Document:

Exhibit 4.2.2

	
 

	 

	
 

	
Gas Prepayment and Sale
  Agreement 

	
 

	 

          International
Resource Management Corporation 

          NGC
New Zealand Limited 

GAS PREPAYMENT AND SALE
AGREEMENT 

TABLE OF CONTENTS 

	
 

	
 

	
 

	
1

	
DEFINITIONS

	
1

	
1.1

	
Defined terms

	
1

	
1.2

	
Construction

	
4

	
 

	
 

	
 

	
2

	
PURPOSE

	
4

	
 

	
 

	
 

	
3

	
TERM

	
4

	
 

	
 

	
 

	
4

	
PREPAYMENT

	
4

	
4.1

	
Payment

	
4

	
4.2

	
Application of Prepayment

	
4

	
 

	
 

	
 

	
5

	
IRM’S
  OBLIGATIONS

	
5

	
 

	
 

	
 

	
6

	
NGC’S
  ENTITLEMENT TO GAS

	
5

	
 

	
 

	
 

	
7

	
DEED OF
  SECURITY

	
6

	
7.1

	
Grant of security interest

	
6

	
 

	
 

	
 

	
8

	
OWNERSHIP
  OF INTEREST IN PEP 38736 AND PEP 38738

	
6

	
 

	
 

	
 

	
9

	
WARRANTIES
  AND REPRESENTATIONS

	
7

	
9.1

	
Representations and
  Warranties

	
7

	
9.2

	
IRM’s Warranties

	
7

	
 

	
 

	
 

	
10

	
TERMINATION

	
8

	
10.1

	
Insolvency Events

	
8

	
10.2

	
NGC’s termination rights

	
8

	
10.3

	
Consequence of Termination

	
9

	
 

	
 

	
 

	
11

	
NGC MAY
  NOMINATE SUBSIDIARY OR RELATED COMPANY

	
9

	
 

	
 

	
 

	
12

	
MISCELLANEOUS
  PROVISIONS

	
9

	
12.1

	
Confidentiality

	
9

	
12.2

	
No Partnership

	
9

	
12.3

	
Amendments

	
9

	
12.4

	
Notices

	
9

	
12.5

	
No Assignment

	
10

	
12.6

	
Governing Law

	
10

	
12.7

	
Determination of unresolved
  terms

	
10

	
12.8

	
Counterparts

	
11

GAS PREPAYMENT AND SALE
AGREEMENT 

	
 

	
 

	
 

	
13

	
BOARD
  APPROVAL

	
11

	
 

	
 

	
 

	
FIRST
  SCHEDULE

	
13

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
1
  

Date:
4 February, 2004 

PARTIES 

International Resource Management Corporation a company incorporated and existing under the
laws of Malaysia, registered with the Labuan Offshore Financial Services
Authority, company number LL03556, whose registered office is at Level 14D,
Financial Park, Labuan, Jalan Merdeka 8700 Labuan FT, Malaysia (IRM)

NGC New Zealand Limited at Wellington (NGC) 

BACKGROUND 

	
 

	
 

	
A

	
IRM carries on business in
  New Zealand as an oil and gas exploration company. Through a joint venture,
  IRM and the other Kahili JV Parties (as defined below) together hold 100% of
  the interest in PEP 38736, of which IRM holds a 25% interest. IRM, through
  another joint venture, together with the other Cheal JV Parties (as defined
  below) hold a 100% interest in PEP 38738, of which IRM holds a 33% interest. 

	
 

	
 

	
B

	
NGC carries on, among other
  businesses, business as a gas wholesaler and has secured rights in relation
  to future gas from the Kahili Gas Field contained within PEP 38736 and wishes
  to secure rights to future gas from the Cheal Gas Field contained within PEP
  38738. 

	
 

	
 

	
C

	
It is intended that NGC
  provide IRM with cash funding to be applied against development of the Gas
  Fields, in return for the right to purchase IRM’s share of the Gas from, in
  the first instance, the Kahili Gas Field in accordance with the Kahili GSA,
  and in the second instance, from the Cheal Gas Field on the terms and
  conditions set out in this Agreement. 

THE PARTIES AGREE as follows: 

	
 

	
 

	
 

	
1

	
DEFINITIONS
  

	
 

	
 

	
 

	
1.1

	
Defined
  terms 

	
 

	
 

	
 

	
 

	
In this Agreement, the
  following capitalised terms have the following meanings: 

	
 

	
 

	
 

	
 

	
Agreement
  means this Gas
  Prepayment and Sale Agreement, as it may be amended from time to time; 

	
 

	
 

	
 

	
 

	
Business
  Day means any day on
  which registered banks are open for business in Wellington, New Zealand; 

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
2
  

	
 

	
 

	
 

	
 

	
Cheal Gas
  Field means the
  gas/condensate structure field located within PEP 38738 and currently
  accessed by the Cheal 1 and 2 wells and into which the Cheal 3 well is
  planned to be drilled; 

	
 

	
 

	
 

	
 

	
Cheal GSA means a gas sale agreement to be
  negotiated, between NGC and the Cheal JV Parties in relation to Gas purchased
  from the Cheal Gas Field on substantially similar terms to the Kahili GSA,
  but excluding all references in relation to the construction of the pipeline
  and treatment facility unless otherwise expressly agreed in writing, as the
  same may be varied from time to time, provided however, that nothing in this
  Agreement shall prevent the parties from entering into the Cheal GSA on terms
  different to the Kahili GSA, including in relation to each party’s liability
  under the Cheal GSA;

	
 

	
 

	
 

	
 

	
Cheal JV
  Parties means each
  of Rata Energy Limited at Wellington, Cheal Petroleum Limited at Katikati,
  and IRM, as holders of PEP 38738; 

	
 

	
 

	
 

	
 

	
Deed of
  Security means the
  deed of security to be entered into to secure the Prepayment to NGC in the
  form set out in the First Schedule, as the same may be varied from time to
  time; 

	
 

	
 

	
 

	
 

	
Encumbrance
  includes any
  mortgage, charge, pledge, lien, assignment by way of security, financial
  lease, hypothecation, retention of title by vendor or other security or
  adverse interest of any kind; 

	
 

	
 

	
 

	
 

	
Gas means IRM’s share of any and all natural
  gas and gas liquids, except for condensate and oil, extracted from the Gas
  Fields; 

	
 

	
 

	
 

	
 

	
Gas
  Fields means each of
  the Cheal Gas Field and the Kahili Gas Field;  

	
 

	
  

	
 

	
 Gas Price has the meaning set out in the Kahili GSA;  

	
 

	
  

	
 

	
 GJ means a
gigajoule of Gas;  

	
 

	
 

	
 

	
 

	
GSAs
  means the Kahili GSA and the Cheal GSA; 

	
 

	
 

	
 

	
 

	
Kahili
  GSA means the Gas
  Sale Agreement entered into, or to be entered into, between NGC and the
  Kahili JV Parties in relation to Gas purchased from the Kahili Gas Field, as
  the same may be varied from time to time; 

	
 

	
 

	
 

	
 

	
Kahili 1B
  Wellhead means the
  wellhead located at Kahili 1B wellsite in the Kahili Gas Field; 

	
 

	
 

	
 

	
 

	
Kahili 2
  Wellhead means the
  wellhead located at the wellsite to be chosen in the area of PEP 38736 in the
  Kahili Gas Field; 

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
3
  

	
 

	
 

	
 

	
 

	
Kahili
  Gas Field means the
  gas field located at Kahili, Taranaki, contained within PEP 38736; 

	
 

	
 

	
 

	
 

	
Kahili JV
  Parties means each
  of Tap (New Zealand) Pty Limited at Australia, Millenium Oil and Gas Limited
  at Wellington, Indo-Pacific Energy (NZ) Limited at Wellington and IRM, as
  holders of the total interest in PEP 38736 unless otherwise specified or
  required by the context; 

	
 

	
 

	
 

	
 

	
IRM
  Account means the
  bank account into which NGC will make payment to IRM; 

	
 

	
 

	
 

	
 

	
Parties means each of the parties to this Agreement
  and includes their respective successors and permitted assigns; 

	
 

	
 

	
 

	
 

	
PEP 38736 means the petroleum exploration permit
  number 38736 issued by the Ministry of Economic Development to IRM as to 25%,
  Tap (New Zealand) Pty Limited as to 30%, Millenium Oil and Gas Limited as to
  25% and Indo-Pacific Energy (NZ) Limited as to 20%, as such percentages may
  be varied from time to time and includes any Petroleum Mining Permit issued
  in respect of the Kahili Gas Field in substitution for PEP 38736 and the
  joint venture operating agreement for PEP 38736; 

	
 

	
 

	
 

	
 

	
PEP 38738 means the petroleum exploration permit
  number 38738 issued by the Ministry of Economic Development to IRM as to
  33.5%, Rata Energy Limited as to 33% and Cheal Petroleum Limited as to 33.5%,
  as such percentages may be varied from time to time and includes any
  Petroleum Mining Permit issued in respect of the Cheal Gas Field in
  substitution for PEP 38738 and the joint venture operating agreement for PEP
  38738; 

	
 

	
 

	
 

	
 

	
Petroleum
  Exploration Permit
  means a valid petroleum exploration permit issued by the Ministry of Economic
  Development and any petroleum mining permit issued in substitution therefor; 

	
 

	
 

	
 

	
 

	
PJ means a petajoule of Gas. 

	
 

	
 

	
 

	
 

	
P90 means, in relation to the estimated proven
  recoverable reserves of a gas field, that there is a 90 per cent probability
  that those proven recoverable reserves will be exceeded, as that standard is
  applied by the operator of the relevant Gas Field acting as a Reasonable and
  Prudent Operator; 

	
 

	
 

	
 

	
 

	
Prepayment means the sum of NZ$2.5 million (two
  million five hundred thousand New Zealand dollars) (plus GST, if any); 

	
 

	
 

	
 

	
 

	
Reasonable
  and Prudent Operator
  means a person seeking in good faith to perform its contractual obligations
  and in so doing and in the general conduct of its undertakings, exercising
  that degree of skill, diligence, prudence, efficiency 

	
 

	
 

	
GAS PREPAYMENT AND SALE AGREEMENT

	
4

	
 

	
 

	
 

	
 

	
and foresight which is
  equal to or better than that which would reasonably and ordinarily be
  expected from a skilled, efficient and experienced operator engaged in the
  same type of undertaking under the same or similar circumstances and conditions;
  

	
 

	
 

	
 

	
1.2

	
Construction
  

	
 

	
 

	
 

	
In the construction of this
  Agreement, unless the context requires otherwise: 

	
 

	
 

	
 

	
 

	
(a)

	
references to clauses are
  to the clauses of this Agreement; 

	
 

	
 

	
 

	
 

	
(b)

	
references to monetary
  amounts are to New Zealand dollars; 

	
 

	
 

	
 

	
 

	
(c)

	
references to any New
  Zealand statute is to that statute as it may be amended or re-enacted; 

	
 

	
 

	
 

	
 

	
(d)

	
the singular includes the
  plural and vice versa. 

	
 

	
 

	
 

	
2

	
PURPOSE 

	
 

	
 

	
 

	
The purpose of this legally
  binding Agreement is to document the agreements between the Parties in
  relation to NGC providing IRM with a certain amount of up-front funding, NGC
  taking a security interest over IRM’s interests in PEP 38736 and PEP 38738
  and IRM agreeing to sell to NGC Gas at the Purchase Price and otherwise on
  the terms and conditions set out in the GSAs and this Agreement. 

	
 

	
 

	
 

	
3

	
TERM 

	
 

	
 

	
 

	
 

	
This Agreement shall remain
  in force from the date of this Agreement, until terminated pursuant to clause 10. 

	
 

	
 

	
 

	
4

	
PREPAYMENT
  

	
 

	
 

	
 

	
4.1

	
Payment 

	
 

	
 

	
 

	
 

	
In consideration of IRM’s
  agreements as described in this Agreement, subject to the Kahili GSA having
  been entered into and executed by all relevant parties and upon presentation
  of a GST invoice, NGC shall pay IRM the Prepayment by deposit to the IRM
  Account. 

	
 

	
 

	
 

	
4.2

	
Application
  of Prepayment 

	
 

	
 

	
 

	
The Prepayment is to be
  applied towards meeting the development costs of the Cheal Gas Field and,
  following application to that purpose, costs associated with IRM’s other
  petroleum exploration and development activities in New Zealand, including
  but not limited to the drilling of additional targets in the PEP 38736, PEP
  38738 and other licences in which IRM holds a working interest within New
  Zealand along with any seismic work, reprocessing of existing data geological
  and 

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
5
  

	
 

	
 

	
 

	
 

	
geophysical work, “A &
  G” costs and any other costs directly associated in the exploration and
  development of the Permits. 

	
 

	
 

	
 

	
5

	
IRM’S
  OBLIGATIONS 

	
 

	
 

	
 

	
 

	
IRM shall: 

	
 

	
 

	
 

	
5.1

	
enter into, or shall have
  entered into, and execute the Kahili GSA and Deed of Security within five (5)
  days of signing this Agreement; 

	
 

	
 

	
 

	
 

	
5.2

	
as soon as reasonably
  practicable, drill further development wells at each of the Cheal Gas Field
  and the Kahili Gas Field and test the reserves of Gas contained in each of
  the Gas Fields; 

	
 

	
 

	
 

	
 

	
5.3 

	
consult and reasonably
  co-operate with NGC to agree the appropriate P90 estimate for each of the
  Cheal Gas Field and Kahili Gas Field including the provision of all relevant
  technical data and reports; 

	
 

	
 

	
 

	
 

	
5.4

	
use its best endeavours
  (including as a joint venture participant) to maximise the amount of Gas that
  is recovered from the Gas Fields, within the limitations of also maximising
  production of other hydrocarbons (oil/condensate), managing the reservoir
  according to good oil and gas field practice, and maximising economic return
  from each of the Gas Fields, in accordance with its joint venture and
  statutory obligations; and 

	
 

	
 

	
 

	
 

	
5.5

	
from time to time (and at
  least 6 monthly) give NGC notice of all discoveries of Gas to which IRM will
  or may have an entitlement from PEP 38736 and PEP 38738 or under any other
  New Zealand permit in which it has an interest, whether by way of joint
  venture or otherwise. Such notice will include details of any economically
  recoverable gas that becomes available for exploitation under any such
  permit. This notice will include information about amounts of gas available,
  quality of the gas and timing of availability. 

	
 

	
 

	
 

	
6

	
NGC’S
  ENTITLEMENT TO GAS 

	
 

	
 

	
 

	
 

	
In consideration for
  payment of the Prepayment: 

	
 

	
 

	
 

	
 

	
6.1

	
IRM grants NGC the
  exclusive right to purchase at the Gas Price from time to time any and all
  Gas to which IRM may become entitled under its interest in the Gas Fields; 

	
 

	
 

	
 

	
 

	
6.2

	
IRM will apply the Prepayment
  in satisfaction of payments for Gas to be made by NGC under the Kahili GSA
  (without payment of any further GST) (but less an amount of payment for Gas
  in each month equivalent to the 

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
6
  

	
 

	
 

	
 

	
 

	
 

	
portion payable by IRM of
  the Annual Fixed Fee (as such term is defined in the Kahili GSA) for that
  month) until such time as the total amount of such payments due from NGC
  under the Kahili GSA equates to the amount of the Prepayment, with monthly
  invoices rendered under the Kahili GSA effectively deducting an amount
  proportionate to IRM’s interest in the Kahili Gas Field. 

