Document:

Exhibit

Exhibit 10.42

ISLAMIC REPUBLIC OF MAURITANIA
Honor - Fraternity – Justice

EXPLORATION-PRODUCTION CONTRACT BETWEEN

THE ISLAMIC REPUBLIC OF MAURITANIA

and

TULLOW MAURITANIA LIMITED

C18

2012

(ENGLISH TRANSLATION)

TABLE OF CONTENTS

	
			
	ARTICLE 1: DEFINITIONS
	4
	

	ARTICLE 2: SCOPE OF THE CONTRACT
	6
	

	ARTICLE 3: EXPLORATION AUTHORIZATION
	7
	

	ARTICLE 4: EXPLORATION WORK OBLIGATION
	8
	

	ARTICLE 5: PREPARATION AND APPROVAL OF ANNUAL WORK PROGRAMS
	10
	

	ARTICLE 6: CONTRACTOR  OBLIGATIONS RELATING TO THE CONDUCT OF THE PETROLEUM OPERATIONS
	10
	

	ARTICLE 7: CONTRACTOR RIGHTS RELATING TO THE CONDUCT OF PETROLEUM OPERATIONS
	12
	

	ARTICLE  8:  CONTROL OVER PETROLEUM OPERATIONS AND ACTIVITY REPORTS - CONFIDENTIALITY
	13
	

	ARTICLE 9: APPRAISAL OF A DISCOVERY AND GRANT OF AN EXPLOITATION AUTHORIZATION
	16
	

	ARTICLE 10: RECOVERY OF PETROLEUM COSTS AND PRODUCTION  SHARING
	19
	

	ARTICLE 11: TAXATION
	20
	

	ARTICLE 12: PERSONNEL
	22
	

	ARTICLE 13: BONUSES
	22
	

	ARTICLE 14:  PRICE OF HYDROCARBONS
	23
	

	ARTICLE 15: NATURAL GAS
	24
	

	ARTICLE 16: TRANSPORT OF HYDROCARBONS THROUGH PIPELINES
	26
	

	ARTICLE 17: OBLIGATIONS TO SUPPLY DOMESTIC MARKET WITH CRUDE OIL
	26
	

	ARTICLE 18: IMPORT AND EXPORT
	27
	

	ARTICLE 19: FOREIGN EXCHANGE
	27
	

	ARTICLE 20: BOOKKEEPING, MONETARY UNIT, ACCOUNTING
	27
	

	ARTICLE 21: GOVERNMENT PARTICIPATION.
	28
	

	ARTICLE 22: ASSIGNMENT
	30
	

	ARTICLE 23: OWNERSHIP, USE AND ABANDONMENT OF ASSETS
	30
	

	ARTICLE 24: LIABILITY AND INSURANCE
	32
	

	ARTICLE 25: TERMINATION OF THE CONTRACT
	33
	

	ARTICLE 26:  APPLICABLE LAW AND STABILITY OF THE CONDITIONS
	33
	

	ARTICLE 27: FORCE MAJEURE
	34
	

	ARTICLE 28: ARBITRATION AND EXPERTISE
	34
	

	ARTICLE 29: CONDITIONS FOR APPLICATION OF THE CONTRACT
	35
	

	ARTICLE 30: EFFECTIVE DATE
	36
	

	APPENDIX 1: EXPLORATION PERIMETER
	38
	

	APPENDIX 2: ACCOUNTING PROCEDURE
	40
	

	APPENDIX 3: MODEL FORM BANK GUARANTEE
	56
	

CONTRACT

Between

The Islamic Republic of Mauritania (hereafter called "the State"), represented hereby by the Minister in charge of Petroleum, Energy and Mines
ON THE ONE HAND,

And

TULLOW MAURITANIA LIMITED a company incorporated under the laws of the Isle of Man (Registration No. 104570C) and having its registered office at Falcon Cliff, Palace Road, Douglas, Isle of Man, IM2 4LB represented hereby by Mr David Lawrie,
(hereinafter TULLOW MAURITANIA LIMITED is to be referred to as the "Contractor"),

ON THE OTHER HAND,

The State and the Contractor are hereafter collectively called "Parties" or individually "Party". THE FOLLOWING HAVING ALREADY BEEN STATED:
The State, owner of the deposits and natural hydrocarbons deposits contained in the ground and the sub- soil of the national territory, wishes to promote the discovery and production of hydrocarbons to support the economic expansion of the country within the framework instituted by law n° 2010-033 dated 20 July 2010 pertaining to the Crude Hydrocarbons Code as amended by law n° 2011-044 dated 25  October 2011;
The Contractor wishes to explore and exploit, within the framework of this exploration-production contract and in accordance with the Crude Hydrocarbons Code, the hydrocarbons which may be contained in the perimeter described in Appendix 1 of this Contract, and has provided evidence that it has the technical skills and financial means necessary for this purpose.

IT WAS AGREED WHAT FOLLOWS:

ARTICLE 1: DEFINITIONS
The terms used in the present document have the following significance:
		
	1.1
	"Calendar Year" means a period of twelve (12) consecutive months beginning on the January first (1st) and ending on the following December thirty-first (31st).

		
	1.2
	"Contract Year" means a period of twelve (12) consecutive months starting as at the Effective Date or the anniversary of the aforesaid Effective Date.

		
	1.3
	"Appendices" mean the appendices of the present Contract consisting of:

		
	1.3.1
	Appendix 1 for the Exploration Perimeter

		
	1.3.2
	Appendix 2 for the Accounting Procedure

		
	1.3.3
	Appendix 3 for the model bank guarantee

		
	1.4
	"Exploration Authorization" means the authorization referred to under Article 3 of this Contract by which the State authorizes the Contractor to carry out, on an exclusive basis, all the hydrocarbon exploration and/or research work within the Exploration Perimeter.

		
	1.5
	"Exploitation Authorization" means the authorization granted to the Contractor to carry out,  on an exclusive basis, all the development and exploitation of the Hydrocarbon deposits within the Exploitation Perimeter.

		
	1.6
	"Barrel" means "U.S. barrel", the equivalent of 42 American gallons (159 liters) measured at a temperature of 60°F (15.6 °C) and at atmospheric pressure.

		
	1.7
	"BTU" means the British energy unit, "British Thermal Unit" such that a million BTU (MMBTU) is equal to about 1055 joules.

		
	1.8
	"Annual Budget" means the detailed estimate of the cost of Petroleum Operations defined in an Annual Work Program.

		
	1.9
	"Crude Hydrocarbons Code" refers to law n° 2010-033 dated 20th July 2010 pertaining to the Code Crude Hydrocarbons, its amendments and its implementation provisions.

		
	1.10
	"Environment Code" refers to law n° 2000-045 dated 26th July 2000 pertaining to the Environmental Code, its amendments and the laws implementing it.

		
	1.11
	"Contractor" means collectively or individually the signatory company/companies of this Contract as well as any entity or company to which an interest would be transferred pursuant to articles 21 and 22 of this Contract.

		
	1.12
	"Contract" means this agreement, its appendices and its amendments. In the event of contradiction between the provisions of this agreement and the provision of its appendices, the provisions of this agreement shall prevail.

		
	1.13
	"Petroleum Costs" means all the costs and expenses incurred by the Contractor for Petroleum Operations provided for under this Contract and determined according to the Accounting Procedure, set out in Appendix 2 of this Contract.

		
	1.14
	"Effective Date" means the commencement date of this Contract as defined in article 30.

		
	1.15
	"Dollar'' means the dollar ($) of the United States of America.

		
	1.16
	"State" means the Islamic Republic of Mauritania.

		
	1.17
	"Gross Negligence" means carelessness or negligence of such gravity as to assume there was malicious intent on the part of the author.

		
	1.18
	"Wet Gas" means Natural Gas containing a fraction of elements becoming liquid at room pressure and temperature, and which justifies the installation of a recovery facility of such liquids.

		
	1.19
	"Natural Gas" means all gas hydrocarbons produced from a well including Wet Gas and Dry Gas which can be associated or not associated with liquid hydrocarbons, and waste gas which is obtained after extraction of natural gas liquids.

		
	1.20
	"Associated Natural Gas" means Natural Gas existing in a reservoir in solution with Crude Oil or in the form of "Gas Cap" in contact with Crude Oil, and which is produced or can be produced in association with Crude Oil.

		
	1.21
	"Non-associated Natural Gas" means Natural Gas other than Associated Natural Gas.

		
	1.22
	"Dry Gas" means Natural Gas containing mainly methane, ethane and inert gases.

		
	1.23
	"Hydrocarbons" means liquid and gas hydrocarbons or solid hydrocarbons such as bituminous sands and shales.

		
	1.24
	"LIBOR" means the annual interbank interest rate applicable for the Dollar as published by the Financial Times or the Wall Street Journal or any other publication of similar standing.

		
	1.25
	"Ministry" means the ministry for Crude Hydrocarbons.

		
	1.26
	"Minister" means the Minister in charge for Crude Hydrocarbons.

		
	1.27
	"Operator" means the company referred to in article 6.2 below responsible for the conduct and performance of Petroleum Operations, or any company which would be substituted to it later on, in accordance with the governing terms and conditions.

		
	1.28
	"Petroleum Operations" means all the research, exploitation, storage, transportation and marketing of hydrocarbons, including the evaluations/assessment, development, production, separation, processing operations up to the Point of Delivery, as well as the rehabilitation of the sites and, more generally, all other operations which are directly or indirectly related to the preceding ones and which carried out by the Contractor as part of this Contract, aside from the refining and distribution of petroleum products.

		
	1.29
	"Ouguiya" means the currency of the Islamic Republic of Mauritania.

		
	1.30
	"Exploitation Perimeter" means all or part of the Exploration Perimeter on which the State, in accordance with the terms of this Contract, grants to the Contractor an Exploitation Authorization in accordance with the provisions of article 9 below.

		
	1.31
	"Exploration Perimeter" means the surface defined in Appendix 1, reduced, if applicable, by the relinquished surface as provided for under article 3 and/or reduced by Exploitation Perimeters, on which the State, under the terms of this Contract, grants to the Contractor an Exploration Authorization in accordance with the provisions of article 2.1 below.

		
	1.32
	"Crude Oil" means all hydrocarbons which are liquid at a natural state or obtained from natural gas by condensation or separation from asphalt.

		
	1.33
	"Delivery Point" means:

		
	1.33.1
	For Crude Oil, the F.O.B point of loading of Crude Oil to the export terminal or any other point fixed by mutual agreement of the Parties;

		
	1.33.2
	For Natural Gas, the point of delivery fixed by mutual agreement of the Parties in accordance with article 15 of this Contract.

		
	1.34
	"Rehabilitation Plan" designates the program of works for the rehabilitation of the sites to be carried out by the Contractor at the expiration, renunciation or cancellation of an Exploitation Authorization in accordance with article 23.2.

		
	1.35
	"Annual Work Program" means the document setting out each element, of the Petroleum Operations to be carried out during a Calendar Year in accordance with the terms of this Contract and which is prepared in accordance with the provisions of articles 4 and 5 below.

		
	1.36
	"Affiliated Company" means

		
	1.36.1
	any company or any other entity which controls or is controlled, directly or indirectly, by a company or entity, or

		
	1.36.2
	any company or any other entity which controls or is controlled, directly or indirectly, by a company or an entity which controls directly or indirectly any company or entity party to this Contract.

For purposes of this definition, the term "control" means the direct or indirect ownership by a company or any other entity of a percentage of company or partnership shares representing over fifty percent (50%) of the voting power at the general assembly of another company or entity.
		
	1.37
	"Third Party" means any natural or legal person, other than the State, the Contractor and the Affiliated Companies of the Contractor.

		
	1.38
	"Quarter" means a period of three (3) consecutive months beginning on the first day of January, April,  July or October of each Calendar Year.

ARTICLE 2: SCOPE OF THE CONTRACT
In accordance with the Crude Hydrocarbons Code, the State hereby authorizes the Contractor to carry out on a purely exclusive basis in the Exploration Perimeter the Petroleum Operations which are useful and necessary in accordance with the terms of this Contract defined in Appendix 1.
		
	2.1
	This Contract is entered into for the duration of the Exploration Authorization as provided for under article 3 of this Contract, including any of its renewal and possible extension periods and, in the event of commercial discovery, for the duration of the Exploitation Authorizations which would have been granted, as defined in article 9.11 below.

		
	2.2
	This Contract will end if, at the expiration of all the phases of the exploration provided for under article 3, the Contractor does not notify the State of its decision to develop a commercial Hydrocarbon reservoir and has not requested an Exploitation Authorization for this field in accordance with the provisions of article 9.5 below.

In the event of a grant of several Exploitation Authorizations and save in the case of an early termination, this Contract shall end at the expiration of the last unexpired Exploitation Authorization in force.
		
	2.3
	The expiration, revocation or termination of this Contract for whatever reason does not release the Contractor from its obligations under this Contract, arising before or at the time of the aforementioned expiration, renunciation or cancellation, which shall have to be carried out by the Contractor.

		
	2.4
	The Contractor will be responsible for carrying out the Petroleum Operations provided for under this Contract. It undertakes to carry them out in compliance with good international petroleum industry practice and to comply with the norms and standards developed by the Mauritanian regulation for industrial safety, environmental protection and operational techniques.

		
	2.5
	The Contractor shall provide all financial and technical means necessary for the smooth running of the Petroleum Operations and shall fully support all the risks related to the performance of  the aforesaid Operations, subject to the provision of article 21 of this Contract. The Petroleum Costs borne by the Contractor shall be recoverable by the Contractor in accordance with the provisions of article 10 below.

		
	2.6
	During the validity period of the Contract, the production resulting from the Petroleum Operations shall be shared between the State and the Contractor in accordance with the provisions of article 10 below.

ARTICLE 3: EXPLORATION AUTHORIZATION
		
	3.1
	The Exploration Authorization inside the Exploration Perimeter defined in Appendix 1 is granted to the Contractor in accordance with the provisions of article 2.1 above for an initial phase of five (5) Contract Years.

		
	3.2
	The Contractor shall be entitled to two (2) renewals of the Exploration Authorization for a period of two (2) Contract Years for the first renewal and three (3) Contract Years for the  second renewal, if it has fulfilled, as part of the preceding exploration phase, all the work obligations stipulated in article 4 below and has provided the bank guarantee for the renewal period in accordance with article 4.6 below.

		
	3.3
	If at the expiration of the phases of the exploration period defined in article 3.2 above, works are in fact being carried out, the Contractor shall be entitled, if it reasonably requests one, to an exceptional extension of that phase for a period not exceeding twelve (12) months.

		
	3.4
	If the Contractor discovers one or more Hydrocarbon reservoirs for which it cannot present a declaration of commerciality before the end of the third phase of the period of exploration in accordance with article 9.5 below, due to the distance of the reservoir from the possible points  of delivery on the Mauritanian territory and the lack of pipeline transport infrastructures, or the lack of market for the production of Natural Gas, it can request an extension of the Exploration Authorization for a maximum duration of three (3) years for petroleum reservoirs and five (5) years for Natural Gas reservoirs, the Exploration Perimeter thus being reduced to the supposed limits of the reservoirs in question.

		
	3.5
	In the event an extension is granted, the Contractor shall submit to the Minister within sixty (60) days of the end of each Calendar Year of the extension period a report showing the commercial character, if any, of the reservoirs concerned, and, in the event of Natural Gas deposit, the results of the works and studies undertaken in accordance with article 15 below.

		
	3.6
	For each renewal or extension, the Contractor shall have to make a request to the Minister no later than two (2) months before the expiration of the ongoing exploration phase. The renewals shall be noted by Ministerial order whereas extensions shall be granted by a decree of the Council of Ministers: such acts shall take effect on the day following the expiration of the previous period.

		
	3.7
	The Contractor undertakes to return to the State at least twenty-five percent (25%) of the initial surface of the Exploration Perimeter at the time of each its renewal, in order to keep only seventy-five percent (75%) of the initial surface of the Exploration Perimeter during the second phase of the exploration period, and only fifty percent (50%) of the initial surface of the Exploration Perimeter during the third phase of the exploration period.

		
	3.8
	For the purposes of article 3.7 above:

		
	3.8.1
	Surfaces having previously been the subject of a voluntary return, in accordance with article 3.9, the surfaces already covered by Exploitation Authorizations shall be deducted from the surfaces to be returned;

		
	3.8.2
	The Contractor shall have the right to fix the scope, form and site of the portion of the Exploration Perimeter which it intends to keep. However, the returned portion shall have to be made up of a perimeter of simple geometrical form, delimited by North-South and East-West lines or by natural boundaries or borders, in accordance with Land Registry   requirements.   The surface area is based upon the cadastral apportionment from one of the initial or residual Exploration Perimeter limits and is calculated contiguously.

		
	3.8.3
	The request for renewal shall be accompanied by a plan indicating the Exploration Perimeter which is kept as well as report specifying the work carried out on the returned surfaces and the results obtained since the Effective Date.

		
	3.9
	The Contractor may at any time, subject to three (3) months' notice, notify to the Minister that it waives all or part of the Exploration Perimeter. In the event of a complete waiver, the Exploration Authorization shall be deemed terminated at the date of the aforesaid notification.

In the event of a partial surrender, the provisions of article 3.8 above shall apply.
In any event, no voluntary renunciation during an exploration period phase shall reduce the exploration work obligations stipulated in article 4 below for the aforementioned period nor  shall it put an end to the corresponding guarantee.
		
	3.10
	Except in the event of an extension in accordance with articles 3.3 and 3.4 above, at the expiration of the third exploration period phase, the Contractor shall have to return the  remaining surface of the Exploration Perimeter, save for the surfaces already covered by the Exploitation Perimeters.

ARTICLE 4: EXPLORATION WORK OBLIGATION
		
	4.1
	During the first phase of the exploration period of five (5) Contract Years defined in article 3.1 above, the Contractor undertakes to carry out the following works:

		
	•
	The acquisition of one thousand two hundred (1200) km of 2D seismic;

		
	•
	The acquisition of six hundred (600) km2 of 3D seismic.

The aforementioned works shall commence within the twelve (12) months following the Effective Date.
		
	4.2
	During the second phase of the exploration period of two (2) Contract Years defined in article

3.2 above, the Contractor undertakes to carry out the following works:
		
	•
	Exploration well drilling: one (1) well to a minimum depth of 2000 meters (below sea level).

The aforementioned works shall commence within six (6) months of the beginning of the phase in question.
		
	4.3
	During the third phase of the exploration period of three (3) Contract Years defined in article 3.2, the Contractor undertakes to complete the following works:

		
	•
	Exploration well drilling: one (1) well to a minimum depth of 2000 meters (below sea level).

The aforementioned works shall commence within three (3) months of the beginning of the phase in question.
		
	4.4
	Each exploration well drilling referred to above shall be carried out up to the minimal depth provided for above, or up to a lesser depth if the Minister authorizes it or if continuation of the drilling, carried out in accordance with good international practice in the petroleum industry, is excluded for any of the following reasons:

		
	4.4.1
	The basement is reached at a depth inferior to the minimal depth referred to above;

		
	4.4.2
	The continuation of the drilling presents an evident danger because of the existence of a pressure of an abnormal layer;

		
	4.4.3
	Rock formations are reached whose hardness does not allow, in practice, for the progress of the drilling carried out with the appropriate equipment facilities;

		
	4.4.4
	Oil-bearing formations are reached whose drilling through requires for their protection the installation of casings making it impossible to reach the minimal depth referred to above.

In each of the above-mentioned cases, the Contractor shall inform the Minister and shall be authorized to suspend drilling, and the aforementioned drilling shall be deemed carried out at the minimal depth referred to above.
		
	4.5
	If the Contractor, during either the first phase of the exploration period, or the second phase of the exploration period, respectively defined in articles 3.1 and 3.2 above, carries out a number of exploration drillings whose volume is higher than the minimal work obligations stipulated respectively in articles 4.1 and 4.2 above for the aforementioned phase, the surplus exploration drilling requirements can be carried over to the next phase(s) of the exploration shall  be deducted from the minimal work obligations stipulated with regard to the aforementioned phases.

For purposes of articles 4.1 to 4.5 above, the drilling carried out as part of the evaluation program of a discovery shall not be considered exploration drillings and, in the event of discovery of Hydrocarbons, only one well per discovery shall be deemed an exploration drilling.
		
	4.6
	In the thirty (30) days following the Effective Date, the Contractor shall submit to the Minister a bank guarantee from a first ranking international bank, in accordance with Appendix 3 amounting to four million eight hundred thousand Dollars ($4,800,000) for the 2D seismic and three million Dollars ($3,000,000) for the 3D seismic referred to in article 4.1, for its minimal work obligations for the first phase of the exploration period defined in article 4.1 above.

In the event of renewal of the Exploration Authorization, the Contractor shall also have to present to the Minister, within thirty (30) days following receipt of the Ministerial order noting the renewal, a bank guarantee from a first ranking international bank, in accordance with Appendix 3 amounting to
		
	•
	ten million Dollars ($10,000,000) per exploration drilling referred to in article  4.2  in respect of a renewal pursuant to Article 3.2 for a second phase of the exploration period covering its minimum work obligations for the phase concerned; and

		
	•
	ten million Dollars ($10,000,000) per exploration drilling referred to in article  4.3  in respect of a renewal pursuant to Article 3.2 for a third phase of the exploration period covering its minimum work obligations for the phase concerned.

If at the end of any phase of the exploration period or in the event of total waiver or termination of the Contract, the exploration works did not meet the minimum obligations under article 4, the Minister shall have the right to call in the guarantee for an amount equal to the amount of the guarantee after deduction of the estimated cost of minimum work possibly carried out.
This cost shall be on a lump sum basis using the following unit costs:
		
	(a)
	four thousand Dollars ($4,000) per kilometre of 2D seismic

		
	(b)
	five thousand Dollars ($5,000) per kilometre square of 3D seismic.

		
	(c)
	ten million Dollars ($10,000,000) per exploration drilling.

Once the payment is made, the Contractor shall be deemed to have fulfilled its minimum exploration obligations in accordance with article 4 of this Contract; the Contractor shall be able, save in the event of a revocation of the Exploration Authorization due to a serious breach of this Contract, to continue to benefit from the provisions of the said Contract and, in the event of an admissible request, to obtain the renewal of the Exploration Authorization.

ARTICLE 5: PREPARATION AND APPROVAL OF ANNUAL WORK PROGRAMS
		
	5.1
	No later than two (2) months after the Effective Date, the Contractor shall prepare and submit to the Ministry for approval a detailed Annual Work Program setting out each element of the works as well as the corresponding Annual Budget for the whole Exploration Perimeter by specifying the Petroleum Operations relating to the period from the Effective Date to the following 31st December.

Then, no later than three (3) months before the beginning of each Calendar Year, the Contractor shall prepare and submit to the Ministry for approval a detailed Annual Work Program setting out each element of the works as well as the corresponding Annual Budget for the whole Exploration Perimeter then, if necessary, for the Exploitation Perimeter(s) by specifying the Petroleum Operations which he offers to carry out during the following Calendar Year.
Each Annual Work Program and the corresponding Annual Budget shall be subdivided between the different exploration activities, and if necessary, including the evaluation activities for each discovery, as well as the development and production activities for each commercial reservoir.
		
	5.2
	If the Ministry deems that revisions or modifications of the Annual Work Program and the corresponding Annual Budget are necessary and useful, it must notify the Contractor in writing with all the justifications deemed useful within sixty (60) days following their receipt. In this case, the Ministry and the Contractor shall meet as soon as possible to study the requested revisions or modifications and to establish by mutual agreement the Annual Work Program and the corresponding Annual Budget in their final form, in accordance with good international petroleum industry practice. The date of adoption of the Annual Work Program and the corresponding Annual Budget shall be the date of the mutual agreement referred to above.

In the absence of notification by the Ministry to the Contractor of its desire to make  amendments or modifications within sixty (60) days referred to above, the aforementioned Annual Work Program and the corresponding Annual Budget shall be deemed accepted by the Ministry at the date of expiration of the said deadline.
In any case, each Annual Work Program operation for which the Ministry shall not have requested an amendment or modification shall have to be performed by the Contractor within the set deadlines.
		
	5.3
	The Parties agree that the results achieved during the course of the work or that particular circumstances may justify changes to the Annual Work Program and to the corresponding Annual Budget. In this case, following notification to the Ministry, the Contractor shall be able to carry out such changes provided that the fundamental objectives of the said Annual Work Program are not modified.

ARTICLE 6: CONTRACTOR OBLIGATIONS RELATING TO THE CONDUCT OF THE PETROLEUM OPERATIONS
		
	6.1
	Without prejudice to the provisions of article 21.1 below, the Contractor shall have to provide  all necessary funds and shall purchase or rent all the materials, equipment and material which are necessary for the performance of the Petroleum Operations. The Contractor is responsible for the preparation and execution of the Annual Work Programs which shall have to be performed in the most appropriate manner in compliance with good international petroleum industry practice.

		
	6.2
	At the Effective Date of this Contract, Tullow Mauritania Limited is designated as Operator and shall be responsible for the control and execution of the Petroleum Operations. The Operator, for and on behalf of the Contractor, shall provide the Minister with all the reports, information and data referred to in this Contract. Any change of Operator considered by the entities of the

Contractor must have the prior approval of the Minister, which shall not be unreasonably withheld.
		
	6.3
	The Operator must maintain for the duration of the Contract in Mauritania; a branch which shall have a person in charge and duly authorized to conduct the Petroleum Operations and to whom any notification could be presented under this Contract.

		
	6.4
	The Contractor shall have to take all the necessary measures for the protection of the environment during the Petroleum Operations.

It shall in particular, for any Petroleum Operation requiring prior approval in accordance with the Environmental Code, to submit to the Minister, as applicable, environmental impact assessments or notes required for this type of operation, implement measures and to comply with the restrictions provided for under the environmental management plan, to provide the declarations and to comply with the audits under the Environmental Code.
Additionally, the Contractor shall take all reasonable steps based on good international petroleum industry practice to:
		
	6.4.1
	make sure that all the installations and equipment used for the Petroleum Operations needs are at any time in good state in conformity with the applicable standards, including those resulting from international conventions ratified by the Islamic Republic of Mauritania and relating to the prevention of pollution;

		
	6.4.2
	avoid loss and discharges of:

		
	(A)
	Hydrocarbons including Natural Gas flaring, (save as provided in Article 40 of Crude Hydrocarbons Code, under penalty of a fine of which the amount shall be further determined by decree taken by the Council of Ministers, and shall not exceed, under any circumstances, twenty (20) percent of the current market price of Natural Gas in Mauritania);

		
	(B)
	muds; or

		
	(C)
	any other products used in the Petroleum Operations,

and deal with it in accordance with the environmental management plan referred to above.
The aforementioned fine shall not be considered either recoverable Petroleum Costs or a deductible expense;
		
	6.4.3
	NOT APPLICABLE;

		
	6.4.4
	store Hydrocarbons products in installations and receptacles built for this purpose;

		
	6.4.5
	dismantle, without prejudice to the provisions of article 23.2 below, the installations which shall no longer be necessary to the Petroleum Operations and clean up the sites; and

		
	6.4.6
	generally prevent pollution of the ground and sub-soil, water and atmosphere, as well as degradations of the fauna and flora.

		
	6.5
	During the Petroleum Operations, the Contractor shall have to take all the necessary measures to protect the health and safety of people in accordance with good international petroleum industry practice and the existing regulation in Mauritania, and in particular to set up:

		
	6.5.1
	suitable means of prevention, quick response and management of risks including risks of blow-out;

		
	6.5.2
	measures for information, training and means adapted to the risks incurred, including personal protective equipment, equipment to control fire as well as means for first aid and prompt evacuation of victims.

		
	6.6
	All the works and installations set up by the Contractor under the terms of this Contract shall, according to their nature and the circumstances, be built, specified, set out and equipped so as to allow free and safe passage at all times within the Exploration Perimeter and the Exploitation Perimeter(s).

		
	6.7
	In the exercise of its right to build, carry out work and maintain all the installations necessary for the purposes of this Contract, the Contractor shall not occupy land located within five-hundred (500) meters of any structure whether religious, cultural or not, places of burial, walled enclosures, yards and gardens, dwellings, groups of dwellings, villages, agglomerations, wells, water points, tanks, streets, roads, railroads, water pipelines, piping systems, works of public utility, works of art, without the prior agreement of the Minister. The Contractor shall be liable for any damage that its work shall have caused.

		
	6.8
	The Contractor undertakes to grant his preference to Mauritanian companies and products,  based on equivalent conditions in terms of price, quantity, quality, terms of payment and delivery lead time, and to require a similar commitment from its subcontractors.

All procurement, construction or service contracts amounting to a value higher than one million (1,000,000) Dollars for exploration/assessment works and one million five hundred thousand (1,500,000) Dollars for development/exploitation works, will be subject to invitations to tender for Mauritanians and foreign bidders, save if otherwise agreed with the Minister.
Copies of such contracts entered into during each Quarter shall be submitted to the Minister within thirty (30) days of the end of the Quarter concerned.
		
	6.9
	The Contractor undertakes to grant his preference, based on equivalent economic conditions, to the purchase of the goods necessary for Petroleum Operations, according to their lease or any other form of lease, and to require a similar commitment from its subcontractors.

For this purpose, each Annual Budget referred to under article 5 shall specify all the draft lease contracts which exceed an annual value of four hundred thousand (400,000) Dollars.

ARTICLE 7: CONTRACTOR RIGHTS RELATING TO THE CONDUCT OF PETROLEUM OPERATIONS
		
	7.1
	The Contractor has the exclusive right to carry out the Petroleum Operations inside the Exploration Perimeter and any Exploitation Perimeter derived from it, provided such operations are in conformity with the terms and conditions of this Contract, the Crude Hydrocarbons Code as well as the provisions of the existing laws and regulations in Mauritania, and that they are carried out according to good practice in the international petroleum industry.

		
	7.2
	For purposes of the execution of the Petroleum Operations, the Contractor shall bear the rights under article 54 of the Crude Hydrocarbons Code.

		
	7.3
	The expenses, allowances, and in general all charges arising from the use of property referred to in articles 55 to 57 of the Crude Hydrocarbons Code shall be borne by the Contractor and shall be recoverable as Petroleum Costs in accordance with the provisions of article 10.2 below.

		
	7.4
	The expiration of an Exploration Authorisation or an Exploitation Authorisation or the mandatory or voluntary, partial or total return of an Exploration Perimeter or an Exploitation Perimeter shall have no effect on the rights arising under article 7.2 above for the Contractor, with respect to the works and installations carried out pursuant to the provisions of this article 7 provided the  aforementioned works and installations continue to be used as part of the

Contractor's activities on the area retained or other exploration or exploitation perimeters in Mauritania.
		
	7.5
	Subject to the provisions of articles 6.8 and 6.9 above, the Contractor has the freedom of choice of the suppliers and subcontractors and shall benefit from the customs procedure under article 18 of this Contract.

