	 
	
              (d)

            	
              “Grantor”shall
                mean Mikwec Energy Canada Ltd.;

            
	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (e)

            	
              “Gross
                Overriding Royalty and/or Royalties”shall
                mean a non-convertible gross overriding royalty of Six and One Half
                Percent (6.5%) to Nearshore Petroleum Corporation of all Petroleum
                Substances produced, saved and marketed from below the Surface from
                the
                said Lands;

            
	 	 
	
              (f)

            	
              “Lands”shall
                mean any lands comprising the Petroleum and Natural Gas Licence(s),
                Oil
                Sands Leases, Petroleum and Natural Gas Lease(s)and any Oil Sands
                Licence(s), which may be selected therefrom as described in the attached
                Schedule “A”;

            
	 	 
	
              (g)

            	
              “Lease(s)”
                shall mean any Petroleum and/or Natural Gas Lease(s), Oil Sands Leases,
                or
                other title document(s) in or acquired in the area set forth in Schedule
                “A” and any renewal or extensions thereof or substitution
                therefore;

            
	 	 
	
              (h)

            	
              “Petroleum
                Substances”shall
                mean all petroleum, natural gas, heavy oil, related hydrocarbons,
                sulphur
                and every other substance an interest in which is granted under the
                said
                Lease(s) below the Surface;

            
	 	 
	
              (i)

            	
              “Point
                of Measurement”shall
                mean the production tankage, in the case of crude oil, shall mean
                the
                point of delivery in the case of natural gas and shall mean the point
                of
                delivery for all other Petroleum Substances;

            
	 	 
	
              (j)

            	
              “Royalty
                Owner”shall
                mean Nearshore Petroleum Corporation;

            
	 	 
	
              2.

            	
              GROSS
                OVERRIDING ROYALTY

            
	 	 
	
              (a)

            	
              Grantor
                hereby grants and assigns Grantee a 6.5% gross overriding royalty
                on the
                leased substances on the interest which Grantor holds in the Lease(s).
                It
                is understood that the gross overriding royalty applies not only
                against
                the initial working interest of Grantor, but also to the interest
                of any
                third party which derives its interest from or through the
                Grantor.

            
	 	 
	
              (b)

            	
              The
                gross overriding royalty shall be paid to Grantee during the term
                of the
                Lease(s) and any renewal or extension thereof.

            
	 	 
	
              3.

            	
              DEDUCTIONS

            
	 	 
	
              The
                said Royalty shall be paid on the current market value of the Petroleum
                Substances without any deductions except the following,
                namely:

            
	 	 
	
              (a)

            	
              With
                respect to crude oil, the said Royalty will bear its proportionate
                share
                of the actual costs of transportation to market connection, where
                sales
                are not made f.o.b. the tanks serving the said Lease(s), provided
                that the
                costs shall not exceed those permitted by the Crown in right of the
                Province of Alberta.

            
	 	 
	
              (b)

            	
              With
                respect to natural gas, the cost of gathering, processing and transporting
                the said Royalty share of the natural gas may be deducted from the
                current
                market value of the natural gas, provided:

            
	 	 
	
              (i)

            	
              the
                deduction of gathering, processing, and transportation costs shall
                not
                exceed those permitted by the Crown in right of the Province of Alberta
                in
                the calculation of Crown Royalty; and

            
	 	 
	
              (ii)

            	
              such
                costs may only be deducted to the extent that they are actually incurred
                and are reasonable and shall never be reduced below fifty (50%) percent
                of
                current market value.

            
	 	 

    

     

    
      	
              If
                any Petroleum Substances are sold at less than current market value
                in any
                transactions (including those transactions which are not at arm’s-length
                or any transactions involving any arrangement from which the Grantor
                obtains a collateral advantage in consideration of the reduced price),
                the
                gross proceeds of the sale of such Petroleum Substances shall, for
                the
                purposes of calculating the said Royalty, not be less than the current
                market value of those Petroleum Substances when produced from the
                said
                Lands as defined by clause 1(b)
                hereof.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Notwithstanding
                anything to the contrary herein contained, the Grantor shall be entitled
                to use, and as a consequence thereof the Grantor shall be free from
                the
                obligation of payment or delivery of the Grantee’s Royalty, such part of
                the Petroleum Substances as is reasonably required for and used by
                the
                Grantor in its operations upon the Lands, including treating and
                preparing
                Petroleum Substances therefrom for market, but not including injection
                thereof in connection with any secondary recovery
                operations.

            
	 	 
	
              4.

            	
              TAKING
                IN KIND

            
	 	 
	
              (a)

            	
              The
                Royalty Owner shall have the right to take in kind the Royalty Owner’s
                share of Petroleum Substances. Such right may be exercised separately
                with
                respect to crude oil, condensate, liquefied petroleum gases and marketable
                gas. In the case of crude oil condensate, such right shall only be
                exercised on a minimum of sixty (60) days notice to the Grantor.
                In the
                case of liquefied petroleum gases such rights shall only be exercised
                on
                six (6) months notice to the Grantor. If the Royalty Owner, however,
                signified in writing its consent to the sale of any of the Royalty
                Owner’s
                share of Petroleum Substances under a contract made by the Grantor
                providing for a minimum term in excess of the said respective notice
                periods, the Royalty Owner’s right to take in kind any petroleum substance
                subject to such contract shall be suspended during the term of such
                contract. The Royalty Owner may cease to take in kind any Petroleum
                Substances upon giving the Grantor the same minimum notice as required
                in
                order to permit the Royalty Owner to take such Petroleum Substances
                in
                kind as aforesaid. The right to take in kind or to cease to take
                in kind
                may be exercised from time to time subject only to the provisions
                of this
                clause 4.

            
	 	 
	
              (b)

            	
              When
                the Royalty Owner is taking in kind any of the Royalty Owner’s share of
                the Petroleum Substances, the Royalty Owner shall have the right
                to use
                free of charge a proportionate share of the Grantor’s lease tankage and
                storage facilities to store a maximum of ten (10) days production
                of the
                Royalty Owner’s share of crude oil and condensate and five (5) days
                production of the Royalty Owner’s share of marketable gas which will be
                delivered by the Grantor at the point of delivery downstream from
                the
                plant and to the purchase designated by the Royalty Owner, for the
                Royalty
                Owner’s account.

            
	 	 
	
              5.

            	
              OPERATIONS
                ON THE LANDS

            
	 	 
	
              No
                royalty shall be payable on Petroleum Substances reasonably used
                in
                operations on the said Lands for the production, treating, processing
                and
                storing of Petroleum Substances on which the said Royalty is payable
                to
                the Royalty Owner hereunder.

            
	 	 
	
              Any
                overriding royalty exemption shall be restricted only to that portion
                of
                the production from a test well used as fuel for heaters, treaters,
                compressors, separators, instruments and similar equipment required
                to
                produce Petroleum Substances from the test well spacing unit. Grantor
                shall not be granted any overriding royalty exemption from production
                of
                Petroleum Substances used for reservoir injection or pressure maintenance,
                secondary and heavy oil recoveries or upgrading schemes, or fuel
                and/or
                feedstock for any gas plant, refinery, satellite or
                battery.

            
	 	 
	
              6.

            	
              RIGHT
                TO POOL OR UNITIZE

            
	 	 
	
              Grantor
                is hereby given the right and authority, at any time and from time
                to
                time, to pool the said Lands, or any portion thereof to form a production
                spacing unit or unitize the said Lands or any portion thereof, or
                any zone
                or formation underlying the same, on such terms and conditions as
                the
                Grantor may determine from time to time. In the event of such pooling
                or
                unitization, Grantee’s gross overriding royalty shall be determined on
                that portion of the production of the leased substances from the
                area so
                pooled or unitized which is allocated to that portion of the said
                Lands
                which is contributed to the pooled or unitized area pursuant to the
                pooling or unitization Agreement
                concerned.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              7.

            	
              RIGHT
                TO COMMINGLE

            
	 	 
	
              The
                Grantor shall have the right to commingle Petroleum Substances produced
                from the said Lands with Petroleum Substances produced from other
                lands
                provided methods acceptable to the Royalty Owner are used to determine
                the
                proper measurement of individual well production.

            
	 	 
	
              Where
                governmental regulations or orders require segregated production
                tests of
                individual wells at intervals not greater than two months, such tests
                will
                be deemed acceptable to the Royalty Owner under this clause and no
                further
                tests will be required.

            
	 	 
	
              8.

            	
              DEVELOPMENT
                OF LANDS

            
	 	 
	
              Notwithstanding
                any provision herein contained, the Grantor shall be under no obligation
                to Grantee to develop the said Lands or any part thereof to produce
                the
                leased substances which may be within, upon or under the said
                Lands.

            
	 	 
	
              9.

            	
              RENTALS,
                RENEWALS AND ROYALTIES

            
	 	 
	
              Grantor
                shall during the term of this Agreement make timely payment of all
                rentals, renewals or extension fees, payment in lieu of actual production
                and royalties becoming due or due in respect of the Lease(s), the
                Lands or
                the Petroleum Substances.

            
	 	 
	
              10.

            	
              TAXES

            
	 	 
	
              Each
                party hereto shall be liable for its proportionate share of taxes
                and
                other charges levied or assessed against the Petroleum Substances,
                and in
                lieu of payment by the Grantee of its share thereof, Grantor may
                make such
                payment and deduct the amount thereof from any money payable by it
                to the
                Grantee.

            
	 	 
	
              11.
                

            	
              RIGHT
                TO AUDIT

            
	 	 
	
              Grantee,
                upon notice in writing to Grantor, shall have the right to audit
                the
                Grantor’s accounts and records relating to the accounting hereunder for
                any calendar year within the twelve (12) month period next following
                the
                end of such calendar year. Any payment made or statement rendered
                by the
                Grantor hereunder which is not disputed by the Royalty Owner on or
                before
                the last day of the twenty-fourth month following the month for which
                such
                statement or payment was rendered shall be deemed to have been correct.
                Any cost to conduct such audit as granted herein shall be at the
                sole
                cost, risk and expense of the Royalty Owner.

            
	 	 
	
              12.

