Document:

Exploration and Development Agreement

 EXHIBIT 10.9 
 EXPLORATION AND DEVELOPMENT AGREEMENT 
 This Exploration and Development Agreement
(“Agreement”), dated and effective the 21st day of November, 2005 (the “Effective
Date”), is entered into by and between Ohio Triangle, L.P., a Texas limited partnership (“Ohio Triangle”) and GEM-CBM Company f/k/a Harken Gulf Exploration Company, a Delaware corporation (“GEM”). Ohio
Triangle and GEM are sometimes referred to individually as a “Party”, and collectively as “Parties.” Ute Oil Company, d/b/a. A.C.T. Operating Company, a Texas corporation (“Ute Oil”) is a party to
this Agreement because it is to be designated as Operator under the applicable operating agreement and, therefore, will be bound by this Agreement. 
 RECITALS 
 WHEREAS, Ohio Triangle and GEM have identified a particular area of land located in the State of Ohio,
described as the “Triangle Prospect Area”, which is believed to be prospective for hydrocarbon exploration and more particularly coalbed methane; and 
 WHEREAS, the Parties desire to jointly explore and develop the Triangle Prospect Area in accordance with the terms and provisions of this Agreement; 
 NOW, THEREFORE, for and in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by all parties, Ohio Triangle and GEM hereby agree as follows: 
 ARTICLE I. 
 AGREEMENT TO PARTICIPATE 
 1.1 Ohio
Triangle and GEM each agrees to participate in the Triangle Prospect Area as set forth in this Agreement, according to the terms and provisions set forth in this Agreement, and all Exhibits hereto. 
 ARTICLE II. 
 TRIANGLE PROSPECT AREA

 2.1 The Triangle Prospect Area. The Triangle Prospect Area consists of the lands, located in Carroll, Jefferson, and
Harrison Counties, Ohio, and included within the red outline on the map as Exhibit A hereto. The only depth restriction applied to the Triangle Prospect Area shall be those, if any, contained in the applicable Leases (as hereinafter defined),
those leases acquired in Phase II (as hereinafter defined), and in leases acquired pursuant to Section 5.4. 
 2.2
Leases. Ohio Triangle is the current beneficial owner of certain Oil, Gas, Coalseam Gas, and Coal Bed Methane Leases covering approximately
                 gross acres of land within the Triangle Prospect Area, which are depicted in yellow on Exhibit A and which are 

  

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more particularly described on Exhibit B hereto. The Oil, Gas, Coalseam Gas, and Coal Bed Methane Leases which are identified in Exhibit B are,
sometimes, collectively referred to as the “Leases.” 
 ARTICLE III. 
 DEVELOPMENT OF THE TRIANGLE PROSPECT AREA 
 3.1 Exploration Phases. Ohio Triangle and GEM shall initially explore and develop the Triangle Prospect Area in three (3) phases, in accordance with the terms of this Agreement. “Phase I” shall mean and
refer to all the obligations and rights of all Parties in Section 3.2, along with the activities described therein. “Phase II” shall mean and refer to all the obligations and rights of all Parties in
Section 3.3, along with the activities described therein. “Phase III” shall mean and refer to all the obligations and rights of all Parties in Section 3.4, along with the activities described therein. Phase
I, Phase II, Phase III and the Subsequent Operations (as defined hereinafter) shall constitute the “Project.” GEM agrees to pay to Ohio Triangle for the purchase of GEM’s proportionate share (as set forth in Section 4.1
below) of the Leases the total sum of Five Hundred Thousand and No/100 Dollars ($500,000.00) which shall be paid in three (3) installments in accordance with the terms set forth in Sections 3.2, 3.3 and 3.4. 
 3.2 Phase I. Contemporaneous with the execution of this Agreement, GEM shall pay to Ohio Triangle the sum of One Hundred Thousand And No/100
Dollars ($100,000.00) as the first payment of the initial Lease costs (“First Lease Payment”). Said First Lease Payment shall be via wire transfer of immediately available funds to the banking coordinates identified, in writing by
Ohio Triangle. Subject to Section 9.16 of this Agreement, failure by GEM to timely make said payment shall cause this Agreement to terminate and become null and void as between the Parties. 
 (a) Within ninety (90) days following execution of this Agreement, GEM shall direct the Operator to commence the drilling of
                         core holes to be located in the Triangle Prospect Area. The
                         core holes (each a “Phase I Core Hole,” and together with any other core holes drilled
during Phase I, the “Phase I Core Holes”) shall be continuous wireline retrievable whole core holes which shall be drilled from the shallowest to the deepest structural position on the Triangle Prospect Area. Each Phase I Core Hole
will be drilled to a depth sufficient to penetrate the #5 coal (as determined by GEM),
                                    
                                
                                        
                                        
                                    
                                
                                 
                                     
                , and at the written request of GEM, may be drilled deeper. The Phase I Core Holes will be drilled on the Leases or on such other lands as may be
acquired by the Operator, at GEM’s cost, which is agreed to between the Parties. Commencement of the operations for the Phase I Core Holes is expressly subject to the Operator’s receipt of permission from all applicable federal, state and
local governmental authorities, rig and ancillary equipment availability. GEM may choose to direct the Operator to drill more
                                 Phase I Core Holes at a location and at a depth to be
determined by GEM, the drilling of additional Phase I Core Holes shall also be considered to be a part of Phase I for all purposes under this Agreement. All Phase I Core Holes shall be plugged and abandoned in compliance with all state and federal
rules, regulations and/or procedures and in accordance with standard industry customs and 

  

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practices. The plugging and abandonment of all Phase I Core Holes shall also be considered to be part of Phase I for all purposes under this Agreement.

 (b) In conjunction with the Phase I Core Hole operations, the Operator will use its best efforts to collect a sufficient quantity of coal
samples in gas desorption canisters. Thereafter, the Operator shall have all Phase I Core Hole samples analyzed by a laboratory approved by the Parties. The analysis will include, without limitation, gas content, gas and coal qualitative analyses,
and desorption isotherm determination. The Operator shall obtain reports of such laboratory analysis and shall deliver such reports to the Parties no later than ten (10) days after receipt of the reports. Within thirty (30) days of the
completion of the Phase I Core Holes and the delivery of the laboratory analysis of all samples taken in the Triangle Prospect Area, the Operator and Ohio Triangle shall prepare and deliver to GEM a report detailing the Operator’s
recommendations (which shall account for environmental issues) for Phase II of the Triangle Prospect (hereinafter referred to as the “Phase I Report”). The Phase I Report shall account for all aspects of the Phase II Pilot Projects
(as defined hereinafter), which shall include, with out limiting the generality of the foregoing, location of each pilot project, schedule for drilling of all wells and construction of facilities, location of each well to be drilled (including
surface and bottomhole locations, if applicable), all zones to be tested, drill depth of each well, prognosis of drilling operations for each well, method of drilling each well, completion procedures to be utilized for each well, any stimulation
procedures to be utilized, equipping of each well, electrical services, production facilities, flowlines, gathering systems and facilities, compression, dehydration and other treating facilities, pipeline taps, transmission lines and facilities. GEM
shall have thirty (30) days after receiving the Phase I Report from the Operator and Ohio Triangle to elect to proceed with Phase II (the “Phase II Election Window”) and must make such election pursuant to the terms of
Section 3.2(d). Within the Phase II Election Window, GEM shall review the Phase I Report and make any modifications to the recommendations (the “Phase I Report Modifications”) set forth in the Phase I Report.
Notwithstanding the foregoing, GEM’s modifications, if any, shall be solely limited to the technical aspects of the Phase I Report, and shall in no manner modify or change the schedule for the drilling or construction of facilities set forth in
the Phase I Report. If GEM does not deliver any Phase I Report Modifications within the Phase II Election Window, it shall be deemed to have no Phase I Report Modifications, and the Phase I Report shall stand as it was submitted to GEM. However, if,
within the Phase II Election Window, GEM delivers to Ohio Triangle, written Phase I Modifications, then the version submitted by the Operator and Ohio Triangle along with the Phase I Report Modifications shall constitute the Phase I Report. Unless
mutually agreed to by the Ohio Triangle and GEM, no Phase I Report Modifications shall have the effect of extending the time of the Phase II Election Window. 
 (c) Following the execution of this Agreement and within ten (10) days of the receipt by GEM of the written request by Ohio Triangle, GEM shall deliver to the Operator, a fully executed Authority For Expenditure
(“AFE I”) attached hereto as Exhibit C. GEM shall pay to the Operator the total AFE I amount within thirty (30) days from its delivery of the fully executed AFE I. Subject to Section 9.16 of this Agreement,
failure by GEM to timely make said payment shall cause this Agreement to terminate and become null and void as between the Parties. Subject to the provisions of Section 3.7 below, GEM is responsible for all of the actual 

  

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costs incurred even if they exceed the amounts shown in the AFE I, and all such costs actually paid or credited shall be considered in the calculation of the
Carried Interest Amount (as defined below). All costs in excess of the AFE I shall be billed to GEM in accordance with the provisions of the Triangle Prospect Joint Operating Agreement and shall be paid by GEM within fifteen (15) days of
receipt of an invoice for any such costs. At the end of operations for Phase I, any overpayment will be returned, unless GEM elects otherwise, and any underpayment will be paid promptly. 
 (d) GEM shall have the option, but not the obligation, to elect to proceed with Phase II of the Triangle Prospect. GEM must provide Ohio Triangle with
written notice of its election to proceed with Phase II within the Phase II Election Window. If GEM fails to respond within the Phase II Election Window, Ohio Triangle shall send GEM a termination notice. If GEM fails to elect to proceed with Phase
II following three (3) business days after receipt of such termination notice, then GEM shall be deemed to have elected not to proceed with Phase II, and this Agreement shall terminate and be null and void as of the date that the Phase II
Election Window expired. 
 3.3 Phase II. If GEM elects to participate in Phase II, it shall pay to Ohio Triangle, within ten
(10) days of receipt by Triangle of GEM’s written election to participate, the sum of Two Hundred Thousand And No/100 Dollars ($200,000.00) as the second payment of the initial Lease costs (“Second Lease Payment”). Said
payment shall be via wire transfer of immediately available funds to the banking coordinates identified in writing by Ohio Triangle. Subject to Section 9.16, GEM’s failure to pay timely shall cause this Agreement to terminate and
become null and void as between the Parties. 
 (a) Within ten (10) days after GEM’s written election to participate in Phase II,
the Operator shall submit to GEM a                      AFE in the amount of Five Hundred Thousand and No/100 Dollars ($500,000.00) which will be
payable by GEM to the Operator as follows: (i) the first payment in the amount of $200,000.00 shall be paid within thirty (30) days from its receipt by GEM of the
                     AFE; (ii) the second payment in the amount of $150,000.00 shall be paid to the Operator within twenty (20) days from
GEM’s receipt of written notice that the Operator has spent seventy five percent (75%) of the first payment; (iii) the third and final payment in the amount of $150,000.00 shall be paid within thirty (30) days from GEM’s
receipt of written notice that the Operator has spent seventy five percent (75%) of the second payment. Subject to Section 9.16 of this Agreement, failure by GEM to timely make each such payment shall 

  

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cause this Agreement to terminate and become null and void as between the Parties. Subject to the provisions of Section 3.7 below, GEM is
responsible for all of the                     
                     costs incurred in accordance with the provisions of this Section 3.3(a), even if they exceed the amounts shown in
                                          AFE,
and all such costs actually paid or credited shall be considered in the calculation of the Carried Interest Amount. At the end of operations for Phase II, any overpayment will be returned, unless GEM elects otherwise, and any underpayment will be
paid promptly.                    
                                          Phase
II shall be considered by the Parties as completed upon the acquisition of Additional Acreage covering                     
                     acres                     
                    , or two hundred forty (240) days after Ohio Triangle’s receipt of the Second Lease Payment, whichever is the first to
occur. 
 (b) Within sixty (60) days of the completion of the lease acquisition portion of Phase II, the Operator shall commence
operations for Phase II which will consist of                      pilot projects. The first pilot project (the “First Pilot
Project”) shall be at a location in the general vicinity of a Phase I Core Hole and will consist of five (5) wells in a “five-spot” pattern spaced on 40 acres, more or less, per well. The second pilot project (the
“Second Pilot Project”; together with the First Pilot Project, referred to as the “Phase II Pilot Projects”) shall be located in the general vicinity of where a Phase I Core Hole (but a different Phase I Core Hole
than chosen for the First Pilot Project) and will consist of five (5) wells in a “five-spot” pattern spaced on 40 acres, more or less, per well. The purpose of Phase II will be to determine the commercial viability of actual producing
wells in the Triangle Prospect Area. The Parties agree to market and sell, to the extent commercially viable, all liquid and gaseous hydrocarbons produced and save from Phase II wells. The Operator, within ninety (90) days after completion of
the Phase II Pilot Projects, or other such time as may be mutually agreed between GEM and Ohio Triangle not to exceed one hundred eighty (180) days after completion of the Phase II Pilot Projects, shall prepare and deliver to Ohio Triangle and
GEM a report detailing the Operator’s recommendations (which shall account for, among other things, environmental issues, if any) for Phase III of the Triangle Prospect (hereinafter referred to as the “Phase II Report”). The
Phase II Report shall account for all aspects of the development drilling of the Triangle Prospect Area, which shall include a development plan scheduling the drilling and development of the Triangle Prospect Area, which shall include without
limiting the generality of the foregoing, a schedule for drilling of all wells, a schedule for the construction of gathering, production, and treatment facilities, location of all wells to be drilled (including surface and bottomhole locations, if
applicable), all zones to be tested, drill depth of each well, prognosis of drilling operations for each well, method of drilling each well, completion procedures to be utilized for each well, any stimulation procedures to be utilized, equipping of
each well, electrical services, production facilities, flowlines, gathering systems and facilities, compression, dehydration and other treating facilities, pipeline taps, transmission lines and facilities and any other operations necessary to the
development of the Triangle Prospect Area. GEM shall have thirty (30) days after receiving the Phase II Report from the Operator and Ohio Triangle to elect to proceed with Phase III (the “Phase III Election Window”) and must
make the election pursuant to the terms of Section 3.3(b). Within the Phase III Election Window, GEM shall review the Phase II Report and make any modifications to the recommendations (the “Phase II Report
Modifications”) set forth in the Phase II Report. Notwithstanding the foregoing, GEM’s modifications, if any, shall be 

  

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solely limited to technical aspects of the Phase II Report, and shall in no way modify or change the schedule for the drilling of wells or construction of
production, gathering, or treating facilities as set forth in the Phase II Report. If GEM does not deliver the Phase II Report Modifications within the Phase III Election Window, then GEM shall be deemed to have no modifications to the Phase II
Report, and the Phase II Report shall stand as it was submitted to GEM. However, if, within the Phase III Election Window, GEM delivers to Ohio Triangle written Phase II Report Modifications, then the version submitted by the Operator along with
GEM’s Phase II Report Modifications shall constitute the Phase II Report. . Unless mutually agreed to by the Ohio Triangle and GEM, no Phase II Report Modifications shall have the effect of extending the time of the Phase III Election Window.

 (i) Within ten (10) days after the written request of Ohio Triangle, following GEM’s written election to participate in Phase II,
GEM shall execute and deliver to the Operator the Authority For Expenditure II (“AFE II”) for 100% of the estimated costs for the First Pilot Project which is attached hereto as Exhibit D. AFE II may be modified by the
Operator to account for any increase or reduction in third party services prices that may have incurred prior to the execution of the AFE II. In the event AFE II is modified Ohio Triangle shall submit the modified AFE II along with the request. GEM
shall pay to the Operator the 100% of AFE amounts for tangible and intangible costs within thirty (30) days from its delivery of the fully executed AFE. That portion of the AFE attributable to field facilities cost shall be paid within five
(5) business days of GEM’s receipt of a written request from the Operator. Subject to Section 9.16 of this Agreement, failure by GEM to timely execute and deliver AFE II or make said payment shall cause this Agreement to
terminate and become null and void as between the Parties. 
 (ii) After the fifth well in the First Pilot Project has been spudded, the
Operator shall submit an additional AFE (“AFE III”) for 100% of the estimated costs for the Second Pilot Project. GEM shall deliver a fully executed AFE III to the Operator within ten (10) days after the receipt of AFE III from
the Operator. GEM shall pay to the Operator the 100% of the AFE amounts for tangible and intangible costs within thirty (30) days from its delivery of the fully executed AFE III. Should GEM elect not to proceed with the Second Pilot Project or,
if GEM fails to return the executed AFE III to the Operator within the specified time, then Ohio Triangle shall send GEM a written termination notice. If GEM fails to deliver the executed AFE III within three (3) business days after receipt of
a termination notice, then GEM shall be deemed to have elected not to proceed with the Second Pilot Project and with Phase III and this Agreement shall terminate and be null and void except, with respect to the wells drilled in the First Pilot
Project. GEM shall earn an assignment of a forty (40) acre production unit, as to all depths, surrounding each well drilled and completed in the First Pilot Project. Said forty (40) acre production unit shall be the closest quarter
(1/4) quarter (1/4) section of land surrounding each such well. 
 (iii) Subject to the provisions of Section 3.7 below,
GEM is responsible for all 

  

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of the costs incurred even if they exceed the amounts shown in AFE II or AFE III, and all such costs actually paid or credited shall be considered in the
calculation of the Carried Interest Amount. At the end of operations for Phase II, any overpayment will be returned, unless GEM elects otherwise, and any underpayment will be paid promptly. 
 (c) GEM shall have the option, but not the obligation, to elect to proceed with Phase III of the Triangle Prospect. GEM must provide Ohio Triangle with
written notice of its election to proceed with Phase III within the Phase III Election Window. If GEM fails to respond within the Phase III Election Window, then Ohio Triangle shall send GEM a written termination notice. If GEM fails to elect to
proceed within three (3) days after receipt of a termination notice, then GEM shall be deemed to have elected not to proceed with Phase III and this Agreement shall terminate and be null and void as of the date that the Phase III Election
Window expired except, with respect to the wells drilled in Phase II, as to a forty (40) acre production unit, as to all depths, for each well drilled and completed in the Triangle Prospect Area in Phase II. Said forty (40) acre production
unit shall be the closest quarter (1/4) quarter (1/4) section of land surrounding each such well. 
 3.4 Phase III.
If GEM elects to participate in Phase III, it shall pay to Ohio Triangle, within ten (10) days of receipt by Ohio Triangle of GEM’s written election to participate, the sum of Two Hundred Thousand And No/100 Dollars ($200,000.00) as the
third and final payment of the initial Lease costs (“Third Lease Payment”). Said payment shall be via wire transfer of immediately available funds to the banking coordinates identified, in writing by Ohio Triangle. Subject to
Section 9.16, GEM’s failure to pay timely shall cause this Agreement to terminate and become null and void as between the Parties. 
 (a) Notwithstanding the operator replacement provisions in the Triangle Prospect Operating Agreement, GEM shall have the option at any time, after GEM makes the Third Lease Payment and after consultation with Ohio Triangle, to become the
contract operator or to appoint a designee as contract operator. For the purposes of this Agreement the term “Contract Operator” shall mean GEM, if it elects to become the contract operator or its designee contract operator and shall not
be interchanged with the term “Operator” as hereinafter defined. If GEM elects to become the Contract Operator, then Ohio Triangle and the Operator shall be obligated to take all reasonably necessary actions to make GEM or a designee the
contract operator for the Triangle Prospect Area for the purposes of this Agreement; such contract operating agreement shall be consistent with industry standards, have a term of one year (and may be renewable, unless terminated earlier by Ohio
Triangle pursuant to Section 3.4(c) hereinbelow), provide that all Overhead charges under the Triangle Prospect Operating Agreement shall be paid to the Contract Operator, but shall provide for distribution of production revenues by the
Contract Operator only if the first purchaser of production who is not a Party, refuses to distribute directly to the Parties. If GEM elects to become the Contract Operator or elects a designee to be the Contract Operator, neither GEM nor its
designee shall in any manner change or modify the scheduling or implementation of the Phase II Report or change or modify any AFE previously submitted to GEM pursuant to the terms of this Agreement. 
  