		
	7.6
	Unless otherwise provided, no restriction shall be made with regard to the entry, residence and freedom of circulation, employment, and repatriation of persons and their families as well as their property, concerning the employees of the Contractor and those of its subcontractors subject to compliance with the labor legislation and regulations as well as the existing social laws in force.

The Ministry shall facilitate the grant to the Contractor as well as its agents, subcontractors and their families, of any administrative authorizations that may be necessary in relation to the Petroleum Operations carried out as part of the present Contract, including the entry and exit visas.

ARTICLE 8: CONTROL OVER PETROLEUM OPERATIONS AND ACTIVITY REPORTS - CONFIDENTIALITY
		
	8.1
	The Petroleum Operations shall be subject to monitoring by the Ministry in accordance with the provisions of Title VIII of the Crude Hydrocarbons Code. The duly appointed representatives of the Ministry shall have the right to monitor the Petroleum Operations, to inspect the installations, equipment, and materials and to audit procedures, norms, recordings and books related to the Petroleum Operations.

For the purposes of allowing the exercise of the aforementioned rights, the Contractor shall provide the Ministry and other agents of the State in charge of supervising the Petroleum Operations with reasonable assistance regarding transportation and accommodation. The transportation and accommodation expenditures which are directly linked to the monitoring and inspection shall be borne by the Contractor. The said expenditures shall be considered as Petroleum Costs recoverable under the provisions of article 10.2 of this Contract and as allowable expenses when determining the business profits tax industrial and commercial.
		
	8.2
	The Contractor shall regularly inform the Ministry of the progress of the Petroleum Operations. It shall in particular submit to the Ministry the following programs and opinions:

		
	8.2.1
	A work program for any geological or geophysical survey at least thirty (30) days before the beginning of the survey in question and specify its precise location, objectives, techniques and equipment used, the name and address of the company which shall carry out the work, the commencement date and the projected duration, the number of kilometers of seismic lines, the estimated costs, and the safety arrangements if the use of explosives is proposed.

		
	8.2.2
	A work program for any drilling at least thirty (30) days before the beginning of the drilling in question and specify its precise location, a detailed description of the work proposed, including the drilling techniques and the associated operations, its depth, its geological objective, the commencement date and the projected duration, the  estimated costs of the program, a summary of the geological and geophysical data having justified the decision of the Contractor, the name and address of the drilling company as well as the designation of the drilling platform, the name and address of all other subcontractors recruited for this operation, and the security measures considered.

		
	8.2.3
	Thirty (30) days’ notice concerning the abandonment of a producing well and seventy- two (72) hours for a non-producing well.

		
	8.2.4
	Seventy-two (72) hours notice concerning any suspension of drilling or any resumption of drilling suspended for more than thirty (30) days.

Any accident occurring in the course of the Petroleum Operations shall be notified to the Minister immediately or within twenty-four (24) hours at the latest.
		
	8.3
	The Minister may require that the Contractor finance and perform of all the works necessary to ensure the safety and hygiene in the context of the Petroleum Operations in accordance with article 6.5 above.

		
	8.4
	The Minister shall have access to all the original data resulting from the Petroleum Operations undertaken by the Contractor inside the Exploration Perimeter and Exploitation Perimeter(s) such as reports on geological, geophysics, petro-physics, drilling, and preliminary exploitation reports as well as any reports generally required to conduct such Petroleum Operations.

		
	8.5
	The Contractor undertakes to submit to the Ministry the following periodic reports:

		
	8.5.1
	Daily reports on drilling activities;

		
	8.5.2
	Weekly reports on geophysics works;

		
	8.5.3
	A detailed report on development activities starting from the granting of an Exploitation Authorization, within fifteen (15) days after the end of each Quarter;

		
	8.5.4
	Effective from the commencement of the production, and within fifteen (15) days after the end of each month, an exploitation report specifying each quantity of Hydrocarbons produced, used in the Petroleum Operations, stored, lost or burned, and sold, during the previous month as well as an estimate of each quantity in question for the current month. Concerning Hydrocarbons which are sold, the report shall specify the identity of the purchaser, the quantity sold and the price obtained for each sale.

		
	8.5.5
	Within fifteen (15) days after the end of each Quarter, a report relating to the  Petroleum Operations carried out during the previous Quarter including, in particular, a description of the Petroleum Operations carried out and a detailed statement of the Petroleum Costs incurred, such costs being broken down by Exploration/Exploitation Perimeter and by nature;

		
	8.5.6
	Within three (3) months after the end of each Calendar Year, a report relating to the Petroleum Operations carried out during the previous Calendar Year, as well as a detailed statement of the Petroleum Costs incurred, such costs being broken down by Exploration/Exploitation Perimeter and by nature and a figures of the staff employed  by the Contractor, indicating the number of employees, their nationality, their position, the total amount of the wages, the rate of mauritanisation employment as well as a report on medical care and instruction given to them.

		
	8.5.7
	Any other report generally required as part of the Petroleum Operations.

		
	8.6
	In addition, the following reports, data and documents shall be presented to the Ministry within a month of their preparation or their acquisition:

		
	8.6.1
	Two (2) copies of the geological reports created as part of the exploration;

		
	8.6.2
	Two (2) copies of the geophysics reports created as part of the exploration. The Ministry shall have access to the originals of all the records made (magnetic tapes or other support) and can obtain copies, upon request;

		
	8.6.3
	Two (2) copies of the reports for the implementation and establishment and end of drilling for each well drilled;

		
	8.6.4
	Two (2) copies of all measurements, tests, trials and surveys recorded during the drilling (end of drilling reports);

		
	8.6.5
	Two (2) copies of each analysis report (petrography, biostratigraphy, geochemistry or other) carried out on cores, cuttings or fluids collected from each well drilled including the negatives of the various related photographs;

		
	8.6.6
	A representative sample of cores taken, of drill cuttings taken from each well as well  as samples of fluids produced during the tests or production tests shall also be submitted within a reasonable time;

		
	8.6.7
	Moreover, the Contractor shall be able to freely export samples of cores and cuttings taken and fluids produced;

		
	8.6.8
	And in general, two (2) copies of all other reports generally required to carry out the Petroleum Operations.

The reports, studies and other results referred to in the present article 8.6, as well as those referred to in article 8.5 above, shall be provided on adequate supports, in digital and paper format.
		
	8.7
	The Parties undertake to treat as confidential and not to communicate to a Third Party or to be published, save with the prior approval of the Minister, any data and information of technical nature related to the Petroleum Operations and which are not yet in the public domain, throughout the duration of the Contract.

In the event of the surrender of an area or a waiver of its rights over an area, the Contractor shall treat as confidential and agrees not disclose to Third Parties or publish, without the prior approval of the Minister, any data and information relating to the perimeter in question and which is not yet in the public domain.
After the surrender, termination or expiry of the Contract, the Contractor shall treat as confidential and shall not disclose to Third Parties nor shall publish, without prior approval of the Minister, any data and information related to the Petroleum Operations which is not already available in the public domain.
		
	8.8
	Notwithstanding the provisions of article 8.7, the State shall be authorized to communicate data and information:

		
	8.8.1
	To all service providers and professional consultants involved in the performance of the Petroleum Operations, after obtaining a similar commitment of confidentiality;

		
	8.8.2
	To any bank or financial institution from which an entity of the State requests or obtains funding, after obtaining a similar commitment of confidentiality;

		
	8.8.3
	As part of any contentious procedure of legal, administrative or arbitral nature.

		
	8.9
	Notwithstanding the provisions of article 8.7, the Contractor shall be authorized to communicate the data and information:

		
	8.9.1
	to any Affiliated Company bound by a similar commitment of confidentiality;

		
	8.9.2
	to all service providers and professional consultants involved in the performance of  the Petroleum Operations, after obtaining a similar commitment of confidentiality;

		
	8.9.3
	to any company interested in good faith in taking a possible assignment, after  obtaining from such company, a commitment to keep confidential this information and data and to use them only for the purposes of the aforesaid assignment;

		
	8.9.4
	to any bank, institution or financial entity from which an entity of the Contractor requests or obtains funding, after obtaining a similar commitment of confidentiality;

		
	8.9.5
	when and to the extent that the regulations of a recognized stock exchange requires it;

		
	8.9.6
	as part of any contentious procedure of legal, administrative or arbitral nature.

		
	8.10
	The Contractor shall report to the Minister as soon as possible about all information relating to mineral substances found during the performance of the Petroleum Operations.

		
	8.11
	The Contractor shall take part in the implementation of the Extractive Industry Transparency Initiative (EITI) in accordance with article 98 of the Crude Hydrocarbons Code.

ARTICLE 9: APPRAISAL OF A DISCOVERY AND GRANT OF AN EXPLOITATION
AUTHORIZATION
		
	9.1
	If the Contractor discovers Hydrocarbons in the Exploration Perimeter, it shall notify the Minister in writing as soon as possible and shall carry out, in accordance with good international petroleum industry practice, the necessary tests. In the thirty (30) days following the date of provisional closing or of abandonment of the discovery well, the Contractor shall submit to the Minister a report giving all information related to the aforementioned discovery and shall provide its recommendations in respect of the continuation of its evaluation.

		
	9.2
	If the Contractor wishes to undertake the appraisal of the discovery referred to above, it shall diligently submit to the Minister for approval the appraisal works programme, the timetable of the works and the corresponding budget estimate, no later than six (6) months following the date on which the discovery was notified as set out in article 9.1 above.

The Contractor shall then undertake with all due diligence the appraisal works in accordance with the established program, it being understood that the provisions of articles 5.2 and 5.3 above will apply to said program.
		
	9.3
	Within three (3) months of the completion of the appraisal works, and no later than thirty (30) days prior to the expiration of the third phase of the exploration period defined in article 3.2, including any extension thereof in accordance with the provisions of articles 3.3 and 3.4 above, the Contractor shall submit to the Minister a detailed report giving all the technical and economic information relating to the reservoir which was discovered and appraised, establishing whether, in the Contractor’s opinion, the aforementioned discovery is commercial or not.

This report shall include inter alia the following information: the geological and petro-physical characteristics and the estimated delimitation of the reservoir; the results of the tests and production tests carried out; the nature, properties and volume of the Hydrocarbons that it contains, a preliminary techno-economic study of the exploitation of the reservoir.
		
	9.4
	Any quantity of Hydrocarbons produced from a discovery before it is declared commercial shall be subject to the provisions of article 10 of this Contract, if it is not used for the performance of the Petroleum Operations or it is lost.

		
	9.5
	If a reservoir is considered by the Contractor to be commercial it shall be entitled to an Exploitation Authorization. In this case, the Contractor shall submit to the Minister an application for an Exploitation Authorization, within three (3) months after the submission of the report referred to in article 9.3 above, and no later than thirty (30) days before the expiration of the third phase of the exploration period defined in article 3.2, including any extension  thereof in accordance with the provisions of articles 3.3 and 3.4 above. The aforementioned application shall specify the lateral and stratigraphic delimitation of the Exploitation Perimeter, which shall only cover the estimated limit(s) of the reservoir discovered and appraised inside the unexpired Exploration Perimeter and shall be supported with the technical justifications necessary for the aforementioned delimitation. The above-mentioned application for an Exploitation Authorization shall be accompanied by a detailed development and production program, including specifically with respect to the reservoir concerned:

		
	9.5.1
	An estimate of the proven and probable recoverable reserves and the corresponding production profile, as well as a study on the methods of recovery of Hydrocarbons and valorization of Natural Gas;

		
	9.5.2
	The description of works and installations required for the exploitation of the reservoir, such as the number of wells, the facilities necessary for the production, separation, processing, storage and transport of Hydrocarbons;

		
	9.5.3
	The program and schedule for performance of the aforesaid works and facilities, including the date of production start-up;

		
	9.5.4
	The estimate of the development investments and operating costs broken down by year, as well as an economic study confirming the commercial nature of the reservoir;

		
	9.5.5
	Methods of financing these investments by each entity constituting the Contractor;

		
	9.5.6
	The environmental impact assessment of the development project to be undertaken by the Contractor in accordance with the provisions of the Environmental Code;

		
	9.5.7
	An indicative diagram of Rehabilitation Plan to rehabilitate the sites at the end of operations.

The Minister shall be entitled to propose amendments or modifications to the above-mentioned development and production program, by notifying them to the Contractor with all the justifications deemed useful within ninety (90) days of receipt of said program. The provisions of article 5.2 above shall apply to said program as regards the approval thereof within the ninety (90) day period referred to above.
If the results obtained during the development justify changes to the development and production program, the aforementioned program may be modified by using the same procedure as that referred to above for its initial adoption.
		
	9.6
	The Exploitation Authorization shall be granted by the Minister within forty-five (45) days of the date of adoption of the development and production program by the Parties. The grant of an Exploitation Authorization entails the cancellation of the Exploration Authorization inside the Exploitation Perimeter, but lets it remain valid outside this area until its expiration date without modifying the minimum exploration work commitment provided for under article 4 above for the relevant phase of the exploration period.

		
	9.7
	If the Contractor makes several commercial discoveries in the Exploration Perimeter, each shall give rise, in accordance with article 9.5 and 9.6 above, to a separate Exploitation Authorization corresponding to an Exploitation Perimeter.

		
	9.8
	If during works performed after the grant of an Exploitation Authorization, it appears that the extent of the reservoir is larger than initially projected pursuant to article 9.5 above, the Minister shall grant to the Contractor under the framework of the Exploitation Authorization already granted, the additional portion provided that the extension forms an integral part of the unexpired Exploration Perimeter and the Contractor provides technical justifications for the extension requested.

If it appears that the reservoir has a shorter extension than initially projected, the Minister may require the Contractor to return the portion(s) which are outside the limits of the reservoir.

		
	9.9
	If a reservoir extends beyond the boundary of the unexpired Exploration Perimeter the Minister may require that the Contractor exploit the aforementioned reservoir in partnership with the permit-holder of adjacent perimeter in accordance with the provisions of article 53 of the Crude Hydrocarbons Code. Within twelve (12) months of the written request of the Minister, the Contractor shall put to him, for approval, a draft development and production program for the reservoir in question, prepared in agreement with the permit-holder of the rights to the adjacent perimeter.

In the event that a reservoir extends over one or several other perimeters which are not subject  to a contract, an extension of the contractual perimeter can be carried out under the provisions  of the Crude Hydrocarbons Code.
		
	9.10
	The Contractor shall start development operations including the necessary studies no later than six (6) months after the grant of the Exploitation Authorization referred to in article 9.6 above and shall monitor them with utmost diligence. The Contractor undertakes to carry out the development and production operations according to good international petroleum industry practice to ensure the optimal recovery of Hydrocarbons contained in the reservoir. The Contractor undertakes to start as soon as possible studies of enhanced recovery in consultation with the Ministry and to use such recovery procedures if, in the Contractor’s opinion, such procedures may result in an improvement in the rate of recovery under economic conditions.

		
	9.11
	The duration of the exploitation period during which the Contractor is authorized to produce from a reservoir declared commercial is fixed at twenty-five (25) years if the exploitation relates to reservoirs of Crude Oil and thirty (30) years if the exploitation relates to Natural Gas reservoirs, starting from the date of grant of the corresponding Exploitation Authorization.

Upon expiry of the initial exploitation period defined above, the corresponding Exploitation Authorization may be renewed for an additional period of no more than ten (10) years upon reasoned request of the Contractor submitted to the Minister no later than one (1) year before the aforementioned expiration, provided that the Contractor has met all its contractual obligations under this Contract during the initial exploitation period and that it can demonstrate that commercial production from the Exploitation Perimeter remains possible during the requested additional period.
		
	9.12
	For any reservoir having resulted in the grant of an Exploitation Authorization, the Contractor undertakes, subject to the provisions of article 21 below, to bear the costs of all the Petroleum Operations which are useful and necessary for the exploitation of the reservoir, in accordance with the development and production program adopted.

However, if on the basis of technical knowledge acquired in respect of this reservoir, the Contractor deems and can provide accountable evidence, during the development and  production program or in the course of exploitation, that production of the said reservoir cannot or can no longer be commercially profitable although the discovery well and the appraisal works resulted in the grant of an Exploitation Authorization in accordance with this Contract, the Minister undertakes not to oblige the Contractor to continue the works and to make technical-commercial arrangements, insofar as possible, with the Contractor which would make it  possible for the Contractor to continue the profitable exploitation of the reservoir. If the Contractor decides not to continue exploitation works and if the Minister requires it, the Contractor shall relinquish the said Exploitation Authorization and any rights related thereto.
		
	9.13
	The Contractor may at any time, subject to at least a six (6) month prior written notice to the Minister, relinquish all or part of an Exploitation Perimeter, provided it has met all the obligations under this Contract.

		
	9.14
	The Contractor undertakes throughout the duration of the Exploitation Authorization to produce annually quantities of Hydrocarbons from each reservoir in accordance with good international petroleum industry standards by principally taking into account the rules of good reservoir preservation and the optimal recovery of Hydrocarbon reserves under economic conditions throughout the duration of the Exploitation Authorizations in question.

		
	9.15
	Stoppage of production of a reservoir for a period of over six (6) consecutive months decided by the Contractor without the approval of the Minister, may result in the termination of this Contract under the conditions provided for in article 25 below.

		
	9.16
	The Minister may, on three (3) months notice, require the Contractor to relinquish immediately, and  without  compensation, all its rights over the supposed  discovery limits, including

Hydrocarbons which could be produced from the said discovery, if the Contractor, without duly justified reason:
		
	9.16.1
	has not submitted an appraisal work program in respect of the said discovery within the timeframe referred to in article 9.2 above;

		
	9.16.2
	has not completed the appraisal work of the said discovery in accordance with the assessment program and within the timeframe referred to in article 9.2 above;

		
	9.16.3
	or has not submitted an application for an Exploitation Authorization within the time referred to in article 9.5 above.

The State may then complete all the appraisal, development and production works in respect of this discovery provided that no damage is caused to the performance of Petroleum Operations  by the Contractor in the Exploration Perimeter.

ARTICLE 10: RECOVERY OF PETROLEUM COSTS AND PRODUCTION SHARING
		
	10.1
	From the start of a regular production of Hydrocarbons under an Exploitation Authorization or an anticipated production authorization, such production shall be shared and marketed in accordance with the provisions below.

		
	10.2
	For the purposes of recovery of Petroleum Costs, the Contractor may freely retain, during each Quarter, in respect of each Exploitation Authorization, a portion of the corresponding total production equal to sixty percent (60%) for Crude Oil and to sixty-five percent (65%) for Dry Gas of the total quantity produced which is neither used in the Petroleum Operations, nor lost,  or only a lesser percentage which would be necessary and sufficient.

The value of the portion of the total production allocated for recovery of the Petroleum Costs by the Contractor, as defined in the preceding paragraph, shall be calculated in accordance with the provisions of articles 14 and 15 below.
If during any Calendar Year the Petroleum Costs not yet recovered by the Contractor under the provisions of this article 10.2, exceed the equivalent in value of sixty percent (60%) in respect  of Crude Oil or sixty-five percent (65%) in respect of Dry Gas of the total production calculated as indicated above, the excess of which cannot be recovered during the Calendar Year under consideration shall be carried forward the following Calendar Year(s) until full recovery of the Petroleum Costs or termination of this Contract.
The recovery of Petroleum Costs for any Quarter shall be made in accordance with the order set out in the Accounting Procedure.
		
	10.3
	The quantity of Hydrocarbons, under each Exploitation Authorization, remaining during each Quarter after the Contractor has retained the portion necessary for the recovery of the Petroleum Costs under the provisions of article 10.2 above from the total production, shall be shared between the State and the Contractor as follows, according to the value of the ratio "R" defined below:

	
			
	Value of "R"
	State Share
	Contractor Share

	Lower than 1
	30%
	70%

	Greater than or equal to 1 and lower than 1.5
	32.5%
	67.5%

	Greater than or equal to 1.5 and lower than 2
	35%
	65%

	Greater than or equal to 2 and  lower than 2.5
	37.5%
	62.5%

	
			
	Greater than or equal to 2.5 and lower than 3
	40%
	60%

	Greater than or equal to 3
	42.5%
	57.5%.

For the purposes of this article, the ratio "R" indicates the ratio of "Net Cumulated Income" of the Contractor to "Cumulated Investments" within the relevant Exploitation Perimeter, where:
"Net Cumulated Income" indicates the sum, from the Effective Date until the end of  the previous Quarter, of the value of Hydrocarbons obtained by the Contractor in accordance with the provisions of articles 10.2 and 10.3 above; reduced by the Exploitation Petroleum Costs incurred by the Contractor, as defined and determined under the provisions of the Accounting Procedure.
"Cumulated Investments" means the sum, from the Effective Date until the end of the previous Quarter, of the Exploration Petroleum Costs, and the Development Petroleum Costs incurred by the Contractor, as defined and determined according to the provisions of the Accounting Procedure.
		
	10.4
	The State may receive its production defined in article 10.3 above, either in kind, or in cash.

		
	10.5
	If the State wishes to receive in kind all or part of its share of production as defined in article

10.3 above, the Minister shall notify the Contractor of such wish in writing at least ninety (90) days before the beginning of the Quarter concerned, specifying the exact quantity that it wishes to receive in kind during the aforementioned Quarter and the conditions of delivery.
To this end, it is agreed that the Contractor shall not enter into any sales commitment relating to the State share of production for a period greater than one hundred and eighty (180) days  without the written approval of the Minister.
		
	10.6
	If the State wishes to receive in cash all or part of its share of production defined in article 10.3 above, or if the Minister has not notified the Contractor of its decision to receive in kind the State's share of production pursuant to article 10.5 above, the Contractor shall market the State's share of production to be taken in cash for the Quarter concerned, to lift this share during this Quarter, and to pay to the State, within the thirty (30) days following each lifting, an amount equal to the quantity corresponding to the State share of production multiplied by the F.O.B sales price less the inherent marketing expenses.

The Minister shall have the right to require the payment for sales of the State share of  production sold by the Contractor in Dollars or any other foreign currency in which the transaction has been made.

ARTICLE 11: TAXATION
		
	11.1
	Each entity constituting the Contractor shall be subject to the business profits tax on their net profits generated in relation to the Petroleum Operations in accordance with articles 66 to 74 of the Crude Hydrocarbons Code and with the provisions of the Accounting Procedure defined in appendix 2 of this Contract.

The rate of this tax is fixed at twenty-six percent (26 %) for the duration of the Contract as defined in article 2.2 above.
For the purposes of determining the business profits tax industrial and commercial, the value of the Hydrocarbons marketed by the Contractor in accordance with articles 10.2 and 10.3 above, to be integrated in the taxable net profit, shall be established in accordance with the provisions  of article 14 below.

		
	11.2
	Subject to the provisions of article 21 below, the Contractor shall pay to the State the following surface fees:

		
	11.2.1
	two Dollars ($2) per square kilometer and per annum during the first phase of the exploration period;

		
	11.2.2
	three Dollars ($3) per square kilometer and per annum during the second phase of the exploration period;

		
	11.2.3
	four Dollars ($4) per square kilometer and per annum during the third phase of the exploration period and during any extension provided for under articles 3.3 and 3.4 above;

		
	11.2.4
	one hundred and seventy Dollars ($170) per square kilometer and per annum for the effective duration of the Exploitation Authorization.

The surface fees referred to in subsections 11.2.1, 11.2.2 and 11.2.3 above shall  be  paid annually in advance, no later than the first day of each Contract Year, for the whole Contract Year, according to the scope of the Exploration Perimeter held by the Contractor as at the expiration date of the aforesaid fees.
The surface fees relating to an Exploitation Authorization shall be paid annually in advance, at the beginning of each Calendar Year according to the grant of the Exploitation Authorization or for the Calendar Year of the said grant, within thirty (30) days of the date of the grant, pro rata temporis for the remainder of the current Calendar Year), according to the scope of the Exploitation Perimeter at the aforementioned date.
In the event of abandonment of a surface during a Calendar Year or resulting from a Force Majeure event, the Contractor shall not be entitled to any reimbursement of surface fees already paid.
The amounts referred to in this article 11.2 shall not be regarded as recoverable Petroleum Costs under the provisions of article 10.2 above, or be considered as deductible charges for the establishment of the business profits in accordance with article 76 of the Crude Hydrocarbons Code.
		
	11.3
	The Contractor shall be liable for taxes and duties as well as deductions withheld and other tax obligations applicable to contractors in accordance with Title VI of the Crude Hydrocarbons Code.

		
	11.4
	The subcontractors of the Contractor as well as the personnel of the Contractor and of its subcontractors are subject to the existing tax provisions of common law in force, subject to the applicable provisions contained in Title VI of the Crude Hydrocarbons Code.

		
	11.5
	Subject to the provisions of article 83 of the Crude Hydrocarbons Code, the shareholders of the entities constituting the Contractor and their Affiliated Companies shall, in addition to the exemptions contained in article 86 of the aforementioned Code, also be exempt from all levies, duties, taxes and contributions relating to the dividends received, debts, loans and  interest related to the Petroleum Operations.

		
	11.6
	Save for the taxes, contributions and duties provided for under Title VI of the Crude Hydrocarbons Code, surface fees provided for under article 11.2 above, bonuses under article 13 below, and the contribution referred in article 12.2 below, the Contractor shall be exempt from all levies, duties, taxes, fees or contributions of any nature, whether national, regional or communal, current or forthcoming, relating to the Petroleum Operations and any related income, or more generally, the properties, activities or acts of the Contractor, including its establishment, transfers of funds and its activities pursuant to the Contract, given that these exemptions apply only to Petroleum Operations.

The exemptions referred to in the present article do not apply to the services actually rendered to the Contractor by the Mauritanian public administrations and communities. However, the tariffs

applied with respect to the Contractor, its subcontractors, carriers, clients and agents shall remain reasonable compared to the services rendered and shall not exceed the tariffs generally applied for these same services by the aforementioned public administrations and communities. The cost of these services shall be regarded as recoverable Petroleum Costs in accordance with the provisions of article 10.2 of this Contract.

ARTICLE 12: PERSONNEL
		
	12.1
	The Contractor undertakes from the beginning of the Petroleum Operations to ensure priority employment based on equal qualifications for Mauritanian personnel and to contribute to the training of that personnel in order to allow their access to any position of skilled workers, foremen, executives, engineers and managers.

For this purpose, the Contractor shall establish at the end of each Calendar Year, in agreement with the Ministry, a plan for the recruitment of Mauritanian personnel and a plan for training and development to achieve an increased participation of the Mauritanian personnel in the Petroleum Operations.
		
	12.2
	The Contractor shall also contribute to the training and development of the agents from the Ministry and other entities referred to in article 80 of the Crude Hydrocarbons Code, in accordance with a plan established by the Ministry at the end of each Calendar Year.

For this purpose, the Contractor shall pay to the State, for the said training and development, an amount equal to one hundred and fifty thousand Dollars ($150,000) per Calendar Year for the duration of the Exploration Authorisation and, from the date of grant of an Exploitation Authorisation, an amount equal to five hundred thousand Dollars ($500,000) per Calendar Year Contract. The payments referred to above shall be considered as non recoverable Petroleum Costs under the provisions of article 10.2 above but as charges deductible from the business profits in accordance with article 82 of the Crude Hydrocarbons Code.

ARTICLE 13: BONUSES
		
	13.1
	The Contractor shall pay to the State a signature bonus of an amount of one million Dollars ($1,000,000) within thirty (30) days following the Effective Date.

		
	13.2
	In addition, the Contractor shall pay to the State the following production bonuses:

		
	13.2.1
	four million Dollars ($4,000,000) when the regular marketed production of Hydrocarbons extracted from the Exploitation Perimeters reaches for the first time the average rate of twenty-five thousand (25,000) Barrels of Crude Oil per day during a period of thirty (30) consecutive days;

		
	13.2.2
	six million Dollars ($6,000,000) when the regular marketed production of Hydrocarbons extracted from the Exploitation Perimeters reaches for the first time the average rate of fifty thousand (50,000) Barrels of Crude Oil per day during a period of thirty (30) consecutive days;

		
	13.2.3
	ten million Dollars ($10,000,000) when the regular marketed production of Hydrocarbons extracted from the Exploitation Perimeters reaches for the first time the average rate of one hundred thousand (100,000) Barrels of Crude Oil per day for a period of thirty (30) consecutive days;

		
	13.2.4
	eighteen million Dollars ($18,000,000) when the regular marketed production of Hydrocarbons extracted from the Exploitation Perimeters reaches for the first time the average rate of one hundred fifty thousand (150,000) Barrels of Crude Oil per day for a period of thirty (30) consecutive days.

Each amount referred to in the paragraphs 13.2.1 to 13.2.4 above shall be paid within thirty (30) days following the aforementioned reference period of thirty (30) consecutive days.
		
	13.3
	The amounts referred to in articles 13.1 and 13.2 above shall not be considered as recoverable Petroleum Costs under the provisions of article 10.2 above, nor considered as  deductible charges for the purpose of calculating the business profits in accordance with article 79 of the Crude Hydrocarbons Code.

ARTICLE 14:  PRICE OF HYDROCARBONS
		
	14.1
	The unit selling price of Crude Oil taken into consideration under articles 10 and 11 above shall be F.O.B. "Market Price" at the Delivery Point expressed in Dollars per Barrel such as below given for each Quarter.

A Market Price shall be established for each type of Crude Oil or mixture of Crude Oils.
		
	14.2
	The Market Price applicable to the liftings of Crude Oil carried out during a Quarter shall be calculated at the end of that Quarter, and shall be equal to the weighted average of the prices obtained by the Contractor and the State for sales of Crude Oil to Third Parties during the relevant Quarter, adjusted to reflect the differences in terms of quality and density as well as in terms of F.O.B delivery and terms of payment, provided that the quantities thus sold to Third Parties during the relevant Quarter represent at least thirty percent (30%) of the total quantities of Crude Oil obtained from all the granted Exploitation Perimeters under this Contract and sold during the said Quarter.

		
	14.3
	In the event that such sales to Third Parties are not made during the relevant Quarter, or do not represent at least thirty percent (30%) of the total quantities of Crude Oil obtained from the whole Exploitation Perimeters granted under this Contract and sold during the Quarter in question, the Market Price shall be established during the Quarter considered by comparison with the "Current International Market Price" of Crude Oil produced in Mauritania and in neighboring producing countries, taking into consideration the differences in terms of quality, density, transport and terms of payment.

The term "Current International Market Price" means the price allowing the Crude Oil sold to reach, at the processing or consumption locations, a competitive price equivalent to that of Crude Oil of similar quality coming from other regions and delivered under comparable commercial conditions, both in terms of quantities and destination and utilization of such Crude Oil and taking into account the market conditions and the type of contracts.
		