            	
              ASSIGNMENT
                OF ROYALTY

            
	 	 
	
              Royalty
                Owner may convey or assign any portion of its interest in the gross
                overriding royalty payable under the Agreement but the Grantor shall
                not
                become liable to make payments in respect of the gross overriding
                royalty
                to more than one person. If the interest of Royalty Owner hereunder
                is at
                any time owned by more than one person, such persons shall nominate
                one
                person to act as a common trustee for receipt of monies payable hereunder
                and to deal with the Grantor in respect of the said interests. In
                such
                event, Grantor shall thereafter make payments to and deal solely
                with such
                common trustee in respect of the said interest.

            
	 	 
	
              13.

            	
              ASSIGNMENT
                OF WORKING INTEREST

            
	 	 
	
              Grantor
                may at any time, sell or otherwise dispose of all or any of its interest
                in the said Lands but Grantor covenants that it shall cause any Assignee
                or successor of the Grantor to deliver to Grantee a written and
                enforceable undertaking to assume the obligations of Grantor under
                this
                Agreement insofar as they relate to such interest and the obligations
                which accrue pursuant to the terms of this Agreement, whereupon the
                Grantor shall be relieved of the obligation so assumed.

            
	 	 
	
              14.

            	
              BOOKS
                AND ACCOUNTS

            
	 	 
	
              Grantor
                shall maintain complete and accurate records of the leased substances
                produced, saved and marketed from the said Lands and of the monies
                received from the sale thereof and shall furnish to Grantee with
                each
                payment of the gross overriding royalty hereunder a statement giving
                sufficient detail for Grantee to ascertain the accuracy of the payment
                of
                the gross overriding royalty made
                therewith.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              15.

            	
              SALE
                OF LEASED SUBSTANCES

            
	 	 
	
              Any
                sale of leased substances by Grantor shall include the gross overriding
                royalty, which shall be sold at a price not less than that for which
                Grantor is selling its share of production. Not later than the last
                day of
                each calendar month, Grantor shall pay to Grantee the proceeds of
                the sale
                of the gross overriding royalty during the preceding calendar month.
                Grantee’s gross overriding royalty share of production shall bear its
                proportionate share of the costs of any transportation services that
                are
                provided with respect thereto prior to the sale
                thereof.

            
	 	 
	
              16.

            	
              FORCE
                MAJEURE

            
	 	 
	
              The
                obligation of the parties, other than the obligations of the Grantor
                to
                the Lessor of the Lease(s), its successors and assigns, shall be
                suspended
                and there shall be no liability for damages during the time and to
                the
                extent that either party is prevented from complying with its obligations
                under this Agreement in part or in whole by strikes, lockouts, acts
                of God
                or the Queen’s enemies, war, blockades, riots, laws, orders or regulations
                of governmental bodies or agencies, unavoidable accidents, delays
                in
                transportation, inability to obtain necessary materials in the open
                market, or any other cause, except financial, whether similar or
                dissimilar to those specifically enumerated, beyond the reasonable
                control
                of the party affected. The party whose obligations under this Agreement
                are suspended shall give notice, including reasonably full particulars,
                of
                the cause for such suspension, in writing or by telegraph to the
                other
                parties within a reasonable time after the occurrence thereof. The
                performance of such obligations shall begin or be resumed within
                a
                reasonable time after such cause has been removed.

            
	 	 
	
              17.

            	
              CONFIDENTIAL
                INFORMATION

            
	 	 
	
              (a)

            	
              Except
                as provided herein, all data and information of whatsoever nature
                acquired
                by the parties from any operations pursuant to this Royalty Agreement
                or
                supplied by one party to the other pursuant hereto shall be for the
                sole
                and exclusive use and benefit of the parties hereto unless the parties
                agree to the dissemination of such information or unless a party
                thereto
                is required to give such information to any governmental department,
                body
                or agency, or any recognized association within the petroleum industry,
                of
                which it is a member, that engages in the exchange of factual information
                relating to the type of operations contemplated by this Royalty Agreement.
                In no event shall information of any type of character relating to
                wells
                drilled on a confidential basis to the parties be
                disclosed.

            
	 	 
	
              (b)

            	
              The
                provisions of this clause shall not apply to disclosures to Affiliates
                provided that such Affiliate agree to be bound by the terms of this
                clause.

            
	 	 
	
              18.

            	
              DURATION
                OF AGREEMENT

            
	 	 
	
              This
                Agreement shall remain in full force and effect for so long as any
                interest hereunder is retained by the parties or any assignees
                thereof.

            

    

     

    
      	 	 
	
              19.

            	
              NOTICES

            
	 	 
	
              Whether
                or not so stipulated herein, all notices, communications and statements
                (hereinafter called “notices”) required or permitted hereunder shall be in
                writing. Notices may be served:

            
	 	 
	
              (a)

            	
              personally,
                by leaving them with the party on whom they are to be served at the
                party’s address hereinafter given. Personally served notices shall be
                deemed received by the addressees when actually delivered provided
                such
                delivery shall be during normal business hours; or

            
	 	 
	
              (b) 

            	
              by
                telegraph (or any other like method by which a written and recorded
                message may be sent) directed to the party on whom they are to be
                served
                at that party’s address hereinafter given. Notices so served shall be
                deemed received by the addressees thereof eight hours after the time
                of
                transmission or at the commencement of the next ensuing normal business
                day, whichever is the later; or

            
	 	 
	
              (c)

            	
              by
                mailing them first class registered post, postage prepaid to the
                party on
                whom they are to be served. Notices so served shall be deemed to
                be
                received by the addressees on the second day (excluding as the second
                day,
                Saturdays, Sundays and statutory holidays) following the mailing
                thereof
                in Canada.

            
	 	 
	
              The
                addresses of each of the respective parties hereto shall be as
                follows:

            
	 	 
	 	 
	
              Mikwec
                Energy Canada Ltd.

            
	
              Suite
                100, 10187 - 104th Street

            
	
              Edmonton,
                Alberta

            
	
              T5J
                0Z9

            
	
              Attn:
                President

            
	 	 
	 	 
	
              Nearshore
                Petroleum Corporation

            
	
              Suite
                3175, 246 Stewart Green S. W.

            
	
              Calgary,
                Alberta

            
	
              T3H
                3C8

            
	
              Attn:
                President

            
	 	 
	
              Any
                party hereto may change its said address by notice served as
                aforesaid.

            
	 	 
	
              20.

            	
              FURTHER
                ASSURANCES

            
	 	 
	
              Each
                of the parties hereto shall, from time to time, and at all times,
                do such
                further acts and deliver all such further assurances, deeds and documents
                as shall be reasonably required in order to fully perform and carry
                out
                the terms of this Agreement.

            
	 	 
	
              21.

            	
              ENTIRE
                AGREEMENT

            
	 	 
	
              The
                terms of this Agreement express and constitute the entire agreement
                between the parties with respect to the matters herein addressed,
                this
                Agreement hereby wholly supersedes and replaces all prior agreements
                and
                representations, whether oral or in writing, between the Parties,
                with
                respect to the subject matter hereof.

            
	 	 
	
              22.

            	
              TIME
                OF ESSENCE

            
	 	 
	
              Time
                is of the essence of this
                Agreement.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              23.

            	
              WAIVER

            
	 	 
	
              No
                waiver by any party of any breach of any of the covenants, conditions
                and
                provisions herein contained shall be effective or be binding upon
                any of
                the parties unless the same shall be expressed in writing. Any waiver
                so
                expressed shall not limit or affect its right with respect to any
                other or
                future breach.

            
	 	 
	
              24.

            	
              NO
                AMENDMENT EXCEPT IN WRITING

            
	 	 
	
              No
                amendment or variation of the provisions of this Agreement shall
                be
                binding upon any party unless it is evident in writing and executed
                by all
                parties.

            
	 	 
	
              25.

            	
              BINDS
                SUCCESSORS AND ASSIGNS

            
	 	 
	
              This
                Agreement shall enure to the benefit of and be binding upon the parties
                hereto, their successors and permitted assigns.

            
	 	 
	
              26.

            	
              COUNTERPART
                EXECUTION

            
	 	 
	
              This
                Agreement may be executed in counterparts and when each such party
                has
                executed a counterpart, all counterparts taken together shall constitute
                one agreement.

            

    

     

    IN
      WITNESS WHEREOF
      the
      parties have executed this Agreement as of the day and year first above
      written.

     

    
      	 	 	 
	 	MIKWEC
              ENERGY CANADA LTD.
	 
 	 
 	 
 
	 	By:  	/s/ Victor
              Davis
	 	
              

            
	 	Victor
              Davis, President

      	 	 	 
	 	NEARSHORE
              PETROLEUM CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ Steve
              Gawne
	 	
              

            
	 	Steve
              Gawne, President

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      ‘A’

     

    Attached
      to and forming part of a ROYALTY AGREEMENT dated 12th December, 2003, between
      Mikwec Energy Canada Ltd. and Nearshore Petroleum Corporation

     

    INCLUSION
      LANDS - RIGHTS

     

    Township
      091 Range 12 West 5: Sections 1 to 36 All P&NG, All Oil Sands

    Township
      091 Range 13 West 5: Sections 1 to 36 All P&NG, All Oil Sands

    Township
      092 Range 12 West 5: Sections 1 to 36 All P&NG, All Oil Sands

    Township
      092 Range 13 West 5: Sections 1 to 36 All P&NG, All Oil Sands

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CAPL
      -
      1993

    

    SCHEDULE
      “B”

    

    ASSIGNMENT
      PROCEDURE

    

    Attached
      to and forming part of the Agreement dated the 12th
      day
      of
      December
A.D.
      2003

    

     

    BETWEEN:      (AMONG)

    

    MIKWEC
      ENERGY CANADA LTD.