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 (b) Within ninety (90) days of Ohio Triangle’s receipt of the Third Lease Payment, the Operator
shall commence operations for Phase III, in accordance with the Phase II Report. The Phase III operations will begin the development drilling of the Triangle Prospect Area. Phase III will end at the point in time when GEM has met the Carried
Interest Amount as defined in Section 3.5 below. 
 (c) In addition to the payment of the Third Lease Payment, GEM shall pay all
of the costs for all operations to be conducted in Phase III until GEM has paid the Carried Interest Amount. Subject to the provisions of Section 3.7, GEM shall pay 100% of the actual costs incurred for Phase III until GEM has paid the
Carried Interest Amount. Within ten (10) days after Ohio Triangle’s receipt of the Third Lease Payment, the Operator shall submit to GEM an AFE for 100% of the estimated costs for all operations to be conducted pursuant to the Phase II
Report for the first calendar quarter. GEM shall pay to the Operator the total AFE amount within thirty (30) days from its receipt of the AFE and shall contemporaneously deliver a fully executed AFE. Thereafter the Operator shall submit to GEM
at least thirty (30) days prior to the next calendar quarter an AFE for 100% of the estimated costs for all operations to be conducted pursuant to the Phase II Report for the next calendar quarter. GEM shall pay to the Operator the total AFE
amount within thirty (30) days from its receipt of the AFE and shall deliver an executed AFE with its payment. The Operator shall continue to submit AFE’s on a quarterly basis until such time as the Carried Interest Amount has been
reached. Once the Carried Interest Amount is met, then Phase III shall end. Subject to Section 9.16 of this Agreement, failure by GEM to timely pay the full amount of each AFE submitted by the Operator for the Phase III costs shall cause
the Agreement to terminate and become null and void as between the Parties. GEM shall only be entitled to an assignment of a forty (40) acre production unit, as to all depths, surrounding each well drilled. Said forty (40) acre production
unit shall be the closest quarter (1/4) quarter (1/4) section of land surrounding each such well. 
 3.5 Ohio Triangle’s
Carried Interest. Notwithstanding anything to the contrary contained herein, GEM hereby agrees to pay for or carry Ohio Triangle’s interest in all operations conducted in Phases I, II, and III in the Triangle Prospect Area until such
time as GEM has expended a total amount of Seven Million Five Hundred Thousand And No/100 Dollars ($7,500,000.00) in the Triangle Prospect Area (the “Carried Interest Amount”), without regard to any production proceeds or other
income received by GEM with respect to the Triangle Prospect. For the purpose of calculating the total amount expended by GEM, the sum shall include the First, Second, and Third Lease Payments, all costs expended in Phase I, II and III, all lease
acquisition costs in Phase II, any costs under the indemnity provisions of Section 8.2 and Section 8.3, all actual costs (including salaries and benefits per COPAS guidelines) incurred and paid by GEM for its technical
employees but only to the extent they are used directly on the Project, any reimbursement paid to surface owners for damages caused by the Project’s activities, any expenses for expenditures related to any bond or letter of credit required by
any governmental authority or any rule, law, statute, or administrative regulations, and all other costs paid by GEM to Ohio Triangle or to the Operator or to any other person or entity providing services to the Triangle Prospect Area, other than
persons or entities related to GEM, except as specified above. GEM shall provide to Ohio Triangle on a quarterly basis a statement identifying the total amounts expended in the Triangle Prospect 

  

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Area; such amounts shall be subject to audit by Ohio Triangle pursuant to the Triangle Prospect Operating Agreement. At such time as GEM has expended
$7,500,000.00 in the Triangle Prospect Area, the Parties shall thereafter share all costs in proportion to their interests as set forth in Section 4.1 below; with respect to costs or services incurred or contracted for prior to the final
payment of the Carried Interest Amount, Ohio Triangle shall pay its share of such costs or services that become due after such final payment, regardless of whether it signed an AFE or consented to the operation. In addition, as interests are
assigned to GEM under Section 4.2, Ohio Triangle shall be responsible for direct operating expenses on the well(s) related to the assignment in accordance with its ownership interest under Section 4.1, regardless of whether
the full amount of the Carried Interest Amount has been paid. For this purpose, operating expenses do not include costs of deepening, side tracking, re-completing a well, overhead costs, or any capital expenditures; such costs of deepening, side
tracking, re-completing a well, overhead costs, or any capital expenditures are to be paid by GEM as part of the Carried Interest Amount. 
 3.6 Subsequent Operations. After the completion of Phase III, all subsequent wells and facilities within the Triangle Prospect Area, and the reworking, deepening, side tracking, re-equipping or re-completion of prior wells
drilled within the Triangle Prospect Area (the “Subsequent Operations”) shall be subject to the Triangle Prospect Operating Agreement. 
 3.7 Limit on Expenditures under AFEs. Notwithstanding the foregoing, in the event any single operation covered by a multiple operation AFE provided hereunder, or under the Triangle Prospect Operating
Agreement, experiences an excess of actual costs over the AFE’d amounts for a single operation which is in excess of 20% of the AFE’d amounts (exclusive of any costs for plugging and abandonment and/or reclamation for any such single well
or operation) or if the single operation is projected to be in excess of 20% of the AFE’d amount (exclusive of any costs for plugging and abandonment and/or reclamation for any such single well or operation), either Party may elect to require
the Operator to cease that operation (and plug and abandon any well). 
 ARTICLE IV. 
 PARTIES AND INTEREST IN PROSPECT AREA 
 4.1 Parties and Interests. The interest of each Party hereto in and to the Triangle Prospect Area (“Triangle Prospect Area Interest”) shall be as follows: 
  

			
	 Party
	  	Triangle Prospect Area Interest
	 Ohio Triangle
	  	35% 
	 GEM
	  	65% 

 Notwithstanding the interests of the Parties set forth above, Ohio Triangle owns 100% of the
Leases subject to GEM’s right to earn interest in the Leases as a result of GEM’s full participation in Phase II and Phase III and full compliance with the terms of this Agreement. 
  

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 4.2 Interests Earned by GEM. Subject to Section 9.16, if GEM timely pays all
sums as required in Section 3.2 and Section 3.3, GEM shall earn an assignment of its proportionate interest as set forth in Section 4.1 as to forty (40) acre production unit, as to all depths, surrounding each well
drilled and completed in the Triangle Prospect Area in Phase II and all Additional Acreage acquired. Said forty (40) acre production unit shall be the closest quarter (1/4) quarter (1/4) section of land surrounding each such well.
Should GEM either elect or be deemed to have elected to not proceed with Phase III or fails to expend the total Carried Interest Amount, GEM shall hereby grant Ohio Triangle a continuing option, which option shall expire one hundred eighty
(180) days after GEM either elects or is deemed to have elected not to proceed with Phase III, to acquire all of GEM’s interest in the Leases for the payment of Two Hundred Thousand and No/100 Dollars ($200,000.00) and/or acquire
GEM’s interest in any Additional Acreage, by paying to GEM, GEM’s proportionate share, as set forth in Section 4.1, of the actual costs incurred for the Additional Acreage (i.e., Ohio Triangle would pay to GEM sixty five
percent (65%) of the actual costs incurred for the Additional Acreage). At the completion of Phase III pursuant to Section 3.5 and if GEM has paid all sums required in Section 3.4 GEM shall earn an assignment of its
proportionate interest as set forth in Section 4.1 as to all Leases and Additional Acreage within the Triangle Prospect Area. 
 4.3 Assignment of Earned Interests. The assignment and conveyance of the interests earned by GEM hereunder shall include the following representations and warranties: 
  

	 	(i)	the assignment shall be without warranty of title, express or implied, except for claims made by through or under Ohio Triangle, but not otherwise; 

  

	 	(ii)	Ohio Triangle has the full authority to execute and deliver the assignment provided for herein in order to convey to GEM the full interest as contemplated hereunder;

  

	 	(iii)	Ohio Triangle owns 100% of the Leases and Additional Acreage being assigned or conveyed subject to GEM’s right to earn interests in the Leases as a result of GEM’s full
participation in Phase II and Phase III and full compliance with the terms of this Agreement; 

  

	 	(iv)	GEM shall receive a net revenue interest not less than 82.5% based on a 100% Working Interest, and Ohio Triangle shall reserve an overriding royalty interest equal to the deference
between the original landowner’s royalty and 82.5% net revenue interest, proportionately reduced to the interest to be conveyed. 

  

	 	(v)	 The interests assigned hereunder to GEM shall be free and clear of any mortgages, liens, burdens, or encumbrances, of any character or kind, originating by through
or under Ohio Triangle, except for leases and burdens contemplated under this Agreement. The assignment and conveyance shall be in the form that is attached hereto as Exhibit E. . In the event a lease within the 

  

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Triangle Prospect Area covers less than the full undivided mineral interest in the lands covered thereby, then the interest to be conveyed herein, shall be
proportionately reduced in direct proportion to that which the mineral interests actually covered under said lease. 

 NOTWITHSTANDING THE FOREGOING, the Parties hereby stipulate and agree that the net revenue interests that may be assigned hereunder, as a result of a farm-in from an unrelated third party whereby an interest in the Triangle Prospect Area
may be earned or acquired, shall be the same net revenue interest acquired pursuant to the terms of said farm-in. Notwithstanding anything to the contrary contained herein, said assignment shall only be delivered to GEM upon the timely payment of
all monies set forth herein, subject to Section 9.16. Each Party agrees to assume and hold each of the other Parties harmless from said Party’s respective share of the conditions, terms and obligations of the Leases and Agreements.

 4.4 Overriding Royalty. Subject to the following limitations, Ohio Triangle shall be entitled to receive an overriding
royalty interest (“Overriding Royalty Interest”) in all leases and interests acquired as Additional Acreage or as a result of the Triangle Prospect Area of Mutual Interest (this provision is not applicable to the Leases and
Agreements) equal to the difference between the royalty burden imposed on the original lease and eighty two and one-half percent (82.5%). 
  

	 	(i)	In no event may the overriding royalty exceed 5%, proportionately reduced; 

  

	 	(ii)	In no event may the overriding royalty be less than 1%, proportionately reduced, even if it results in GEM receiving a smaller net revenue interest than is provided for in this
Section 4.4 above; 

  

	 	(iii)	The Overriding Royalty Interest shall be free and clear of all costs of exploration, drilling, completion and production, but shall bear its proportionate share of all severance and
ad valorem taxes and its proportionate share of all costs incurred after the wellhead in making such production marketable and transporting it to market, which shall never exceed a maximum of twenty five cents ($00.25) per mmbtu;

  

	 	(iv)	The Overriding Royalty Interest shall apply to all of the Triangle Prospect Area Interest; that is, Ohio Triangle’s interest shall be burdened along with GEM’s interest;
and 

  

	 	(v)	No Overriding Royalty Interest shall apply to any leases in which less than all of the expense bearing, or working interest is acquired by the Parties(but without regard to unleased
interests); and 

  

	 	(vi)	No Overriding Royalty Interest shall apply to any leases which are acquired by the Parties in a joint venture or partnership with parties that are unrelated to GEM and/or Ohio
Triangle. 

  

 11 

	 	(vii)	In the event of the acquisition of a lease in the Triangle Prospect Area of Mutual Interest under Section 5.4, the Overriding Royalty Interest shall apply except as
follows: 

  

	 	(a)	No Overriding Royalty Interest shall apply to any leases acquired by a farm-in or similar means under which an interest in leases is acquired by drilling; 

4.5 Additional Leases Acquired. Notwithstanding any other provision of this Agreement under which GEM forfeits or surrenders its
interest, if the Carried Interest Amount has not been reached at the time of such forfeit, and additional leases or other interests have been acquired under this Agreement after the date of this Agreement and have been paid for by GEM, GEM shall not
be required to surrender such additional leases until it has been reimbursed for the actual, out of pocket, acquisition costs incurred and paid by GEM for such additional leases. 
 ARTICLE V. 
 OPERATIONS 
 5.1 The Triangle Prospect Operating Agreement. All operations in the Triangle Prospect Area shall be governed by the terms of the Triangle
Prospect Operating Agreement. Notwithstanding the foregoing, the Parties stipulate and agree that none of the Triangle Prospect Operating Agreement’s non-consent provisions shall in any manner be applicable until after the completion of Phase
III; however, the default provisions of the Triangle Prospect Operating Agreement shall be applicable to the extent that any such provision is not in conflict with the terms of this Agreement. The Triangle Prospect Operating Agreement is subject to
the terms of this Agreement and shall be in the form attached as Exhibit F (the “Triangle Prospect Operating Agreement”). In the event of a conflict between the terms of the Triangle Prospect Operating Agreement and this
Agreement, the terms of this Agreement shall control. The Triangle Prospect Operating Agreement shall be deemed to have been executed by Ohio Triangle and GEM upon the execution of this Agreement. 
 5.2 Operator. Ute Oil shall be designated as the operator of record in the Triangle Prospect Area, pursuant to the terms of the Triangle
Prospect Operating Agreement and subject to the terms of this Agreement. Ute Oil shall remain the operator of record of the Triangle Prospect Area through the completion of Phase III, subject only to (i) its removal or resignation under the
terms of the Triangle Prospect Operating Agreement or (ii) a vote of 75% of the working interest owners by interest without regard to the provisions of the Triangle Prospect Operating Agreement. For the purposes of this Agreement the term
“Operator” shall mean the operator of record. 
 5.3. Triangle Prospect Area of Mutual Interest. 

(a) By the execution of this Agreement, the Parties establish an Area of 

  

 12 

 
Mutual Interest covering the Triangle Prospect Area. If, during the term of this Agreement, any Party acquires a legal or beneficial interest, or the right
to acquire same, in a coal bed methane lease, oil and gas lease, mineral interest, royalty or overriding royalty (excluding the Overriding Royalty Interest), production payments, net profits interest or any other interest in oil or gas (an
“AMI Interest”) within the Triangle Prospect Area of Mutual Interest, then such Party (the “Acquiring Party”) shall promptly notify the other Party hereto (the “Non-Acquiring Party”) advising that
such interest has been acquired. The notification shall set forth the direct costs incurred by the Acquiring Party in connection therewith (the “Acquisition Costs”), along with any documents relating to the acquisition of the AMI
Interest, all title information, and an invoice of the Acquisition Costs to the Non-Acquiring Party. The Non-Acquiring Party shall have a fourteen (14) day period after proper notice has been received in which to elect to acquire its
proportionate Triangle Prospect Area Interest in such interest by paying the Acquiring Party its proportionate share of the Acquisition Costs as determined by Section 5.3(b) and Section 5.4(c). An election to acquire an interest in
such an AMI Interest by a Non-Acquiring Party must be made by giving written notice to the Acquiring Party of the intent to so acquire, accompanied with the appropriate payment of its share of the Acquisition Costs (the “Non-Acquiring
Party’s AMI Payment”); this notice and payment must be made on or before the expiration of the fourteenth (14th) day after receipt of the notice that the interest had been acquired. Failure to timely make such notice of election and payment within said time period will be deemed an election to not acquire an interest. If any Party elects
to not acquire an interest, the Acquiring Party shall notify the Non-Acquiring Party who did elect to acquire an interest and said Party shall have fourteen (14) days from the date of its notice in which to elect to acquire and pay a
proportionate share of the interest which was not taken, in the proportion that the interest of each of said Party’s Triangle Prospect Area Interest bears to the total Triangle Prospect Area Interest of all of the Parties remaining with an
interest in said AMI Interest. Within five (5) business days after the receipt of payment, the Acquiring Party shall execute and deliver to the Parties who have acquired an interest therein a recordable assignment of said interest. All AMI
Leases in which any of the Parties acquire an interest therein pursuant to this provision shall be subject to the terms of this Agreement and the Triangle Prospect Operating Agreement. An AMI Lease must be free and clear of liens and burdens other
than such liens and/or burdens which were reserved or created by unrelated parties prior to the acquisition by the Acquiring Party and must be fully disclosed to the Non-Acquiring Party when notice is given of the acquisition of an AMI Lease. If an
Acquiring Party fails to give timely notice of liens or burdens associated with an AMI Lease to the Non-Acquiring Party, then the Non-Acquiring Party may elect to re-assign its interests in the AMI Lease to the Acquiring Party, and the Acquiring
Party must return all monies paid by Non-Acquiring Party, along with reasonable expenses, including, without limitation, attorney fees, of the Non-Acquiring Party. 
 (b) Ohio Triangle shall receive its Overriding Royalty Interest in any leases constituting an AMI Interest pursuant to Section 4.4. 
 (c) Upon the completion of the lease acquisition portion of Phase II (as defined in Section 3.3(a) herein above) either Party may propose the
creation of a lease acquisition budget designed to acquire interests within the Triangle Prospect Area of Mutual Interest. Upon the mutual written agreement of GEM and Ohio Triangle, the proposing party shall submit an AFE to the non-proposing party
outlining the area wherein the interests will 

  

 13 

 
be acquired and the estimated costs for the acquisition, which will include, without limitation, all bonus, brokerage, legal, recording fees and
miscellaneous expenses. Upon the payment of the non-proposing party’s share of the estimated AFE costs, the proposing party shall begin its activities in the acquisition of interests within the Triangle Prospect Area of Mutual Interest. All
interests acquired pursuant to this section shall be owned by the parties pursuant to Section 4.1.  
 (d) Although the Triangle
Prospect Area is subject to the Triangle Prospect Area of Mutual Interest, the ownership and payment provisions of this Section 5.3 (a) shall not apply to the Additional Acreage acquired in accordance with Section 3.3(a).
 
 5.4 Interests Not Subject to This Agreement. Any AMI Lease in which only one Party participates shall be free and clear
of this Agreement, including its exhibits. In other words, if an interest is offered under Section 5.3, and no other Party elects to participate, the offered interest is no longer subject to this Agreement. 
 5.5 Parties Subject to Triangle Area of Mutual Interest. Parties who have signed this Agreement, other than GEM, and Ohio Triangle have
done so solely for the purpose of agreeing that he, she, or it is bound by the terms of Section 5.3, and Article 6 of this Agreement and is thereby required to tender any AMI Lease it acquires to GEM and Ohio Triangle and is not
entitled to retain or receive any interest therein. 
 5.6 Modifications to Operating Agreement. Notwithstanding the adoption
of the Triangle Prospect Operating Agreement in Section 5.1 above, and as otherwise modified by this Agreement, Ohio Triangle and Ute Oil Company agree that if Ute Oil Company ever sells, transfers, or conveys 50% interest or more of the
shares of stock currently held in Ute Oil Company, Ute Oil Company shall be deemed, at the option of GEM, to have resigned immediately as Operator under the Triangle Prospect Operating Agreement, without any further action necessary to be taken by
any Non-Operator. Ute Oil Company undertakes and agrees to inform GEM, in writing, of the change in ownership of Ute Oil Company of 50% or greater. 
 ARTICLE VI. 
 RECORDS AND DATA 
 6.1 Data. The Operator under the Triangle Prospect Operating Agreement shall, during the term of this Agreement maintain accurate land, land accounting, and geological and mapping records relating to the
Triangle Prospect Area. Subject to the terms of this Agreement, each Party, proportionate to its Triangle Prospect Area Interest will jointly own and be entitled to receive, copy and possess all such land, legal and geological information, maps
(including interpretational maps) and data developed by the Operator or any of the Parties in connection with the Triangle Prospect Area (“Data”). The Operator shall provide access, during normal business hours to the Data to any
Party. 
  

