Document:

Exhibit 10.7

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT is entered into as of October 1, 2007, by and
between Exterra Energy, Inc., a Nevada corporation (the "Company"), and Ray R.
Ledesma.

                                    WITNESS:

     WHEREAS, the Company desires to employ the Employee and the Employee
desires to be employed by the Company, in accordance with the provisions
contained in this Employment Agreement (the "Agreement");

     NOW THEREFORE, in consideration of the premise and the respective covenants
and agreements of the Company and the Employee contained in this Agreement, the
Company and the Employee agrees as follows:

                                   ARTICLE 1.

                                   EMPLOYMENT

     The Company employs the Employee, and the Employee accepts such employment.
Subject to the direction of the Board of Directors of the Company, the Employee
will serve as the Chief Executive Officer of the Company. The Employee has such
responsibilities, must perform such duties and exercise such power and authority
as is inherent in, or incident to, the offices of Chief Executive Officer. The
employee must devote the majority of his business time and attention and his
best efforts to the performance of his duties as an employee of the Company.
Employee agrees that he must not delegate any or all of his duties or
obligations under this agreement to any other person or entity.

                                   ARTICLE 2.

                                      TERM

     Subject to the provisions of Article 5 below, the term of this Agreement is
for the period commencing on October 1, 2007, and terminating on September 30,
2011.

                                   ARTICLE 3.

                                     SALARY

     3.1. Salary. In full payment for the obligations to be performed by the
Employee, during the period commencing on October 1, 2007, and terminating on
September 30, 2008, the Company must pay to the Employee a salary at the annual
rate of $150,000.00. Beginning on October 1, 2008, and terminating on September
30, 2008, the Company must pay to the Employee a salary at the annual rate of
$220,000.00.

     3.2. Adjustment of Salary. After the conclusion of each anniversary of
employment with the Company subsequent to those specifically set forth in
paragraph 3.1, the Board of Directors will determine any increase in the salary
from the previous year. Any decrease in the salary from the previous year must
be with the consent of the Employee.

     3.3. Payment of Salary. Payments of salary will be made to the Employee in
installments from time to time on the same dates that payment of salary are
generally made to all employees of the Company.

     3.4 Additional Compensation. As additional consideration, during the
initial three years of this contract term the Company shall issue to the
Employee 400,000 shares of stock per year with certain restrictions on its sale
as proscribed by the Board of Directors.

<PAGE>

                                   ARTICLE 4.

                                PERFORMANCE BONUS

     As additional compensation, the Employee may receive a performance bonus
for each fiscal year in such amounts and payable at such time, as may from time
to time be declared by the Board of Directors of the Company; provided, however,
that nothing contained in this Article 4 will be construed to obligate the
Company to pay any amount to the Employee as a performance bonus.

                                   ARTICLE 5.

                             CERTAIN FRINGE BENEFITS

     5.1. Generally. The Employee is entitled to receive such benefits and to
participate in such benefit plans as are generally provided from time to time by
the Company to its senior management employees; provided, however, that nothing
contained in this Section 5.1 will be construed to obligate the Company to
provide any specific benefits to the Employee.

     5.2. Vacations. The Employee is entitled to vacation time on an annual
basis in accordance with such policies as are from time to time adopted by the
Company's Board of Directors with respect to its senior management employees.

     5.3. Automobile. The employer shall provide the employee with an automobile
with such optional equipment as he may select. The employee shall be provided
with a replacement automobile. The type of automobile shall be selected by the
Board of Directors. The employer shall also obtain and pay the premiums on the
insurance for such automobile

     5.4. Stock Options. The Employee is entitled to participate in the
Company's Incentive Stock Option Plan and to receive such incentive stock
options as may from time to time be granted to him; provided, however, that
nothing contained in this Section 5.4 will be construed to obligate the Company,
its Board of Directors or any committee of its Board of Directors to grant any
incentive stock option whatsoever to the Employee under the Company's Incentive
Stock Option Plan.

     5.5 Directors and Officers Liability Insurance: The Company shall use its
best efforts to acquire Directors and Officers (D&O) Liability Insurance for all
directors and officers of the Company.

                                   ARTICLE 6.

                            TERMINATION OF EMPLOYMENT

     6.1. Certain Definitions. The following terms have the respective meanings
when utilized in this Article 6:

     a. "Bonus" means, as of a given date, the most recent annual bonus paid by
the Company to the Employee.

     b. "Cause" means any action by the Employee or an inaction by the Employee
that is reasonably believed by the Company to constitute:

     (i). fraud, embezzlement, misappropriation, dishonesty or breach of trust;

     (ii). a felony or crime of moral turpitude;

     (iii). material breach or violation of any or all of the covenants,
agreements, and obligations of the Employee set forth in this Agreement, other
than as the result of the Employee's death or disability (as hereinafter
defined);

<PAGE>

     (iv). a willful or knowing failure or refusal by the Employee to perform
any or all of his material duties and responsibilities as an officer of the
Company, other than as the result of the Employee's death or disability; or

     (v). gross negligence by the Employee in the performance of any or all of
his material duties and responsibilities as an officer of the Company, other
than as the result of the Employee's death or disability; provided, however,
that in the event that the basis for any termination of the Employee's
employment by the Company as set forth in the Termination Notice, (as
hereinafter defined) delivered by the Company to the Employee. The definition of
Cause set forth in Section 6.1(b)(iii), Section 6.1(b)(iv) or Section 6.2(b)(v)
of this Agreement, then, in such event, allows the Employee 15 days from and
after the date of his receipt of the Termination Notice to cure the action or
inaction specified therein to the reasonable satisfaction of the Company.

     c. "Compensation" means the amount of the Employee's Salary (as hereinafter
defined) and Bonus.

     d. "Disability" means any mental or physical illness, condition, disability
or incapacity which prevents the Employee from reasonably discharging his duties
and responsibilities as an officer of the Company. In the event that any
disagreement or dispute arises between the Company and the Employee as to
whether the Employee suffers from any Disability, then, the Employee must submit
to the physical or mental examination of a physician licensed under the laws of
the State of Texas, who will be mutually selected by the Company and the
Employee, and such physician will make the determination whether the Employee
suffers from any disability. In the absence of fraud or bad faith, the
determination of such physician will be final and binding on the Company and the
Employee. The entire cost of any examination will be borne solely by the
Company.

     e. "Good Reason" means:

     (i). The assignment by the Board of Directors of the Company to the
Employee, without his express written consent of duties and responsibilities
which results in the Employee having less significant duties and
responsibilities or exercising less significant power and authority that is not
comparable to the level and nature which he had, immediately prior to any
assignment;

     (ii). The removal of the Employee from, or a failure to reappoint the
Employee to, his current position with the Company or its subsidiaries or
affiliates, except (A) with the Employee's express written consent or (B) in
connection with any termination of the Employee's employment by the Company as
the result of the Employee's Protracted Disability (as hereinafter defined) or
for Cause;

     (iii). The Company's failure to timely perform its obligations under this
Agreement (including without limitation its obligations to make payments to the
Employee pursuant to the provisions of Articles 3 and 4 above);

     (iv). The Company's requiring of the Employee, without his express written
consent, to travel on Company business to an extent substantially greater than
the Employee's business travel obligations immediately prior thereto;

     (v). The Company's requiring of the Employee, without his express written
consent, to change his place of permanent residency to a place outside of
Williamson County or Travis County, Texas; or

     (vi). The failure of the Company to obtain the express written assumption
and agreement to timely perform the Company's obligations under this Agreement
by any successor to the Company as required by Article 9 of this Agreement.

     f. "Protracted Disability" means any disability that prevents the Employee
from reasonably discharging his duties and responsibilities as an officer of the
Company for a period of six-consecutive months.

     g. "Salary" means, as of a given date, the Employee's current annual
salary.

<PAGE>

     h. "Termination Date" means a specific date not less than 45, nor more than
90 days, from and after the date of any Termination Notice on which the
Employee's employment by the Company will be terminated in accordance with the
provisions of this Agreement.

     i. "Termination Notice" means a written notice which (i) sets forth the
specific provision of this Agreement relied on to terminate the Employee's
employment by the Company, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide the basis for the termination of the Employee's
employment by the Company pursuant to the specific provision of this Agreement
relied on and (iii) sets forth a Termination Date.

     6.2. Termination of Employment.

     a. Notwithstanding the provisions of Article 2 above, this Agreement (i)
will be automatically terminated on the death of the Employee pursuant to the
provisions of Section 6.3 below, and (ii) may be terminated at any time by the
Company pursuant to the provisions of Section 6.4 or 6.5 below, and (ii) may be
terminated at any time by the Employee pursuant to the provisions of Section 6.6
below.

     b. In the event that either the Company or Employee desires to terminate
the Employee's employment by the Company pursuant to any of the provisions of
Sections 6.4, 6.5 or 6.6 below, then the party causing any such termination must
give to the other party a Termination Notice.

     c. In the event this agreement is terminated pursuant to any of the
provisions of this Article 6, the Company will be discharged from all of its
obligations to the Employee on its payment to the Employee of the required
amount set forth in the section of this Article 6 pursuant to which the
termination occurs. The Employee's sole and exclusive remedy for the termination
of this Agreement prior to September 30, 2011, regardless of whether the
termination is initiated by the Company or by the Employee, and regardless
whether the termination is with cause, will be the payment by the Company to him
of the amount set forth in the section of this Article 6 pursuant to which such
termination occurs.

