Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Austral Pacific Energy Ltd. - Exhibit 4.6.2

VARIATION OF SETTLEMENT AGREEMENT 

	BETWEEN 	Dr David Bennett (“the Chief Executive
      Officer”) 
	AND 	Austral Pacific Energy Ltd. (“the Employer”)
  

BACKGROUND 

	A. 	
      The parties entered into an agreement dated 23 December
      2005 for the retirement of the Chief Executive Officer and settlement of
      matters between the parties (“Settlement Agreement”).

	 	 
	B. 	
      The parties have now agreed to vary the settlement as it
      relates to the stock options granted to the Chief Executive
  Officer.

IT IS AGREED: 

1.        The Settlement
Agreement is varied by deleting clauses 5, 6 and 7, and inserting the following
in their place: 

		
      “5. 
	
      The Chief Executive Officer agrees to waive all rights
      to, and allow the Employer to cancel, the 600,000 vested options and the
      300,000 performance options which he would otherwise be entitled to
      retain. 

	 	6. 	
      In consideration for the Chief Executive Officer agreeing
      as set out in clause 5, the Employer agrees to grant to the Chief
      Executive Officer 750,000 options with effect from 2 February 2006, vested
      immediately, at an exercise price of US$1.20, expiry 2 February
    2008.

	 	7. 	
      [Not Used] “

2.        The Employer
agrees to issue an Option Commitment granting the options as set out in clause 6
of the Settlement Agreement as amended, immediately upon execution of this
variation to the Settlement Agreement. 

3.        The Employer will
sign a consultancy agreement with the Chief Executive Officer, substantially in
the terms of the Employer’s standard consultancy agreement, with a guaranteed
minimum period of two years from 2 February 2006, at an annual rate of NZ$1,
payable in advance as a basic retainer for merely being available for
consultation to the Company. All hours actually worked under such arrangements
to be paid by the Employer at prevailing market rates for such services. The
extent and timing of such additional services, if any, shall be in the
Employer’s sole discretion. The Employer may terminate the agreement without
cause anytime after July 1, 2007 on thirty days’ notice and any unexercised
options then held by the Chief Executive Officer at the end of such thirty day
period shall lapse without any payment due in consideration thereof. 

3.        Except as amended
by this variation, the Settlement Agreement is confirmed by both parties as
remaining in full force, and this variation is subject to the confidentiality
obligations set out in the Settlement Agreement. 

Dated at Wellington
this           day of February
2006 

__________________________ Dr David Bennett 

__________________________ for Austral Pacific Energy Ltd.Filed by Automated Filing Services Inc. (604) 609-0244 - Austral Pacific Energy Ltd. - Exhibit 4.7

 

 

 

Austral Pacific Energy Ltd. 

 

 

2006 SHARE OPTION PLAN 

Dated for Reference March 3, 2006 

AUSTRAL PACIFIC ENERGY LTD. 
(the “Company”) 

2006 SHARE OPTION PLAN 

Dated for Reference March 3, 2006 

ARTICLE 1 
PURPOSE AND INTERPRETATION 

Purpose 

1.1                   
The purpose of this Plan is to advance the interests of the Company by
encouraging equity participation in the Company through the acquisition of
Common Shares of the Company. It is the intention of the Company that this Plan
will at all times be in compliance with the TSX Venture Policies (or, if
applicable, the NEX Policies) and any inconsistencies between this Plan and the
TSX Venture Policies) (or, if applicable, the NEX Policies) will be resolved in
favour of the latter. 

Definitions 

1.2                    
In this Plan 

(a)          
Affiliate means a company that is a parent or subsidiary of the Company,
or that is controlled by the same entity as the Company; 

(b)          
Associate has the meaning set out in the Securities Act; 

(c)          
Board means the board of directors of the Company or any committee
thereof duly empowered or authorized to grant Options under this Plan; 

(d)          
Change of Control includes situations where after giving effect to the
contemplated transaction and as a result of such transaction:

(i)          
any one Person holds a sufficient number of voting shares of the Company or
resulting company to affect materially the control of the Company or resulting
company, or, 