 14 

 6.2 Confidential Information. The Data is confidential information and any Data disclosed
or delivered by the Operator to any of the Parties shall be prominently marked as being confidential. The Parties and Operator shall protect the Data against disclosure using the same degree of care, but no less than a reasonable degree of care, as
each uses to protect its own confidential information. The Parties and Operator shall each ensure that its officers and employees who may have access to the Data are legally obligated to preserve the confidentiality of such information. This
Agreement imposes no confidentiality obligation upon the Parties with respect to any Data disclosed under this Agreement which: (a) was in the Party’s possession prior to receipt from the Operator; or (b) is rightfully received by the
Party from a third party without a duty of confidentiality; or (c) is disclosed by the Operator to a third party without a duty of confidentiality on the third party; or (d) is independently developed by the Party. This Agreement imposes
no confidentiality obligation upon the Parties or the Operator with respect to any Data disclosed under this Agreement which: (a) is or becomes a matter of public knowledge through no fault of the Party or the Operator; or (b) is required
to be disclosed by operation of law or court order; or (c) is disclosed by the Party or the Operator with the other Parties’ and Operator’s prior written approval. Each Party agrees to give the other Party and the Operator, and the
Operator agrees to give the Parties, an adequate opportunity to interpose an objection or take action to assure confidential handling of the Data before making any use or disclosure in reliance upon one of the foregoing exceptions. 
 6.3 Utilization of Data. Each Party and the Operator shall have the right to use the Data in connection with the joint exploration and
development of the Triangle Prospect Area. Except as provided in Section 6.4 below, neither the Operator nor an of the Parties shall have the right to sell, trade, share, disclose, distribute, or exchange the Data during the term of this
Agreement without the prior written consent of all the other Parties. The Data may be sold or exchanged upon the unanimous consent of the Parties. 
 6.4 Disclosure of Data. Notwithstanding the confidentiality obligations of he Parties and the Operator under Section 6.2, each Party may disclose the Data only to: (i) third parties in connection with bona
fide negotiations with such third parties for farmout or farm-in agreements with the disclosing Party covering all or parts of the Triangle Prospect Area; (ii) third parties with a bona fide interest in entering into agreements to purchase all
or a portion of a Party’s Triangle Prospect Area Interest, or otherwise participating in the exploration and/or development of all or parts of the Triangle Prospect Area with the disclosing Party; or (iii) any consultant retained by a
Party to evaluate the Data; provided, however, that all third parties to which the Data is to be disclosed during the term of this Agreement must execute prior to review of the Data, a Confidentiality/Non-Circumvention Agreement
in a form acceptable to all Parties, and provided that the Data is prominently marked as being confidential. 
 ARTICLE VII 

TERM 
  

 15 

 7.1 Term. The obligations of the Parties pursuant to this Agreement shall be for a term of
five (5) years from the Effective Date, and as long thereafter as any Lease and Agreement acquired by the Parties pursuant to this Agreement remains in force and effect, unless sooner terminated under the provisions hereof or by the agreement
of the Parties. 
 ARTICLE VIII. 
 RELATIONSHIP OF PARTIES 
 8.1 No Partnership. The liabilities of the Parties hereunder shall be several, but
not joint or collective. The Parties hereto expressly do not intend to create, and no provision hereof shall be construed as creating a partnership, joint venture, mining partnership, corporation, association, agency relationship or other
relationship whereby any Party shall ever be held liable for the acts either by omission or commission, of the other, the liability of all the respective Parties being several and not joint or collective. Except as expressly provided in this
Agreement or in connection with the sale of production and the disposition of proceeds thereof, the Parties hereto expressly do not intend to create, and no provision hereof shall be construed as creating an agency relationship. Each Party shall be
individually responsible for its own obligations as set out in this Agreement and in the Triangle Prospect Operating Agreement, and all exhibits attached thereto. However, if for federal income tax purposes, this Agreement and the operations
hereunder are regarded as a partnership, each party thereby affected elects not to be excluded in the application of all of the provisions of Subchapter “K” Chapter 1, Subtitle “A” of the Internal Revenue Code of 1986, as amended
(hereinafter referred to as the “Code”), as permitted and authorized by Section 761 of the Code and the regulations promulgated thereunder. Should there be any requirement that each Party hereby affected give further evidence of this
election, each such Party shall execute such documents and furnish such other evidence as may be required by the Federal Internal Revenue Service or as may be necessary to evidence this election. No Party shall give any notice or take any other
action inconsistent with the election made hereby. In making the foregoing election, each Party states that the income derived by such Party from operations hereunder can be adequately determined without computation of partnership taxable income.

 8.2 Third Party Claim and Liability. ANY THIRD PARTY DAMAGE CLAIM OR SUIT OF ANY KIND ARISING DIRECTLY FROM ANY OPERATIONS
CONDUCTED PURSUANT TO THE TERMS OF THIS AGREEMENT AND ALL COSTS AND EXPENSES OF HANDLING, SETTLING, OR OTHERWISE DISCHARGING SUCH CLAIM OR SUIT SHALL BE AT THE JOINT EXPENSE OF THE PARTIES PARTICIPATING IN THE AGREEMENT OR BY THE OPERATION GIVING
RISE TO THE CLAIM, EACH PARTY’S RESPONSIBILITY BEING IN THE PROPORTION OF THEIR TRIANGLE PROSPECT AREA INTEREST IN THE AGREEMENT OR OPERATION GIVING RISE TO THE CLAIM OR SUIT, REGARDLESS OF WHETHER OR NOT SUCH THIRD PARTY DAMAGE CLAIM OR SUIT
IS FOUND TO ARISE IN WHOLE OR IN PART FROM THE SOLE OR CONCURRENT NEGLIGENCE OF ANY PARTY HERETO; PROVIDED, HOWEVER, THAT THIS SECTION 8.2 SHALL NOT APPLY TO ANY DAMAGE CLAIM OR SUIT ARISING AS A RESULT OF A PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. THE PARTIES REPRESENT THAT, TO THE BEST OF THEIR KNOWLEDGE, NO SUCH THIRD PARTY ADVERSE CLAIM OR SUIT PRESENTLY EXISTS. IN THE EVENT AN SUCH CLAIM OR SUIT IS MADE AGAINST ANY 

  

 16 

 
PARTY HERETO, SUCH PARTY SHALL IMMEDIATELY NOTIFY THE OTHER PARTIES, AND THE CLAIM OR SUIT SHALL BE JOINTLY HANDLED BY ALL OF THE PARTIES HERETO
PARTICIPATING IN THE OPERATION GIVING RISE TO THE CLAIM OR SUIT. 
 8.3 Waiver of Consumer Protective Act-Deceptive Trade
Practices. DECEPTIVE TRADE PRACTICES. AS PARTIAL CONSIDERATION FOR THE PARTIES AGREEING TO ENTER INTO THIS AGREEMENT, THE PARTIES EACH CAN AND DO EXPRESSLY WAIVE THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES—CONSUMER PROTECTION
ACT, ARTICLE 17.41, ET SEQ., TEXAS BUSINESS AND COMMERCE CODE, AND ANY APPLICABLE SIMILAR LAW OF ANY OTHER STATE, A LAW THAT GIVE CONSUMERS SPECIAL RIGHTS AND PROTECTIONS, AND ALL THE CONSUMER PROTECTION LAWS OF THE STATE OF TEXAS, OR ANY OTHER
STATE, APPLICABLE TO THIS TRANSACTION THAT MAY BE WAIVED BY THE PARTIES. IT IS NOT THE INTENT OF THE PARTIES HERETO TO WAIVE AND THE PARTIES SHALL NOT WAIVE ANY APPLICABLE LAW OR SUB-PART THEREOF WHICH IS PROHIBITED BY LAW FROM BEING WAIVED. THE
PARTIES HERETO REPRESENT THAT THEY HAVE HAD AN ADEQUATE OPPORTUNITY TO REVIEW THE PRECEDING WAIVER PROVISION, INCLUDING THE OPPORTUNITY TO SUBMIT THE SAME TO LEGAL COUNSEL FOR REVIEW AND COMMENT AND AFTER CONSULTATION WITH AN ATTORNEY OF THEIR OWN
SELECTION, VOLUNTARILY CONSENT TO THIS WAIVER, AND UNDERSTAND THE RIGHTS BEING WAIVED HEREIN. 
 8.4 Bankruptcy. If, following
the granting of relief under the Bankruptcy Code to any Party hereto as debtor thereunder, this Agreement and the Triangle Prospect Operating Agreement shall be held to be an executory contract under the Bankruptcy Code, then any remaining
Party(ies) shall be entitled to determination by debtor or any trustee for debtor within thirty (30) days from the date an order for relief is ordered under the Bankruptcy Code as to the rejection or assumption of this Agreement. In the event
of an assumption, such Party(ies) seeking determination shall be entitled to have all of debtor’s existing defaults under this Agreement cured within five days of such assumption, and to be provided adequate assurances as to the future
performance of the debtor’s obligation hereunder and the protection of the interest of all Parties. The debtor shall satisfy its obligations to provide adequate assurances by either advancing payments or depositing the debtor’s
proportionate share of expenses in escrow. 
 ARTICLE IX. 
 MISCELLANEOUS 
 9.1 Assignments. The terms of this Agreement will be binding on the
Parties hereto, their successors and assigns. Any assignment or encumbrance of a Party’s interest in and to any Leases and Agreements covering the Triangle Prospect Area or the Triangle Prospect Area of Mutual Interest shall be made expressly
subject to this Agreement and the Triangle Prospect Operating Agreement, and any assignee shall be deemed to have expressly assumed its proportionate share of the liabilities under this Agreement form and after the effective date of such assignment;
the assigning Party shall remain fully liable for its 

  

 17 

 
obligations prior to such effective date. This provision also applies to successor-in-interest who acquires a Party’s interest under this Agreement
through foreclosure. 
 9.2 Notices. All notices made by one Party to one or more other Parties shall be in writing and
delivered in person, by email, or by United States mail, courier service, telecopy, postage or charges prepaid and addressed to such Parties at the addresses listed below. Notice given under any provision hereof 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 thereto shall run from the date the originating notice is received. All originating email or telecopy notices shall be confirmed by
mailing such notice by United States mail, but the date of receipt shall be the date such email or telecopy was delivered to the computer or telecopy machine of the recipient. The responsive notice shall be deemed delivered when deposited in the
United States mail or at the office of the courier or upon transmittal by telecopy or email, to the Party as follows: 
  
  

					
	 Ohio Triangle:
	  		  	        GEM:
	 111 Soledad, Suite 250
	  		  	580 Westlake Park Blvd., Suite 750
	 San Antonio, Texas 78205
	  		  	Houston, Texas 77079
		  		  	
	 Attention: Mr. Harvey V. Risien, Jr.
	  		  	        Attention: Mr. Jim Denny
		  		  	
	 Telephone: (210) 225-0800
	  		  	        Telephone: (281) 504-4021
	 Facsimile: (210) 225-8282
	  		  	Facsimile: (281) 504-4123
	 E-Mail: hvrisien@sbcglobal.net
	  		  	E-Mail: jdenny@gemtx.com
		  		  	
	 With a copy to:
	  		  	
		  		  	
	 Oil Transaction
	  		  	Elmer A. Johnston
	 3480 Buskirk Ave, Suite 330
	  		  	        General Counsel to GEM
	 Pleasant Hill, CA 94523
	  		  	180 State Street, Suite 200
		  		  	Southlake, Texas 76092
		  		  	
	 Telephone: (925) 933-5464
	  		  	        Telephone: (817) 424-2424
	 Facsimile: (925) 947-3920
	  		  	Facsimile: (817) 488-0971
	 E-Mail: oiltrans@sbcglobal.net
	  		  	E-Mail: eaj@harkenenergy.com

 A Party may change its address by giving notice to the other Parties, in the manner provided in
this section, at least ten (10) days prior to the effective date of such change of address. 
 9.3 Governing Law. THIS
AGREEMENT (INCLUDING ALL ITS EXHIBITS) SHALL, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW WHICH WOULD RESULT IN THE APPLICATION OF THE LAW OF A DIFFERENT JURISDICTION, BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN TEXAS, EXCEPT THAT TO THE EXTENT THAT THE LAW OF A 

  

 18 

 
STATE IN WHICH A PORTION OF THE TRIANGLE PROSPECT AREA IS LOCATED OR WHICH IS OTHERWISE APPLICABLE TO A PORTION OF THE TRIANGLE PROSPECT AREA NECESSARILY
GOVERNS WITH RESPECT TO PROCEDURAL AND SUBSTANTIVE MATTERS RELATING TO THE CREATION, TRANSFER AND ENFORCEMENT OF THE LEASES AND OTHER INTEREST IN MINERALS, IN WHICH CASE THE LAW OF SUCH STATE SHALL APPLY TO THE PORTION OF THE TRIANGLE PROSPECT AREA
LOCATED WITHIN SUCH STATE. 
 9.4 Entirety of Agreement. This Agreement, including its Exhibits, all of which are incorporated
herein by reference, supersedes any and all other agreements, either verbal or in writing, between the Parties hereto with respect to the subject matter hereof and contains all of the covenants and agreements between the Parties with respect to said
subject matter. Each Party to this Agreement acknowledges that no inducements, promises or agreements, verbally or otherwise, have been relied upon or made by any Party, or anyone acting on behalf of any Party, which are not embodied herein and that
any other agreement, statement, or promise not contained in this Agreement shall not be valid or binding. 
 9.5 Counterparts.
This Agreement may be executed in a number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. It shall not be necessary that the Parties hereto execute a single counterpart
hereof, and this Agreement shall be effective when each Party has executed a counterpart hereof (whether or not any other Party has executed the same counterpart). 
 9.6 Amendment. Unless otherwise expressly provided for herein, this Agreement may only be amended by an instrument in writing signed by all Parties. 
 9.7 Construction. The Parties acknowledge that they and their respective counsel have negotiated and drafted this Agreement jointly and
agree that the rule of construction that ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation or construction of this Agreement. 
 9.8 Cost of Litigation. If any Party hereto should hereafter institute litigation against any other Party hereto alleging that such other
Party has breached this Agreement or any contracts or other instrument delivered pursuant hereto, the non-prevailing Party or Parties (whether plaintiff or defendant) in such action shall reimburse the prevailing Party for the prevailing
Party’s reasonable attorney’s fees, witness fees court costs, and all other reasonable costs in connection with such litigation. 
 9.9 No Third Party Beneficiaries. Nothing in this Agreement (express or implied) is intended or shall be construed to confer upon any person or entity not a Party any right, remedy or claim under or by reason of this
Agreement. 
 9.10 Subject Headings. The subject headings of the articles, sections and subsections of this Agreement are
included solely for purposes of convenience and reference only, and shall not be deemed to explain, modify, limit, amplify or aid in the meaning, construction or interpretation of any of the provisions of this Agreement. 
  

 19 

 9.11 Securities Law. The Parties have entered into this Agreement for their own accounts
and shall acquire any Leases hereunder for their own accounts and not with the intent to make a distribution thereof within the meaning of Securities Act of 1933 and the rules and regulations pertaining to it or distribution thereof in violation of
any applicable securities laws. The Parties acknowledge that each Party and their respective officers, managers, members, and/or directors are sophisticated and experienced investors who have engaged actively in the oil and gas business, or other
business with limited liquidity and/or high risk and is are Accredited Investors as that term is defined in the Securities Act of 1933, as amended. The Parties, at their sole risk and expense, have either conducted their own independent evaluation
of the interests identified herein, or having been provided the opportunity have elected to not exercise that opportunity. 
 9.12
Further Assurances. Each Party hereto shall from time to time do and perform such further acts and execute and deliver such further instruments, assignments and documents as may be required or reasonably requested by the Parties to
carry out and effect the intentions and purposes of this Agreement. 
 9.13 Rights Cumulative. The rights, remedies, and powers
granted to the Parties under this Agreement shall be cumulative and shall not be exclusive rights, remedies and powers, but shall be in addition to all other rights, remedies and powers available at law or in equity, by virtue of any statute or
otherwise, and may be exercised from time to time concurrently or independently and as often and in such order as deemed expedient. 
 9.14
No Waiver. The failure of any Party hereto to insist upon strict performance of any provision hereof shall not constitute a waiver of or estoppel against asserting, the right to require such performance in the future, nor shall a
waiver or estoppel in any once instance constitute a waiver or estoppel with respect to a later breach of a similar nature or otherwise. 
 9.15 Unenforceable Provisions. If any part of this Agreement is invalid or unenforceable, the other provisions of this Agreement shall remain in full force and effect and shall be liberally construed to effectuate the intent
of this Agreement. 
 9.16 Cure Period. In the event of a payment default by a Party under the terms of this Agreement, such
defaulting party shall have ten (10) days after receiving written notice of such default, in accordance with Section 9.2 of this Agreement, to cure the default. After the Carried Interest Amount is reached, this
Section 9.16 shall no longer apply, nor shall any forfeiture provisions of this Agreement (other than those related to the AMI) and all payment provisions and times shall be governed by the Triangle Prospect Operating Agreement.

 9.17 Public Announcements. The Parties to this Agreement hereby stipulate and agree that no Party (including any of its
parents, affiliates, or subsidiaries) shall issue a public statement or press release with respect to the transaction contemplated herein(including the price and other contract terms), the Triangle Prospect Area, or the operations contemplated
herein, without the prior written consent of the other Party, except as required by law, disclosure requirements of any recognized securities exchange, applicable securities laws, or by any applicable rules, regulations, or orders of any 

  

 20 

 
governmental authority or agency having jurisdiction and then only after prior consultation with and approval as to content by the other Party. The Parties
agree that such approval will not be unreasonably withheld and will be given in a timely manner. 
 9.18 Time. The Parties
stipulate and agree that TIME IS OF THE ESSENCE IN THIS AGREEMENT. 
 IN WITNESS WHEREOF, this Agreement is executed, accepted and
agreed to by the Parties effective as of the Effective Date first set forth above. 
  

			
	OHIO TRIANGLE, L.P.
		
	By:	 	 /s/ Harvey V. Risien, Jr.

		 	 Harvey V. Risien, Jr., President of
 25-25 Corp., its General Partner

  

			
	GEM-CBM COMPANY
		
	By:	 	 /s/ James W. Denny, III

		 	 James W. Denny, III,
 President and CEO

 Ute Oil Company d/b/a A.C.T. Operating Company executes this Agreement solely for the purpose of stating that, for
good and valuable consideration, the sufficiency of which is hereby confessed, Ute Oil Company d/b/a A.C.T. Operating Company is bound by the terms of Sections 5.3 and 5.5 and Article 6 of this Agreement. 
 UTE OIL COMPANY, doing business as A.C.T. Operating Company 
  

			
		
	By:	 	 /s/ Donald W. Raymond

		 	 Donald W. Raymond, President

  

 21Exploration and Production Contract

 Exhibit 10.10 
  

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	

  

 PUBLIC DEED No. 0216 
 ZERO – TWO HUNDRED AND SIXTEEN 
 GRANTED BY NOTARY ELEVENTH OF BOGOTA, D.C. 
 DATE: JANUARY 30TH. OF 2006 
 TYPE OF ACT OR ACTS: EXECUTION 
 GRANTOR: HARKEN DE COLOMBIA LIMITED

 I, ZULMA NAVARRO DE BAUTISTA, acting as Notary Eleventh of Bogota Circuit, granted this public deed hereunder following term in Bogota, Capital District,
Cundinamarca State, Republic of Colombia 
 Before me personally appeared GUILLERMO SANCHEZ BARBOSA, of legal age, temporarily in this city, identified with
Passport No. 132457597, acting as Legal Representative on behalf of HARKEN DE COLOMBIA LIMITED, partnership that by means of public deed No. 406 of February 19 of 1993, granted by Notary Eleventh of Bogota D.C. Circuit, registered on
February 26 of 1993 under number 37180 of Book VI, formalized the establishing of its branch in Colombia, such quality and existence is certified in the Certificate of Incorporation and Legal Representation issued by the Chamber of Commerce of
Bogotá, D.c. which is attached for its execution, and he expressed: 
 FIRST: That he presents for safeguarding and formalizing in this Notary the
HYDROCARBON EXPLORATION AND PRODUCTION CONTRACT – LUNA LLENA, Agencia Nacional de Hidrocarburos, Sector Luna Llena, Contractor: Harken de Colombia Limited, in fifty six (56) sheets of notarial paper. Effective date: December 275h of 2005,
with its attachments: Attachment A: Contracted area, Attachment B: Minimum Exploratory Plan, Attachment C: Model of Letter of Credit. 
 SECOND: That he
presents said document for its execution for the purpose that the Notary issues the corresponding copies. 
 HERE MINUTES
SUBMITTED. 
 GRANTING AND AUTHORIZATION 
 This is issued in two (2) sheets of notarial paper with numbers AA 23759220 AA23700391 and having been duly read by grantors they gave their conformity and consent with redaction as it corresponds to minute submitted and in witness
thereof they executed it before me. 
 Notary rights $36,640. 
 Superintendency $3,055 
 Notary National Fund $3,055 
 Decree 1681 of 1996, Resolution 7200 of December 14 of 2005 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	

  

 CHAMBER OF COMMERCE DOCS 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	1

  

 AGENCIA NACIONAL DE HIDROCARBUROS 
 HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT – LUNA LLENA 
  

			
	SECTOR:	 	LUNA LLENA
	CONTRACTOR:	 	HARKEN DE COLOMBIA LIMITED
	EFFECTIVE DATE:	 	DECEMBER 27, 2005

 The contracting parties, Agencia Nacional de Hidrocarburos (National Hydrocarbon Agency), hereinafter ANH, special
administrative unit to the Ministry of Mines and Energy, created by Act 1760 of June 26, 2003, with main domicile in Bogotá, D.C., represented by JOSE ARMANDO ZAMORA REYES, of legal age, with citizenship card No. 19.303.017 issued
in Bogota, with domicile in Bogota D.C. who states that 1. in his capacity of General Director of ANH, acting as representative of the agency and 2. for the purpose of entering into this contract he has been authorized by the ANH Board of Directors,
as recorded in Minute No. 45 of November 11 of 2005, and in the other party HARKEN DE COLOMBIA LIMITED, partnership established under the law of Cayman Islands, domiciled in Cayman Islands, with a branch in Colombia and domiciled in
Bogotá, D.C., as per public deed No. 406 of February 19 of 1993, granted by Notary Eleventh (11) of Bogotá, D.C. Circuit, represented by GUILLERMO SANCHEZ, of legal age, citizen of the United States of America,
identified with Passport 132457597 who states that 1. He is acting as Legal Representative of the company HARKEN DE COLOMBIA LIMITED. 2. for the purpose of entering into this contract he has been fully authorized by as recorded in the Certificate of
Incorporation and Legal Representation issued by the Chamber of Commerce of Bogotá, D.C. 3. solemnly swears that he and the company represented by him do not fall in any of the clauses of incompatibility or ineligibility stated for entering
into this contract and 4. HARKEN DE COLOMBIA LIMITED has certified that has and is bound to maintain the financial capacity, the technical competence and its professional skills needed for performing the operations of this contract. The
aforementioned company shall be for all purposes named as THE CONTRACTOR. 
 In witness whereof ANH and THE CONTRACTOR have
executed this contract contained in following clauses: 
 1st CLAUSE – DEFINITIONS 
 For the purpose of this contract,
following statements shall have following meaning: 
 Attachments A, B, and C form an integral part of this Contract, and therefore, whenever the statements
herein referred to are used in said attachments, they shall also have the same meanings. 