	
 

	
 

	
 

	
 

	
6.3

	
To the extent that the
  total amount of the payments made under the Kahili GSA is less than the
  Prepayment, IRM will then apply the Prepayment in satisfaction of payments
  for Gas to be made by NGC under the Cheal GSA (without payment of any further
  GST) until such time as the total amount of such payments due from NGC under
  the Cheal GSA equates to the amount of the Prepayment, with monthly invoices
  rendered under the Cheal GSA effectively deducting an amount proportionate to
  IRM’s interest in the Cheal Gas Field. 

	
 

	
 

	
 

	
7

	
DEED OF
  SECURITY 

	
 

	
 

	
 

	
7.1

	
Grant of
  security interest 

	
 

	
 

	
 

	
 

	
To secure IRM’s performance
  under this Agreement, IRM will grant to NGC in the form of the Deed of
  Security, for so long as NGC has been unable to access Gas to the full value
  of the Prepayment, a security interest registrable under the Personal
  Property Securities Act 1999 over its interest in the PEP 38736 and in the joint
  venture between the Kahili JV Parties and a security interest registrable
  under the Personal Property Securities Act 1999 over all of IRM’s right,
  title and interest in and to petroleum produced from the Cheal Gas Field to
  which IRM is entitled in accordance with PEP 38738 and the joint venture
  agreement between the Cheal JV Parties, and which is available to be
  delivered to or uplifted by IRM as its own property. 

	
 

	
 

	
 

	
8

	
OWNERSHIP
  OF INTEREST IN PEP 38736 AND PEP 38738 

	
 

	
 

	
 

	
 

	
Prior to IRM transferring
  its interest in either PEP 38736 or PEP 38738, either in full or in part, to
  any other party (the Other Party)
  IRM shall notify NGC of such proposed transfer and shall ensure that the
  Other Party enters into such deeds, agreements and arrangements as NGC may
  require, including in relation to the security interest and the GSAs, to
  ensure that the Other Party is required to, and is able to, perform any and
  all of IRM’s obligations owed to NGC in respect of the transferred interest
  and that NGC is in a position no worse than if such interest had never been
  transferred. IRM shall not be released from its obligations under this
  Agreement, the GSAs or the Deed of Security unless NGC reasonably considers
  that the Other Party is technically and financially capable of satisfying its
  obligations under such agreements. Any failure by IRM to comply with this
  clause shall result in the Deed of Security becoming immediately enforceable.
  

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
7
  

	
 

	
 

	
 

	
9

	
WARRANTIES
  AND REPRESENTATIONS 

	
 

	
 

	
 

	
9.1

	
Representations
  and Warranties 

	
 

	
 

	
 

	
 

	
Each of IRM and NGC hereby
  represents and warrants to each other that: 

	
 

	
 

	
 

	
 

	
(a)

	
it has the legal right and
  full corporate power and authority to enter into, and to perform its
  obligations under, this Agreement, the GSAs and the Deed of Security and has
  obtained all necessary approvals and consents to enable it to do so; 

	
 

	
 

	
 

	
 

	
(b)

	
this Agreement has been
  properly authorised and executed by it and constitutes its legal, valid and
  binding obligations enforceable against it in accordance with its terms; and 

	
 

	
 

	
 

	
 

	
(c)

	
its entry into and
  performance of this Agreement, the GSAs and the Deed of Security does not
  constitute a breach of any law, obligation (including any statutory,
  contractual or fiduciary obligation), or default under any agreement or
  undertaking, by which it is bound. 

	
 

	
 

	
 

	
9.2

	
IRM’s
  Warranties 

	
 

	
 

	
 

	
 

	
IRM further represents and
  warrants to NGC on a continuing basis that: 

	
 

	
 

	
 

	
 

	
(a)

	
IRM is a company
  incorporated in Malaysia that holds valid interests in PEP 38736 and PEP
  38738 and is a joint venture participant in respect of those permits; 

	
 

	
 

	
 

	
 

	
(b)

	
it is the exclusive holder
  of that percentage of the interest in PEP 38736 and PEP 38738 as specified in
  the definition of PEP 38736 and PEP 38738, respectively, in clause 1.1, and
  that no other party has any right to control that interest; 

	
 

	
 

	
 

	
 

	
(c)

	
it has full power and
  authority to grant a valid and registrable security interest under the Deed
  of Security; 

	
 

	
 

	
 

	
 

	
(d)

	
there are no Encumbrances
  over its interest in PEP 38736 and PEP 38738 other than that created by this
  Agreement and the Deed of Security and normal joint operating agreement
  authorities for expenditure from time to time to explore and maintain PEP
  38736 and PEP 38738 are in good stead; 

	
 

	
 

	
 

	
 

	
(e)

	
it has and will maintain
  all permits, consents, authorisations and approvals necessary to perform its
  obligations under this Agreement, the GSAs and the Deed of Security. 

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
8
  

	
 

	
 

	
 

	
 

	
10

	
TERMINATION
  

	
 

	
 

	
 

	
 

	
10.1

	
Insolvency
  Events 

	
 

	
 

	
 

	
 

	
(a)

	
Either Party may terminate
  this Agreement if: 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
a meeting has been convened
  or resolution proposed, or petition presented, and an order has been made,
  for the liquidation of the other party (Defaulting
  Party); 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
a voluntary arrangement has
  been proposed or reached with any creditor of the Defaulting Party; 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
a receiver, receiver and
  manager, provisional liquidator, liquidator, administrator or other officer
  of the court has been appointed in relation to the Defaulting Party; or 

	
 

	
 

	
 

	
 

	
 

	
(iv)

	
the Defaulting Party is
  aware of any circumstances which could reasonably be expected to give rise to
  any such event. 

	
 

	
 

	
 

	
 

	
10.2

	
NGC’s
  termination rights 

	
 

	
 

	
 

	
 

	
(a)

	
NGC may terminate this
  Agreement immediately upon written notice if: 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Material
  Breach: IRM has, by
  its act or omission, caused a material breach of this Agreement which has not
  been remedied within 21 days of written notice from NGC that such material
  breach has occurred; 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Change of
  Control: There is
  any change in the effective control of IRM through a change in either: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(A)

	
IRM’s equity ownership of
  greater than 25%; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(B)

	
any change in the control
  of its Board; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
(C)

	
a reduction in the value of
  the assets of IRM by 25% from the value of the assets that IRM may hold at
  any time, save that such reduction shall not include a reduction in the value
  of assets as a result of the sale of Gas in accordance with the GSAs 

	
 

	
 

	
 

	
 

	
 

	
 

	
in which case IRM shall
  notify NGC promptly if any such change in control occurs; or 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
the Kahili GSA and/or the
  Cheal GSA is terminated for any reason. 

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
9
  

	
 

	
 

	
10.3

	
Consequence
  of Termination 

	
 

	
 

	
 

	
If this Agreement is
  terminated pursuant to clauses 10.1 or
  10.2, then to the extent that NGC has been unable to access Gas to
  the full value of the Prepayment, the outstanding amount of the Prepayment
  will be refundable in full to NGC (without interest on such amount until
  fourteen days after the date of termination, and if such amount is still
  unpaid thereafter at the Default Rate, as such term is defined in the GSAs)
  immediately upon demand. 

	
 

	
 

	
11

	
NGC MAY
  NOMINATE SUBSIDIARY OR RELATED COMPANY 

	
 

	
 

	
 

	
Upon written notice to IRM,
  NGC may transfer all its rights and obligations under this Agreement and/or
  the GSAs to a wholly-owned subsidiary or a related company of NGC and IRM
  hereby consents to such transfer. If any such assignment occurs, NGC shall
  remain liable for the performance of this Agreement as fully as if it
  remained a party. 

	
 

	
 

	
12

	
MISCELLANEOUS
  PROVISIONS 

	
 

	
 

	
12.1

	
Confidentiality
  

	
 

	
 

	
 

	
Each Party shall keep this
  Agreement, its contents and any matter in relation to this Agreement strictly
  confidential and agrees not to make any public disclosure about them except
  to the extent required by law, court order, the rules of any applicable stock
  exchange, the filing or registration of any document, information, statement
  in relation to the Personal Property Securities Act 1999 or in the event that
  an Enforcement Event (as such term is defined in the Deed of Security) occurs
  or is likely to occur. 

	
 

	
 

	
12.2

	
No
  Partnership 

	
 

	
 

	
 

	
Nothing in this Agreement
  or in the relationship between the Parties is to be construed in any sense as
  creating any partnership between NGC and IRM. 

	
 

	
 

	
12.3

	
Amendments
  

	
 

	
 

	
 

	
No amendment to this
  Agreement is to be effective unless it is in writing and signed by NGC and
  IRM. 

	
 

	
 

	
12.4

	
Notices 

	
 

	
 

	
(a)

	
Each notice or other
  communication under this Agreement is to be in writing, is to be made by
  facsimile or hand delivery to the addressee at the facsimile number or
  address, as appropriate, and is to be marked for the attention of the person
  or office holder (if any) from time to time designated for the purpose by the
  addressee to the other Party. 

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
10

	
 

	
 

	
 

	
(b)

	
The initial designated
  addresses and contact details of the Parties are as follows: 

	
 

	
 

	
 

	
 

	
IRM

	
 

	
 

	
 

	
 

	
4 Adina Road 

	
 

	
City Beach

	
 

	
WA 6015

	
 

	
 

	
 

	
 

	
Facsimile No: +61 8 9385 7349
  

	
 

	
 

	
 

	
 

	
Attention: James
  Zadko/Derek Willshee 

	
 

	
 

	
 

	
 

	
NGC 

	
 

	
 

	
 

	
The NGC Building 

	
 

	
44 The Terrace 

	
 

	
Wellington 

	
 

	
 

	
 

	
 

	
Facsimile No: +64 4 462
  8600 

	
 

	
 

	
 

	
 

	
Attention: Company
  Secretary 

	
 

	
 

	
 

	
(c)

	
No communication is to be
  effective until received. A communication is to be deemed to be received by
  the addressee: 

	
 

	
 

	
 

	
 

	
(i)

	
in the case of a facsimile,
  on the Business Day on which it is sent or, if sent after 5 pm (in the place
  of receipt) on a Business Day or, if sent on a non-Business Day, on the next
  Business Day after the date of sending; and

	
 

	
 

	
 

	
 

	
(ii)

	
in the case of personal
  delivery, when delivered. 

	
 

	
 

	
 

	
12.5

	
No
  Assignment 

	
 

	
 

	
 

	
 

	
Subject to clause 11, unless agreed to in writing
  by both parties, no Party may assign or transfer any of its rights or obligations
  under this Agreement. 

	
 

	
 

	
 

	
12.6

	
Governing
  Law 

	
 

	
 

	
 

	
 

	
This Agreement shall be
  governed by and construed in accordance with New Zealand law and the Parties
  irrevocably and unconditionally submit to the non-exclusive jurisdiction of
  the courts of New Zealand. 

	
 

	
 

	
 

	
12.7

	
Determination
  of unresolved terms 

	
 

	
 

	
 

	
 

	
The Parties agree to enter
  into such further agreements, instruments or other arrangements as may be
  necessary to give effect to this Agreement. Any unresolved terms may be
  referred by either party to an independent expert or arbitrator for binding
  decision, to be identified and agreed upon prior to negotiations commencing
  and, in the absence of agreement, to be nominated at 

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
11

	
 

	
 

	
 

	
 

	
either Party’s request by
  the president for the time being of the New Zealand Law Society. 

	
 

	
 

	
 

	
12.8

	
Counterparts
  

	
 

	
 

	
 

	
(a)

	
This Agreement may be
  executed in any number of counterparts each of which is to be deemed an
  original, but all of which together are to constitute a single instrument. 

	
 

	
 

	
 

	
(b)

	
This Agreement may be
  executed on the basis of an exchange of facsimile copies and execution of
  this Agreement by such means is to be a valid and sufficient execution.

	
 

	
 

	
 

	
13

	
BOARD
  APPROVAL 

	
 

	
 

	
 

	
 

	
This Agreement is subject
  to and conditional upon the approval of NGC’s Board of Directors. 

	
 

	
 

	
 

	
14

	
SERVICE OF
  PROCESS

	
 

	
 

	
 

	
 

	
Without prejudice to any
  other mode of service allowed under any relevant law, IRM: 

	
 

	
 

	
 

	
 

	
(a)

	
irrevocably appoints James
  Zadko and/or Derek Wilshee at his address at: 

	
 

	
 

	
 

	
 

	
 

	
4 Adina Road 

	
 

	
 

	
City Beach 

	
 

	
 

	
WA 6015 

	
 

	
 

	
Western Australia 

	
 

	
 

	
 

	
 

	
 

	
as its agent for service of
  process in relation to any proceedings before the New Zealand courts in
  connection with this Agreement; and 

	
 

	
 

	
 

	
 

	
(b)

	
agrees that the service of
  any process, summons, notice or document by delivery to the abovementioned
  address of its process agent shall be effective service of process for any
  proceeding brought against IRM in a New Zealand Court. 

	
 

	
 

	
GAS PREPAYMENT AND SALE
  AGREEMENT

	
12

EXECUTED by the Parties on the date appearing at the top of page 1. 

International Resource Management

Corporation by:

	
 

	
 

	 

	
 

	
Director 

	
 

	
 

	
 

	
 

	 

	
 

	
Director 

	
 

	
 

	
 

	
NGC New
  Zealand Limited by:

	
 

	
 

	
 

	
 

	 

	
 

	
Director 

	
 

	
 

	
 

	
 

	 

	
 

	
Director

	
 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT - FIRST SCHEDULE (DEED OF SECURITY)

	
13

FIRST SCHEDULE

DEED OF SECURITY

	
 

	
 

	 

	
 

	
Deed of Security in PEP
  38736 and IRM’s Cheal Petroleum Entitlement 

	
 

	 

	
 

	
 

	
International Resource
  Management Corporation (IRM) 

	
 

	
 

	
 

	
NGC New Zealand Limited
  (NGC)

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
14

TABLE OF
CONTENTS

	
 

	
 

	
 

	
PART 1:
  INTERPRETATION

	
18

	
 

	
 

	
 

	
1

	
INTERPRETATION

	
18

	
1.1

	
Defined Terms

	
18

	
1.2

	
Construction

	
21

	
1.3

	
PPSA terms incorporated

	
22

	
 

	
 

	
 

	
PART 2:
  NATURE OF SECURITY

	
22

	
 

	
 

	
 

	
2

	
NATURE OF
  SECURITY

	
22

	
2.1

	
Security Interest

	
22

	
2.2

	
Charge

	
23

	
2.3

	
Crystallisation of floating
  charge

	
23

	
2.4

	
Conditions of Security
  Interest

	
23

	
 

	
 

	
 

	
3

	
PRIORITY
  OF SECURITY

	
24

	
 

	
 

	
 

	
PART 3:
  IRM’S OBLIGATIONS

	
24

	
 

	
 

	
 

	
4

	
PERFORMANCE

	
24

	
4.1

	
Performance of Secured
  Obligations

	
24

	
 

	
 

	
 

	
5

	
NGC ACTION
  TO PROTECT ITS SECURITY

	
24

	
 

	
 

	
 

	
6

	
COSTS

	
24

	
 

	
 

	
 

	
7

	
REPRESENTATIONS,
  WARRANTIES AND UNDERTAKINGS

	
24

	
7.1

	
Representations, Warranties
  and Undertakings

	
24

	
7.2

	
Repetition of
  Representations, Warranties and Undertakings

	
24

	
7.3

	
Reliance on
  Representations, Warranties and Undertakings

	
24

	
 

	
 

	
 