(ii)          
any combination of Persons, acting in concert by virtue of an agreement,
arrangement, commitment or understanding, holds in total a sufficient number of
voting shares of the Company or its successor to affect materially the control
of the Company or its successor,

where such Person or combination of
Persons did not previously hold a sufficient number of voting shares to affect
materially control of the Company or its successor. In the absence of evidence
to the contrary, any Person or combination of Persons acting in concert by
virtue of an agreement, arrangement, commitment or understanding, holding more
than 20% of the voting shares of the Company or resulting company is deemed to
materially affect control of the Company or resulting company; 

(e)          
Common Shares means common shares without par value in the capital of the
Company providing such class is listed on the TSX Venture (or the NEX, as the
case may be); 

- 1 - 

(f)          
Company means the company named at the top hereof and includes, unless
the context otherwise requires, all of its Affiliates and successors according
to law; 

(g)          
Consultant means an individual or Consultant Company, other than an
Employee, Officer or Director that:

(i)          
provides on an ongoing bona fide basis, consulting, technical, managerial or
like services to the Company or an Affiliate of the Company, other than services
provided in relation to a Distribution; 

(ii)          
provides the services under a written contract between the Company or an
Affiliate and the individual or the Consultant Company; 

(iii)          
in the reasonable opinion of the Company, spends or will spend a significant
amount of time and attention on the business and affairs of the Company or an
Affiliate of the Company; and 

(iv)          
has a relationship with the Company or an Affiliate of the Company that enables
the individual or Consultant Company to be knowledgeable about the business and
affairs of the Company; 

(h)          
Consultant Company means for an individual consultant, a company or
partnership of which the individual is an employee, shareholder or partner; 

(i)          
Directors means the directors of the Company as may be elected from time
to time; 

(j)          
Discounted Market Price has the meaning assigned by Policy 1.1 of the TSX
Venture Policies; 

(k)          
Disinterested Shareholder Approval means approval by a majority of the
votes cast by all the Company’s shareholders at a duly constituted shareholders’
meeting, excluding votes attached to Common Shares beneficially owned by
Insiders who are Service Providers or their Associates; 

(l)          
Distribution has the meaning assigned by the Securities Act, and
generally refers to a distribution of securities by the Company from treasury;

(m)          
Effective Date for an Option means the date of grant thereof by the
Board; 

(n)          
Employee means:

(i)           an
individual who is considered an employee under the Income Tax Act (i.e. for whom
income tax, employment insurance and CPP deductions must be made at source);

(ii)          
an individual who works full-time for the Company or a subsidiary thereof
providing services normally provided by an employee and who is subject to the
same control and direction by the Company over the details and methods of work
as an employee of the Company, but for whom income tax deductions are not made
at source; or 

(iii)          
an individual who works for the Company or its subsidiary on a continuing and
regular basis for a minimum amount of time per week providing services normally
provided by an employee and who is subject to the same control and direction by
the Company over the details and methods of work as an employee of the Company,
but for whom income tax deductions need not be made at source; 

- 2 - 

(o)          
Exercise Price means the amount payable per Common Share on the exercise
of an Option, as determined in accordance with the terms hereof;

(p)          
Expiry Date means the day on which an Option lapses as specified in the
Option Commitment therefor or in accordance with the terms of this Plan; 

(q)          
Insider means an insider as defined in the TSX Venture Policies or as
defined in securities legislation applicable to the Company; 

(r)          
Investor Relations Activities has the meaning assigned by Policy 1.1 of
the TSX Venture Policies; 

(s)          
Management Company Employee means an individual employed by a Person
providing management services to the Company which are required for the ongoing
successful operation of the business enterprise of the Company, but excluding a
Person engaged in Investor Relations Activities; 

(t)          
NEX means a separate board of the TSX Venture for companies previously
listed on the TSX Venture or the Toronto Stock Exchange which have failed to
maintain compliance with the ongoing financial listing standards of those
markets; 

(u)          
NEX Issuer means a company listed on the NEX; 

(v)          
NEX Policies means the rules and policies of the NEX as amended from time
to time; 

(w)          
Officer means a Board appointed officer of the Company; 

(x)          
Option means the right to purchase Common Shares granted hereunder to a
Service Provider; 

(y)          
Option Commitment means the notice of grant of an Option delivered by the
Company hereunder to a Service Provider and substantially in the form of
Schedule A attached hereto; 