			
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 1.1. Abandonment: Plugging and abandonment of wells, dsimantling of constructions and cleaning and environmental
restoring of areas where exploratory, evaluation or exploitation operations were performed, pursuant to this contract, in conformity to Colombian legislation. 
 1.2. Year: It is the twelve consecutive month period as per the Gregorian calendar, effective from a specific date. 
 1.3. Calendar
year: It is the twelve month period between the January 1st and December 31st, both inclusive, of each year. 
 1.4. Contracted area: Surface and its projection in subsoil identified in Clause 3 and bordered in Attachment A, in which THE CONTRACTOR has been authorized, pursuant to this contract, to perform the Hydrocarbon Exploration,
Evaluation and Exploitation Operations thereof. 
 1.5. Evaluation area: It is the portion of Contracted Area where THE CONTRACTOR made a Discovery
and where he has decided to carry out the Evaluation Program to establish its commerciality, pursuant to Clause 7. This area shall be framed by a surface regular polygon, preferably of four sides which shall comprise the boundary of the vertical
projection on surface of structure or geological trap containing the Discovery. 
 1.6. Exploitation area: It is the portion of Contracted Area where
one or more commercial fields are located as set forth in Clause 9 (section 9.3) of this contract. The area of each Commercial Field shall comprise the boundary of the vertical projection on the surface of the reservoir or reservoirs that form part
of it and that have been defined by the Ministry of Mines and Energy, in conformity to Decree 3229 of November 11, 2003, or with norms that amend or supersede it. 
 1.7. Barrel: It is the volume measure unit of Liquid Hydrocarbons, represents 42 US gallons, corrected at standard conditions (temperature of 60oF and 1 absolute pressure atmosphere). 
 1.8. Good practices of
oil industry: They are the good, safe and efficient operations and procedures generally used by prudent and diligent operators in international oil industry, under conditions and circumstances alike to the ones that arise in the performance of
operations of this contract, basically in those aspects related to the use of adequate methods and processes for obtaining the maximum economical benefit in the final recovery of reserves, reduction of losses, operational safety and protection to
environment, among others, as to they do not infringe Colombian law. 
 1.9. Commercial field: It is the portion of Contracted Area in which subsoil
there are one or more discovered reservoirs that THE CONTRATOR has decided to exploit commercially. 

			
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 1.10. Statement of commerciality: It is the written communication from THE CONTRACTOR to ANH by which it is stated
that the Discovery made in the Contracted Area is a Commercial Field. 
 1.11. Discovery: The hydrocarbon reservoir exists when by drilling with drill
or an alike equipment and with appropriate fluid tests, it is achieved the finding of a rock with hydrocarbons accumulated and that behaves as an independent unit as to production mechanisms, petro-physical properties and fluid properties.

 1.12. Discovery of Non-related natural gas: It is the Discovery which official test of production, provided that such test be representative of the
discovered reservoir or reservoirs, shows a Gas Oil Ratio (GOR) higher than 7,000 feet3 gas standard per each barrel
of Liquid Hydrocarbon and a molar composition of heptanes (C7+) less than 4.0%. RGO is understood as the relation
between natural gas volume in feet3 per day and the volume of Liquid Hydrocarbons in barrels per day produced by a
well and the molar composition of heptanes (C7+) and other hydrocarbons of higher molecular weight. The RGO of a
Discovery with several reservoirs shall be determined upon the weighted average of production of each reservoir and the heptane molar composition (C7+) as the simple arithmetic mean. 
 1.13. Day: Period of 24 hours initiated at zero hours (00:00) and
terminated at twenty four hours (24:00). 
 1.14. Development or Development Operations: Operations and works made by THE CONTRACTOR that include,
this is not an exhaustive list, drilling, completion and furnishing development wells, design, construction, installation and maintenance of equipment, pipelines, transfer lines, storing tanks, artificial production methods, primary and improved
recovery systems, transfer systems, treatment, storing, among others, within the Exploitation Area of the Contracted Area and outside when necessary. 
 1.15. Exploration or Exploration Operations: All the studies and works that THE CONTRACT executes to determine the existence and location of Hydrocarbons in subsoil, included but not limited to geophysical, geochemical, geological,
mapping and in general, to operations of surface projection, drilling of Exploratory Wells and other operations directly related to subsoil exploration for Hydrocarbons. 
 1.16. Evaluation or Evaluation Operations: All the operations carried out by THE CONTRACTOR in an Evaluation Area pursuant to Clause 7 of this contract, with the purpose of evaluating a Discovery, setting
limits of reservoir or reservoirs geometry within the Evaluation Area, determining viability of Hydrocarbon extraction in economically exploitable quantity and quality and the impact on environment and social setting it might generate, among others.
Such operations include drilling of Exploratory Wells, acquisition of seismic detailed programs, carrying production tests and in general, other operations focused toward establishing if Discovery is a Commercial Field and for setting its limits.

			
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 1.17. Exploitation: It comprises Development and Production. 
 1.18. Effective date: It is the day of execution of this contract and since when all its terms will be effective. 
 1.19. Natural gas: Mix of gas Hydrocarbons at standard conditions (temperature of 60oF and 1 absolute pressure atmosphere) formed by the most volatile members of the paraffinic Hydrocarbons series. 
 1.20. Hydrocarbons: All organic compounds constituted basically by the natural mix of Carbon and Hydrogen and also by those substances that are with them or are
derived from them. 
 1.21. Liquid Hydrocarbons: All Hydrocarbons produced in the Contracted Area that under standard conditions of temperature ad
pressure (temperature of 60oF and 1 absolute pressure atmosphere) occur as liquid in the well head or in the
separator, and also de distillates and condensates extracted from gas. 
 1.22. Heavy Liquid Hydrocarbons: All liquid Hydrocarbons with API gravity
equal or below 15o (15o API). 
 1.23. Interest on arrears: When it is about Colombian pesos it shall be the maximum interest
on arrears rate legally permitted and certified by the competent authority; when it is about US dollars it shall be the main LIBOR rate (London Interbank Lending Offered Rate) at three months for deposits in US dollars, plus 4% (LIBOR +4%).

 1.24. Month: Period from any day of a calendar month that ends up the Day precedent to the same Day in the next calendar month, or if it is the
first Day of the month until the last Day of said month. 
 1.25. Parties: When Contract execution, ANH and THE CONTRACTOR. Later and at any time, ANH
one party and THE CONTRACTOR and/or its assignees duly accepted by ANH. 
 When THE CONTRACTOR party is formed by a plural number of companies, they shall
appoint a single one to act as their representative before ANH. 
 1.26. Exploratory period: It is the period of six (6) years effective from the
effective date, as well as of any granted extension, during which THE CONTRACTOR shall perform the Minimum Exploratory Plan. 
 1.27. Exploitation
period: With regard to each Exploitation Area, it is the term of up to twenty four (24) years and their extensions, if any, effective since the date of Statement of Commerciality of the appropriate Commercial Field, during which THE
CONTRACTOR shall perform the Development and Production Operations. 

			
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 1.28. Exploitation Plan: It is the guideline document prepared by THE CONTRACTOR pursuant to Clauses 9 and 10 of
this contract for performing the technical, efficient and economical Exploitation of each Exploitation Area and it shall contain, among other aspects, the calculation of Hydrocarbon reserves, description of production facilities and Hydrocarbon
transport, short and medium-term forecasts of Hydrocarbon Production, the Abandonment plan and the Exploitation Work Plan for the remaining calendar year or for next calendar year. 
 1.29. Exploratory Well: It is the well to be drilled by THE CONTRACTOR in the Contracted Area for the exploration of Hydrocarbon reservoirs, in a non-tested area as Hydrocarbon producer or to find additional
reservoirs to a Discovery or to extend limits of known reservoirs of a Discovery. 
 1.30. Production or Production Operations: All operations
performed by THE CONTRACTOR in the Exploitation Area related to processes for extracting, collection, treatment, storing and transfer of Hydrocarbon up to Delivery Point, Abandonment and any other operations related to Hydrocarbon obtaining.

 1.31. Minimum Exploratory Plan: It is the plan of Exploration Operations agreed in Clause 5 (section 5.1) of this contract that THE CONTRACTOR is
bound to perform, at least during the phase of the Exploration Period where it enters. 
 1.32. Evaluation Program: It is the Evaluation of Operations
presented by THE CONTRACTOR to ANH pursuant to Clause 7 of this contract with the purpose of evaluating the Discovery and determining if it is a Commercial Field. The performance of the Evaluation Program and the presentation of the outcome report
to ANH are the requirements for the statement if the Discovery is a Commercial Field. 
 1.33. Work Plan: It is the description of operations and
Exploration, Evaluation and/or Exploitation operations of Contracted Area pursuant to this contract. The Work Plan shall include the schedule as per THE CONTRACTOR shall initiate and finish the operations and the appropriate budget. 
 1.34. Delivery Point: It is the place agreed by the Parties where the Hydrocarbon production of each field is measures in the minimum specification of entry to
any transport system used by THE CONTRACTOR with the purpose of determining the Hydrocarbon volume corresponding to royalties and the Hydrocarbon volume of THE CONTRACTOR. 
 1.35. Re-entry: Existing plugged well that is re-activated by drilling techniques for the purpose of carrying out the evaluation of the target reservoir. 

			
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 CLAUSE 2 – SUBJECT 
 2.1. Subject: By virtue of this contract THE CONTRATOR is granted exclusively with the right to explore the Contracted Area and to explore the Hydrocarbons property of the State that are discovered in said
area. THE CONTRACTOR shall have rights on his corresponding part of the Hydrocarbons production from the Contracted Area, pursuant to the Clause 14 of this contract. 
 2.2. Scope: THE CONTRACTOR, exercising its right, shall perform the operations and operations subject matter of this contract, at their exclusive cost and risk, providing all necessary resources for
forecasting, preparing and carrying out the Exploration, Evaluation, Development and Production operations and activities within the Contracted Area. 
 2.3. Exlusion of righst on other natural resources: Rights granted in this contract refer exclusively to Hydrocarbons property of State that are discovered within the Contracted Area and therefore, shall not extend to another natural
resource that might exist in said area. 
 CLAUSE 3 – CONTRACTED AREA 
 3.1. Extension: The Contracted Area comprises a total extension of approximately one hundred and forty nine three hundred (149.300) hectares. This area is
the one described in Annex “A” which forms part of this contract and is located within municipalities jurisdictions of Paz de Ariporo in Casanare state and La Primavera in Vichada. The Contracted Area shall be reduced gradually pursuant to
this clause. 
 3.2. Restrictions: In the event that a portion of the Contracted Area is extended to areas comprised within the Natural National Parks
System or another reserved, excluded or restricted areas, geographically limited by the appropriate authority, or when the over the contracted area regions with same characteristics aforementioned are extended. THE CONTRACTOR shall be bound to
accept the conditions that regarding such areas the competent authorities so impose. ANH shall not assume any responsibility to this regard. 
 Every time
the ANH shall know any demand of private property on Hydrocarbons of subsoil within the Contracted Area, it shall proceed as appropriate in conformity to legal provisions. 
 3.3. Return of Areas in Exploration, Evaluation and Exploitation: THE CONTRACTOR shall return the areas in Exploration, Evaluation, and Exploitation in all cases foreseen in this contract as the grounds of
return, by waive, by terms maturity, by cases foreseen in clause 8 (section 8.2) and by non compliance of activities corresponding to Work Plans or in general, by any other contractual ground that imposes to THE CONTRACTOR the obligation of
returning the respective area. 

			
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 3.4. Voluntary returns: THE CONTRACTOR shall at any time make partial returns of Contracted Area, provided that
the compliance of obligations contracted by virtue of this contract are not affected. If such voluntary returns take place during the effectiveness of the Exploration Period they shall be accounted for the purpose of the obligatory return of areas.

 3.5. Restoring of return areas: THE CONTRACTOR shall make all Abandonment activities needed and shall restore the returned areas in conformity to
provision of Colombian legislation and this contract. 
 3.6. Outlining of returned areas: Areas returned by THE CONTRACTOR shall comprise the less
possible number of rectangular adjacent blocks limited by lines in direction North-South and East-West, following a similar grid than the one formed by the cartographic plates of Instituto Geográfico “Agustín Codazzi”.

 3.7. Execution of areas returning: Every area return made during this contract shall be executed in a minute by the Parties. 
 CLAUSE 4 – TERM AND PERIODS 
 4.1. Term:
Term of this contract shall be determined pursuant to following clauses. 
 4.2. Exploration period: The exploration period shall last six
(6) years as from the Effective Date and is split in the phases described below. The first phase of the Exploration Period shall start in the Effective Date and the next phases in the Calendar Day following the termination of previous phase.

 Phase 1 will last eighteen (18) months 
 Phase 2 will last eighteen (18) months 
 Phase 3 will last twelve (12) months 
 Phase 4 will last twelve (12) months 
 Phase 5 will last twelve (12) months

 4.2.1. Waiver right in the Exploration Period: During the development of any of the phases of the Exploration Period, THE CONTRACTOR shall have the
right to waive this contract, provided that it has satisfactorily complied with the Minimum Exploratory Plan of the ongoing phase and any other obligations at its account. To that effect, THE CONTRACTOR shall notify in writing to ANH previous to
completion of ongoing process. 
 4.2.2. Extension of one Exploration Period phase: Upon request from THE CONTRACTOR to ANH the ongoing phase of the
Exploration Period shall be extended until the drilling completion of the Exploratory Wells and/or acquisition of seismic programs and two (2) months more, provided that following conditions are fulfilled: 
  

	a.	That aforementioned Exploration Operations form part of the Minimum Exploratory Plan and would have been started at least one (1) month before date of completion of the
corresponding phase of the Exploration Period. 

			
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	b.	That THE CONTRACTOR has performed in uninterrupted manner such Exploration Operations, and 

  

	c.	That nevertheless the diligence applied to perform such Exploration Operations, THE CONTRACTOR deems reasonable that the remaining time is insufficient for concluding them before
the expiration date of the ongoing phase. 

 With the request for extension THE CONTRACTOR shall submit to ANH the documents supporting its
request and appropriate guarantee, in conformity to requirements set forth in Clause 22 of this contract. 
 4.2.3. Termination of Contract for expiration
date of Exploration Period: By expiration date of Exploration Period the contract shall be terminated if there is not an Evaluation Area, an Exploitation Area or a Discovery made by THE CONTRACTOR in the last phase of the Exploration Period in
Contracted Area. In such event, THE CONTRACTOR shall return to ANH the entire Contracted Area without prejudice of the compliance of other liabilities and it is bound to demonstrate that it has complied with the Abandonment liabilities, certifying
that drilled wells have been duly plugged and abandoned, that surface facilities have been fully dismantled and that cleaning and environmental tasks have been carried in conformity to applicable regulations. 
 4.3. Exploitation Period: The Exploitation Period is addressed separately from each Exploitation Area and, therefore, any reference to term, extension or
completion of Exploitation Period are related to each Exploitation Area in particular. 
 4.3.1. Term: The Exploitation period shall last twenty four
(24) years effective as of the date that ANH receives the Commerciality Statement from THE CONTRACTOR, provided in Clause 8 of this contract. 
 4.3.2. Extension of Exploitation Period: The ANH shall extend the Exploitation Period up to the economical limit of the Commercial Field, at THE CONTRACTOR’S option, provided that following conditions are complied with:

 That THE CONTRACTOR submits the extension request by writing to ANH with four (4) years in advance as maximum but not less than one (1) year with
regard to the date of expiration date of the Period of Exploitation of the corresponding Area of Exploitation. 

			
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 That the Area of Exploitation is producing Hydrocarbons with regularity at the date of request. 
 That THE CONTRACTOR demonstrates that for the four (4) Calendar Years previous to date of request it has carried out the drilling plan that includes ate least one
well for each Calendar Year and/or that it has had the pressure maintenance project active or the secondary, tertiary or improved recovery. 
 Paragraph: If THE CONTRACTOR does not satisfy the entire scope of the condition demanded in section c) above, the ANH, previous to analysis of rationale submitted by THE CONTRACTOR shall grant the extension. It is understood that
rejection by ANH shall not generate a disagreement and shall not subject to the procedure set forth in Clause 27 of this contract. In any event, extension of the Exploitation Period shall be executed by the signature of an addendum to the contract.

 4.3.3. Voluntary termination of the Exploitation Period: THE CONTRACTOR shall be able to terminate this contract with respect to any Exploitation
Area at any time during the Exploitation Period, for such purpose it shall notify by writing to ANH with at least three (3) months in advance, without prejudice of the compliance of remaining liabilities. 
 4.3.4 Effects of termination of Period of Exploitation: When for any cause, rights and operative liabilities cease with respect to any Exploitation Area, THE
CONTRACTOR shall leave in good condition the wells that by that time are productive and constructions and other real estate, which shall become property of ANH free of charge, with easements and goods acquired for the benefit of exploitation until
the Delivery Point, even if such goods are out of the Exploitation Area. With regard to movable goods exclusively intended for servicing said Exploitation Area, if termination takes place before the first eighteen (18) years of the Exploitation
Period, THE CONTRACTOR shall be bound to offer to ANH at their value in books. If in the three (3) month term, as from the date of offering, ANH did not respond positively, THE CONTRACTOR shall dispose of them freely. If the termination takes
place after the first eighteen (18) Years of the Exploitation Period, such goods will pass to ANH free of charge. ANH shall establish which of the wells in production at that time shall be abandoned and those that shall continue in production.
Any disagreement with regard to the type and destination of goods shall be subject to the procedure provided in Clause 27. Likewise, THE CONTRACTOR shall be bound to assign to ANH or whoever it indicates the Environmental License and the economical
resources needed for honoring the Abandonment liabilities. Enforcing of this clause shall not imply a employer substitution between THE CONTRACTOR and ANH. 