     6.3. Death of Employee. In the event that at any time during the term of
this Agreement the Employee dies, then the employment of the Employee by the
Company automatically terminates on the date of the Employee's death. In such
event, not more than 90 days from and after the date of the Employee's death,
the Company will pay to the Employee's estate or heirs, as the case may be, an
amount in cash equal to the Employee's Compensation (subject to any applicable
payroll and/or other taxes required by law to be withheld) determined as of the
date of the Employee's death. The Employee's estate, heirs or beneficiaries, as
the case may be, will also be entitled to receive any benefits which may be
payable under any life insurance policy provided by the Company.

     6.4. Disability of Employee.

     a. In the event that at any time during the term of this Agreement the
Employee suffers any disability, then the Company is obligated to continue to
pay in the ordinary and normal course of its business to the Employee or his
legal representatives, as the case may be, the Employee's Compensation (subject
to any applicable payroll and/or other taxes required by law to be withheld)
from the date that the Employee first suffers any disability to the date that
the Employee's employment by the Company is terminated pursuant to any of the
provisions of this Agreement.

     b. In the event that the Employee suffers any protracted disability during
the term of this Agreement, then the Company may terminate this Agreement. In
such event, in addition to any other benefits, which may have been provided by
the Company to the Employee or his legal representatives, pursuant to the
provisions of Section 6.4 (a) above, not later than the Termination Date
specified in the Termination Notice, the Company must pay to the Employee or his
legal representatives, an amount in cash equal to the Employee's Compensation
(subject to any applicable payroll and/or other taxes required by law to be
withheld) determined as of the date of the Termination Notice. Subsequent to the
Termination Date, the Employee or his legal representatives, as the case may be,
will also be entitled to receive any benefits that may be payable under any
disability insurance policy or disability plan provided by the Company.

<PAGE>

     6.5. Termination of Employment by Company.

     a. The Company may terminate this Agreement at any time with Cause. In such
event, the Company is obligated to continue to pay in the ordinary and normal
course of its business to the Employee only his Salary (subject to any
applicable payroll and/or other taxes required by law to be withheld) from the
date of the Employee's receipt of the Termination Notice given by the Company to
him to the Termination Date set forth in the Termination Notice.

     6.6. Termination of Employment by Employee.

     a. The Employee may terminate this Agreement at any time for Good Reason.
In such event, (i) not later than the Termination Date specified in the
Termination Notice given by the Employee to the Company, as the case may be, the
Company must pay to the Employee an amount in cash equal to the Employee's
Compensation (subject to any applicable payroll and/or other taxes required by
law to be withheld) determined as of the date of the Termination Notice, and
(ii) the restrictions set forth in Section 8.1 (b) below do not apply to the
Employee.

     b. The Employee may terminate this Agreement at any time without Good
Reason upon 90 days written Termination Notice. In such event, the Company is
obligated to continue to pay in the ordinary and normal course of its business
to the Employee only his Salary (subject to any applicable payroll and/or other
taxes required by law to be withheld) from the date of the Company's receipt of
the Termination Notice given by the Employee to it to the Termination Date set
forth in the Termination Notice.

                                   ARTICLE 7.

          TERMINATION OF EMPLOYMENT SUBSEQUENT TO BUSINESS COMBINATION

     7.1. Business Combination Defined. For purposes of this Article 7, the term
"Business Combination" has the meaning given to it in Article Eleven of the
Company's Certificate of Incorporation as in effect on the date of this
Agreement.

     7.2. Termination of Employment. Notwithstanding the provisions of Articles
2 and 6 above, in the event that there is a Business Combination, and at any
time subsequent to the date of any such Business Combination, either the Company
terminates the employment of the Employee by the Company for any reason, other
than as the result of the death of the Employee or the Protracted Disability of
the Employee, or the Employee terminates his employment by the Company for any
reason whatsoever, then, in that event, and not later than the Termination Date
specified in the Termination Notice delivered by the Company to the Employee, or
by the Employee to the Company, as the case may be, the Company must pay to the
Employee an amount in cash equal to the Employee's Compensation determined as of
the date of the Termination Notice, multiplied by three (subject to any
applicable payroll and/or other taxes required by law to be withheld).

                                   ARTICLE 8.

                         CERTAIN RESTRICTION ON EMPLOYEE

     8.1. Certain Restrictions. The Employee covenants and agrees with the
Company as follows:

     a. He may not at any time directly or indirectly, for himself or for any
other person, firm, corporation, partnership association or other entity,
attempt to employ, or enter into any contractual arrangement for employment with
any employee or former employee of the Company or any of its subsidiaries or
affiliates.

     b. He may not, during the term of this Agreement, and for a period of one
year from and after the date of termination of this Agreement, directly or
indirectly, without the express written consent of the Board of Directors: (i)
acquire or own in any manner any interest in, or loan any amount to, any person,
firm, partnership, corporation, association or other entity which competes in
any manner with the Company or any of its subsidiaries or affiliates in the
United States (collectively, the "Territory"), (ii) be employed by or serve as
an employee, agent, officer, director of, or as a consultant to, any person,
firm, partnership, corporation, association or other entity, other than the
Company and its subsidiaries, and affiliates, which competes in any manner with

<PAGE>

any of the Company or its subsidiaries or affiliates in the Territory, (iii)
compete in any manner with the Company or its subsidiaries or affiliates in the
Territory, or (iv) solicit, attempt to solicit, provide goods or services to, or
attempt to provide goods or services to, any present or future customer of the
Company or any of its subsidiaries or affiliates. The foregoing provisions of
this Section 8.1 (b) will not prevent the Employee from acquiring or owing
equity securities of any entity whose securities are listed for trading on a
national securities exchange or are regularly traded in the over-the-counter
securities market.

     c. He may not at any time disclose, directly or indirectly, to any person,
firm, corporation, partnership, or association the financial condition, assets,
personnel, procedures, techniques, customers, sources of leads and methods of
obtaining new business or the methods generally of doing and operating the
respective businesses of the Company and its subsidiaries and affiliates, except
to the extent that such information is a matter of public knowledge or is
required to be disclosed by law or judicial or administrative process.

     8.2. Injunction. It is recognized and acknowledged by the Company and the
Employee that a breach or violation by the Employee of any or all of his
covenants and agreements contained in Section 8.1 of this Agreement will cause
irreparable harm and damage to the Company and its subsidiaries and affiliates
in a monetary amount which would be virtually impossible to ascertain. As a
result, the Employee recognizes and acknowledges that the Company and its
subsidiaries and affiliates will be entitled to a temporary restraining order
and/or injunction from any court of competent jurisdiction enjoining and
restraining any breach or violation by the Employee and/or his affiliates,
employees, associates, partners, or agents, either directly or indirectly, of
any or all of the Employee's covenants and agreements contained in Section 8.1
of this Agreement. Such right to a temporary restraining order and/or injunction
will be cumulative and in addition to whatever other rights or remedies the
Company and its subsidiaries and affiliates may possess, at law or in equity.
Nothing contained in this Agreement will be construed to prevent the Company and
its subsidiaries and affiliates from seeking and recovering from the damages
suffered by any or all of the employees as a result of any breach or violation
by the Employee and/or his affiliates, employees, associates, partners, or
agents of the Employee's covenants and agreements contained in this Agreement.

     8.3. Reduction in Scope. In the event that any of the covenants and
agreements of the Employee contained in Section 8.1 of this Agreement are held
invalid or unenforceable by a court of competent jurisdiction because of their
duration or geographic area, then, in any event, the covenants or agreements
must be reduced by such court in duration or geographical areas, or both, to
such extent as to make it valid and enforceable in the jurisdiction where such
court is located, and in all other respects it will remain in full force and
effect.

                                   ARTICLE 9.

                              SUCCESSOR TO COMPANY

     The Company requires any successor, whether direct or indirect, whether by
purchase, merger, consolidation or otherwise, to succeed to all or most of the
business or properties and assets of the Company. The successor will execute and
deliver to the Employee a written instrument in form and in substance reasonably
satisfactory to the Employee and his legal counsel pursuant to which any
successor agrees to assume and to timely perform or to cause to be timely
performed all of the Company's covenants, agreements and obligations set forth
in this Agreement (a "Successor Agreement"). The failure of the Company to cause
any successor to execute and deliver a Successor Agreement to the Employee (a)
constitutes a breach of the provisions of this Agreement by the Company, and (b)
is deemed to constitute a termination by the Employee of his employment by the
Company (as of the date that any successor succeeds to all or most of the
business or properties and assets of the Company) for Good Reason.

<PAGE>

                                   ARTICLE 10.

                                 ATTORNEY'S FEES

     In the event that any litigation arises between the Company and the
Employee, based, in whole or in part, on this Agreement or any or all of the
provisions contained here, the prevailing party in the litigation is entitled to
recover from the losing party, and will be awarded by a court of competent
jurisdiction, any and all fees and disbursements of trial and appellate counsel
paid, incurred or suffered by the prevailing party as the result of, arising
from, or in connection with, the litigation.

                                   ARTICLE 11.

                                  MISCELLANEOUS

     11.1. Governing Law. This Agreement is governed by, and will be construed
and interpreted in accordance with, the laws of the State of Texas.

     11.2. Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Employee with respect to the subject matter and
supersedes all prior negotiations, agreements, understandings and arrangements,
both oral and written, between the Company and the Employee with respect to
subject matter. This Agreement may not be modified in any way, except by a
written instrument executed by the Company and the Employee.

     11.3. Notices. Any and all notices required or permitted to be given under
this Agreement must be in writing and will be deemed to have been duly given
when delivered by hand or when deposited in the U.S. mail, by registered or
certified mail, return receipt requested, postage prepaid, as follows:

     If to the Company:                   Exterra Energy, Inc.
                                          P.O. Box 4038, Lago Vista, Texas 78645
                                          Attention: Gord McDougall, President

     If to the Employee:                  Ray R. Ledesma
                                          P.O. Box 4038, Lago Vista, Texas 78645

or to such other address as either party may give written notice of from time to
time.