(z)          
Optioned Shares means Common Shares that may be issued in the future to a
Service Provider upon the exercise of an Option; 

(aa)          Optionee
means the recipient of an Option hereunder; 

(bb)         
Outstanding Shares means at the relevant time, the number of issued and
outstanding Common Shares of the Company from time to time; 

(cc)         
Participant means a Service Provider that becomes an Optionee; 

(dd)         
Person includes a company, any unincorporated entity, or an individual;

(ee)         
Plan means this share option plan, the terms of which are set out herein
or as may be amended; 

(ff)          Plan
Shares means the total number of Common Shares which may be reserved for
issuance as Optioned Shares under the Plan as provided in §2.2; 

(gg)         
Regulatory Approval means the approval of the TSX Venture and any other
securities regulatory authority that has lawful jurisdiction over the Plan and
any Options issued hereunder; 

- 3 - 

(hh)         Securities
Act means the Securities Act, R.S.B.C. 1996, c. 418, or any successor
legislation; 

(ii)          
Service Provider means a Person who is a bona fide Director, Officer,
Employee, Management Company Employee, Consultant or Company Consultant, and
also includes a company, 100% of the share capital of which is beneficially
owned by one or more Service Providers; 

(jj)          
Share Compensation Arrangement means any Option under this Plan but also
includes any other stock option, stock option plan, employee stock purchase plan
or any other compensation or incentive mechanism involving the issuance or
potential issuance of Common Shares to a Service Provider; 

(kk)        
Shareholder Approval means approval by a majority of the votes cast by
eligible shareholders of the Company at a duly constituted shareholders’
meeting; 

(ll)          
TSX Venture means the TSX Venture Exchange and any successor thereto; and

(mm)         TSX
Venture Policies means the rules and policies of the TSX Venture as amended
from time to time. 

Other Words and Phrases 

1.3                    
Words and phrases used in this Plan but which are not defined in the Plan, but
are defined in the TSX Venture Policies (and, if applicable, the NEX Policies),
will have the meaning assigned to them in the TSX Venture Policies (and, if
applicable, the NEX Policies). 

Gender 

1.4                    
Words importing the masculine gender include the feminine or neuter, words in
the singular include the plural, words importing a corporate entity include
individuals, and vice versa. 

ARTICLE 2 
SHARE OPTION PLAN 

Establishment of Share Option Plan 

2.1                    
The Plan is hereby established to recognize contributions made by Service
Providers and to create an incentive for their continuing assistance to the
Company and its Affiliates.

Maximum Plan Shares 

2.2                    
The maximum aggregate number of Plan Shares that may be reserved for issuance
under the Plan at any point in time is 10% of the Outstanding Shares at the time
Plan Shares are reserved for issuance as a result of the grant of an Option,
less any Common Shares reserved for issuance under share options granted under
Share Compensation Arrangements other than this Plan, unless this Plan is
amended pursuant to the requirements of the TSX Venture Policies and, if
applicable, the NEX Policies. 

Eligibility 

2.3                    
Options to purchase Common Shares may be granted hereunder to Service Providers
from time to time by the Board. Service Providers that are not individuals will
be required to undertake in writing not to effect or permit any transfer of
ownership or option of any of its securities, or to issue more 

- 4 - 

of its securities (so as to indirectly transfer the benefits of
an Option), as long as such Option remains outstanding, unless the written
permission of the TSX Venture and the Company is obtained. 

Options Granted Under the Plan 

2.4                    
All Options granted under the Plan will be evidenced by an Option Commitment in
the form attached as Schedule A, showing the number of Optioned Shares, the term
of the Option, a reference to vesting terms, if any, and the Exercise Price.

2.5                    
Subject to specific variations approved by the Board, all terms and conditions
set out herein will be deemed to be incorporated into and form part of an Option
Commitment made hereunder. 