			
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 CLAUSE 5 – MINIMUM EXPLORATORY PLAN 
 5.1. Minimum Exploratory Plan of each phase: During the Exploration Period THE CONTRACTOR shall perform the Minimum Exploratory Plan of each phase described in
Attachment B which forms part of this contract. For the compliance of the Minimum Exploratory Plan liabilities, the Exploratory Wells proposed by THE CONTRACTOR shall be Exploratory Wells for a new field (of type A-3) or Exploratory Wells that form
part of the Evaluation Plan, in conformity to provisions in Clause 7 (section 7.3b) of this contract. In remaining cases the Exploratory Well proposed by THE CONTRACTOR shall be accepted by ANH in advance. 
 5.2. Exploration Works Plans: THE CONTRACTOR is bound to submit to ANH the Exploration Work Plan for the phase to initiate, describing how the compliance of
liabilities will be carried out with eight (8) Calendar Days in advance, with regard to the start of each phase of the Exploratory Period. For the first phase THE CONTRACTOR shall submit the Exploration Work Plan in thirty (30) Calendar
Days as of the Effective Date. 
 5.3. Modifications to Minimum Exploratory Plan 
 5.3.1. During ongoing phase: In the course of the first half of the term of any Exploration Period phase, other than the first phase, THE CONTRACTOR shall substitute the acquisition and processing of a seismic
program contained in the Minimum Exploratory Plan, initially presented for the ongoing phase, by the drilling of one or more Exploratory Wells or by the acquisition and processing of the seismic program of latest technology provided that the
financial effort of the new Minimum Exploratory Plan be equivalent or better than the presented initially for the respective phase. In this event, THE CONTRACTOR shall notify by writing and in advance to ANH of the intended Exploration Operations
substitution. 
 5.3.2. For next phase: If after drilling a Exploratory Well it turns out dry THE CONTRACTOR judges that Contracted Area forecast does
not justify the drill of one (1) Exploratory Well contained in the Minimum Exploratory Plan of next phase of Exploration Period, THE CONTRACTOR shall be able to substitute said drilling by the acquisition and processing of a seismic program,
provided that the financial effort be equivalent or better than the Minimum Exploratory Plan for the respective phase and that THE CONTRACTOR shall inform in advance and by writing to ANH of the intended substitution. 
 5.4. Additional Exploration: THE CONTRACTOR shall carry out additional Exploratory Operations in the Minimum Exploratory Plan or in the Subsequent Exploratory
Plan, with no modification of the agreed term for the performance of the Minimum Exploratory Plan or of the Subsequent Exploratory Plan of the ongoing phase or of next phases due to such Exploration Operations. For exercising this right THE
CONTRACTOR shall notify to ANH in advance with respect to intended additional Exploration Operations. If said Exploration Operations are the defined in the Minimum Exploratory Plan of following phase, the ANH shall certify such Exploration
Operations in compliance to exploratory commitments agreed for next phase. Otherwise, if THE CONTRACTOR wishes 

			
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that such additional Exploration Operations be certified to the compliance of exploratory commitments agreed for next phase, if any, it shall request so by
writing to ANH who at its sole discretion, shall determine whether it accepts or not such certificate. In the event that said request be accepted by ANH, it shall determine how the additional Exploration Operations performed in next phase of
Exploration Period will be certified in full or in part. 
 5.5. Problems during Exploratory Wells drilling: During the drilling of the Exploratory
Well corresponding to the Minimum Exploratory Plan or to the Subsequent Exploratory Plan and before reaching the target depth, should non-controllable geological problems arise such as cavities, abnormal pressures, impenetrable formations, severe
circulation losses or other technical conditions that prevent from drilling the Exploratory Well, in spite of THE CONTRACTOR’s tenacity to continuing drilling works pursuant to Good Practices of Oil Industry; THE CONTRACTOR shall be able to
request to ANH to consider the drilling obligation fulfilled by means of presenting the technical report which describes in detail the situation and efforts made to overcome the problem. Said report shall be presented to ANH in a term no later than
fifteen (15) Calendar Days as of said non-controllable problem start. If ANH accepts that THE CONTRACTOR terminates the drilling operations in the aforementioned well, it should abandon or complete it up to reached depth, and the Minimum or
Subsequent Exploratory Plan obligation for such well shall be understood as fulfilled. 
 CLAUSE 6 – SUBSEQUENT EXPLORATORY PLAN

 6.1. Subsequent Exploratory Plan: By the end of the Exploration Period, provided that there is at least one Evaluation Area or one Exploitation
Area or one Discovery made by THE CONTRACTOR in the last phase of the Exploration Area in Contracted Area, THE CONTRACTOR shall be able to retain fifty (50%) of Contracted Area (excluded Evaluation and Exploitation Areas) to carry out the
Subsequent Exploration Plan in the retained area but outside Evaluation and Exploitation Areas. In such event, following procedure shall be applied: 
  

	a.	Before the termination date of the last phase of the Exploration Period, THE CONTRACTOR shall notify in writing to ANH its intention to carry out the Subsequent Exploration Plan.

  

	b.	Such notice should describe the Exploration Operations that constitute the Subsequent Exploration Plan that THE CONTRACTOR undertakes to carry out by splitting in two
(2) phases of two (2) years each, as of the first until the completion of last phase of the Minimum Exploratory Plan. Each of the phases of the Subsequent Exploratory Plan shall contain at least same Exploratory Operations for last phase
of Minimum Exploratory Period. 

  

	c.	 Once the liabilities of first phase of Subsequent Exploratory Plan have been complied timely, THE CONTRACTOR shall be able to choose not continuing to 

			
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second phase, which imposes the entire return of retained areas for this effect of for continuing with second phase, which forces to return only fifty
(50%) of them, excluded existing Evaluation and Exploitation. THE CONTRACTOR shall inform by writing to ANH its decision within the month following the first phase completion. 

 Returns of areas mentioned in this clause are understood without prejudice of existing Evaluation and Exploitation Areas. 
 CLAUSE 7 – DISCOVERY AND EVALUATION 
 7.1.
Discovery Notice: THE CONTRACTOR shall notify by writing to ANH at any time within the four (4) months following to completion of drilling of any Exploratory Well whose results indicate that a Discovery has been made. Such notice shall be
supported by a technical report with results of tests and description of geological aspects and analysis of fluids and rocks as it has been instructed by the Ministry of Mines and Energy or by appropriate authority. 
 Paragraph: If discovery is a Non-related Natural Gas or of Heavy Liquid Hydrocarbons, THE CONTRACTOR shall likewise, submit calculations and other supporting
information that should have presented to the Ministry of Mines and Energy or to appropriate authority in charge, for the purpose of its classification. 
 7.2. Presentation of Evaluation Plan: If THE CONTRACTOR believes that Discovery is potentially commercial, it shall present and perform the Evaluation Plan related to such Discovery pursuant to this Clause. If the Discovery takes
place in the Exploration Period, THE CONTRACTOR shall present the Evaluation Plan within the six (6) Months following to completion of drilling of discovered Exploratory Well and in all events, before termination of Exploration Period. If the
Discovery is the result of the Subsequent Exploratory Plan, THE CONTRACTOR shall present the Evaluation Plan within the six (6) Months following to the completion of drilling of discovered Exploratory Well and in all events before the next
areas return provided in Clause 6. 
 7.3. Contents of Evaluation Plan: The Evaluation Plan should contain at least: 
  

	a.	The map with coordinates of Evaluation Area. 

  

	b.	Description and objectives of each Evaluation Operations and information to be obtained for determining if the Discovery might be declared as Commercial Field. If in the Evaluation
Plans performed during the Exploration Period THE CONTRACTOR includes drilling the Exploratory Wells, it could certify both the compliance with the Minimum Exploratory Plan and the appropriate Evaluation Plan even with drilling of two
(2) Exploratory Wells, provided that it is finished before the term of the Evaluation Plan where they were included or the phase of the Exploration Period to which said wells correspond, whichever is the nearest. 

  

	c.	Total budget of Evaluation Plan, segregated by years. 

			
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	d.	Total term of Evaluation Plan which shall not exceed two (2) years when it includes drilling of Exploration Wells or one (1) year in remaining events, such term shall be
effective as of the date of presentation to ANH and should consider the estimated times needed for obtaining permits by other authorities. 

  

	e.	Schedule for performing Evaluation Operations within the aforementioned term. 

  

	f.	Information on the destination of Hydrocarbons and other fluids that THE CONTRACTOR expects to recover as a result of Evaluation Operations. 

  

	g.	The proposal of Delivery Point for ANH analysis. 

 7.4 Term extension
of Evaluation Plan: If THE CONTRACTOR shall decide to drill Exploration Wells non forecasted in the Evaluation Plan presented at the beginning, ANH shall extend the Evaluation Plan term by an additional term that shall not exceed one
(1) Year provided that following conditions are complied with: 
  

	a.	That THE CONTRACTOR requests so in writing to ANH with at least two (2) months in advance to the date of termination of the initial term. 

  

	b.	That THE CONTRACTOR is diligent with regard to Evaluation Operations forecasted in the Evaluation Plan, 

  

	c.	That the required extension is justified by the time needed for drilling and for additional tests of Exploration Well or Wells; 

 With the request for extension, THE CONTRACTOR shall deliver to ANH supporting documents. 
 7.5. Modifications to Evaluation Plan: THE CONTRACTOR shall be able to modify the Evaluation Plan at any time during the six (6) Months following to the date of its presentation to ANH, by notifying timely
to ANH and shall adequate the total term, pursuant to Section 2.3d of this clause, without modifying the initial agreed date. 
 7.6. Results of the
Evaluation Plan: THE CONTRACTOR shall present to ANH the thorough report of the Evaluation Plan results within the three (3) Months following to the termination date. Such report shall include, at least: the geological description of
Discovery and its structure configuration, physical properties of rocks and fluids in reservoirs related to the Discovery, pressure, volume and analysis of temperature of fluids, production capacity (per well and per the whole Discovery) and an
estimated on the Hydrocarbon recoverable reserves. 
 Paragraph: In the event that a Non-Related Natural Gas or Heavy Liquid Hydrocarbon Discovery,
and at any time of the second half of the Evaluation Plan term, THE CONTRACTOR shall be able to request to ANH the extension of the Evaluation Plan up to two (3) additional Years in order to carry out the feasibility studies for infrastructure
construction, on production methods and/or for market development. In such cases, the request shall include in the Evaluation Plan the information related with feasibility studies that THE CONTRACTOR considers necessary. By the end of the granted
extension, THE CONTRACTOR shall submit to ANH the conclusions and recommendations of feasibility studies. 

			
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 7.7. Only Discovered Exploratory Wells drilled by THE CONTRACTOR outside the designated areas for Evaluation or
Exploitation shall be submitted to this clause application. Therefore, when new hydrocarbon volumes found form part of the same Evaluation or Exploitation Area there will not be an Evaluation Period. 
 CLAUSE 8 – COMMERCIALITY STATEMENT 
 8.1.
Notice: THE CONTRACTOR shall submit to ANH a written statement that contains clearly and accurately its unconditional decision to exploiting such Discovery commercially or not, within the three (3) Months following to the expiration date
provided in paragraph of section 7.6 of Clause 7, if applicable. In the affirmative case, as of the Discovery statement it shall be regarded as Commercial field. 
 8.2. Waiver of Rights in negative case: If THE CONTRACTOR does not submit to ANH such statement in the provided term, it shall be understood that THE CONTRACTOR has concluded that the Discovery is not a Commercial Field. If the
statement is negative or if there is not any statement, THE CONTRACTOR shall accept that no right on its behalf was generated and, consequently, he waives to claiming any right on the Discovery. 
 CLAUSE 9 – EXPLOITATION PLAN 
 9.1.
Presentation and Contents: THE CONTRACTOR shall submit to ANH the initial Exploitation Plan within the three (3) Months following to the presentation of the Commerciality Statement pursuant to Clause 8, which shall contain the following
information, at minimum: 
  

	a.	The map with coordinates of Exploitation Area. 

  

	b.	Calculation of reserves and of Hydrocarbon accumulated production segregated by type of Hydrocarbon. 

  

	c.	General scheme projected for the Development of the Commercial Field, which includes the description of the drilling plan of development wells, of extraction methods, of appropriate
facilities and of processes under which the extracted fluids shall be subject to before the Delivery Point. 

  

	d.	The annual production forecast of Hydrocarbon and their sensitivities, using the optimum production rate for achieving the maximum economical recovery of reserves.

  

	e.	The identification of critical factors for performing the Exploitation Plan such as environmental, social, economical, and logistic aspects and their management options.

  

	f.	The proposal of the Delivery Point for ANH analysis. 

			
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	g.	The basket proposal of three (3) crude oils maximum of alike quality for the purpose of calculating High Prices Rights described in Clause 16. 

  

	h.	The Abandonment plan pursuant to Clause 30th. 

 9.2. Delivery of the
Exploitation Plan: ANH shall acknowledge receipt of the Exploitation Plan when THE CONTRACTOR submits all aforementioned information. If ANH does not receive the Exploitation Plan with the totality of aforementioned information within the
fifteen (15) Calendar days following its presentation, it shall request the delivery of the missing information and THE CONTRACTOR shall have thirty (30) Calendar days effective from the reception of request, to submit it. If ANH does not
respond to within the fifteen (15) Calendar days following to the presentation of the Exploitation Plan by THE CONTRACTOR, it shall be understood that it has been accepted. If THE CONTRACTOR does not deliver the Exploitation Plan in the date
provided in above section or if ANH does not receive the missing documentation within the thirty (30) days term provided in this section, the breach of the contract will be brought and will result in the application of Clause 28. 
 9.3. Exploitation Area: The Exploitation Area shall be delimited by a regular four-side polygon, preferable, which shall comprise the Commercial Field or its
portion within the Contracted Area, plus a margin surrounding the Commercial Field not larger than one (1) kilometer, provided that the Contracted Area allows it. As required by the area of the Commercial Field contained in the Exploitation
Area may vary, the Exploitation Area shall remain unchangeable, unless the provided in next section. 
 9.4. Extension of Exploitation Area: In the
course of the Exploitation Period of an Exploitation Area, if THE CONTRACTOR determines that the Commercial Field extends over the Exploitation Area but within the current Contracted Area, he could request to ANH the enlargement of such Exploitation
Area, with supporting information. Having fulfilled aforementioned satisfactorily to ANH, it shall enlarge the Exploitation Area, being understood that if such enlargement is overlapped on the Exploitation Area the Exploitation period term that will
be applied to the comprised Exploitation Area shall be the one of the Exploitation Area that was first declared as commercial. 
 Paragraph: When the
Exploitation Area requested by THE CONTRACTOR, pursuant to Section 9.4 extends outside the Contracted Area, ANH shall enlarge the Contracted Area giving it the contractual treatment as an Evaluation Area, unless any of the following situations
arise with regard to requested area: 
  

	a.	That there are rights granted to third parties for performing alike or similar activities to the subject matter of this contract. 

  

	b.	That it is under negotiation or bidding process for ANH rights granting. 

  

	c.	That there is any restriction ordered by the competent authority which prevent from carrying out activities subject of the contract. 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	16

  

 9.5. Update of the Exploitation Plan: THE CONTRACTOR shall adjust and present annually in February of each
Calendar year and subject to procedure above described in Section 9.2 of this clause, the Exploitation Plan for each current Exploitation Areas in this contact. When the Hydrocarbon real production of Calendar year preceding immediately differs
in more than fifteen (15%) versus the annual production forecast in the Exploitation Plan for any Exploitation Areas, THE CONTRACTOR shall present appropriate explanations. 
 CLAUSE 10 – EXPLOITATION WORK PLANS 
 10.1. Preparation and presentation: If the
Exploitation Plan provided in Clause 9 is presented with six (6) Months in advance to the end of the Calendar year in course, THE CONTRACTOR shall present the first of the Exploitation Works Plan for the remaining Calendar year. For subsequent
calendar years THE CONTRACTOR shall present the Exploitation Work Plan for each Calendar year in November of the Calendar year preceding immediately. 
 10.2. Contents of the Exploitation Work Plan: The Exploitation Work Plan for each Exploitation Area shall contain, as minimum: 
  

	a.	The detailed description of the Development and Production Operations plan expected to be performed by THE CONTRACTOR in said Year with the appropriate schedule, segregated per
project and Calendar quarter, which should also consider the terms required to obtain authorizations and licenses from competent authorities. 

  

	b.	The monthly production forecast of Exploitation Areas for respective Calendar year. 

  

	c.	The cost estimate (investments and expenses) for the four (4) Calendar years following to or up to the Exploitation Period termination, whichever is shorter.

  

	d.	The terms and conditions applicable for the development of the programs to benefit communities of the Exploitation Area influence. 

 10.3. Performance and Adjustments: The Development and Production Operations of the Exploitation Work Plan pursuant to section (1) above are mandatory. THE
CONTRACTOR shall start said Exploitation Operations in compliance to presented schedule. During the Exploitation Work Plan performance, THE CONTRACTOR shall made adjustments to it for the ongoing Calendar year, provided that such adjustments do not
imply any diminishment in the production in more than fifteen (15%) with regard to the initial forecast. The adjustments could not be made with a frequency below three (3) months unless emergency situations. THE CONTRACTOR shall report in
advance an in writing of any adjustment to the Exploitation Work Plan. 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	17

  

 CLAUSE 11 – OPERATIONS DIRECTION 
 11.1. Autonomy: THE CONTRACTOR shall control all operations and activities necessary for a technical, efficient and economic Exploration of the Contracted Area
and for the Evaluation and Exploitation of Hydrocarbon therein contained. THE CONTRACTOR shall plan, prepare, make and control all activities by his own means and with technical and management autonomy, in conformity with Colombian law and following
the Good Practices of the oil industry. THE CONTRACTOR shall develop activities directly or through subcontractors. 
 11.2. Responsibility: THE
CONTRACTOR shall carry out the operations subject-matter of this contract in a diligent, responsible, and efficient manner and technical and economical adequate. He shall ensure that all his subcontractors comply with terms set forth herein and with
Colombian law. THE CONTRACTOR shall be the only liable for damages and losses caused by any activity and operation derived from this contract, including those caused by his subcontractors, being understood that at any time he shall be liable by
criteria mistakes or by losses or damages that did not resulted from gross negligence and fraud. When THE CONTRACTOR subcontracts works and services they shall be carried out on his behalf, in view of which THE CONTRACTOR shall maintain his direct
liability on any obligation set forth in the subcontract and on those derived thereof, from which he could not get waived. ANH shall not assume any liability for this concept, even as a joint liability. 
 11.3. Obtaining licenses: THE CONTRACTOR must obtain on his own account and risk all licenses, authorizations, permits and any other appropriate rights in
conformity to law, necessary for proceeding with operations subject of this contract. 
 11.4. Damages and losses of assets: All costs and expenses
needed for replacing or repairing damages or losses of goods and equipment occurred under fire, floods, storms, accidents or similar facts shall be at THE CONTRACTOR’s risk. THE CONTRACTOR shall inform the soonest ANH about any loss or damages
occurred. 
 CLAUSE 12 – ROYALTIES 
 12.1. Collection: THE CONTRACTOR shall make available the percentage of the Hydrocarbon production set forth in the appropriate royalties law to the ANH in the Point of Delivery. Collection of royalties shall be made in cash or in
kind, as per the competent authorities so establishes. 
 12.2. Payment of participating interests: ANH shall pay to entities provided by law the
participating interests of royalties, as appropriate, and it shall be the only responsible for such payment. 

			
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 12.3. Collection in kind: When the collection of royalties is made in kind THE CONTRACTOR shall submit to ANH the
appropriate amount of Hydrocarbons, for which purpose the Parties shall agree the procedure for scheduling the deliveries and other needed issues. In all event, ANH shall have one (1) month to withdraw such amount. Once said term is due and ANH
has not withdrawn the volume corresponding to royalties, and if there is storage availability at THE CONTRACTOR’s facilities, he shall be bound to store said Hydrocarbons for up to three (3) consecutive months and ANH shall pay the storing
fees which shall be agreed between Parties for each event. At the end of last term THE CONTRACTOR shall trade said volume pursuant to following section. 
 Paragraph: If there is not storage availability, THE CONTRACTOR shall be able to continue producing the field and dispose of the royalties volume, crediting to ANH the volume corresponding to royalties that it did not retire for the
subsequent delivery. 
 12.4. Trading of royalties volume: When ANH deems appropriate and provided that regulatory provisions allow it, THE CONTRACTOR
shall trade the portion of Hydrocarbons production that corresponds to royalties and shall deliver to ANH the monies from such sales. For such purpose, the Parties shall agree the particular trading terms, but in all event, THE CONTRACTOR shall do
his best effort for trading such production at the highest price in available markets. ANH shall recognize to THE CONTRACTOR the direct costs and a reasonable trading margin which shall be agreed between the Parties. 
 12.5. Collection in cash: When THE CONTRACTOR shall pay the royalties in cash he shall deliver to ANH the amounts corresponding to terms set forth by the
competent authority. In the event of delinquency, THE CONTRACTOR shall pay to ANH the amount necessary to cover the debt, the appropriate interests in arrears and the expenses incurred for payment. 
 CLAUSE 13 – MEASUREMENT 
 13.1.
Measurement: THE CONTRACTOR shall carry out the measurement, sampling and quality control of produced Hydrocarbons and shall maintain equipment or measurement instruments calibrated in conformity to standards and methods accepted by Goods
Practices of Oil Industry and by legal and regulatory ruling provisions by performing applicable analysis and pertinent corrections to liquidation of net Hydrocarbon volumes received and delivered at standard conditions. THE CONTRACTOR shall take
all necessary actions for maintaining the integrity, reliability and security of facilities and equipment or supervision instruments. Besides, he shall keep, for the term established in the Commerce Code and other pertinent regulations, the regular
calibration registers of said equipment and instruments and of the daily measurements of hydrocarbons and fluids production and consumption in each Commercial Field for the purpose of ANH and competent authorities’ review. ANH shall have the
right to inspect the measurement equipment installed by THE CONTRACTOR and all the measurement units in general. 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	19

  

 13.2. Common facilities: When two or more production fields are served by same development facilities, they shall
include a measurement system for establishing the production from each field. 
 CLAUSE 14 – PRODUCTION AVAILABILITY 