	
PART 4:
  ENFORCEMENT

	
25

	
 

	
 

	
 

	
8

	
CONSEQUENCES
  OF ENFORCEMENT EVENT OCCURRING

	
25

	
8.1

	
Termination of NGC’s
  Obligations

	
25

	
8.2

	
Security Enforceable

	
25

	
8.3

	
Appoint Receiver

	
25

	
8.4

	
NGC’s Rights Exercisable

	
25

	
8.5

	
PPSA

	
25

	
8.6

	
Other Rights

	
26

	
 

	
 

	
 

	
9

	
RECEIVER

	
26

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
15

	
 

	
 

	
 

	
9.1

	
Appointment of Receiver

	
26

	
9.2

	
Capacity to Act as a
  Receiver

	
26

	
9.3

	
Additional Powers in
  respect of Receiver

	
26

	
9.4

	
Remuneration

	
26

	
9.5

	
Receiver Agent of IRM

	
26

	
9.6

	
Appointment of Receiver
  After Commencement of Dissolution

	
26

	
9.7

	
Receiver’s Powers

	
27

	
9.8

	
Exercise of the Receiver’s
  Powers

	
27

	
9.9

	
Withdrawal

	
27

	
 

	
 

	
 

	
10

	
PROCEEDS
  OF ENFORCEMENT

	
27

	
10.1

	
Sequence of Application

	
27

	
 

	
 

	
 

	
11

	
PROTECTION
  OF NGC AND RECEIVER IN RESPECT OF ENFORCEMENT

	
28

	
11.1

	
No Liability or Obligation

	
28

	
 

	
 

	
 

	
12

	
NO
  MARSHALLING

	
28

	
 

	
 

	
 

	
13

	
PROTECTION
  OF THIRD PARTIES

	
28

	
13.1

	
No Enquiry

	
28

	
13.2

	
Impropriety or Irregularity

	
28

	
 

	
 

	
 

	
PART 5:
  GENERAL SECURITY, PAYMENT AND INDEMNITY PROVISIONS

	
29

	
 

	
 

	
 

	
14

	
GENERAL
  SECURITY PROVISIONS

	
29

	
14.1

	
Security Continuing and
  Independent

	
29

	
14.2

	
Further Assurances

	
29

	
14.3

	
Power of Attorney

	
29

	
14.4

	
Partial Release of Security

	
30

	
14.5

	
Unconditional Release of
  Security

	
30

	
14.6

	
Right to redeem

	
30

	
14.7

	
Default by NGC

	
31

	
 

	
 

	
 

	
15

	
GENERAL
  EXPENSES AND INDEMNITY PROVISIONS

	
31

	
15.1

	
Liability for Expenses

	
31

	
15.2

	
Indemnification and
  Reimbursement

	
31

	
15.3

	
Survival of Indemnities

	
32

	
 

	
 

	
 

	
PART 5:
  MISCELLANEOUS

	
32

	
 

	
 

	
 

	
16

	
MISCELLANEOUS
  PROVISIONS

	
32

	
16.1

	
Amendments

	
32

	
16.2

	
Assignments

	
32

	
16.3

	
Authorised Delegate

	
32

	
16.4

	
Communications

	
32

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
16

	
 

	
 

	
 

	
16.5

	
Contracts (Privity) Act
  1982

	
33

	
16.6

	
Counterparts

	
33

	
16.7

	
Governing Law and Jurisdiction

	
33

	
16.8

	
No Reliance

	
34

	
16.9

	
Partial Invalidity

	
34

	
16.10

	
Powers

	
34

	
16.11

	
Survival of Obligations

	
34

	
16.12

	
Service of Process

	
34

	
 

	
 

	
 

	
SCHEDULE
  1: REPRESENTATIONS AND WARRANTIES

	
36

	
1

	
Status

	
36

	
2

	
Powers

	
36

	
3

	
Corporate Action,
  Authorisation and Consents

	
36

	
4

	
Obligations Binding

	
36

	
5

	
Non-Contravention

	
36

	
6

	
No Default

	
37

	
7

	
No Enforcement Event

	
37

	
8

	
Solvency

	
37

	
9

	
Participating Interest

	
37

	
10

	
No Litigation

	
37

	
 

	
 

	
 

	
SCHEDULE
  2: UNDERTAKINGS

	
38

	
1

	
Approvals under Kahili JVOA
  and Cheal JVOA

	
38

	
2

	
Negative Pledge

	
38

	
3

	
Non-disposal of the
  Participating Interest

	
38

	
4

	
Maintain and Preserve the
  Participating Interest and Company

	
38

	
5

	
Preservation and Protection
  of the Participating Interest

	
38

	
6

	
Name Change

	
38

	
7

	
Authorisations

	
38

	
8

	
Compliance with Obligations

	
38

	
9

	
Compliance with Kahili JVOA
  and Cheal JVOA

	
38

	
10

	
Compliance with Law

	
39

	
11

	
Maintenance of Corporate
  Existence

	
39

	
12

	
Conduct of Business

	
39

	
13

	
Notify Enforcement Events

	
39

	
Material Events

	
39

	
 

	
 

	
 

	
SCHEDULE
  3: ENFORCEMENT EVENTS

	
40

	
1

	
Breach or Non-Compliance
  with Secured Obligations under this Deed

	
40

	
2

	
Breach of Representation,
  Warranty, Undertaking or Statement

	
40

	
3

	
Vitiation of the Deed

	
40

	
4

	
Withdrawal of Consent
  affecting this Deed

	
40

	
5

	
Security Enforceable

	
40

	
6

	
Material Adverse Change

	
40

	
7

	
Cessation or Disposal of
  Business

	
40

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
17

	
 

	
 

	
 

	
8

	
Dissolution

	
40

	
9

	
Insolvency: Compositions

	
41

	
10

	
Statutory Management

	
41

	
 

	
 

	
 

	
SCHEDULE
  4: RECEIVER’S POWERS

	
42

	
1

	
Take Possession

	
42

	
2

	
Deal with Participating
  Interest

	
42

	
3

	
Disposal of Collateral

	
42

	
4

	
Execution of Documents

	
42

	
5

	
Variation or Termination

	
42

	
6

	
General Power

	
42

	
7

	
Exercise Powers

	
42

	
8

	
Appoint Agents

	
42

	
9

	
Delegate

	
43

	
10

	
Proceedings or Disputes

	
43

	
11

	
Retention of Moneys

	
43

	
12

	
Incidental Powers

	
43

	
 

	
 

	
 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
18

Date:

PARTIES 

International Resource Management Corporation, a company incorporated and existing under
the laws of Malaysia, registered with the Labuan Offshore Financial Services
Authority, company number LL03556, whose registered office is at Level 14D,
Financial Park, Labuan, Jalan Merdeka 8700 Labuan FT, Malaysia (IRM) 

NGC New Zealand Limited at Wellington (NGC) 

BY THIS DEED the parties agree as follows: 

PART 1: INTERPRETATION 

	
 

	
 

	
1

	
INTERPRETATION
  

	
 

	
 

	
1.1

	
Defined
  Terms 

	
 

	
 

	
 

	
In this Deed, the following
  capitalised terms have the following meanings unless the context otherwise
  requires: 

	
 

	
 

	
 

	
Cheal
  JVOA means the joint
  venture operating agreement dated 16 December 2002 between the Cheal JV Parties,
  as in existence at the date of this Deed; 

	
 

	
 

	
 

	
Cheal JV
  Parties means each
  of Rata Energy Limited at Wellington, Cheal Petroleum Limited at Katikati,
  and IRM, as holders of PEP 38738 as they may be from time to time; 

	
 

	
 

	
 

	
Companies
  Act means the
  Companies Act 1993; 

	
 

	
 

	
 

	
Deed means this Deed of Security in PEP 38736
  and IRM’s Cheal Petroleum Entitlement, as the same may be amended from time
  to time; 

	
 

	
 

	
 

	
Dollars and
  $means New Zealand dollars; 

	
 

	
 

	
 

	
Enforcement
  Event means any of
  the events specified in Schedule 3;
  

	
 

	
 

	
 

	
GPSA means the Gas Prepayment and Sale Agreement
  to be entered into on or about the date of this Deed by IRM and NGC, as the
  same may be amended from time to time; 

	
 

	
 

	
 

	
GSA means the Gas Sale Agreement between the
  Kahili JV Parties and NGC entered into and executed on or around the date of
  this Deed; 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
19

	
 

	
 

	
 

	
IRM’s
  Cheal Petroleum Entitlement means all of IRM’s right, title and interest in and to petroleum (as
  “petroleum” is defined in the Crown Minerals Act 1991) produced from the
  Cheal Gas Field, to which IRM is entitled in accordance with PEP 38738 and
  the Cheal JVOA, and which is available to be delivered to or uplifted by IRM
  as its own property, whether in existence as at the date of this Deed or
  arising or accruing in the future; 

	
 

	
 

	
 

	
Kahili
  Joint Venture means
  the joint venture currently between the Kahili JV Parties constituted by the
  Kahili Joint Venture Operating Agreement ; 

	
 

	
 

	
 

	
Kahili JV
  Parties means each
  of Tap (New Zealand) Pty Limited at Australia, Millenium Oil and Gas Limited
  at Wellington, Indo-Pacific Energy (NZ) Limited at Wellington and IRM, as
  holders of the total interest in PEP 38736, unless otherwise specified or
  required by the context; 

	
 

	
 

	
 

	
Kahili
  JVOA means the Joint
  Venture Operating Agreement dated 16 December 2002 between the Kahili JV
  Parties in relation to PEP 38736, as in existence at the date of this Deed. 

	
 

	
 

	
 

	
Other
  Property means all
  of IRM’s present and future right, title and interest in, the Participating
  Interest, other than any personal property to which the PPSA applies; 

	
 

	
 

	
 

	
Participating
  Interest means: 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
IRM’s Cheal Petroleum
  Entitlement; and 

	
 

	
 

	
 

	
 

	
(b)

	
the following obligations,
  benefits and rights of IRM, expressed as a percentage of, and determined in
  accordance with, the Kahili JVOA, whether in existence as at the date of this
  Deed or arising or accruing in the future: 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
the ownership as a tenant
  in common of an individual share of that percentage of the interest in PEP
  38736 (as defined in the definition of PEP 38736); 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
the ownership of, and the
  right and benefit as a tenant in common to receive in kind and to dispose of
  for its own account, its share of the Petroleum (as defined in the Crown
  Minerals Act 1991) which is produced from PEP 38736; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
the beneficial ownership as
  a tenant in common of an individual share of that percentage of all Joint
  Property (as defined in the Kahili JVOA); 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
20

	
 

	
 

	
 

	
including in each case any
  present and future rights and proceeds in relation to such participating
  interest and any reference to the Participating
  Interest is a reference to the Participating
  Interest as it exists at the relevant time;

	
 

	
 

	
 

	
PEP 38736 means the petroleum exploration permit
  number 38736 issued by the Ministry of Economic Development to IRM, as to
  25%, and Tap (New Zealand) Pty Limited as to 30%, Millenium Oil and Gas
  Limited as to 25% and Indo-Pacific Energy (NZ) Limited as to 20%, as such percentages
  may vary from time to time as permitted by the GPSA and includes any
  petroleum mining permit issued in respect of the Kahili Gas Field in
  substitution for PEP 38736 and the joint venture operating agreement for PEP
  38736; 

	
 

	
 

	
 

	
PEP 38738
  means the petroleum
  exploration permit number 38738 issued by the Ministry of Economic
  Development to IRM as to 33%, Rata Energy Limited as to 33.5% and Cheal
  Petroleum Limited as to 33.5%, as such percentages may be varied from time to
  time and includes any petroleum mining permit issued in respect of the Cheal
  Gas Field in substitution for PEP 38738 and the joint venture operating
  agreement for PEP 38738; 

	
 

	
 

	
 

	
Potential
  Enforcement Event
  means any event or circumstance which, with the giving of notice, lapse of time,
  or fulfilment of any other requirement, would constitute an Enforcement
  Event; 

	
 

	
 

	
 

	
PPSA means the Personal Property Securities Act
  1999; 

	
 

	
 

	
 

	
Prepayment
  means the fee to be
  paid by NGC to IRM as provided for in the GPSA; 

	
 

	
 

	
 

	
Receiver means a receiver, or a manager, or receiver
  and manager, of all or any part of the Participating Interest appointed by
  NGC under this Deed; 

	
 

	
 

	
 

	
Related
  Company means, in
  relation to IRM, any other company (i) to which IRM is related within the
  meaning of sections 2(3) and 2(4) of the Companies Act; or (ii) which under
  any New Zealand Generally Accepted Accounting Practice from time to time
  approved by the Institute of Chartered Accountants of New Zealand is
  considered to be a related party of IRM; 

	
 

	
 

	
 

	
Secured
  Obligations means
  all present and future obligations of IRM (whether alone or with any other
  person and in any capacity) under this Deed, the GPSA and the GSA. 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
21

	
 

	
 

	
 

	
 

	
1.2

	
Construction
  

	
 

	
 

	
 

	
 

	
In the construction of this
  Deed: 

	
 

	
 

	
 

	
(a)

	
Headings,
  italics and bold text are for convenience only, and
  do not affect interpretation; 

	
 

	
 

	
 

	
 

	
(b)

	
The singular includes the plural and vice
  versa; 

	
 

	
 

	
 

	
 

	
(c)

	
A gender includes all genders; 

	
 

	
 

	
 

	
 

	
(d)

	
A part or any
  includes the whole or all, and the converse; 

	
 

	
 

	
 

	
 

	
(e)

	
Where a word or phrase is defined, its other
  grammatical forms have a corresponding meaning; 

	
 

	
 

	
 

	
 

	
(f)

	
A reference to: 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
this deed
  includes the
  Schedules; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
a
  Schedule is to a
  schedule to this Deed; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
a clause is to a clause of this Deed, and
  where such a reference appears in a Schedule it is a reference to a clause in
  that Schedule; 

	
 

	
 

	
 

	
 

	
 

	
(g)

	
A reference to a party to, or beneficiary under, this
  Deed or any other agreement or document includes that party’s successors and
  permitted substitutes and assigns; 

	
 

	
 

	
 

	
 

	
(h)

	
A reference to a person, company, trust, partnership,
  unincorporated body or other entity includes any of the foregoing, in each
  case whether or not having legal personality; 

	
 

	
 

	
 

	
 

	
(i)

	
A reference to an agreement or document is to the
  agreement or document as amended, novated, supplemented or replaced from time
  to time, except to the extent prohibited by this Deed; 

	
 

	
 

	
 

	
 

	
(j)

	
A reference to a business
  day is to a day on which registered banks are open for business in
  Wellington; 

	
 

	
 

	
 

	
 

	
(k)

	
A reference to legislation or to a provision of
  legislation includes a modification or re-enactment of it, a legislative
  provision substituted for it and a regulation or statutory instrument issued
  under it; 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
22

	
 

	
 

	
 

	
 

	
 

	
(l)

	
A reference to a right or power or remedy includes
  all or any of the foregoing, and all rights, powers and remedies under this
  Deed are in addition to those granted by law; 

	
 

	
 

	
 

	
 

	
(m)

	
A reference to security includes: 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
any mortgage, charge,
  encumbrance, lien, pledge, finance lease, sale (or lease) and lease-back,
  sale and repurchase, assignment by way of security, title retention
  arrangement or similar interest imposed by statute, or other arrangement of
  any nature having similar economic effect to any of the foregoing; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
any present or future right
  or interest in personal property that is a security interest for the purposes
  of the PPSA (other than such a security interest referred to in section
  17(1)(b) of the PPSA and not included in paragraph (a) of this definition); 

	
 

	
 

	
 

	
 

	
 

	
(n)

	
Specific inclusions, or
  inclusions by way of example, are to be construed as being without limitation; 

	
 

	
 

	
 

	
 

	
(o)

	
Anything which may be done
  at any time may also be done from time to
  time; 

	
 

	
 

	
 

	
 

	
(p)

	
Time is of the essence, and references to time
  are to New Zealand time; 

	
 

	
 

	
 

	
 

	
(q)

	
A contingent liability includes a
  liability for which a person may become actually or contingently liable if a
  contingency occurs, whether or not that liability will actually arise. 