     11.4. Benefits; Binding Effect. This Agreement is for the benefit of, and
is binding on, the Company and the Employee and their respective heirs, personal
representatives, legal representatives, successors and assigns.

     11.5. Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement does not
affect the enforceability of the remaining portions of this Agreement or any
part hereof, all of which are inserted conditionally on their being valid in
law. Except as is otherwise provided in Section 8.3 above, in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement is declared invalid by a court of competent jurisdiction, then,
this Agreement will be construed as if the invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted.

     11.6. Waivers. The waiver by either party of a breach or violation of any
term or provision of this Agreement by the other party does not operate and will
not be construed as a waiver of any subsequent breach or violation of any
provision of this Agreement nor of any other right or remedy.

<PAGE>

     11.7. Section Headings. The section headings contained in this agreement
are for reference purposes only and do not affect in any way the meaning or
interpretation of any or all of the provisions of this Agreement.

     11.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original and all of which
when taken together constitute but one and the same instrument.

     IN WITNESS WHEREOF, each of the parties has executed and delivered this
Agreement as of the date first above written.

Employee:                                       Company:

                                                Exterra Energy, Inc.

----------------------------------              --------------------------------
Ray R. Ledesma                                  Gord McDougall, PresidentFiled by sedaredgar.com - West Canyon Energy Corp. - Exhibit 10.1

FARMOUT AGREEMENT

for

BUENAVISTA BLOCK

by and between

PETROSOUTH ENERGY CORPORATION SUCURSAL
COLOMBIA

and

DELAVACO ENERGY COLOMBIA INC. SUCURSAL
COLOMBIA

FARMOUT AGREEMENT

THIS AGREEMENT is entered into on the [DAY] day of [MONTH] 2008
by and between PETROSOUTH ENERGY CORPORATION SUCURSAL COLOMBIA,
a branch of the foreign corporation PetroSouth Energy Corporation, established
by public deed 657 dated March 5, 2007, from Notary 35 of Bogotá, legally
represented by its authorized officer, Mr. FELIPE PIMIENTA
BARRIOS, Colombian citizen, domiciled in Bogotá, DC, identified with
the citizen identification card number 79.785.924, according to the Certificate
of Legal Existence and Representation issued by the Chamber of Commerce of
Bogotá, attached hereto as Exhibit A (hereinafter referred to as “Farmor”); and
DELAVACO ENERGY COLOMBIA INC. SUCURSAL COLOMBIA, a Colombian
Branch Office of DELAVACO ENERGY COLOMBIA INC., established by
public deed 3.713 dated June 3 of 2.008, from Notary 6 of Bogotá, legally
represented by its authorized officer, Mr. ANDREW DEFRANCESCO,
Canadian citizen, domiciled in Ontario, identified with Canadian Passport number
WJ709416, according to the Certificate of Legal Existence and Representation
issued by the Chamber of Commerce of Bogotá, attached hereto as Exhibit B
(hereinafter referred to as “Farmee”). The companies named above, and their
respective successors and assignees (if any), may sometimes individually be
referred to as “Party” and collectively as the “Parties”.

WITNESSETH:

WHEREAS, on November 8, 2004 the Colombian Agencia Nacional de
Hidrocarburos (hereinafter referred to as “ANH”) and UNI? TEMPORAL OMEGA
ENERGY, (hereinafter referred to as “UTOE”) entered into an Exploration
and Production Agreement for the exploration, development and production of
hydrocarbons in the Contract Area (hereinafter referred to as the “Buenavista
Contract”);

WHEREAS, at the time of execution of the Buenavista Contract,
UTOE was formed by TECNICONTROL S.A. (hereinafter referred to as “TECNICONTROL”)
and PETROLEUM EQUIPMENT INTERNATIONAL LTDA. (hereinafter referred to as “PEI”),
each with fifty percent (50%) Participating Interest.

WHEREAS, on June 22, 2005 the ANH by Resolution 216 of
September 13, 2005, authorized the assignment to Bohemia Investment S.A.
Sucursal Colombia of twenty five percent (25%) of PEI’s Participating
Interest.

WHEREAS, on June 30, 2006, Bohemia Investment S.A. Sucursal
Colombia reassigned its 25 % Participating Interest back to PEI. This assignment
has not yet been approved by the ANH.

Page 2 of 32

WHEREAS, on July 28, 2006, PEI assigned twelve point five
percent (12.5%) Participating Interest to Quality Services and
Investors, S.A. (hereinafter referred to as “QSI”). This assignment has
not yet been approved by the ANH.

WHEREAS, TECNICONTROL assigned its entire Participating
Interest (50%) in the Buenavista Contract to TC Oil & Services
S.A. (hereinafter referred to as “TC Oil”).

WHEREAS, on September 7, 2006, TECNICONTROL applied to the ANH
for approval of its assignment to TC Oil of its fifty percent (50%)
Participating Interest.

WHEREAS, on August 10, 2007, XANDORO LIMITED
(hereinafter referred to as “XANDORO”) entered into a Memorandum of
Understanding according to which XANDORO acquired one and one quarter percent
(1.25%) of the total Participating interests in the Buenavista Contract.. The
assignment has not been completed to date.

WHEREAS, on August 16, 2007 INFINITY OIL
LIMITED (hereinafter referred to as “INFINITY”) entered into an
arrangement with UTOE to acquire, by way of undertaking work commitments, a
fifty percent (50%) Participating Interest. Said fifty percent (50%) is made up
from the following Participating Interests transferred to INFINITY:

	Party 	Interest 
	TC OIL & SERVICES S.A. 	25% 
	QUALITY SERVICES AND INVESTORS S.A. 	8% 
	PETROLEUM EQUIPMENT INTERNATIONAL LTDA. 	17% 
	Total 	50% 

WHEREAS, on August 30, 2007, PEI and Farmor entered into an
Assignment Agreement whereby Farmor acquired a sixteen percent (16%)
Participating Interest;

WHEREAS, Farmor is willing to assign and transfer a certain
undivided interest in its rights and obligations under the J-V Agreement,
related to the Buenavista Contract, and related to the Buenavista Contract Area;
and the JOA to Farmee in accordance with the terms set forth herein and Farmee
wishes to acquire such interest;

Page 3 of 32

NOW, THEREFORE, in consideration of the premises and the mutual
covenants and obligations set out below and to be performed, the Farmor and
Farmee agree as follows:

ARTICLE 1

DEFINITIONS

As used in this Agreement, the following capitalized words and
terms shall have the meanings ascribed to them below. Any capitalized term used
in this Agreement and not specifically defined in this Agreement shall have the
same meaning as in the Buenavista Contract or the JOA.

	1.1 	
      Agreement means this Farmout
      Agreement together with the Exhibits attached hereto, and any extension,
      renewal or amendment hereof agreed to in writing by the Parties.

	 	 
	1.2 	
      ANH means the Agencia Nacional de
      Hidrocarburos.

	 	 
	1.3 	
      Approval means formal approval or
      endorsement by ANH of the assignment of the Participating Interest as
      contemplated hereunder.

	 	 
	1.4 	
      Approval Date
      means the date upon which ANH grants the Approval.

	 	 
	1.5 	
      Assignment means the document
      attached hereto as Exhibit E, by which Farmor assigns, transfers and
      conveys its 16% Participating Interest in Buenavista block to
    Farmee.

	 	 
	1.6 	
      Balance has the meaning specified
      at Section 4.1(b).

	 	 
	1.7 	
      Buenavista Contract or Contract
      means the Hydrocarbon Exploration and Production, entered into by ANH
      and UTOE on November 8, 2004, attached as Exhibit C and any extension,
      renewal or amendment thereto.

	 	 
	1.8 	
      Business Day means a day on which
      the banks are customarily open for business in Bogotá, Colombia.

	 	 
	1.9 	
      Closing Date means the date that
      Farmee pays the Balance to Farmor pursuant to Section
  4.1(b).

Page 4 of 32

	1.10 	
      Conditions Precedent means all of
      the conditions enumerated in Article 3.

	 	 
	1.11 	
      Consideration has the meaning
      given in Article 4.

	 	 
	1.12 	
      Contract Area means the area or
      block more particularly described in the Buenavista Contract.

	 	 
	1.13 	
      Documents means (i) the
      Buenavista Contract, (ii) the JOA, (iii) any Farmout Agreement,
      Participation Agreement or other commercial agreement related to the
      Buenavista Contract or the rights and obligations to be acquired by Farmee
      hereunder, (iv) the J-V Agreement as amended, and (v) any documents
      referred to in Exhibit G hereto, which documents are necessary to complete
      Farmee’s remaining due diligence in respect of the transactions and
      matters contemplated hereunder (the “Outstanding Due Diligence
      Documents”).

	 	 
	1.14 	
      Effective Date means the date of
      execution of this Agreement by Farmor and Farmee.

	 	 
	1.15 	
      Government means the government
      of the Republic of Colombia and any political subdivision, agency or
      instrumentality thereof, including the ANH.

	 	 
	1.16 	
      Interim Period means the period
      commencing from the Effective Date until (i) the Closing Date, or (ii) the
      termination of this Agreement as provided hereunder.

	 	 
	1.17 	
      J-V Agreement means the temporary
      union agreement entered into by PEI and Tecnicontrol on October 8, 2004 as
      amended, attached hereto as Exhibit H.

	 	 
	1.18 	
      JOA means the joint operating
      agreement referred to at Section 2.2.

Page 5 of 32

	1.19 	
      Laws/Regulations means those
      laws, statutes, rules and regulations governing activities under the
      Buenavista Contract.