14.1. Volume determination: Hydrocarbons produced, except for those that have been used for the benefit of operations of this contract and those that are
unavoidably wasted in said operations, shall be transported by THE CONTRACTOR to the Delivery Point. Hydrocarbons shall be measured pursuant to the procedure set forth in section 13.1. above, and upon such measurement the royalties volume referred
to in Clause 12 and of remaining Hydrocarbons shall be determined, which correspond to THE CONTRACTOR. 
 14.2. Availability: Subsequent to the
Delivery Point and without prejudice of legal provisions applicable to the issue, THE CONTRACTOR shall be free to selling locally or to exporting the corresponding Hydrocarbons or to disposing of them in any way. 
 CLAUSE 15 – NATURAL GAS 
 15.1. Use: THE
CONTRACTOR shall be bound to avoid waste of the natural gas extracted from the field and in conformity with legal and regulatory ruling provisions, before of the appropriate Delivery Point, he could use it as fuel for operations, as source of energy
for the maximum final recovery of Hydrocarbons reserves or to keep it in the reservoirs thereof for the purpose of using it during the contract term. 
 15.2. Use of related Natural Gas: In the event that THE CONTRACTOR shall discover one or several Commercial Fields with related Natural Gas, he shall present to ANH within the three (3) Years following to the start of the
exploitation of each Commercial Field, the project for using the related Natural Gas. If THE CONTRACTOR does no comply with said liability ANH shall b able to dispose of the related Natural gas from said field on a free basis, subject to current
legal regulations. 
 CLAUSE 16 – CONTRACTUAL ECONOMICAL RIGHTS OF ANH 
 16.1. Rights for the use of subsoil: The use of subsoil by THE CONTRACTOR shall cause following rights on behalf of ANH: 

			
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 16.1.1. Areas in exploration: As of the second phase of the Exploration Period and for each phase THE CONTRACTOR
shall recognize and pay to ANH the right whose economic amount, with face value in US dollars, shall be the result of multiplying the number of hectares and fraction of hectare of the Contracted Area, excluded the Exploitation Areas, by the value of
following chart. Such payment shall be done within the Month following to the start of the respective phase. 
 Value per phase in
US$/Hectare 
  

									
	 Size of area
	  	 For first 100,000
 hect.
	  	Per each hectare
additional to 100,000
hect.
	 Phase duration
	  	£
12
months	  	> 12
months	  	£
12
months	  	> 12
months
	 In polygons A and B
	  	0.75	  	1.0	  	1.0	  	1.5
	 Outside polygons
	  	0.5	  	0.75	  	0.75	  	1.0
	 Offshore areas
	  	0.25

 16.1.2. Evaluation and Exploitation areas: THE CONTRACTOR shall recognize and pay to ANH the right whose
economic amount, with face value in US dollars, shall be the result of multiplying the Hydrocarbon production corresponding to THE CONTRACT pursuant to Clause 14 by US ten cents (USD$0.10) per each Liquid Hydrocarbon barrel. Said amount shall be
increased annually pursuant to what is provided in Clause 16.2. as of January 1st of 2006. For natural gas said
amount shall be one cent (USD$0.01) per each one thousand cubic feet (1.000 ft 3). Such payment shall be done per
past due semester, within the first month of following semester. 
 16.2. Right for high prices: 
 For liquid hydrocarbons: As of when the accumulated production of each Exploitation Area, including royalties volume, exceeds the five (5) million Liquid
Hydrocarbon barrels and in the event that price of crude index “West Texas Intermediate” (WTI) exceeds the base price Po, THE CONTRACTOR shall pay to ANH a face value in US dollars and payable per past due calendar Month, within the thirty
(30) Calendar days following to each expiration. 
 For natural gas: Five (5) years after the start of exploitation of field, certified in
the approval resolution issued by competent authority, and in the event that the price in the Natural Gas index “US Gulf Coast Henry Hue” exceeds the base price Po, THE CONTRACTOR shall pay to ANH a face value in US dollars and payable per
past due calendar Month, within the thirty (30) Calendar days following to each expiration. 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	21

  

 Value payable for this right per each Exploitation Area shall be the result of following formula: 
  

															
	Payment to ANH =	  	 Hydrocarbon value
 At Delivery Point
	 	x	    	Contractor’s Hydrocarbon volume	    	x	    	P-Po	    	x	    	30%
							
		  		 		    		    	 Factor “A”
	    		    	

 Where: 
 Hydrocarbon value at Delivery Point: 
 For Liquid Hydrocarbons: 
 For the effect of this formula, it shall be the reference price for corresponding Calendar month, expressed in US dollars per Barrel (USD $/BI) of maximum three
(3) crudes in a basket of similar quality to the ones coming from the Exploitation Area, presented by THE CONTRACTOR in the Exploitation Plan and agreed with ANH and adjusted for Delivery Point by a pre-arranged margin. 
 If once the procedure for determining the Value of Liquid Hydrocarbons has been applied in conformity to above paragraph, differences arise by excess or by default in
more than three percent (3%) between the basket reference price and the actual price sale at the Delivery Point, the Party affected shall request the review of the basket or of the adjustment margin. For the purposes herein contained, the
actual sale price of Liquid Hydrocarbons produced in the Exploitation Area for corresponding Calendar month shall be the weighted average of the sales price agreed by THE CONTRACTOR with purchasers non-related economically or by any other
partnership relation and provided that in any event, the transactions are framed within the usual trading practices, deducting the transport and transfer costs between the Delivery Point and the reference sales point as per rates set by the Ministry
of Mines and Energy, or whoever is authorized to do so. 
 When THE CONTRACTOR sells the Liquid Hydrocarbons to the refinery for internal supply, the
provisions in section 16.5 of this Clause shall be applied. 
 For Natural Gas: 
 For the effect of this formula, it shall be the actual sale price of Natural Gas for the production of the corresponding Calendar month, expressed in US dollars per million of BTU (USD $/MMBTU), agreed by THE
CONTRACTOR with purchasers, deducting the transport and processing costs between the Delivery Point and the actual sales point. 
 At any time ANH shall be able to review said price. 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	22

  

 THE CONTRACTOR’s Hydrocarbon volume: 
 It is the volume of Hydrocarbons expressed in Barrels for Liquid Hydrocarbons an in the BTU for Natural Gas, which correspond to THE CONTRACTOR pursuant to Clause 14 in a
particular Calendar month. 
 P: 
 For Liquid Hydrocarbons is the average price per barrel of the crude oil index “West Texas Intermediate” (WTI) in US dollars per barrel (USD $/BI) and for natural gas is the average price per natural gas index “US Gulf Coast
Henry Hub” in US dollars per million of BTU unit (US $/MMBTU). Said averages are for the appropriate Calendar month whose specifications and quotes are published in media of worldwide reputation. 
 Po: 
 For Liquid Hydrocarbons is the
base price of the crude oil index expressed in US dollars per Barrel (USD $/BI) and for Natural Gas is the average price per Natural Gas in US Dollar per million of BTU unit (US/MMBTU) as shown in next chart: 
  

				
	 API Gravity of produced Liquid
Hydrocarbons
	  	Po (USD $/BI)
	 >15 and < 22
	  	$	28
	 > 22 and < 29
	  	$	27
	 > 29
	  	$	26
	 Discovering at more than 300 mts water depth
	  	$	32
		
	 Natural gas produced exported –
straight-line distance between delivery point and reception point in
destination country, in kms.
	  	Po USD $/MMBTU
	 >0 and < 500
	  	$	8
	 >500 and < 1000
	  	$	7
	 >100 or NGL plant
	  	$	8

 For the exploitation of Heavy Liquid Hydrocarbons and with API gravitiy higher than ten degrees (10o), Po shall be forty US dollars (USD $40.oo) per barrel (USD$/BI) and for Heavy Liquid Hydrocarbons with API gravity less or
equal to ten degrees (10o) THE CONTRACTOR shall not pay any Right for High Prices to ANH. For Natrual Gas for
country internal consumption, in the event that its price is regulated by the Comisión de Regulación de Energía y Gas “CREG” (Energy and Gas Regulatory Committee) or the entity authorized to do so, THE CONTRACTOR shall
not pay any Right for High Prices to ANH. Otherwise, the Parties shall agree the natural gas index and the Po value and shall execute de appropriate agreement. 
 Said Po base price shall adjusted annually as of January 1st of 2006 as per following formula:

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	23

  

 Po = Po(n-1) x (1 + l(n-2)) 
 Where: 
  

			
	Po(n-1):	 	is the Po value of the immediately preceding Calendar year.
	l(n-2):	 	is the annual variation, expressed in fraction, of the US producer price index for Calendar Year, two years before the one calculated, published by the US Treasury Department

 Aforementioned calculation shall be made in December each year. 
 Paragraph: In the event that price of crude oil index “West Texas Intermediate” or of natural gas index “US Gulf Coast Henry Hub”
(P) loses its recognition as international price index and ANH shall select the new crude oil or natural gas index to be used and shall modify the chart on the basis of the new index, keeping the equivalents with Po values for crude oil index
“West Texas Intermediate” or for natural gas index “US Gulf Coast Henry Hub”. 
 With three (3) months in advance at least, ANH
shall request by writing to THE CONTRACTOR that payment for said right is made in kind for a six (6) month period minimum. THE CONTRACT shall accept such request provided that it does not affect commercial commitments agreed. The volume that
shall correspond to ANH shall result from calculating “factor A”. 
 16.3. Production tests: Liquid Hydrocarbons obtained as a result of the
production tests carried out by THE CONTRACTOR shall also cause rights aforementioned provided that conditions of section 16.2 are complied. 
 16.4.
Participation interests in production during extension of Exploitation Period: In all extension events of Exploitation Period of the Exploitation Area, THE CONTRACTOR shall recognize and pay to ANH as the participation rights in production, an
amount equivalent to ten percent (10%) of the production value of light Liquid Hydrocarbons at the Delivery Point, or five percent (5%) in the event of non-related Natural Gas or of Heavy Liquid Hydrocarbons, obtained by THE CONTRACTOR as
of the expiration date of the initial term of the Exploitation Period and valued at the Delivery Point, after deducting the percentage corresponding to royalties. On said participation no economical rights mentioned in sections 16.1.2. and 16.2.
shall be caused. During extension of Exploitation Period the rights for use of subsoil and for high prices mentioned in sections 16.1.2 and 16.2, respectively, shall only be caused on THE CONTRACTOR’s volume after having deducted the
participation right mentioned herein. 
 16.5. Prices for internal supply: When THE CONTRACTOR sells its crude for refining needs of internal supply,
prices shall be calculated on the international price basis, as has been established in Resolution No. 18-1709 of December 23, 2003 granted by the Ministry of Mines and Energy, or in any other legal or regulatory provision that amends or
substitutes it. 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	24

  

 CLAUSE 17– Joint exploitation 
 Whenever an economically exploitable reservoir extends continuously to another area or areas outside the Contracted Area, THE CONTRACTOR, in agreement with ANH and other interested parties, shall put into practice,
previous approval by competent authority, a cooperative joint exploitation plan subject to Colombian law. 
 CLAUSE 18 – PROPERTY OF
ASSETS 
 18.1 Property: Pursuant to Clause 4 (section 4.3.4.) facilities, goods, materials and equipment property of THE CONTRACTOR that are
intended on a permanent basis for development of Exploitation Operations up to the Delivery Point, shall pass to the ANH property free of charge at the time of the return of Contracted Area or at the termination of this contract, when one or the
other occur after the first eighteen (18) years of the Exploitation Period, even though said goods are outside the Contracted Area. 
 18.2. THE
CONTRACTOR shall assign free of charge to ANH the return of the area or at the termination of contract, whichever has occurred after the first eighteen (18) years of the Exploitation Period, all rights derived from contracts under the project
financing modality such as leasing, of construction, goods exploitation and reversal, BOT (Build, Operate and Transfer), BOMT (Build, Operate, Maintain and Transfer), BOOT (Build, Own, Operate and Transfer), MOT (Modernize, Operate and Transfer) and
others alike, that at their completion establish the liability of assigning the goods, equipment and facilities property to THE CONTRACTOR, when such contracts have been executed for the purpose of developing the Exploitation Period in the
respective area. In the event that said contracts shall be entered into for a term higher than then the Exploitation Period, they shall require the ANH previous authorization. 
 18.3. Inventories: THE CONTRACTOR shall carry out the physical inventory of equipment and goods related to Exploitation Operations, with reasonable intervals of at least three (3) Calendar years,
classifying them per THE CONTRACTOR’s or third parties’ property. ANH shall have the right of being represented when said inventories are carried out. For such purpose, THE CONTRACTOR shall inform in advance to ANH with fifteen
(15) Calendar days. 
 18.4. Disposal of assets: THE CONTRACTOR shall dispose of goods and equipment located up to the Delivery Point and that
are not indispensable for maintaining the existing exploitation conditions. Nevertheless aforementioned, after eighteen (18) years of the Exploitation Period of each Exploitation Area or when eighty per cent (80%) of its proved reserves,
whichever occurs first, THE CONTRACTOR shall request ANH previous approval for such disposals. 

			
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 CLAUSE 19 – INFORMATION SUPPLY AND CONFIDENTIALITY 
 19.1. Technical information: THE CONTRACTOR shall keep ANH duly and permanently informed on the progress and results of operations. Therefore, besides documents
required in other clauses herein contained, THE CONTRACTOR shall submit to ANH, as it is obtained and before the expiration dte of each phase of Exploration Period and per Calendar Year during the Exploitation Period, all scientific, technical and
environmental information related, gathered in compliance to this contract. Said Exploration and Exploitation information shall be submitted to ANH pursuant to the Manual on Exploration and Exploitation Information Supply. 
 19.2. Confidentiality: Parties agree that all data and information produced, obtained or developed as a result of the operations of this contract shall be
regarded as strictly confidential for the following five (5) Calendar years as of the end of the Calendar year where they should have been produced, obtained or developed; or until the contract termination; or at the time of the partial return
of area as to the information acquired in the returned areas, whichever occurs first. For the interpretations based upon data obtained as a result of operations herein contained, such term shall be of twenty (20) Calendar years as of the date
of the mandatory return to ANH, or until the contract termination or at the time of the partial return of areas as to the information acquired in returned areas, whichever occurs first. This provision shall not be applied to data or information that
Parties should provide in conformity to legal or regulatory ruling provisions, neither to the ones required by their affiliates, advisors, contractors, auditors, legal advisors, financial institutions and competent authorities with jurisdiction on
the Parties or their affiliates or by the standards of any stock exchange where THE CONTRACTOR’s or related partnership’s stocks have been registered; however, the supply of information shall be informed to the other Party. Restrictions to
information disclosure shall not prevent that THE CONTRACTOR provides data or information to companies interested in a possibly rights assignment related to Contracted Area, provided that said companies execute the appropriate confidentiality
agreement in compliance to this clause. ANH shall undertake to not providing any data or information obtained as a result of operations performed by THE CONTRACTOR to third parties, except when it is deemed necessary for the compliance of any legal
provision applicable to ANH or in for their performance. In any other event, ANH shall request previous authorization from THE CONTRACTOR. 
 19.3.
Information ownership: As the confidentiality time that determines above clause as elapsed, it is understood that THE CONTRACTOR shall assign to ANH all rights on such data an interpretations and he shall not lose the right to use said
information. As of such time ANH shall be able to dispose of said information freely. 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	26

  

 19.4. Informative meetings: ANH shall be able to call for informative meetings with THE CONTRACTOR at any time
during the term of this contract. 
 19.5. Biannual Executive Report. Besides the information referred to in the clauses herein contained, the Manual
of Information Supply and the information mandatory by Colombian law, THE CONTRACTOR shall submit to ANH basic and summarized information on the issues such as: prospectivity, reserves, current and forecasted production, Exploration, Evaluation or
Exploitation Operations, performed or projected for following Calendar year, personnel, industrial environmental and communities safety, national contents in contracting, among others. The report of second semester shall be the Annual Operations
report and the program to be performed the following Calendar year. Said reports shall be submitted within the sixty (60) Calendar days following to the end of each calendar semester. 
 CLAUSE 20 – INSPECTION AND FOLLOW UP 
 20.1. Visits to Contracted Area: During term
of this contract, ANH, at his own risk, at any time and by the adequate procedures, shall be able to visit the Contracted Area to inspect and follow up THE CONTRACTOR’s or subcontractor’s activities, directly related to this contract, and
to ensure of this contract compliance. Likewise, he shall be able to verify the accuracy of received information. When inspector detects any failure or irregularity made by THE CONTRACTOR, he shall state his comments which shall be answered by THE
CONTRACTOR by writing and within the term set by ANH. 
 THE CONTRACTOR at his own risk shall provide to ANH’s representative transport, lodging and
meals services and any other in conditions equal to the ones provided to his own personnel, if needed. 
 20.2. Delegation: ANH shall be able to
delegate the inspection and follow up of operations in Contracted Area with the purpose of ensuring that THE CONTRACTOR is in compliance with the liabilities pursuant to this contract and to Colombian law. Absernce of inspection and follow
activities by ANH does not release in any way TO THE CONTRACTOR from his complying with the obligations contracted in virtue to this contract and does neither imply their reduction. 
 CLAUSE 21 – INSURANCE 
 21.1. Insurance: THE CONTRACTOR shall subscribe all
insurance required by Colombian law an any other pursuant to the Good Practices of the Oil Industry. Likewise he shall request to each contractor who performs any job for the contract, the subscribing and keeping effective all insurance, as needed.
Costs of contracting and keeping effective said insurances shall be on THE CONTRACTOR’s own account and responsibility. 

			
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 21.2. Performance insurance on labor obligations: THE CONTRACTOR shall underwrite the insurance policy for
guaranteeing salary payment, social benefits and indemnities and any other labor debts for any judicial sentence derived from workers’ employees hired by THE CONTRACTOR acting as the sole and actual employer. The policy effectiveness shall not
be less than three (3) years as of the date of termination of this Contract and the insured value shall be equivalent to ten percent (10%) of THE CONTRACTOR’s payroll for the compliance of this Contract during the preceding year to
termination. 
 CLAUSE 22 – GUARANTEES 
 22.1. Subject of guarantees: THE CONTRACTOR shall grant on behalf of ANH, in the form, terms and conditions pursuant to this contract, the guarantees that ensure compliance and proper performance of all obligations of each phase of
the Exploration period and of the Subsequent Exploratory Plan, if any, and of other activities inherent thereof. In any event this guarantee shall not be a penal clause. 
 22.2. Means of guarantees: THE CONTRACTOR shall settle, at his own cost, one or several unconditional and irrevocable outstanding letters of credit payable at sight, with a bank of financial institution legally
incorporated in Colombia, or any other instrument or institution previously accepted by ANH. 
 22.3. Delivery of guarantees. THE CONTRACTOR shall
deliver to ANH all guarantees set forth in this clause, in conformity to basic terms of the for in Annex C of this contract, with ate least eight (8) Calendar days in advance to the start date of each phase of the Exploration Period or of the
Subsequent Exploratory Plan, as the case might be. For the first phase THE CONTRACTOR shall submit the guarantee within the fifteen (15) Calendar days following to the contract execution. If for any reason beyond THE CONTRACTOR’s control,
duly supported, he could not deliver said guarantees to ANH in the aforementioned term, as per THE CONTRACTOR’s request, ANH could postpone the delivery date. Non-delivery of guarantees by THE CONTRACTOR within the provided terms, shall be the
grounds for breach of contract. 
 22.4. Amount of guarantees: THE CONTRACTOR shall grant the appropriate guarantees to each phase of the Exploration
Period or of the Subsequent Exploratory Plan, as the case might be, for the ten percent (10%) of the budget for the phase of the Minimum Exploratory Plan or of the Subsequent Exploratory Plan, as the case might be, with face value in US dollars
and payable in Colombian pesos. In no event the guarantee value for each phase shall be below one hundred thousand US dollars (USD $100,000) not exceed three million US dollars (USD $3,000,000). 