	14.4
	The following transactions shall, inter alia, be excluded from the calculation of the Market Price of Crude Oil:

		
	14.4.1
	sales in which the buyer is an Affiliated Company of the seller as well as sales between entities constituting the Contractor;

		
	14.4.2
	sales in exchange for payment other than payment in freely convertible currencies and sales driven, in whole or part, for reasons other than the usual economic incentives involved in Crude Oil sales on the international market (such as exchange contracts, sales from government to government or to government agencies).

		
	14.5
	A committee chaired by the Minister or his delegate and consisting of State representatives and those of the Contractor shall meet upon request of its chair, at the end of each Quarter, to establish, in accordance with the stipulations of this article 14 the Market Price of Crude Oil produced, which shall apply to the previous Quarter. The decisions of the committee shall be taken unanimously.

In the event that no decision is taken by the committee within thirty (30) days from the end of the Quarter in question, the Market price of the Crude Oil produced shall be definitely determined by an internationally recognized expert appointed by mutual agreement between the Parties, or, failing such agreement, by the International Center for Technical Expertise from  the

International Chamber of Commerce. The expert shall set the price in accordance with the provisions of this article 14 within twenty (20) days from his appointment. The expert’s costs shall be shared equally by the Parties.
		
	14.6
	Pending the determination of the price, the Market price provisionally applicable to a Quarter shall be the Market price of the preceding Quarter. Any necessary adjustment shall be made no later than thirty (30) days after the determination of the Market Price for the relevant Quarter.

		
	14.7
	The Contractor shall measure all the Hydrocarbons produced after their extraction from water and the related substances, using, with the consent of the Ministry, the instruments and procedures in keeping with the international petroleum industry methods then in force. The Ministry shall have the right to examine these measurements and to control the instruments and procedures used.

If during the exploitation, the Contactor wishes to change the said instruments and procedures, it shall obtain the prior consent of the Ministry.
If, during an inspection carried out by the Ministry, it is noted that the measuring instruments are inaccurate and exceed the permitted tolerances, and this situation is confirmed by an independent expert, the inaccuracy in question shall be regarded as having existed for half of the period since the preceding inspection, unless it can be demonstrated that this occurred in respect of a different length of time. The Petroleum Costs' account and the production and lifting shares of the Parties shall be subject of suitable adjustments within thirty (30) days following receipt of the expert's report.
		
	14.8
	For Dry Gas, the provision of this article 14 shall apply mutatis mutandis without prejudice to the provisions of article 15 below.

ARTICLE 15: NATURAL GAS
Non-associated Natural Gas
		
	15.1
	If a discovery as referred to in article 9.1 above relates to a Non-associated Natural Gas  reservoir that the Contractor has undertaken to appraise in accordance with article 9.2 above, the Minister and the Contractor shall carry out jointly, and concurrently with the appraisal works of the said discovery, a market research intended to evaluate the possible outlets for this Natural Gas, for the local market and exportation, as well as the necessary means for its marketing, and they shall consider the possibility of jointly marketing their shares of production. The study shall determine in particular the quantities which can definitely be shifted on the local market by virtue of their nature as combustible or as raw material, the installations and arrangements necessary for the movement of this Natural Gas to user companies or government agency responsible for its distribution, as well as the estimated selling price which shall be determined in accordance with the principles provided for under article 15.8 below.

In order to assess the marketability of the discovered Non-associated Natural Gas, the  Contractor shall be entitled, in accordance with article 3.4 above, to an extension of its Exploration Authorization.
If, following the evaluation of a discovery of Non-associated Natural Gas, it appears that the development of such discovery requires special economic terms, the Parties may agree, in exceptional circumstances, to such terms.
		
	15.2
	At the end of the appraisal work, should the Parties jointly decide to exploit this Natural Gas to supply the local market, or should the Contractor decide to exploit it for export, it shall submit before the end of the Exploration Authorization a request for an Exploitation Authorization which the Minister shall grant under the conditions provided in article 9.6 above.

The Contractor shall then carry out the development and the production of this Natural Gas in accordance with the development and production plan submitted and approved by the Minister in accordance with the provisions of article 9.5.   The provisions of this Contract which are

applicable to Crude Oil shall apply mutatis-mutandis to Natural Gas, subject to the specific provisions of articles 15.7 to 15.9 below.
If the production is intended in whole or in part for the local market, a supply contract shall be entered into, under the aegis of the Minister, by the Contractor and the State agency responsible for the distribution of gas. The contract shall fix the obligations of the parties in terms of the supply and lifting of commercial gas and shall include a clause requiring the buyer to pay part  of the price in case of failure in the lifting of contractual quantities.
		
	15.3
	In the absence of submission of an appraisal program or of a request for an Exploitation Authorization within the deadlines specified in articles 9.2 and 9.5 above, the surface including the extent of the reservoir of Non-associated Natural Gas shall be returned, at the request of the Minister, to the State which shall carry out for its own account all the works for the exploitation of the reservoir in question.

Associated Natural Gas
		
	15.4
	In the event of a discovery of a reservoir of Crude Oil which is commercial and which contains Associated Natural Gas, the Contractor shall indicate in the report referred to in article 9.3  above if it considers that the production of this Associated Natural Gas is likely to exceed the quantities necessary to the requirements of the Petroleum Operations related to the production  of Crude Oil including re-injection operations, and if it considers that this excess can be produced in commercial quantities. If the Contractor has informed the Minister of such an excess, the Parties shall jointly evaluate the possible outlets for this surplus, both on the local market and for export (including the possibility of a joint marketing of their shares of  production of this excess), as well as the means necessary for its marketing.

If the Parties agree to exploit the Associated Natural Gas surplus, or if the Contractor decides to exploit this surplus for export, the Contractor shall indicate in the development and production program referred to in article 9.5 above the additional facilities necessary for the development and the exploitation of this surplus and its estimate of the related costs.
The Contractor shall then proceed with the development and exploitation of this surplus in accordance with the development and production program submitted and approved by the Minister in accordance with the provisions of article 9.5 above, and the provisions of this Contract applicable to Crude Oil shall apply mutatis-mutandis to the Natural Gas surplus, subject to the specific provisions of articles 15.7 to 15.9 below.
A similar procedure to that in the above paragraph shall be followed if the marketing of the Associated Natural Gas is decided during the exploitation of a reservoir.
		
	15.5
	Should the Contractor decide not to exploit the excess Associated Natural Gas and should the State, at any time, wish to use it, the Minister shall notify the Contractor thereof, in which case:

		
	15.5.1
	The Contractor shall make available to the State, free of charge, upon its exit of the gas separation facilities, all or part of the excess which the State wishes to lift;

		
	15.5.2
	The State shall be responsible for the collection, processing, compression and  transport of that excess from the separation facilities referred to above, and shall support all the additional costs related thereto;

		
	15.5.3
	The construction by the State of the facilities necessary for the operations mentioned  in paragraph b) above, as well as the lifting of the excess by the State, shall be carried out in accordance with good international petroleum industry practice in such a way as to not impede with the production, lifting and transportation of Crude Oil by the Contractor.

		
	15.6
	Any excess of Associated Natural Gas which would not be utilized under articles 15.4 and 15.5 above shall be reinjected by the Contractor.

Common provisions
		
	15.7
	The Contractor shall have the right to dispose of its share of production of Natural Gas, in accordance with the provisions of this Contract. It shall also have the right to proceed with the separation of the liquids from all Natural Gas produced, and to transport, store as well as to sell on the local market or for export its share of liquid Hydrocarbons thus separated, which shall be regarded as Crude Oil for purposes of sharing between the Parties under article 10 above.

		
	15.8
	For the purposes of this Contract, the Market Price of Natural Gas, expressed in Dollars per million BTU, shall be equal:

		
	15.8.1
	With respect to the Natural Gas export sales to third parties, to the price obtained from purchasers;

		
	15.8.2
	With respect to sales on the local market of Natural Gas as a fuel, to a price agreed by mutual agreement between the Minister (or the national entity in charge of the distribution of gas on the local market) and the Contractor, on the basis of the market price of the rate of a substitute fuel for Natural Gas.

		
	15.9
	For the purposes of the application of articles 10.2, 10.3 and 13.2 above, the quantities of Natural Gas available after deduction of the reinjected or flared quantities and those used for the requirements for the Petroleum Operations, shall be expressed in a number of Barrels of Crude Oil such as one hundred and sixty five (165) cubic meters of Natural Gas measured at the temperature of 15.6°C and at the atmospheric pressure of 1,01325 bars are considered equal to one (1) Barrel of Crude Oil, unless otherwise agreed by the Parties.

ARTICLE 16: TRANSPORT OF HYDROCARBONS THROUGH PIPELINES
		
	16.1
	The Contractor shall have the right, during the term of the Contract and in the conditions defined in Title V of the Crude Hydrocarbons Code, to process and transport in its own facilities inside the territory of Mauritania and to have products processed and transported while keeping ownership thereof, the products of its exploitation activities or its share of the aforesaid products, to the storage, processing, lifting or major consumption points.

		
	16.2
	If conventions for the purposes of allowing or facilitating the transportation of Hydrocarbons through pipelines through other states are entered into between the aforementioned states and the Mauritanian Government, the State shall grant without discrimination to the Contractor all the advantages which could result from the execution of these conventions.

		
	16.3
	As part of transportation operations, the Contractor shall have rights and shall be subject to the obligations provided for under Title V of the Crude Hydrocarbons Code.

ARTICLE 17: OBLIGATIONS TO SUPPLY DOMESTIC MARKET
		
	17.1
	The Contractor shall comply with the requirements for domestic consumption of Hydrocarbons in accordance with the provisions of article 41 of the Crude Hydrocarbons Code.

		
	17.2
	The Minister shall notify the Contractor in writing, no later than October 1st of each Calendar Year, of the quantities of Hydrocarbons that the State desires to purchase in accordance with  this article for the following Calendar Year. The deliveries shall be made to the State or to the beneficiary designated by the Minister, in amounts and at regular intervals during the said Calendar Year in accordance with the terms agreed by the Parties.

		
	17.3
	The price of the Hydrocarbons thus sold by the Contractor to the State shall be the market price determined in accordance with the provisions of article 14 and 15.8; it shall be payable to the Contractor in Dollars.

ARTICLE 18: IMPORT AND EXPORT
		
	18.1
	The Contractor shall have the right to import into Mauritania, on its behalf or that of its subcontractors, all the goods, materials, machinery, equipment, spare parts and consumables directly necessary for the proper conduct of the Petroleum Operations and specified in a specific customs list established by the Ministry, upon proposal from the Contractor, in accordance with article 92 of the Crude Hydrocarbons Code.

It is understood that the Contractor and its subcontractors undertake to effect the above- mentioned imports only insofar as the said materials and equipment are not available in Mauritania in equivalent conditions in terms of price, quantity, quality, terms of payment and delivery period.
		
	18.2
	The imports and re-exportations of the Contractor and its subcontractors are subject to the customs procedure under articles 90 to 96 of the Crude Hydrocarbons Code.

		
	18.3
	The Contractor, its customers and their carriers shall have the right, throughout the Contract, to export freely at the point of export chosen for this purpose, free of any duties and taxes and, without prejudice to the foregoing, VAT will be at zero rate and at any time, the share of Hydrocarbons to which the Contractor is entitled in accordance with the provisions of the Contract, after deduction of all the deliveries made to the State. However, the Contractor undertakes at the request of the State, not to sell Mauritanian Hydrocarbons to countries declared hostile to the State.

ARTICLE 19: FOREIGN EXCHANGE
		
	19.1  
	The Contractor shall benefit from rights and shall be subject to the obligations under Title VII of the Crude Hydrocarbons Code regarding foreign exchange control and the protection of investments.

ARTICLE 20: BOOKKEEPING, MONETARY UNIT, ACCOUNTING
		
	20.1
	The Contractor shall maintain its records and books in accordance with the accounting regulations generally used in the international petroleum industry in accordance with the existing regulations and the Accounting Procedure defined in Appendix 2 of this Contract.

		
	20.2
	The records and books shall be maintained in Arabic, French or English and expressed in Dollars. They shall be materially supported by detailed documentation evidencing the expenditure and receipts of the Contractor under this Contract.

These records and books shall be used to determine the Petroleum Costs, the net profits of the Contractor subjected to the tax on business profit tax in accordance with articles 66 et al of the Crude Hydrocarbons Code. They shall include the Contractor's account showing the Hydrocarbon sales under this Contract.
For information purposes, the income statements and the balance sheets shall be maintained in Ouguiyas.
		
	20.3
	The original records and books indicated in article 20.1 above shall be maintained at the head office of the Operator, with at least one copy in Mauritania, until the Contractor is granted its first Exploitation Authorization. From the month during which the Contactor is granted the said Exploitation Authorization, the original records and books as well as the supporting documentation shall be maintained in Mauritania.

		
	20.4
	After notifying the Contractor in writing, the Minister shall have auditors of choice or his own agents examine and audit the records and books relating to the Petroleum Operations, in accordance with the conditions specified in the Accounting Procedure.  He shall have a period

of five (5) years following the end of a given Calendar Year to carry out the appraisals or audits relating to the aforementioned Calendar Year and to put to the Contractor his objections for any contradictions or errors observed during these examinations or audits. The Parties may agree to extend this period for another year if special circumstances warrant it. The Parties expressly acknowledge that a Calendar Year may only be audited once.
The audit and correction period shall be extended to the end of the second Calendar Year following the Calendar Year during which the first lifting of Hydrocarbons was performed, for the Petroleum Costs incurred before the first year of production of Hydrocarbons.
The Contractor shall be required to provide all necessary assistance to the people designated by the Minister for this purpose and facilitate their interventions. The reasonable appraisal and  audit expenditure shall be refunded to the State by the Contractor and shall be regarded as recoverable Petroleum Costs under the provisions of article 10.2 above.
		
	20.5
	The amounts due to the State or the Contractor shall be payable in Dollars or in another convertible currency selected by mutual agreement between the Parties.

In the event of a delay in payment, the amounts owed shall bear interest at the LIBOR rate +5% from the day when they should have been paid until the day of their payment, with monthly capitalization of interest if the delay exceeds thirty (30) days.

ARTICLE 21: GOVERNMENT PARTICIPATION
		
	21.1
	The State shall acquire, as at the Effective Date, through the National Company (Société Mauritanienne des Hydrocarbures) referred to in Article 6 of the Crude Hydrocarbons Code, an interest of ten percent (10%) in the rights and obligations of the Contractor in the Exploration Perimeter. Contractor entities, other than the National Company, shall finance this share in respect of all Petroleum Costs corresponding to the Exploration Petroleum Operations including appraisal / assessment of the discoveries made in the Exploration Perimeter and this for the duration of the Exploration Authorization referred to in article 3 above.

The National Company, as a Contractor entity, shall be entitled, pro rata to its participation, to the same rights and benefits and shall be subject to the same obligations as other members of the Contractor, subject to the provisions of this article 21.
		
	21.2
	The State shall have the option, through the National Company, to acquire a share in the Petroleum Operations in any Exploitation Perimeter stemming from the Exploration Perimeter, subject to the provisions of article 21.3 below.

In this case, the National Company shall have, in proportion to its participation, the same rights and shall be subject to the same obligations as the Contractor's as established in this Contract, subject to the provisions of this article 21.
For the avoidance of doubt, the participation of the State in the Exploration Perimeter shall continue to be financed by the Contractor entities, in accordance with article 21.1 above.
		
	21.3
	In the event the option to participate within an Exploitation Perimeter referred to in article 21.2 is exercised by the State, such State participation shall, in any event, be no less than ten percent (10%) and shall not exceed the maximum percentage of fifteen percent (15%).

		
	21.4
	No later than six (6) months from the date of grant of an Exploitation Authorization, the  Minister shall notify the Contractor in writing the decision of the State to exercise its option to participate, specifying the percentage which it wishes to take, within the limits provided for in article 21.3 above. Such participation will take effect from the date of receipt of notification of the exercise of the State's option.

For the avoidance of doubt, the State shall not participate in any Petroleum Operations in the entire Exploitation Perimeter resulting from the Exploration Perimeter unless it exercises the option referred to in article 21.2
		
	21.5
	As from the date of receipt of notification of its participation referred to in articles 21.2 to 21.4, the State shall fund the Petroleum Costs in the relevant Exploitation Perimeter proportionally to its participation.

The State will reimburse the Contractor entities, other than the National Company, in  accordance with article 21.6 below, in proportion to its participation, the Petroleum Costs not yet recovered relating to the relevant Exploitation Perimeter and which have been incurred from the Effective Date (save for exploitation Petroleum Costs (OPEX) and financial costs) up to the date of receipt of the notification referred to in article 21.4 above.
The Contractor shall be exempt from any tax or fee of any nature whatsoever in respect of such refunds or any capital appreciation thereon.
		
	21.6
	The State will transfer and will continue to give the Contractor forty five percent (45%) of the production share accruing to it in respect of its participation and in respect of its recovery of Petroleum Costs in accordance with article 10.2 above and the Accounting Procedure set out in Appendix 2, until the sum of these transfers or payments, valued at the provisions of articles 14 and 15 above is equal to one hundred and twelve percent (112%) of the Petroleum Costs referred to in the second paragraph of article 21.5 above.

		
	21.7
	For the avoidance of doubt, the reimbursement of Petroleum Costs stipulated in articles 21.5 and

21.6 above, does not address any part of the sums paid by the Contractor under articles 12 and 13 of this Contract.
		
	21.8
	The reimbursements made by the State under articles 21.5 and 21.6 above, will be paid in kind by the State, which will transfer to the Contractor entities, other than the National Company, a percentage of its quarterly share of the Hydrocarbons production stipulated in the articles, every Quarter, at the Delivery Point.

However, the State reserves the option to make such payments in Dollars, such payment to be made within ninety (90) days from the effective date of the participation referred to in article 21.4 above.
In the event of a failure to settle the full payment of such reimbursement within the deadline stipulated above, the repayment in kind referred to in articles 21.5 and 21.6 above will apply.
		
	21.9
	The practical arrangements for State participation stipulated in article 21.1 above as well as the rules and obligations applying to the Contractor entities, including the National Company, will be fixed in a joint operating agreement (JOA) to be entered into by these entities and which will enter into force no later than ninety (90) days from the Effective Date. Said joint operating agreement (JOA) will be amended whenever necessary and in particular to take into account, where applicable, the exercise by the State of its option under article 21.2 above.

		
	21.10
	The National Company on the one hand and other entities constituting the Contractor on the  other hand, will not be jointly and severally liable for obligations under this Contract. The National Company shall be individually responsible vis-à-vis the State for its obligations as provided in this Contract. Any failure by the National Company to perform any of  its  obligations shall not constitute a failure of the other entities constituting the Contractor and shall, in no case, be invoked by the State to terminate this Contract. The association of the National Company and the Contractor, shall not, under any circumstances, cancel or affect the rights of other entities constituting the Contractor to have recourse to the arbitration clause provided for  in article 28 below.

ARTICLE 22: ASSIGNMENT
		
	22.1
	The rights and obligations resulting from this Contract cannot be assigned to a third party, in whole or in part, by one of the entities constituting the Contractor without the prior approval of the Minister.

Each entity constituting the Contractor can assign freely and at any time, the whole or part of its interests arising from the Contract to an Affiliated Company or to another entity of the Contractor subject to a prior notification of the Minister.
If within three (3) months following notification to the Minister of a proposed assignment accompanied by all the necessary information to support the technical and financial capacities  of the assignee, as well as the terms and conditions of the said assignment, the Minister has not given notice of his justified refusal, the said assignment shall be deemed approved by the Minister.
From the date of approval, the assignee shall acquire the status of Contractor and shall have to meet the obligations prescribed to the Contractor by this Contract.
		
	22.2
	Additionally, the Contractor or any entity of the Contractor shall have to submit the following to the prior approval of the Minister:

		
	22.2.1
	Any project which would be likely to bring, in particular by means of a new distribution of the registered shares, a change in the direct control of the Contractor or of the entity in question of the Contractor. The following shall be considered elements of control of the Contractor, or of one of its entities: the distribution of the registered capital, the nationality of the majority shareholders, as well as the statutory provisions relating to the head office and to the rights and obligations associated with the registered shares in relation to the majority required in the general meetings. However, the assignments of registered shares to Affiliated Companies shall be free subject to a prior notice being given to the Minister for information purposes and to  the  application of the provisions of article 24.4 below if necessary. Assignments of registered shares to Third Parties, however, shall be subject to the approval of the Minister only if they have the effect of assigning more than thirty percent (30%) of the capital of the company.

		
	22.2.2
	Any project to take security over assets and facilities allocated to Petroleum Operations.

The projects referred to in subparagraphs 22.2.1 and 22.2.2 shall be notified to the Minister. If within three (3) months following the aforementioned notification, the Minister has not notified the Contractor, or one of the entities in question, of his reasonable refusal to the said projects, they shall be deemed approved.
		
	22.3
	Where the Contractor consists of several entities, it shall provide the Minister, within a month of its signing, a copy of the joint operating agreement (JOA) entered into by the entities, and of all amendments which may be made to that agreement, and shall specify the name of the company designated as "Operator" for the Petroleum Operations. Any change of Operator shall be subject to the approval of the Minister in accordance with the provisions of article 6.2 above.

		
	22.4
	Assignments carried out in breach of the provisions of this article 22 shall be null and void.

ARTICLE 23: OWNERSHIP, USE AND ABANDONMENT OF ASSETS
		
	23.1
	The Contractor will be the owner of the assets, furniture and buildings, which it shall have acquired for the purposes of the Petroleum Operations, and shall maintain their full use, as well as the right to export or to transfer them to Third Parties throughout the duration of the Contract, provided that the State can acquire, free of charge, at the request of the Minister, all or part of

the assets belonging to the Contractor which shall have been used for Petroleum Operations and whose costs of acquisition shall have been fully recovered in accordance with article 10 above, in the following cases:
		
	23.1.1
	Upon expiration, waiver or termination of this Contract;

		
	23.1.2
	in the event of relinquishment or expiry of an Exploitation Authorization, with respect to the works and facilities located in the Exploitation Perimeter and the equipment assigned exclusively to the Petroleum Operations in the Exploitation Perimeter in question, unless the Contractor wishes to use these assets for Petroleum Operations in other Exploitation Perimeters resulting from the Exploration Perimeter.

		
	23.2
	Upon expiry, surrender or termination of any Exploitation Authorization, the Contractor shall carry out all the operations necessary to rehabilitate the sites in accordance with a Rehabilitation Plan established and financed in accordance with the following terms:

		
	23.2.1
	At the end of the Quarter during which sixty percent (60%) of the recoverable Hydrocarbon reserves identified in the development program of a reservoir as referred to in article 9.5 shall have been recovered, the Contractor shall prepare and submit to the Minister for approval a Rehabilitation Plan of the site, in conformity with international petroleum industry standard practices, which it proposes to carry out at the end of the operations of production, as well as a corresponding budget. Each year, the Contractor shall make the necessary amendments to the Rehabilitation Plan to take account of the evolution of the technical and financial parameters. The revised Rehabilitation Plan shall become the new Rehabilitation Plan on which bases the payments on the receiving accounts shall be calculated;

		
	23.2.2
	The Rehabilitation Plan shall include a detailed description of the removal works and/or of the securitization of the infrastructures such as the rigs, the storage facilities, the wells, etc. necessary to the protection of the environment and people;

		
	23.2.3
	The Minister shall propose, in consultation with the Minister for the Environment, amendments or changes to the Rehabilitation Plan, by notifying the Contractor of said revisions and changes in writing to the Contractor with all useful justifications, within ninety (90) days following receipt of the said Plan. The provisions of article 5.2 above shall apply in respect of the adoption of said Plan. When the results achieved during the exploitation justify changes to the Rehabilitation Plan, the aforementioned Plan and the corresponding budget shall be modified in accordance with the  aforementioned approval and adoption procedure;

		
	23.2.4
	In order to finance the operations provided for in the Rehabilitation Plan, the Contractor shall open a receiver account at an international banking institution approved by the Minister, which it shall supply, starting from the Quarter following the adoption of the Rehabilitation Plan with annual deposits according to a schedule established in agreement with the Minister;

		
	23.2.5
	The funds deposited in the receiver account shall be deemed recoverable Petroleum Costs according to the procedures provided for in article 10.2 above, and shall be treated as deductible charges for the calculation of business profits tax. These funds,  as well as the interest charged on the receiver accounts, shall be assigned exclusively for the payment of expenditures related to the operations of the Rehabilitation Plan;

		
	23.2.6
	The Contractor shall give the Minister prior notice of one hundred and eighty (180) days of its intention to start the operations provided for in the Rehabilitation Plan, save if the Minister notifies the Contractor within thirty (30) days following the above mentioned notification that:

		
	(A)
	the exploitation of the reservoir on the Exploitation Perimeter in question shall hereinafter be continued by the State or a Third Party, or

		
	(B)
	the State wishes to preserve the facilities for duly justified reasons.

In either of the aforementioned cases (A) and (B) above, the receiver account shall be transferred to the transferee;
		
	23.2.7
	If the expenditure necessary to the execution of the Rehabilitation Plan would be greater than the amount available in the receiver account, the entire excess shall be the responsibility of the Contractor;

		
	23.2.8
	The Contractor shall pay to the State at the expiry of the Exploitation Authorization  the remaining sums in the receiver account which were not used for the performance of the Rehabilitation Plan and which have been recovered pursuant to article 10.2 above.

During the period of validity of the Contract, the wells recognized by mutual agreement as inappropriate for exploitation, may be taken over by the State, at the request of the Minister, for the purpose of converting them into water wells. The Contractor shall then leave the casings in place at the height requested, and possibly, the wellhead, and shall carry out at its expense the plugging of the well at a depth requested. In this case, the Contractor shall not be liable for the consequences of the conversion and the future use of the well.
ARTICLE 24: LIABILITY AND INSURANCE
		
	24.1
	The Contractor shall indemnify and compensate any person, including the State, for any damage or loss that the Contractor, its employees or its subcontractors and their employees may cause to any person, to the property or the rights of other people, caused by or resulting from Petroleum Operations.

In the event that State liability is sought as a result of or in relation to the Petroleum Operations, the Minister shall notify the Contractor who, in turn, will defend any claim in this respect and will indemnify the State for any amount which it would be liable for or for expenses related thereto that it would have paid or incurred in relation to such a claim.
		
	24.2
	The Contractor shall take out and maintain in force, and cause to be taken out and maintained in force by its subcontractors, all insurances relating to the Petroleum Operations of such forms and for such amounts used in the international petroleum industry, including (a) an insurance contract in respect of its general civil liability and covering the pecuniary consequences of the physical, material and immaterial damages during the or caused by the performance of Petroleum Operations, (b) an insurance contract covering the environmental risks related to the performance of Petroleum Operations, (c) an insurance contract covering industrial accidents and covering the financial consequences of industrial accidents which their personnel would be victims of, and (d) any other insurance contract whose subscription would be required by the regulations in force.

The insurances in question shall be taken out with well-known insurance companies, in accordance with applicable legislation.
The Contractor shall provide the Minister with certificates justifying the subscription to and the maintenance of the insurances referred to above.
		
	24.3
	When the Contractor consists of several entities, the duties and liabilities of the latter under the terms of this Contract shall be, subject to the provisions of article 21 above, joint, save for their obligations with respect to the tax on business profits.

		
	24.4
	If one of the entities of the Contractor transfers all or part of its rights and obligations under this Contract to an Affiliated Company, provided that the latter has lower technical and financial capacities, its parent company shall submit to the approval of the Minister an undertaking to guarantee the proper performance of the obligations arising from this Contract.

ARTICLE 25: TERMINATION OF THE CONTRACT
		
	25.1
	This Contract may be terminated, without compensation, in either of the following cases:

		
	25.1.1
	Serious and/or recurring breach by the Contractor of the provisions of this Contract, of the Crude Hydrocarbons Code, or of the existing regulations applicable to the Contractor;

		
	25.1.2
	Non-delivery of the banking guarantee in accordance with article 4.6;

		
	25.1.3
	Delay of over three (3) months with respect to the payment due to the State;

		
	25.1.4
	Discontinuation of development works with respect to a reservoir for six (6) consecutive months without approval of the Minister;

		
	25.1.5
	After the start of the production from a reservoir, stoppage of its exploitation for a duration of more than six (6) months decided by the Contractor without approval of the Minister;

		
	25.1.6
	Failure by the Contractor to comply, within the time prescribed, with an arbitral award delivered in accordance with the provisions of article 28 below;

		
	25.1.7
	Bankruptcy, judicial settlement or liquidation of the Contractor's assets.

		
	25.2
	Save as provided for in paragraph 25.1.7 above, the Minister shall declare the forfeiture  provided for in article 25.1 above only after having given formal notice to the Contractor, by registered letter with acknowledgment of delivery, to remedy the breach in question within three months (or within six (6) months with respect to the occurrences set forth in paragraphs 25.1.4 and 25.1.5 above) from the date of receipt of such notice.

Failure of the Contractor to remedy the breach stated in the notice within the time limit shall cause the termination of this Contract.
Any dispute as to whether any ground exists to justify the termination of the Contract declared by the Minister may be subject to arbitration in accordance with the provisions of article 28 below. In this case, the Contract shall remain in force until the enforcement of the arbitral award by the Parties.
Termination of this Contract shall automatically lead to the withdrawal of the Exploration Authorization and the Exploitation Authorizations currently in force.

ARTICLE 26: APPLICABLE LAW AND STABILITY OF THE CONDITIONS
		
	26.1
	This Contract shall be governed by the laws and regulations of the Islamic Republic of Mauritania, supplemented by the general principles of the international commercial law.

The provisions of this Contract shall prevail over any other contrary provisions.
		
	26.2
	The Contractor shall be subject at any time to the laws and regulations in force in the Islamic Republic of Mauritania.

		
	26.3
	The Contractor shall not be subject to any legislative or regulatory provision arising after the Effective Date of the Contract which could effectively directly or indirectly reduce the rights of the Contractor or increase its obligations under this Contract and under the legislation and the regulations in force at the effective date of this Contract, without prior agreement of the Parties.

However, it is agreed that the Contractor shall not, under the preceding paragraph, object to the application of the legislative and regulatory provisions of the general law adopted subsequently to the Effective Date of the Contract relating to the safety of people and protection of the environment or to employment law.

ARTICLE 27: FORCE MAJEURE
		
	27.1
	Any obligation resulting from this Contract which a Party would be totally or partially unable to comply with, save in respect to the payments of which it would be liable, shall not be deemed a breach of this Contract if the aforementioned non performance results from a Force Majeure event, provided, however, that there is a direct cause and effect relationship between the non performance and the Force Majeure event invoked.

		
	27.2
	For the purposes of this Contract, Force Majeure events shall mean any unforeseeable event which is irresistible or beyond the control of the Party invoking it, such as earthquakes, accidents, strikes, guerillas, terrorist acts, blockades, riots, insurrections, civil disorders, sabotages, acts of war, subjection of the Contractor to any law, regulation, or any other uncontrolled cause is to delay and render performance of its obligations, in whole or in part, temporarily impossible. The intention of the Parties is that Force Majeure shall be interpreted in accordance with international petroleum industry principles and practices.