	 	 
	1.20 	
      Lien means any mortgage, charge,
      pledge, hypothec, security interest, assignment, lien (statutory or
      otherwise), easement, title retention agreement or arrangement,
      conditional sale, deemed or statutory trust, restrictive covenant or other
      encumbrance of any nature or any other arrangement or condition which, in
      substance, secures payment or performance of an obligation.

	 	 
	1.21 	
      Liquidity Event means the date
      upon which the common shares in the capital of Delavaco Energy Inc. are
      (i) first listed for trading on a recognized stock exchange or are
      otherwise quoted or traded on an alternative trading system, or (ii) have,
      pursuant to a share purchase, amalgamation, arrangement, merger, business
      combination or similar transaction, been transferred, exchanged, replaced
      or otherwise substituted for shares or other securities that are listed
      for trading on a recognized stock exchange or are otherwise quoted or
      traded on an alternative trading system.

	 	 
	1.22 	
      Operator means the entity
      registered before the ANH and designated to conduct operations in the
      Buenavista Contract Area pursuant to the Buenavista Contract, which entity
      is, as of the Effective Date, Tecnicontrol S.A.

	 	 
	1.23 	
      Participating Interest means as
      to any Party to the Buenavista Contract and any Party to the UTOE, the
      undivided legal and beneficial interest of such party expressed as a
      percentage of the total interest of all parties in the rights and
      obligations derived from the Buenavista Contract.

	 	 
	1.24 	
      Permitted Lien means (i) the
      Government’s economic and other rights as described in the Buenavista
      Contract, and (ii) easements, encroachments and other minor imperfections
      of title which do not, individually or in the aggregate, materially
      detract from the value of or impair the use or marketability of any
      underlying right in the Buenavista Contract.

Page 6 of 32

	1.25 	
      Preferential Rights means a right
      held by any third party under any of the Documents or under applicable law
      rule or regulation to pre-empt the transaction contemplated by this
      Agreement or affect its terms in any way.

	 	 
	1.26 	
      UTOE Members means the members of
      UTOE duly registered and approved by the ANH, which on the Effective Date
      are Tecnicontrol S.A., Petroleum Equipment International Ltda. and Bohemia
      Investment S.A. Sucursal Colombia.

ARTICLE 2

ASSIGNMENT OF INTEREST

	2.1 	Grant 
	  	 
		
      (a) On the Effective Date, Farmor hereby assigns and
      transfers to Farmee, and Farmee agrees to accept, a sixteen percent (16%)
      Participating Interest in JOA related to the the Buenavista Contract, with
      all accrued benefits, entitlements and rights attached thereto free and
      clear of any and all Liens (except Permitted Liens) and liabilities,
      except as provided in Section 2.1(b) and subject to the Resolutory or
      Subsequent Condition (“Condición Resolutoria pursuant to Section 3.4.
    

	
       
	
       

		
      (b) Until the Consideration specified in Section 4 herein
      has been paid in full, Farmor shall retain the Entitlement (as defined in
      the JOA) derived from the sixteen percent (16%) Participating Interest
      being assigned hereunder; provided, however, that on the Closing Date,
      Farmor shall cease to have any claim whatsoever to such Entitlement, which
      shall fully vest in Farmee. 

	
       
	
       

	
      2.2 
	
      Joint Operating Agreement 

	
       
	
       

		
      Farmee agrees and acknowledges that Farmor has entered
      into a JOA made as of August 8, 2007 with TC Oil & Services S.A.,
      Petroleum Equipment International Ltda., Quality Services & Investors
      S.A., Infinity Oil Limited and Xandoro Limited, to which terms it adheres,
      and accepts that any amendments to the JOA should be negotiated directly
      with all the parties to the JOA. 

	  	 
	 2.3 	Binding Effect
    

Page 7 of 32

		
      Farmor and Farmee shall be bound by this Agreement as of
      the date hereof and shall fully perform all of their respective
      obligations under this Agreement.

	 	 
	2.4 	
      Ownership

	 	 
		
      After the assignment contemplated under this Article 2,
      the Participating Interests in the JOA related to the Buenavista Contract
      shall be:

	
Buenavista Block 	Participating
      
Interest 
	INFINITY OIL LIMITED 	50.0% 
	TC OIL & SERVICES S.A. 	25.0% 
	DELAVACO ENERGY COLOMBIA INC. SUCURSAL COLOMBIA 	16.0% 
	QUALITY SERVICES AND INVESTORS, S.A. 	4.5% 
	PETROLEUM EQUIPMENT INTERNATIONAL LTDA. 	2.5% 
	XANDORO LIMITED 	2.0% 
	Total 	100%

	2.5 	
      Declarations and Acknowledgments

	 	 
		
      Regarding the Buenavista Contract, Farmor hereby agrees
      and irrevocably undertakes to file a request to the UTOE and the UTOE
      Members to issue to Delavaco the document attached hereto as Exhibit F
      before the Closing Date, and to follow-up the compliance with such
      request, so that Farmor obtains the required document. Farmor shall
      deliver the executed document to Farmee as soon as possible, upon
      execution of this Agreement, and in any case, no later than the Closing
      Date.Regarding the J-V Agreement, Farmor hereby agrees and irrevocably
      undertakes to file a request to the non-approved UTOE Members to issue to
      Delavaco the document attached hereto as Exhibit I before the Closing
      Date, and to follow-up the compliance with such request, so that Farmor
      obtains the required document. Farmor shall deliver the executed document
      to Farmee as soon as possible, upon execution of this Agreement, and in
      any case, no later than the Closing Date.

	 	 
	2.6 	
      Operator’s rights and obligations

	 	 
		
      This Assignment does not include the transfer of the
      rights and obligations of Operator under the Buenavista
  Contract.

ARTICLE 3 

CONDITIONS PRECEDENT 

Page 8 of 32

	3.1 	
      Conditions Precedent

	 	 	 
		
      If on or before the Closing Date, any of the following
      “Conditions Precedent” in favor of Farmee have not been satisfied or
      waived by Farmee in its sole discretion, Farmee shall have (without
      limitation to any rights of Farmee hereunder) the rights of termination as
      specified in Section 3.3 herein:

	 	 	 
		a) 	
      Execution of JOA. The Parties and each
      of the parties holding interests in the rights and obligations in the
      Buenavista Contract shall execute a mutually acceptable amendment to the
      JOA in respect to the Buenavista Contract;

	 	 	 
		b) 	
      Local Counsel Opinion. Farmee shall
      receive an opinion from Farmee’s Colombian counsel satisfactory to Farmee
      in its sole discretion, in respect to the matters and transactions
      contemplated herein, including that this Agreement constitutes a valid
      transfer of legal and beneficial rights, interests, benefits and
      entitlements in and to the JOA interest related to the Buenavista Contract
      and underlying properties free and clear of any Liens (other than
      Permitted Liens) and liabilities in accordance with the terms of the
      Buenavista Contract and applicable laws;

	 	 	 
		c) 	
      Board Approval Farmee’s Board of
      Directors, after consultation with its advisors, shall approve the matters
      and transactions contemplated herein;

	 	 	 
		d) 	
      No Misrepresentation. As of each of the
      Effective Date and the Closing Date, each of Farmor’s (i) representation
      and warranties as contained herein shall be true and accurate in all
      material respects, and (ii) covenants shall have been satisfied in all
      material respects;

	 	 	 
		e) 	
      Farmee’s Due Diligence. Farmor shall
      provide to Farmee and Farmee’s representatives, all material documentation
      (including but not limited to the Documents), and Farmee shall be
      satisfied with its due diligence investigations in respect of and related
      to the transaction subject matter of this Agreement, in a manner
      satisfactory to Farmee in its own discretion; and

	 	 	 
		f) 	
      Declarations and Acknowledgements.
      Executed originals of the Exhibits specified at Section 2.5 shall have
      been delivered to Delavaco prior to the Closing
Date.

Page 9 of 32

		
      g) Farmee’s Due Diligence. Farmor shall
      provide to Farmee and Farmee’s representatives, all material documentation
      (including but not limited to the Documents), and Farmee shall be
      satisfied with its due diligence investigations in respect of and related
      to the transaction subject matter of this Agreement, in a manner
      satisfactory to Farmee in its own discretion; and

	 	 	 
		
      h) Declarations and Acknowledgements.
      Executed originals of the Exhibits specified at Section 2.5 shall have
      been delivered to Delavaco prior to the Closing Date.

	 	 	 
	3.2 	
      Acts to be Performed:

	 	 	 
		
      Each party shall use its best endeavors to execute all
      documents and do and procure to be done all such acts and things as are
      reasonably within its power to ensure that as soon as is reasonably
      practicable after the Effective Date, (i) the Conditions Precedent are
      satisfied, and (ii) the assignment contemplated hereunder is approved by
      the ANH.

	 	 	 
	3.3 	
      Termination

	 	 	 
		
      Notwithstanding any period of Force Majeure under Article
      12,

	 	 	 
		(i) 	
      If the Conditions Precedent are not satisfied as
      determined by Farmee in

	 	 	 
		
      its sole discretion (or waived by Farmee in its sole
      discretion) within the time periods specified in Section 3.1, or in the
      event of any material breach by Farmor hereunder, Farmee shall have the
      right to terminate this Agreement by giving notice to Farmor in accordance
      with Article 10 herein.

	 	 	 
		(ii) 	
      If Farmee does not pay the Consideration within the time
      period

	 	 	 
		
      provided in Section 4.1(b), this Agreement shall
      immediately terminate unless otherwise mutually agreed by the Parties in
      writing.