    

    and

    

    NEARSHORE
      PETROLEUM CORPORATION

    

    

    ARTICLE
      1

    

    DEFINITIONS

    

    

    
      	
              1.01

            	
              In
                this Assignment Procedure, the following terms, when capitalized,
                shall
                have the meaning assigned to each
                below:

            

    

    

    
      	 	
              (a)

            	
              “Affiliate”
                - for the purposes of this Assignment Procedure, means a corporation
                or
                partnership that is affiliated with the party in respect of which
                the
                expression is being applied, and, for the purpose of this definition
                a
                corporation or partnership is affiliated with another corporation
                or
                partnership if it directly or indirectly controls or is controlled
                by that
                other corporation or partnership, and for the purpose of determining
                whether a corporation or partnership is so controlled, it shall be
                deemed
                that:

            

    

    

    
      	 	
              (i)

            	
              a
                corporation is directly controlled by another corporation or partnership
                if the shares of the corporation to which are attached more than
                50% of
                the votes that may be cast to elect directors of the corporation
                are
                beneficially owned by that other corporation or partnership and the
                votes
                attached to those shares are sufficient, if exercised, to elect a
                majority
                of the directors of the
                corporation;

            

    

    

    
      	 	
              (ii)

            	
              a
                partnership is directly controlled by a corporation or other partnership
                it that corporation or partnership beneficially owns more than a
                50%
                interest in the partnership;

            

    

    

    
      	 	
              (iii)

            	
              a
                corporation or partnership is indirectly controlled by another corporation
                or partnership if control, as defined above, is exercised through
                one or
                more other corporations or
                partnerships.

            

    

    

    Where
      two
      or more corporations or partnerships are affiliated at the same time with the
      same corporation or partnership, they shall be deemed to be Affiliates of each
      other.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (b)

            	
              “Agreement”
                - means the agreement to which this Assignment Procedure is attached
                and
                made a part.

            

    

    

    
      	 	
              (c)

            	
              “Assigned
                Interest” - means the interest in the Agreement which is the subject of an
                assignment and which is specified in a Notice of Assignment, but
                shall not
                include rights of the Assignor as
                operator.

            

    

    

    
      	 	
              (d)

            	
              “Assignee”
                - means the entity named in a Notice of Assignment as the
                Assignee.

            

    

    

    
      	 	
              (e)

            	
              “Assignment
                and Novation Agreement” - means an agreement by all parties to the
                Agreement and a party to whom an interest in the Agreement has been
                assigned where:

            

    

    

    
      	 	
              (i)

            	
              the
                assignee assumes the duties and obligations of the assignor for the
                Assigned Interest; and

            

    

    

    
      	 	
              (ii)

            	
              the
                assignor is released from its duties for the Assigned Interest;
                and

            

    

    

    
      	 	
              (iii)

            	
              the
                assignee is substituted as a party to the Agreement in the place
                of the
                assignor to the extent of the Assigned
                Interest.

            

    

    

    
      	 	
              (f)

            	
              “Assignor”
                - means the party to the Agreement named in a Notice of Assignment
                as the
                Assignor.

            

    

    

    
      	 	
              (g)

            	
              “Binding
                Date” - means the first day of the second calendar month following the
                month in which the Notice of Assignment is served in accordance with
                Article IV below.

            

    

    

    
      	 	
              (h)

            	
              “Notice
                of Assignment” - means a notice in the form entitled Notice of Assignment
                attached hereto as Appendix A.

            

    

    

    
      	 	
              (i)

            	
              “Third
                Party” - means the parties to the Agreement who are not the
                Assignor.

            

    

    

    
      	 	
              (j)

            	
              “Transfer
                Date” - means the effective date of the transfer of the Assigned Interest,
                as specified in the Notice of
                Assignment.

            

    

    

    
      	
              1.02

            	
              In
                this Assignment Procedure, when a numbered clause or Article is referred
                to, that clause or Article is of this Assignment
                Procedure.

            

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
       

      ARTICLE
        II

       

    

    APPLICATION,
      CONDITIONS AND FORM OF NOTICE

    

    
      	
              2.01

            	
              (a)

            	
              A
                Notice of Assignment issued in accordance with this Assignment Procedure
                shall be used in place of an Assignment and Novation Agreement for
                assignments where the Agreement:

            

    

    

    
      	 	
              (i)

            	
              requires
                parties to use; or

            

    

    
      	 	
              (ii)

            	
              entitles
                parties to request; or

            

    

    
      	 	
              (iii)

            	
              is
                silent as to the right of any party to
                request;

            

    

    

    an
      Assignment and Novation Agreement.

    

    
      	 	
              (b)

            	
              The
                Notice of Assignment shall be in the form indicated in Appendix A
                and
                shall be executed by the Assignor and the
                Assignee.

            

    

    

    
      	
              2.02

            	
              If
                there is a conflict between the Assignment Procedure and the provisions
                of
                the Agreement, the Assignment Procedure shall
                prevail.

            

    

    

    
      	
              2.03

            	
              If
                the Agreement requires each Third Party’s consent to an assignment but
                does not specify a time within which each Third Party shall respond
                or
                shall be deemed to have responded, then consent of each Third Party
                to an
                assignment shall be deemed if it fails to reply within 20 days of
                receipt
                of a written request for consent.

            

    

    

    
      	
              2.04

            	
              (a)

            	
              If
                the Agreement is silent regarding rights of first refusal or consent
                from
                Third Party which relates to an Assigned Interest, then Assignor
                shall, by
                notice pursuant to Article IV:

            

    

    

    
      	 	
              (i)

            	
              advise
                Third Party of:

            

    

    -
      its
      intention to make the disposition;

    -
      a
      description of the Assigned Interest; and

    -
      the
      identity of the proposed Assignee, and

    

    
      	 	
              (ii)

            	
              request
                Third Party’s written consent to such disposition, which consent shall not
                be unreasonably withheld.

            

    

    

    Consent
      of each Third Party shall be deemed if it fails to reply to Assignor within
      20
      days of receipt of the written request for consent.

    

    
      	 	
              (b)

            	
              Clause
                2.04 (a) shall not apply in the following instances,
                namely:

            

    

    

    
      	 	
              (i)

            	
              an
                assignment made by way of security for present or future indebtedness,
                or
                liabilities (whether contingent, direct or indirect and whether financial
                or otherwise), the issuance of the bonds or debentures of a corporation,
                or the performance of the obligations of a guarantor under a guarantee,
                provided that in the event the security is enforced by a sale or
                foreclosure, Clause 2.04 (a) shall apply;
                or

            

    

    

    
      	 	
              (ii)

            	
              an
                assignment to an Affiliate, or in consequence of a merger or amalgamation
                with another corporation or pursuant to an assignment made by a party
                of
                its entire interest in the Agreement to a corporation in return for
                shares
                in that corporation or to a registered partnership in return for
                an
                interest in that partnership; or

            

    

    

    
      	 	
              (iii)

            	
              an
                assignment is required within the terms of the Agreement (such as,
                but not
                limited to, abandonment, forfeiture or
                surrender).

            

    

    

    
      	
              2.05

            	
              An
                assignment of an Assigned Interest shall (subject to Clause 2.06)
                be
                effective against Third Party on the Binding Date
                if:

            

    

    

    
      	 	
              (a)

            	
              all
                prohibitions, limitations or conditions (such as, but not limited
                to, a
                right of first refusal or a requirement for prior consent from Third
                Party) applying to the Assigned Interest have been complied with
                and
                satisfied pursuant to the Agreement, or waived by Third Party, including,
                if applicable, compliance with Clauses 2.03 and 2.04;
                and

            

    

    

    
      	 	
              (b)

            	
              following
                compliance with Clause 2.05(a), a Notice of Assignment is served
                on Third
                Party in accordance with Article
                IV.

            

    

    

    
      	
              2.06

            	
              (a)

            	
              A
                Third Party who objects to the Notice of Assignment on the basis
                of a
                failure to comply with Clause 2.05 may, prior to the Binding Date,
                notify
                (pursuant to Article IV) Assignor and Third Party of its
                objections.

            

    

    

    
      	 	
              (b)

            	
              If
                a notice of objection is served pursuant to Clause 2.06(a), the Notice
                of
                Assignment to which the notice of objection relates will be of no
                effect.

            

    

    

    
      	 	
              (c)

            	
              If
                a Third Party does not object pursuant to Clause 2.06(a), the Notice
                of
                Assignment will be effective for purposes of Article Ill, but each
                Third
                Party will retain all other rights or remedies arising as a consequence
                of
                the failure of Assignor to comply with Clause 2.05, including (without
                limitation), rights to seek damages for breach of the Agreement and
                rights
                to seek specific performance of a right of first
                refusal.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      III

    

    ASSIGNMENT,
      ASSUMPTION AND DISCHARGE BY NOTICE

    

    
      	
              3.01

            	
              If
                a Notice of Assignment has become effective in accordance with Clauses
                2.05 or 2.06, then Assignor, Assignee and Third Party shall have
                agreed
                that:

            

    

    

    
      	 	
              (a)

            	
              Subject
                to Clause 3.01(d), Assignor and Assignee shall have acknowledged
                and
                represented that the Assignor has transferred, assigned and conveyed
                the
                Assigned Interest to Assignee as of the Transfer
                Date.

            

    

    

    
      	 	
              (b)

            	
              Subject
                to Clause 3.01(d), Assignee shall replace Assignor as a party to
                the
                Agreement with respect to the Assigned Interest on and after the
                Transfer
                Date.

            

    

    

    
      	 	
              (c)

            	
              Only
                insofar as Third Party is concerned, notwithstanding the terms and
                provisions in the “Transfer Agreement” referenced in the Notice of
                Assignment:

            

    

    

    
      	 	
              (i)

            	
              Subject
                to Clause 3.01(d), Assignee shall assume and be bound by, observe
                and
                perform all terms, obligations and provisions in the Agreement with
                regard
                to the Assigned Interest at all times on or after the Transfer Date;
                and

            

    

    

    
      	 	
              (ii)

            	
              Assignor
                shall retain and be entitled to all rights, benefits and privileges
                under
                the Agreement with respect to the Assigned Interest at all times
                prior to
                the Transfer Date; and

            

    

    

    
      	 	
              (iii)

            	
              Subject
                to Clause 3.01(d), Assignee shall assume and be entitled to all rights,
                benefits and privileges under the Agreement with respect to the Assigned
                Interest at all times on and after the Transfer
                Date.

            

    

    

    
      	 	
              (d)

            	
              In
                all matters relating to the Assigned Interest subsequent to the Transfer
                Date and prior to the Binding Date, Assignor acts as trustee for
                and duly
                authorized agent of Assignee, and Assignee, for the benefit of Third
                Party, ratifies, adopts and confirms all acts or omissions of the
                Assignor
                in such capacity as trustee and agent. Third Party agrees to recognize
                and
                accept Assignor as trustee and agent for
                Assignee.