		
	27.3
	When a Party considers that it is prevented from carrying out any of its obligations because of a Force Majeure event, it must immediately notify it in writing with the other Part by specifying all elements establishing the occurrence of a Force Majeure event and to take, in agreement with the other Party, all useful and necessary measures allowing the normal resumption of the performance of the obligations affected by the Force Majeure as of the suspension of the Force Majeure event.

The obligations other than those affected by Force Majeure shall continue to be performed in accordance with the provisions of this Contract.
		
	27.4
	If the execution of any of the obligations of this Contract is delayed due to a case of Force Majeure, the duration of the resulting delay, along with the time which may be necessary to make good any damage caused by the Force Majeure event, shall be added to the time stipulated in this Contract for the performance of the aforesaid obligation as well as to the duration of the Contract, the Exploration and Exploitation Authorizations currently in force.

ARTICLE 28: ARBITRATION AND EXPERTISE
		
	28.1
	In the event of any dispute between the State and the Contractor in respect of the interpretation or the application of the provisions of this Contract, the Parties shall endeavor to solve this dispute by amicable agreement.

The provisions of article 14.5 above apply to the Market price of Crude Oil.
The Parties may also agree to submit any other dispute of technical order to an expert appointed by mutual agreement or by the International Center of Technical Expertise of the International Chamber of Commerce ("ICC").
If, within ninety (90) days the notification of a dispute, the Parties do not reach an amicable settlement, or following the expert's recommendation, the dispute shall be submitted, at the request of the most diligent Party, to the ICC for arbitration in accordance the ICC Rules of Arbitration.
		
	28.2
	The seat of the arbitration shall be Paris (France). The language used during the procedure shall be the French language and the applicable law shall be Mauritanian law as well as the international law rules and practices applicable to the subject matter.

The arbitration tribunal shall be composed of three (3) arbitrators. No arbitrator shall be a national of the countries to which either Party belongs.
The arbitration award shall be final and irrevocable. It shall be binding on the Parties and immediately enforceable.

The expenses of the arbitration shall be supported equally by the Parties, subject to the decision of the tribunal concerning their apportionment.
The Parties give up formally and without reservation any right to challenge the aforementioned award, to hinder its recognition and enforcement by any means whatsoever.
		
	28.3
	The Parties shall conform to any conservatory measures prescribed by the arbitration tribunal. Without prejudice to the capacity of the arbitration tribunal to recommend conservatory measures, each Party shall request temporary or conservatory measures pursuant to the pre arbitration provisory settlement of the ICC.

		
	28.4
	A commencement of arbitral proceedings shall give rise to the suspension of the contractual provisions concerning the subject matter of the dispute, but all other rights and obligations of  the Parties under this Contract shall remain in force.

		
	28.5
	Subject to the provisions of article 21 above, the fees and expenses of the expert referred to in article 28.1 above shall be borne by the Contractor until the grant of the first Exploitation Authorization, and shall thereafter be borne equally by each Party. These costs shall be regarded as recoverable Petroleum Costs in accordance with article 10 of this Contract.

ARTICLE 29: CONDITIONS FOR APPLICATION OF THE CONTRACT
		
	29.1
	The Parties hereby agree to cooperate in all possible ways in order to achieve the object of this Contract.

The State shall facilitate the performance, by the Contractor of its operations by granting it all permits, authorizations, licenses and rights of access necessary for performance of the  Petroleum Operations, and by making available all the appropriate services for the said Operations of the Contractor and its employees and agents on the national territory.
Any request for permits, authorizations, licenses and rights referred to above shall be submitted to the Minister who shall transmit it, if necessary, to the relevant ministries and organizations, and shall ensure its follow-up. These requests shall not be rejected without legitimate reason and shall be promptly reviewed to avoid any undue delay of the Petroleum Operations.
		
	29.2
	All the notifications or other communications referring to the present Contract shall be made in writing and shall be regarded as having been validly given or made either as soon as they have been personally delivered and with acknowledgement of receipt to the a qualified representative of the Party concerned at its principal place of business in Mauritania, or shall have been delivered as registered mail with acknowledgment of delivery, or sent by facsimile confirmed  by letter and after confirmation of the reception by the recipient with the indication of residence indicated below:

For the Ministry:
Directorate of Crude Hydrocarbons ("Direction des Hydrocarbures Bruts") BP:4921
Nouakchott Mauritania
Tel/fax: +222.524 43 07
For the Contractor:
Tullow Mauritania Ltd
Ksar Rue 23-030, PO Box 1551 Nouakchott, Mauritania
Tel: +222 525 6143
Fax: +222 525 6182

The notifications shall be deemed made on the date of receipt by the recipient, in accordance with the acknowledgment of receipt.
		
	29.3
	The State and the Contractor may at any time change their authorized representatives or amend the addresses mentioned in article 29.2 above, subject to prior notice of at least ten (10) days.

		
	29.4
	This Contract may be modified only by mutual agreement between the Parties and by the conclusion of an amendment approved and coming into effect in accordance with the conditions provided in article 30 above.

		
	29.5
	Any waiver by the State of the performance of an obligation of the Contractor shall be made in writing and signed by the Minister, and no waiver shall be considered as a precedent if the State waives the exercise of any of its rights which it is entitled to under this Contract.

		
	29.6
	The headings in this Contract are inserted for convenience and reference purposes only and shall not in any manner define, restrict or describe the scope or object of the provisions of the Contract.

		
	29.7
	Appendices 1, 2 and 3 are an integral part of this Contract. In case of conflict, the provisions of this Contract shall prevail over those of the Appendices.

ARTICLE 30: EFFECTIVE DATE
After execution by the Parties, this Contract shall be approved by decree of the Council of Ministers and shall become effective as from the date of the publication of said decree in the Official Journal, the aforementioned date being indicated under the name of Effective Date and making the aforementioned Contract binding for the Parties.

In witness whereof, the Parties have signed this Contract in three (3) original copies.
In Nouakchott on  17 May 2012
For
THE ISLAMIC REPUBLIC OF MAURITANIA
Minister in charge of Petroleum, Energy and Mines

/s/ Taleb Abdivall

Mr Taleb Abdivall

For
TULLOW MAURITANIA LTD

/s/ David Lawrie

Mr David Lawrie

APPENDIX 1: EXPLORATION PERIMETER
Appended as an integral part of the Contract made between the Islamic Republic of Mauritania and the Contractor.
As at the Effective Date, the initial Exploration Perimeter covers a surface area deemed to be equal to thirteen thousand two hundred and twenty five (13,225) km2.
Co-ordinates given on the maps are defined below by reference to the following coordinates using WGS 1984 Geographic Coordinate Reference System.

MAP OF THE EXPLORATION PERIMETER

APPENDIX 2 : ACCOUNTING PROCEDURE
Appended as an integral part of the Contract made between the Islamic Republic of Mauritania and the Contractor.

ARTICLE 1 : GENERAL PROVISIONS
		
	1.1
	Purpose

The purpose of this Accounting Procedure is to establish the rules and methods of accounting for and controlling Petroleum Costs with a view to collecting such costs and with a view to sharing production in keeping with article 10 of the Contract, and the rules for determining the net profit earned by the Contractor for the purposes of calculating the tax on industrial and commercial profits.
		
	1.2
	Accounts and Records

The accounts, books and records of the Contractor shall be kept following the rules of the chart of accounts in effect in Mauritania and the practices and methods in use in the international oil industry.
In accordance with the provisions of article 20.2 of the Contract, the accounts, books and records of the Contractor shall be kept in French and denominated in Dollars.
Whenever it is necessary to convert the expenses and receipts paid or received in any other currency into Dollars, such expenses and receipts shall be evaluated on the basis of the  exchange rates quoted on the Paris foreign exchange market, according to terms established by mutual agreement.
		
	1.3
	Interpretation

The definitions of the terms included in this Appendix 2 are the same as those of corresponding terms in the Contract.
In addition to the meaning assigned to the term "Contractor" in the Contract, "Contractor" may at times refer to the Operator where the Contractor is made up of several entities and the Petroleum Operations in question are led by the Operator on behalf of all those entities, or at times to each of these entities where the obligations in question are borne by them individually.

ARTICLE 2 : PETROLEUM COSTS ACCOUNT
		
	2.1
	General Rules and Principles – Categories and Groups

		
	2.1.1
	The Contractor shall maintain a specific account set up and reserved for recording Petroleum Costs, which will record in detail the Petroleum Costs actually paid by the Contractor that entitle the Contractor to recovery pursuant to the provisions of this Contract and Appendix, the recovered Petroleum Costs whenever production is allocated for that purpose, and any amounts credited or charged to Petroleum Costs

		
	2.1.2
	The Petroleum Costs account must always make evident, in respect of the Exploration Perimeter and any Exploitation Perimeter arising from it:

		
	•
	The total Petroleum Costs paid by the Contractor since the Effective Date;

		
	•
	The total amount of recovered Petroleum Costs;

		
	•
	Amounts    mitigating    or    subtracted    from    Petroleum    Costs    and    the corresponding operations;

		
	•
	The amount of Petroleum Costs remaining to be recovered.

		
	2.1.3
	The Petroleum Costs account shall record in the debit column all expenses actually paid and directly related to the Petroleum Operations, pursuant to the Contract and provisions of this Appendix that should be allocated to Petroleum Costs.

These expenses that have been paid must be:
		
	•
	the actual responsibility of the Contractor;

		
	•
	necessary for the satisfactory conduct of Petroleum Operations;

		
	•
	justified and substantiated by supporting documentation for effective oversight by the Ministry.

		
	2.1.4
	The Petroleum Costs account shall record in the credit column the amount of recovered Petroleum Costs as these are recovered, together with the revenue and proceeds of all kinds, whenever these are collected, that may be deducted from or offset against the Petroleum Costs.

		
	2.1.5
	Original copies of contracts, invoices and all other supporting documentation for the Petroleum Costs must be kept at the disposal of the Ministry and presented upon any Ministry request.

		
	2.1.6
	Petroleum Costs shall be recovered:

		
	(A)
	in accordance with nature of the costs order of priority:

		
	•
	Exploitation Petroleum Costs;

		
	•
	Development Petroleum Costs;

		
	•
	Exploration Petroleum Costs;

as these Petroleum Cost categories are defined below in articles 3.2, 3.3 and
3.4 of this Appendix.
		
	(B)
	In accordance with the geographical order of priority:

		
	•
	The Petroleum Costs incurred in an Exploitation Perimeter shall be first to be recovered from the production resulting from it, in the order specified in paragraph (A) above.

		
	•
	The Petroleum Costs incurred outside of an Exploitation Perimeter shall be second to be recovered from the production resulting from it, in the order specified in paragraph (A) above.

		
	•
	The Petroleum Costs incurred within the Exploitation Perimeters,  other than the one in question, will be recovered before the Petroleum Costs incurred in the Exploration Perimeter in the order specified in paragraph (A) above.

Each entity that makes up the Contractor is entitled to recover its Petroleum Costs as soon as production begins.
		
	2.1.7
	The Petroleum Costs account must be true and sincere; it must be set up, and the books kept and presented such that the related Petroleum Costs may be easily grouped together and identified, in particular with regards to expenses for:

		
	•
	exploration,

		
	•
	appraisal,

		
	•
	development,

		
	•
	production of Crude Oil,

		
	•
	production of Natural Gas,

		
	•
	removal of Hydrocarbons and storage,

		
	•
	related, subsidiary or secondary activities, identifying each;

and any amounts paid into a receiver account in accordance with article 23.2 of the Contract.
		
	2.1.8
	For each of the activities below, the Petroleum Costs account must plainly identify the expenses for:

		
	(A)
	Tangible fixed assets, especially those connected with the acquisition, creation, construction or completion of:

		
	•
	land,

		
	•
	buildings (workshops, offices, shops, housing, laboratories, etc.);

		
	•
	warehouse loading facilities,

		
	•
	access roads and general infrastructure,

		
	•
	means of transporting Hydrocarbons (drainage systems, tankers, etc.),

		
	•
	general equipment,

		
	•
	special equipment and facilities,

		
	•
	transportation vehicles and civil engineering devices,

		
	•
	equipment and tools (the normal length of use of which is more than one year),

		
	•
	production wells,

		
	•
	other tangible fixed assets.

		
	(B)
	With respect to intangible fixed assets, specifically those related to:

		
	•
	geological and geophysical field work, laboratory work, studies, reprocessing, etc.),

		
	•
	non-productive exploration wells which are not used in relation to the development plan,

		
	•
	other intangible fixed assets.

		
	(C)
	Consumable equipment and material.

		
	(D)
	Operational expenditures:

These are various kinds of expenses, excluding the general expenses referred to below, that are not included in paragraphs (A) to (C) above of this article
2.1.8    and directly linked to the study, conduct, and performance of the Petroleum Operations.
		
	(E)
	Non-operational expenditures or general expenses. These are expenses borne by the Contractor in relation to the Petroleum Operations and directly linked  to the management and administration of such operations.

		
	2.1.9
	For each expense category listed or defined above in paragraphs (A) to (D) of article 2.1.8, the Petroleum Costs account must also plainly identify payments made to:

		
	•
	the Operator for goods and services it provided;

		
	•
	entities that make up the Contractor, for goods and services they themselves provided;

		
	•
	Affiliated Companies;

		
	•
	Third Parties.

		
	2.2
	Analysis of expenses and allocation methods

		
	2.2.1
	The Contractor's usual principles of allocation and methods of analysis in terms of distribution and repayment must be applied to all its activities evenly, fairly, and without discrimination. These principles must be disclosed to the Ministry at the Ministry's request.

The Contractor shall inform the Ministry of any amendment it may make to its principles and methods.
		
	2.2.2
	Tangible assets built, manufactured, created or realised by the Contractor as part of the Petroleum Operations and effectively allocated to such operations, together with day- to-day maintenance, shall be recorded at their construction, manufacturing, creation or realisation cost price.

		
	2.2.3
	The equipment, material, and consumable goods required for the  Petroleum Operations other than those referred to above are:

		
	(A)
	those either acquired for immediate use, subject to shipping time and, if necessary, temporary storage by the Contractor (without being mixed together with its own inventory). For the purposes of allocation to Petroleum Costs, such equipment, material and consumable goods acquired by the Contractor shall be valued at the delivered price where they are used (delivered price in Mauritania)

The delivered price in Mauritania includes the following items, allocated according to the cost accounting methods of the Contractor:
		
	•
	the purchase price after deductions and rebates,

		
	•
	the costs of transportation, insurance, transit, handling and customs (and other possible duties and taxes) from the store of the vendor to the store of the Contractor or place of use, whichever is applicable,

		
	(B)
	or those provided by the Contractor from its own inventory.

		
	•
	New equipment and materials, together with consumable materials, provided by the Contractor from its own inventory shall be valued, for the purposes of allocation, at the last average weighted cost price, calculated in accordance with the provisions of paragraph (A) of this article 2.2.3, hereinafter referred to as the "net cost".

		
	•
	The depreciable materials and equipment which have already been used and that were provided by the Contractor from its own inventory or that for its other activities, including its Affiliated Companies, shall be valued for allocation to Petroleum Costs on the following scale:

		
	•
	New Material (State "A"): New material which has never been used: 100% (one hundred per cent) of the net cost.

		
	•
	Material in good condition (State "B"): Second-hand material in good condition still capable of being used for its initial purpose without repairs: 75% (seventy five per cent) of the net cost of the new material as defined above.

		
	•
	Other used material (State "C"): Material which is capable of being used for its initial purpose, but only after repairs and reconditioning:

50% (fifty per cent) of the net cost of the new material as defined above.
		
	•
	Material in poor condition (State "D"): Material which is not capable of being used for its initial purpose, but which may be used for other services: 25% (twenty five per cent) of the net cost of the  new  material as defined above.

		
	•
	Scrap and rejects (State "E"): Material incapable of being used and repaired: current scrap price.

		
	2.2.3.1
	The Operator does not guarantee the quality of the new material referred to above beyond the guarantee provided by the manufacturer or seller of the material in question. In the event of defective new material, the Contractor shall endeavour to obtain reimbursement or compensation from the manufacturer or from the seller; however, the corresponding credit shall only be recorded upon receipt of reimbursement or compensation.

		
	2.2.3.2
	In the event the used material referred to above is defective, the Contractor shall  credit the Petroleum Costs account with the sums it has effectively collected as compensation.

		
	2.2.3.3
	Use of materials, equipment and facilities belonging to the Contractor itself.

A rental amount for the material, equipment and facilities belonging to the Contractor and used temporarily for the Petroleum Operations shall be allocated which covers
		
	(A)
	Maintenance and repairs.

		
	(B)
	A share, proportional to the amount of time used for Petroleum Operations, of the depreciations calculated by applying a rate to the historical cost price (non- revalued initial cost) that is not greater than the one set out in article 4.2 below.

		
	(C)
	Transportation and running expenses and all other expenses which are not already allocated elsewhere.

The price invoiced excludes all charges arising out of the surplus owed, in particular, because of a fixed asset or because of abnormal or cyclical suspension of use of said equipment and facilities for the Contractor's activities other than the Petroleum Operations.
In any event, the costs allocated to Petroleum Costs for the use of such equipment and facilities shall not exceed those which would normally be incurred in Mauritania by third party companies, nor result in multi-stage allocations of costs and profits.
The Contractor shall keep a detailed statement of materials, equipment and facilities that belong to it and which are allocated to the Petroleum Operations, providing the description and identification number of each item, the related maintenance and repair charges and the dates on which each item was allocated and withdrawn from  Petroleum Operations. This statement must be received by the Ministry no later than 1 March of each year.
		
	2.3
	Operating expenses

		
	2.3.1
	These expenses shall be allocated to Petroleum Costs at the cost price for the Contractor of relevant services or costs, as the price is recorded in the Contractor's accounts and as it is determined pursuant to the provisions of this Appendix. These expenses include, in particular:

		
	2.3.2
	Fees, duties and taxes incurred and paid in Mauritania under applicable regulations  and under the provisions of the Contract which are directly linked to the Petroleum Operations.

The surface area royalty, business/professional income tax and the bonuses referred to in articles 11 and 13 of the Contract respectively, or any other charge for which recovery is excluded by a provision of the Contract or of this Appendix, shall not be allocated to Petroleum Costs.
		
	2.3.3
	Costs of staff and staff surroundings

		
	2.3.3.1
	Principles

Insofar as they correspond to actual work and services and are not excessive in proportion to the extent of responsibilities undertaken, the work performed  and usual practices, these costs include all payments made for the use and the surroundings of staff working in Mauritania and recruited for the execution and performance or oversight of the Petroleum Operations. These staff members include people hired locally by the Contractor and those made available to the Contractor by Affiliated Companies, other Parties or Third Parties.
These expenses are also deductible when they relate to a permanent establishment of the Contractor abroad when the business of this permanent establishment is carried out exclusively for the Contractor's Petroleum Operations in Mauritania.
		
	2.3.3.2
	Included Items.

Costs for staff and surroundings include, on one hand, all amounts paid or reimbursed for the above-mentioned staff pursuant to laws or regulations, collective bargaining agreements, employment contracts and regulations specific to the Contractor and, on the other hand, expenses paid for the staff's environment, in particular:
		
	(1)
	Wages and activity or holiday pay, overtime, bonuses and other compensation;

		
	(2)
	Related employer's contributions arising from laws and regulations, collective bargaining agreements and terms of employment;

		
	(3)
	Costs paid for staff surroundings; these include in particular:

		
	•
	Costs of medical and hospital care, social contributions and all other specific employee costs of the Contractor,

		
	•
	Costs of transportation of employees, their families and personal property, when these costs are assumed by the employer pursuant to the employment contract,

		
	•
	Staff housing costs, including the related services when these are assumed by the employer pursuant to the employment contract (water, gas, electricity, telephone, etc.),

		
	•
	Allowances paid upon arrival and departure of employees,

		
	•
	Costs of administrative staff performing the following  services: management and recruitment of local personnel, management of expatriate personnel, professional training, maintenance and operations of offices and lodgings, when these costs are not included in general expenses or other headings,

		
	•
	Costs of renting or occupying offices, costs of collective administrative services (secretariat, furniture, office equipment, telephone, etc.).

		
	2.3.3.3
	Allocation conditions.

Staff costs correspond either to:
		
	(4)
	Direct costs allocated to the corresponding Petroleum Costs account,  or

		
	(5)
	Indirect or shared costs allocated to the Petroleum Costs account using cost accounting data determined pro rata to the time dedicated to Petroleum Operations.

		
	2.3.4
	Expenses paid for services provided by Third Parties, entities making up the  Contractor and Affiliated Companies, including in particular:

		
	2.3.4.1
	Services provided by Third Parties and the Parties, shall be allocated at the accounting cost price for the Contractor, i.e. at the price charged by the suppliers, including all possible duties, taxes and supplemental charges; all discounts, reductions, refunds and rebates obtained either directly or indirectly by the Contractor shall be deducted from these cost prices.

		
	2.3.4.2
	The technical assistance provided to the Contractor by its Affiliated Companies; this consists of services provided for the benefit of Petroleum Operations by the departments and services of those Affiliated Companies which carry out the following activities:

		
	•
	Geology,

		
	•
	Geophysics,

		
	•
	Engineering,

		
	•
	Drilling and production,

		
	•
	Fields and study of reservoirs,

		
	•
	Economic surveys,

		
	•
	Technical contracts,

		
	•
	Laboratories,

		
	•
	Purchases and transit (save for expenses included in those referred to in 2.2.3 above),

		
	•
	Drawings,

		
	•
	Certain administrative and legal activities related to well- defined or occasional studies or works and which are not part of the current and regular activity, nor of the legal activity referred to in 2.3.8 below.

Technical assistance shall essentially be the subject of service contracts agreed between the Contractor and its Affiliated Companies.
Expenses for technical assistance provided by the Affiliated Companies shall be allocated at the cost price for the Affiliated Company providing the assistance. This cost price includes, in particular, personnel costs, the costs of consumable materials and goods used, expenses for repairs and maintenance, insurance, taxes, a share of the depreciation of general investments calculated according to the original acquisition value or construction value of the relevant assets and all other expenses incurred as a result of those services which have not been allocated elsewhere.

The price excludes, however, all charges relating to additional costs due, in particular, to a fixed asset or to an abnormal or cyclical use or suspension of use of materials, facilities and equipment by the Affiliated Company.
In any event, the expenses relating to these services shall not exceed those which are normally required, for similar services, by companies providing technical services and independent laboratories. They must not result in multi-stage allocations of costs and profits.
In addition, all these services, including analytical studies, must be supported with reports presented upon request of the Ministry. They must be requested through written orders issued by the Contractor,  and be recorded in detailed invoices thereafter.
		
	2.3.4.3
	When the Contractor uses material, equipment or facilities for Petroleum Operations, which belong exclusively to an entity forming part of the Contractor, it shall allocate to Petroleum Costs, pro rata to the length of use, the corresponding charges determined  using  its usual methods and pursuant to the principles defined in 2.3.4.2 above. This charge includes, in particular, a share of:

		
	•
	the annual depreciation calculated on the original "delivered price in Mauritania" defined in 2.2.3 above;

		
	•
	the cost of commissioning, insurance, day-to-day maintenance, financing and periodical revisions;

		
	•
	storage costs;

		
	•
	storage and handling costs (staffing costs and service operating costs) shall be allocated to Petroleum Costs pro rata to the exit value of the registered goods;

		
	•
	transportation costs: the expenses for the transportation of personnel, material, or equipment assigned and allocated to the Petroleum Operations and which have not already been covered by the paragraphs above or which are not integrated in the cost price, shall be allocated to Petroleum Costs.

		
	2.3.5
	Damage and losses affecting common goods

All expenses which are necessary for the repair and reconditioning of goods following damage or losses as a result of fire, flooding, storms, thefts, accidents or any other cause, shall be allocated under the principles defined in this Appendix.
The sums recovered from insurance companies for those damages and losses shall be credited to the Petroleum Costs accounts.
		
	2.3.6
	Maintenance expenses

Maintenance expenses (day-to-day maintenance and heavy maintenance) of the material, equipment and facilities assigned to the Petroleum Operations shall be allocated to Petroleum Costs at their cost price.
		
	2.3.7
	Insurance premiums and costs relating to the recovery of claims The following shall be allocated to Petroleum Costs:

		
	(A)
	insurance premiums and costs relating to compulsory and contractual  insurance contracted to cover the Hydrocarbons extracted, the persons and assets assigned to the Petroleum Operations or to cover the Contractor's civil liability to Third Parties within the scope of said operations;

		
	(B)
	expenses borne by the Contractor as a result of a claim arising in the context  of Petroleum Operations, for the settlement of any loss, claim, damage and other ancillary expenses that are not covered by the insurance policy;

		
	(C)
	expenses paid for the settlement of losses, claims, damages or legal actions not covered by insurance and for which the Contractor is not required to take out insurance. The amounts recovered from insurance pursuant to policies or guarantees shall be accounted for in accordance with article 2.6.2(G) below;

		
	2.3.8
	Legal expenses

The expenses pertaining to the legal costs of proceedings, enquiries and settlement of litigation and claims (demands for reimbursement or compensation) arising in the context of the Petroleum Operations or which are necessary to protect or recover the assets, including, in particular, the fees of legal advisors or experts, court fees, costs of investigating or of securing evidence, as well as the amounts paid to settle or make final payment pursuant to any litigation or claim shall be allocated to Petroleum Costs.
When such services are performed by the Contractor's staff, remuneration corresponding to the time and the costs actually incurred shall be included in the Petroleum Costs. The price so allocated shall not be greater than that which would have been paid to Third Parties for identical or similar services.
		
	2.3.9
	Interest, bank and financial charges

Any interest and bank charges paid by the Contractor for loans contracted with Third Parties or for advances and loans obtained from Affiliated Companies shall be allocated to Petroleum Costs, insofar as such advances and loans are being used to finance the Petroleum Costs only for the Petroleum Operations to develop a commercial deposit (excluding exploration and evaluation Petroleum Costs), and not exceeding seventy per cent (70%) of the total amount of such development Petroleum Costs. Such advances and loans must be submitted for Ministry approval.
If such financing is obtained from the Affiliated Companies, the admissible interest rate cannot exceed the rates normally charged on international financial markets for similar loans.
		
	2.3.10
	Exchange losses

Exchange losses linked to borrowings and debts of the Contractor under the conditions set out in the Contract shall be allocated to Petroleum Costs.
		
	2.3.11
	Payments for expenses incurred as part of inspections and audits carried out by the Ministry, in accordance with the provisions of the Contract, shall be included in the Petroleum Costs.

		
	2.3.12
	Payments for other expenses, including expenses paid to Third Parties for the transportation of Hydrocarbons to the Delivery Point shall be included in the  Petroleum Costs. These are any and all payments made or losses suffered that are connected with or required for the proper performance of Petroleum Operations and for which the allocation to Petroleum Costs is not excluded by the provisions of the Contract or Appendix, provided that they cannot be understood as costs that the Ministry bars from deduction, and provided that these expenses have been approved  by the Ministry. In addition, unless otherwise provided by law, the Contractor may, if it wishes, make economic, social, cultural, and athletics contributions, but absolutely may not contribute to any political financing. These contributions shall be debited from the Petroleum Costs account.

		
	2.4
	General Expenses

Those expenses relate to Petroleum Costs which have not been taken into account elsewhere. They concern:
		
	2.4.1
	Expenses paid outside Mauritania

The Contractor will add a reasonable amount as overheads spent abroad which are necessary for the realization of Petroleum Operations to be borne by the Contractor and its Affiliates, such amounts representing the cost of services performed for the benefit of such Petroleum Operations.
The amounts for these expenses must be justified by accounting documents and copies of the reports pertaining to the services and work performed; any fixed allocation must be supported by relevant explanations together with the rules applied to make the allocation.
The amounts charged will be provisional amounts determined on the basis of the experience of the Contractor and will be adjusted annually based on actual costs incurred by the Contractor, shall not, in any case, exceed the following limits:
		
	•
	before the first Exploitation Authorisation is granted: three per cent (3%) of Petroleum costs excluding general expenses

		
	•
	Once the first Exploitation Authorisation has been granted: one and one-half per cent (1.5%) of the Petroleum Costs excluding financial expenses and general expenses.

These percentages apply to expenses other than general expenses which are allocated as Petroleum Costs for the Calendar Year in question.
		
	2.4.2
	Expenses paid in Mauritania.

These expenses cover payments for the following activities and services:
		
	•
	General management and general secretariat;

		
	•
	Information and communications;

		
	•
	General administration (legal services, insurance, tax services, computing services);

		
	•
	Accounting and budget;

		
	•
	Internal audit.

They must correspond to services actually required for the needs of the Petroleum Operations and to services actually performed in Mauritania by the Contractor or the Affiliated Companies. They must not result in multi-stage allocations of costs and profits.
The amounts for these expenses are either actual amounts when for direct expenses, or amounts resulting from allocations when for indirect expenses. In the latter case, allocation rules must be clearly defined and the amounts justified by management accounting.
		
	2.5
	Expenses Not Attributable To Petroleum Costs

Payments made in respect of costs, charges or expenses not directly attributable to the  Petroleum Operations, payments which this Contract or Appendix exclude from deduction or allocation, or those not required for the needs of the said Petroleum Operations shall not be taken into account and cannot be recovered.
These are principally payments made for:
		
	2.5.1
	Capital increase costs;

		
	2.5.2
	Costs for activities conducted beyond the Delivery Point, in  particular  marketing costs;

		
	2.5.3
	Costs relating to the period prior to the Effective Date;

		
	2.5.4
	External auditing costs paid by the Contractor within the scope of the particular relationship between the entities that make up the Contractor;

		
	2.5.5
	Expenses borne for meetings, studies and works performed within the framework of the relationship between the entities that make up the Contractor, the purpose of which is not the satisfactory performance of Petroleum Operations;

		
	2.5.6
	Interest, and bank and financial charges other than those for which allocation is provided in the article 2.3.9 of this Appendix.

		
	2.5.7
	Exchange losses which may be incurred other than those for which allocation is permitted by the Contract.

		
	2.5.8
	Exchange losses which represent loss of earnings resulting from risks originally linked to working capital and self-financing.

		
	2.6
	Items to be credited to the Petroleum Costs Account

In particular, the following are to be credited to the Petroleum Costs Account:
		
	2.6.1
	The income from the quantities of Hydrocarbons allocated to the Contractor in accordance with the provisions of article 10.2 of the Contract, calculated on the basis of the related Market price as defined in articles 14 and 15 of the Contract.