	
 

	
 

	
 

	
1.3

	
PPSA terms
  incorporated 

	
 

	
 

	
 

	
 

	
In this Deed, unless the
  context requires otherwise, the following words and expressions (and
  grammatical variations of them) have the same meanings as are given to them
  in the PPSA: at risk, financing statement,
  inventory, personal property, proceeds, security interest and verification statement. 

	
 

	
 

	
PART 2:
  NATURE OF SECURITY 

	
 

	
2

	
NATURE OF
  SECURITY 

	
 

	
 

	
2.1

	
Security
  Interest 

	
 

	
 

	
 

	
IRM, as the holder of a 25%
  participating interest in PEP 38736 and a 33% participating interest, in PEP
  38738, hereby grants a security interest in relation to all of its right,
  title and interest in and to the Participating Interest in favour of NGC as security
  for the performance of and compliance with the Secured Obligations. 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
23

	
 

	
 

	
 

	
2.2

	
Charge 

	
 

	
 

	
 

	
Without limiting paragraph
  2.1, IRM as the holder of a 25% participating interest in PEP 38736 and a 33%
  participating interest in PEP 38738, hereby charges all its right, title and
  interest in and to the Participating Interest to the extent it is not
  personal property for the purposes of the PPSA, to NGC as further security
  for the performance of and compliance with the Secured Obligations. The
  charge contained in this paragraph is a fixed charge on the Participating
  Interest to the extent it is not personal property for the purposes of the
  PPSA. However, if that charge is not legally and fully effective as a fixed charge
  then, for so long as and to the extent it may not be so legally and fully
  effective, that charge is a floating charge until such time as it becomes a
  fixed charge by virtue of clause 2.3. 

	
 

	
 

	
2.3

	
Crystallisation
  of floating charge 

	
 

	
 

	
 

	
Any floating charge created
  under this document will become a fixed charge: 

	
 

	
 

	
 

	
(a)

	
Without
  notice:
  automatically, without the need for any notice or action by NGC, immediately
  prior to or, if that would not result in the fixed charge being legally and fully effective, contemporaneously with,
  the occurrence of any Enforcement Event; or 

	
 

	
 

	
 

	
 

	
(b)

	
With
  notice: upon notice
  from NGC to IRM, in respect of such of the Other Property subject to that
  floating charge as is specified in the notice, if, in the opinion of NGC, any
  of that Other Property is or might be or become seized or taken, subject to
  any security, or otherwise in jeopardy. 

	
 

	
 

	
 

	
2.4

	
Conditions
  of Security Interest 

	
 

	
 

	
 

	
The security interest
  created by this Deed is subject to the following conditions: 

	
 

	
 

	
 

	
(a)

	
the rights conferred by
  this Deed shall be subordinate to the respective rights and interests of the
  parties to the Kahili JVOA other than those of IRM; 

	
 

	
 

	
 

	
 

	
(b)

	
the rights conferred by
  this Deed shall in no way affect the participating interests of the parties
  to the Kahili JVOA other than that of IRM; 

	
 

	
 

	
 

	
 

	
(c)

	
the exercise or enforcement
  of any power of sale or administration or other power or right contained in
  this Deed shall be subject to the provisions of the Kahili JVOA in so far as
  they apply for the benefit of parties other than IRM, and in particular (but
  without limitation) NGC agrees to abide by the confidentiality provisions of
  the Kahili JVOA, and keep all information received from IRM under this Deed
  confidential. 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
24

	
 

	
 

	
3

	
PRIORITY
  OF SECURITY 

	
 

	
 

	
 

	
Except to the extent agreed
  otherwise by NGC in writing, the security and the charge created by this Deed
  with IRM is intended to be a first ranking security, with priority in point
  of both security and payment over all other securities whatsoever created
  over the Participating Interest. 

	
 

	
 

	
PART 3:
  IRM’S OBLIGATIONS 

	
 

	
4

	
PERFORMANCE
  

	
 

	
 

	
4.1

	
Performance
  of Secured Obligations 

	
 

	
 

	
 

	
IRM agrees that it will
  perform and comply with all the Secured Obligations in accordance with this
  Deed. 

	
 

	
 

	
5

	
NGC ACTION
  TO PROTECT ITS SECURITY 

	
 

	
 

	
 

	
If IRM fails to perform or
  comply with any Secured Obligation, including because of any failure by IRM
  under the GPSA or GSA, NGC will be entitled to take any action whatsoever to
  remedy that failure or to protect the security created by this Deed. Such
  entitlement is without prejudice to NGC’s other rights and does not create
  (i) any obligation upon NGC to take any such action or (ii) any liability
  upon NGC for any total or partial failure to take such action. 

	
 

	
 

	
6

	
COSTS 

	
 

	
 

	
 

	
All costs and expenses
  incurred in relation to the creation or release of the rights conferred by
  this Deed shall be paid by IRM if IRM has caused an Enforcement Event to
  occur. 

	
 

	
 

	
7

	
REPRESENTATIONS,
  WARRANTIES AND UNDERTAKINGS 

	
 

	
 

	
7.1

	
Representations,
  Warranties and Undertakings 

	
 

	
 

	
 

	
IRM makes the
  representations and warranties set out in Schedule
  1 and gives the undertakings set out in Schedule 2. 

	
 

	
 

	
7.2

	
Repetition
  of Representations, Warranties and Undertakings 

	
 

	
 

	
 

	
Each of the representations
  and warranties made, and each of the undertakings given, by IRM will be
  deemed to be repeated by IRM continuously whilst this Deed remains in effect,
  by reference to the facts and circumstances then existing. 

	
 

	
 

	
7.3

	
Reliance
  on Representations, Warranties and Undertakings 

	
 

	
 

	
 

	
IRM acknowledges that NGC
  relies on the representations and warranties made, and the undertakings
  given, by IRM. 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
25

	
 

	
 

	
 

	
 

	
PART 4: ENFORCEMENT
  

	
 

	
 

	
 

	
 

	
8

	
CONSEQUENCES
  OF ENFORCEMENT EVENT OCCURRING 

	
 

	
 

	
 

	
 

	
 

	
Whenever any Enforcement
  Event occurs, whether or not that occurrence is within or beyond the control
  of any party: 

	
 

	
 

	
 

	
 

	
 

	
8.1

	
Termination
  of NGC’s Obligations 

	
 

	
 

	
 

	
 

	
 

	
 

	
NGC may upon notice to IRM
  terminate all or any obligations of NGC under the GPSA and/or the GSA, as
  appropriate;

	
 

	
 

	
 

	
 

	
 

	
8.2

	
Security
  Enforceable 

	
 

	
 

	
 

	
 

	
 

	
 

	
The security created by
  this Deed will, without notice, become immediately enforceable;

	
 

	
 

	
 

	
 

	
 

	
8.3

	
Appoint
  Receiver 

	
 

	
 

	
 

	
 

	
 

	
 

	
NGC may immediately appoint
  any Receiver pursuant to clause 9.1;

	
 

	
 

	
 

	
 

	
 

	
8.4

	
NGC’s
  Rights Exercisable 

	
 

	
 

	
 

	
 

	
 

	
 

	
NGC may, without notice,
  whether or not a Receiver has been appointed, immediately exercise all or any
  rights which (i) are provided by law or in this Deed, or (ii) are specified
  in Schedule 4 (as if references
  to the Receiver were references to NGC), subject only to any restrictions of
  the Kahili JVOA existing as at the date of this Deed in so far as they apply
  for the benefit of parties other than IRM.

	
 

	
 

	
 

	
 

	
 

	
8.5

	
PPSA 

	
 

	
 

	
 

	
 

	
 

	
 

	
NGC and IRM contract out
  of:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
section 109(1) of the
  Personal Property Securities Act 1999 (the PPSA)
  but only if and for so long as NGC is not the secured party with priority
  over all other secured parties in respect of the Participating Interest; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
sections 114(1)(a),
  117(1)(c), 120(2), 121, 133 and 134 of the PPSA; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
IRM’s rights referred to in
  section 107(2) of the PPSA; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(iv)

	
(without limiting clause 14.6) IRM’s rights to redeem any
  Participatory Interest under section 132 of the PPSA; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(v)

	
IRM’s rights to receive any
  verification statement in respect of any financing statement or financing
  change statement relating to any security interest created under and by this
  Deed. 

	
 

	
 

	
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  PREPAYMENT AND SALE AGREEMENT

	
26

	
 

	
 

	
 

	
 

	
8.6

	
Other
  Rights 

	
 

	
 

	
 

	
 

	
 

	
Where NGC has rights in
  addition to, or existing separately from, those in Part 9 of the PPSA, those
  rights will continue to apply and are not limited or excluded (or otherwise
  adversely affected) by any right provided by this Deed or by law.

	
 

	
 

	
9

	
RECEIVER 

	
 

	
 

	
9.1

	
Appointment
  of Receiver 

	
 

	
 

	
 

	
NGC may appoint a Receiver
  in respect of all or any of the Participating Interest whenever (i) any
  Enforcement Event occurs, whether or not it is continuing, (ii) IRM so
  requests, or (iii) any of the Participating Interest appears to NGC to be at
  risk of being taken by any creditor, affected by any process of law, or being
  jeopardised in any way. NGC may do this whether or not it has exercised any
  other right and even if dissolution of IRM has already commenced. 

	
 

	
 

	
9.2

	
Capacity
  to Act as a Receiver 

	
 

	
 

	
 

	
NGC may appoint as a
  Receiver any person not prohibited from appointment by the Receiverships Act
  1993, and may appoint two or more persons jointly, severally, or jointly and
  severally. 

	
 

	
 

	
9.3

	
Additional
  Powers in respect of Receiver 

	
 

	
 

	
 

	
NGC may at any time upon or
  following the appointment of any Receiver (i) determine, or vary, the terms
  of appointment of the Receiver, (ii) require any Receiver to give a security
  or an indemnity for the due performance of the Receiver’s duties, (iii)
  remove any Receiver, or (iv) appoint another Receiver in addition to, or in
  place of, any Receiver. 

	
 

	
 

	
9.4

	
Remuneration
  

	
 

	
 

	
 

	
NGC may, subject to the
  Receiverships Act 1993, determine or vary the remuneration of any Receiver.
  Such remuneration (i) may be (or may include) a commission; (ii) is payable
  by IRM; (iii) will form part of the Secured Obligation; and (iv) will be
  secured by the security created under this Deed. 

	
 

	
 

	
9.5

	
Receiver
  Agent of IRM 

	
 

	
 

	
 

	
Subject to clause 9.6, every Receiver is the agent
  of IRM. IRM is solely responsible for each Receiver’s actions, including the
  misconduct, negligence or default of a Receiver. 

	
 

	
 

	
9.6

	
Appointment
  of Receiver After Commencement of Dissolution 

	
 

	
 

	
 

	
NGC may appoint a Receiver
  notwithstanding that dissolution of IRM may have commenced and whether or
  not, in those circumstances, a Receiver is capable of acting as the agent of
  IRM. 

	
 

	
 

	
GAS PREPAYMENT
  AND SALE AGREEMENT

	
27

	
 

	
 

	
 

	
9.7

	
Receiver’s
  Powers 

	
 

	
 

	
 

	
In addition to any powers
  granted by law, and subject to the specific terms of appointment of each
  Receiver, each Receiver has the power in respect of the Participating
  Interest to do anything (whether alone or with any other person) that IRM
  could do, as if the Receiver had full legal and beneficial ownership of the
  Participating Interest, including those powers set out in Schedule 4, subject to any restrictions
  contained in the Kahili JVOA. 

	
 

	
 

	
9.8

	
Exercise
  of the Receiver’s Powers 

	
 

	
 

	
 

	
Every Receiver will
  exercise its powers in compliance with any directions issued by NGC, and
  otherwise on such terms and conditions as the Receiver thinks fit. 

	
 

	
 

	
9.9

	
Withdrawal
  

	
 

	
 

	
 

	
NGC may at any time give up
  possession of all or part of the Participating Interest and may at any time
  discontinue any receivership. 

	
 

	
 

	
10

	
PROCEEDS
  OF ENFORCEMENT 

	
 

	
 

	
10.1

	
Sequence
  of Application 

	
 

	
 

	
 

	
All moneys received or
  recovered by a Receiver or by NGC under or by virtue of this Deed will be
  applied in the manner and sequence determined by NGC. In the absence of such
  determination, such moneys will be applied as follows: 

	
 

	
 

	
 

	
(a)

	
first in payment of all expenses incurred by NGC
  or a Receiver in the exercise, or attempted exercise, of powers under, or
  otherwise in connection with, this Deed, the GPSA and the GSA; 

	
 

	
 

	
 

	
 

	
(b)

	
secondly, in payment of the Receiver’s remuneration;
  

	
 

	
 

	
 

	
 

	
(c)

	
thirdly, in payment of any outstanding amount of the
  Prepayment that has not been applied as a prepayment for gas; 

	
 

	
 

	
 

	
 

	
(d)

	
fourthly, in payment of any surplus to the persons
  who appear to be entitled to the same. 

	
 

	
 

	
 

	
 

	
This clause is subject to: 

	
 

	
 

	
 

	
(a)

	
any claims ranking in
  priority to the security created under this Deed; 

	
 

	
 

	
 

	
 

	
(b)

	
any mandatory provision of
  law (and including in the case of any Personal Property, any mandatory
  provisions of the PPSA). 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
28

	
 

	
 

	
 

	
11

	
PROTECTION
  OF NGC AND RECEIVER IN RESPECT OF ENFORCEMENT 

	
 

	
 

	
11.1

	
No Liability
  or Obligation 

	
 

	
 

	
 

	
Neither NGC nor any
  Receiver will be: 

	
 

	
 

	
 

	
(a)

	
liable to account for any
  proceeds of enforcement other than those proceeds actually received by it; 

	
 

	
 

	
 

	
 

	
(b)

	
obliged to enforce
  performance of, or compliance with, the Secured Obligations; 

	
 

	
 

	
 

	
 

	
(c)

	
liable in respect of any
  conduct or delay in the exercise, manner of exercise, attempted exercise, or
  non-exercise of any power; 

	
 

	
 

	
 

	
 

	
(d)

	
liable to account as the
  security interest holder in possession in respect of the Participating Interest;
  or 

	
 

	
 

	
 

	
 

	
(e)

	
liable for any loss
  resulting from or consequential upon, any of the same. 

	
 

	
 

	
 

	
12

	
NO
  MARSHALLING 

	
 

	
 

	
 

	
NGC is not required to
  marshal, enforce, apply, appropriate, recover or exercise any security or
  other entitlement held by it or any assets which it holds or is entitled to
  receive. 