            

    

    

    
      	 	
              (e)

            	
              On
                and after the Transfer Date, Third
                Party:

            

    

    

    
      	 	
              (i)

            	
              releases
                and discharges Assignor from the observance and performance of all
                terms
                and covenants of the Agreement and all obligations and liabilities
                which
                arise or occur on or after the Transfer Data under the Agreement
                with
                respect to the Assigned Interest;
                and

            

    

    

    
      	 	
              (ii)

            	
              does
                not release and discharge Assignor from any obligation or liability
                which
                had arisen or accrued prior to the Transfer Data or which does not
                relate
                to the Assigned Interest.

            

    

    

    
      	 	
              (f)

            	
              Subject
                to the terms and provisions of the “Transfer Agreement” referenced in the
                Notice of Assignment, Assignee on and after the Transfer
                Date:

            

    

    

    
      	 	
              (i)

            	
              releases
                and discharges Assignor from the observance and performance of all
                terms
                and covenants of the Agreement and all obligations and liabilities
                which
                arise or occur on or after the Transfer Date under the Agreement
                with
                respect to the Assigned Interest;
                and

            

    

    
      	 	
              (ii)

            	
              does
                not release and discharge Assignor from any obligation or liability
                which
                had arisen or accrued prior to the Transfer Date or which does not
                relate
                to the Assigned Interest.

            

    

    

    
      	 	
              (g)

            	
              The
                address of Assignee for the purposes of the Agreement and the serving
                of
                notices under it shall be the address stated for Assignee in the
                Notice of
                Assignment.

            

    

    

    
      	 	
              (h)

            	
              The
                Agreement shall continue in full force and effect from and after
                the
                Transfer Date with Assignee made a party thereto to the extent of
                the
                Assigned Interest, subject to Clause 3.01(d). The Agreement is amended
                as
                necessary to give effect to the Notice of Assignment and, as so amended,
                is ratified and confirmed by each
                party.

            

    

    

    
      	
              3.02

            	
              In
                no event shall errors, inaccuracies or misdescriptions in a Notice
                of
                Assignment have any effect on the Third Party or the interests of
                Third
                Party in the Agreement, even if Third Party has knowledge of an error,
                inaccuracy or misdescription.

            

    

    

    
      	
              3.03

            	
              Assignor
                and Assignee shall be solely responsible for any adjustment between
                themselves with respect to the Assigned Interest as to revenues,
                benefits,
                costs, obligations or indemnities which accrue prior to Binding
                Date.

            

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
      IV

    

    SERVICE
      OF NOTICES

    

    
      	
              4.01

            	
              All
                notices and Notices of Assignment (herein called “notices”) required or
                permitted by the terms of this Assignment Procedure shall be in writing,
                subject to the provisions of this Article. This Article applies only
                to
                notices served pursuant to this Assignment Procedure. Any notice
                to be
                given under this Assignment Procedure shall be deemed to be served
                properly if served in any of the following
                modes:

            

    

    

    
      	 	
              (a)

            	
              personally,
                by delivering the notice to the party on whom it is to be served
                at that
                party’s address for service. Personally served notices shall be deemed
                received by the addressee when actually delivered as aforesaid, if
                such
                delivery is during normal business hours, on any day other than a
                Saturday, Sunday or statutory holiday. If a notice is not delivered
                during
                normal business hours, such notice shall be deemed to have been received
                by such party at the commencement of the day next following the date
                of
                delivery, other than a Saturday, Sunday or statutory holiday;
                or

            

    

    

    
      	 	
              (b)

            	
              by
                telecopier or telex (or by any other like method by which a written
                and
                recorded message may be sent) directed to the party on whom it is
                to be
                served at that party’s address for service (however, an original executed
                copy of a Notice of Assignment shall subsequently be provided to
                all
                addressees without delay). A notice so served shall be deemed received
                by
                the respective addressees: (i) when actually received by them, if
                received
                within the normal business hours on any day other than a Saturday,
                Sunday
                or statutory holiday; or (ii) at the commencement of the next ensuing
                business day following transmission thereof if such notice is not
                received
                during such normal business hours;
                or

            

    

    

    
      	 	
              (c)

            	
              by
                mailing it first class (air mail if to or from a location outside
                of
                Canada) registered post, postage prepaid, directed to the party on
                whom it
                is to be served at that party’s address for service. Notices so served
                shall be deemed to be received by the addressees at noon, local time,
                on
                the earlier of the actual date of receipt or the fourth (4th) day
                (excluding Saturdays, Sundays and statutory holidays) following mailing.
                However, if postal service is interrupted or operating with unusual
                or
                imminent delay, notice shall not be served by such means during such
                interruption or period of delay.

            

    

    

    
      	
              4.02 

            	
              The
                addresses for service of a notice pursuant to this Assignment Procedure
                shall be as set out (and amended from time to time) in the
                Agreement.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CAPL
      -
      1993

    

    (Appendix
      A to the 1993 CAPL ASSIGNMENT PROCEDURE)

    

    NOTICE
      OF
      ASSIGNMENT

    ___________________________________

    ___________________________________

    ___________________________________

    (For
      reference only: general land description)

    

    

    WHEREAS,
      by agreement (“Transfer Agreement”) dated _________________________, (full name
      of Assignor[s]), as Assignor, transferred and conveyed effective
      __________________ (“Transfer Date”) an interest in property as more fully
      described below to ___________________________(full name of Assignee[s]), as
      Assignee; and

     

    WHEREAS,
      Assignor and one or more parties (“Third Party”) are subject to and bound by
      that certain_______________________ agreement dated_______________, made
      between, by or
      among___________________________________________________________________as
      may
      have been amended, affecting the land or property therein described (“Master
      Agreement”); and

    

    WHEREAS,
      in accordance with the terms and provisions of the Master Agreement, Assignor
      and Assignee intend to serve notice to Third Party to the Master Agreement
      of
      the transfer and conveyance as described in the Transfer Agreement.

    

    NOW,
      THEREFORE, THIS NOTICE OF ASSIGNMENT WITNESSES THAT in consideration of the
      mutual advantages to the parties hereto, notice is hereby given, as
      follows:

    

    
      	
              1.

            	
              Assignor
                (specify proportions if more than one
                Assignor):

            

    

    

    

    

    
 

    
      	
              2.

            	
              Assignee
                (specify proportions if more than one Assignee and include address
                for
                service of notice pursuant to Master
                Agreement):

            

    

    

    

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                3.

              	
                Current
                  Third Party to Master Agreement:

              

      

      
 

    

     

     

    

      
        	
                4.

              	
                Assigned
                  Interest: (Check A or B below):

              

      

      

 

    

    _____A.
      Transfer Agreement covers ______% of Assignor’s entire undivided right, title
      and interest in the Master Agreement but shall not include rights of the
      Assignor as operator (“Assigned Interest”); OR

    

    

    

    _____B.
      Transfer Agreement covers a portion of Assignor’s right, title and interest in
      the Master Agreement but shall not include rights of the Assignor as operator
      (“Assigned Interest”). In the event Alternative B is checked, the following is
      the legal description of all lands and interests transferred and conveyed in
      the
      Transfer Agreement (attach schedule if more space is needed):

    
 

    

    
      
        	
                5.

              	Subject to Clause 7 of this Notice of Assignment,
                Assignor and Assignee, in accordance with the terms of the Transfer
                Agreement, acknowledge that:

      

       

    

    
      	 	
              (i)

            	
              Assignor
                has transferred and conveyed the Assigned Interest to the Assignee
                as of
                the Transfer Date; and

            

    

    

    
      	 	
              (ii)

            	
              Assignee
                agrees to replace Assignor, on and after the Transfer Date, as a
                party to
                the Master Agreement with respect to the Assigned Interest;
                and

            

    

    

    
      	 	
              (iii)

            	
              Assignee
                agrees to be bound by and observe all terms, obligations and provisions
                in
                the Master Agreement with respect to the Assigned Interest on and
                after
                the Transfer Date.

            

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      	
              6.

            	
              Subject
                to the terms and provisions of the Transfer Agreement, Assignee on
                and
                after the Transfer Date:

            

    

    

    
      	 	
              (i)

            	
              discharges
                and releases the Assignor from the observance and performance of
                all terms
                and covenants in the Master Agreement and any obligations and liabilities
                which arise or occur under the Master Agreement with respect to the
                Assigned Interest, and

            

    

    

    
      	 	
              (ii)

            	
              does
                not release and discharge the Assignor from any obligation or liability
                which had arisen or accrued prior to the Transfer Date or which does
                not
                relate to the Assigned Interest.

            

    

    

    
      	
              7.

            	
              Assignee
                and Assignor agree that in all matters relating to the Master Agreement
                with respect to the Assigned Interest, subsequent to the Transfer
                Date and
                prior to the Binding Date, Assignor acts as trustee for and duly
                authorized agent of the Assignee and Assignee, for the benefit of
                the
                Third Party, ratifies, adopts and confirms all acts or omissions
                of the
                Assignor in such capacity as trustee and
                agent.

            

    

    

    
      	
              8.

            	
              This
                Notice of Assignment shall become binding on all parties to the Master
                Agreement on the first day of the second calendar month following
                the
                month this notice is served on Third Party in accordance with the
                terms of
                the Master Agreement (“Binding Date”). In addition, Assignor and Assignee
                agree that they shall be solely responsible for any adjustment between
                themselves with respect to the Assigned Interest as to revenues,
                benefits,
                costs, obligations or indemnities which accrue prior to the Binding
                Date.

            

    

    

    
      	
              9.

            	
              Assignor
                represents and certifies that this Notice of Assignment and its service
                are in compliance with all the terms and provisions of the Master
                Agreement.

            

    

    

    IN
      WITNESS WHEREOF this Notice of Assignment has been duly executed by the Assignor
      and Assignee on the date indicated for each below:

     

    
      	
              Assignor

            	 	
              Assignee

            
	 	 	 	 	 
	
              Per:

            	 	 	
              Per:

            	 
	 	 	 	 	 
	
              Per:

            	 	 	
              Per:

            	 
	 	 	 	 	 
	 	 	 	 	 
	
              Date:

            	 	 	
              Date:Exhibit
      10.3

    JOINT
      OPERATING AGREEMENT

    SAWN
      LAKE AREA, ALBERTA

    

    

    

    THIS
      AGREEMENT made as of April 26, 2004.