Limitations on Issue 

2.6                    
Subject to §2.9, the following restrictions on issuances of Options are
applicable under the Plan: 

(a)           no
Service Provider can be granted an Option if that Option would result in the
total number of Options granted to such Service Provider in the previous 12
months, together with all other Share Compensation Arrangements granted to such
Service Provider in the previous 12 months, exceeding 5% of the Outstanding
Shares (unless the Company is classified as a Tier 1 Issuer by the TSX Venture
and has obtained Disinterested Shareholder Approval to do so); 

(b)           no
Options can be granted under the Plan if the Company is on notice from the TSX
Venture to transfer its listed shares to the NEX; 

(c)          
the aggregate number of Options granted to Service Providers conducting Investor
Relations Activities in any 12-month period cannot exceed 2% of the Outstanding
Shares, calculated at the time of grant, without the prior consent of the TSX
Venture; and 

(d)          
the aggregate number of Options granted to any one Consultant in any 12-month
period cannot exceed 2% of the Outstanding Shares, calculated at the time of
grant, without the prior consent of the TSX Venture. 

Options Not Exercised 

2.7                    
In the event an Option granted under the Plan expires unexercised or is
terminated by reason of dismissal of the Optionee for cause or is otherwise
lawfully cancelled prior to exercise of the Option, the Optioned Shares that
were issuable thereunder will be returned to the Plan and will be eligible for
re-issuance. 

Powers of the Board 

2.8                    
The Board will be responsible for the general administration of the Plan and the
proper execution of its provisions, the interpretation of the Plan and the
determination of all questions arising hereunder. Without limiting the
generality of the foregoing, the Board has the power to 

(a)          
allot Common Shares for issuance in connection with the exercise of Options;

(b)          
grant Options hereunder; 

(c)          
subject to any necessary Regulatory Approval, amend, suspend, terminate or
discontinue the Plan, or revoke or alter any action taken in connection
therewith, except that no general amendment or suspension of the Plan will,
without the prior written consent of all Optionees, alter or impair any Option
previously granted under the Plan unless the alteration or impairment 

- 5 - 

occurred as a result of a change in the
TSX Venture Policies or the Company’s tier classification thereunder; 

(d)          
delegate all or such portion of its powers hereunder as it may determine to one
or more committees of the Board, either indefinitely or for such period of time
as it may specify, and thereafter each such committee may exercise the powers
and discharge the duties of the Board in respect of the Plan so delegated to the
same extent as the Board is hereby authorized so to do; and 

(e)          
amend this Plan (except for previously granted and outstanding Options) to
reduce the benefits that may be granted to Service Providers (before a
particular Option is granted) subject to the other terms hereof. 

Terms or Amendments Requiring Disinterested Shareholder
Approval 

2.9                    
The Company shall obtain Disinterested Shareholder Approval prior to any of the
following actions becoming effective: 

(a)          
the Plan, together with all of the Company’s other Share Compensation
Arrangements, could result at any time in: 

(i)          
the aggregate number of Common Shares reserved for issuance under Options
granted to Insiders exceeding 10% of the Outstanding Shares (in the event that
this Plan is amended to reserve for issuance more than 10% of the Outstanding
Shares);

(ii)          
the number of Optioned Shares issued to Insiders within a one-year period
exceeding 10% of the Outstanding Shares (in the event that this Plan is amended
to reserve for issuance more than 10% of the Outstanding Shares); or,

(iii)          
in the case of a Tier l Issuer only, the issuance to any one Optionee, within a
12-month period, of a number of Common Shares exceeding 5% of Outstanding
Shares; or 

(b)          
any reduction in the Exercise Price of an Option previously granted to an
Insider. 

ARTICLE 3 
TERMS AND CONDITIONS OF OPTIONS 

Exercise Price 

3.1                    
The Exercise Price of an Option will be set by the Board at the time such Option
is allocated under the Plan, and cannot be less than the Discounted Market
Price. 

Term of Option 

3.2                    
An Option can be exercisable for a maximum of 10 years from the Effective Date
for a Tier 1 Issuer, or five years from the Effective Date for a Tier 2 or a NEX
Issuer. 

Option Amendment 

3.3                    
Subject to §2.9(b), the Exercise Price of an Option may be amended only if at
least six (6) months have elapsed since the later of the date of commencement of
the term of the Option, the date the Common Shares commenced trading on the TSX
Venture, and the date of the last amendment of the Exercise Price. 

- 6 - 

3.4                    
An Option must be outstanding for at least one year before the Company may
extend its term, subject to the limits contained in §3.2. 