		
	2.6.2
	All other revenue, income and related, subsidiary or ancillary profits or income  directly or indirectly linked to the Petroleum Operations received by the Contractor, in particular, when arising out of:

		
	(A)
	The sale of related substances;

		
	(B)
	The transportation and storage of products owned by Third Parties in the facilities assigned to the Petroleum Operations;

		
	(C)
	Reimbursements from insurers;

		
	(D)
	Amounts paid for settlements or final judgements;

		
	(E)
	Disposals or leases of assets already declared in the Petroleum Costs;

		
	(F)
	Rebates, reductions and refunds obtained where they have not been allocated as deductible from the cost price of assets to which they relate;

		
	(G)
	All other revenue or income similar to those listed above shall be deducted from the Petroleum Costs.

		
	2.7
	Material, Equipment and Facilities Sold By the Contractor.

		
	2.7.1
	Material, equipment, facilities and consumables that have not been or cannot be used shall be withdrawn from the Petroleum Operations and shall be either down-graded or considered as "scrap and rejects", or re-purchased by the Contractor for its own needs, or sold to Third Parties or to Affiliated Companies.

		
	2.7.2
	In case of a sale to entities making up the Contractor or their Affiliated Companies, prices shall be determined in accordance with the provisions of article 2.2.3 (B) of this Appendix or, if they are higher than those resulting from the application of the said article, shall be agreed between the Parties. When the use of the asset in question for Petroleum Operations has been temporary and does not justify the price reductions set out in the abovementioned article, the asset shall be valued so that a net charge corresponding to the value of the service provided is deducted from the Petroleum Costs.

		
	2.7.3
	Material, equipment, facilities and consumables sold by the Contractor to Third  Parties shall be sold at the best price possible. All reimbursement or compensation granted to a purchaser for defective material shall be debited from the Petroleum Costs account to the extent that and at the time they are actually paid by the Contractor.

		
	2.7.4
	When an asset is utilised for the benefit of a Third Party or of the Contractor for operations not covered by the Contract, the corresponding royalties shall be calculated at rates which, save with Ministry approval, cannot be calculated on a basis which is less than the cost price.

		
	2.8
	Revenue, income and related, subsidiary or ancillary profits or income directly or indirectly linked to the Petroleum Operations, in particular, when arising out of:

ARTICLE 3 : CALCULATION OF THE RATIO "R"
		
	3.1
	For the purpose of calculating the ratio "R" for the application of article 10.3 of the Contract,  the Petroleum Costs falling within the scope of the calculation of the Net Cumulated Income and Cumulated Investments shall be categorised and recorded separately under the following categories.

		
	3.2
	Exploration Petroleum Costs

These are the Petroleum Costs relating to the Petroleum Operations carried out for exploration purposes within an Exploration Perimeter incurred pursuant to the provisions of the Contract, including but not limited to the following:
		
	3.2.1
	Geophysical, geochemical, paleontological, geological, topographical and seismic surveys together with all related surveys and their interpretations;

		
	3.2.2
	Core drilling, exploration wells, appraisal wells and water wells;

		
	3.2.3
	Cost of labour, equipment, supplies and services pertaining to the drilling of exploration wells or wells drilled to appraise a discovery that do not become  producing wells;

		
	3.2.4
	Equipment used exclusively for the purposes set out in articles 3.2.1, 3.2.2 and 3.2.3 above, including access roads and the geological and geophysical information acquired;

		
	3.2.5
	The share of the Petroleum Costs for the construction of facilities and installations, general expenses covered by the Exploration Petroleum Costs as calculated for the fair allocation of all of the Petroleum Costs (including general expenses) between the Exploration Petroleum Costs and all of the Petroleum Costs excluding general expenses;

		
	3.2.6
	All other Petroleum Costs incurred for exploration purposes between the Effective Date and the date of commencement of the production of commercially viable Hydrocarbons not included in article 3.3 below.

		
	3.3
	Development Petroleum Costs

These are the Petroleum Costs incurred with respect to the Petroleum Operations carried out for development purposes relating to an Exploitation Authorization, including but not limited to the following:
		
	3.3.1
	Development and production drilling, including wells drilled to inject water or gas with a view to increasing the rate of recovery of Hydrocarbons and those intended for the conservation and storage of gas;

		
	3.3.2
	Wells completed by the installation of casing or equipment after a well has been drilled for the purpose of completing it as a producing well or a well for injecting

water or gas with a view to increasing the rate of recovery of Hydrocarbons and those intended for the conservation and storage of gas;
		
	3.3.3
	Equipment costs relating to production, transportation and storage upstream of the Delivery Point, such as pipelines, flow-lines, treatment and production units, equipment at the wellhead, underwater equipment, stimulated recovery systems, offshore platforms, floating production units and/or floating production and storage units (FPO and FPSO), storage units, export terminals, port facilities and related installations and access roads relating to production activities;

		
	3.3.4
	Engineering and design studies relating to the equipment listed in article 3.3.3;

		
	3.3.5
	The portion of the construction Costs and general expenses covered by the Development Petroleum Costs, as shown by the proportion of the Development Petroleum Costs as compared to the total Petroleum Costs without general expenses;

		
	3.3.6
	Financial fees relating to the financing of the Development Petroleum Costs are excluded.

		
	3.4
	Exploitation Petroleum Costs

These are the Petroleum Costs incurred in an Exploitation Perimeter after the commencement date of the production of commercially viable Hydrocarbons that are not Exploration Petroleum Costs, Development Petroleum Costs or general expenses.
The Exploitation Petroleum Costs include but are not limited to the provisions paid to cover losses or expenses including the provision for the Program of Rehabilitation, which was paid in full into the receiver account established to finance the rehabilitation of the site pursuant to article 23.2 of the Contract.
The portion of the general expenses not allocated to Exploration Petroleum Costs or Development Petroleum Costs shall be included in the Exploitation Petroleum Costs.
		
	3.5
	All depreciation of fixed assets carried out for the calculation of the taxable profit pursuant to the provisions of article 4 below shall not be treated as Petroleum Costs and accordingly shall not be included in the calculation of the Ratio "R".

ARTICLE 4 : DEDUCTIBLE EXPENSES FOR THE CALCULATION OF THE TAX ON INDUSTRIAL AND COMMERCIAL PROFITS
		
	4.1
	Deductible expenses

Pursuant to Article 70 of the Crude Hydrocarbons Code, subject to the limits set out in this Accounting Procedure and excluding the non-deductible expenses listed in Title VI of the Crude Hydrocarbons Code and those expenses that are not deductible from the Petroleum Costs listed in article 2.5 above of this Appendix, the deductible expenses for the calculation of the tax on industrial and commercial profits shall consist in the following items:
		
	•
	the Exploitation Petroleum Costs, as defined in accordance with the provisions of this Accounting Procedure;

		
	•
	general expenses, pursuant to the provisions of article 2.4 above of this Appendix;

		
	•
	depreciation on the fixed assets comprising the Development Petroleum Costs, pursuant to the provisions of article 4.2 below;

		
	•
	interest, bank charges and financial fees, pursuant to the provisions of article 2.3.9 above;

		
	•
	losses of equipment or materials resulting from destruction or damage, unrecoverable debts and compensation paid to third parties for losses (save where such losses have been caused by the actions or failure to act of the Contractor);

		
	•
	reasonable and justified provisions paid against specifically defined losses or expenses and made likely by current events;

		
	•
	the unaudited amount of losses relating to previous years up to a limit of five (5) years following the year in which the losses were made.

		
	4.2
	Depreciation of fixed assets

Fixed assets constructed by the Contractor and required for the Petroleum Operations shall be depreciated using the straight-line depreciation method.
The minimum term of depreciation of the fixed assets shall be:
		
	•
	ten (10) Calendar Years for fixed assets comprising the pipeline for the transportation of Hydrocarbons;

		
	•
	five (5) Calendar Years for all other fixed assets.

The depreciation period shall commence in the Calendar Year during which the fixed assets are constructed or in the year in which the fixed assets first enter normal service, if later, and on a pro rata basis for the first Calendar Year.
		
	4.3
	Exploration Petroleum Costs

The Exploration Petroleum Costs incurred by the Contractor within the Exploration Perimeter, including, in particular, geological and geophysical survey expenses and expenses pertaining to exploration well drilling and the evaluation of discoveries (with the exception of productive wells, which shall be recorded as fixed assets pursuant to the provisions of article 4.2 above of this Appendix), shall be treated as deductible expenses in their entirety from the first year in which they are incurred or may be depreciated using the depreciation method selected by the Contractor.

ARTICLE 5 : INVENTORIES
		
	5.1
	Frequency

The Contractor shall keep a permanent inventory of all materials used in the Petroleum Operations both in quantity and value and shall proceed at reasonable intervals, at least once a year, with such physical inventories as may be required by the Parties.
		
	5.2
	Notices

A written notice of intent to conduct a physical inventory shall be sent by the Contractor at least ninety (90) days before the commencement of said inventory, such that the Ministry and the entities constituting the Contractor may be represented, at their expense, during the inventory operations.
		
	5.3
	Information

In the event that the Ministry or any entity constituting the Contractor is not represented during an inventory, said Party shall be bound by the inventory established by the Contractor, which shall then furnish to such Party a copy of said inventory.

ARTICLE 6 : AUDIT REPORTS ON WORKS CARRIED OUT – STATEMENTS - ACCOUNTS.
		
	6.1
	Principles

In addition to the statements and information to be supplied as provided elsewhere, the Contractor shall furnish the Ministry, under the conditions, in the format and within the timeframes set out below, with details of the operations and works carried out, as recorded in

the accounts, documents, reports and statements kept or established by the Contractor and relating to the Petroleum Operations.
		
	6.2
	Report on variations of investment accounts and stocks of equipment and consumable materials

This report must reach the Ministry no later than the fifteenth (15th) day of the first month of each Quarter.
It shall contain, inter alia, details of the acquisitions and creations of fixed assets, equipment and consumable materials necessary to the Petroleum Operations, per field and per large categories, as well as the withdrawals of these goods (assignment, loss, destruction, removal from service) for the previous Quarter.
		
	6.3
	Report on quantities of Crude Oil and Natural Gas transported each month

This report must reach the Ministry no later than the fifteenth (15th) day of each month.
It shall indicate, per field, the quantities of Crude Oil and Natural Gas that were transported during the previous month between the field and the point of export or delivery and shall identify the pipelines used and transportation costs paid when transportation was provided by a Third Party. It shall also indicate the allocation between the Parties of the products transported.
		
	6.4
	Report on the recovery of Petroleum Costs

This report must reach the Ministry no later than the fifteenth (15th) day of each month.
It shall present the breakdown of the Petroleum Costs account for the previous month and show, in particular:
		
	•
	The Petroleum Costs remaining to be recovered at the end of the previous month;

		
	•
	The Petroleum Costs pertaining to the activities of the month;

		
	•
	The Petroleum Costs recovered over the month, indicating the quantity and value of the production taken off for such purpose;

		
	•
	The amounts received from the attenuation or reduction of the Petroleum Costs during the month;

		
	•
	The Petroleum Costs remaining to be recovered at the end of the month.

		
	6.5
	Ratio "R" calculation report

This report must reach the Ministry no later than the fifteenth (15th) day of the first month of each Quarter.
It shall indicate all items used to calculate the ratio "R", as defined in Article 6 of the Accounting Procedure, and the resulting value of the relationship that will be applicable to the Quarter in question.
		
	6.6
	Inventory of Crude Oil and Natural Gas stocks.

This report must reach the Ministry no later than the fifteenth (15th) day of each month. It shall indicate, for the previous month and per storage facility:
		
	•
	Stocks at the beginning of the month;

		
	•
	Additions to stocks during the month;

		
	•
	Withdrawals from stocks during the month;

		
	•
	Theoretical stocks at the end of the month;

		
	•
	Measured stocks at the end of the month;

		
	•
	Explanations for any discrepancies.

		
	6.7
	Tax returns.

The Contractor shall submit to the Ministry a copy of all returns that the entities constituting the Contractor must file with the tax authorities in charge of taxable income, especially those  related to tax on industrial and commercial profits, along with all appendices, documents and supporting instruments appended thereto.
		
	6.8
	Statement on the payment of fees and taxes.

By the fifteenth (15th) of the first month of each Quarter at the latest, the Contractor shall draw up and submit to the Ministry a statement of the payment of all fees, duties and taxes made during the previous Quarter, indicating the precise nature of said fees, duties and taxes (surface fees, customs duties, etc.), the type of payment (deposit, balance, adjustment, etc.), the date and amount of the payment, the name of the party responsible for collecting the funds and all other useful information.
		
	6.9
	Specific provisions

The statements, reports and information described in articles 6.2 to 6.8 above shall be established and submitted using the model forms issued by the Ministry, in consultation with the Contractor.
The Ministry may, as necessary, request that the Contractor submit any other statement, report or information it may deem necessary.

APPENDIX 3 : MODEL FORM BANK GUARANTEE

Appended as an integral part of the Contract made between the Islamic Republic of Mauritania and the Contractor.

(On the bank's headed stationery)

PERFORMANCE BANK GUARANTEE

Islamic Republic of Mauritania Ministry of [     ] Minister for Crude Hydrocarbons Nouakchott
Mauritania

Performance bank guarantee no.: --------  Maximum Amount: -------------------------------------
In letters: ----------------------------------------------------------
Currency of payment: -----------------------

We have been informed that on ------------- the Islamic State of Mauritania (the "State") concluded an exploration production Contract with the Contractor made up of the following entities:
-----------------------------------
-----------------------------------
-----------------------------------
----------------------------------- (the "Contractor")
The company ----------------------, address,---------------------is the principal and is hereinafter referred to as such.
Pursuant to Article (4.1, 4.2 or 4.3, depending on whether this is the 1st, 2nd or 3rd phase of the Exploration Period) of this Contract, a bank guarantee for the satisfactory performance (the "Guarantee") of the minimum work commitments must be provided to the State.
Accordingly, we (bank name ----------------- address --------------------------------), hereinafter referred to as the "Bank", hereby irrevocably undertake to pay the State, irrespective of the validity or legal effects of the Contract in question and without any possibility of relying upon any exception or objection deriving from said contract, on your first demand, any amount up to the above-mentioned Maximum Amount stated in this letter of guarantee within seven (7) working days ("working day" being a day (other than Saturday or Sunday) when the banks in London, Paris and New York are open) from receipt of a duly signed demand for payment in the form of the schedule to this Guarantee.
Your demand for payment must be addressed to us by registered post or by another express courier method to the following address [insert address]. For identification purposes, your written demand for payment will only be considered as valid if it is sent to us via our correspondent bank in Mauritania (name, address;) (the "Correspondent Bank"), together with a statement from said bank certifying that it has authenticated your signature.
Your demand will equally be accepted if it is sent in its entirety by the Correspondent Bank via

authenticated SWIFT MT799 addressed to our address SWIFT [xxxx] confirming that it has sent us the original by registered post or by another express courier method and that the signature made thereupon has been authenticated.
It is expressly specified that the role of the Correspondent Bank is limited to the verification of the signature on the demand of payment and to its transmission to the Bank.
Our guarantee is valid until --------------------------------- (the "Expiry Date") (6 months after the end of the relevant Exploration Period phase) and shall expire automatically and in its entirety if your demand for payment or authenticated SWIFT MT799 does not reach us at the above address by this date at the latest, irrespective of whether such date is a business day or otherwise.
The rights of the State under this Guarantee may be transferred. Any transfer will only be effective as from the date on which it has been served on us by a bailiff. All bank charges related to this Guarantee shall be borne by the Applicant.
This Guarantee is subject to the Uniform Rules for Demand Guarantees of the International Chamber of Commerce (ICC Publication No. 758).
This Guarantee is governed by English law. The English courts shall have exclusive jurisdiction to settle all litigation resulting from this Guarantee.

-    Signature of the authorized representative and Bank seal

Schedule Form of Demand

From: The Minister in charge of Crude Hydrocarbons Nouakchott
Mauritania
To:    [    ]
[Address]

[Dated]

Dear Sir and/or Madam,
Your Performance Guarantee No. [    ] dated [    ] issued in favour of the Islamic Republic of Mauritania - the Minister in charge of Crude Hydrocarbons (the "Guarantee")
We refer to the Guarantee. Terms defined in the Guarantee have the same meaning when used in this demand.
		
	1.
	We certify that:

		
	(i)
	the Contractor Applicant is in breach of its minimum work obligations under the Contract; and

		
	(ii)
	the type and estimated cost of the work that have not been carried out under the Contract are as follows: [insert brief description].

		
	2.
	We therefore demand payment of the sum of [    ].

		
	3.
	Payment should be made in accordance with the terms of the Guarantee to the following account:

Name:
Account Number:
Bank:
		
	4.
	The date of this demand is not later than the Expiry Date.

Yours faithfully

........................ authorised signatory for
The Minister in charge of Crude HydrocarbonsExhibit

Exhibit 10.43

EXECUTION VERSION

Dated __23 October__ 2017

Share Sale and Purchase Agreement
relating to the sale and purchase of 
shares in Hess International Petroleum, Inc.

between

HESS EQUATORIAL GUINEA INVESTMENTS LIMITED

as Seller 

and

HESS CORPORATION

as Seller Guarantor 

and
KOSMOS ENERGY EQUATORIAL GUINEA

as Kosmos 

and
KOSMOS ENERGY OPERATING

as Kosmos Guarantor 

and
TRIDENT ENERGY E.G. OPERATIONS, LTD.

as Trident

Table of Contents
	
			
	Interpretation
	4
	

	Sale and purchase
	15
	

	Condition
	15
	

	Consideration
	16
	

	Pre-Completion Obligations
	18
	

	Final statements of accounts
	21
	

	Leakage
	23
	

	Completion
	23
	

	Post-completion covenants
	24
	

	Seller’s warranties
	24
	

	Seller’s limitations on liability
	31
	

	Purchasers' warranties and undertakings
	32
	

	Environmental indemnity
	33
	

	Termination
	33
	

	Non-solicitation of employees
	34
	

	Mutual warranties
	34
	

	Withholding
	36
	

	Access
	36
	

	Effect of completion
	37
	

	Assurance
	37
	

	Insurance
	37
	

	Assignment
	37
	

	Entire agreement
	38
	

	Notices
	38
	

	Announcements
	40
	

	Guarantees
	40
	

	Confidentiality
	43
	

	Costs and expenses
	44
	

	Counterparts
	44
	

	Severance and validity
	44
	

	Variations
	45
	

	Remedies and waivers.
	45
	

	Third party rights
	46
	

	Governing law and jurisdiction
	46
	

	Agent for service of process
	47
	

	Purchaser Obligations are several
	47
	

	Schedule 1 (Details of the Group Companies)
	48
	

	Part 1 (Details of the Company)
	48
	

	Part 2 (Details of the Subsidiary)
	49
	

	Schedule 2 (Completion Arrangements)
	50
	

	Part 1 (Seller’s Obligations)
	50
	

	Part 2 (Purchaser’s Obligations)
	52
	

	Schedule 3 (Seller’s Limitations on Liability)
	53
	

	Schedule 4 (Form of Resignation Letter)
	57
	

	Schedule 5
	59
	

	
			
	Part 1 (Initial Statement of Accounts Form)
	59
	

	Part 2 (Final Statement of Accounts Form)
	60
	

	Schedule 6 (Senior Managers)
	61
	

	Schedule 7 (Affiliate Contract)
	62
	

	Schedule 8 (Transitional Services Agreement Term Sheet) 
	63
	

This agreement is made on    2017 (the “Agreement”)
Between:
		
	(1)
	HESS EQUATORIAL GUINEA INVESTMENTS LIMITED, an exempted company incorporated with limited liability under the laws of the Cayman Islands, with company number 219960, and having its registered office at Sterling Trust (Cayman) Limited, Whitehall House, 238 North Church Street, PO Box 1043, George Town, Grand Cayman, KY1-1102, Cayman Islands (the “Seller”);

		
	(2)
	HESS CORPORATION, a company incorporated under the laws of the State of Delaware, and having its principal place of business at 1185 Avenue of the Americas, New York, New York 10036, USA (the “Seller Guarantor”);

		
	(3)
	KOSMOS ENERGY EQUATORIAL GUINEA, a company incorporated in the Cayman Islands, with company number 269135 and having its registered office at Fourth Floor, Century Yard, Cricket Square, Elgin Avenue, P.O. Box 32322, George Town, KY1-1209, Grand Cayman, Cayman Islands (“Kosmos”);

		
	(4)
	KOSMOS ENERGY OPERATING, a company incorporated in Cayman Islands, with company number 231417 and having its registered office at Fourth Floor, Century Yard, Cricket Square, Elgin Avenue, P.O. Box 32322, George Town, KY1-1209, Grand Cayman,

Cayman Islands (“Kosmos Guarantor”); and
		
	(5)
	TRIDENT ENERGY E.G. OPERATIONS, LTD., a company incorporated in the Cayman Islands, with company number 326264 and having its registered office at c/o Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands (“Trident”),

(together referred to as the “Parties”, and each individually as a “Party”).
Whereas:
		
	(A)
	The Seller has agreed to sell the Shares (as defined below), and the Purchasers (as defined below) have each agreed to purchase and pay for fifty percent (50%) of the Shares, in each case, on the terms of this Agreement.

		
	(B)
	Particulars of the Company and its Subsidiary are set out in Part 1 of Schedule 1 (Details of the Company) and Part 2 of Schedule 1 (Details of the Subsidiary).

		
	(C)
	The Seller Guarantor has agreed to guarantee the obligations of the Seller on the terms and subject to the conditions of this Agreement and to give the warranties in Clause 26.15.

		
	(D)
	The Kosmos Guarantor has agreed to guarantee the obligations of Kosmos to pay the Consideration payable by Kosmos under and in accordance with this Agreement and to give the warranties in Clause 26.14.

		
	(E)
	Certain investment funds affiliated with Warburg Pincus LLC have on the Execution Date provided an equity commitment letter in favour of each of Trident and the Seller in respect of the obligations of Trident to pay the Consideration payable by Trident under and in accordance with this Agreement.

Now it is hereby agreed as follows:

		
	1.
	Interpretation

		
	1.1
	In this Agreement and the Schedules to it:

“ABC Warranties” means the warranties from the Seller set out in Clause 16;
“Accounts” means the unaudited financial statements of the Group Companies for the accounting reference period that ends on 31 December 2016, such financial statement comprising, in each case, a balance sheet and a profit and loss account statement;
“Adjustments” means the adjustments to the Initial Consideration prior to Completion as described in Clause 4.3 (Consideration) and subsequent adjustments to the Initial Adjusted Consideration following Completion as described in Clause 4.4 (Consideration);
“Affiliate” means, in relation to a Party, any subsidiary or subsidiary undertaking or holding company of that Party and any subsidiary or subsidiary undertakings of that holding  company, which in the case of Trident shall (i) include any investment fund affiliated with Warburg Pincus LLC and any general partner, trustee, nominee, manager or adviser of or to any such investment fund and (ii) exclude any portfolio company of any investment fund affiliated with Warburg Pincus LLC;
“Affiliate Contract” means the contracts, agreements or arrangements between any Group Company and any member of the Retained Group listed in Schedule 7;
“Anti-Bribery Laws” means in each case: (i) the UK Bribery Act 2010 (as amended); (ii) the
U.S. Foreign Corrupt Practices Act of 1977 (as amended); (iii) any other applicable law, rule or regulation of similar purpose and scope of the Republic of Equatorial Guinea; and (iv) for each Party, the laws prohibiting bribery and corruption in the countries of such Party’s place of incorporation, principal place of business, or place of registration as an issuer of securities, or in the countries of such Party’s ultimate parent entity’s place of incorporation, principal place of business, or place of registration as an issuer of securities. For purposes of this Agreement, the laws described above will be treated as though they apply to each Party, its Affiliates, its Associated Persons, directors, officers, employees, agents or consultants;
“Arbitration” has the meaning given in Clause 34.3 (Governing law and jurisdiction);
“Assets Documents” means all deeds, contracts, permits, instruments, notices and other documents to the extent affecting or otherwise pertaining to a Licence Area or a Group Company (including its assets or operations), as any of the same may have been or may be assigned, amended, modified, varied, replaced or novated from time to time;
“Associated Person” means, in relation to a company, a person who performs or has performed services for or on that company’s behalf;
“Assurance” means any warranty, representation, statement, assurance, covenant, agreement, undertaking, indemnity, guarantee or commitment of any nature whatsoever;
“Books and Records” includes, without limitation, all notices, correspondence, orders, inquiries, drawings, plans, Tax Records, books of account and other documents and all computer disks or tapes or other machine legible programs or other records (excluding software);
“Business” means the business of the Group Companies comprising activities related to oil and gas exploration, development, production and transportation as carried out by the Group Companies at the Execution Date;
“Business Day” means a day (other than a Saturday or a Sunday or a public holiday) on which commercial banks are open for business in London, New York and Dallas, Texas;
“Claim” means any claim made by one or more Purchaser under this Agreement (excluding any  claim  made  under  or  pursuant  to  Clauses  4.6  (Consideration),  5    (Pre-Completion

Obligations), 6.3 to 6.7 (Final Statements of Account) or 7 (Leakage)) and “Claims” shall mean all such claims;
“Companies Act” means the Companies Act 2006 as enacted by the Parliament of the United Kingdom;
“Company” means Hess International Petroleum, Inc., a company incorporated in the Cayman Islands, with company number 55991 and having its registered office at Sterling Trust (Cayman) Limited, Whitehall House, 238 North Church Street, PO Box 1043, George Town, Grand Cayman, KY1-1102, Cayman Islands, further details of which are set out in Part 1 of Schedule 1 (Details of the Company);
“Completion” means completion of the sale and purchase of the Shares under this Agreement;
“Completion Date” means the later of:
		
	(a)
	thirty days after (and excluding) the Execution Date; and

		
	(b)
	ten (10) Business Days after (and excluding) the day on which the Condition has been satisfied or waived in accordance with this Agreement,

or such other date as the Seller and the Purchasers agree in writing; “Condition” has the meaning given in Clause 3.1 (Condition);
“Confidentiality Agreement” means, collectively, the confidentiality agreement between the Seller and Kosmos Energy Ventures dated 20 March 2017; and the confidentiality agreement between the Seller and Trident Energy Management Limited dated 3 April 2017;
“Consideration” means the total consideration payable for the Shares as set out in Clause 4 (Consideration) of this Agreement;
“Continuing Provisions” means  Clause 1  (Interpretation),  Clause 22  (Assignment),  Clause 23 (Entire agreement), Clause 24 (Notices), Clause 25 (Announcements), Clause 26 (Confidentiality), Clause 28 (Costs and expenses), Clause 30 (Severance and  validity),  Clause 31 (Variations), Clause 32 (Remedies and waivers), Clause 33 (Third party rights), Clause 34 (Governing law and jurisdiction) and Clause 35 (Agent for service of process), all of which shall continue to apply after the termination of this Agreement pursuant to Clause
3.6 (Condition) or Clause 8.3(c) (Completion) without limit in time;
“Data Room Documents” means the documents and data (including correspondence, electronic files, software and information) made available in a physical and/or virtual data room by or on behalf the Seller and/or any other member of the Retained Group and/or any Group Company for inspection by or on behalf of one or more Purchaser and/or any member of the Kosmos Group or the Trident Group (and/or any of their Representatives) in relation to or connected with the Company, its Subsidiary and/or the PSC Licence and/or the JOA: (i) as contained on one or more hard disk drives or CDs initialled on behalf of the Seller and the Purchasers and delivered to the Purchasers on or before the date of this Agreement or in the case of the Updated Disclosure Letter, five (5) days prior to the Completion Date; or (ii) if not contained on such hard disk drives or CDs, as annexed to the Disclosure Letter or Updated Disclosure Letter, as applicable;
“Debt” means, as of any date, any indebtedness outstanding, secured or unsecured,  contingent or otherwise, which is for borrowed money including all principal, interest, premiums, fees, expenses, overdrafts and penalties with respect thereto, or evidenced by

bonds, notes, debentures or similar instruments or representing the balance deferred and unpaid of the purchase price of any property or service, and shall also include:
		
	(a)
	all obligations for the reimbursement of any obligation or on any letter of credit, banker’s acceptance or similar credit transaction;

		
	(b)
	obligations under any swap, hedge or similar protection device; and

		
	(c)
	any other obligations, contingent or otherwise, that, in accordance with US GAAP, should be classified upon the balance sheet as indebtedness;

“Designated Person” means a person or entity:
		
	(a)
	listed in the index to, or otherwise subject to the provisions of, the Executive Order;

		
	(b)
	named as a “Specially Designated National and Blocked Person” (“SDN”) on the most current list published by OFAC at its official website or any  replacement website or other replacement official publication of such list;

		
	(c)
	in which an entity on the SDN list has 50% or greater ownership interest or that is otherwise controlled by an SDN; or

		
	(d)
	with which the Seller or any member of the Retained Group is prohibited from dealing or otherwise engaging in any transaction by any Sanctions Laws and Regulations;

“Disclosed” means fairly disclosed to the Purchasers and/or any member of the Kosmos Group or the Trident Group (and/or any of their Representatives) by or on behalf of the Seller and/or any other member of the Retained Group and/or any Group Company:
		
	(a)
	in the Disclosure Letter; and/or

		
	(b)
	in the Updated Disclosure Letter, as applicable; and/or

		
	(c)
	in the Data Room Documents;

“Disclosure Letter” means the disclosure letter in the agreed form and dated as of the date of this Agreement, addressed by the Seller to the Purchasers and delivered to the Purchasers before the execution of this Agreement;
“Dispute” has the meaning given in Clause 34.2 (Governing law and jurisdiction); “Documents” has the meaning given in Clause 10.2(b);
“Due Diligence” means the investigation into and the assessment of the affairs of the Group Companies carried out by or on behalf of a Purchaser and/or any member of the Purchaser’s Group (and/or their respective Representatives) prior to the date of this Agreement, including the review and evaluation of all information, data, materials and other documentation  (whether in electronic or hard copy format) which was Disclosed (whether in electronic or hard copy format, on-line or pursuant to presentations) to the Purchaser and/or any member of the Purchaser’s Group (and/or any of their respective Representatives) prior to the date of this Agreement;
“Economic Date” means 1 January 2017;
“Encumbrance” means any claim, pledge, charge, option, lien (other than liens arising by operation of law in the ordinary course of trading), assignment, mortgage, debenture, hypothecation, security interest, title retention, obligation to purchase an interest, pre-emption right or other rights of any third persons, or any agreement to create any of the above;