	
 

	
 

	
13

	
PROTECTION
  OF THIRD PARTIES 

	
 

	
 

	
13.1

	
No Enquiry
  

	
 

	
 

	
 

	
No person dealing, and no
  party entering into a transaction, with NGC, any Receiver, or any agent or
  attorney of NGC or any Receiver, is obliged to enquire whether (i) an
  Enforcement Event has occurred or is continuing, (ii) this Deed the GPSA or
  the GSA or the security created by this Deed has become enforceable, (iii)
  any Receiver, attorney or agent has been properly appointed, (iv) the relevant
  powers were exercised or are exercisable, or as to (v) the propriety or
  regularity of any transaction or dealing. 

	
 

	
 

	
13.2

	
Impropriety
  or Irregularity 

	
 

	
 

	
 

	
Any impropriety or
  irregularity in any such transaction or dealing is deemed to be within the
  powers of NGC, any Receiver and any agent or attorney purporting to act on
  behalf of either or both of them, and to be valid whether or not that party
  or person has been notified to the contrary. 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
29

	
 

	
 

	
 

	
PART 5: GENERAL
  SECURITY, PAYMENT AND INDEMNITY PROVISIONS 

	
 

	
14

	
GENERAL
  SECURITY PROVISIONS 

	
 

	
 

	
14.1

	
Security
  Continuing and Independent 

	
 

	
 

	
 

	
This Deed, each security
  created under this Deed, and each collateral security, is: 

	
 

	
 

	
 

	
(a)

	
Continuing: A continuing security, notwithstanding any
  intermediate payments, settlements of account, exercise of powers or other
  matter or circumstance; 

	
 

	
 

	
 

	
 

	
(a)

	
Independent: In addition to, and enforceable
  independently of, any other security, guarantee or collateral security; 

	
 

	
 

	
 

	
 

	
(b)

	
Indebtedness: To remain in full force and effect whether
  or not at any given time IRM owes obligations to NGC; and 

	
 

	
 

	
 

	
 

	
(c)

	
Release: To remain in full force and effect until
  the execution by NGC and delivery to IRM of an unconditional release of this
  Deed. 

	
 

	
 

	
 

	
14.2

	
Further
  Assurances 

	
 

	
 

	
 

	
IRM will promptly execute,
  deliver to NGC and (if applicable) register, all relevant transfers,
  assignments, securities, instruments, other deeds and documents in each case
  in the form and substance specified by NGC, and will additionally take all
  other action which is necessary, or which NGC requires, in order to: 

	
 

	
 

	
 

	
(a)

	
on Title: Perfect the title of IRM, as appropriate,
  to all or any part of the Participating Interest; 

	
 

	
 

	
 

	
 

	
(b)

	
Security: Perfect or protect the security intended
  to be created by this Deed, or the priority of that security; 

	
 

	
 

	
 

	
 

	
(c)

	
Power: Facilitate the exercise of any power by
  NGC or any Receiver; 

	
 

	
 

	
 

	
 

	
(d)

	
Realisation: Facilitate the realisation of all or any
  part of the Participating Interest following the occurrence of an Enforcement
  Event; 

	
 

	
 

	
 

	
 

	
(e)

	
Full
  Benefit: Otherwise
  enable NGC to obtain the full benefit of the provisions of this Deed. 

	
 

	
 

	
 

	
14.3

	
Power of
  Attorney 

	
 

	
 

	
(a)

	
          Appointment: IRM irrevocably appoints NGC, every
  officer of NGC and every Receiver separately to be the attorney of IRM. Such
  appointment is for valuable consideration, and by way of security for the
  purpose of enabling NGC to obtain the full benefit of this Deed. 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
30

	
 

	
 

	
 

	
(b)

	
          Extent of
  Attorney’s Powers:
  Each attorney may, at the expense, and in the name, of IRM do anything which
  (i) such party is obliged or ought to do under this Deed, (ii) the attorney
  thinks fit to secure performance of and compliance with the Secured
  Obligations, and to give effect to the powers conferred on NGC or any
  Receiver by this Deed or by law or otherwise, or (iii) is incidental to any
  of those matters. 

	
 

	
 

	
(c)

	
          Delegation: Each attorney may delegate its powers
  (including this power of delegation) to any person for any period, and may
  revoke such delegation. 

	
 

	
 

	
(d)

	
          Conflict
  of Interest: Each
  attorney may exercise or concur in exercising its power whether or not the
  attorney has a conflict of duty or interest in exercising its powers, or in
  the means or result of that exercise of powers. 

	
 

	
 

	
(e)

	
          Ratification: IRM ratifies everything done by its
  attorney, or by the delegate of any attorney, in accordance with this clause.
  

	
 

	
 

	
14.4

	
Partial
  Release of Security 

	
 

	
 

	
 

	
NGC is entitled, but not
  obliged, to execute at any time a partial release of any part of the
  Participating Interest from the security created by this Deed. 

	
 

	
 

	
14.5

	
Unconditional
  Release of Security 

	
 

	
 

	
 

	
NGC will not be obliged to
  execute or deliver any unconditional release of this Deed, or the security
  created by it, unless IRM has completely performed and complied with the
  Secured Obligations. 

	
 

	
 

	
14.6

	
Right to
  redeem 

	
 

	
 

	
 

	
IRM may redeem the
  Participatory Interest if all of the following conditions are satisfied: 

	
 

	
 

	
 

	
(a)

	
an Enforcement Event has
  occurred and is continuing which has not been remedied to the satisfaction
  of, or waived by, NGC; 

	
 

	
 

	
 

	
 

	
(b)

	
NGC has not sold or agreed
  to sell any of the Participatory Interest and is not deemed to have taken any
  Participatory Interest in satisfaction of the Secured Obligations; and 

	
 

	
 

	
 

	
 

	
(c)

	
NGC is satisfied that all
  the Secured Obligations have been complied with. 

	
 

	
 

	
 

	
 

	
IRM may only effect the
  redemption by tendering to NGC, in cleared funds, an amount certified by NGC
  as being equal to the value of the Secured Obligations as at the date the
  amount is tendered. 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
31

	
 

	
 

	
 

	
 

	
14.7

	
Default by
  NGC 

	
 

	
 

	
 

	
NGC may not enforce this
  Deed to the extent that an Enforcement Event has occurred as a result of
  NGC’s default under the GPSA or the GSA. 

	
 

	
 

	
15

	
GENERAL
  EXPENSES AND INDEMNITY PROVISIONS 

	
 

	
 

	
15.1

	
Liability
  for Expenses 

	
 

	
 

	
 

	
All actions taken and all
  expenses incurred by IRM, or by NGC, any Receiver or any attorney, in those
  respective capacities, are at the cost of, and payable by, IRM. 

	
 

	
 

	
15.2

	
Indemnification
  and Reimbursement 

	
 

	
 

	
 

	
IRM indemnifies, and will
  upon demand reimburse, on a full indemnity basis, NGC, each Receiver and each
  attorney, for all such expenses, including those incurred or sustained in
  connection with: 

	
 

	
 

	
 

	
(a)

	
Security: The security created by this Deed,
  including those expenses incurred under clause
  14; 

	
 

	
 

	
 

	
 

	
(b)

	
Participating
  Interest: The
  Participating Interest (including any defect in IRM’s title to the Participating
  Interest); 

	
 

	
 

	
 

	
 

	
(c)

	
Secured
  Obligations: The
  Secured Obligations, including performance of the Secured Obligations by NGC
  under clause 5; 

	
 

	
 

	
 

	
 

	
(d)

	
Enforcement: Any actual, attempted or contemplated
  enforcement of this Deed, the GPSA and/or the GSA; 

	
 

	
 

	
 

	
 

	
(e)

	
Powers: Any actual, attempted or contemplated
  exercise, preservation or consideration of any power; 

	
 

	
 

	
 

	
 

	
(f)

	
Possession: Possession of, or any interest or rights
  in, the Participatory Interest, or any liability, control or right relating to
  the Participatory Interest; 

	
 

	
 

	
 

	
 

	
(g)

	
Releases: The release of the Participatory Interest
  from the security created under this Deed; 

	
 

	
 

	
 

	
 

	
(h)

	
PPSA: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
preparing, registering and
  maintaining any financing statement or financing change statement (including
  pursuant to section 167 of the PPSA); 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
complying with any demand
  made under section 162 of the PPSA. 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
32

	
 

	
 

	
 

	
15.3

	
Survival
  of Indemnities 

	
 

	
 

	
 

	
Each indemnity in this
  clause is: (i) unconditional and irrevocable; (ii) a continuing and separate
  obligation which will survive termination, release or discharge of this Deed
  and performance of and compliance with all Secured Obligations; and (iii) not
  to be discharged or impaired by any action or matter or circumstance which
  might otherwise discharge or impair it. 

	
 

	
 

	
PART 5:
  MISCELLANEOUS 

	
 

	
16

	
MISCELLANEOUS
  PROVISIONS 

	
 

	
 

	
16.1

	
Amendments
  

	
 

	
 

	
 

	
No amendments to this Deed
  will be effective unless it is in writing and signed by all the parties. 

	
 

	
 

	
16.2

	
Assignments
  

	
 

	
 

	
(a)

	
          By IRM:
  IRM may not transfer or assign any of its rights or obligations under this
  Deed without the prior consent of NGC. 

	
 

	
 

	
(b)

	
          By NGC:
  NGC may transfer or assign all or any of its rights or obligations under this
  Deed without the consent of IRM. 

	
 

	
 

	
(c)

	
          Assignee: Each permitted transferee and assignee is
  to have the same rights and obligations under this Deed as if named as an
  original party to this Deed in place of the transferor or assignor. 

	
 

	
 

	
(d)

	
          Information
  Disclosure: NGC may
  disclose to a potential assignee or transferee reasonable information about
  IRM, whether or not that information is confidential or publicly available,
  but always subject to clause 18.1
  of the Kahili JVOA and clause 18.1
  of the Cheal JVOA. 

	
 

	
 

	
16.3

	
Authorised
  Delegate 

	
 

	
 

	
 

	
The powers of NGC under
  this Deed, or at law may be exercised on behalf of NGC by any person
  authorised by NGC. 

	
 

	
 

	
16.4

	
Communications
  

	
 

	
 

	
 

	
Each notice, request,
  demand, consent, approval, agreement or other communication under this Deed: 

	
 

	
 

	
 

	
(a)

	
Delivery
  Method: Must be in
  writing and given by delivery, post or facsimile; 

	
 

	
 

	
 

	
 

	
(b)

	
Delivery
  Address: Must be
  given to the address or facsimile number currently designated by the
  recipient for the purpose of this Deed. The 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
33

	
 

	
 

	
 

	
 

	
 

	
initial designated
  addresses and contact details of the Parties are as follows:

	
 

	
 

	
 

	
 

	
IRM

	
 

	
 

	
 

	
 

	
 

	
Address:

	
4 Adina Road, City Beach,
  WA 6015

	
 

	
 

	
 

	
 

	
Facsimile No:

	
61 8 9385 7349

	
 

	
Attention:

	
James Zadko/Derek Willshee

	
 

	
 

	
 

	
 

	
NGC

	
 

	
 

	
 

	
 

	
 

	
The NGC Building

  44 The Terrace 

  Wellington

	
 

	
 

	
 

	
 

	
Facsimile No: 04 462 8600

  Attention: Company Secretary

	
 

	
 

	
 

	
 

	
(c)

	
Deemed
  Delivery: Will be
  deemed to be received by the recipient: (i) if delivered, upon delivery, (ii)
  if sent by post, on delivery; (iii) if sent by facsimile; upon production of
  a completed transmission report by the machine from which the facsimile was
  sent; and (iv) if received or deemed received after 5.00 p.m. on a working
  day in the place to which it is sent, or on a non-working day in that place,
  on the next working day in that place. 

	
 

	
 

	
 

	
16.5

	
Contracts
  (Privity) Act 1982 

	
 

	
 

	
 

	
For the purposes of the
  Contracts (Privity) Act 1982, each Receiver and each attorney is entitled to
  enforce against IRM each provision of this Deed which confers a benefit upon
  a Receiver or attorney (as the case may be). However, neither the Receiver or
  the attorney need consent to any amendment made to this Deed. 

	
 

	
 

	
16.6

	
Counterparts
  

	
 

	
 

	
 

	
This Deed may be executed in
  any number of counterparts. All executed counterparts will be taken together
  to constitute one instrument. 

	
 

	
 

	
16.7

	
Governing
  Law and Jurisdiction 

	
 

	
 

	
 

	
This Deed will be governed
  by and construed in accordance with New Zealand law, and the parties hereby
  submit to the non-exclusive jurisdiction of the courts of New Zealand. 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
34

	
 

	
 

	
 

	
16.8

	
No
  Reliance 

	
 

	
 

	
 

	
IRM has not entered into
  this Deed as a result of any conduct of, or in any way in reliance on, NGC,
  except as to NGC’s performance of the GPSA. 

	
 

	
 

	
16.9

	
Partial
  Invalidity 

	
 

	
 

	
 

	
The illegality, invalidity,
  or unenforceability of any provision of this Deed under the law of any
  relevant jurisdiction will not impair the legality, validity or
  enforceability of the other remaining provisions. 

	
 

	
 

	
16.10

	
Powers 

	
 

	
 

	
 

	
The powers conferred by law
  on a secured party or NGC are: (i) additional to the powers conferred by this
  Deed; (ii) excluded or varied only to the extent that they are inconsistent
  with this Deed; and (iii) exercisable by NGC without notice or consent. No
  delay in exercising or attempting to exercise, nor any non-exercise of, any
  power under this Deed or at law operates as a waiver of that power. 

	
 

	
 

	
16.11

	
Survival
  of Obligations 

	
 

	
 

	
 

	
The Secured Obligations
  will survive the release of this Deed. 

	
 

	
 

	
16.12

	
Service of
  Process

	
 

	
 

	
 

	
Without prejudice to any
  other mode of service allowed under any relevant law, IRM 

	
 

	
 

	
 

	
(a)

	
irrevocably appoints James
  Zadko and/or Derek Wilshee at his address at: 

	
 

	
 

	
 

	
 

	
 

	
4 Adina Road 

  City Beach 

  WA 6015 

  Western Australia

	
 

	
 

	
 

	
 

	
 

	
as its agent for service of
  process in relation to any proceedings before the New Zealand courts in
  connection with this Agreement; and

	
 

	
 

	
 

	
 

	
(b)

	
agrees that the service of
  any process, summons, notice or document by delivery to the abovementioned
  address of its process agent shall be effective service of process for any
  proceeding brought against IRM in a New Zealand Court.

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
35

	
 

	
 

	
EXECUTED as a deed in New Zealand

	
 

	
 

	
 

	
For and on behalf of

	
 

	
International
  Resource

	
 

	
Management
  Corporation by:

	
 

	
 

	
 

	 

	
 

	
Director

	
 

	
 

	
 

	 

	
 

	
Director

	
 

	
 

	
 

	
For and on behalf of

	
 

	
NGC New
  Zealand Limited by:

	
 

	
 

	
 

	 

	
 

	
Director

	
 

	
 

	
 

	 

	
 

	
Director

	
 

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
36

SCHEDULE 1: REPRESENTATIONS AND WARRANTIES

	
 

	
 

	
 

	
 

	
IRM represents and warrants
  that: 

	
 

	
 

	
1

	
Status 

	
 

	
 

	
 

	
It is a company duly
  incorporated in Malaysia and able to perform the Secured Obligations in
  accordance with New Zealand law. 

	
 

	
 

	
2

	
Powers 

	
 

	
 

	
 

	
It has the power to enter
  into, and exercise its rights and perform and comply with its obligations
  under, this Deed, the GPSA and the GSA. 