    

    AMONG:

    MIKWEC
      ENERGY CANADA LIMITED, a body corporate, having an office at the City of
      Calgary, in the Province of Alberta (herein referred to as
“MIKWEC”)

    

                OF
      THE FIRST
      PART

    

    -
      and
      -

    

    MAXEN
      PETROLEUM INC. a body corporate, having an office at the City of Calgary, in
      the
      Province of Alberta (herein referred to as “MAXEN”)

    

                                    OF
      THE SECOND
      PART

    

    WHEREAS
      MIKWEC and MAXEN acquired on April 23, 2004 certain interests in the Joint
      Lands;

    

    AND
      WHEREAS the parties wish to provide for the manner of conducting operations
      on
      the Joint Lands.

    

    NOW
      THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual premises
      and of the covenants contained herein, the parties agree each with the other
      as
      follows:

     

    
      
        

        

        
          	1. 	INTERPRETATION

        

         

        
          	
                  (a)

                	
                  
                    In
                      this Agreement, unless the context otherwise requires, the
                      definitions
                      contained in clause 101 of the Operating Procedure shall apply,
                      and:

                  

                

        

        

        
          	 	(i) 	
                  “Assignment
                    Procedure” means the 1993 CAPL Assignment Procedure as completed and
                    attached as Schedule “C”

                

          	 	 	 

          	 	(ii) 	“Effective
                  Date” means April 23, 2004; 

          	 	 	 

          	 	(iii) 	
                  “Joint
                    Lands” means the lands described in Schedule “A” hereto, including where
                    the context requires the petroleum substances within, upon or
                    under such
                    lands, or any interest or interests in such lands from time to
                    time
                    remaining subject to this Agreement;

                

          	 	 	 

          	 	(iv) 	
                  “Operating
                    Procedure” means the Operating Procedure as completed and attached as
                    Schedule “B”, together with the Accounting Procedure as completed and
                    annexed thereto as Exhibit “A”

                

          	 	 	 

          	 	(v) 	
                  “Operator”
                    initially means MIKWEC, appointed as such in Clause 5 of
                    this Agreement;

                

          	 	 	
                   

                

          	 	(vi) 	“Participating
                  Interest” means the percentage interest of a party set forth in Clause 4
                  of this Agreement;

          	 	 	 

          	 	(vii) 	“Title
                  Document” means the document of title set forth and described in Schedule
                  “A” hereto and any renewal, extension or replacement thereof, including
                  any leases selected from a license or reservation, insofar as they
                  relate
                  in each case to the Joint Lands; and

          	 	 	 

          	 	 	 

          	 	 	 

        

         

        

          
            
              
              

            

            
              1

              
                

              

            

            
              
              

            

          

        

      

    

     

    
      	
              (b)

            	
              
                The
                  headings of the clauses of this Agreement and the Schedules are
                  inserted
                  for convenience of reference only and shall not affect the meaning
                  or
                  construction thereof.

              

            

    

     

     

    
      	
              (c)

            	
              
                Whenever
                  the singular or masculine or neuter is used in this Agreement or
                  the
                  Schedules, the same shall be construed as meaning plural or feminine
                  or
                  body politic or corporate and vice versa as the context
                  requires.

              

            

    

     

     

    
      	
              (d)

            	
              
                In
                  the event of any conflict or inconsistency between the provisions
                  of this
                  Agreement and those of any Schedule, the provisions of this Agreement
                  shall prevail. If any term or condition of this Agreement conflicts
                  with a
                  term or condition of any Title Document, then such term or condition
                  of
                  such Title Document shall prevail and this Agreement shall be deemed
                  to be
                  amended accordingly with respect to such Title
                  Document.

              

            

    

     

    

    
      	
              2.

            	
              
                SCHEDULES

              

            

    

     

    The
      following Schedules are attached to and are incorporated into this
      Agreement:

     

    
      	
              (a)

            	
              
                Schedule
                  “A” which sets forth and describes the Joint Lands and the Title
                  Document;

              

            

      	
              (b)

            	
              
                 Schedule
                  “B” which is the Operating Procedure together with the Accounting
                  Procedure annexed thereto as Exhibit “A”;
                  and

              

            

    

     

    
      	
              (c)

            	
              
                Schedule
                  “C” which is the Assignment
                  Procedure.

              

            

    

     

     

    
      	
              3.

            	
               TITLE

            

    

     

    No
      party
      warrants title to its Participating Interest in the Title Document or the Joint
      Lands but each party covenants that it has complied with the terms of the Title
      Document to the extent necessary to keep it in full force and effect,
      has good right, full power and authority to enter into this Agreement and
      represents that it has not as of the Effective Date of this Agreement received
      any notice of default in respect of any Title Document.

     

    
      	
              4.

            	
              
                PARTICIPATING
                  INTERESTS

              

            

    

    

    Except
      as
      otherwise provided in the Operating Procedure, the parties shall bear all costs
      and expenses paid or incurred under this Agreement and the Operating Procedure
      and shall own the Title Document the Joint Lands, all wells
      thereon and information obtained therefrom and the equipment pertaining thereto
      and the petroleum substances produced therefrom in accordance with the following
      respective Participating Interests:

     

    
      	
              MIKWEC

            	
              80%

            
	
              MAXEN

            	
              20%

            

    

     

     

    
      	
              5.

            	
              
                APPOINTMENT
                  OF OPERATOR

              

            

 

    MIKWEC
      is
      hereby appointed initial Operator and shall be responsible for the operation
      and
      development of the Joint Lands for the joint account and, subject to the terms
      and provisions of this Agreement and the Operating
      Procedure, shall have the sole and exclusive control and management of all
      operations conducted pursuant to this Agreement. MIKWEC hereby accepts such
      appointment as Operator. The Operator shall account for
      the
      Goods and Services Tax (Canada), pursuant to Subsection 273 (1) of the Excise
      Tax Act, on all purchases and sales occurring on the Joint Lands.

     

     

    
      	
              6.

            	
              
                OPERATING
                  PROCEDURE

              

            

    

     

    The
      parties agree that the Operating Procedure as amended by this Agreement governs
      the relationship of the parties hereto and applies to all operations conducted
      in respect of the exploration, development and maintenance
      of the Joint Lands for the production of petroleum substances.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              7.

            	
              INFORMATION
                TO JOINT-OPERATOR

            

    

    

    In
      addition to the information and data required to be provided to the
      Joint-Operator by the Operator pursuant to the Operating Procedure, the
      Operator, upon any well reaching total depth, shall supply the
      Joint-Operator with
      two (2) copies of a geological (factual) report containing:

     

    
      	
              (a)

            	
              final
                summary of survey log formation
                tops;

            

    

     

    
      	
              (b)

            	
              detailed
                drillstem test data, if applicable;

            

    

    

      	
              (c)

            	
              lithologic
                core and sample report, if applicable;
                and

            

    

     

    
      	
              (d)

            	
              core,
                water, gas or oil analyses, if
                applicable.

            

    

     

    
      	
              8.

            	
              ENCUMBRANCES
                ON INTEREST

            

    

    

    If
      the
      interest of any party in the Joint Lands is now or hereafter shall become
      encumbered by any security interest or by any royalty, production payment or
      other charge of a similar nature, other than the royalties setforth
      under
      the
      terms of the Title Document covering such lands or any compensatory royalty
      payments, then such security interest, additional royalty, production payment
      or
      charge shall be charged to and paid entirely by
      the
party
      whose interest is or becomes thus encumbered. Any such encumbrance hereafter
      made or granted by a party shall be expressly made subject to the rights of
      the
      other parties hereunder. In no event shall a party
      hereto
      acquiring an interest in such lands by virtue of the operation of any provision
      of the body of this Agreement of the Operating Procedure (except Article XXIV
      of
      the Operating Procedure, where applicable) ever
      be
required
      to assume any part of such interest, royalty, payment or charge.

    

    

    
      	
              9.

            	
              NEW
                ROYALTY APPLICATIONS

            

    

    

    If
      any
      well on the Joint Lands is completed for the taking of production the Operator
      shall be responsible for making timely application, on behalf of the parties,
      pursuant to the Regulations, for new royalty status on any petroleum
      substances and for any royalty holiday or abatement that may be applicable
      to
      operations hereunder.

     

    
      	
              10.

            	
              INCENTIVE
                ASSISTANCE PROGRAM

            

    

    

    Incentives
      of any kind which are generated by operations on the Joint Lands by the parties
      shall be allocated and shared in accordance with each party’s participation in
      such operation.

     

    
      	
              11.

            	
              CONFIDENTIAL
                INFORMATION

            

    

    

    Notwithstanding
      the Operating Procedure, a party may release information obtained in the course
      of or as a result of operations on the Joint Lands to an industry scouting
      association in which the party is a participant, or to
      a
      lawful governmental authority to the extent required by law, or to a stock
      exchange on which a party’s shares are listed or traded to the extent required
      by the rules of such exchange.

    

    

    
      	
              12.

            	
              TERM
                OF AGREEMENT

            

    

    

    This
      Agreement is effective from the Effective Date and shall continue for the life
      of any Title Document in which the parties hold their interest as provided
      herein and any extensions or renewals of such Title Document whether
      by production or otherwise and until final settlement of accounts has been
      made
      among the parties.

     

     

    
      	
              13.

            	
              ENTIRE
                AGREEMENT

            

    

     

    The
      terms
      of this Agreement express and constitute the entire Agreement among the parties.
      No implied covenant or liability is created or shall arise by reason of this
      Agreement or anything herein contained.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    
      	
              14.

            	
              COVENANTS
                RUN WITH THE LAND

            

    

     

    All
      terms
      and provisions of this Agreement shall run with and be binding upon the Joint
      Lands during the term hereof.

     

     

    
      	
              15.

            	
              ENUREMENT

            

    

    
       

      This
        Agreement shall be binding upon and enure to the benefit of the parties hereto
        and their respective successors and assigns.

       

    

     

    
      	
              16.

            	
              LAWS
                OF ALBERTA

            

    

     

    Parties
      agree that this Agreement shall for all purposes
      be construed and interpreted according to the laws of the Province of Alberta,
      and that the courts having jurisdiction with respect to matters relating to
      this
      Agreement shall be the courts of said Province, to the
      jurisdiction of which courts the parties by their execution of this Agreement
      do
      hereby submit.