	 	 	 
		
      In the event of termination pursuant to this Section 3.3
      (i) or (ii), the proposed Assignment shall terminate, shall have no force
      or effect and Farmee shall have no interest or obligation whatsoever in
      the JOA related to the Buenavista Contract and shall be deemed to have
      reassigned any rights or equitable interest it may have acquired under
      this Agreement to Farmor from the date of termination of this
      Agreement.

	 	 	 
		
      In the event of termination pursuant to this Section
      3.3(i) Farmor shall, within ten (10) calendar days of receiving such
      notice of termination, reimburse Farmee for the payments made by Farmee,
      as of the Effective Date up until the date of such notice of termination,
      pursuant to its

Page 10 of 32

		
      obligations under the JOA (the “reimbursement
      obligation”). The reimbursement obligation shall be enforceable
      immediately and without any prior judicial or non-judicial notification or
      request. The Parties agree that the reimbursement obligation awards
      executive merit and in order to enforce its payment, it shall be
      sufficient to present this Agreement along with a certificate issued by
      Farmee stating the details of the breach on the part of the breaching
      party, which shall be understood as being given under oath after being
      signed. Enforcement of this provision shall be excluded from
      arbitration.

	 	 
		
      In the event of termination pursuant to this Section
      3.3(ii) there will not be any reimbursement obligation.

	 	 
	3.4. 	
      Resolutory or Subsequent Condition
      (“Condición Resolutoria”)

	 	 
		
      The parties agree that it shall be understood as a
      Resolutory or Subsequent Condition (“Condición Resolutoria”) if payment of
      4.1 (b) has not occurred on or prior to December 31,
  2008.

ARTICLE 4

CONSIDERATION

	4.1 	
      Cash Consideration

	 	 	 
		
      In consideration for receiving the assignment of the
      rights related to the Participating Interest hereunder, Farmee hereby
      agrees as follows:

	 	 	 
		(a) 	
      To pay to Farmor the amount of USD$200,000 (the
      “Initial Payment”) on or before the Effective Date, and
      Farmor hereby acknowledges that the Initial Payment has been paid by
      Farmee to Farmor; and

	 	 	 
		(b) 	
      To pay to Farmor or its nominee the amount of
      USD$3,800,000 (the “Balance”), payable by Farmee on or
      before the date that is thirty (30) days from the date of occurrence of a
      Liquidity Event. If such Liquidity Event has not occurred on or before
      December 31, 2008, the Balance would be payable to Farmor or its nominee
      on or before the December 31, 2008 in the form of a certified cheque, bank
      draft or wire transfer of immediately available funds.

	 	 	 
		
      The Initial Payment and the Balance are collectively
        referred to as the
  “Consideration”.

Page 11 of 32

ARTICLE 5

OBLIGATIONS UNDER CONTRACT AND JOA

	5.1 	
      Acceptance of Prior
      Terms

	 	 
		
      Farmee hereby ratifies, confirms and accepts the terms of
      the Contract (and JOA) and during the Interim Period, Farmee agrees to
      abide by the terms of such agreements to the extent of its Participating
      Interest.

ARTICLE 6

UNDERTAKING OF THE PARTIES

	6.1 	
      Farmor
  Obligations

	 	 	 
		
      As of the Effective Date, Farmor shall promptly notify
      Farmee and provide details upon the occurrence of:

	 	 	 
		a) 	
      Any written notice of default or termination received or
      given by Farmor with respect to the J-V Agreement, the Buenavista Contract
      or the JOA;

	 	 	 
		b) 	
      Any written notice of any pending or threatened claim,
      demand, action, suit, inquiry or proceeding related to the J-V Agreement,
      the Buenavista Contract or the JOA;

	 	 	 
		c) 	
      Any material damage, destruction or loss to major assets
      under the J-V Agreement, the Buenavista Contract or the JOA; or

	 	 	 
		d) 	
      Any event or condition occurring or existing at any time
      between the Effective Date and the Closing Date that (i) would have a
      material adverse effect on the business, operations, financial condition
      or results of operations under the Buenavista Contract or the JOA, taken
      as a whole, or (ii) would render impossible Farmee’s right to the
      assignment contemplated hereunder.

	 	 	 
	6.2 	
      Mutual Obligations

	 	 	 
		
      As of the Effective Date, Farmee and Farmor shall comply
      with each of the following undertakings:

Page 12 of 32

	 	a) 	
      Each Party, as applicable, agrees to use commercially
      reasonable efforts to satisfy, in an expeditious manner, the Conditions
      Precedent set forth in Article 3.

	 	 	 
	 	b) 	
      Each Party, as applicable, agrees to use its best efforts
      to have the Approval granted as soon as possible upon execution of this
      Agreement.

	 	 	 
	 	c) 	
      The Parties shall not take any action nor fail to take
      any action prior to the Approval Date that would result in a breach of any
      of its representations and warranties under this
  Agreement.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

7.1 Farmor’s Representations and
Warranties

Except as otherwise disclosed in the Exhibits attached hereto,
Farmor makes the following representations and warranties to Farmee as of the
Effective Date and repeated on the Closing Date:

A. Farmor's
Rights

Farmor, directly or through the
Operator, holds the rights to a sixteen percent (16%) undivided Participating
Interest in a JOA related to the Contract Area, free and clear of any Liens
(other than Permitted Liens) according to the terms of the Buenavista Contract
and all applicable Laws. The Buenavista Contract is in full force and effect and
no notice of default, termination, or breach under the Buenavista Contract has
been received neither by Farmor nor, to the knowledge of Farmor, any party to
the Buenavista Contract. The JOA related to the Buenavista Contract, together
with applicable Laws, contains the entirety of the obligation of Farmor to the
Government, and no other understanding or agreement exists between Farmor and
the Government in relation to the subject matter of the Buenavista Contract
except as otherwise disclosed under this Agreement. There are no Preferential
Rights that have not been expressly disclosed by Farmor to Farmee and no third
party consents required in relation to the execution and perfection of this
Agreement and the interests assigned to Farmee.

B. Buenavista
Assignment

After the Buenavista Assignment
contemplated under Article 2 herein, Farmee shall have full legal and beneficial
ownership free and clear of any and all Liens, other than Permitted Liens, of a
sixteen percent (16%) 

Page 13 of 32

undivided Participating Interest of the
Contract Area and in the JOA related to the Buenavista Contract. 

C. Cost
Estimates

Cost estimates provided to Farmee by
Farmor for work to be completed under the Buenavista Contract are reasonable and
were diligently given at time provided.

D.
Documents

Farmor has provided Farmee with
complete and correct copies of the Documents. Where Farmor has provided any
translation of a Document, Farmor has done so as a courtesy to the Farmee and
Farmor makes no representation or warranty as to the accuracy of the
translation.

As soon as possible upon execution of
this Agreement, Farmor shall deliver or cause to be delivered to Farmee complete
and correct copies of the official correspondence existing between the ANH and
the Operator, to the extent Farmor has such correspondence and it does not
breach any laws or regulations.

E. Claims and
Litigation

To the best of Farmor’s knowledge,
there are no material claims, demands, actions, suits, governmental inquiries,
or proceedings pending or to Farmor's knowledge threatened in connection with
the Contract, the J-V Agreement, the JOA or other Documents which would have an
adverse effect upon the consummation of the transactions contemplated by this
Agreement.

7.2 Farmee’s Representations and
Warranties

Except as otherwise disclosed in the Exhibits attached hereto,
Farmee makes the following representations and warranties to Farmor as of the
Effective Date and repeated on the Closing Date:

A. Acknowledgement of Farmor's
Rights

Farmee, acknowledges that Farmor right
subject to this Agreement, is a sixteen percent (16%) undivided Participating
Interest in a JOA related to the Contract Area, and not a direct Participation
Interest in the Buenavista 

Page 14 of 32

Contract. Farmee, acknowledges that
Farmor is not a recognized party under the Buenavista Contract before the
ANH.

B. Claims and
Litigation

There are no material claims, demands,
actions, suits, governmental inquiries, or proceedings pending, or to Farmee’s
knowledge, threatened, against Farmee which would have an adverse effect upon
the consummation of the transactions contemplated by this Agreement.

C. Technical
Capability

Farmee has the technical capability,
personnel and resources to fulfill its obligations under this Agreement.

7.3 Mutual Representations and
Warranties

The Parties make the following representations and warranties
to each other as of the Effective Date and repeated on the Closing Date:

A. Corporate
Authority.

Each Party is duly organized and
validly existing under the laws of the country where it is organized. To the
extent required, each Party is qualified to conduct business in the jurisdiction
as necessary to perform the Buenavista Contract. Each Party has all requisite
corporate power and authority to enter into this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by each Party and
constitutes a legal, valid and binding obligation of each Party, enforceable
against each Party in accordance with its terms.

B. Payments

Neither Party nor its Affiliates have
made, offered, or authorized and will not make, offer or authorize any payment,
gift, promise or other advantage, in connection with the matters which are the
subject to this Agreement, whether directly or indirectly through any other
person or entity, to or for the use or benefit of any public official (i.e., any
person holding a legislative, administrative or judicial office, including any
person employed by or acting on behalf of a public agency, a public enterprise
or a public international organization) or any political party or political
party official or candidate for 

Page 15 of 32

office, where such payment, gift or
promise would violate: (a) the applicable Laws of the country of operations; (b)
the laws of the country of formation of the Party or such Party's ultimate
parent company (or its principal place of business); or, (c) the principles
described in the Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, signed in Paris on December 17, 1997, which
entered into force on February 15, 1999, and the Convention's Commentaries.