	
 

	
 

	
3

	
Corporate
  Action, Authorisation and Consents 

	
 

	
 

	
 

	
Everything required to be
  done, including the taking of all necessary corporate action and the
  obtaining of all necessary consents, has been duly done in order to: 

	
 

	
 

	
 

	
(i)

	
          enable it lawfully to enter
  into, exercise its rights and perform and comply with its obligations under,
  this Deed, the GPSA and the GSA; 

	
 

	
 

	
 

	
 

	
(ii)

	
          ensure that those
  obligations and (subject to all necessary registration being effected) the
  security created by this Deed are legal, valid, binding and enforceable in
  accordance with their respective terms; and 

	
 

	
 

	
 

	
 

	
(iii)

	
          make this Deed, the GPSA
  and the GSA admissible in evidence in any New Zealand court. 

	
 

	
 

	
 

	
4

	
Obligations
  Binding 

	
 

	
 

	
 

	
Its obligations under this
  Deed, the GPSA and the GSA and (subject to all necessary registration being
  effected) the security created by this Deed, are legal, valid, binding and
  enforceable in accordance with their respective terms. 

	
 

	
 

	
5

	
Non-Contravention
  

	
 

	
 

	
 

	
Its entry into, the
  exercise of its rights, and the performance of and compliance with its
  obligations under, this Deed, the GPSA and the GSA do not and will not: 

	
 

	
 

	
 

	
(i)

	
contravene any law or
  regulation to which it is subject; 

	
 

	
 

	
 

	
 

	
(ii)

	
contravene any of the
  documents constituting it; 

	
 

	
 

	
 

	
 

	
(iii)

	
exceed any limitation on,
  or constitute an abuse of, the powers of its directors or officers;

	
 

	
 

	
 

	
 

	
(iv)

	
contravene any agreement to
  which it is a party or which is binding on any of its assets

	
 

	
 

	
GAS
  PREPAYMENT AND SALE AGREEMENT

	
37

	
 

	
 

	
 

	
 

	
(v)

	
result in the creation of,
  or oblige it (absolutely or contingently) to create or permit to exist any
  security over or affecting any of its assets, other than for any security
  created under this Deed; or 

	
 

	
 

	
 

	
 

	
(vi)

	
result in the acceleration
  of any of its indebtedness, or give rise to any event of default or analogous
  event under any agreement relating to any of its indebtedness. 

	
 

	
 

	
6

	
No Default
  

	
 

	
 

	
 

	
It is not in default under
  any agreement relating to indebtedness or any other agreement, in a manner or
  to an extent which has or could have a material adverse effect upon it. 

	
 

	
 

	
7

	
No
  Enforcement Event 

	
 

	
 

	
 

	
No Enforcement Event has
  occurred. 

	
 

	
 

	
8

	
Solvency 

	
 

	
 

	
 

	
It is solvent, able to pay
  its indebtedness as it falls due and the value of its assets is greater than
  the value of its liabilities (taking into account contingent and prospective
  liabilities). 

	
 

	
 

	
9

	
Participating
  Interest 

	
 

	
 

	
 

	
In respect of the
  Participating Interest 

	
 

	
 

	
 

	
(i)

	
it has good title to, and
  is the sole legal and beneficial owner of (including assets which would be
  part of the Participating Interest but for any defect in title); 

	
 

	
 

	
 

	
 

	
(ii)

	
no security exists over or
  affects any of the Participating Interest, or any other of its assets (nor is
  there any agreement to give or permit to exist such security) except in each
  case as disclosed to and consented to by NGC; and 

	
 

	
 

	
 

	
 

	
(iii)

	
it is lawfully entitled to
  create, in favour of NGC, the security created by this Deed over the
  Participating Interest. 

	
 

	
 

	
 

	
10

	
No
  Litigation 

	
 

	
 

	
 

	
No litigation, arbitration
  or administrative proceedings is current or pending or, to its knowledge,
  threatened which has or would have a material adverse effect on it and has
  not been disclosed in writing by it to, and accepted by, NGC.

	
 

	
 

	
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38

SCHEDULE 2: UNDERTAKINGS

	
 

	
 

	
 

	
IRM undertakes that: 

	
 

	
 

	
1

	
Approvals
  under Kahili JVOA and Cheal JVOA 

	
 

	
 

	
 

	
It will procure any
  approvals that are necessary under the Kahili JVOA and Cheal JVOA to enable
  it to grant an enforceable security to NGC in accordance with the provisions
  of this Deed. 

	
 

	
 

	
2

	
Negative
  Pledge 

	
 

	
 

	
 

	
It will not create or
  permit to exist any security over or affecting the Participating Interest
  (except for any security created under this Deed or expressly consented to by
  NGC). 

	
 

	
 

	
3

	
Non-disposal
  of the Participating Interest 

	
 

	
 

	
 

	
It will not dispose of any
  part of the Participating Interest, except with the prior written consent of
  NGC. 

	
 

	
 

	
4

	
Maintain
  and Preserve the Participating Interest and Company 

	
 

	
 

	
 

	
It will maintain and
  preserve or procure the maintenance and preservation of the Participating
  Interest in accordance with the Kahili JVOA and Cheal JVOA. 

	
 

	
 

	
5

	
Preservation
  and Protection of the Participating Interest 

	
 

	
 

	
 

	
It will not do, allow to
  occur, or omit to do, anything which might: (i) result in the Participating
  Interest, any interest in the same, or any security created under this Deed
  being or becoming invalid, unenforceable or liable to forfeiture or
  cancellation, (ii) result in any deterioration in value of the Participating
  Interest, or (iii) otherwise adversely affect the security of NGC under this
  Deed. 

	
 

	
 

	
6

	
Name
  Change 

	
 

	
 

	
 

	
It will promptly notify NGC
  of any change of its name (including any name by which it is known or under
  which it trades). 

	
 

	
 

	
7

	
Authorisations
  

	
 

	
 

	
 

	
It will maintain, keep in
  force and renew (and comply with) all authorisations which are necessary for
  the ownership, use or operation of the Participatory Interest. 

	
 

	
 

	
8

	
Compliance
  with Obligations 

	
 

	
 

	
 

	
It will comply with its
  obligations under all laws, documents or agreements material to: (i) its
  business, (ii) the Participating Interest, and (iii) the security of NGC
  under this Deed. 

	
 

	
 

	
9

	
Compliance
  with Kahili JVOA and Cheal JVOA 

	
 

	
 

	
 

	
IRM will comply with all
  its obligations under the Kahili JVOA and the Cheal JVOA. 

	
 

	
 

	
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39

	
 

	
 

	
 

	
10

	
Compliance
  with Law 

	
 

	
 

	
 

	
It will comply with all
  laws and other obligations binding on it or the Participatory Interest,
  (including the payment of all taxes and indebtedness on or before the
  relevant due dates) failure to comply with which could have a material
  adverse effect on it. 

	
 

	
 

	
11

	
Maintenance
  of Corporate Existence 

	
 

	
 

	
 

	
It will maintain its
  corporate existence in its current jurisdiction of incorporation.

	
 

	
 

	
12

	
Conduct of
  Business 

	
 

	
 

	
 

	
It will conduct its
  business properly and efficiently in accordance with best current commercial
  practice. 

	
 

	
 

	
13

	
Notify
  Enforcement Events 

	
 

	
 

	
 

	
It will notify NGC of the
  occurrence of any Enforcement Event, any Potential Enforcement Event, or any
  other event or circumstance (including the issuing of proceedings) which might
  have a material adverse effect on it or NGC, immediately it becomes aware of
  it. 

	
 

	
 

	
14

	
Material
  Events 

	
 

	
 

	
 

	
It will notify NGC of all
  material events that occur under the Kahili JVOA and the Cheal JVOA,
  including: 

	
 

	
 

	
 

	
14.1

	
significant matters arising
  in connection with Joint Operations (including those matters about which the
  Operator is required to inform, or make information available to, IRM under clauses 5.11 of the Kahili JVOA and clause
5.11 of the Cheal JVOA which are
  requested from time to time by NGC); and 

	
 

	
 

	
 

	
 

	
14.2

	
significant decisions made
  by the Operating Committee (under clause
  7.3 of the Kahili JVOA and clause
  7.3 of the Cheal JVOA) including (but not limited to) decisions
  relating to the work program or decisions relating to the amendment or
  termination of PEP 38736 and/or PEP 38738, as appropriate.

	
 

	
 

	
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40

SCHEDULE 3: ENFORCEMENT EVENTS

	
 

	
 

	
 

	
An Enforcement Event occurs
  whenever: 

	
 

	
 

	
1

	
Breach or
  Non-Compliance with Secured Obligations under this Deed 

	
 

	
 

	
 

	
IRM breaches, or fails to
  perform or comply with, any of the Secured Obligations under this Deed. 

	
 

	
 

	
2

	
Breach of
  Representation, Warranty, Undertaking or Statement 

	
 

	
 

	
 

	
Any representation,
  warranty, undertaking or statement made or given, or deemed to be repeated,
  by IRM in or under this Deed, or in or under any other document or statement
  contemplated by or made under or pursuant to, this Deed, is or was untrue or
  incorrect when made, deemed repeated or delivered, to any extent which, in
  the opinion of NGC, is material. 

	
 

	
 

	
3

	
Vitiation
  of the Deed 

	
 

	
 

	
 

	
All or any part of this
  Deed (i) is terminated, or is or may become, void, illegal, invalid or
  unenforceable, (ii) is or becomes capable of being avoided, rescinded,
  terminated or cancelled by IRM or any Relevant Party, or (iii) is repudiated,
  or any person evidences any intention to repudiate the same. 

	
 

	
 

	
4

	
Withdrawal
  of Consent affecting this Deed 

	
 

	
 

	
 

	
Any consent or
  authorisation which, in the opinion of NGC, is required in connection with this
  Deed, or the implementation or performance of the same, ceases to remain in
  full force and effect in its original form. 

	
 

	
 

	
5

	
Security
  Enforceable 

	
 

	
 

	
 

	
Any security over the
  Participating Interest is enforceable or enforced, or any distress, attachment
  or other execution is levied or enforced over the Participating Interest, or
  any receiver, manager, receiver and manager, trustee or administrator is
  appointed in respect of any of its assets. 

	
 

	
 

	
6

	
Material
  Adverse Change 

	
 

	
 

	
 

	
In the opinion of NGC, a
  material adverse change occurs in relation to it or its ability or
  willingness to comply with all or any of its obligations under this Deed. 

	
 

	
 

	
7

	
Cessation
  or Disposal of Business 

	
 

	
 

	
 

	
It ceases or threatens to
  cease carrying on all or a substantial part of its business or operations. 

	
 

	
 

	
8

	
Dissolution
  

	
 

	
 

	
(i)

	
A resolution is passed,
  proceedings are filed, an order is made or any other action is taken by any
  person, for its dissolution or its amalgamation, reconstruction,
  administration, merger or consolidation (except for the purpose of and
  followed by a solvent amalgamation, reconstruction or reorganisation 

	
 

	
 

	
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41

	
 

	
 

	
 

	
 

	
previously approved in
  writing by NGC unless during or following such reconstruction, merger,
  amalgamation or reorganisation, it becomes or is declared to be, insolvent or
  the credit risk to NGC, in the reasonable opinion of NGC, is materially
  increased).

	
 

	
 

	
(ii)

	
A notice is issued pursuant
  to sections 319 or 320 of the Companies Act 1993 in respect of it. 

	
 

	
 

	
9

	
Insolvency:
  Compositions 

	
 

	
 

	
 

	
If it: 

	
 

	
 

	
 

	
 

	
(i)

	
          is (or admits that it is,
  or is deemed under any applicable law to be) unable to pay its debts as they
  fall due or otherwise is insolvent; or 

	
 

	
 

	
 

	
 

	
(ii)

	
          stops or suspends, or
  threatens to stop or suspend, or a moratorium is declared on, payment of its
  indebtedness; or 

	
 

	
 

	
 

	
 

	
(iii)

	
          makes, or commences
  negotiations or takes any other steps with a view to making any assignment or
  composition with or for the benefit of its creditors, or any arrangement for
  the rescheduling of its indebtedness or otherwise with a view to avoiding, or
  in expectation of its inability to pay, its debts. 

	
 

	
 

	
 

	
10

	
Statutory
  Management 

	
 

	
 

	
 

	
Any step is taken to
  appoint, or to recommend the appointment of, or with a view to appointing, a
  statutory manager of it under the Corporations (Investigation and Management)
  Act 1989, or it is declared to be at risk or under statutory management under
  that Act.

	
 

	
 

	
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42

SCHEDULE 4: RECEIVER’S POWERS

	
 

	
 

	
 

	
The Receiver has: 

	
 

	
 

	
1

	
Take
  Possession 

	
 

	
 

	
 

	
The power to take
  possession of, get in or manage the Participating Interest, and exercise or
  enforce all or any of the powers of IRM or NGC in respect of the
  Participating Interest, subject to the terms of the Kahili JVOA. 

	
 

	
 

	
2

	
Deal with
  Participating Interest 

	
 

	
 

	
 

	
The power to deal with and
  to obtain any income or returns from the Participating Interest in any
  manner. 

	
 

	
 

	
3

	
Disposal
  of Collateral 

	
 

	
 

	
 

	
The power, whether or not
  the Receiver has taken possession, to dispose of or concur in the disposal
  of, the Participating Interest, subject to any restrictions in the Kahili
  JVOA. 

	
 

	
 

	
4

	
Execution
  of Documents 

	
 

	
 

	
 

	
The power to execute, or
  authorise the execution, in the name of and on behalf of IRM, any document in
  relation to the Participating Interest and/or the Secured Obligations. 

	
 

	
 

	
5

	
Variation
  or Termination 

	
 

	
 

	
 

	
The power to buy in, vary,
  rescind, cancel or terminate any contract, right, obligation, agreement or
  any document in relation to the Participating Interest and/or the Secured
  Obligations. 

	
 

	
 

	
6

	
General
  Power 

	
 

	
 

	
 

	
The power to do or cause to
  be done, or carry out, or cause or authorise to be carried out, any act or
  thing (including any transaction, scheme or arrangement whatsoever) in
  respect of the Participating Interest as the Receiver could if the Receiver
  had absolute ownership of the Participating Interest or without being liable
  for any loss or damage which might result. 

	
 

	
 

	
7

	
Exercise
  Powers 

	
 

	
 

	
 

	
The power to exercise and
  enforce all powers capable of being exercised by IRM, itself in relation to
  the Participating Interest, whether or not it is then in liquidation. 

	
 

	
 

	
8

	
Appoint
  Agents 

	
 

	
 

	
 

	
The power to appoint,
  employ, dismiss or discharge any person as an agent, officer, manager,
  employee, advisor, contractor, consultant, auctioneer or otherwise, for any
  purpose and on terms which it may consider necessary or expedient in relation
  to the Participating Interest and/or the Secured Obligations. 

	
 

	
 

	
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  PREPAYMENT AND SALE AGREEMENT

	
43

	
 

	
 

	
9

	
Delegate 

	
 

	
 

	
 

	
The power to delegate any
  of the powers conferred upon it under this Deed or by law, including this
  power of delegation. 

	
 

	
 

	
10

	
Proceedings
  or Disputes 

	
 

	
 

	
 

	
The power (in the name of
  IRM, or otherwise) to commence, conduct, defend, discontinue, settle,
  compromise or submit to arbitration or mediation claims, issues, disputes or
  proceedings (including insolvency proceedings) arising in connection with the
  Participating Interest. 

	
 

	
 

	
11

	
Retention
  of Moneys 

	
 

	
 

	
 

	
Retain out of any moneys
  received by the Receiver a sum to cover the Receiver’s remuneration referred
  to in clause 9.4 of this Deed
  and expenses referred to in clause 15 of
  this Deed. 