“EG Government” means the government of Equatorial Guinea;
“Environment” means living organisms including the ecological systems of which they form part and the following media: air (including air within natural or man-made structures, whether above or below ground); water (including territorial, coastal and inland waters, water under or within land and water in drains and sewers); land (including land under water); soil and land and any ecological systems and living organisms supported by these media;
“Environmental” means relating to the Environment;
“Environmental Indemnity Claim” means any claim made by a Purchaser under Clause 13.2;
“Environmental Law” means all laws, international treaties, national, federal, provincial, state or local statutes or regulations (including by-laws and other subordinate legislation), the common law, and any codes and conventions of law (having legal effect) as amended from time to time to which any member of the Retained Group or the Group Companies is subject and any obligations owed thereunder or rules in respect thereof, from time to time, in any relevant jurisdiction (including any guidelines, notes for industry and decommissioning programmes in effect from time to time, in each case having legally binding effect) concerning harm or damage to or protection of the Environment or the provision of remedies in respect of or compensation for harm or damage to the Environment, worker or public  health and safety, pollution or decommissioning, abandonment, removing or making safe any property (including platforms, pipelines, plant, machinery, wells (including well and drill cuttings), facilities and all other offshore and onshore installations and structures);
“Environmental Liabilities” means any claims, demands, actions, proceedings, costs, charges, expenses, losses, liabilities or obligations incurred in relation to or arising out of any breach of Environmental Law, arising in connection with any of the assets of the Group Companies, including in relation to cleaning up, decontamination of, removing and disposing of debris or any property (including platforms, pipelines, plant, machinery, wells (including well cuttings), facilities and all other offshore and onshore installations and structures) reinstating any area of land, foreshore or seabed, wherever situated; and including any residual liability for anticipated or necessary continuing insurance, maintenance and monitoring costs, and in all cases irrespective of when such claims, costs, charges, expenses, liabilities or obligations are or were incurred and regardless in each case of any breach of obligation or negligence on the part of any of member of the Retained Group or any Group Company;
“Environmental Warranties” means the warranties listed in Clauses 10.2(jj) to 10.2(ll); “Excluded Matters”  means any one or more of the following:
		
	(a)
	any country-wide, regional, or industry-wide or other international changes in the social, political, industrial, market, financial or economic conditions in which the Group Companies operate or in which the products of the Group Companies are used or distributed (including changes in energy, electricity or other operating costs);

		
	(b)
	any changes in stock markets, commodity prices, currency, exchange rates or interest rates;

		
	(c)
	any natural decline in the well production levels, reserves or resources of any of the Group Companies or any reclassification or recalculation of reserves, but in each case excluding a material adverse impact on the reserves or production levels that results from an extraordinary or catastrophic operational incident, blow-out, or similar adverse physical event;

		
	(d)
	any change in laws, regulations or accounting practices, or the enforcement or interpretation thereof, applicable to the Group Companies;

		
	(e)
	storms, floods, tornadoes, earthquakes or any other natural disaster (but excluding such event to the extent that it has a material adverse impact on production, reserves or resources of any of the Group Companies);

		
	(f)
	any hostilities, acts of war, sabotage, terrorism or military action, other than any such event in or relating to the jurisdiction in which the Group Companies operate; or

		
	(g)
	drilling, completion or production results for a Group Company obtained as a result  of activities by or on behalf of a Group Company conducted in accordance with the relevant Interest Documents and in the Ordinary Course of Business;

“Execution Date” means the date this Agreement is executed by both the Seller and the Purchasers;
“Executive Order” means the US presidential Executive Order No. 13224 of 23 September 2001, entitled Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism or any other order which superseded or amended the Executive Order No. 13224;
“Final Adjusted Consideration” means the Initial Adjusted Consideration adjusted by the Final Statement of Accounts and any applicable interest, in accordance with Clauses 4.4   and
6.6 and Schedule 5 (Final Statement of Accounts);
“Final Settlement Amount” means the difference between the Initial Consideration and the Final Adjusted Consideration;
“Final Statement of Accounts” means a Final Statement of Accounts in the form set out in Part 2 of Schedule 5 (Final Statement of Accounts);
“Final Statement of Accounts Date” means the date on which the Seller delivers the Final Statement of Accounts to the Purchasers in accordance with Clause 6.1 (Final statements of accounts);
“Good and Prudent Oilfield Practice” means the exercise of that degree of skill, diligence, prudence and foresight that would reasonably and ordinarily be expected to be applied by a skilled and experienced person engaged in the upstream oil and gas industry;
“Government Official” means (i) any official, employee, agent, advisor or consultant employed by or acting on behalf of a government or any federal, regional or local department, agency, state-owned or state-operated enterprise or corporation or any other instrumentality thereof, (ii) any official or employee or agent of a public international organisation designated by Executive Order pursuant to 22 U.S.C. § 288 or as defined in Section 6(6) of the UK Bribery Act 2010 (as amended), or (iii) any official or employee or agent of a political party  or candidate for political office;
“Governmental or Regulatory Authority” means any court, tribunal, arbitrator, legislature, government, ministry, committee, inspectorate, authority, agency, commission, official or other competent authority of any country or any state, as well as any region, city or other political subdivision of any of the foregoing;
“Group” means the Kosmos Group or the Trident Group, as the context requires;
“Group Companies” means the Company and the Subsidiary and a “Group Company” means any of them;

“Guaranteed Obligations” has the meaning given in Clause 26.1; “Interest Documents” means:
		
	(a)
	the PSC Licence; and

		
	(b)
	each JOA;

“Initial Adjusted Consideration” means the Initial Consideration due and payable at Completion, as calculated in the Initial Statement of Accounts, having been adjusted in accordance with Clause 4.3 (Consideration);
“Initial Consideration” has the meaning given in Clause 4.1 (Consideration);
“Initial Statement of Accounts” means an Initial Statement of Accounts in the form set out  in Part 1 of Schedule 5 (Statement of Accounts);
“JOA” means:
		
	(a)
	First Restated Joint Operating Agreement between Triton Equatorial Guinea, Inc. and Energy Africa Equatorial Guinea Limited dated 1 June 1999 and restated as of 1 January 2000 for operations in Block G offshore Equatorial Guinea; and

		
	(b)
	Joint Operating Agreement for Field Development and Production between the Entities Constituting Part of Contractor (as defined therein) in the Field (as defined in the PSC Licence), which at the time of signature were Triton Equatorial Guinea, Inc. and Energy Africa Equatorial Guinea Limited, and/or their respective successors and assigns, which may include the Republic of Equatorial Guinea, effective as of the Effective Date for each Field, being the approval date of the Development Plan (as defined in the PSC Licence) for each such Field under the terms of the PSC Licence.

“Kosmos Designated Account” means the USD bank account the details of which shall be notified to the Seller by Kosmos at least five (5) Business Days prior to the due date of the relevant payment;
“Kosmos Guarantee” has the meaning given in Clause 26.1; “Kosmos Guarantor” means Kosmos Energy Operating;
“Kosmos Group” means Kosmos and all its subsidiary undertakings, all its holding companies and all other subsidiary undertakings of each of its holding companies and “Kosmos Group Company” shall mean any one of them;
“LCIA” has the meaning given in Clause 34.2 (Governing law and jurisdiction); “Leakage” has the meaning given in Clause 7.1 (Leakage);
“Licence Areas” means the areas on which oil and gas exploration, development and/or production are authorised pursuant to the PSC Licence;
“Long Stop Date” means 31 December 2017 or such other date as the Parties may agree in writing;
“Loss” or “Losses” means all losses, liabilities, actions and claims, including charges, costs, damages, fines, penalties, interest and all legal and other professional fees and expenses, including, in each case, all related Taxes;
“MAC Event” means any change in the physical condition of the assets of the Group Companies,  the  Business,  the  financial  condition  or  the  operations  of  any  of  the Group

Companies occurring from the date of this Agreement that results in or has resulted in a Material Effect, provided that under no circumstances shall a MAC Event result in any way from an Excluded Matter;
“Maintained Affiliate Contracts” has the meaning given in Clause 9.3 (Post-Completion Covenants);
“Marketing Services Agreement” means the marketing services agreement dated 15 December 2016 between Hess International Sales LLC and the Subsidiary;
“Material Contract” means a contract, agreement, arrangement, guarantee or indemnity to which a Group Company is a party, from which a Group Company benefits or which imposes obligations on a Group Company, in each case which (a) involves payments or receipts by a Group Company of more than USD 1 million over its term; (b) involves the giving of a guarantee or indemnity by a Group Company which could reasonably be expected to result in a payment of more than USD 1 million; or (c) is not on arm's length terms;
“Material Effect” means:
		
	(a)
	Losses suffered or incurred by the Group Companies exceeding, in the aggregate, an amount equal to 20% of the Initial Consideration; or

		
	(b)
	a diminution in value of the Shares, in aggregate, in an amount exceeding 20% of the Initial Consideration;

“MMH Inspection” means the MMH inspection and related matters referred to in specific disclosure (a) set out in the Disclosure Letter;
“OFAC” means the U.S. Department of the Treasury Office of Foreign Assets Control;
“Ordinary Course of Business” means the activities of the Group Companies that are taken in the course of the normal day-to-day operations of the Group Companies, consistent with:
		
	(a)
	applicable law and regulations;

		
	(b)
	Good and Prudent Oilfield Practices; and

		
	(c)
	their by-laws or articles of association;

“Permitted Dividend” means any and all distributions of paid in capital or retained earnings, including decapitalisations or dividends paid by the Company to the Seller made after the Economic Date until (and including) the Completion Date, provided that such dividend can be satisfied in cash which is available to the Company from its existing cash resources at the date of payment; and the payment otherwise complies with applicable law;
“Permitted Encumbrances” means liens, charges, mortgages, pledges, encumbrances, security interests (whether legal or equitable), production payments, carried interests, overrides, rights of set off or other burdens, in each case, arising under or otherwise resulting by operation of law;
“Permitted Equity Contribution” means any contribution of an equity nature paid to a Group Company by the Seller or on its behalf, in each case in whatever form insofar as such contribution is paid after the Economic Date until (and including) the Completion Date but  not including any contribution of an equity nature paid by or on behalf of the Seller to a  Group Company, or by the Company to the Subsidiary, in connection with the satisfaction of the Condition;
“Permitted  Leakage”  means  costs  reasonably  and  properly  incurred  in  accordance with

previous business practice and in the Ordinary Course of Business by the Group Companies on a cash basis of accounting after the Economic Date until (and including) the Completion Date pursuant to Affiliate Contracts, and provided that where Permitted Leakage falls under paragraph 4 of Schedule 7, such aggregate amount shall not exceed USD 15 million;
“PSC Licence” means the production sharing contract entered into between the Republic of Equatorial Guinea (represented by the Ministry of Mines and Energy) and Triton Equatorial Guinea, Inc. for Block G on 26 March 1997, as amended from time to time;
“Purchasers” means both of Kosmos and Trident and “Purchaser” means either one of  them;
“Purchaser’s Warranties” means the warranties referred to in Clause 12 (Purchasers' warranties and undertakings);
“Reasonably Endeavour” means the taking by a Party of action in accordance with Good and Prudent Oilfield Practice and reasonable commercial practice as applied to the particular matter in question, provided, however, that such action shall not include the incurring of any unreasonable expense;
“Reference Interest Rate” means three (3) percentage points per annum; “Related Persons” has the meaning given in Clause 23.4 (Entire agreement);
“Representatives” means, in relation to a person, its directors, officers, employees, external legal advisers, accountants, consultants, financial advisers and bankers;
“Retained Group” means the Seller, its subsidiaries and subsidiary undertakings from time  to time, any holding company of the Seller and all other subsidiaries or subsidiary undertakings of any such holding company, in each case as defined in the Companies Act and including, for the avoidance of doubt, Hess Corporation and its subsidiaries but excluding the Group Companies after the Completion Date;
“Rules” has the meaning given in Clause 34.2 (Governing law and jurisdiction);
“Sanctions Laws and Regulations” means (i) any sanctions or requirements imposed by, or based upon the obligations or authorities set forth in, the Executive Order, the USA Patriot Act of 2001, the Iran Threat Reduction and Syria Human Rights Act of 2012, the U.S. International Emergency Economic Powers Act (50 U.S.C. §§ 1701 et seq.), the U.S. Trading with the Enemy Act (50 U.S.C. App. §§ 1 et seq.), the U.S. United Nations Participation Act, the U.S. Syria Accountability and Lebanese Sovereignty Act, the U.S. Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, the Iran Sanctions Act, or Section 1245 of the National Defense Authorization Act of 2012, all as amended, or any of the foreign assets control regulations (including but not limited to 31 C.F.R., Subtitle B, Chapter V, as amended) or any other law or executive order relating thereto administered by OFAC, and  any similar law, regulation, or Executive Order enacted in the United States after the date of this Agreement and (ii) any sanctions measures imposed by the United Nations Security Council, European Union or any of its present member states, or the United Kingdom;
“Seadrill Claim” means the claim against the Subsidiary by Seadrill Esparanza Limited referred to in specific disclosure (c)(14) set out in the Disclosure Letter;
“Seller’s Designated Account” means the bank account the details of which shall be notified to the Purchasers by the Seller at least five (5) Business Days prior to Completion or the due date of the relevant payment;
“Seller Guarantee” has the meaning given in Clause 26.4;

“Seller’s Lawyers” means White & Case LLP, 5 Old Broad Street, London EC2N 1DW; “Senior Managers” means the individuals listed in Schedule 6 (Senior Managers);
“Settlement Agreement” means the settlement agreement between inter alia The Republic of Equatorial Guinea and the Subsidiary entered into on or about the Execution Date;
“Shares” means, subject to Clause 5.6, 35,001 ordinary shares in the Company with a par value of USD 1 each, representing 100% of the shares in the issued share capital of the Company;
“Subsidiary” means Hess Equatorial Guinea, Inc., further details of which are set out in Part 2 of Schedule 1 (Details of the Subsidiary);
“Subsidiary Shares” means 100,001 ordinary shares in the Subsidiary with a par value of USD 10 each, representing 100% of the shares in the issued share capital of the Subsidiary;
“Surrender Date” has the meaning given in Clause 5.6(a); “Tax” and “Taxation” means:
		
	(a)
	all taxes, assessments, charges, duties, fees, levies or other governmental charges in the nature of a tax, including all national, federal, state, local, municipal, foreign and other income, franchise, profits, gross receipts, capital gains, capital stock, transfer, property, sales, use, value-added, occupational, excise, severance, windfall profits, stamp, licence, payroll, social security, royalties, withholding and other taxes, assessments, charges, duties, fees, levies or other governmental charges in the nature of a tax (whether payable directly or by withholding, whether or not requiring filing, whether chargeable directly or primarily against or attributable directly or primarily  to any of the Group Companies or any other person and whether any amount in respect of any of them is recoverable from any other person) imposed by any Tax Authority; and

		
	(b)
	all penalties, fines and interest included in or relating to any Taxation falling in paragraph (a) above;

“Tax Authority” means any Governmental or Regulatory Authority or other authority anywhere in the world that has the power to impose or collect any Tax;
“Tax Records” means all returns, information, statements, accounts, registrations, computations, disclosures, notices, claims, disclaimers, elections, surrenders and applications relating to Tax;
“Tax Warranties” means the warranties set out in Clause 10.2(qq) to Clause 10.2(aaa);
“Tax Statute” any directive, statute, enactment, law or regulation wherever enacted or issued, coming into force or entered into providing for or imposing any Tax, or providing for the reporting, collection, assessment or administration of any Tax liability, and shall include orders, regulations, instruments, bye-laws or other subordinate legislation made under the relevant statute or statutory provision and any directive, statute, enactment, law, order, regulation or provision that amends, extends, consolidates or replaces the same or that has been amended, extended, consolidated or replaced by the same;
“Title Warranties” means the warranties set out in Clause 10.2(a) to Clause 10.2(i) and Clause 10.2(p) to Clause 10.2(r) (Seller’s warranties);
“Transaction Documents” means:

		
	(a)
	this Agreement;

		
	(b)
	the Disclosure Letter;

		
	(c)
	the Updated Disclosure Letter;

		
	(d)
	the Transitional Services Agreement;

and “Transaction Document” shall mean any of them;
“Transitional Services Agreement” means the transitional services agreement relating to certain transitional services to be provided by the Retained Group to the Subsidiary following Completion, to be entered into on the Completion Date substantially on the terms set out in the term sheet set out in Schedule 8;
“Trident Designated Account” means the account the details of which shall be notified to  the Seller by Trident at least five (5) Business Days prior to the due date of the relevant payment;
“Trident Group” means Trident and all its subsidiary undertakings, all its holding companies and all other subsidiary undertakings of each of its holding companies and “Trident Group Company” shall mean any one of them;
“Updated Disclosure Letter” means the disclosure letter described as such and dated as of the Completion Date, addressed by the Seller to the Purchasers and delivered to the  Purchasers on the Completion Date, substantially in the same form as the Disclosure Letter;
“US GAAP” means the United States generally accepted accounting principles in effect from time to time;
“USD”, “Dollars” or “$” means the lawful currency of the United States of America;
“Warranties” means the warranties set out in Clause 10 (Seller’s warranties) and Clause 16 (Mutual warranties) given by the Seller and “Warranty” shall be construed accordingly;
“Wilful Misconduct” means any act or failure to act (whether sole, joint, or concurrent) by a person or entity which was intended to cause, or which was in reckless disregard of or wanton indifference to, the harmful consequences such person or entity knew, or should have known, such act or failure would have on the safety or  property of another person or entity;
“Working Capital Amount” means USD 46,450,000, being the working capital of the Group Companies as at the Economic Date; and
“Working Hours” means, in relation to any location, 9.30 a.m. to 5.30 p.m. at such location on a Business Day.
		
	1.2
	The expression “in the agreed form” means in the form agreed between the Parties and signed for the purposes of identification by or on behalf of the Parties.

		
	1.3
	Any reference to “writing” or “written” means any method of reproducing words in a legible and non-transitory form (excluding, for the avoidance of doubt, email).

		
	1.4
	References to “include” or “including” are to be construed without limitation.

		
	1.5
	References to a “company” include any company, corporation or other body corporate wherever and however incorporated or established.

		
	1.6
	References to a “person” include any individual, company, partnership, joint venture, firm, association, trust, Governmental or Regulatory Authority or other body or entity (whether or not having separate legal personality).

		
	1.7
	The expressions “body corporate”, “holding company”, “parent undertaking”, “subsidiary” and “subsidiary undertaking” shall have the meaning given in the Companies Act.

		
	1.8
	The table of contents and headings are inserted for convenience only and do not affect the construction of this Agreement.

		
	1.9
	Unless the context otherwise requires, words in the singular include the plural and vice versa and a reference to any gender includes all other genders.

		
	1.10
	References to Clauses, paragraphs and Schedules are to clauses and paragraphs of, and schedules to, this Agreement. The Schedules form part of this Agreement.

		
	1.11
	References to any statute or statutory provision include a reference to that statute or statutory provision as amended, consolidated or replaced from time to time (whether before or after the date of this Agreement) and include any subordinate legislation made under the  relevant statute or statutory provision except to the extent that any amendment, consolidation or replacement would increase or extend the liability of the Seller under this Agreement.

		
	1.12
	References to any English legal term for any action, remedy, method of financial proceedings, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term.

		
	1.13
	All payments required in accordance with this Agreement shall be made in USD. For the purposes of applying a reference to a monetary sum expressed in USD, an amount in a different currency shall be converted into USD on a particular date at an exchange rate equal to the mid-point closing rate for converting that currency into USD on that date as quoted in the New York edition of the Financial Times first next published (or, if no such rate is quoted in the Financial Times, the mid-point closing rate quoted by Barclays Bank PLC in London). In relation to a Claim, the date of such conversion shall be the date of receipt of notice of that Claim in accordance with Schedule 3 (Limitations on Liability).

		
	1.14
	This Agreement shall be binding on and be for the benefit of the successors of the Parties.

		
	2.
	Sale and purchase

		
	2.1
	The Seller shall sell the Shares and the Purchasers shall each purchase fifty percent (50%) of the Shares with all rights attaching or accruing to them at Completion on the terms of this Agreement.

		
	2.2
	The Seller shall transfer the title to the Shares to the Purchasers free from all Encumbrances.

		
	2.3
	Neither the Seller nor the Purchasers shall be obliged to complete the sale and purchase of any of the Shares unless the sale and purchase of all the Shares is completed simultaneously.

		
	3.
	Condition

		
	3.1
	The obligations of the Seller and the Purchasers to complete the sale and purchase of the Shares are in all respects conditional on the satisfaction (or waiver, as the case may be) of the following condition:

		
	(a)
	all sums owing by the Contractor (as defined in the Settlement Agreement) to the General Treasury of the State pursuant to clause 4 of the Settlement Agreement having been paid (the “Condition”).

		
	3.2
	The Seller shall:

		
	(a)
	make an equity contribution to the Company and/or the Subsidiary equal to the sums owing by the Subsidiary to the General Treasury of the State pursuant to clause 4 of the Settlement Agreement; and

		
	(b)
	use reasonable endeavours to procure the fulfilment of the Condition as soon as possible and in any event before the Long Stop Date.

		
	3.3
	The Seller and the Purchasers may, acting jointly and in writing, waive in whole or in part the Condition.

		
	3.4
	The Seller undertakes to notify the Purchasers in writing, and the Purchasers undertake to notify the Seller in writing, of anything which will or may prevent the Condition from being satisfied on or before the Long Stop Date promptly after it comes to its attention.

		
	3.5
	Each Party undertakes to notify the other Party as soon as possible on becoming aware that  the Condition has been satisfied and in any event within two (2) Business Days of such satisfaction.

		
	3.6
	If the Condition is not fulfilled or waived on or before the Long Stop Date, the Parties shall be entitled to treat this Agreement as terminated subject to, and  on  the  basis  set  out  in,  Clause 14.2 (Termination).

		
	4.
	Consideration

Initial Consideration
		
	4.1
	The initial consideration for the sale and purchase of the Shares shall be an aggregate amount equal to USD 650,000,000.00 (six hundred and fifty million Dollars) (the “Initial Consideration”), as adjusted pursuant to the provisions of this Clause 4.

Initial Statement of Accounts
		
	4.2
	The Seller shall prepare and deliver to the Purchasers, by no later than ten (10) Business Days prior to the Completion Date, the Initial Statement of Accounts, prepared in accordance with Part 1 of Schedule 5 (Statement of Accounts). The Initial Statement of Accounts shall be prepared taking into account reasonable best estimates available at the time of preparation.

Initial Adjusted Consideration
		
	4.3
	The Initial Consideration shall be modified (as applicable) by the following Adjustments calculated in the Initial Statement of Accounts:

		
	(a)
	increased by an amount equal to any and all Permitted Equity Contributions paid by the Seller to the Company;

		
	(b)
	decreased by an amount equal to any and all Permitted Dividends paid by the Company to the Seller;

		
	(c)
	increased by the Working Capital Amount;

		
	(d)
	increased by amounts paid by the Seller or a member of the Retained Group for the benefit of a Group Company after the Economic Date until (and including) the Completion Date to the extent that such amounts:

		
	(i)
	are not Permitted Leakage;

		
	(ii)
	are reasonably and properly incurred in the Ordinary Course of Business and in accordance with previous business practice; and

		
	(iii)
	in aggregate do not exceed US$1 million unless otherwise agreed by the Purchasers;

		
	(e)
	decreased by an amount equal to Leakage except for Permitted Leakage;

		
	(f)
	increased by an amount equivalent to interest calculated in Dollars, using the Reference Interest Rate, on the Permitted Equity Contribution from the date of payment of the Permitted Equity Contribution until (and inclusive of) the Completion Date;

		
	(g)
	increased by an amount equivalent to interest calculated in Dollars, using the Reference Interest Rate, on the Working Capital Amount from (and exclusive of) the Economic Date until (and inclusive of) the Completion Date;

		
	(h)
	decreased by an amount equivalent to interest calculated in Dollars, using the Reference Interest Rate, on the Permitted Dividends from the date of payment of the Permitted Dividend until (and inclusive of) the Completion Date; and

		
	(i)
	decreased by an amount equivalent to interest calculated in Dollars, using the Reference Interest Rate, on an amount equal to Leakage (other than Permitted Leakage) from the date such Leakage arises until (and inclusive of) the Completion Date; and

		
	(j)
	increased by an amount equivalent to interest calculated in Dollars, using the Reference Interest Rate, on the Initial Consideration from (and exclusive of) the Economic Date until (and inclusive of) the Completion Date.

		
	4.4
	At Completion, the Initial Adjusted Consideration shall be calculated by increasing or decreasing the Initial Consideration (as the case may be) in accordance with the Initial Statement of Accounts and in accordance with Clause 4.3 above; provided, however, that the amount of the Initial Consideration shall not be reduced by the Permitted Leakage, if any.

		
	4.5
	Payment by each Purchaser to the Seller of fifty percent (50%) of the Initial Adjusted Consideration (based on the Initial Statement of Accounts to be delivered by the Seller to the Purchasers on Completion) shall be made at Completion in accordance with paragraph 1 of Part 2 of Schedule 2 (Completion Arrangements).

Final Settlement Amount
		
	4.6
	The Initial Adjusted Consideration shall be further adjusted after Completion by the Final Settlement Amount and an amount equivalent to interest calculated in Dollars in accordance with Clause 6, using the Reference Interest Rate, on the Final Settlement Amount as set out in the Final Statement of Accounts, from and including the day on which Completion takes   place to and including the date of payment thereof, payable in each case by the Purchasers to the Seller if the Final Adjusted Consideration is greater than the Initial Adjusted Consideration, and payable in each case by the Seller to the Purchasers if the Final Adjusted Consideration is less than the Initial Adjusted Consideration. If an amount is payable by the Purchasers under this clause, each Purchaser shall be liable to pay the Seller fifty percent 

(50%) of such amount. If an amount is payable by the Seller to the Purchasers under this clause, the Seller shall be liable to pay each Purchaser fifty percent (50%) of such amount.

		
	5.
	Pre-Completion Obligations

		
	5.1
	Subject to Clause 5.2, the Seller shall procure that from the Execution Date until Completion, each Group Company will:

		
	(a)
	conduct its business in the Ordinary Course of Business and in substantially the same manner as in the 24 months prior to the Execution Date;

		
	(b)
	subject to the non-Affiliated parties to the JOA and any other non-Affiliated committee members providing their prior consent, permit the Purchasers, at the Purchaser’s sole cost to appoint an observer to operating committee meetings and technical committee meetings under a JOA, provided that any such meeting shall proceed irrespective of whether such appointee is in attendance;

		
	(c)
	consult with the Purchasers with regard to the PSC Licence prior to any material decision in connection with the PSC Licence which is not in the Ordinary Course of Business;

		
	(d)
	procure that each Purchaser is given reasonable access at reasonable times, on reasonable advance notice and at the Purchaser’s sole cost, to all material documents, material information and data reasonably requested by a Purchaser relating to all material facts, matters and things in respect of the Group Companies and the Interest Documents;

		
	(e)
	conduct its affairs in relation to the PSC Licence materially in accordance with and in compliance with the Interest Documents (including taking all reasonable steps to ensure that the PSC Licence is protected and maintained); and

		
	(f)
	insure the Business and the assets of the Group Company and the PSC Licence and operations at the PSC Licence in the Ordinary Course of Business and substantially in the same manner and to the same extent as prior to the date of this Agreement and  pay all premia thereon,

provided that neither the Seller nor any Group Company shall be required to comply with paragraphs (b), (c) or (d) above, where (i) the Seller and/or a Purchaser has given notice that, in its reasonable opinion the Condition is unlikely to be satisfied on or before the Long Stop Date or (ii) the Seller reasonably believes that doing so would lead to the disclosure of any proprietary or commercially sensitive information relating to the Seller or any of its Affiliates (other than information relating solely to the Business).
		
	5.2
	Notwithstanding Clause 5.1, in the period between the Execution Date and Completion,  except as may be required or permitted by this Agreement or as may be required by any applicable law or any Governmental or Regulatory Authority, the Seller shall not and shall procure that, no Group Company shall do any of the following without the prior written consent of each Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):

		
	(a)
	declare, make or pay any dividend or other distribution, other than dividends or distributions to another Group Company or Permitted Dividends;

		
	(b)
	sell or agree to sell the Shares or the Subsidiary Shares (in whole or in part) to a third party or accept any offer from a third party to purchase the Shares or the Subsidiary Shares (in whole or in part);

		
	(c)
	create, allot or issue any shares in a Group Company, or give, create or enter into any option over shares in a Group Company, other than to another Group Company;

		
	(d)
	create or grant, or agree to create or grant, any Encumbrance (other than Permitted Encumbrances) over the Shares or the Subsidiary Shares or over any material assets  of a Group Company;

		
	(e)
	sell or agree to sell any material assets of a Group Company (in whole or in part);

		
	(f)
	in respect of the Group Companies only, grant any guarantees or indemnities for the benefit of any person, other than in the Ordinary Course of Business;

		
	(g)
	grant any loans by the Group Companies other than credit under usual terms or write off or release any debts;

		
	(h)
	voluntarily surrender, withdraw from or abandon the PSC Licence (in whole or in part);

		
	(i)
	amend (in any material respect), terminate or agree to amend or terminate any of the Interest Documents;

		
	(j)
	amend, any Affiliate Contract in a manner that would cause Permitted  Leakage arising from such Affiliate Contract to be materially increased;

		
	(k)
	waive or agree to waive any of its rights or remedies under the Interest Documents in so far as such rights and remedies materially affect the PSC Licence;

		
	(l)
	enter into any contract, agreement or arrangement which, once entered into, would be a Material Contract, or amend (in any material respect), terminate or agree to amend or terminate any such Material Contract, in any such case, other than in the Ordinary Course of Business;

		
	(m)
	propose any scheme or plan of arrangement, reconstruction, amalgamation, merger or demerger in respect of the Group Companies;

		
	(n)
	propose any winding-up or liquidation of the Group Companies;

		
	(o)
	make any material change in the nature or organisation of the business of the Group Companies;

		
	(p)
	discontinue, cease to operate or wind up, or resolve to do any of the foregoing, as to all or any material part of the business of the Group Companies;

		
	(q)
	make any variation to the terms and conditions of employment of any employee of a Group Company other than in the usual course of business;

		
	(r)
	appoint, employ or offer to appoint or employ any person other than in the usual course of business;

		
	(s)
	dismiss any employee other than in the usual course of business;

		
	(t)
	incur or pay any management charge or make any other payment in each case to any member of the Retained Group or their Representatives, other than, for the avoidance of doubt, payments of such fees to another Group Company and payments specified  as Permitted Leakage or as Permitted Dividends;

		
	(u)
	institute, abandon or settle any material legal proceedings (except debt collection in the Ordinary Course of Business) against or otherwise involving a Group Company or make any admission of material liability by or on behalf of a Group Company;

		
	(v)
	make, revoke or amend any Tax election or, other than as expressly required to satisfy the Condition, settle or compromise any Tax liability or agree to an extension or waiver of the limitation period to any Tax claim made by any Tax Authority or grant any power of attorney with respect to Taxes or enter into any closing agreement with respect to any Tax;

		
	(w)
	change any method of accounting for Tax purposes; or

		
	(x)
	file any amended income Tax return or other material amended Tax return other than as expressly required to satisfy the Condition.