C. Other Representations and
Warranties

Except as otherwise disclosed, the
execution, delivery, and performance of this Agreement by each Party, the
consummation of the transactions contemplated hereby, and the compliance with
the provisions hereof will not, to the best of each Party's knowledge and
belief:

	 	(a) 	
      violate any applicable Laws/Regulations, judgment, decree
      or award;

	 	 	 
	 	(b) 	
      contravene the organization documents of a Party;
    or

	 	 	 
	 	(c) 	
      Result in a violation of a term or provision, or
      constitute a default or accelerate the performance of an obligation under
      any contract or agreement executed by a Party
hereto.

		
      All representations and warranties given under this
      Article 7 shall, for the Buenavista Contractual term set forth herein, be
      deemed repeated and valid, true and correct as of the Approval Date, and
      each Party agrees to inform the other Party of any material changes to the
      facts in the representations and warranties prior to the Approval Date or
      the execution of the Assignment, whichever is later.

	 	 
	7.4 	
      Disclaimer of Other Representations and
      Warranties

	 	 
		
      Except for the representations and warranties provided in
      this article, Farmor and Farmee make no, and disclaim any, warranty or
      representation of any kind, either express, implied, statutory, or
      otherwise, including, without limitation, the accuracy or completeness of
      any data, reports, records, projections, information, or materials now,
      heretofore, or hereafter furnished or made available to Farmee in
      connection with this agreement.

ARTICLE 8

TAX

8.1 Tax Obligations

Page 16 of 32

Each Party shall be responsible for reporting and discharging
its own tax measured by the profit or income of the Party and the satisfaction
of such Party’s share of all contract obligations under the Buenavista Contract
and under this Agreement. Each Party shall protect, defend and indemnify each
other Party from any and all loss, cost or liability arising from the
indemnifying Party’s failure to report and discharge such taxes or satisfy such
obligations. The Parties intend that all income and all tax benefits (including
deductions, depreciation, credits and capitalization) with respect to the
expenditures made by the Parties hereunder will be allocated by the Government
tax authorities to the Parties based on the share of each tax item actually
received or borne by each Party. If such allocation is not accomplished due to
the application of the Laws / Regulations or other Government action, the
Parties shall attempt to adopt mutually agreeable arrangements that will allow
the Parties to achieve the financial results intended. Operator shall provide
each Party, in a timely manner and at such Party’s sole expense, with such
information with respect to Joint Operations as such Party may reasonably
request for preparation of its tax returns or responding to any audit or other
tax proceeding.

8.2 Joint Levy

If interpretation or enforcement of the Buenavista Contract by
the Government imposes joint and several liability on the Parties for any levy,
charge or tax, the Parties agree to cross indemnify each other to the extent
that such levy, charge or tax is owed by one Party individually.

ARTICLE 9

CONFIDENTIALITY

9.1 Confidentiality

Except as otherwise provided in the Buenavista Contract and the
JOA, each Party agrees that all information disclosed under this Agreement,
except information in the public domain or lawfully in possession of a Party
prior to the Closing Date, shall be considered confidential and shall not be
disclosed to any other person or entity without the prior written consent of the
Party which owns such confidential information. This obligation of
confidentiality shall remain in force during the term of the Buenavista Contract
and for a period of three (3) years thereafter. Notwithstanding the foregoing,
confidential information may be disclosed without consent and without violating
the obligations contained in this Article in the following circumstances:

Page 17 of 32

	 	a) 	
      to an Affiliate provided the Affiliate is bound to the
      provisions of this Article 9 and the Party disclosing is responsible for
      the violation of an Affiliate;

	 	 	 
	 	b) 	
      to a governmental agency or other entity when required by
      the Buenavista Contract;

	 	 	 
	 	c) 	
      to the extent such information is required to be
      furnished in compliance with the applicable Laws/Regulations, or pursuant
      to any legal proceedings or because of any order of any court binding upon
      a Party;

	 	 	 
	 	d) 	
      to attorneys engaged, or proposed to be engaged, by any
      Party where disclosure of such information is essential to such attorneys'
      work for such Party and such attorneys are bound by an obligation of
      confidentiality;

	 	 	 
	 	e) 	
      to contractors and consultants engaged, or proposed to be
      engaged, by any Party where disclosure of such information is essential to
      such contractor’s or consultant’s work for such Party;

	 	 	 
	 	f) 	
      to a bona fide prospective transferee of a Party’s
      Participating Interest, or portion thereof, to the extent appropriate in
      order to allow the assessment of such Participating Interest (including an
      entity with whom a Party and/or its Affiliates are conducting bona fide
      negotiations directed toward a merger, consolidation or the sale of a
      majority of its or an Affiliate's shares);

	 	 	 
	 	g) 	
      to a bank or other financial institution to the extent
      appropriate to a Party arranging for funding;

	 	 	 
	 	h) 	
      to the extent such information must be disclosed pursuant
      to any rules or requirements of any government or stock exchange having
      jurisdiction over such Party, or its Affiliates; provided that such Party
      shall comply with the requirements of Section 14.10 hereunder;

	 	 	 
	 	i) 	
      to its respective employees, subject to each Party taking
      sufficient precautions to ensure such information is kept confidential; to
      the extent any information which, through no fault of a Party, becomes a
      part of the public domain; and

	 	 	 
	 	j) 	
      to the other parties to the Buenavista Contract and JOA
      and the Government solely to the extent as may be required to satisfy the
      Conditions Precedent.

9.2 Disclosure

Disclosure as pursuant to Sections 9.1(e), (f) and (g) shall
not be made unless prior to such disclosure the disclosing Party has obtained a
written undertaking from the 

Page 18 of 32

recipient party to keep the information strictly confidential
for at least as long as the period set out above and to use the information for
the sole purpose described in Sections 9.1(e), (f) and (g), whichever is
applicable, with respect to the disclosing Party.

ARTICLE 10

NOTICES

All notices authorized or required between the Parties by any
of the provisions of this Agreement shall be in writing (in English) and
delivered in person or by courier service or by any electronic means of
transmitting written communications which provides written confirmation of
complete transmission, and properly addressed to the other Party. Verbal
communication does not constitute notice for purposes of this Agreement, and
e-mail addresses and telephone numbers for the Parties are listed below as a
matter of convenience only. A notice given under any provision of this Agreement
shall be deemed delivered only when received by the Party to whom such notice is
directed, and the time for such Party to deliver any notice in response to such
originating notice shall run from the date the originating notice is received.
“Received” for purposes of this Article shall mean actual delivery of the notice
to the address of the Party specified hereunder.

Name: PETROSOUTH ENERGY CORPORATION SUCURSAL COLOMBIA

Address: Carrera 7 No 73 - 55, Piso 7, Bogotá Colombia 
Attention: FELIPE
PIMIENTA BARRIOS
Facsimile: +57.1. 6293642

Name: DELAVACO ENERGY COLOMBIA INC SUCURSAL COLOMBIA

Address: Cale 113 No 7  21, Torre A, Of. 1203, Bogotá Colombia

Attention: ANDREW DEFRANCESCO

	c.c.	
       Gabriela Mancero, Cavelier Abogados 
Carrera 4
      No. 72-35, Bogotá, Colombia 
Fax: +57.1.2118650

ARTICLE 11

LAW AND DISPUTE RESOLUTION

11.1 Governing Law

Page 19 of 32

The substantive law of Colombia, exclusive of any conflicts of
laws principles that could require the application of any other law, shall
govern this Agreement for all purposes, including the resolution of disputes
between or among Parties.

11.2 Dispute Resolution

The Parties shall first attempt to resolve any dispute,
controversy, or claim arising out of or relating to this Agreement, or the
breach, termination, or invalidity thereof through friendly consultations. If
the dispute is not resolved in this manner within thirty (30) days after
commencement of discussions, then either Party may submit the dispute to final
and binding arbitration. The tribunal shall be formed by three (3) arbitrators,
all chosen by the mutual agreement of the Parties. The arbitrators should be
duly licensed to practice law in Colombia with more than five (5) years
experience in the oil & gas industry, and fully bilingual in the English and
Spanish languages. If no agreement is reached within one (1) month counted as
from the date on which any of the Parties expresses its intention to submit the
dispute to arbitration, then arbitrators shall be appointed by drawing lots from
the list of arbitrators of the Arbitration Centre of Bogotá Chamber of Commerce
Bogotá. The venue shall be the city of Bogotá. The language of the arbitration
procedure shall be the Spanish language. The arbitral award shall be final and
binding upon de Parties and the parties agree to be bound thereby and to act
accordingly. The costs of arbitration and the costs of enforcing the arbitral
award (including witness expenses and attorneys' fees) shall be borne by the
losing Party, unless otherwise determined by the arbitral award. When any
dispute occurs and when any dispute is under arbitration, except for the matters
under dispute, the parties shall continue to exercise their remaining respective
rights and fulfill their remaining obligations under this Agreement to the
extent possible under the circumstances.

ARTICLE 12

FORCE MAJEURE

If as a result of Force Majeure, any Party is rendered unable,
wholly or in part, to carry out its obligations under this Agreement, other than
the obligation to pay any amounts due, then the obligations of the Party giving
such notice, so far as and to the extent that the obligations are affected by
such Force Majeure, shall be suspended during the continuance of any inability
so caused and for such reasonable period thereafter as may be necessary for the
Party to put itself in the same position that it occupied prior to the Force
Majeure, but for no longer period. The Party claiming Force Majeure shall notify
the other Parties of the Force 

Page 20 of 32

Majeure within a reasonable time after the occurrence of the
facts relied on and shall keep all Parties informed of all significant
developments. Such notice shall give reasonably full particulars of the Force
Majeure and also estimate the period of time, which the Party will probably
require to remedy the Force Majeure. The affected Party shall use all reasonable
diligence to remove or overcome the Force Majeure situation as quickly as
possible in a commercially reasonable manner but shall not be obligated to
settle any labor dispute except on terms acceptable to it. All such disputes
shall be handled within the sole discretion of the affected Party. For the
purposes of this Agreement, “Force Majeure” shall have the same meaning as is
set out in the Buenavista Contract. 