3.5                    
Any proposed amendment to the terms of an Option must be approved by the TSX
Venture prior to the exercise of such Option. 

Vesting of Options 

3.6                    
Subject to §3.7, vesting of Options shall be in accordance with Schedule B
attached hereto or otherwise, at the discretion of the Board, and will generally
be subject to: 

(a)          
the Service Provider remaining employed by or continuing to provide services to
the Company or any of its Affiliates as well as, at the discretion of the Board,
achieving certain milestones which may be defined by the Board from time to time
or receiving a satisfactory performance review by the Company or any of its
Affiliates during the vesting period; or 

(b)          
the Service Provider remaining as a Director of the Company or any of its
Affiliates during the vesting period. 

Vesting of Options Granted to Consultants Conducting
Investor Relations Activities 

3.7                    
Notwithstanding §3.6, Options granted to Consultants conducting Investor
Relations Activities will vest: 

(a)          
over a period of not less than 12 months as to 25% on the date that is three
months from the date of grant, and a further 25% on each successive date that is
three months from the date of the previous vesting; or 

(b)          
such longer vesting period as the Board may determine. 

Optionee Ceasing to be Director, Employee or Service
Provider 

3.8                    
No Option may be exercised after the Service Provider has left his employ/office
or has been advised by the Company that his services are no longer required or
his service contract has expired, except as follows: 

(a)           in
the case of the death of an Optionee, any vested Option held by him at the date
of death will become exercisable by the Optionee’s lawful personal
representatives, heirs or executors until the earlier of one year after the date
of death of such Optionee and the date of expiration of the term otherwise
applicable to such Option; 

(b)           in
the case of a Tier 1 Issuer, an Option granted to any Service Provider will
expire within 90 days after the date the Optionee ceases to be employed by or
provide services to the Company, but only to the extent that such Option has
vested at the date the Optionee ceased to be so employed by or to provide
services to the Company;

(c)           in
the case of a Tier 2 or NEX Issuer, Options granted to a Service Provider
conducting Investor Relations Activities will expire within 30 days of the date
the Optionee ceases to conduct such activities, but only to the extent that such
Option has vested at the date the Optionee ceased to conduct such
activities;

(d)           in
the case of a Tier 2 or NEX Issuer, any Option granted to an Optionee other than
one conducting Investor Relations Activities will expire within 90 days after
the Optionee ceases to be employed by or provide services to the Company, but
only to the extent that such Option has 

- 7 - 

vested at the date the Optionee ceased
to be so employed by or to provide services to the Company; and 

(e)           in
the case of an Optionee being dismissed from employment or service for cause,
such Optionee’s Options, whether or not vested at the date of dismissal will
immediately terminate without right to exercise same. 

Non Assignable 

3.9                    
Subject to §3.8, all Options will be exercisable only by the Optionee to whom
they are granted and will not be assignable or transferable. 

Adjustment of the Number of Optioned Shares 

3.10                    The
number of Common Shares subject to an Option will be subject to adjustment in
the events and in the manner following: 

(a)           in
the event of a subdivision of Common Shares as constituted on the date hereof,
at any time while an Option is in effect, into a greater number of Common
Shares, the Company will thereafter deliver at the time of purchase of Optioned
Shares hereunder, in addition to the number of Optioned Shares in respect of
which the right to purchase is then being exercised, such additional number of
Common Shares as result from the subdivision without an Optionee making any
additional payment or giving any other consideration therefor; 

(b)           in
the event of a consolidation of the Common Shares as constituted on the date
hereof, at any time while an Option is in effect, into a lesser number of Common
Shares, the Company will thereafter deliver and an Optionee will accept, at the
time of purchase of Optioned Shares hereunder, in lieu of the number of Optioned
Shares in respect of which the right to purchase is then being exercised, the
lesser number of Common Shares as result from the consolidation; 

(c)           in
the event of any change of the Common Shares as constituted on the date hereof,
at any time while an Option is in effect, the Company will thereafter deliver at
the time of purchase of Optioned Shares hereunder the number of shares of the
appropriate class resulting from the said change as an Optionee would have been
entitled to receive in respect of the number of Common Shares so purchased had
the right to purchase been exercised before such change; 