		
	5.3
	Clause 5.2 does not apply in respect of and shall not operate so as to restrict or prevent:

		
	(a)
	any matter reasonably undertaken in an emergency or disaster situation with the intention of and to the extent only of those matters strictly required with a view to minimising any adverse effect of such situation (and of which the Purchasers will be promptly notified in writing);

		
	(b)
	the completion or performance of any obligations undertaken pursuant to any agreement Disclosed prior to the date of this Agreement and which was entered into prior to the date of this Agreement.

		
	(c)
	any matter expressly permitted by, or necessary for performance of, this Agreement (including, for the avoidance of doubt, the satisfaction of the Condition and the performance of Clause 5.6) or any of the other Transaction Documents or necessary for Completion;

		
	(d)
	any matter undertaken at the request of the Purchaser (subject to the Seller being able to undertake such matter);

		
	(e)
	providing information to any Regulatory Authority in the Ordinary Course of Business;

		
	(f)
	any matter to the extent required by applicable law;

		
	(g)
	any Permitted Leakage.

		
	5.4
	It would be unreasonable for the Purchasers to withhold their consent under Clause 5.2 if the consent being sought is reasonably necessary to maintain the present status or condition of any of the assets of the Group Companies in accordance with Good and Prudent Oilfield Practice and/or in order to comply with its obligations under the Interest Documents as Disclosed prior to the Execution Date.

		
	5.5
	The Seller and the Purchasers (each on behalf of the Subsidiary) shall use all reasonable endeavours and shall negotiate in good faith to agree as soon as reasonably practicable after the date of this Agreement, and in any event before Completion, the final form of the Transitional Services Agreement in accordance with the principles and agreed terms set out in Schedule 8 (Transitional Service Agreement Term Sheet). If upon Completion the Seller and the Purchasers (each on behalf of the Subsidiary) have not agreed the final form of the Transitional Services Agreement, and/or the parties thereto have not entered into the Transitional Services Agreement, the Seller shall procure that the Retained Group provides  the relevant transitional services to the Subsidiary in accordance with the terms set out in the term sheet set out in Schedule 8.

		
	5.6
	No later than five (5) Business Days prior to the Completion Date, the Seller shall:

		
	(a)
	irrevocably surrender one Share for zero consideration (the date of such surrender being the “Surrender Date”), such that on Completion the Company will  have 35,000 shares with a par value of USD 1 each in issue; and

		
	(b)
	notify the Purchasers that such surrender has taken place and provide to the Purchasers a certified copy of the register of members of the Company evidencing such surrender,

and with effect from the Surrender Date the definition of “Shares” in Clause 1.1 shall be construed accordingly.

		
	6.
	Final statements of accounts

		
	6.1
	The Seller shall prepare and deliver to the Purchasers, by no later than one hundred and twenty (120) days after the Completion Date, the Final Statement of Accounts, prepared in accordance with Part 2 of Schedule 5 (Statement of Accounts). The Final Statement of Accounts shall be based on actual financial results where available, or, in the absence of such results, on reasonable best estimates available at the time of preparation, and shall include any amounts not previously accounted for at Completion pursuant to the Initial Statement of Accounts and/or any necessary correction of amounts accounted for pursuant to the Initial Statement of Accounts.

		
	6.2
	During a period of thirty (30) days following the Final Statement of Accounts Date, the Purchasers may verify all amounts in the Final Statement of Accounts.

		
	6.3
	If any Purchaser takes exception to any of the figures contained in the Final Statement of Accounts, that Purchaser shall notify the Seller in writing, within forty-five (45) days of the Final Statement of Accounts Date, listing all figures in the Final Statement of Accounts that it disputes or is otherwise unable to verify based upon the Seller’s documentation (or lack thereof) and detailing the basis for each exception, to the extent of the information then available to the Purchaser. In the event that a Purchaser delivers such a written notice of dispute to the Seller within the applicable time limit, the provisions of Clause 6.4 shall apply as to all disputed figures contained in the Final Statement of Accounts.

		
	6.4
	Upon a Purchaser delivering a written notice to the Seller pursuant to Clause 6.3, the Seller and the Purchasers shall Reasonably Endeavour to resolve all of the written exceptions, and upon such resolution the Final Statement of Accounts shall be deemed amended accordingly. In the event that the Seller and the Purchasers have not agreed upon the resolution of all outstanding figures in the Final Statement of Accounts within fifty-five (55) days of the Final Statement of Accounts Date, a Purchaser may, by written notice delivered to the Seller within sixty (60) days of the Final Statement of Accounts Date, refer all unresolved figures in the Final Statement of Accounts for binding dispute resolution by an independent expert as provided for in Clause 6.6.

		
	6.5
	All figures:

		
	(a)
	to which no Purchaser, within the time permitted, takes exception as provided for in Clause 6.3; or

		
	(b)
	that are disputed by a Purchaser pursuant to Clause 6.3 within the time permitted but are resolved between the Purchasers and the Seller or not referred by a Purchaser for dispute resolution within sixty (60) days of the Final Statement of Accounts Date as provided for in Clause 6.4,

shall be deemed finally resolved between the Purchasers and the Seller and shall be paid, in accordance with the relevant Final Statement of Accounts, by the owing Party or Parties (as

applicable) to the other Party or Parties (as applicable), by the transfer of immediately available funds to the Seller’s Designated Account or in equal parts into the Kosmos Designated Account and the Trident Designated Account (as applicable) within seventy-five (75) days of the Final Statement of Accounts Date. In the event that a Purchaser, within the time permitted, takes exception to any figure in a Final Statement of Accounts pursuant to Clause 6.3 and then, within the time permitted, a Purchaser invokes binding dispute resolution as to any outstanding exception as referenced in Clause 6.4, no disputed amount shall be paid by the relevant Party or Parties (as applicable) until such outstanding exception is resolved. For the avoidance of doubt, all amounts that are not disputed shall be paid by the relevant Party or Parties (as applicable) no later than within seventy-five (75) days of the Final Statement of Accounts Date.
		
	6.6
	In the event that a Purchaser notifies the Seller, within the applicable time limit, of the referral of any dispute regarding any figures contained in the Final Statement of Accounts for resolution by an independent expert as provided for in Clause 6.4, the Seller and the Purchasers shall Reasonably Endeavour to appoint, by agreement, an independent expert, being a member in good standing for not less than ten (10) years of the American Institute of Certified Public Accountants, with relevant expertise, and without any conflict of interest involving any Party or their Affiliates. In the event that the Seller and the Purchasers do not make such appointment within ten (10) days of delivery of the Purchaser’s referral notice as described in Clause 6.4, then, upon the application of any Party, the appointment shall be referred to the New York Office of the American Arbitration Association. The independent expert shall consider such written documentation and other submittals as he or she may  request of the Parties and may seek such specialised consultancy advice as he or she sees fit. The decision of the independent expert so appointed shall be in writing, delivered not later than sixty (60) Business Days from the date of appointment of such independent expert unless otherwise agreed by the Parties and shall, in the absence of fraud or manifest error, be final and binding on the Parties. The payment of any outstanding amount, as determined by such independent expert, plus interest on such amount at the Reference Interest Rate from (and inclusive of) the Completion Date to (and inclusive of) that certain Business Day immediately preceding the date of payment, as determined to be owing by either Party to the other, shall be made within fifteen (15) days of such decision. The costs of the independent expert shall be borne as determined by the independent expert. Such independent expert shall be deemed to be acting as an expert and not as an arbitrator.

		
	6.7
	All Adjustments shall be accounted for in Dollars, and any Adjustments not expressly provided herein as Adjustments to be accounted for in Dollars shall be converted to Dollars, with any such exchange rate conversions being made as provided for in the definition thereof in Clause 1.1 of this Agreement and in accordance with the Seller’s normal  accounting policies and procedures. Any and all amounts owing pursuant to this Agreement shall be paid on the due date for payment in immediately available funds to the Seller’s Designated Account or in equal parts into the Kosmos Designated Account and the Trident Designated Account (as applicable).

		
	6.8
	No item taken into account in calculating any one Adjustment shall be taken into account in calculating any other Adjustment such that it would result in a Party making or receiving payment twice in respect thereof.

		
	6.9
	For the avoidance of doubt, all payments made by one Party to another Party pursuant to the Final Statement of Accounts, including any amount that is ultimately determined to be owing by one Party to another Party pursuant to the dispute resolution procedures of Clause 6.6, shall be deemed Adjustments to the Initial Adjusted Consideration.

		
	7.
	Leakage

		
	7.1
	Pending Completion, the Seller shall procure that no Group Company shall undertake any act or course of conduct which would result in Leakage. In this Agreement, “Leakage” means:

		
	(a)
	the declaration, making or payment of any dividend or other distribution, or making  of any redemption, purchase or other acquisition of any of its shares or other ownership interests, other than Permitted Dividends; and

		
	(b)
	the making of any payment (including of consulting, advisory or management fees) to the Retained Group or their Representatives, other than, for the avoidance of doubt, payments specified as Permitted Leakage,

but shall not include:
		
	(c)
	any matter undertaken at the request of the Purchasers (subject to the Seller being  able to undertake such matter) or with the Purchasers' consent, such consent not to be unreasonably withheld, conditioned or delayed;

		
	(d)
	for the avoidance of doubt, any payment made by a Group Company to the General Treasury of the State (as referred to in the Settlement Agreement) in order to satisfy the Condition; and

		
	(e)
	any Permitted Leakage.

		
	7.2
	Except where an adjustment is made in respect of Leakage under Clause 4.3 (Initial Adjusted Consideration) or 4.6 (Final Settlement Amount), the Seller shall indemnify and hold each Purchaser harmless from and against all Losses suffered or incurred by it arising from the breach by the Seller of any covenants or undertakings contained in Clause 7.1.

		
	7.3
	Any payment pursuant to Clause 7.2 shall be treated as an adjustment to the Initial Adjusted Consideration or Final Adjusted Consideration, as applicable.

		
	8.
	Completion

		
	8.1
	Completion shall take place on the Completion Date at the offices of the Seller’s Lawyers or at such other place as is agreed in writing by the Seller and Purchasers.

		
	8.2
	At Completion the Seller shall do those things listed in Part 1 of Schedule 2 (Completion Arrangements) and the Purchasers shall do those things listed in Part 2 of Schedule 2 (Completion Arrangements).

		
	8.3
	If there is a material breach of Clause 8.2 and Schedule 2 (Completion Arrangements) on the Completion Date, the Seller or, as the case may be, the Purchasers may (provided, that the Seller or a Purchaser (as applicable) has not itself materially breached Clause 8.2 and Schedule 2 (Completion Arrangements)):

		
	(a)
	defer Completion (with the provisions of this Clause 8 applying to Completion as so deferred);

		
	(b)
	proceed to Completion as far as practicable (without limiting its rights and remedies under this Agreement); or

		
	(c)
	terminate this Agreement by written notice to the other Parties, provided that the Parties’ accrued rights and obligations under this Agreement (excluding any right of the  Purchasers  to  claim  damages  for  breach  of  Warranty)  and  their  rights    and

obligations under the Continuing Provisions shall continue, but in all other respects the Parties’ rights and obligations under this Agreement shall cease.

		
	9.
	Post-completion covenants

		
	9.1
	Following Completion, each Purchaser undertakes to the Seller not to bring (and to procure that no other member of the Kosmos Group (in respect of Kosmos) or the Trident Group (in respect of Trident) (including, for the avoidance of doubt in respect of each of Kosmos or Trident, the Group Companies) shall bring) any action, challenge, claim or  proceeding, against all Senior Managers in respect of any action (or inaction), conduct, default or  omission of any such person prior to Completion except in the case of fraud or Wilful Misconduct.

		
	9.2
	Subject to Clause 9.3, the Seller shall procure that each Affiliate Contract and any other contract or arrangement between a Group Company and any member of the Retained Group shall be terminated at Completion and, except in respect of issuance pursuant to Clause 9.4 and payment of any bona fide invoices issued, the Seller shall, and shall procure that its Affiliates shall, release in full and hold the Group Companies harmless in respect of and the relevant Group Company shall release in full and hold the Seller, and its Affiliates, harmless against all claims and liabilities (other than in respect of third party claims) arising directly under the Affiliate Contracts up to and including the Completion Date. Notwithstanding termination of the Marketing Services Agreement pursuant to this Clause 9.2 (or as otherwise agreed), the Seller shall procure that Hess International Sales LLC or any member of the Retained Group will pay to the Subsidiary all sums that would, but for the termination, have been payable by Hess International Sales LLC to the Subsidiary under the Marketing Services Agreement (or otherwise) in relation to any Sales Agreements (as defined under the Marketing Services Agreement) entered into prior to the date of such termination.

		
	9.3
	The Purchasers may request in writing to the Seller at least fifteen (15) Business Days prior to Completion that certain Affiliate Contracts shall remain in place following Completion (the “Maintained Affiliate Contracts”). On receipt of a written request from the Purchasers, the Seller shall procure that each Maintained Affiliate Contract shall not be terminated at Completion.

		
	9.4
	If, at Completion, any amounts have been reasonably and properly incurred in accordance with an Affiliate Contract or a Maintained Affiliate Contract but have not been invoiced to the Group Company, within thirty (30) days of Completion the Seller shall or shall procure that  its Affiliate shall, issue a final invoice under that Affiliate Contract or the latest invoice under that Maintained Affiliate Contract requesting payment of such outstanding amounts.

		
	10.
	Seller’s warranties

		
	10.1
	Any Warranties that are qualified by the knowledge, belief or awareness of the Seller shall mean the actual (but not constructive or imputed) knowledge, belief or awareness of the  Senior Managers (having made all reasonable enquiries of such other Senior Managers), provided, that, in the event of any breach or claim with respect to the Warranties, such individuals shall not incur any liability under the Agreement on the basis of their responses to such enquiry.

		
	10.2
	The Seller warrants to the Purchasers as of the Execution Date and as of the Completion Date that:

Incorporation and Authority

		
	(a)
	The Seller and the Group Companies are companies duly incorporated and validly existing under laws of the Cayman Islands and each of the Group Companies have full corporate power and authority to carry on its business as it is now being  conducted and to own the assets it now owns.

		
	(b)
	The Seller has full power and authority to enter into and perform this Agreement and the Seller has full power and authority to enter into and perform the other Transaction Documents to which it is a party and all other documents executed by the Seller which are to be delivered at Completion (together, the “Documents”), each of which constitutes (when executed) legal, valid and binding obligations of the Seller in accordance with its respective terms.

		
	(c)
	The execution, delivery and performance by the Seller of the Documents will not constitute a breach of any laws or regulations in any relevant jurisdiction or result in a breach of or constitute a default under (i) any provision of the memorandum and articles of association of the Seller; (ii) any order, judgment or decree of any court or governmental authority by which the Seller, or the Company is bound; or (iii) any agreement or instrument to which the Seller or any Group is a party or by which it is bound.

		
	(d)
	The Seller and any the Group Company are not insolvent or unable to pay its debts within the meaning of the Insolvency Act 1986 (or under the insolvency laws of any applicable jurisdiction) or has stopped paying debts as they fall due. No order has been made, petition presented or resolution passed for the winding up of the Seller or any Group Company. No administrator or any receiver or manager has been appointed by any person in respect of the Seller or any Group Company or all or any of its or their assets and no steps have been taken to initiate any such appointment and no voluntary arrangement has been proposed. The Seller and any Group Company have not become subject to any analogous proceedings, appointments or arrangements under the laws of any applicable jurisdiction.

Ownership of the Shares
		
	(e)
	The Seller is and will at the Completion Date be the sole legal and beneficial owner of, and has the right to exercise all voting and other rights over, all of the Shares. The Company is and will at the Completion Date be the sole legal and beneficial owner  of, and has the right to exercise all voting and other rights over, all of the Subsidiary Shares in the Subsidiary.

		
	(f)
	The Shares are and will at the Completion Date constitute the entire allotted and issued share capital of the Company and are fully paid up. The Subsidiary Shares are and will at the Completion Date constitute the entire allotted and issued share capital of the Subsidiary and are fully paid up.

		
	(g)
	The Shares are and will at the Completion Date be free from all Encumbrances and there is no agreement or commitment to give or create any Encumbrance over or affecting the Shares and no claim has been made by any person to be entitled to any such Encumbrance. The Subsidiary Shares are and will at the Completion Date be  free from all Encumbrances and there is no agreement or commitment to give or  create any Encumbrance over or affecting the Subsidiary Shares and no claim has been made by any person to be entitled to any such Encumbrance.

		
	(h)
	There are and will be no agreements or commitments outstanding which call for the issue of any shares, loan stock or debentures in or other securities of any Group Company 

or accord to any person the right to call for the issue of any such shares, loan stock, debentures or other securities.

		
	(i)
	No notices have been received by any of the Seller or any Group Company and so far as the Seller is aware no steps have been taken in relation to any expropriation, nationalisation or dilution or similar of the share capital of any Group Company or  the PSC Licence.

Corporate and business
		
	(j)
	The information relating to the Group Companies set out in Schedule 1 (Details of the Group Companies) is true and accurate in all respects.

		
	(k)
	No Group Company has any subsidiary undertakings or any interest in the shares or other capital of any entity, other than, in the case of the Company, the Subsidiary.

		
	(l)
	The copies of the constitutional documents of the Group Companies, the PSC Licence, the JOA and, so far as the Seller is aware, the minutes of the Operating Committee (excluding any attachments, annexes or schedules thereto) included in the Data Room Documents are true and complete copies of the originals of such documents.

		
	(m)
	The books, registers and records (including all accounting records) of the Group Companies are in all material respects complete and accurate and up to date in accordance with applicable laws and are maintained and retained in accordance and for the period required by applicable laws. All such books, registers and records and other necessary documents and records relating to its affairs are in the possession or under the direct control, and subject to the unrestricted access, of the relevant Group Company. So far as the Seller is aware, the Group Companies have not received any application for rectification of any of its registers, including the register of members.

		
	(n)
	So far as the Seller is aware, there is no power of attorney given by any Group Company in force and no outstanding authority by which any person may enter into an agreement, arrangement or obligation to do anything on behalf of any Group Company (other than any authority of its directors, branch manager and certain legal representatives to act in the ordinary and usual course of their duties).

		
	(o)
	No Group Company is subject to any actual or contingent liability arising out of or in connection with any production sharing contract or equivalent arrangement (other than the PSC Licence) to which it has been a party or in which it has held an interest.

Asset and title to the PSC Licence
		
	(p)
	The relevant Group Company is the holder of an 80.75% equity participating interest in the PSC Licence, which is burdened by an 85% paying working interest in the PSC Licence, but otherwise free from any Encumbrances (other than the rights in favour of GEPetrol and other Governmental or Regulatory Authority according to the terms of the PSC Licence and applicable laws).

		
	(q)
	So far as the Seller is aware, the PSC Licence and the JOA are valid and in full force and effect.

		
	(r)
	No Group Company is or, so far as the Seller is aware, has in the past been in default or in breach of any material terms or conditions of any of the PSC Licence or the JOA and no event has occurred or failed to occur which constitutes, or with the giving of notice or lapse of time or both, would constitute, a material breach or default of the PSC Licence or the JOA by a Group Company.

		
	(s)
	So far as the Seller is aware, no other party to the JOA is in default or in breach of any material terms or conditions of any of the JOA and so far as the Seller is aware, no

event has occurred or failed to occur which constitutes, or with the giving of notice or lapse of time or both, would constitute, a material breach or default of the JOA by any other party to it.
		
	(t)
	So far as the Seller is aware, the Group Companies have paid all material fees and charges imposed by any applicable Governmental or Regulatory Authority, which have become due and payable with respect to the PSC Licence.

		
	(u)
	So far as the Seller is aware, no Group Company has received any written notification from any applicable Governmental or Regulatory Authority that any investigation or inquiry is being or has been conducted by any such Governmental or Regulatory Authorities in respect of violations of Environmental Law in relation to the PSC Licence.

		
	(v)
	The PSC Licence, together with applicable laws, contains the entirety of the  obligation of the relevant Group Company to the Governmental or Regulatory Authorities, and no other understanding or agreement exists between the relevant Group Company and the Governmental or Regulatory Authorities in relation to the subject matter of the PSC Licence.

Material assets
		
	(w)
	The material assets included in the Accounts or acquired by the Group Companies since the Economic Date (other than trading stock disposed of since that date in the ordinary course of business) and all other material assets owned by the Group Companies are the absolute property of the relevant Group Company (save to the extent cost recovered under the PSC Licence) and are free from any Encumbrance.

		
	(x)
	The Group Companies do not have any Encumbrances subsisting over the whole or any part of its present or future revenues or material assets.

		
	(y)
	All such material assets owned by the Group Companies are not the subject of any leasing, hiring or hire purchase agreement or agreement for payment on deferred terms or assignment or factoring or other similar agreement.

		
	(z)
	All such material assets are in the possession or under the control of the relevant Group Company.

Any reference to “assets” in (w) and (z) shall not include any assets constituting the participating interest in the PSC Licence (including any Joint Property as defined in the JOA) or the PSC Licence.
Accounts
(aa)    The Accounts:
		
	(i)
	have been prepared by the Group Companies in accordance with the applicable law and US GAAP;

		
	(ii)
	have been prepared in accordance with the Group Companies' relevant accounting principles (as Disclosed), and in a manner consistent with the Group Companies' past practice of applying such accounting principles;

		
	(iii)
	are accurate in all material respects;

		
	(iv)
	show a true and fair view of the financial position, assets, liabilities, profit or loss and cash flows of the Group Companies as of the dates and periods indicated therein; and

		
	(v)
	the Disclosure Letter contains true and accurate copies of all the Accounts,

provided that no warranty given by this paragraph (aa) shall be construed as a warranty relating to the appropriate inclusion in the Accounts of any reserve or accrual for uncertain or contingent Tax positions as required by US GAAP.

Debt
		
	(bb)   
	Save as Disclosed, the Group Companies have no Debt and are not party to nor bound by any agreement relating to Debt. On the Closing Date, no Group Company will  have any Debt whatsoever nor be party to nor be bound by any agreement relating to Debt;

Material Disputes
		
	(cc)     
	Save as Disclosed, no Group Company is a plaintiff nor, so far as the Seller is aware,  a defendant in or otherwise a party to any litigation, arbitration or administrative proceedings of a material nature;

		
	(dd)   
	So far as the Seller is aware, no Group Company has received any written notification of any material dispute which in the reasonable opinion of the Seller is likely to give rise to any such litigation, arbitration or administrative proceedings as are referred to in (cc) above.

Compliance with Laws
		
	(ee)   
	So far as the Seller is aware, each Group Company (i) has carried on, and is carrying  on, the Business (including, in the case of the Subsidiary, as Operator and in relation to the ownership of the participating interest in the PSC Licence) in compliance in all material respects with applicable laws and (ii) holds (and is in compliance with) all material authorisations, permissions, licences, permits, consents and approvals from and agreements with any Governmental or Regulatory Authority required under applicable law in relation to its acting as Operator, the conduct of the Business and operations and the ownership of the participating interest in the PSC Licence.

		
	(ff) 
	Save as Disclosed, (i) there is no ongoing disagreement in writing between any Group Company and any Governmental or Regulatory Authority in relation to cost recovery in respect of a material amount, (ii) so far as the Seller is aware, no Governmental or Regulatory Authority has indicated in writing that any material sums incurred in relation to operations under the PSC Licence are not capable of being cost recovered; and (iii) no written request for an official audit, review or investigation in relation to cost recovery has been received by any Group Company from any Governmental or Regulatory Authority.

		
	(gg) 
	None of the Seller, any member of the Retained Group nor any of their respective Representatives acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement and other Transaction Documents is or will be at the Completion Date: (i) in violation of any Sanctions Laws and Regulations; (ii) a Designated Person or otherwise the target of Sanctions; (iii) involved in any transactions directly or indirectly, relating to or with entities located in countries subject to U.S. economic sanctions; or (iv) engaged in dealings in or with any property or interest in property blocked pursuant to any Sanctions Laws and Regulations.

Contracts

		
	(hh) 
	Other than those agreements contained in the Data Room Documents, there is no outstanding amount over the amount of USD$25,000 which is due and payable under any material agreement to which any Group Company is a party.

		
	(ii)
	Other than as Disclosed, there is no material agreement to which any Group Company is a party, including any area of mutual interest agreement, joint bidding agreement, guarantee, indemnity, credit support or suretyship.

Environment, Health and Safety
		
	(jj) 
	The Subsidiary complies and has at all times in the ten years prior to the date of this Agreement complied in all material respects with Environmental Law;

		
	(kk)   
	So far as the Seller is aware, the Subsidiary has not received in the ten years prior to   the date of this Agreement a written complaint or a notice alleging a material breach of, or a material liability under, Environmental Law.

		
	(ll)    
	So far as the Seller is aware, the Subsidiary has obtained and complies, and at all     times in the ten years prior to the date of this Agreement has obtained and complied, in all material respects with each material Environmental permit required to carry on the Business and its operations under the PSC Licence.

Employees
(mm)    The current employees of the Group Companies are listed in the Disclosure Letter. (nn)    The  Group  Companies  have  complied  in  all  material  respects  with  all employee
benefit  plans,  employment  contracts,  union  agreements  and  local  labour  laws  in
respect of the employees of the Group Companies.
		
	(oo)   
	Save as Disclosed, there are no material disputes with (or claims by) any unions,    works councils, staff associations or other employee representative bodies in relation to the employees of the Group Companies so far as the Seller is aware.

		
	(pp)  
	So far as the Seller is aware, the Group Companies have funded all reserves required   by local labour laws in respect of end of service severance payments, retirement funds and other benefit plans and programs.

Tax
		
	(qq) 
	For all periods commencing on or after the Economic Date, each Group Company has complied, in all jurisdictions, in all material respects with all statutory provisions, rules, regulations, orders and directions required of it under any Tax Statute or otherwise required by law, and all Tax Records submitted after the Economic Date which relate to periods commencing on or after the Economic Date remain at the date of this Agreement complete, correct and accurate in all material respects.

		
	(rr) 
	Each Group Company has complied in all material respects  with  all  statutory  provisions, rules, regulations, orders and directions required of it in relation to records, invoices and other information required to be kept in relation to Tax.

		
	(ss) 
	For all periods commencing on or after the Economic Date, each Group Company has duly and timely paid all Tax (including where required by way of deduction or withholding and including any requirement to account for such deducted or withheld Tax) for which it is liable and no Group Company is liable, nor has for all periods commencing on or after the Economic Date been liable, to pay any interest, fine or other penalty in connection with Tax.

(tt)    Since the Economic Date:
		
	(i)
	no Group Company has been involved in any transaction outside  the  Ordinary Course of Business which has given or may give rise to a liability to Tax on any Group Company (or would have given or might give rise to such a Tax liability but for the availability of any Tax relief);

		
	(ii)
	no accounting period of any Group Company has ended; and

		
	(iii)
	there has been no change to the approach taken by any Group Company to matters relating to Tax as compared to any positions taken in any  Tax  Returns which have been filed prior to the Economic Date save as required  by the Settlement Agreement.

		
	(uu)  
	For all periods commencing on or after the Economic Date, no Group Company has  been or is involved in any material dispute with any Tax Authority, and no Group Company is the subject of any enquiry with any Tax Authority concerning any matter other than routine enquiries of a minor nature and the Seller is not aware of any circumstances which would or would be liable to give rise to such a dispute or enquiry.

		
	(vv)   
	The Company is incorporated, and has its registered office, in the Cayman Islands.    No Tax Authority in any jurisdiction considers the Company is resident for Tax purposes in or has a permanent establishment in its jurisdiction. The Company is tax- exempted in the Cayman Islands.

		
	(ww) 
	The Subsidiary is incorporated, and has its registered office, in the Cayman Islands.   No Tax Authority in any jurisdiction (other than the Republic of Equatorial Guinea) considers that the Subsidiary is resident for Tax purposes in or has a permanent establishment in its jurisdiction. The Subsidiary is tax-exempted in the Cayman Islands.

		
	(xx) 
	Since the Economic Date, all transactions entered into by each Group Company have been entered into on an arm's length basis and the consideration (if any) which has been charged, received or paid by the relevant Group Company on all transactions entered into by it since the Economic Date has been equal to the consideration which would have been expected to be charged, received or paid between independent persons dealings at arm's length.

		
	(yy) 
	No Group Company is or has been party to any scheme, arrangement, transaction or series of transactions the main purpose, or one of the main purposes of which, was the avoidance of Tax which was either entered into after the Economic Date or otherwise has effect for any period after the Economic Date.

		
	(zz) 
	No Group Company is bound by or party to any Tax sharing or Tax allocation  agreement.

		
	(aaa) 
	So far as the Seller is aware, no transaction, act, omission or event has occurred in consequence of which any Group Company is or may be held liable for any Tax (including under an indemnity) which Tax is primarily or directly chargeable against or attributable to any person other than any of the Group Companies, whether such liability arises as a result of the operation of law or any agreement entered into by any of the Group Companies.

		
	10.3
	Each Purchaser acknowledges and confirms, that:

		
	(a)
	it does not rely on and has not been induced to enter into this Agreement on the  basis

of any warranties, representations, covenants, undertakings, indemnities or other statements whatsoever other than the Warranties. In particular, no warranty, representation, covenant, undertaking, indemnity or other statement has been given (expressly or impliedly) in respect of, and each Purchaser acknowledges that it has had an adequate opportunity to review, agrees to hold the Retained Group harmless and is solely responsible for forming its own opinion as to:
		
	(i)
	the amount, quality or deliverability of hydrocarbons attributable to any asset of any Group Company;

		
	(ii)
	any geological, geophysical, engineering, economic or other interpretations, forecasts or evaluations;

		
	(iii)
	any forecast of expenditures, budgets or financial projections (including any projections as to the future profitability or future value of any Group Company);

		
	(iv)
	any geological formation, drilling prospect or hydrocarbon reserves;

		
	(v)
	the repair, condition, working order, fitness for purpose or future  performance or capability of any property, plant or equipment forming part of or relating to the assets of any Group Company; and

		
	(vi)
	the future performance of any Group Company (including revenues and costs);

		
	(b)
	none of the Seller, any Group Company, any member of the Retained Group nor any of their Representatives have given any such warranties, representations, covenants, undertakings, indemnities or other statements;

		
	(c)
	it has carried out such investigations, made such enquiries and taken such advice as is necessary to evaluate the merits and risks of acquiring the Group Companies and to protect its interests in connection with such acquisition; and

		
	(d)
	it has had adequate access to information regarding the Business, the Seller, the Retained Group and any Group Companies and it has performed Due Diligence to its full satisfaction and in a manner and to a degree customary with respect to the type and size of transaction contemplated by this Agreement.

		
	10.4
	Nothing in Clause 10.3 shall limit the Warranties given by the Seller or the standard of Disclosure required to limit the Seller's liability in respect thereof under Schedule 3 (Seller’s Limitations on Liability).