			
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 22.5. Effectiveness of guarantees: All and each of the guarantees shall be effective during the term of the phase
whose obligations are being warranted plus three (3) additional months. In the event of extensions, the guarantees shall also be extended or substituted by other with same value and with a minimum effectiveness equal to the extension time plus
three (3) months more. 
 22.6. Rejection of guarantees. ANH shall reject the guarantees granted by THE CONTRACTOR when they do not comply with
requirements provided in this clause. ANH shall have one (1) Month as of the date of reception in section 22.3 to notify its rejection to THE CONTRACTOR and to return the guarantees back. As of said notice, THE CONTRACTOR shall have eight
(8) Calendar days to amend the guarantee. If it is not amended, guarantees rejected shall be understood as non delivered for the effects of provisions in section 22.3. 
 22.7. Enforceability of guarantees: ANH shall enforce the guarantees provided that THE CONTRACTOR non-complies with all or part of guaranteed obligations, without prejudice of the compliance of the remaining
obligations agreed. Payment of the standby letter(s) of credit shall not release THE CONTRACTOR from his obligation to compensating damages resulting form his non-compliance. ANH reserves the right to turn to dispute solution mechanisms when the
value of guarantee is not sufficient for covering the compensation amount. 
 CLAUSE 23 – SUBCONTRACTORS, PERSONNEL AND TECHNOLOGY
TRANSFER 
 23.1. Subcontractors: For performing the operations subject to this contract THE CONTRACTOR shall, in compliance to Colombian law,
enter into contract at his own cost and risk, for obtaining goods and services in the country or overseas. In said subcontracts THE CONTRACTOR shall include the provisions that bound the subcontractors to subject to Colombian law and to the
provisions herein contained. 
 23.2. Lists of contracts and subcontractors: THE CONTRACTOR shall maintain an update list of his contracts on works,
services and supplies and it shall be available to ANH, whenever it requests it. Said list should detail, at least, name of supplier/vendor, contractor or subcontractor, subject, value and term of contract. 
 23.3. National component: THE CONTRACTOR shall endeavor for preferring national bidders of goods and services of national origin in equal conditions of quality,
opportunity and price. 
 23.4. Personnel: For all legal purposes, THE CONTRACTOR shall act as the sole employer for workers hired to develop actions
to this contract, and consequently, he shall be liable for all labor obligations derived from the respective relations or work contracts such as salary payment and social benefits, parafiscal contributions, affiliation and payment of contributions
to pension funds, health and professional risks of the Integral Social Security Systems in conformity to law. THE 

			
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CONTRACTOR shall train adequately the Colombian personnel required to replace foreign personnel that THE CONTRACTOR believes necessary for performing
operations pursuant to this contract. In all events, THE CONTRACTOR shall comply with legal provisions that establish the proportion of national and foreign employees and workers. 
 23.5. Technology transfer: THE CONTRACTOR shall be bound to hold training programs at his own cost for professionals or by the sponsorship of investigation projects designated by ANH in areas related to this
contract development and during its term. Training shall be related with the oil industry in technical, environmental, commercial and legal areas, among others. Training shall be carried out by the integration of professionals designated by ANH to
the work team appointed by THE CONTRACTOR to the Contracted Area or by other related activities. All training costs, with exception to labor costs in the benefit of professionals, that are caused for the compliance of THE CONTRACTOR’s
obligations by virtue of this clause, shall be assumed hundred per cent (100%) by THE CONTRACTOR. In no event, THE CONTRACTOR shall assume any cost derived from the labor relation of the training beneficiaries. In order to comply with the
obligations of Technology transfer pursuant to this clause, in each of the phases of the Exploration Period and its extensions, THE CONTRACTOR shall commit to carry out the technology transfer programs up to the twenty five percent (25%) of the
amount resulting from multiplying the number of hectares and the fraction of hectare of the Contracted Area, by the value presented in the chart defined in Clause 16 (section 16.1.1) and this calculation shall be done at the start of each phase,
included the first one. With regard to Exploitation Areas, the technology transfer shall be up to ten percent (10%) of the amount of the right of use of subsoil pursuant to Clause 16 (section 16.1.2) per each Calendar year. In no event,
THE CONTRACTOR shall be required that the total value of the Technology Transfer exceeds one hundred thousand US dollars (USD $100,000) per phase or Calendar year, as it corresponds. 
 CLAUSE 24 – OPERATOR 
 24.1. Without prejudice of performing the operation directly,
THE CONTRACTOR shall be able to contract a third party for acting as operator provided that he demonstrates experience, suitability and financial stability. In these events, the appointment of a third party as operator shall require the ANH’s
definitive approval. 
 24.2. When THE CONTRACTOR is formed by two or more companies, it shall be notified which of them shall be acting as operator.

 24.3. When more than two operators are required at the same time in this contract, the ANH’s previous approval shall be required. 

24.4. When the operator decides to renounce he shall inform with at least ninety (90) Calendar days in advance. 

			
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 24.5. When a third party acts as the operator and ANH is aware that he has assumed negligent behaviors or contrary
to the Good Practices of the Oil Industry with regard to the compliance of the obligations subject to this contract, ANH shall inform THE CONTRACTOR who shall dispose of a ninety (90) Calendar days term as of the request for adopting corrective
measures as appropriate. If upon expiration of said term the aforementioned conduct persists, ANH shall demand from THE CONTRACTOR to change such operator. 
 CLAUSE 25 – RIGHTS OF ASSIGNMENT 
 25.1. Right: THE CONTRACTOR has the right to assign or transfer all or
partially his interests, rights and obligations pursuant to this contract, with ANH previous written authorization, to another company, consortium or temporal joint venture with the financial capability, the technical competence, the professional
skills and the juridical capacity needed for acting in Colombia. 
 25.2. Procedure: To this effect, THE CONTRACTOR shall request by writing to ANH,
indicating essential elements for negotiation such as: name of possible assignee, information on his legal, financial, technical and operational capabilities, the value of rights and obligations to be assigned, scope of operation, etc. ANH shall
exercise its discretionary authority within sixty (60) working days following to the reception of such request for analyzing it. Subsequently ANH shall make its determination without being obliged to provide the rationale. In the event that any
of the companies forming part of THE CONTRACTOR Party starts merging, division, absorption or partnership transformation, it will only be necessary to inform to ANH timely, without prejudice of the information that might be required by Colombian
authorities. ANH reserves the right of evaluating THE CONTRACTOR’s new conditions or of any of the companies that form part of it, as to their financial capacity, technical competence, professional skills and juridical capacity need to acting
and shall be able to request the guarantees granting. 
 Paragraph: When the assignments are given on behalf of the controlling companies of THE
CONTRACTOR or to any of the companies that form part of it or to their affiliates or subsidiaries, or among companies that form part of the same economical group, if ANH does not provide the answer in the agreed term, it shall be understood that the
corresponding assignment has been authorized. 
 CLAUSE 26 – FORCE MAJEURE AND FORTUITOUS EVENT 
 26.1. Definitions: To the effect of this contract, Force Majeure is the unforeseen irresistible event such as a law, authority act, shipwreck or earthquake, etc.,
and is the irresistible fact from a third party such as a war, act of ill will by third parties, etc. For the purpose of this contract, both Force Majeure and Fortuitous event 

			
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shall be releasing of liability and shall suspend the compliance of non-financial obligations affected by such circumstance, provided that they are an
strange cause and the Party that receives the notice accepts the irresistibleness and impediment character of the alleged fact. 
 Paragraph: To the
effect of this contract, the winter of environmental license proceedings shall not constitute release cause as to Force Majeure or fortuitous event with regard to the obligation of drilling the well, since such situations are foreseeable by THE
CONTRACTOR. 
 26.2. Suspension: Compliance of this contract obligations shall be suspended for all time when any of the Parties is not capable to
fulfill them total or partially, due to Force Majeure or Fortuitous Events circumstances. When any of the Parties is affected by any of such circumstances it shall notify to the other within the fifteen (15) Calendar days following, invoking
this clause and submitting the appropriate justifications, detailing the grounds that have originated its impediment, how it affects the compliance of appropriate obligation, estimated period of activities suspension and any other information that
allows to demonstrate said fact and its irresistibleness. 
 26.3. Acceptance: The affected Party shall respond by writing within the fifteen
(15) Calendar days following to the notice reception, accepting or not the releasing liability circumstance, and with such acceptance the terms for the compliance of affected obligations shall be suspended. In such event the suspension shall
take place as of the time when the fact invoked as ground for release occurred. If the affected Party does not respond within such term, it shall be understood as accepted the occurrence of the invoked ground and the compliance of the affected
obligation shall be suspended. The suspension shall only interrupt the compliance of affected obligations. 
 26.4. Termination of suspension: The
Party affected by the releasing liability ground shall restart the compliance of its suspended obligations within the Month following to the disappear of the fact invoked as ground. In this event, the other Party shall be informed within the next
fifteen (15) Calendar days. The Party bound to compliance of obligation shall do its best efforts for complying it within the terms and conditions agreed by both Parties. 
 26.5. Effects in terms: When the suspension prevents from the compliance of any of the Exploration Operations of any of the phases of the Minimum Exploratory Plan or the Subsequent Exploratory Plan and such
impediment is extended for more than two (2) Consecutive months, ANH shall restore the contractual term for a period equal to the impediment, without prejudice that THE CONTRACTOR must extend the existing guarantee or to underwrite a new one
pursuant to terms of Clause 22nd. 

			
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 CLAUSE 27 – SOLUTION OF DISPUTES BETWEEN THE PARTIES 
 27.1. Executive plea: Any difference or disagreement that arises in the contract development and related thereof, shall be by the Parties’ officials
authorized for such purpose. If within thirty (30) Calendar days as of the written notice, such disagreement has not been resolved, it shall be subject to the top executive of each of the parties, who resides in Colombia, in order to look for a
joint solution. If within the thirty (30) Calendar days following to the date that one of the Parites has requested to the other the disagreement submission to the aforementioned executives, the Parties reached an agreement or decision on such
issue, within the fifteen (15) Calendar days after achieving it the agreement or decision taken shall be executed. 
 27.2 Expert’s opinion and
arbitration authorities: If within the aforementioned thirty (30) days the top executives of both Parties have not reach an agreement or decision, or if within the aforementioned fifteen (15) days they did not execute the
agreement or adopted decision, any of the Parties shall be able to turn to the mechanisms provided in sections 27.2.1., 27.2.2. and 27.2.4., as appropriate, in the following way: 
 27.2.1. Expert opinion. If it is about a technical disagreement, it shall be submitted to the expert’s opinion, appointed as follows: one by each Party and the third one by the two main experts, and if
there is not consensus between them, and at the request of any of the Parties, said third one shall be appointed by the professional association related to the issue in controversy, that be a technical advisory institution of the Government and
located in Bogotá. 
 Once experts have been appointed: 
  

	a.	The experts shall issue their opinion in a thirty (30) days term as of their appointment. The experts shall indicate place and term to receive information from the Parties. At
experts’ requests, the Parties might grant the extension to the initial term. 

  

	b.	The Parties shall deliver all information pertinent that experts may consider necessary. 

  

	c.	The Parties shall focus and delimit the issues that are related to the expertise. 

  

	d.	The costs and expenses of technical experts shall be paid equally by the Parties. 

  

	e.	The opinion shall be issued by majority and shall be binding to the parties with the effects of the transaction. 

			
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 27.2.2. Accounting expert’s opinion: If the disagreement is an accounting matter it shall be subject to the
experts’ opinion who shall be certified public accountants appointed as: one by each Party and the third one by the two main experts, and if there is not consensus between them, and at the request of any of the Parties, said third one shall be
appointed by the Junta Central de Contadores de Bogotá (Accountants Board of Bogotá). Once the experts have been appointed proceedings shall be similar to provisions in subsections a.3 of above section. 
 27.2.3. Dispute regarding the type: In the event of a disagreement between the Parties as to the technical, accounting or legal quality of the controversy, it
shall be regarded as legal type. 
 27.2.4. Arbitration: Any disagreement or dispute derived from or related to this contract other than a technical
or accounting disagreement, shall be resolved by means of arbitration. The Arbitration Court shall be formed by three (3) arbitrators appointed by mutual agreement by the Parties. If they do not reach to an consensus for the arbitrators
appointment they shall appointed by the Arbitration and Trade Conciliation Center of the Chamber of Commerce of Bogotá D.C., previous request filed by any of the Parties. In any event, the arbitrators shall have experience certified by more
than five (5) years in issues related to the oil industry. The Court shall apply the current Colombian Substantial Law and its award shall be granted by law. Language of arbitration shall be Spanish. 
 27.2.5. Exclusion: In conformity to provision of Clause 4 of this contract (section 4.2.2 paragraph), lack of agreement between the parties for the extension of
the Exploitation Period of each Exploitation Area shall not generate a disagreement and shall not be subject to the procedures herein stated. 
 CLAUSE 28 – TERMINATION 
 28.1. Grounds for termination: This contract shall be terminated and THE CONTRACTOR’s rights
shall cease in any of the following events. 
  

	a.	For expiration of the term of the Exploration Period, without THE CONTRACTOR would have made the Discovery. 

  

	b.	For expiration of the term of the Exploitation Period. In this event, the contract effects shall be terminated with regard to the Exploitation Area where the Exploitation Period
would have terminated. 

  

	c.	For THE CONTRACTOR’s resignation during the Exploration Period in the cases foreseen in Clause 4 (section 4.2.1.). 

  

	d.	For THE CONTRACTOR’s resignation at any time of the Exploitation Period. 

  

	e.	At any time by mutual agreement between Parties. 

  

	f.	For THE CONTRACTOR’s non-compliance statement. 

  

	g.	For application of any of the grounds for unilateral termination foreseen in this contract. 

			
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	h.	For occurrence of any of the ground for termination or expiration ordered by law. 

 In the cases foreseen in subsections f., g., and h., ANH shall enforce the guarantee mentioned in Clause 22nd without prejudice of any appeal or action to be filed. 
 28.2. Grounds for non-compliance
termination: Following are the grounds for non-compliance termination: 
  

	a.	To assign this contract, total or partially without complying to provisions in Clause 25. 

  

	b.	To suspend with no justification the Exploration Operations for more than six (6) continuous months within the same phase. 

  

	c.	To suspend with no justification the Evaluation and/or Exploitation Operations for a period higher than half the term of the Evaluation Plan in an Evaluation Area or for six
(6) consecutive months in an Exploitation Area. In such events, the effects of this contract shall terminate with regard to the Evaluation or Exploitation Area where the Operations suspension would have occurred. 

  

	d.	To misuse resources and minerals that do not form part of this contract subject. 

  

	e.	To omit with no justification in the established terms the delivery of technical information resulting from Exploration, Evaluation, Development or Production Operations whose
relevance prevents from ANH function development. 

  

	f.	Non-compliance of guarantees delivery pursuant to Clause 22nd (section 22.3). 

  

	g.	Non compliance with no justification any other obligation agreed by THE CONTRACTOR by virtue of and related to this contract subject. 

 28.3. Procedure for non-compliance statement: In the event of the occurrence of any of the grounds for non-compliance, ANH shall terminate this contract after
sixty (60) Calendar days of having requested by writing THE CONTRACTOR, previous approval from ANH Board of Directors, indicating the ground invoked for such statement, provided that THE CONTRACTOR has not presented the explanations
satisfactory to ANH within the twenty (20) working days following to the date of reception of such request or he has not corrected the failure in the contract compliance within a sixty (60) days period. If within the twenty
(20) working days period aforementioned THE CONTRACTOR presents the explanations satisfactory to ANH and the remaining period for completing the sixty (60) Calendar days is insufficient to comply with pending obligations, ANH shall be able
to grant and additional term for allowing such compliance, without prejudice of demanding necessary guarantees for supporting it. If at the end of such period the necessary corrective measures have not been implemented, ANH shall state the
non-compliance and the termination of this contract. It is understood that term provided in this section for the compliance of pending obligations in no event constitutes the extension of the agreed term for the performance of the Minimum
Exploratory Plan of an ongoing phase and does not modify the terms of the phases following to the Exploration Period. 

			
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 28.4. Grounds for unilateral termination: ANH shall be able to declare the unilateral contract termination at any
time in following cases: 
  

	a.	For the start of THE CONTRACTOR’s liquidation process, if legal entity. 

  

	b.	For THE CONTRACTOR’s judicial seizure that seriously affects the contract compliance. 

 When several legal entities and/or individuals form part of THE CONTRACTOR the ground for above sections shall be applied when they affect seriously the contract compliance. 
 PARAGRAPH. RESOLUTORY CONDITION. For each phase where there is any obligation to drill an exploratory well or wells, THE CONTRACTOR shall initiate the appropriate
proceedings before the Ministry of Environment in order to obtain the environmental license within the thirty (30) Calendar days following to the start of the respective phase. The breach of this obligation by THE CONTRACTOR shall terminate
this contract. 
 28.5. Mandatory clauses: ANH shall declare the termination, expiration or obligatory liquidation of this contract when ground
ordered by law occur, such as the Law 418 of 1997, extended and amended by Laws 548 of 1999 and 782 of 2002, or Law 40 of 1993 or in the laws that supersede or amend them. 
 28.6. Subsequent obligations: Upon termination of this contract by any cause and at any time, the Parties are bound to satisfactorily comply with their legal obligations between each other and to third parties
and with the ones pursuant to this contract. It includes the liability for losses and damages resulting when the contract has been unilateral terminated and by reasons attributable to THE CONTRACTOR, with legal indemnities and compensations.

 CLAUSE 29 – ENVIRONMENT 
 29.1.
THE CONTRACTOR shall pay special care to environment protection and to the compliance of applicable regulations on this issue. Likewise, it shall implement and perform specific contingency plans for assisting emergencies and repairing damages,
in the more efficient and timely manner. 
 29.2. THE CONTRACTOR shall report biannually to ANH about the environment issues of Operations being
performed, of application of preventive plans and of contingency plans, and on the status of proceedings before competent environmental authorities with regard to permits, authorizations, concessions and licenses, as appropriate. 
 29.3. When any activity or Exploration Operation requires permits, authorizations, concessions or environmental licenses, THE CONTRACTOR shall refrain from
carrying them out while he obtains such permits, authorizations, concessions or licenses. 

			
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 29.4. Without the approval of environmental impact studies and the issuance of appropriate environmental licenses
or any other requirement, THE CONTRACTOR shall not be able to start the Exploitation. In any event, for phases where exploratory wells will be drilled THE CONTRACTOR shall start the pertinent proceedings for obtaining the environmental license, the
latest, one month after the respective phase has been initiated, under penalty of declaring the breach of the contract. 
 29.5. Non-compliance of any
of said obligations shall be ground for termination for unfulfilling the terms in Clause 28 (section 28.2., subsection g.). 
 CLAUSE 30
– ABANDONMENT 
 30.1. Abandonment: Without prejudice of provisions in section 4.3.4. of this contract in any event where areas return take
place, both in land and offshore, THE CONTRACTOR shall plan and carry out all Abandonment activities, in conformity to Colombian law and in compliance to the Good Practices of Oil Industry. 
 30.2. Return of Exploration and Evaluation Areas: Within the sixty (60) days following to the date where the Exploration or Evaluation areas return should
take place, THE CONTRACTOR shall carry out the Abandonment plan, satisfactory to ANH and to other competent authorities. 
 30.3. In Exploitation
areas: The Exploitation Plan of each Exploitation Area shall include the appropriate Abandonment plan. Likewise, in the updates to the Exploitation Plan of section 9.4, THE CONTRACTOR shall make adjustments needed to the Abandonment plan.

 30.4. Abandonment fund: 
 30.4.1. Creation: By
the end of the first Calendar Year of the Month when THE CONTRACTOR initiated the commercial and regular production of Hydrocarbons of any Exploitation Area and as of then, THE CONTRACTOR shall make the special register in its accounting named
Abandonment Fund, and to guarantee the availability of enough financial resources for the aforementioned Abandonment plan, THE CONTRACTOR shall establish a trust account, a bank guarantee or any other instrument accepted by ANH. In any event the
terms and conditions of instrument agreed shall be determined by the Parties within the year immediately preceding the date when such Abandonment Fund shall be created. In the event that no agreement would be reached, THE CONTRACTOR shall any way
constitute the bank guarantee as per the terms of this clause. 

			
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 30.4.2. Value of the Abandonment fund: The value of the Abandonment Fund at the end of each Calendar year shall
result from the following formula: 
 AMA = (PAH / RIH)2 x CAB 
 Where, 

	AMA	is the value of the Abandonment Fund that THE CONTRACTOR shall register for each Exploitation Area at the end of each Calendar year. 

  

	PAH	is the accumulated volume of Hydrocarbons produced in each Exploitation Area, since the start
of production up to December 31st of the year for which this calculation is being made.

  

	PAH	are the proved Hydrocarbon reserves in each Exploitation Area, expressed in Barrels of Liquid
Hydrocarbons, as per the Exploitation Plan and their updates. This value includes the accumulated production (PAH)
plus remaining proved reserves. 

  

	CAB	is the updated estimated cost of Abandonment operations of each Exploitation Area. When it is
about annual readjustments, the CAB shall be reduced in the value of Abandonment costs already executed.

 All aforementioned Hydrocarbons production and reserves calculations (PAH
/ RIH) shall be made in Barrels of Liquid
Hydrocarbons. For such purpose the Parties agree that for making the appropriate conversion five thousand seven hundred (5,700) feet3 of gas, at Standard Conditions, are equivalent to one (1) Barrel of Liquid Hydrocarbons. 
 The variables of formula shall be
revised and updated annually by THE CONTRACTOR upon the basis of actual disbursements of Abandonment activities carried out and of production and reserve Hydrocarbons volume. 
 Paragraph: Pursuant to this clause, Proved Reserves are the quantity of Hydrocarbons that on the grounds of the geological and engineering analysis, THE CONTRACTOR estimates with reasonable certainty that might
be commercially recoverable, as of a specific date o the basis of the known reservoirs and in conformity to economical conditions, to operative methods and to the regulatory frame ruling at the calculation time. 
 30.5. Compliance of obligations pursuant to this clause does not release THE CONTRACTOR from his obligation to carry out at his own cost and risk all Abandonment
operations in each Exploitation Area. 