(d)           in
the event of a capital reorganization, reclassification or change of outstanding
equity shares (other than a change in the par value thereof) of the Company, a
consolidation, merger or amalgamation of the Company with or into any other
company or a sale of the property of the Company as or substantially as an
entirety at any time while an Option is in effect, an Optionee will thereafter
have the right to purchase and receive, in lieu of the Optioned Shares
immediately theretofore purchasable and receivable upon the exercise of the
Option, the kind and amount of shares and other securities and property
receivable upon such capital reorganization, reclassification, change,
consolidation, merger, amalgamation or sale which the holder of a number of
Common Shares equal to the number of Optioned Shares immediately theretofore
purchasable and receivable upon the exercise of the Option would have received
as a result thereof. The subdivision or consolidation of Common Shares at any
time outstanding (whether with or without par value) will not be deemed to be a
capital reorganization or a reclassification of the capital of the Company for
the purposes of this §3.10; 

(e)           an
adjustment will take effect at the time of the event giving rise to the
adjustment, and the adjustments provided for in this section are cumulative;

(f)          
the Company will not be required to issue fractional shares in satisfaction of
its obligations hereunder. Any fractional interest in a Common Share that would,
except for the 

- 8 - 

provisions of this §3.10, be
deliverable upon the exercise of an Option will be cancelled and not be
deliverable by the Company; and 

(g)           if
any questions arise at any time with respect to the Exercise Price or number of
Optioned Shares deliverable upon exercise of an Option in any of the events set
out in this §3.10, such questions will be conclusively determined by the
Company’s auditors, or, if they decline to so act, any other firm of Chartered
Accountants, in Vancouver, British Columbia (or in the city of the Company’s
principal executive office) that the Company may designate and who will be
granted access to all appropriate records. Such determination will be binding
upon the Company and all Optionees. 

ARTICLE 4 
COMMITMENT AND EXERCISE PROCEDURES

Option Commitment 

4.1                    
Upon grant of an Option hereunder, an authorized officer of the Company will
deliver to the Optionee an Option Commitment detailing the terms of such Options
and upon such delivery the Optionee will be subject to the Plan and have the
right to purchase the Optioned Shares at the Exercise Price set out therein
subject to the terms and conditions hereof. 

Manner of Exercise 

4.2                    
An Optionee who wishes to exercise his Option may do so by delivering 

(a)           a
written notice to the Company specifying the number of Optioned Shares being
acquired pursuant to the Option; and 

(b)           a
certified cheque, wire transfer or bank draft payable to the Company for the
aggregate Exercise Price by the Optioned Shares being acquired. 

Delivery of Certificate and Hold Periods 

4.3                    
As soon as practicable after receipt of the notice of exercise described in §4.2
and payment in full for the Optioned Shares being acquired, the Company will
direct its transfer agent to issue a certificate to the Optionee for the
appropriate number of Optioned Shares. Such certificate issued will bear a
legend stipulating any resale restrictions required under applicable securities
laws. Further, if the Company is a Tier 2 or NEX Issuer, or the Exercise Price
is set below than the then current market price of the Common Shares on the TSX
Venture, the certificate will also bear a legend stipulating that the Optioned
Shares are subject to a four-month TSX Venture hold period commencing the date
of the grant of the Option. 

ARTICLE 5 
GENERAL 

Employment and Services 

5.1                    
Nothing contained in the Plan will confer upon or imply in favour of any
Optionee any right with respect to office, employment or provision of services
with the Company, or interfere in any way with the right of the Company to
lawfully terminate the Optionee’s office, employment or service at any time
pursuant to the arrangements pertaining to same. Participation in the Plan by an
Optionee is voluntary. 

- 9 - 

No Representation or Warranty 

5.2                    
The Company makes no representation or warranty as to the future market value of
Common Shares issued in accordance with the provisions of the Plan or to the
effect of the Income Tax Act (Canada) or any other taxing statute
governing the Options or the Common Shares issuable thereunder or the tax
consequences to a Service Provider. Compliance with applicable securities laws
as to the disclosure and resale obligations of each Participant is the
responsibility of each Participant and not the Company. 

Interpretation 

5.3                    
The Plan will be governed and construed in accordance with the laws of the
Province of British Columbia. 