	
 

	
 

	
12

	
Incidental
  Powers 

	
 

	
 

	
 

	
The power to
  do anything incidental to any of the matters specified in this Schedule, or
  incidental to the exercise of any other power.Exhibit 4.2.3 

October, 2005

ASSET SALE AGREEMENT

	
 

	
 

	
Dated

	
“23
  December”      2005        

	
 

	
 

	
BETWEEN:

	
INTERNATIONAL
  RESOURCE MANAGEMENT CORPORATION LIMITED, (formerly named INTERNATIONAL RESOURCE MANAGEMENT CORPORATION) C/- Deloitte,
  8 Nelson Street, Auckland (the ‘Assignor’) 

	
 

	
 

	
AND:

	
ARROWHEAD
  ENERGY LIMITED incorporated
  in New Zealand and having a registered office c/o BDO SPICERS, BDO House,
  99-105 Customhouse Quay Wellington, New Zealand (the ‘Assignee’) 

INTRODUCTION:

	
 

	
 

	
A.

	
The Assignor holds Participating
  Interests in certain Petroleum Exploration Permits in New Zealand, in the
  respective Joint Ventures formed by the permit holders of those Permits and
  rights and obligations pursuant to certain contractual arrangements in
  relation to those permits or petroleum produced from them, (together the
  ‘Assigned Interests’) as more particularly described in Schedule 1. 

	
 

	
 

	
B.

	
The Assignor has agreed to
  transfer to the Assignee its interest in each of the Assigned Assets on the
  conditions set out in this Agreement. 

	
 

	
 

	
IT IS
  AGREED:

	
 

	
1.

	
DEFINITIONS
  AND INTERPRETATION

	
 

	
 

	
1.1

	
Unless otherwise defined
  in this Agreement or the contrary intention appears, a term used in this
  Agreement, which is defined in a JVOA, has the meaning ascribed to it in that
  JVOA. 

	
 

	
 

	
1.2

	
In this Agreement
  (including the Recitals), unless the context otherwise requires: 

	
 

	
 

	
 

	
“Act” means the
  Crown Minerals Act 1991, (New Zealand); 

	
 

	
 

	
 

	
“Assigned Interests” means each of the Participating Interests
  and other rights and interests, described in Schedule 1, to be assigned by
  Assignor to the Assignee; 

	
 

	
 

	
 

	
“Conditions” means
  the conditions precedent set out in clause 2.1.1 and 2.1.2; 

	
 

	
 

	
 

	
“Deeds of Assignment”
  means the one or more deeds of Assignment and Assumption relating to this transaction
  and the Assigned Interests, in a usual form agreed by the parties and
  accepted by the other parties to that deed;; 

	
 

	
 

	
 

	
“Dollar” or “$” means New Zealand dollars; 

	
 

	
 

	
 

	
“Effective Date”
  means [30 September] 2005. 

	
 

	
 

	
 

	
“JVOA” means, with
  respect to each of the Participating Interests, the Joint Venture Operating
  Agreement between the Permit Holders in relation to that Participating
  Interest. 

	
 

	
 

	
 

	
“Joint Venture” means, with respect to each of the
  Participating Interests, the joint undertaking of the Permit Holders
  (together with the Assignee after the Assign Date of this Agreement) to
  conduct the Joint Operations pursuant to the JVOA; 

	
 

	
 

	
 

	
“Minister” means the Minister of Energy for New Zealand or any other person for
  the time being authorised to administer the Act.

	
 

	
 

	
 

	
“Operator” means,
  with respect to each of the Participating Interests, the Operator appointed
  under the JVOA; 

	
 

	
 

	
 

	
“Participating Interest” means
  the interest of the Assignor in each of the respective Permits and the
  respective Joint Ventures relating to each of the Permits; 

	
 

	
 

	
 

	
“Parties” means the
  named parties to this Agreement and their permitted successors and assigns,
  and “Party”
  has a corresponding meaning; 

	
 

	
 

	
 

	
“Permit” means, with
  respect to each of the Participating Interests, the respective Petroleum
  Permits PEP 38736, PMP 38153 and PEP 38738 (as it relates to Shallow
  Petroleum), issued pursuant to the Act, and includes any extension, renewal,
  re-issuance or other such permit issued to any Party pursuant to the Act in
  replacement of it; 

	
 

	
 

	
 

	
“Permit Area” means
  the area the subject of the Permit at any time; 

	
 

	
 

	
 

	
“Permit Holders”
  means, with respect to each of the Participating Interests, the holders of
  the Permit, being at the time of this agreement the Assignor and the permit
  holders named in Schedule 2; 

	
 

	
 

	
 

	
“working day” means a day other than a Saturday, a Sunday or a public holiday in
  the place in which the act, matter or thing is to be done or is deemed to be
  done or received. 

	
 

	
 

	
1.3

	
The headings to this Agreement
  are for reference only and are not to be used in construing the Agreement. 

	
 

	
 

	
1.4

	
Unless the context
  otherwise requires, words importing the singular include the plural and vice
  versa and words importing a gender include any other gender. 

	
 

	
 

	
1.5

	
References to a clause,
  Schedule or Attachment is to a clause, schedule or attachment to this
  Agreement. 

	
 

	
 

	
1.6

	
In this Agreement, other
  grammatical forms of a word or phrase defined in this Agreement have a
  corresponding meaning. 

2

	
 

	
 

	
 

	
2.

	
CONDITIONS
  PRECEDENT

	
 

	
 

	
 

	
2.1

	
Consent to Agreement

	
 

	
 

	
 

	
2.1.1

	
This Agreement and the
  Parties’ rights and obligations herein are conditional upon: 

	
 

	
 

	
 

	
 

	
(a)

	
the Minister granting
  consent to the assignment of the Assigned Interests in accordance with the
  Act; and 

	
 

	
 

	
 

	
 

	
(b)

	
all other necessary
  consents, including by other parties to the contracts referred to in Schedule
  1, being granted to the assignment of the Assigned Interests. 

	
 

	
 

	
 

	
2.1.2

	
The Operator must, as soon
  as practicable after the execution of this Agreement by all Parties, seek the
  consents referred to in clause 2.1.1. Each Party must use its best endeavours
  to execute all documents and do and procure to be done all acts and things as
  are reasonably within its powers to ensure that the Conditions are satisfied
  as soon as is reasonably practicable after the execution of this Agreement.
  Immediately upon a Party becoming aware that a Condition is satisfied, it
  must notify the other Parties of such satisfaction. 

	
 

	
 

	
 

	
2.1.3

	
Nothing in clause 2.1.1
  affects the rights and obligations of the Parties or provisions of this
  Agreement which do not create, assign, affect or deal with any legal or
  equitable interest in or affecting the Permit. 

	
 

	
 

	
 

	
2.2

	
Consequences of
  Non-Satisfaction

	
 

	
 

	
 

	
2.2.1

	
If the Condition in clause
  2.1.1 has not been satisfied within 18 months after the date of this
  Agreement or such later date as the Parties may agree in writing, then: 

	
 

	
 

	
 

	
 

	
(a)

	
either Party may by 14
  days’ prior notice in writing to the other Parties terminate this Agreement
  to the extent that it relates to the Assigned Interest, in which event the
  Assignee must do and procure to be done all acts and things and execute and
  deliver and procure the execution and delivery of all documents as may be
  reasonably necessary to effect the re-transfer of the Assigned Interest to
  the Assignor. The Assignor must within 90 days after the date of termination
  reimburse to the Assignee that proportion of the amounts referred to in
  clause 3 that relate to the Assigned Interest already paid by the Assignee;
  and 

	
 

	
 

	
 

	
 

	
(b)

	
except as otherwise
  expressly provided in this Agreement, no Party in respect of which the
  Agreement has been terminated will have any further rights or obligations
  under this Agreement, and will not be liable to any other Party in respect of
  any damages, costs or expenses except such as may arise or have arisen as a
  result of a breach of this Agreement prior to termination under this clause. 

	
 

	
 

	
 

	
2.2.2

	
If the Assignee fails to
  complete its obligations according to the JVOA and this Agreement, the
  Parties must execute all documents and do all other things necessary or
  desirable to place each other in the same position as they would have been
  had this Agreement not been executed or acted upon; including Assignee
  refunding all revenues from the Permits and assigning the Assigned Interest
  back to the Assignor and all things incidental to reassignment. 

3

	
 

	
 

	
2.3

	
Effective Date 

	
 

	
 

	
 

	
Upon satisfaction of the
  Conditions, this Agreement is deemed to have effect from the Effective Date. 

	
 

	
 

	
3.

	
PAYMENT
  OBLIGATION

	
 

	
 

	
3.1

	
Consideration 

	
 

	
 

	
3.1.1

	
The Assignee will pay to
  the Assignor, as consideration for the assignment of the respective Assigned
  Interests, a sum equal to the amount of the expenditures incurred by the
  Assignor upon that Assigned Interest, according to the records of the
  Assignor, and the Assignee will accept liability for all further obligations
  and expenditures to be incurred in relation to each of the Assigned
  Interests. 

	
 

	
 

	
3.1.2

	
The Parties agree that,
  with respect to each of the Participating Interests, the supply made under
  this Agreement is the supply of a going concern under the Goods and Services
  Act 1985 on which GST is chargeable at the rate of zero per cent. If GST in
  respect of the supply is assessed to be payable at a different rate, then the
  Vendor shall issue a valid GST invoice for the Purchase Price and the
  Purchaser shall pay to the Vendor the GST which is so payable in one sum,
  each party acting by or on the latest of the Settlement date, the date the
  supply is deemed to be made or the date GST is so assessed to be payable. 

	
 

	
 

	
3.2

	
Other Costs 

	
 

	
 

	
 

	
From the Effective Date,
  with respect to each of the Participating Interests, the Assignee will
  contribute its Participating Interest share of all costs and expenses of the
  Joint Venture and the Joint Operations under the JVOA. 

	
 

	
 

	
3.3

	
Payment

	
 

	
 

	
 

	
The Assignee shall pay all
  money required under clause 3.2 in accordance with the cash calls made by the
  Operator and otherwise in accordance with the JVOA to the Joint Account. 

	
 

	
 

	
4.

	
ASSIGNEE
  RIGHTS

	
 

	
 

	
4.1

	
Assigned Interest

	
 

	
 

	
 

	
On completion of the
  Assignee’s obligations under clause 3.1, the Parties will execute and deliver
  the Deeds of Assignment to effect the formal assignment of the Assigned Interest
  to the Assignee, and the Assignee will have the right to seek specific
  performance of the execution and delivery of the Deeds of Assignment in a
  court of equity having jurisdiction. The Operator will seek all relevant
  consents to such executed Deed, as required by the Act. Clauses 2.1 and 2.2
  (with such changes as are necessary) apply to this seeking of consent.

	
 

	
 

	
4.2

	
Participation in Joint
  Venture 

	
 

	
 

	
 

	
From the date of execution
  of this Agreement, with respect to each of the Participating Interests, the
  Assignee has the right to be represented on the Operating Committee and to
  vote in accordance with its Participating Interest as set out in Schedule 2,
  subject to continued compliance with its obligations under this Agreement.

4

	
 

	
 

	
 

	
5.

	
DEFAULT

	
 

	
 

	
 

	
5.1

	
Default by Assignee

	
 

	
 

	
 

	
5.1.1

	
If the Assignee defaults
  in the payment of any money required to be paid by it under clause 3 or in
  any other obligation under this Agreement and that default is not remedied
  within 21 days after it receives a notice from the Operator to remedy the
  default then, in addition to all other rights of the Assignor under this
  Agreement, the JVOA and at law, the Assignor has the right to terminate this
  Agreement to the extent it relates to the Assigned Interest, by giving notice
  to the Assignee and to require the Assignee to reassign to the Assignor (at
  the Assignee’s sole cost and expense) the Interest of the Assignor that had
  been transferred to the Assignee. 

	
 

	
 

	
 

	
5.1.2

	
At that time, each Party
  must execute and deliver all documents and use its best endeavours to do and
  procure to be done all acts, matters and things as may be necessary or
  desirable to carry out and give full force and effect to the reassignments
  referred to in this clause 5.1. 

	
 

	
 

	
 

	
5.2

	
Power of Attorney

	
 

	
 

	
 

	
 

	
The Assignee irrevocably
  grants to the Assignor a power of attorney, exercisable at any time after
  termination of this Agreement under clause 5.1 or a failure to fulfil the
  Conditions within 18 months after the date of this Agreement or a failure to
  fulfil the obligations referred to in clause 2.2.2. The Assignor as attorney
  shall have power in the Assignee’s name and on its behalf to carry out,
  execute, sign, seal and deliver all deeds, instruments, acts and things that
  in the opinion of the Assignor are reasonably necessary to carry out,
  execute, sign, seal, deliver or do in order to retransfer the Assigned
  Interest to the Assignor. Any act or thing done by the attorney on behalf of
  the Assignee in accordance with this clause binds the Assignee absolutely.
  The Assignee must, at all times, indemnify and hold harmless the attorney and
  its directors, officers, employees and representatives from and against any
  and all claims, damages and liabilities arising out of any act or thing
  reasonably done, and any obligation or responsibility reasonably assumed by
  the attorney on behalf of the Assignee. 

	
 

	
 

	
 

	
6.

	
REPRESENTATIONS,
  WARRANTIES AND COVENANTS

	
 

	
 

	
 

	
6.1

	
Assignor’s Warranties

	
 

	
 

	
 

	
6.1.1

	
The Assignor represents
  and warrants, in respect of each of the Assigned Interests, that at the date
  of this Agreement: 

	
 

	
 

	
 

	
 

	
(a)

	
no act, event or omission
  has occurred which (or which with the passage of time) would render it liable
  to be struck off the register of the place in which it is incorporated; 

	
 

	
 

	
 

	
 

	
(b)

	
it has full power and
  authority to enter this Agreement and to perform and observe the terms and
  conditions of this Agreement; 

	
 

	
 

	
 

	
 

	
(c)

	
it is not in liquidation
  nor has it passed any resolution for its winding up, no receiver or receiver
  and manager has been appointed over all or any part of its property or
  undertaking, no petition has been presented for its winding up and no writ of
  execution has been issued against it or any of its property and, to the best
  of its knowledge, information and belief, no such action is threatened or
  contemplated and 

5

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
no act, event or omission
  has occurred which (or which with the passage of time) might result in any
  such event or action; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
it is the legal and
  beneficial owner of its Participating Interest; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
it has clear and
  marketable title to its Participating Interest and that interest is free and
  clear of any and all encumbrances, overrides or carries or rights or
  interests of third parties of any nature other than: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
i.

	
rights or interests
  created by the Act or the Permit; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ii.

	
rights or interests
  created under the JVOA; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(f)

	
to the best of its
  knowledge, information and belief, after having made the due enquiry, the
  Permit is in full force and effect and not subject to forfeiture or any other
  related process of any kind which may affect the title or good standing of
  the Permit for any reason; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(g)

	
it is not engaged in any
  litigation or arbitration proceedings or other dispute in respect of the
  Permit, nor is it aware, to the best of its knowledge, information and
  belief, after having made due enquiry, of any pending or threatened
  litigation or arbitration proceedings or other dispute in respect of the
  Permit; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(h)

	
it is not aware of any
  outstanding breach of any lawful obligation that will materially adversely
  affect the Permit. 

	
 

	
 

	
 

	
 

	
 

	
6.1.2

	
Any claim by the Assignee
  for a breach of a warranty referred to in clause 6.1.1 will be taken to be
  waived or withdrawn and will be barred and unenforceable on the second
  anniversary of the date of this Agreement unless proceedings in respect of
  the claim have been commenced against the Assignor. 