ARTICLE 13

DEFAULT

13.1 Notice of Default

Where a Party is in default of any provisions of this Agreement
the non-defaulting Party will give notice of default to the defaulting Party in
accordance with Article 10. The defaulting Party will have thirty (30) days to
remedy the default. If after thirty (30) days the default has not been remedied,
the non-defaulting Party shall have the right to terminate the Agreement in
accordance with Article 3.3.

13.2 Default

Except as otherwise agreed, if Farmee fails to pay the
Consideration under Article 4 of this Agreement by the applicable dates, Farmee
shall be in default. In such event, Farmor would retain the right to receive any
and all revenues derived from production from the Buenavista Contract. On the
date such Consideration is paid in full, Farmor would cease to have any rights,
benefits or entitlements whatsoever in respect of the Buenavista Contract, and
all rights, benefits or entitlements acquired pursuant to the assignment of
Participating Interest would fully vest in Farmee.

ARTICLE 14

ASSIGNMENT

14.1 Assignment

Farmee may enter into any transaction (whether by way of
reconstruction, reorganization, consolidation, amalgamation, business
combination, merger, transfer, or otherwise) whereby any portion, all or
substantially all of its 

Page 21 of 32

undertaking, property, assets or capital stock would become the
property of, or beneficially owned by any other person or, in the case of any
such amalgamation, of the continuing corporation resulting therefrom (such
amalgamated corporation, the Successor Corporation) provided that: (i) the
Farmee is not in default or no default would result therefrom; (ii) the
Successor Corporation will continue to be liable for the obligations of the
Farmee under this Agreement, the Buenavista Contract and the JOA. 

ARTICLE 15

GENERAL PROVISIONS

15.1 Relationship of Parties

The rights, duties, obligations and liabilities of the Parties
under this Agreement shall be individual, not joint or collective. It is not the
intention of the Parties to create, nor shall this Agreement be deemed or
construed to create, a mining or other partnership association or (except as
explicitly provided in this Agreement) a trust. This Agreement shall not be
deemed or construed to authorize any Party to act as an agent, servant or
employee for any other Party for any purpose whatsoever except as explicitly set
forth in this Agreement. In their relations with each other under this
Agreement, the Parties shall not be considered fiduciaries except as expressly
provided in this Agreement.

15.2 Further Assurances

Each of the Parties shall do all such acts and execute and
deliver all such documents as shall be reasonably required in order to fully
perform and carry out the terms of this Agreement.

15.3 Waiver

No waiver by any Party of any one or more defaults by another
Party in the performance of any provision of this Agreement shall operate or be
construed as a waiver of any future default or defaults by the same Party
whether of a like or of a different character. Except as expressly provided in
this Agreement, no Party shall be deemed to have waived, released or modified
any of its right under this Agreement unless such Party has expressly stated, in
writing, that it does waive, release or modify such right.

15.4 Joint Preparation

Page 22 of 32

Each provision of this Agreement shall be construed as though
all Parties participated equally in the drafting of the same. Consequently, the
Parties acknowledge and agree that any rule of construction that a document is
to be construed against the drafting party shall not be applicable to this
Agreement.

15.5 Severance of Invalid
Provisions

If and for so long as any provision of this Agreement shall be
deemed to be judged invalid for any reason whatsoever, such invalidity shall not
affect the validity or operation of any other provision of this Agreement except
only so far as shall be necessary to give effect to the construction of such
invalidity, and any such invalid provision shall be deemed severed from this
Agreement without affecting the validity of the balance of this Agreement.

15.6 Modifications

There shall be no modification of this Agreement except by
written consent of all Parties.

15.7 Priority of Agreement

In the event of any conflict between the provisions of the main
body of this Agreement and its Exhibits, the provisions of the main body of the
Agreement shall prevail. In the event of any conflict between this Agreement and
the JOA, this Agreement shall prevail. In the event of any conflict between this
Agreement and the Buenavista Contract, this Agreement shall prevail unless such
would be in violation of the Laws of Colombia or the terms of the Buenavista
Contract.

15.8 Interpretation

	 	a. 	
      Headings. The topical
      headings used in this Agreement are for convenience only and shall not be
      construed as having any substantive significance or as indicating that all
      of the provisions of this Agreement relating to any topic are to be found
      in any particular Article.

	 	 	 
	 	b. 	
      Singular and Plural.
      Reference to the singular includes a reference to the plural and vice
      versa.

	 	 	 
	 	c. 	
      Gender. Reference to any
      gender includes a reference to all other genders.

	 	 	 
	 	d. 	
      Article. Unless otherwise
      provided, reference to any Article, Section or an Exhibit means an Article
      or Exhibit of the Agreement.

Page 23 of 32

	 	e. 	
      Include. "include" and
      "including" shall mean to be inclusive without limiting
      the generality of the description preceding such term and are used in an
      illustrative sense and not a limiting sense.

15.9 Counterpart Execution

This Agreement may be executed in any
number of counterparts and each such counterpart shall be deemed an original
Agreement for all purposes; provided that no Party shall be bound to this
Agreement unless and until all Parties have executed a counterpart. For purposes
of assembling all counterparts into one document, Farmor is authorized to detach
the signature page from one or more counterparts and, after signature thereof by
the respective Party, attach each signed signature page to a counterpart.

15.10 Public Announcements

No public announcement or statement
regarding the terms or existence or this Agreement shall be made without prior
written consent of all Parties; provided that, notwithstanding any failure to
obtain such approval, no Party shall be prohibited from issuing or making any
such public announcement or statement to the extent it is necessary to do so in
order to comply with the applicable laws, rules or regulations of any
government, legal proceedings or stock exchange having jurisdiction over such
Party or its affiliates, however, any such required public announcement shall
include only that portion information which the disclosing Party is advised by
written opinion of counsel (including in-house counsel) is legally required.
Such opinion shall be delivered to the other Party prior to any such public
announcement unless such delivery is waived by the non-disclosing Party.

15.11 Entirety

With respect to the subject matter
contained herein, this Agreement (i) is the entire agreement of the Parties; and
(ii) supersedes all prior understandings, agreements and negotiations of the
Parties.

[The remainder of this page is intentionally left
blank]

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     IN WITNESS of their agreement
each Party has caused its duly authorized representative to sign this instrument
on the date set out in the first sentence of this Agreement.

Farmor

/s/ Felipe Pimienta Barrios
PETROSOUTH ENERGY
CORPORATION SUCURSAL COLOMBIA
Felipe Pimienta Barrios 
Authorized
Office

Farmee

/s/ Andrew Defrancesco
DELAVACO ENERGY COLOMBIA INC.
SUCURSAL COLOMBIA
Andrew Defrancesco 
Authorized Officer

OVR/OVR/ID-128416/WPC16423

EXHIBITS

	Exhibit A 	- 	Farmor’s certificate of legal
      existence and representation 
	Exhibit B 	- 	Farmee’s certificate of legal existence and
      representation 
	Exhibit C 	- 	Buenavista Contract 
	Exhibit D 	- 	Joint Operating Agreement 
	Exhibit E 	- 	Assignment 
	Exhibit F 	- 	Document to be issued by UTOE Members 
	Exhibit G 	- 	Outstanding Due Diligence
      Documents 
	Exhibit H 	- 	J-V Agreement 
	Exhibit I 
	- 
	Document to be issued by
      non-approved members of the 
UTOE 

Page 25 of 32

EXHIBIT F.1
DOCUMENT TO BE ISSUED BY THE OPERATOR OF
THE BUENAVISTA CONTRACT

[INSERT DATE]

MR.
ANDREW DEFRANCESCO 
AUTHORIZED OFFICER
DELAVACO
ENERGY COLOMBIA INC. SUCURSAL COLOMBIA 
BOGOTÁ

Re: Assignment of Participating Interests under the
Buenavista Contract

Dear Mr. DeFrancesco,

I, __________, acting in my capacity as Legal Representative of
Tecnicontrol S.A., a company organized and existing under the laws of the
Republic of Colombia, as evidenced in the legal existence and representation
certificate issued by the Chamber of Commerce of Bogotá and attached hereto
(“Tecnicontrol”) do hereby

DECLARE

1. That Tecnicontrol is a member of UTOE, and the authorized
operator of the Buenavista Contract and is in good standing before the ANH.

2. That Tecnicontrol acknowledges that DELAVACO ENERGY COLOMBIA
INC. SUCURSAL COLOMBIA is the legal assignee of sixteen percent (16%)
Participating Interest in the Buenavista Contract (“the Assignee”).

3. That Tecnicontrol, acting in its capacity as Operator under
the Buenavista Contract undertakes and agrees in an irrevocable manner (i) to
execute the Assignment required under Colombian law for Assignee to be approved
as such by the ANH; (ii) to make its best efforts to obtain such Approval
including but not limited to provide any information or document, to sign and
deliver any required document or certificate; and in general, to fully cooperate
with the Assignee and the ANH in order to obtain Approval of the Assignee.

Given this [DAY] ([DAY]th) day of [MONTH] two thousand
  and eight (2008).