     

     

    
      	
              17.

            	
              COUNTERPART
                EXECUTION

            

    

    
       

      This
        Agreement may be executed by the parties in counterpart and when each party
        has
        executed a counterpart, all counterparts taken together shall constitute
        one
        agreement.

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

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

    

    
      	 	 	 
	 	
              MIKWEC
                ENERGY CANADA LIMITED

            
	 
 	 
 	 
 
	 	By:  	/s/ Vic
              Davies
	 	
              

            
	 	President

    

    

    
      	 	 	 
	 	
              MAXEN
                PETROLEUM INC.

            
	 
 	 
 	
               

            
	 	By:  	/s/
              Sam Charanek
	 	
              

            
	 	President

     

    This
      is
      page 1 of 1 execution page attached to and forming part of a Joint Operating
      Agreement dated as of April 26, 2004 among MIKWEC ENERGY CANADA LTD. and MAXEN
      PETROLEUM INC.

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    SCHEDULE
      “A”

    

    This
      is
      Schedule “A” attached to and forming part of a Joint Operating Agreement dated
      as of April 26, 2004 among MIKWEC ENERGY CANADA LTD. and MAXEN PETROLEUM
      INC.

     

    
      
        

      

    

    THE
      JOINT
      LANDS

    

    Oil
      Sands Development Lease 7403070365
      is
      described as follows:

    Township
      91, Range 12: Sections 27, 28, 29, 30, 31, 32,

    Township
      91, Range 13: Sections 25, 26, 27, 35, 36

    Oil
      Sands
      (Top of the Peace River to Base of the Pekisko) 100%

    Covering
      2816 hectares

    

    Oil
      Sands Development Lease 7403070367
      is
      described as follows:

    Township
      92, Range 13: Sections 1, 2, 10, 11, 12, 13, 14, 15, 22, 23, 24

    Oil
      Sands
      (Top of the Peace River to Base of the Pekisko) 100%

    Covering
      2816 hectares

    

    Oil
      Sands Development Lease 7403070368
      is
      described as follows:

    Township
      92, Range 13: Sections 6, 7, 8, 9, 16, 17, 18, 19, 20, 21

    Oil
      Sands
      (Top of the Peace River to Base of the Pekisko) 100%

    Covering
      2560 hectares

    

    Oil
      Sands Permit 7003040812
      is
      described as follows:

    Township
      91, Range 13: N1/2 Section 28, Sections 32, 33, 34

    Township
      92, Range 13: Sections 3, 4, 5

    Oil
      Sands
      (Top of the Peace River to Base of the Pekisko) 100%

    Covering
      1664 hectares

    

    Petroleum
      & Natural Gas Lease 5495030101
      is
      described as follows:

    Township
      91, Range 13: N1/2 Section 28, Sections 32, 33, 34

    Township
      92, Range 13: Sections 3, 4, 5

    Petroleum
      & Natural Gas (From Surface to Basement) 100%

    Covering
      1664 hectares

     

     

    TITLE
      DOCUMENTS

    

    Crown
      Agreement Title # 7403070365

    Fifteen
      year term commencing July 9, 2003.

    

    Crown
      Agreement Title # 7403070367

    Fifteen
      year term commencing July 9, 2003.

    

    Crown
      Agreement Title # 7403070368

    Fifteen
      year term commencing July 9, 2003.

    

    Crown
      Agreement Title # 7003040812

    Five
      year
      term commencing April 9, 2003.

    

    Crown
      Agreement Title # 5495030101

    Five
      year
      term commencing March 3, 2003.

    

    

    ENCUMBRANCES

    Crown
      Royalty payable to the Province of Alberta

    A
      six and
      one half (6.5%) Gross Overriding Royalty (GOR) payable to Nearshore Petroleum
      Corporation

    

    

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    SCHEDULE
      “B”

    This
      is a
      Summary Schedule “B” attached to and forming part of a Joint Operating Agreement
      dated as of April 26, 2004 among MIKWEC ENERGY CANADA LTD. and MAXEN PETROLEUM
      INC.

     

    
      
        

      

       

    

    1990
      CAPL
      OPERATING AGREEMENT

    

    

      
        	
                CLAUSE
                  311 - Insurance Election:

              	
                A___

              	
                B
                  x

              
	 	 	 
	
                CLAUSE
                  604 -  Marketing
                  Fee:

              	
                Ax

              	
                B
                  ___

              
	 	 	 
	
                CLAUSE
                  903 - Casing Point Election:

              	
                A
                  x

              	
                B
                  ___

              

      

    

     

    CLAUSE
      1007 - Penalty for Independent Operations:

     

    1)
      Development 400 %

     

    2)
      Exploratory 500 %

     

    
      	
              CLAUSE
                903 - Casing Point Election:

            	
              180
                days

            

    CLAUSE
      1010 (iv) - Well Preserving Title: 

    

    CLAUSE
      2201 - Notice of Service:

    

    MIKWEC
      ENERGY CANADA LTD.

    Suite
      3175

    246
      Stewart Green S.W.

    Calgary,
      Alberta

    T3H
      3C8

    Attention:
      Manager. Land Administration

    Fax:
      (403) 663-9226

    

    MAXEN
      PETROLEUM INC.

    102
      - 325
      24th
      Avenue
      S.W.

    Calgary,
      Alberta

    T2S
      3E7

    Attention:
      Manager. Land Administration

    Fax:
      (403) XXX-XXXX

     

    
      	
              CLAUSE
                2401 - Disposition of Interests: 

            	
              Ax

            	
              B
                ___

            
	 	 	 
	
              CLAUSE
                2404 - Recognition upon Assignment 

            	
              A
                x

            	
              B
                ___

            

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    PASC
      ACCOUNTING PROCEDURE - 1988

    

    CLAUSE
      105 (a) Operating Advances: 10%

    

    CLAUSE
      109 - Asset Records: replace with The
      Operator shall maintain detailed asset records of Controllable Material and
      other tangible assets as it may deem necessary to prevent the potential loss
      or
      under utilization of assets.

    

    CLAUSE
      110 - Approvals: 2 or more parties, 75%

     

    
      
        	
                CLAUSE
                  202 - Labour

              
	
                b)

              	
                (1)
                  shall not be be chargeable.

              
	 	
                (2)
                  shall not be chargeable.

              
	 	 	 
	
                CLAUSE
                  203 - Employee Benefits: (b) Non-compulsory 25%

              
	 	 	 
	
                CLAUSE
                  217 - Warehouse Handling:

              
	
                 

              	(1)
                2.5%, $5,000
	
                 

              	(2)
                5%
	 	 	 
	
                CLAUSE
                  302

              	 
	
                a)
                  For each Exploration Project

              
	 	
                1.

              	
                5%
                  of the first $ 50,000.00

              
	 	
                2.

              	
                3%
                  of the next $ 100,000.00

              
	 	
                3.

              	
                1%
                  of the cost exceeding the sum of (1) and (2).

              
	 	 	 
	
                b)
                  For each Drilling Well

              
	 	
                1.

              	
                5%
                  of the first $ 50,000.00

              
	 	
                2.

              	
                3%
                  of the next $ 100,000.00

              
	 	
                3.

              	
                1%
                  of the cost exceeding the sum of (1) and (2).

              
	 	 	 
	
                c)
                  For each Construction Project:

              
	 	
                1.

              	
                5%
                  of the first $ 50,000.00

              
	 	
                2.

              	
                3%
                  of the next $ 100,000.00

              
	 	
                3.

              	
                1%
                  of the cost exceeding the sum of (1) and (2).

              
	 	 	 
	
                d)
                  For Operating and Maintenance, per month:

              
	 	
                1.

              	
                n/a
                  of the Cost of Operation and Maintenance of the Joint Property;
                  and

              
	 	
                2.

              	
                $250
                  per producing well per month.

              
	 	
                3.

              	
                n/a
                  flat rate...

              

      

    

    
Rates
      in
      sub clauses d(2) and d(3) will not be adjusted

    

    Article
      IV Pricing of Joint Material Purchases, Transfers and Dispositions: $
      35,000

    

    CLAUSE
      501 - Periodic Inventory: at its discretion but not less than five (5) year
      intervals.

    

    

    FEDERAL
      GOODS AND SERVICES TAX (GST) ELECTION

    

    Each
      party authorizes the Operator to make the election jointly and account for
      GST
      under subsection 273(1) of the Excise Act.

    

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    SCHEDULE
      “C”

    This
      is a
      Summary Schedule “C” attached to and forming part of a Joint Operating Agreement
      dated as of April 26, 2004 among MIKWEC ENERGY CANADA LTD. and MAXEN PETROLEUM
      INC.

    

    
      
        

      

    

    ASSIGNMENT
      PROCEDURE CAPL - 1993

    

    Attached
      to and forming part of the Agreement dated April 26, 2004

    BETWEEN(AMONG)

    

    MIKWEC
      ENERGY CANADA LTD.

    

    MAXEN
      PETROLEUM INC.

    

    

    ARTICLE
      I

    

    DEFINITIONS

     

     

    
      	1.01 	 In
              this Assignment Procedure, the following terms, when capitalized, -
              shall
              have the meaning assigned to each
              below:

    

     

    
      	
              a)

            	
              
                “Affiliate”
                  - for the purposes of this Assignment Procedure, means a corporation
                  or
                  partnership that is affiliated with the party in respect of which
                  the
                  expression is being applied, and, for the purpose of this definition
                  a
                  corporation or partnership is affiliated with another corporation
                  or
                  partnership if it directly or indirectly controls or is controlled
                  by that
                  other corporation or partnership, and for the purpose of determining
                  whether a corporation or partnership is so controlled, it shall
                  be deemed
                  that:

              

            

    

     

    
      	 	
              (i)
 	a
              corporation is directly controlled by another corporation or partnership
              if the shares of the corporation to 
              
                which
                  are attached more than 50% of the votes that may be cast to elect
                  directors of the corporation are beneficially owned by that other
                  corporation or partnership and the votes attached to those shares
                  are
                  sufficient, it exercised, to elect a majority of the directors
                  of the
                  corporation;

              

            

    

     

    
      	 	(ii)	a
              partnership is directly controlled by a corporation or other partnership
              if that corporation or partnership beneficially owns more than a 50%
              interest in the partnership;

    

      

    
      	 	(iii)	a
              corporation or partnership is indirectly controlled by another corporation
              or partnership if control, as defined above, is exercised through one
              or
              more other corporations or partnerships.