	
 

	
 

	
 

	
 

	
 

	
6.2

	
Assignee’s Warranties 

	
 

	
 

	
 

	
 

	
 

	
 

	
The Assignee represents
  and warrants that, as at the date of this Agreement: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
no act, event or omission
  has occurred which (or which with the passage of time) would render it liable
  to be struck off the register of the place in which it is incorporated; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
it has full power and
  authority to enter this Agreement and to perform and observe the terms and
  conditions of this Agreement; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
it is not in liquidation
  nor has passed any resolution for its winding up, no receiver or receiver and
  manager has been appointed over all or any part of its properties or
  undertakings, no petition has been presented for its winding up and no writ
  of execution has been issued against it or any of its property and, to the
  best of its knowledge, information and belief, no such action is threatened
  or contemplated and no act, event or omission has occurred which (or which
  with the passage of time) might result in any such event or action. 

	
 

	
 

	
 

	
 

	
 

	
6.3

	
No Merger 

6

	
 

	
 

	
 

	
The warranties given in
  clauses 6.1 and 6.2 will not merge on the satisfaction of the Conditions. 

	
 

	
 

	
7.

	
RECORDS
  AND DATA

	
 

	
 

	
 

	
The Assignor must deliver
  to the Assignee a copy of all records, data and information of a technical
  nature relating to the Assigned Interest reasonably requested by the Assignee
  as soon as practicable after the request is made. If this Agreement is
  terminated for any reason, the Assignee must immediately return all records,
  data and information provided to it, and all copies made by it or its
  employees, contractors, consultants or other agents, to the Operator. 

	
 

	
 

	
8.

	
CONFIDENTIALITY

	
 

	
 

	
 

	
The provisions of the JVOA
  in respect of confidentiality, in relation to each of the respective
  Participating Interests, shall apply to this Agreement and all of its
  provisions and other information provided pursuant to this Agreement by the Assignor
  to the Assignee. 

	
 

	
 

	
9.

	
ASSIGNMENT

	
 

	
 

	
 

	
A Party may not assign its
  rights or novate its obligations under this Agreement unless, with respect to
  each of the Assigned Interests, it first complies with the provisions of the
  JVOA or other relevant contract regarding assignments. 

	
 

	
 

	
10.

	
RISK

	
 

	
 

	
 

	
The Assignor retains all
  risk and liability connected with ownership of and operations undertaken in
  connection with the Assigned Interests on or prior to the Effective Date, and
  the Assignor must indemnify, defend and hold the Assignee harmless from all
  costs, liabilities, penalties, claims, causes of action, demands, lawsuits
  and expenses (including without limitation, court costs and legal fees)
  associated with ownership of the Assigned or arising out of any operation,
  accident, act, event or circumstance occurring in connection with the
  Assigned Interests, on or prior to the Effective Date. After the Effective
  Date, the Assignee, subject to the JVOA, assumes all risk and liability
  connected with ownership of and operations undertaken in connection with the
  Assigned Interest. 

	
 

	
 

	
11.

	
COSTS

	
 

	
 

	
11.1

	
Subject to clause 11.2,
  any consent or other fee payable in respect of this Agreement or any
  reassignment of the Assigned Interests will be borne and paid by the
  Assignee, and the Assignee indemnifies the Assignor against liability to pay
  any such fees. 

	
 

	
 

	
11.2

	
In the case of a
  reassignment of the Assigned Interest as a consequence of the failure to
  satisfy a Condition, any costs for any reassignment will be shared equally
  between the Assignor and the Assignee. 

	
 

	
 

	
11.3

	
Each Party will bear its
  own costs, including legal costs, associated with the negotiation,
  preparation and execution of this Agreement. 

	
 

	
 

	
12.

	
FURTHER
  ASSURANCES

	
 

	
 

	
 

	
Each Party must execute
  and deliver all documents and use its best endeavours to do and procure to be
  done all acts, matters and things necessary or desirable to carry out and
  give 

7

	
 

	
 

	
 

	
full force and effect to
  the terms and satisfy the conditions of this Agreement and the terms of the
  Act. 

	
 

	
 

	
13.

	
NOTICES

	
 

	
 

	
13.1

	
Method and Addresses

	
 

	
 

	
 

	
All notices or other
  communications permitted or required to be given must be in writing and are
  deemed to have been received: 

	
 

	
 

	
(a)

	
in the case of posting, on
  the tenth working day after it is posted; 

	
 

	
 

	
(b)

	
in the case of delivery by
  hand, at the time of such delivery on a working day; 

	
 

	
 

	
(c)

	
in the case of a facsimile
  transmission, at the time and date of dispatch shown in a report issued by
  the sender’s facsimile machine which confirms transmission to the recipient
  of the number of pages in the notice. If the time of dispatch is not on a
  working day or is after 4.00 pm on a working day, then it will be deemed
  received at the commencement of business on the next working day; 

	
 

	
 

	
 

	
and is to be delivered or
  sent to the following address or facsimile transmission number set out below:
  

	
 

	
 

	
 

	
          If to ASSIGNOR :

	
4 Adina Road, City Beach

	
 

	
 

	
Perth W A 6015

	
 

	
 

	
Australia

	
 

	
          Attention:
            Executive
  Chairman

	
 

	
          Facsimile:
            +61 8 9385 7349

	
 

	
 

	
 

	
          If to ASSIGNEE:

	
4 Adina Road, City Beach

	
 

	
 

	
Perth W A 6015

	
 

	
 

	
Australia

	
 

	
          Attention:
            Executive
  Chairman

	
 

	
          Facsimile:
            +61 8 9385 7349

	
 

	
 

	
13.2

	
Substitute Address

	
 

	
 

	
 

	
A Party may at any time
  and from time to time designate a substitute address for the purpose of
  clause 13.1 by giving notice to the other Parties. 

	
 

	
 

	
14.

	
WAIVER
  AND VARIATION

	
 

	
 

	
14.1

	
Waiver

	
 

	
 

	
 

	
No waiver of any provision
  of this Agreement nor consent to any departure from it by any of the Parties
  will be effective unless it is in writing signed by a duly authorised
  representative of the relevant Party. Such waiver or consent will be
  effective only for the specific instance and for the specific purpose for
  which it has been given. 

	
 

	
 

	
14.2

	
Default or Delay Not
  Waiver

	
 

	
 

	
 

	
No default or delay on the
  part of any Party in exercising any rights, powers or privileges under this
  Agreement will operate as a waiver thereof nor will a single or partial
  exercise thereof preclude any other or further exercise 

8

	
 

	
 

	
 

	
thereof or the exercise of
  any other right, power or privilege. 

	
 

	
 

	
14.3

	
Variation

	
 

	
 

	
 

	
No variation of this
  Agreement will be effective as between the Parties unless made in writing and
  signed by a duly authorised representative of each of the Parties. 

	
 

	
 

	
15.

	
BINDING
  EFFECT

	
 

	
 

	
 

	
This Agreement is to be
  binding upon and shall enure to the benefit of the Parties and their lawful
  permitted assigns. 

	
 

	
 

	
16.

	
SEVERANCE

	
 

	
 

	
 

	
If a provision of this
  Agreement is held to be illegal, void or unenforceable by any Court or
  administrative body having jurisdiction, such determination will not affect
  the remaining parts of this Agreement which shall remain in full force and
  effect as if such illegal or unenforceable provision had not been included. 

	
 

	
 

	
17.

	
RIGHTS OF
  PARTIES

	
 

	
 

	
17.1

	
All remedies, rights,
  undertakings, obligations or agreements of the Parties arising by law, this
  Agreement or otherwise are cumulative and are not in limitation of any other
  right, remedy, undertaking, obligation or agreement of such Party. Each Party
  may follow any remedy to which such Party is entitled by law, this Agreement
  or otherwise concurrently or successively at that Party’s option. 

	
 

	
 

	
17.2

	
Those clauses which by
  their nature are intended to survive termination of this Agreement (including
  without limitation clauses 7 and 8) shall so survive termination. 

	
 

	
 

	
18.

	
ENTIRE
  AGREEMENT

	
 

	
 

	
 

	
This Agreement constitutes
  the entire agreement between the Parties with respect to the subject matter
  of this Agreement and supersedes and extinguishes any covenants, agreements,
  representations and warranties previously given or made. No oral or written
  warranties or representations not contained in this Agreement will be of any
  force or effect unless reduced to writing and signed by all Parties and
  expressed to be in modification of this Agreement. 

	
 

	
 

	
19.

	
GOVERNING
  LAW

	
 

	
 

	
 

	
This Agreement is to be
  governed and interpreted in accordance with the law of New Zealand. Each
  Party submits to the exclusive jurisdiction of the Courts of that country. 

9

	
 

	
 

	
 

	
20.

	
COUNTERPART
  EXECUTION

	
 

	
 

	
20.1

	
This Agreement may be
  executed in counterparts, each of which is to be deemed an original but all
  of which will constitute one and the same instrument. Any signature page of a
  counterpart may be detached from it without impairing the legal effect of the
  signatures on it and attached to another counterpart identical in form but
  having attached to it one or more additional signature pages signed by the
  other Parties. 

	
 

	
 

	
20.2

	
Upon execution by it of a
  counterpart of this Agreement, each Party will cause a facsimile copy of the
  signature page of the counterpart to be transmitted to each of the other
  Parties and each Party will: 

	
 

	
 

	
 

	
(a)

	
be bound by this Agreement
  from the time the last of the counterparts has been successfully transmitted;
  and 

	
 

	
 

	
 

	
 

	
(b)

	
post the originally
  executed counterpart executed by it to each other Party or as directed by the
  Operator. 

EXECUTED AS AN AGREEMENT by the Parties on the date set out above. 

	
 

	
 

	
 

	
 

	
Signed for and on behalf
  of

	
 

	
 

	
 

	
INTERNATIONAL
  RESOURCE

	
 

	
 

	
 

	
MANAGEMENT
  CORPORATION

	
 

	
)

	
 

	
LIMITED by its duly authorised

	
 

	
)

	
 

	
representative in the
  presence of:

	
 

	
)

	 

	
 

	
 

	
)

	
Representative

	
 

	
 

	
)

	
 

	
 

	
 

	
 

	
 

	
Signed for and on behalf
  of

	
 

	
 

	
 

	
ARROWHEAD
  ENERGY LIMITED

	
 

	
)

	
 

	
by its duly authorised
  representative

	
 

	
)

	
 

	
in the presence of:

	
 

	
)

	 

	
 

	
 

	
)

	
Representative

	
 

	
 

	
)

	
 

	
 

	
 

	
 

	
 

10

SCHEDULE 1 

ASSIGNED INTERESTS

	
 

	
 

	
 

	
KAHILI ASSETS: 

	
 

	
 

	
 

	
 

	
•

	
25% Participating Interest
  in PMP 38153 and by virtue of Joint Venture Operating Agreement dated 17
  October, 2002; 

	
 

	
 

	
 

	
 

	
•

	
Interest as Seller in
  Kahili Gas Sales agreement dated 14 January, 2004, between Assignor and AUSTRAL PACIFIC ENERGY (NZ) LIMITED and TAP (NEW ZEALAND)
PTY LIMITED and MILLENNIUM OIL
  AND GAS LIMITED as Sellers and NGC NEW ZEALAND LIMITED as Purchaser; 

	
 

	
 

	
 

	
 

	
•

	
Interest as Principal in
  Kahili liquids Marketing Agency Agreement dated 1 November, 2004 between
  Assignor as Principal and AUSTRAL PACIFIC ENERGY (NZ) LIMITED as Agent; 

	
 

	
 

	
 

	
PEP38736 

	
 

	
 

	
 

	
 

	
•

	
25% Participating Interest
  in PEP 38736 and by virtue of Joint Venture Operating Agreement dated 17
  October, 2002; 

	
 

	
 

	
 

	
PEP38738 Shallow
  (including Cheal) Assets 

	
 

	
 

	
 

	
 

	
•

	
Interest as a Permit
  Holder in PEP38738 and holder of 33% Participating Interest in respect of
  Shallow Petroleum and in Shallow Joint Venture by virtue of a Joint venture
  Operating Agreement dated 16 December, 2002 as varied on 2 July, 2004 and a
  Coordination Agreement between all permit holders dated 2 July, 2004. 

	
 

	
 

	
 

	
NGC Contractual Interests 

	
 

	
 

	
 

	
 

	
•

	
Interest as a party to a
  gas prepayment and sale agreement dated 16 January, 2004 between Assignor and
  NGC New Zealand Limited (NGC) to record the payment by NGC of funds to the
  Assignor to be applied against future gas, from the Kahili Field and the
  Cheal Field, to be sold by Assignor to NGC; 

	
 

	
 

	
 

	
 

	
•

	
Interest as grantor by
  virtue of a Deed of Security dated 16 January, 2004 between Assignor and NGC
  New Zealand Limited (NGC) granting to NGC a security interest over the rights
  of the Assignor in PEP 38736 and PMP 38153, petroleum produced from those
  permits and the Assignor’s Cheal Petroleum Entitlement as defined in that
  Deed of Security. 

11

SCHEDULE 2

PERMIT HOLDERS IN PMP 38153 AND PEP 38736

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Permit
  holder

	
 

	
Current Interest

	
Interest after Assignment

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ASSIGNOR

	
 

	
 

	
25

	
%

	
 

	
 

	
00

	
 

	
 

	
TAP (NEW ZEALAND) PTY LIMITED

	
 

	
 

	
30

	
%

	
 

	
 

	
30

	
%

	
 

	
MILLENNIUM OIL AND GAS LIMITED

	
 

	
 

	
25

	
%

	
 

	
 

	
25

	
%

	
 

	
AUSTRAL PACIFIC ENERGY (NZ) LIMITED

	
 

	
 

	
20

	
%

	
 

	
 

	
20

	
%

	
 

	
ASSIGNEE

	
 

	
 

	
00

	
 

	
 

	
 

	
25

	
%

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
100.00

	
%

	
 

	
 

	
100.0

	
%

	
 

PERMIT HOLDERS IN PEP 38738 AND SHALLOW JOINT VENTURE

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Permit
  holder

	
 

	
Current Interest

	
Interest after Assignment

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ASSIGNOR

	
 

	
 

	
33

	
%

	
 

	
 

	
00

	
 

	
 

	
KANUKA ENERGY LIMITED

	
 

	
 

	
36.5

	
%

	
 

	
 

	
36.5

	
%

	
 

	
CHEAL PETROLEUM LIMITED

	
 

	
 

	
30.5

	
%

	
 

	
 

	
30.5

	
%

	
 

	
CARDIFF HOLDINGS NO.1 LIMITED

	
 

	
 

	
0
  

	
 (Deep only)

	
 

	
 

	
 

	
 

	
 

	
CARDIFF HOLDINGS NO.2 LIMITED

	
 

	
 

	
0
  

	
 (Deep only)

	
 

	
 

	
 

	
 

	
 

	
RATA ENERGY LIMITED (“Rata”)

	
 

	
 

	
0
  

	
 (Deep only)

	
 

	
 

	
 

	
 

	
 

	
AUSTRAL PACIFIC ENERGY (NZ) LIMITED

	
 

	
 

	
0
  

	
 (Operator only)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
	
 

	
 

	
ASSIGNEE

	
 

	
 

	
00

	
 

	
 

	
 

	
33

	
%

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
	
 

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
100.00

	
%

	
 

	
 

	
100.0

	
%

	
 

12

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