			
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 CLAUSE 31 – CONTRACTUAL DOMICILE AND APPLICABLE LAW 
 For all purposes of this contract, the Parties set as domicile the city of Bogotá, D.C., Republic of Colombia. This contract shall be governed by the Colombian
law and THE CONTRACTOR waives to diplomatic claim as to his rights and obligations from this contract, except in the event of justice denied. It is understood that there shall not be justice denied when THE CONTRACTOR has had access to all means and
action recourses that proceed in conformity to Colombian law. 
 CLAUSE 32 – SPOKESMANSHIP REPRESENTATION 
 Without prejudice of THE CONTRACTOR’s legal rights derived from legal provisions of from clauses in this contract, ANH shall represent THE CONTRACTOR before
Colombian authorities with relation to activities developed by virtue of this contract, provided that it should do it, and it shall provide all data and reports that might be legally required to officials and government institutions. THE CONTRACTOR
shall be bound to prepare and to supply to ANH all appropriate reports. Expenses incurred by ANH to assist any issue in this clause, shall be at THE CONTRACTOR’s charge and when such expenses exceed five thousand US dollar (USD $5,000) or its
equivalent in Colombian currency, THE CONTRACTOR’s previous approval shall be necessary. The Parties declare, for any relation with third parties, that neither what has been provided in this clause nor in any other of this contract, implies the
granting of a general power of attorney and either that the parties have incorporated a civil or commercial partnership or any other relation under which any of the Parties might be considered as jointly liable for the other Party’s acts or
omits, or to have the authority or mandate that might bind the other Party as to any other liability. This contract is related to the activities within the territory of the Republic of Colombia. 
 CLAUSE 33 – PAYMENTS AND CURRENCY 
 33.1.
Currency: All payments made by THE CONTRACTOR on behalf of ANH, by virtue of this contract, shall be made in US dollars, when the exchange regulations so permit it, or in Colombian pesos and in the bank designated by ANH. THE CONTRACTOR shall be
able to make payments in foreign currency when the exchange regulations so permit it, and it shall be authorized by ANH. 
 33.2. Exchange rate: When
translation of US dollars into Colombian pesos is possible the representative market exchange rate effective at the payment date, certified by the Bank Superintendent or the entity authorized, shall be applied. 
 33.3. Interests in arrears: If payments that THE CONTRACTOR should make on behalf of ANH by virtue of this contract, are not made within the foreseen terms, THE
CONTRACTOR shall pay the delinquent interest at the maximum legal permitted rate. 

			
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 CLAUSE 34 – TAXES 
 THE CONTRACTOR shall be subject to the Colombian Tax law. 
 CLAUSE 35 – NOTICES AND COMMUNICATIONS

 35.1. Domicile for Notices and Communications: Notices and communications between the Parties shall be sent to their representatives at their
registered domicile for judicial notices, which at the date of entering into this contract are: 
 For ANH: Calle 37 No. 7-43, Piso 5, Edificio
Guadalupe, Bogotá, D.C. Colombia 
 For THE CONTRACTOR: Calle 114 No. 9-01, Oficina 1001, Torre A, Bogotá, D.C. Colombia 
 35.2. Changes: Any change in the representative or in aforementioned domicile should be officially informed to the other Party within the five (5) days
following to its occurrence. 
 35.3. Effectiveness: The communications between the Parties with regard to this contract shall be effective at the
time of reception by the Party addressed, in the aforementioned domiciles and in any event, when they have been delivered in the domicile registered in the Chamber of Commerce for judicial notices. 
 CLAUSE 36 – EXTERNAL COMMUNICATIONS 
 When THE
CONTRACTOR shall require to issue public statements, announcements or communications with regard to this contract on any information which might affect its normal development, THE CONTRACTOR shall request previous written authorization from ANH. In
any event, the external communications on Discoveries made, Discoveries declared or to be commercially declared and of Hydrocarbons reserves volume shall be authorized by ANH. 
 CLAUSE 37 – LANGUAGE 
 For all effects and acts related to this contract the official
language shall be Spanish. 

			
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 CLAUSE 38 – EXECUTION 
 This contract shall be executed by the Parties’ subscription. 
 In witness whereof this contract is signed in two
originals with the same content and effect in Bogotá, D.C. on December 27, 2005. 
  

	
	 AGENCIA NACIONAL DE HIDROCARBUROS

	
	 /s/ JOSE ARMANDO ZAMORA REYES

	 JOSE ARMANDO ZAMORA REYES

	 GENERAL DIRECTOR

	
	 HARTEN DE COLOMBIA LIMITED

	
	 /s/ GUILLERMO SANCHEZ

	 GUILLERMO SANCHEZ

	 LEGAL REPRESENTATIVE

  

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	41

  

 ANNEX C – MODEL OF LETTER OF CREDIT 
 ANNEX TO THE EXPLORATION AND PRODUCTION CONTRACT OF “LUNA LLENA” SECTOR 
  

			
	 Letter of credit No.
	 	
		
	 Place and date of issuance:
	 	
		
	 Date of expiration:
	 	Duration of the respective phase plus three (3) months.
		
	 Face value:
	 	(USD $    )
		
	 Issuing bank:
	 	(Name of Issuing bank)
		
	 Beneficiary:
	 	Agencia Nacional de Hidrocarburos – ANH
		
	 Principal:
	 	(Name of company)
		
	 Name of contact:
	 	

 We hereby inform you that on behalf and to the order of (name of company), hereinafter THE CONTRACTOR, we have
issued this irrevocable standby letter of credit for the amount in Colombian pesos resulting from the translation of the amount of USD $
                        at the representative market exchange rate effective the date when the non-compliance
communication is sent to us, as provided below, to guarantee the compliance and adequate performance of all or some of the obligations of Phase             of the Exploration period,
with a             term and of any other inherent activities to such obligations from the Exploration and Production Contract xxxxxx entered into THE CONTRACTOR and ANH in
            , hereinafter THE CONTRACT. 
 It is understood that the (name of issuing
bank)’s liability derived from this standby letter of credit is limited only and exclusively to the amount in Colombian legal currency aforementioned. 
 In the event of non-compliance by THE CONTRACTOR of all or any of his obligations and of other activities inherent to such obligations derived from THE CONTRACT mentioned in the first paragraph of this standby letter of credit, hereinafter
GUARANTEED OBLIGATIONS, the Beneficiary shall inform such non-compliance to (name of issuing bank) in the offices of (            ) within the effectiveness of this letter of credit.
In the same date when we receive said communication we shall proceed to pay unconditionally to the order of the Beneficiary the amounts claimed by him with charge to this letter of credit, without exceeding in no event the total guaranteed value.

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	42

  

 If the non-compliance communication is sent after the mentioned effectiveness of this letter of credit, our
responsibility derived from it shall cease. 
 The communication by means of which the (name of issuing bank) is informed on the non-compliance of the
GUARANTEED OBLIGATIONS shall consist in a document duly signed by the ANH Legal Representative, or whoever is designated, where the non-compliance by THE CONTRACTOR of the GUARANTEED OBLIGATIONS is set forth and the payment of this letter of credit
is requested. The number of this letter of credit and its value translated into Colombian legal currency at the market representative exchange rate effective at the date when said communication is being sent to us, should be mentioned, as per
certification of the Bank Superintendent of Colombia or by the designated entity. 
 This document shall be governed by the “Rules and Uniform uses
regarding documenting credits” (last review) published by the International Chamber of Commerce. 
  

	
	  
  

	 Signature of Issuing Bank’s Legal Representative

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	43

  

 ANNEX A 
 CONTRACTED AREA 
 ATTACHMENT TO EXPLORATION AND PRODUCTION CONTRACT OF “LUNA LLENA” SECTOR

 The entire area comprised within the block below described is of one hundred forty nine thousand three hundred hectares (149,300). Cartographic
information was taken from the Political Map of Colombia, digital file of the IGAC, at 1:1,500,000. 
 LUNA LLENA BLOCK 
 The polygon area formed by the apex related below is of one hundred forty nine thousand three hundred hectares (149,300) and is located within the municipality
jurisdiction of Paz de Ariporo in Casanare state and La Primavera in Vichada state. This area is described below and as it appears in the map enclosed as Attachment A, that forms part of this contract, as the corresponding charts that have taken as
reference point in the auxiliary geodetic apex “TELL-117” of Instituto Geográfico Agustín Codazzi, whose GAUSS plain coordinates with Bogota origin are: N-1’045.241,984 meters, E-1’242.850,73 meters, which
correspond to geographical coordinates Latitude 5o 00’ 16” 0,334 at Ecuador North, Longitude
71o 53’ 29” 0,802 at Greenwich West. 
 Point A: 
 From this apex (TELL-117) it continues bound for N 70o 32’ 25” 0,633 mil E by a distance of 161367.049 meters up to point “A”, whose coordinates are N- 1099000 meters, E- 1395000 meters.

 Point B: 
 From this point it continues bound for NORTH by a
distance of 8000 meters up to point “B”, whose coordinates are N- 1107000 meters, E- 1395000 meters. 
 Point C: 
 From this point it continues bound for EAST by a distance of 7000 meters up to point “C”, whose coordinates are N- 1107000 meters, E- 1402000 meters.

 Point D: 
 From this point it continues bound for NORTH by a
distance of 10000 meters up to point “D”, whose coordinates are N- 1117000 meters, E- 1402000 meters. 
 Point E: 
 From this point it continues bound for EAST by a distance of 22000 meters up to point “E”, whose coordinates are N- 1117000 meters, E- 1424000 meters.

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	44

  

 Point F: 
 From this point it
continues bound for NORTH by a distance of 18000 meters up to point “F”, whose coordinates are N- 1135000 meters, E- 1424000 meters. 
 Point G:

 From this point it continues bound for EAST by a distance of 23000 meters up to point “G”, whose coordinates are N- 1135000 meters, E- 1447000
meters. 
 Point H: 
 From this point it continues bound for
NORTH by a distance of 11000 meters up to point “H”, whose coordinates are N- 1146000 meters, E- 1447000 meters. 
 Point I: 
 From this point it continues bound for EAST by a distance of 21000 meters up to point “I”, whose coordinates are N- 1146000 meters, E- 1468000 meters. The line
“H-I” is adjacent to the HEAVY CRUDES sector, special area of ANH. 
 Point J: 
 From this point it continues bound for SOUTH by a distance of 6000 meters up to point “J”, whose coordinates are N- 1140000 meters, E- 1468000 meters. 
 Point K: 
 From this point it continues bound for WEST by a distance of 10000
meters up to point “K”, whose coordinates are N- 1140000 meters, E- 1458000 meters. 
 Point L: 
 From this point it continues bound for SOUTH by a distance of 21000 meters up to point “L”, whose coordinates are N- 1119000 meters, E- 1458000 meters.

 Point M: 
 From this point it continues bound for WEST by a
distance of 11000 meters up to point “M”, whose coordinates are N- 1119000 meters, E- 1447000 meters. 
 Point N: 
 From this point it continues bound for SOUTH by a distance of 14000 meters up to point “N”, whose coordinates are N- 1105000 meters, E- 1447000 meters.

 Point O: 
 From this point it continues bound for WEST by a
distance of 24000 meters up to point “O”, whose coordinates are N- 1105000 meters, E- 1423000 meters. 
 Point P: 
 From this point it continues bound for SOUTH by a distance of 6000 meters up to point “P”, whose coordinates are N- 1099000 meters, E- 1423000 meters.

 From this point it continues bound for WEST by a distance of 28000 meters up to point “A”, departure point and close of boundaries. 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	45

  

 AGENCIA NACIONAL DE HIDROCARBUROS 
 Calculation of Area, Bounds and Distances based on Gauss Coordinates. Bogota origin. 
 Data and results chart for sector LUNA LLENA BLOCK 
 Jurisdiction of Municipality of Paz de Ariporo in Casanare state and La
Primavera in Vichada state 
  

													
	Point	 	NORTH	 	EAST	 	Distance	 	Dif. Norths	 	Dif Easts	 	Bounds
	Apex	 	1,045,241.984	 	1,242,850.730	 		 		 		 	
		 		 		 	161,367.05	 	53,758.02	 	152,149.27	 	N 70o 32’ 25” 0,633 mil E
	A	 	1,099,000.000	 	1,395,000.000	 		 		 		 	
		 		 		 	8,000.00	 	8,000.00	 	0.00	 	NORTH
	B	 	1,107,000.000	 	1,395,000.000	 		 		 		 	
		 		 		 	7,000.00	 	0.00	 	7,000.00	 	EAST
	C	 	1,107,000.000	 	1,402,000.000	 		 		 		 	
		 		 		 	10,000.00	 	10,000.00	 	0.00	 	NORTH
	D	 	1,117,000.000	 	1,402,000.000	 		 		 		 	
		 		 		 	22,000.00	 	0.00	 	22,000.00	 	EAST
	E	 	1,117,000.000	 	1,424,000.000	 		 		 		 	
		 		 		 	18,000.00	 	18,000.00	 	0.00	 	NORTH
	F	 	1,135,000.000	 	1,424,000.000	 		 		 		 	
		 		 		 	23,000.00	 	0.00	 	23,000.00	 	EAST
	G	 	1,135,000.000	 	1,447,000.000	 		 		 		 	
		 		 		 	11,000.00	 	11,000.00	 	0.00	 	NORTH
	H	 	1,146,000.000	 	1,447,000.000	 		 		 		 	
		 		 		 	21,000.00	 	0.00	 	21,000.000	 	EAST
	I	 	1,146,000.000	 	1,468,000.000	 		 		 		 	
		 		 		 	6,000.00	 	-6,000.00	 	0.00	 	SOUTH
	J	 	1,140,000.000	 	1,468,000.000	 		 		 		 	
		 		 		 	10,000.00	 	0.00	 	-10,000.00	 	WEST
	K	 	1,140,000.000	 	1,458,000.000	 		 		 		 	
		 		 		 	21,000.00	 	-21,000.00	 	0.00	 	SOUTH
	L	 	1,119,000.000	 	1,458,000.000	 		 		 		 	
		 		 		 	11,000.00	 	0.00	 	-11,000.00	 	WEST
	M	 	1,119,000.000	 	1,447,000.000	 		 		 		 	
		 		 		 	14,000.00	 	-14,000.00	 	0.00	 	SOUTH
	N	 	1,105,000.000	 	1,447,000.000	 		 		 		 	
		 		 		 	24,000.00	 	0.00	 	-24,000.00	 	WEST
	O	 	1,105,000.000	 	1,423,000.000	 		 		 		 	
		 		 		 	6,000.00	 	-6,000.00	 	0.00	 	SOUTH
	P	 	1,099,000.000	 	1,423,000.000	 		 		 		 	
		 		 		 	28,000.00	 	0.00	 	-28,000.00	 	WEST
	A	 	1,099,000.000	 	1,395,000.00	 		 		 		 	

 POLYGON AREA (H.): 149,300 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	46

  

 ANNEX A 
 (MAP) 
  

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	47

  

 ANNEX B – MINIMUM EXPLORATORY PLAN 
 ATTACHMENT TO EXPLOITATION AND PRODUCTION CONTRACT OF “LUNA LLENA” SECTOR 
 THE CONTRACTOR
shall bind to carry out the following Exploratory Plan, as minimum: 
 Phase 1 (18 months): 
  

	•	 	Reprocessing and interpretation of five hundred (500) kilometers of 2D seismic. 

  

	•	 	Acquisition and interpretation of one hundred and sixty five (165) kilometers of 2D seismic. 

  

	•	 	Drilling of two wells up to formations that could produce hydrocarbons. 

  

	•	 	Re-entry of a well (in the event of not being able to re-entry, then drilling of a new well) 

  

	•	 	Evaluation of the 7 wells in the area. 

 Phase 2 (18 months): 

 

	•	 	Drilling on one (1) exploratory well 

  

	•	 	Re-entry of a well (in the event of not being able to re-entry, then drilling of a new well) 

 Phases 3 to 5 (12 months each): 
  

	•	 	Drilling of one (1) exploratory well per phase. 

			
	HYDROCARBON EXPLORATORY AND PRODUCTION CONTRACT-LUNA LLENA	  	

  

 CONTENTS 
  

							
	 CLAUSE 1st
	 	–	 	DEFINITIONS	 	1
	 CLAUSE 2nd
	 	–	 	SUBJECT	 	6
	 CLAUSE 3
	 	–	 	CONTRACTED AREA	 	6
	 CLAUSE 4
	 	–	 	TERM AND PERIODS	 	7
	 CLAUSE 5
	 	–	 	MINIMUM EXPLORATORY PLAN	 	10
	 CLAUSE 6
	 	–	 	SUBSEQUENT EXPLORATORY PLAN	 	11
	 CLAUSE 7
	 	–	 	DISCOVERY AND EVALUATION	 	12
	 CLAUSE 8
	 	–	 	COMMERCIALITY STATEMENT	 	14
	 CLAUSE 9
	 	–	 	EXPLOITATION PLAN	 	14
	 CLAUSE 10
	 	–	 	EXPLOITATION WORK PLANS	 	16
	 CLAUSE 11
	 	–	 	OPERATIONS DIRECTION	 	17
	 CLAUSE 12
	 	–	 	ROYALTIES	 	17
	 CLAUSE 13
	 	–	 	MEASUREMENT	 	18
	 CLAUSE 14
	 	–	 	PRODUCTION AVAILABILITY	 	19
	 CLAUSE 15
	 	–	 	NATURAL GAS	 	19
	 CLAUSE 16
	 	–	 	CONTRACTUAL ECONOMICAL RIGHTS OF ANH	 	19
	 CLAUSE 17
	 	–	 	Joint exploitation	 	24
	 CLAUSE 18
	 	–	 	PROPERTY OF ASSETS	 	24
	 CLAUSE 19
	 	–	 	INFORMATION SUPPLY AND CONFIDENTIALITY	 	25
	 CLAUSE 20TH
	 	–	 	INSPECTION AND FOLLOW UP	 	26
	 CLAUSE 21ST
	 	–	 	INSURANCES	 	26
	 CLAUSE 22nd
	 	–	 	GUARANTEES	 	27
	 CLAUSE 23
	 	–	 	SUBCONTRACTORS, PERSONNEL AND TECHNOLOGY TRANSFER	 	28
	 CLAUSE 24
	 	–	 	OPERATOR	 	29
	 CLAUSE 25
	 	–	 	RIGHTS OF ASSIGNMENT	 	30
	 CLAUSE 26
	 	–	 	FORCE MAJEURE AND FORTUITOUS EVENT	 	30
	 CLAUSE 27
	 	–	 	SOLUTION OF DISPUTES BETWEEN THE PARTIES	 	32
	 CLAUSE 28
	 	–	 	TERMINATION	 	33
	 CLAUSE 29
	 	–	 	ENVIRONMENT	 	35
	 CLAUSE 30TH
	 	–	 	ABANDONMENT	 	36
	 CLAUSE 31ST
	 	–	 	CONTRACTUAL DOMICILE AND APPLICABLE LAW	 	38
	 CLAUSE 32nd
	 	–	 	SPOKESMANSHIP REPRESENTATION	 	38
	 CLAUSE 33
	 	–	 	PAYMENTS AND CURRENCY	 	38
	 CLAUSE 34
	 	–	 	TAXES	 	39
	 CLAUSE 35
	 	–	 	NOTICES AND COMMUNICATIONS	 	39
	 CLAUSE 36
	 	–	 	EXTERNAL COMMUNICATIONS	 	39
	 CLAUSE 37
	 	–	 	LANGUAGE	 	39
	 CLAUSE 38
	 	–	 	EXECUTION	 	40
	 ANNEX C
	 	–	 	MODEL OF LETTER OF CREDIT	 	41
	 ANNEX A
	 		 		 	43
	 ANNEX A
	 		 		 	46
	 ANNEX B
	 	–	 	MINIMUM EXPLORATORY PLAN	 	47

 THIS SHEET FORMS PART OF THE PUBLIC DEED NO. 0216 of January 30th, 2006. 
 GRANTOR: 
  
 (Signature) 
 GUILLERMO SANCHEZ BARBOSA 
 P.P. 132457597 
 NIT. 800.187.974-3 
 LEGAL REPRESENTATIVE 
 (Who acts on behalf and representation of HARKEN DE COLOMBIA LIMITED). 
 Notary 11.

  
 (Signature) 
 ZULMA NAVARRO DE BAUTISTA 

 SECOND (2ND) COPY (PHOTOCOPY) OF THE DEED NO. 0216 OF JANUARY 30, 2006 TAKEN FROM ITS ORIGINAL IN CONFORMITY TO ARTICLE 41 OF DECREE 2148 OF 1983, ISSUED IN BOGOTA, D.C. IN FEBRUARY 1ST, 2006, IN THIRTY ONE (31) USEFUL SHEETS INTENDED TO: THE INTERESTED. 
  
 (Signature) 
 ZULMA NAVARRO DE BAUTISTA 
 NOTARY 11

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