_____________________________________
Tecnicontrol
S.A.
Name: 
C.C.
Position: Legal Representative

Page 26 of 32

EXHIBIT F.2
DOCUMENT TO BE ISSUED BY UTOE
MEMBER

[INSERT DATE]

MR.
ANDREW DEFRANCESCO 
AUTHORIZED OFFICER
DELAVACO
ENERGY COLOMBIA INC. SUCURSAL COLOMBIA 
BOGOTÁ

Re: Assignment of Participating Interests under the
Buenavista Contract

Dear Mr. DeFrancesco,

I, Omar Leal Quiroz, acting in my capacity as Legal
Representative of PETROLEUM EQUIPMENT INTERNATIONAL LTDA., a company organized
and existing under the laws of the Republic of Colombia, as evidenced in the
legal existence and representation certificate issued by the Chamber of Commerce
of Bogotá and attached hereto (“PEI”) do hereby

DECLARE

1. That PEI is a member of UTOE, and is in good standing before
the ANH.

2. That PETROLEUM EQUIPMENT INTERNATIONAL LTDA. acknowledges
that DELAVACO ENERGY COLOMBIA INC. SUCURSAL COLOMBIA is the legal assignee of
sixteen percent (16%) Participating Interest in the Buenavista Contract (“the
Assignee”).

3. That PEI, acting in its capacity as UTOE Member under the
Buenavista Contract undertakes and agrees in an irrevocable manner (i) to
execute the Assignment required under Colombian law for Assignee to be approved
as such by the ANH; (ii) to make its best efforts to obtain such Approval
including but not limited to provide any information or document, to sign and
deliver any required document or certificate; and in general, to fully cooperate
with the Assignee and the ANH in order to obtain Approval of the Assignee.

Given this [DAY] ([DAY]th) day of [MONTH] two thousand
  and eight (2008).

_____________________________________
PETROLEUM EQUIPMENT
INTERNATIONAL LTDA. 
Name: Omar Leal Quiroz 
C.C. 91.241.011
 Position:
Legal Representative

Page 27 of 32

EXHIBIT F.3
DOCUMENT TO BE ISSUED BY UTOE
MEMBER

[INSERT DATE]

MR.
ANDREW DEFRANCESCO 
AUTHORIZED OFFICER
DELAVACO
ENERGY COLOMBIA INC. SUCURSAL COLOMBIA 
BOGOTÁ

Re: Assignment of Participating Interests under the
Buenavista Contract

Dear Mr. DeFrancesco,

I, __________________________________________, acting in my
capacity as authorized officer of Bohemia Investment S.A. Sucursal Colombia, an
establishment organized and existing under the laws of the Republic of Colombia,
as evidenced in the legal existence and representation certificate issued by the
Chamber of Commerce of Bogotá and attached hereto (“Bohemia”) do hereby

DECLARE

1. That Bohemia is a Member of UTOE, and is in good standing
before the ANH.

2. That Bohemia acknowledges that DELAVACO ENERGY COLOMBIA INC.
SUCURSAL COLOMBIA is the legal assignee of sixteen percent (16%) Participating
Interest in the Buenavista Contract (“the Assignee”).

3. That Bohemia, acting in its capacity as Operator under the
Buenavista Contract undertakes and agrees in an irrevocable manner (i) to
execute the Assignment required under Colombian law for Assignee to be approved
as such by the ANH; (ii) to make its best efforts to obtain such Approval
including but not limited to provide any information or document, to sign and
deliver any required document or certificate; and in general, to fully cooperate
with the Assignee and the ANH in order to obtain Approval of the Assignee.

Given this [DAY] ([DAY]th) day of [MONTH] two thousand
  and eight (2008).

_____________________________________
Bohemia Investment
S.A. Sucursal Colombia 
Name: 
C.C.
Position: Authorized Oficer

OVR/OVR/ID-130565WPC16423

Page 28 of 32

EXHIBIT G 
OUTSTANDING DUE DILIGENCE DOCUMENTS

The following documents are necessary to complete Farmee’s
remaining due diligence in respect of the transactions and matters contemplated
hereunder (the “Outstanding Due Diligence Documents”):

	1. 	
      Status of E&P Contract

	 	 	 
		1.1. 	
      Documents evidencing the current compliance status with
      the ANH;

	 	 	 
		1.2. 	
      Any correspondence with the ANH regarding defaults,
      administrative proceedings and requests regarding compliance with the
      Contract;

	 	 	 
		1.3. 	
      Any amendment or extension granted to the E&P
      contract with ANH;

	 	 	 
		1.4. 	
      Any servitude or right of way agreements entered into, in
      order to conduct exploration activities;

	 	 	 
	2. 	
      Participating Interests

	 	 	 
		2.1. 	
      Any amendment to existing assignment agreements or
      similar arrangements;

	 	 	 
		2.2. 	
      Any claim, litigation, existing or threatened, from
      existing or former partners to the Block regarding their
    participation

	 	 	 
	3. 	
      Environmental

	 	 	 
		3.1. 	
      Copy of the environmental insurance policy, if
      available.

	 	 	 
		3.2. 	
      Copy of the environmental licenses issued in favor of the
      operators, if applicable.

	 	 	 
		3.3. 	
      Listing and copies of all environmental permits issued.
      We mention the following for your information: (i) dumping, (ii)
      authorization to use deep wells; (iii) water concessions; (iv) forest
      exploitation; (v) registration as used oil generator; (vi) registration as
      hazardous waste generator; (vii) information concerning the Department of
      Environmental Management.

	 	 	 
		3.4. 	
      Copy of the correspondence exchanged with environmental
      authorities during the last 3 years.

	 	 	 
		3.5. 	
      Copies of agreements entered with third parties for
      managing and exploitation of natural resources (if available), or for
      solid or liquid waste disposal (if available).

	 	 	 
		3.6. 	
      Copies of operators’ environmental policies, if
      available.

	 	 	 
		3.7. 	
      Stating whether the operator is ISO 14000 certified. If
      so, certificates should be enclosed.

	 	 	 
		3.8. 	
      Copies of all documents describing, identifying and
      regulating the customary handling and final disposal procedure of
      industrial waste (liquid and solid). A statement should be made as to
      whether hazardous wastes are produced (irritating odors, noise,
    etc.).

Page 29 of 32

		3.9. 	
      Certification of fulfillment of obligations imposed on
      the company in the performance of permits, licenses or other actions from
      the environmental authorities.

	 	 	 
		3.10. 	
      Proof of payment of contributions such as compensatory
      and/or retributive fees (if applicable).

	 	 	 
		3.11. 	
      Copies of all administrative investigations and eventual
      sanctioning resolutions, if necessary, relating to the aforesaid
      matters.

	 	 	 
		3.12. 	
      Report of fines or administrative sanctions imposed by
      environmental, or competent control authorities in connection with the
      aforesaid matters. If copies of the same are available.

	 	 	 
		3.13. 	
      Copies of all processes, judicial claims, group actions
      or Writ of Mandamus and the eventual sanctioning rulings against the
      company, if applicable, in connection with the aforesaid
matters.

	 	 	 
		3.14. 	
      Any documents relating to or containing relevant
      environmental issues (incidents/emergencies), including monitoring
      reports, work-related accidents or diseases, spills, fires and other
      emergencies.

	 	 	 
		3.15. 	
      Documents proving compliance of the requirements for
      management and production of hazardous wastes, pursuant to Decree 4741 of
      2005.

	 	 	 
		3.16. 	
      Copy of the documents certifying the existence or
      otherwise of indigenous or black communities within the areas of the oil
      fields.

	 	 	 
	4. 	
      JOA

	 	 	 
		4.1. 	
      Cost estimates for work commitments

	 	 	 
		4.2. 	
      Reports evidencing income from partners and expenses
      incurred

	 	 	 
		4.3. 	
      Current balance of the JOA joint account

	 	 	 
	5. 	
      Any other document or information that may be relevant
      regarding the Buenavista Contract, the JOA or any
  Document.

Farmee’s Colombian counsel, on behalf of Farmee, hereby
confirms to Farmor that it has received the Outstanding Due Diligence Documents
this _____day of _________________, 2008.

CAVELIER ABOGADOS

Page 30 of 32

EXHIBIT I
STATEMENT BY NON-APPROVED MEMBERS OF THE
UTOE

[INSERT DATE]

MR.
ANDREW DEFRANCESCO 
AUTHORIZED OFFICER
DELAVACO
ENERGY COLOMBIA INC. SUCURSAL COLOMBIA 
BOGOTÁ

Re: Assignment of Participating Interests under the J-V
Agreement

Dear Mr. DeFrancesco,

We, the undersigned authorized officers of the entities that
are current members of the Uni? Temporal Omega Energy (UTOE), do hereby

DECLARE

	1. 	
      That we are private members of the UTOE not officially
      approved as such by the ANH.

	 	 
	2. 	
      That we acknowledge that DELAVACO ENERGY COLOMBIA INC.
      SUCURSAL COLOMBIA is the legal assignee of sixteen percent (16%)
      Participating Interest in the Buenavista Contract (“the
  Assignee”).

	 	 
	3. 	
      That we accept the above-mentioned assignment and
      recognize DELAVACO ENERGY COLOMBIA INC. SUCURSAL COLOMBIA as a member of
      the UTOE.

Given this [DAY] ([DAY]th) day of [MONTH] two
thousand and eight (2008).

_____________________________________
INFINITY OIL
LIMITED
Name: 
C.C.

Page 31 of 32

Position: Authorized Oficer

_____________________________________
TC OIL &
SERVICES S.A.
Name: 
C.C.
Position: Authorized Oficer

_____________________________________
QUALITY
SERVICES AND INVESTORS, S.A.
Name: 
C.C.
Position: Authorized
Oficer

_____________________________________
XANDORO
LIMITED
Name: 
C.C.
Position: Authorized Oficer

Page 32 of 32

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