Continuation of Plan 

5.4                    
The Plan will become effective from and after May 2, 2006, and will remain
effective provided that the Plan, or any amended version thereof receives
Shareholder Approval at each annual general meeting of the holders of Common
Shares of the Company subsequent to May 2, 2006.

- 10 - 

SCHEDULE A 

SHARE OPTION PLAN 

OPTION COMMITMENT 

Notice is hereby given that, effective this ________ day of
________________, ________ (the “Effective Date”) AUSTRAL PACIFIC ENERGY LTD.
(the “Company”) has granted to ___________________________________________
(the “Optionee”), an Option to acquire ______________ Common Shares (“Optioned
Shares”) up to 5:00 p.m. Vancouver Time on the __________ day of
____________________, ______ (the “Expiry Date”) at an Exercise Price of
Cdn$____________ per share. 

At the date of grant of the Option, the Company is classified
as [a Tier ____ Issuer under TSX Venture Policies][NEX Issuer]. 

Optioned Shares will vest and may be exercised as follows:

{COMPLETE ONE} 

____________ In accordance with the vesting provisions
set out in Schedule B of the Plan 

or 

____________ As follows: [INSERT
VESTING SCHEDULE ][INSERT VESTING TERMS] 

The grant of the Option evidenced hereby is made subject to the
terms and conditions of the Plan, which are hereby incorporated herein and forms
part hereof. 

To exercise your Option, deliver a written notice specifying
the number of Optioned Shares you wish to acquire, together with a certified
cheque, wire transfer or bank draft payable to the Company for the aggregate
Exercise Price. A certificate for the Optioned Shares so acquired will be issued
by the transfer agent as soon as practicable thereafter and will bear a minimum
four month non-transferability legend from the date of this Option Commitment,
the text of which is as follows. [A Tier 1 Issuer may grant stock options
without a hold period, provided the exercise price of the options is set at or
above the market price of the Company’s shares rather than below.].

  
    
      "WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE
        AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES
        REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED
        OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE
        OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT
        UNTIL 12:00 A.M. (MIDNIGHT) ON [insert date 4 months from the date of
        grant]”. 

    

  

The Company and the Optionee represent that the Optionee under
the terms and conditions of the Plan is a bona fide Service Provider (as defined
in the Plan), entitled to receive Options under TSX Venture Policies. 

The Optionee also acknowledges and consents to the collection
and use of Personal Information (as defined in the Policies of the TSX Venture
Exchange) by both the Company and the TSX Venture (or the 

- 11 - 

NEX, as the case may be) as more particularly set out in the
Acknowledgement - Personal Information in use by the TSX Venture (or the NEX, as
the case may be) on the date of this Share Option Plan. 

(AUSTRAL PACIFIC ENERGY LTD.) 

 

	 	 
	Authorized Signatory 	 
	 	 
	 	 
	(<> SIGNATURE OF OPTIONEE) 	 

- 12 - 

SCHEDULE B 

SHARE OPTION PLAN VESTING SCHEDULE

1.                    
Options granted pursuant to the Plan to Directors, Officers and all Employees
and Consultants employed or retained by the Company for a period of more than
six months at the time the Option is granted will vest as follows: 

(a)          
1/3 of the total number of Options granted will vest six months after the date
of grant; 

(b)           a
further 1/3 of the total number of Options granted will vest one year after the
date of grant; and

(c)          
the remaining 1/3 of the total number of Options granted will vest eighteen
months after the date of grant. 

2.                    
Options granted pursuant to the Plan to an Employee or a Consultant who has been
employed or retained by the Company for a period of less than six months at the
time the Option is granted will vest as follows: 

(a)          
1/3 of the total number of Options granted will vest one year after the date of
grant; 

(b)           a
further 1/3 of the total number of Options granted will vest eighteen months
after the date of grant; and

(c)          
the remaining 1/3 of the total number of Options granted will vest two years
after the date of grant. 

3.                    
Options granted to Consultants retained by the Company pursuant to a short term
contract or for a specific project with a finite term, will be subject to such
vesting provisions determined by the Board of Directors of the Company at the
time the Option Commitment is made, subject to Regulatory Approval. 

4.                    
Options granted to Service Providers involved in Investor Relations Activities
shall vest in accordance with §3.7 of the Plan. 

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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]