    

     

    
      
        	
                Where
                  two or more corporations or partnerships are affiliated at the
                  same time
                  with the same corporation or partnership, they shall be deemed
                  to be
                  Affiliates of each other.

              

      

       

      
        	
                (b)

              	
                “Agreement”
                  - means the agreement to which this Assignment Procedure is attached
                  and
                  made a part.

              
	 	 
	
                (c)

              	
                “Assigned
                  Interest” - means the interest in the Agreement which is the subject of an
                  assignment and which is specified in a Notice of Assignment, but
                  shall not
                  include rights of the Assignor as operator.

              
	 	 
	
                (d)

              	
                “Assignee”
                  - means the entity named in a Notice of Assignment as the
                  Assignee.

              

      

       

      
        	
                (e)

              	
                “Assignment
                  and Novation Agreement” - means an agreement by all parties to the
                  Agreement and a party to whom an interest in the Agreement has
                  been
                  assigned where:

              

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
        	
              	
                (i)

              	
                the
                  assignee assumes the duties and obligations of the assignor for
                  the
                  Assigned Interest; and

              

      

      
      

       

      
        	
              	
                (ii)

              	
                the
                  assignor is released from its duties for the Assigned Interest;
                  and

              

      

      
      

       

      
        	
              	
                (iii)

              	
                the
                  assignee is substituted as a party to the Agreement in the place
                  of the
                  assignor to the extent of the Assigned
                  Interest.

              

      

      
      

       

      
        	
                (f)

              	
                “Assignor”
                  - means the party to the Agreement named in a Notice of Assignment
                  as the
                  Assignor.

              
	 	 
	
                (g)

              	
                “Binding
                  Date” - means the first day of the second calendar month following the
                  month in which the Notice of Assignment is served in accordance
                  with
                  Article IV below.

              
	 	 
	
                (h)

              	
                “Notice
                  of Assignment” - means a notice in the form entitled Notice of Assignment
                  attached hereto as Appendix A.

              
	 	 
	
                (i)

              	
                “Third
                  Party” - means the parties to the Agreement who are not the
                  Assignor.

              
	 	 
	
                (j)

              	
                “Transfer
                  Date” - means the effective date of the transfer of the Assigned Interest,
                  as specified in the Notice of Assignment.

              
	 	 
	
                1.02

              	
                In
                  this Assignment Procedure, when a numbered clause or Article is
                  referred
                  to, that clause or Article is
                  of this Assignment Procedure.

              
	
                 

              	 

      

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
 

    ARTICLE
      II

    

    

    APPLICATION,
      CONDITIONS AND FORM OF NOTICE

    

    2.01(a)
      A
      Notice of Assignment issued in accordance with this Assignment Procedure shall
      be used in place of an Assignment and Novation Agreement for assignments where
      the Agreement:

     

    
      	(i)  	
              requires
                parties to use; or

            

    

     

    
      	(ii)  	
              entitles
                parties to request; or

            

    

     

    
      	(iii)  	
              is
                silent as to the right of any party to
                request;

            

    

    

    an
      Assignment and Novation Agreement.

     

    
      
        	
                (b)

              	
                The
                  Notice of Assignment shall be in the form indicated in Appendix
                  A and
                  shall be executed by the Assignor and the Assignee.

              
	 	 
	
                2.02

              	
                If
                  there is a conflict between the Assignment Procedure and the provisions
                  of
                  the Agreement, the Assignment
                  Procedure shall prevail.

              
	
                 

              	 
	
                2.03

              	
                If
                  the Agreement requires each Third Party’s consent to an assignment but
                  does not specify a time within which each Third Party shall respond
                  or
                  shall be deemed to have responded, then consent of each Third Party
                  to an
                  assignment shall be deemed if it fails to reply within 20 days
                  of receipt
                  of a written request for consent.

              
	 	 
	
                2.04
                  (a)

              	
                If
                  the Agreement is silent regarding rights of first refusal or consent
                  from
                  Third Party which relates to an Assigned Interest, then Assignor
                  shall, by
                  notice pursuant to Article
                  IV:

              

      

    

     

    
      	
              (i) 

            	
              
                advise
                  Third Party of:

              

            

 

    
      	 	a.	its
              intention to make the disposition;

    

     

    
      	 	b.	
              a
                description of the Assigned Interest;
                and

            

    

     

    
      	 	c. 	
              the identity of the proposed Assignee,
                and

            

    

     

    
      	
              (ii) 

            	 request
              Third Party’s written consent to such disposition, which consent shall not
              be unreasonably withheld. 

    

     

    Consent
      of each Third Party shall be deemed if it fails to reply to Assignor within
      20
      days of receipt of the written
      request for consent.

     

    (b)
      Clause 2.04 (a) shall not apply in the following instances, namely:

     

    
      
        	
                (i) 

              	an
                assignment
                made by way of security for present or future indebtedness, or liabilities
                (whether contingent, direct or indirect and whether financial or
                otherwise), the issuance of the bonds or debentures of a corporation.
                of
                the performance of the obligations of a guarantor under a guarantee,
                provided that in the event the security is enforced by a sale or
                foreclosure. Clause 2.04 (a) shall apply;
                or

      

       

      
        	
                (ii) 

              	an
                assignment
                to an Affiliate, or in consequence of a merger or amalgamation with
                another corporation or pursuant to an assignment made by a party
                of its
                entire interest in the Agreement to a
                corporation in return for shares in that corporation or to a registered
                partnership in return for an interest in that partnership;
                or

      

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    

      	
              (iii) 

            	an
              assignment is required within the terms of the Agreement (such as,
              but not
              limited to, abandonment, forfeiture or
              surrender).

    

     

    
      	
              2.05

            	
               
                An assignment of an Assigned Interest shall (subject to Clause 2.06)
                be
                effective against Third Party on the Binding Date
                if:

            

    

     

    
      	
              (a)

            	
              all
                prohibitions, limitations or conditions (such as, but not limited
                to, a
                right of first refusal or a requirement for prior consent from Third
                Party) applying to the Assigned Interest have been complied with
                and
                satisfied pursuant to the Agreement, or waived by Third Party, including,
                if applicable, compliance with Clauses 2.03 and 2.04;
                and

            
	 	 
	(b)	 following
              compliance with Clause 2.05(a), a Notice of Assignment is served on
              Third
              Party in accordance with Article IV.

    

     

    
      	
              2.06
                (a)

            	A Third Party
              who
              objects to the Notice of Assignment on the basis of a failure to comply
              with Clause 2.05 may, prior to the Binding Date, notify (pursuant to
              Article IV) Assignor and Third Party of its
              objections.

    

     

    
      	
              (b)

            	
              If
                a notice of objection is served pursuant to Clause 2.06(a), the Notice
                of
                Assignment to which the notice of objection relates will be of no
                effect.

            
	 	 
	(c)	If a Third
              Party does
              not object pursuant to Clause 2.06(a), the Notice of Assignment will
              be
              effective for purposes of Article 11\, but each Third Party will retain
              all other rights or remedies arising as a consequence of the failure
              of
              Assignor to comply with Clause 2.05,
              including
              (without limitation), rights to seek damages for breach
              of the Agreement and rights to seek specific performance of a right
              of
              first refusal.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    ARTICLE
      III

    

    ASSIGNMENT,
      ASSUMPTION AND DISCHARGE BY NOTICE

     

    

      
        	
                3.01

              	
                If
                  a Notice of Assignment has become effective in accordance with
                  Clauses
                  2.05 or 2.06, then Assignor, Assignee and Third Party shall have
                  agreed
                  that:

              
	 	 	 
	
                (a)

              	
                Subject
                  to Clause 3.01 (d), Assignor and Assignee shall have acknowledged
                  and
                  represented that the Assignor has transferred, assigned and conveyed
                  the
                  Assigned Interest to Assignee as of the transfer Date.

              
	 	 	 
	
                (b)

              	
                Subject
                  to Clause 3.01(d), Assignee shall replace Assignor as a party to
                  the
                  Agreement with respect to the Assigned Interest on and after the
                  Transfer
                  Date.

              
	 	 	 
	
                (c)

              	
                Only
                  insofar as Third Party is concerned, notwithstanding the terms
                  and
                  provisions in the “Transfer Agreement” referenced in the Notice of
                  Assignment:

              
	 	 	 
	 	
                (i)

              	
                Subject
                  to Clause 3.01 (d), Assignee shall assume and be bound by, observe
                  and
                  perform all terms, obligations and provisions in the Agreement
                  with regard
                  to the Assigned Interest at all times on or after the Transfer
                  Date;
                  and

              
	 	 	 
	 	
                (ii)

              	
                Assignor
                  shall retain and be entitled to all rights, benefits and privileges
                  under
                  the Agreement with respect to the Assigned Interest at all times
                  prior to
                  the Transfer Date; and

              
	 	 	 
	 	
                (iii)

              	
                Subject
                  to Clause 3.01 (d), Assignee shall assume and be entitled to all
                  rights,
                  benefits and privileges under the Agreement with respect to the
                  Assigned
                  Interest at all times on and after the Transfer
                  Date.

              
	 	
                 

              	 
	
                (d)

              	
                In
                  all matters relating to the Assigned Interest subsequent to the
                  Transfer
                  Date and prior to the Binding Date, Assignor acts as trustee for
                  and duly
                  authorized agent of Assignee, and Assignee, for the benefit of
                  Third
                  Party, ratifies, adopts and confirms all acts or omissions of the
                  Assignor
                  in such capacity as trustee and agent. Third Party agrees to recognize
                  and
                  accept Assignor as trustee and agent for Assignee.

              
	 	 	 
	
                (e)

              	
                On
                  and after the Transfer Date, Third Party:

              
	 	 	 
	 	
                (i)

              	
                releases
                  and discharges Assignor from the observance and performance of
                  all terms
                  and covenants of the Agreement and all obligations and liabilities
                  which
                  arise or occur on or after the Transfer Date under the Agreement
                  with
                  respect to the Assigned Interest; and

              
	 	 	 
	 	
                (ii)

              	
                does
                  not release and discharge Assignor from any obligation or liability
                  which
                  had arisen or accrued prior to the Transfer Date or which does
                  not relate
                  to the Assigned Interest.

              
	 	 	 
	
                (f)

              	
                Subject
                  to the terms and provisions of the “Transfer Agreement” referenced in the
                  Notice of Assignment, Assignee on and after the Transfer
                  Date:

              
	 	 	 
	 	
                (i)

              	
                releases
                  and discharges Assignor from the observance and performance of
                  all terms
                  and covenants of the Agreement and all obligations and liabilities
                  which
                  arise or occur on or after the Transfer Date under the Agreement
                  with
                  respect to the Assigned Interest; and

              
	 	 	 
	 	
                (ii)

              	
                does
                  not release and discharge Assignor from any obligation or liability
                  which
                  had arisen or accrued prior to the Transfer Date or which does
                  not relate
                  to the Assigned Interest.

              
	 	 	 
	
                (g)

              	
                The
                  address of Assignee for the purposes of the Agreement and the serving
                  of
                  notices under it shall be the address stated for Assignee in the
                  Notice of
                  Assignment.

              
	 	 	 
	
                (h)

              	
                The
                  Agreement shall continue in full force and effect from and after
                  the
                  Transfer Date with Assignee made a party thereto to the extent
                  of the
                  Assigned Interest, subject to Clause 3.01(d). The Agreement is
                  amended as
                  necessary to give effect to the Notice of Assignment and, as so
                  amended,
                  is ratified and confirmed by each party.

              
	 	 	 
	
                3.02

              	
                In
                  no event shall errors, inaccuracies or misdescriptions in a Notice
                  of
                  Assignment have any effect on the Third Party or the interests
                  of Third
                  Party in the Agreement, even if Third Party has knowledge of an
                  error,
                  inaccuracy or misdescription.

              
	 	 	 
	
                3.03

              	
                Assignor
                  and Assignee shall be solely responsible for any adjustment between
                  themselves with respect to the Assigned Interest as to revenues,
                  benefits,
                  costs, obligations or indemnities which accrue prior to Binding
                  Date.

              

      

    

    

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    ARTICLE
      IV

    

    SERVICE
      OF NOTICES

     

     

    

      
        	
                4.01

              	
                All
                  notices and Notices of Assignment (herein called “notices”) required or
                  permitted by the terms of this Assignment Procedure shall be in
                  writing,
                  subject to the provisions of this Article. This Article applies
                  only to
                  notices served pursuant to this Assignment Procedure. Any notice
                  to be
                  given under this Assignment Procedure shall be deemed to be served
                  properly if served in any of the following modes:

              
	 	 	 
	
                (a)

              	
                personally,
                  by delivering the notice to the party on whom it is to be served
                  at that
                  party’s address for service. Personally served notices shall be deemed
                  received by the addressee when actually delivered as aforesaid,
                  if such
                  delivery is during normal business hours, on any day other than
                  a
                  Saturday, Sunday or statutory holiday. If a notice is not delivered
                  during
                  normal business hours, such notice shall be deemed to have been
                  received
                  by such party at the commencement of the day next following the
                  date of
                  delivery, other than a Saturday, Sunday or statutory holiday;
                  or

              
	 	 	 
	
                (b)

              	
                by
                  telecopier or telex (or by any other like method by which a written
                  and
                  recorded message may be sent) directed to the party on whom it
                  is to be
                  served at that party’s address for service (however, an original executed
                  copy of a Notice of Assignment shall subsequently be provided to
                  all
                  addressees without delay). A notice so served shall be deemed received
                  by
                  the respective addressees:

              
	 	 	 
	 	
                (i)

              	
                when
                  actually received by them, if received within the normal business
                  hours on
                  any day other than a Saturday, Sunday or statutory holiday;
                  or

              
	 	 	 
	 	
                (ii)

              	
                at
                  the commencement of the next ensuing business day following transmission
                  thereof if such notice is not received during such normal business
                  hours;
                  or

              
	 	 	 
	
                (c)

              	
                by
                  mailing it first class (air mail if to or from a location outside
                  of
                  Canada) registered post, postage prepaid, directed to the party
                  on whom it
                  is to be served at that party’s address for service. Notices so served
                  shall be deemed to be received by the addressees at noon, local
                  time, on
                  the earlier of the actual date of receipt or the fourth (4th) day
                  (excluding Saturdays, Sundays and statutory holidays) following
                  mailing.
                  However, if postal service is interrupted or operating with unusual
                  or
                  imminent delay, notice shall not be served by such means during
                  such
                  interruption or period of delay.

              
	 	 	 
	
                4.02

              	
                The
                  addresses for service of a notice pursuant to this Assignment Procedure
                  shall be as set out (and amended from time to time) in the
                  Agreement.

              

      

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    CAPL
      -
      1993

    

    (Appendix
      A to the 1993 CAPL ASSIGNMENT PROCEDURE)

    

    NOTICE
      OF
      ASSIGNMENT

    ___________________________________

    ___________________________________

    ___________________________________

    (For
      reference only: general land description)

    

    

    WHEREAS,
      by agreement (“Transfer Agreement”) dated this ___ day of
      __________________,200_, ________________________(full
      name
      of Assignor[s]),
      as
      Assignor, transferred and conveyed effective on __day of _______________,200_,
      (“Transfer Date”) an interest in property as more fully described below to
      ___________________________(full
      name
      of Assignees [s]),
      as
      Assignee; and

    

    

    

    WHEREAS,
      Assignor and one or more parties (“Third Party”) are subject to and bound by
      that certain _______________________
      agreement dated__day of _____________,200_, made between, by or
      among

    _____________________________________________________________________________________
      as
      may
      have been amended, affecting the land or property therein described (“Master
      Agreement”); and

    
 

    WHEREAS,
      in accordance with the terms and provisions of the Master Agreement, Assignor
      and

    

    Assignee
      intend to serve notice to Third Party to the Master Agreement of the transfer
      and conveyance as described in the Transfer Agreement

    
 

    NOW,
      THEREFORE, THIS NOTICE OF ASSIGNMENT WITNESSES THAT in consideration of the
      mutual advantages
      to the parties hereto, notice is hereby given, as follows:

     

    
      	
              1. 

            	
              Assignor
                (specify proportions if more than one
                Assignor):

            

     

     

     

    

    
      	
              2

            	
              Assignee
                (specify proportions if more than one Assignee and include address
                for
                service of notice pursuant to Master
                Agreement):

            

     

     

     

     

    

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

     

    
      	
              3.

            	
              Current
                Third Party to Master
                Agreement:

            

    

    

    
 

    
 

    
      	
              4.

            	
              Assigned
                Interest: (Check A or B below):

            

    

    

    
 

    _____A. Transfer
      Agreement covers ______% of Assignor’s entire undivided right, title and
      interest in the Master Agreement but shall not include rights of the Assignor
      as
      operator (“Assigned Interest”); OR

    

    

    

    _____B. Transfer
      Agreement covers a portion of Assignor’s right, title and interest in the Master
      Agreement but shall not include rights of the Assignor as operator (“Assigned
      Interest”). In the event Alternative B is checked, the following is the legal
      description of all lands and interests transferred and conveyed in the Transfer
      Agreement (attach schedule if more space is needed):

    

    

    

    

    

    

     

    
 

    
      	
              5.

            	
              Subject
                to Clause 7 of this Notice of Assignment, Assignor and Assignee,
                in
                accordance with the terms of the Transfer Agreement, acknowledge
                that:

            

      	
            	
              (i)

            	Assignor has
              transferred and conveyed the Assigned Interest to the Assignee as of
              the
              Transfer Date; and
	 	 	 
	 	
              (ii)

            	Assignee agrees
              to
              replace Assignor, on and after the Transfer Date, as a party to the
              Master
              Agreement with respect to the Assigned Interest; and
	 	 	 
	 	(iii) 	Assignee agrees
              to be
              bound by and observe all terms, obligations and provisions in the Master
              Agreement with respect to the Assigned Interest on and after the Transfer
              Date.

    

     

    

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

     

    
      	
              6.

            	
              Subject
                to the terms and provisions of the Transfer Agreement, Assignee on
                and
                after the Transfer

            

    

    Date:

     

    

      	
            	
              (i)

            	discharges
              and releases
              the Assignor from the observance and performance of all terms and
              covenants in the Master Agreement and any obligations and liabilities
              which arise or occur under the Master Agreement with respect to the
              Assigned Interest, and
	 	 	 
	 	
              (ii)

            	does not release
              and
              discharge the Assignor from any obligation or liability which had arisen
              or accrued prior to the Transfer Date or which does not relate to the
              Assigned Interest.

    

     

    
      	
              7.

            	
              Assignee
                and Assignor agree that in all matters relating to the Master Agreement
                with respect to the Assigned Interest, subsequent to the Transfer
                Date and
                prior to the Binding Date, Assignor acts as trustee for and duly
                authorized agent of the Assignee and Assignee, for the benefit of
                the
                Third Party, ratifies, adopts and confirms all acts or omissions
                of the
                Assignor in such capacity as trustee and
                agent.

            

    

     

    
      	
              9.

            	
              This
                Notice of Assignment shall become binding on all parties to the Master
                Agreement on the first day of the second calendar month following
                the
                month this notice is served on Third Party in accordance with the
                terms of
                the Master Agreement (“Binding Date-). In addition, Assignor and Assignee
                agree that they shall be solely responsible for any adjustment between
                themselves with respect to the Assigned Interest as to revenues,
                benefits,
                costs, obligations or indemnities which accrue prior to the Binding
                Date.

            

    

     

    
      	
              9.

            	
              Assignor
                represents and certifies that this Notice of Assignment and its service
                are in compliance with all the terms and provisions of the Master
                Agreement.

            

    

     

    IN
      WITNESS WHEREOF this Notice of Assignment has been duly executed by the Assignor
      and Assignee on the date indicated for each below:

    
 

    

    
      	
              Assignor

            	 	
              Assignee

            
	 	 	 	 	 
	
              Per:

            	 	 	
              Per:

            	 
	 	 	 	 	 
	
              Per:

            	 	 	
              Per:

            	 
	 	 	 	 	 
	 	 	 	 	 
	
              Date:

            	 	 	
              Date:

            	 
	 	 	 	 	 
	 	 	 	 	 

    

    

    

    
      
        
        

      

      
        17

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