		
	10.5
	Each of the Warranties (subject to Clause 11 (Seller’s limitations on liability) and Schedule 3 (Seller’s Limitations on Liability) below) shall be construed as a separate and independent warranty and shall not be limited or restricted by reference to or inference from the terms of any of the other Warranties.

		
	10.6
	Each Purchaser agrees and undertakes that (in the absence of fraud or Wilful Misconduct) it has no rights against and shall not make any claim against any Representative of any member of the Retained Group or any Group Company on whom it may have relied before agreeing to any term of any of the Transaction Documents.

		
	11.
	Seller’s limitations on liability

The liability of the Seller in respect of Claims shall be limited as provided in Schedule 3 (Seller’s Limitations on Liability).

		
	12.
	Purchasers' warranties and undertakings

		
	12.1
	Each Purchaser warrants to the Seller on the Execution Date and on the Completion Date (in respect of itself only) that:

		
	(a)
	it has the requisite power and authority, and has received all necessary approvals, to enter into and perform its obligations under this Agreement and the other Transaction Documents to which it is party;

		
	(b)
	its obligations under this Agreement and the other Transaction Documents will when delivered constitute binding obligations of it in accordance with their respective terms except as enforceability may be limited by bankruptcy, insolvency, reorganisation, moratorium or other laws affecting creditors' rights generally and general principles  of equity (whether considered in a proceeding at law or in equity);

		
	(c)
	the execution and delivery of, and the performance by it of its obligations under, this Agreement and the other Transaction Documents will not: (i) result in a material breach of any provision of the constitutional documents of it; (ii) result in a material breach of, or constitute a default under, any instrument to which it is a party or by which it is bound; (iii) so far as it is aware, result in a material breach of any order, judgment or decree of any court or governmental agency to which it is a party or by which it is bound; or (iv) require the consent of its shareholders;

		
	(d)
	it is not nor will it be required to give any notice to or make any filing with or obtain any permit, consent, waiver or other authorisation from any Governmental or Regulatory Authority in connection with the execution, delivery and performance of the Transaction Documents;

		
	(e)
	no order has been made, petition presented or resolution passed for the winding up of it. No administrator nor any receiver or manager has been appointed by any person in respect of it or all or any of its assets and, so far as it is aware, no steps have been taken to initiate any such appointment and no voluntary arrangement has been proposed. It has not become subject to any analogous proceedings, appointments or arrangements under the laws of any applicable jurisdiction;

		
	(f)
	all information, including, without limitation, any financial information, supplied by any member of its Group or any of their respective Representatives in connection  with the transactions contemplated in the Transaction Documents was when given  and remains true and accurate in all respects and not misleading;

		
	(g)
	it has and will have at Completion immediately available on an unconditional basis (subject only to Completion) the cash resources required to meet in full its obligations under the Transaction Documents;

		
	(h)
	none of it, any member of its Group nor any of their respective Representatives acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement and other Transaction Documents is or will be at the Completion Date: (i) in violation of any Sanctions Laws and Regulations; (ii) a Designated Person or otherwise the target of Sanctions; (iii) involved in any transactions directly or indirectly, relating to or with entities located in countries subject to U.S. economic sanctions; or (iv) engaged in dealings in or with any property or interest in property blocked pursuant to any Sanctions Laws and Regulations; and

		
	(i)
	none of the it, any member of the its Group, nor any of their respective Representatives acting or benefiting in any capacity in connection with the transactions contemplated  by  this Agreement and  other Transaction Documents:  (i) will permit the Company to engage in any transactions with or relating to countries or persons subject to Sanctions; and (ii) none of the proceeds used in connection with  the acquisition of the shares in the Company will be derived from or in any way related directly or indirectly to business with countries or persons subject to Sanctions.

		
	12.2
	Kosmos warrants to the Seller and Trident on the Execution Date and on the Completion Date that it is a company duly incorporated and organised and validly existing under the laws of the Cayman Islands.

		
	12.3
	Trident warrants to the Seller and Kosmos on the Execution Date and on the Completion Date that it is a company duly incorporated and organised and validly existing under the laws of the Cayman Islands.

		
	12.4
	Each Purchaser shall at its own cost procure that no later than six (6) months following Completion:

		
	(a)
	no member of its Group shall use "Hess" or any other mark, logo, name, symbol or design which, in the opinion of the Seller, is capable of being confused with Hess;  and

		
	(b)
	all references to any member of the Retained Group wherever and however any such reference is made by its Group in connection with the Business are removed,

and each of the Purchaser undertakes to the Seller that in the event of any sale of the whole or any part of the its Group or its businesses to any third party, it shall procure that any successor in title shall enter into equivalent undertakings in respect of the Retained Group.
		
	12.5
	If Completion does not take place, each Purchaser undertakes to the Seller that it shall forthwith hand over, or procure the handing over of, all books, records, documents and papers of or relating to the Retained Group which shall have been made available to it and all copies or other records derived from such materials and that it shall remove any information derived from such materials or otherwise concerning the subject matter of this Agreement from any computer, word processor or other device containing information.

		
	13.
	Environmental indemnity

		
	13.1
	Subject to Completion occurring, and other than as set out in Clause 13.2, the Purchasers  agree that no member of the Retained Group shall have any liability to any member of the Trident Group, any member of the Kosmos Group, or to any Group Company in respect of any Environmental Liabilities of whatsoever nature and howsoever arising whether before, on or after the Economic Date.

		
	13.2
	Subject to Completion occurring, the Seller hereby indemnifies each Purchaser against any and all Losses suffered or incurred by it and in respect of any Claims arising out of, relating to or attributable to any breach of any of the Environmental Warranties.

		
	14.
	Termination

		
	14.1
	This Agreement shall terminate and, subject to Clause 14.3, each Party’s rights and obligations shall cease to have force and effect from such termination if at any time prior to Completion a Purchaser gives written notice of termination to the Seller following:

		
	(a)
	a breach by the Seller of any of the Title Warranties, in which case this Agreement shall terminate with immediate effect on the date set out in the notice;

		
	(b)
	the occurrence and continuance of a MAC Event, in which case this Agreement shall terminate with effect from the earlier of (i) the Business Day following the day on which the Condition has been satisfied or waived in accordance with this Agreement, unless the Purchasers notify the Seller that the MAC Event has been cured to their reasonable satisfaction or no longer exists; and (ii) the Long Stop Date; provided that if the MAC 

Event occurs after the Condition has been satisfied or waived in accordance with this Agreement then the termination shall occur with immediate effect.
		
	14.2
	Save for the Parties’ express right to terminate in this Clause 14 and Clauses 3.6 (Condition), 8.3(c) (Completion) and 16(f) (Mutual Warranties) , the Parties shall not be entitled to rescind or terminate this Agreement, whether before or after Completion. Nothing in this Clause 14 shall operate to limit or exclude any liability for fraud.

		
	14.3
	If this Agreement is terminated by a Party in accordance with:

		
	(a)
	Clause 3.6 (Condition);

		
	(b)
	Clause 8.3(c) (Completion);

		
	(c)
	Clause 14.1 (Termination); or

		
	(d)
	Clause 16(f) (Mutual Warranties),

the rights and obligations of the Parties under this Agreement shall cease immediately, save in respect of antecedent breaches (but excluding any right of the Purchasers to claim damages for breach of Warranty or of the Seller’s obligations under Clause 5 (Pre-Completion Obligations)) and under the Continuing Provisions.

		
	15.
	Non-solicitation of employees

Each Purchaser shall not and undertakes to procure that each member of the its Group will  not, either pending or within two (2) years after Completion, solicit or entice away from the employment of any member of the Retained Group any person employed by a member of the Retained Group at the date of this Agreement except for any employee who answers a general public advertisement without further solicitation.

		
	16.
	Mutual warranties

The Parties make the following warranties to each other as of the date of this Agreement and the Completion Date:
		
	(a)
	Each Party warrants that, since January 1, 2012, and except as otherwise Disclosed, it, its Affiliates, its Associated Persons, its directors, officers, employees, agents, or consultants, or any other person acting for, or on behalf of the Party or its Affiliates, and except as set forth in subsection (a)(iii) below in connection with this Agreement and the Agreement’s subject matter (and in the case of the Seller, in connection with the PSC Licence, the Seller’s and Seller Guarantor’s activities in Equatorial Guinea including Block G, and the activities of any Group Company), directly or indirectly:

		
	(i)
	have not violated or committed any act that would constitute a violation of, or an offence under, any Anti-Bribery Laws or Sanctions Laws and Regulations, irrespective of whether the Anti-Bribery Laws or Sanctions Laws and Regulations apply;

		
	(ii)
	have not paid, offered, promised, or authorised the payment, directly or indirectly, of any monies or anything of value to any person for the purpose  of improperly influencing any act or decision by that person, or by a Government Official, to obtain, retain, or direct business or to secure an improper advantage;

		
	(iii)
	have not, to the knowledge of the Party, been the subject of any actual, pending or threatened, legal, administrative, arbitral or other proceeding, claim, suit, inquiry, or action against, or government investigation in connection with any Anti-Bribery Laws or Sanctions Laws and Regulations  in or concerning any jurisdiction, whether or not relating to operations or activities in Equatorial Guinea, nor, so far as the Party is aware, are there any circumstances likely to give rise to any such investigation, inquiry or proceeding in or concerning activities or operations in Equatorial Guinea; or

		
	(iv)
	have no injunction, order, judgment, ruling, or decree against them by or before any government in connection with any Anti-Bribery Laws or Sanctions Laws or Regulations.

		
	(b)
	In connection with the Agreement, each Party warrants and undertakes that it, its Affiliates, its directors, officers, employees, agents or consultants, and any other person acting for, or on behalf of, such Party, directly or indirectly shall not violate any Anti-Bribery Law or Sanctions Law or Regulation, or engage any act, practice, or conduct that would constitute a violation of, or an offence under, the Anti-Bribery Laws or Sanctions Laws and Regulations, as if those laws applied to it.

		
	(c)
	Each Party shall defend, indemnify and hold the other Party and its Affiliates  harmless from and against any and all claims and Losses (including all Losses, suffered or incurred in investigating, settling or disputing any such action (actual or potential) and/or the reasonable costs of obtaining advice as to any such action (actual or potential)) which the other Party or its Affiliates may suffer or incur or which may be brought against it in any jurisdiction arising, directly or indirectly, out of, in  respect of, or in connection with any breach of the warranties and undertakings under this Clause 16.

		
	(d)
	Notwithstanding anything in this Agreement to the contrary, no provision shall be interpreted or applied so as to require any Party to do, or refrain from doing, anything which would constitute a violation of any law or regulation applicable to such Party.

		
	(e)
	For the term of this Agreement and for a period of five (5) years thereafter, each Party shall reasonably cooperate in good faith with any reasonable request of any other Party to be entitled to review relevant documentation, and further each Party agrees to encourage its representatives, management and/or staff to engage in interviews at the request of any other Party, in order to verify compliance with the terms of this Clause

16 and the requirements of the Anti-Bribery Laws or Sanctions Laws and  Regulations. Each Party shall cooperate fully and in good faith in any such audit or investigation conducted by another Party in relation to compliance with this Clause  16 and the Anti-Bribery Laws and Sanctions Laws and Regulations.

		
	(f)
	Notwithstanding anything in this Agreement to the contrary, each Party shall have the right to suspend or terminate this Agreement and any payments hereunder if the other Party has failed to materially comply with any of the terms of Clause 16(a) and  Clause 16(b).

		
	17.
	Withholding

		
	17.1
	Any payments made or due from a Party (the "Payer") under this Agreement shall  be effected by the Payer without any deduction or withholding of any Tax unless required by law. In the event that the Payer is obliged to deduct or withhold any such Tax  under applicable law when effecting any such payment, the Payer shall:

		
	(a)
	make the deduction or withholding and account to the relevant Tax Authority for the amount deducted or withheld within the time allowed and in the minimum amount required by law and promptly provide the Party receiving the relevant payment (the "Payee") with evidence reasonably satisfactory to the Payee that it has done so; and

		
	(b)
	(other than where the relevant payment is, or is in respect, of the Consideration) increase the amount payable to the Payee to the extent necessary to ensure that after making the required deduction or withholding the Payee receives the payment in the amount it would have received had the Payer had no obligation to make the required deduction or withholding.

		
	17.2
	The Payer covenants to pay to the Payee on demand an amount equal to any Losses incurred or suffered by the Payee as a result of any failure by the Payer to comply with its obligations under Clause 17.1(a).

		
	18.
	Access

		
	18.1
	The Purchasers shall make available to the Seller copies of any Books and Records of the Group Companies (or, if practicable, the relevant parts of those Books and Records) which  are reasonably required by the Seller for the purpose of dealing with its Tax or accounting affairs and/or in preparation of the Final Statement of Accounts in accordance with Clause 6.1 (Statements of accounts) and, accordingly, the Purchasers shall, upon being given reasonable notice by the Seller and subject to the Seller giving such undertaking as to confidentiality as the Purchasers shall reasonably require, procure that such Books and Records are made available to the Seller and its Representatives for inspection (during Working Hours) and copying (at the Seller’s expense) for and only to the extent necessary for such purpose and for a period of five (5) years from Completion.

		
	18.2
	The Seller shall make available to the Purchasers copies of any Books and Records of members of the Retained Group (or, if practicable, the relevant parts of those Books and Records) which are reasonably required by the Purchasers for the purpose of dealing with its Tax or accounting affairs and, accordingly, the Seller shall, upon being given reasonable notice by the Purchasers and subject to the Purchasers giving such undertaking as to confidentiality as the Seller shall reasonably require, procure that such Books and Records are made available to the Purchasers and their Representatives for inspection (during Working Hours) and copying (at the Purchasers' expense) for and only to the extent necessary for such purpose and for a period of five (5) years from Completion.

		
	18.3
	In the event that any proceeding, enquiry or investigation of any judicial or Governmental or Regulatory Authority is pending at the time of expiry of the period of five (5) years from Completion, or if at such time the Seller or the Purchasers (as applicable) is in the process of 

using any Books and Records in connection with satisfying applicable laws or regulations, the Seller or the Purchasers (as applicable) shall be entitled to continuing access to the Books and Records on the same terms as provided in Clauses 18.1 and 18.2 for a further period until completion of the relevant enquiry, investigation or other event.

		
	19.
	Effect of completion

Any provision of the Transaction Documents which is capable of being performed after, but which has not been performed at or before Completion, shall remain in full force and effect notwithstanding Completion.

		
	20.
	Assurance

		
	20.1
	Each Purchaser, for itself and its successors and assigns, covenants that, at any time and from time to time on or after Completion, it and they will execute and deliver all such instruments of assumption and acknowledgements or take such other action as the Seller may reasonably request in order to give full effect to this Agreement and the Transaction Documents.

		
	20.2
	The Seller, for itself and its successors and assigns, covenants that, at any time and from time to time on or after Completion, it and they will execute and deliver all such instruments of assumption and acknowledgements or take such other action as the Purchasers may  reasonably request in order to give full effect to this Agreement and the Transaction Documents.

		
	21.
	Insurance

The Purchasers undertake that with effect from the Completion Date it will arrange insurance cover in respect of the Group Companies and acknowledges that with effect from the Completion Date any pre-existing insurance cover maintained by the Retained Group shall no longer apply to the Group Companies.

		
	22.
	Assignment

		
	22.1
	Subject to Clause 22.2, a Purchaser may not assign, transfer, charge, declare a trust of or otherwise dispose of all or any part of its rights and benefits under this Agreement or any  other Transaction Documents (including any cause of action arising in connection with any of them) or of any right or interest in any of them without the prior written consent of the Seller and the other Purchaser.

		
	22.2
	A Purchaser may assign all or any of its rights under any Transaction Document by way of security or charge (or both of the foregoing) for the benefit of:

		
	(a)
	any bank(s), and/or financial institution(s), and/or holder(s) of debt securities or any other person lending money or making other banking or credit facilities available to such Purchaser and/or its Affiliates (including in connection with any refinancing or replacement of such facilities) in connection with the transaction contemplated by this Agreement; and/or

		
	(b)
	any person from time to time appointed by any bank(s), and/or financial institution(s), and/or holder(s) of debt securities or any other person referred to in Clause 22.2(a) to act on its/their behalf as facility or security agent, security trustee, arranger of finance, receiver or person fulfilling a similar or related role in connection with the transaction contemplated by this Agreement,

and any such beneficiary of security may assign all or any of those rights for the purpose of enforcing such security assignment or charge.

		
	23.
	Entire agreement

		
	23.1
	This Agreement, together with the Transaction Documents and any other documents referred to in this Agreement or any Transaction Document, constitutes the whole agreement between the Parties and supersedes any previous arrangements or agreements between them relating to the sale and purchase of the Shares.

		
	23.2
	A Party’s only right or remedy in respect of any provision of this Agreement or any other Transaction Document shall be for breach of this Agreement or that Transaction Document.

		
	23.3
	Save in relation to breach of this Agreement or any other Transaction Document, no Party nor any of its Related Persons shall have any right or remedy, or make any claim, against another Party nor any of its Related Persons in connection with the sale and purchase of the Shares.

		
	23.4
	In this Clause 23, “Related Persons” means, in relation to a Party, members of the Retained Group (in respect of the Seller), the Kosmos Group (in respect of Kosmos) or the Trident Group (in respect of Trident) (as applicable) and the Representatives of that Party and of members of the Retained Group (in respect of the Seller), the Kosmos Group (in respect of Kosmos) or the Trident Group (in respect of Trident) (as applicable).

		
	23.5
	Nothing in this Clause 23 shall operate to limit or exclude any liability for fraud.

		
	24.
	Notices

		
	24.1
	Any notice or other communication to be given under or in connection with this Agreement shall be in the English language in writing and signed by or on behalf of the Party giving it. A notice may be delivered personally or sent by fax, pre-paid recorded delivery or international courier to the address or fax number provided in Clause 24.3, and marked for the attention of the person specified in that Clause.

		
	24.2
	A notice shall be deemed to have been received:

		
	(a)
	at the time of delivery if delivered personally;

		
	(b)
	at the time of transmission if sent by fax;

		
	(c)
	two (2) Business Days after the time and date of posting if sent by pre-paid recorded delivery; or

		
	(d)
	three (3) Business Days after the time and date of posting if sent by international courier,

provided that if deemed receipt of any notice occurs after 5.30 p.m. or is not on a Business Day, deemed receipt of the notice shall be 9.30 a.m. on the next Business Day. References to time in this Clause 24 are to local time in the country of the addressee.
		
	24.3
	Notices under this Agreement shall be sent to a Party at its address or number and for the attention of the individual set out below:

Seller
Name:    Hess Equatorial Guinea Investments Limited
		
	Address:
	care of Hess Corporation, 1501 McKinney,   Houston, Texas 77010, USA

Attn:    General Counsel
Facsimile no.:    +1 713 496-8052

		
	with a copy to:
	care  of  Hess  Corporation,  1185  Avenue  of the Americas, New York, NY 10036, USA

Attn:    Timothy Goodell, General Counsel
Facsimile no.:    +1 212 536-8241

Seller Guarantor

Name:    Hess Corporation
		
	Address:
	1185 Avenue of the Americas, New York, New York 10036, USA

Attn:    Timothy Goodell, General Counsel
Facsimile no.:    +1 212 536-8241

Purchasers Kosmos
Name:    Kosmos Energy Equatorial Guinea
Address:    c/o Wilmington Trust (Cayman Islands)
Fourth Floor, Century Yard, Cricket Square, Elgin    Avenue,
P.O. Box 32322, George Town, KY1-1209, Grand Cayman, Cayman Islands
Attn:    General Counsel
Facsimile no.:    +1 214 445-9705 With a copy to:
Name:    Kosmos Energy LLC

		
	Address:
	8176 Park Lane, Suite 500 Dallas, Texas 75231 U.S.A.

Attn:    General Counsel
Facsimile no.:    +1 214 445-9705

Trident
Name:    Trident Energy E.G. Operations, Ltd.
		
	Address:
	c/o  Walkers  Corporate  Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands

Attn:    General Counsel

With a copy to :    c/o Trident Energy Management Limited
Address:    129 Wilton Road, London SW1V 1JZ, United Kingdom
Attn:    General Counsel

Kosmos Guarantor:
Name:    Kosmos Energy Operating
		
	Address:
	c/o Kosmos Energy LLC 8176 Park Lane, Suite 500 Dallas, Texas 75231 U.S.A.

Attn:    General Counsel
Facsimile no.:    +1-214-445-9705

		
	24.4
	A Party shall notify the other Parties of any change to its details in Clause 24.3 in accordance with the provisions of this Clause 24, provided that such notification shall only be effective  on the later of the date specified in the notification and five (5) Business Days after deemed receipt.

		
	25.
	Announcements

No Party nor its Affiliates shall make any public announcements or other statements  regarding the execution of this Agreement, the Transaction Documents, Completion or any other matter involving this Agreement or any of the transactions or documents contemplated under this Agreement without the prior written consent of the other Parties, such consent not to be unreasonably withheld, conditioned or delayed, except that a Party may make a public announcement that is required by law or to comply with any directives or other requirements of any law of any relevant jurisdiction or any securities exchange, Governmental or Regulatory Authority provided that, to the extent permissible, such Party gives the other Parties notice and a copy of the announcement at least forty-eight (48) hours prior to such announcement being made. Without limiting the scope of the foregoing provision and for the avoidance of doubt, the Purchasers are not authorised to include the ‘Hess’ logo in any form  in any public announcement or statement, the Seller and Kosmos are not authorised to include the ‘Trident’ logo in any form in any public announcement or statement and the Seller and Trident are not authorised to include the ‘Kosmos’ logo in any form in any public announcement or statement.

		
	26.
	Guarantees

		
	26.1
	In consideration of the Seller entering into this Agreement, the Kosmos Guarantor irrevocably and unconditionally guarantees to the Seller punctual performance by Kosmos of its obligations to pay all monies owed by Kosmos to the Seller in connection with the purchase  of the Shares on the terms and subject to the conditions of this Agreement (the “Guaranteed Obligations”), and undertakes to the Seller that whenever Kosmos does not fulfil a Guaranteed Obligation, the Kosmos Guarantor shall immediately on demand pay that amount as if it was the principal obligor so that the same benefits are conferred on the Seller as it would have received if such obligation had been performed and satisfied by Kosmos (the “Kosmos Guarantee”).

		
	26.2
	The Kosmos Guarantor, as principal obligor and as a separate and independent obligation and liability from its obligations and liabilities under the Kosmos Guarantee, undertakes to indemnify and hold the Seller harmless from and against any Loss suffered or incurred by it arising directly or indirectly out of, as a result of or in connection with the non-performance by Kosmos of any of the Guaranteed Obligations.

		
	26.3
	The Kosmos Guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by Kosmos under the Guaranteed Obligations, regardless of any intermediate payment or discharge in whole or in part.

		
	26.4
	In consideration of each of the Purchasers entering into this Agreement, the Seller Guarantor irrevocably and unconditionally guarantees to each of the Purchasers punctual performance  by the Seller of all of the Seller’s obligations under this Agreement and undertakes to each Purchaser that:

		
	(a)
	whenever the Seller does not pay any amount when due under or in connection with this Agreement and any other Transaction Document, the Seller Guarantor shall immediately on demand pay that amount to the Purchasers as if it was the principal obligor; and

		
	(b)
	whenever the Seller fails to perform any other obligations under this Agreement or any other Transaction Document, the Seller Guarantor shall immediately on demand perform (or procure performance of) and satisfy (or procure the satisfaction of) that obligation,

so that the same benefits are conferred on each of the Purchasers as it would have received if such obligation had been performed and satisfied by the Seller (the “Seller Guarantee”).
		
	26.5
	The Seller Guarantor, as principal obligor and as a separate and independent obligation and liability from its obligations and liabilities in Clause 26.4, undertakes to indemnify and hold each Purchaser harmless from and against any Loss suffered or incurred by it arising directly or indirectly out of, as a result of or in connection with the non-performance by the Seller of any of its obligations in accordance with the Seller Guarantee.

		
	26.6
	The Seller Guarantee is a continuing guarantee and will extend to any sums payable by the Seller to the Purchasers under this Agreement, regardless of any intermediate payment or discharge in whole or in part.

		
	26.7
	The obligations of the Kosmos Guarantor and/or the Seller Guarantor, as the case may be,  will not be affected by any act, omission, matter or thing which, but for this Clause 26.7 would reduce, release or prejudice any of its obligations under this Agreement or any other Transaction Document including:

		
	(a)
	any time, waiver or consent granted to the Purchasers, Seller (as the case may be) or any other person;

		
	(b)
	the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against any guaranteed Party under this Agreement or any other Transaction Document;

		
	(c)
	the insolvency (or similar proceedings) of the Seller or Kosmos (as applicable), any incapacity or lack of power, authority or legal personality of the Seller or Kosmos (as applicable) or change in control, ownership or status of the Seller or Kosmos (as applicable);

		
	(d)
	any amendment to this Agreement or any other Transaction Document;

		
	(e)
	any illegality, invalidity or unenforceability of any obligation of any person under this Agreement or any other Transaction Document; or

		
	(f)
	any other act, event or omission which might operate to discharge, impair or  otherwise affect any of the obligations of the Kosmos Guarantor or Seller   Guarantor

(as applicable) or any of the rights, powers and remedies conferred on the Purchaser, in each case under this Agreement or any other Transaction Document.
		
	26.8
	The Kosmos Guarantor waives any right which it may have to first require the Seller to proceed against Kosmos before claiming from the Kosmos Guarantor. The Seller Guarantor also waives any right which it may have to first require the Purchasers to proceed against the Seller before claiming from the Seller Guarantor, in each case under this Clause 26.

		
	26.9
	Until all amounts which may be or become payable:

		
	(a)
	by Kosmos to the Seller under the Guaranteed Obligations have been irrevocably paid in full:

		
	(i)
	the Kosmos Guarantor will not make demand for the payment of any sum from Kosmos connected with or in relation to the sum demanded  by  the Seller or claim any set-off or counterclaim against Kosmos;

		
	(ii)
	if Kosmos is insolvent or in liquidation, the Kosmos Guarantor will not prove in any such insolvency or liquidation in competition with the Seller;

		
	(iii)
	the Seller shall not be obliged to apply any sums held or received by it from the Kosmos Guarantor towards payment of Kosmos’s obligations; and

		
	(iv)
	the Kosmos Guarantor will not exercise any rights which it may have to be indemnified by the Seller or otherwise claim from the Seller any sums which may be owing to it from the Seller.

		
	(b)
	by the Seller to the Purchasers under or in connection with this Agreement and any other Transaction Document have been irrevocably paid in full:

		
	(i)
	the Seller Guarantor will not make demand for the payment of any sum from the Seller connected with or in relation to the sum demanded by the Purchasers or claim any set-off or counterclaim against the Seller;

		
	(ii)
	if the Seller is insolvent or in liquidation, the Seller Guarantor will not prove in any such insolvency or liquidation in competition with the Purchasers;

		
	(iii)
	the Purchasers shall not be obliged to apply any sums held or received by them from the Seller Guarantor towards payment of the Seller’s obligations; and

		
	(iv)
	the Seller Guarantor will not exercise any rights which they may have to be indemnified by the Purchasers or otherwise claim from the Purchaser any sums which may be owing to it from either Purchaser.

		
	26.10
	The Kosmos Guarantor undertakes to hold any security taken from Kosmos in connection  with the Kosmos Guarantee and any monies or rights received by the Kosmos Guarantor from Kosmos as trustee on trust for the Seller pending discharge in full of all of the Kosmos Guarantor’s obligations under the Kosmos Guarantee.

		
	26.11
	The Seller Guarantor undertakes to hold any security taken from the Seller in connection with the Seller Guarantee and any monies or rights received by the Seller Guarantor from the  Seller as trustee on trust for the Purchasers pending discharge in full of all of the Seller Guarantor’s obligations under the Seller Guarantee.

		
	26.12
	The Seller Guarantor agrees that:

		
	(a)
	if any payment received by the Purchasers from the Seller in relation to its obligations under this Agreement is avoided or set aside on the subsequent insolvency or liquidation of the Seller any amount received by the Purchasers and subsequently repaid, shall not discharge or diminish the liability of the Seller Guarantor under this Clause 26, and this Clause 26 shall apply as if such payment had at all times remained owing by the Seller; and

		
	(b)
	after a demand has been made by the Purchasers under this Clause 26 and until the amount demanded has been paid in full, the Purchasers may take such action as it thinks fit against the Seller to recover all sums due and payable to it under this Agreement, without affecting the obligations of the Seller Guarantor under this  Clause 26.

		
	26.13
	The Kosmos Guarantor agrees that:

		
	(a)
	if any payment received by the Seller from Kosmos in relation to its obligations under this Agreement is avoided or set aside on the subsequent insolvency or liquidation of Kosmos any amount received by the Seller and subsequently repaid, shall not discharge or diminish the liability of the Kosmos Guarantor under this Clause 26, and this Clause 26 shall apply as if such payment had at all times remained owing by Kosmos; and

		
	(b)
	after a demand has been made by the Seller under this Clause 26 and until the amount demanded has been paid in full, the Seller may take such action as it thinks fit against Kosmos to recover all sums due and payable to it under this Agreement, without affecting the obligations of the Kosmos Guarantor under this Clause 26.

		
	26.14
	The Kosmos Guarantor warrants to the Seller as of the Execution Date and as of the Completion Date in the terms of Clause 10.2(a) to 10.2(d) (inclusive) (with all references to “the Seller” and/or the “Group Companies” deemed to be references to the “Kosmos Guarantor”).

		
	26.15
	The Seller Guarantor warrants to the Purchasers as of the Execution Date and as of the Completion Date in the terms of Clause 10.2(a) to 10.2(d) (inclusive) (with all references to “the Seller” and/or the “Group Companies” deemed to be references to the “Seller Guarantor”).

		
	27.
	Confidentiality

		
	27.1
	Save as expressly provided in Clause 27.3, the Seller shall and shall procure  that  each member of the Retained Group shall treat as confidential the provisions of the Transaction Documents, all information they possess relating to each Group Company and all information they have received or obtained relating to the Purchasers' Group as a result of negotiating or entering into the Transaction Documents.

		
	27.2
	Save as expressly provided in Clause 27.3, each Purchaser shall, and shall procure that each member of its Group shall, treat as confidential the provisions of the Transaction Documents and all information it has received or obtained about the Retained Group as a result of negotiating or entering into the Transaction Documents.

		
	27.3
	A Party may disclose, or permit the disclosure of, information which would otherwise be confidential if and to the extent that it:

		
	(a)
	is disclosed to Representatives of that Party or its Affiliates, if this is reasonably required in connection with this Agreement (and provided that such persons are required to treat that information as confidential);

		
	(b)
	is required to do so by law or any securities exchange, or by compulsory process issued by any Governmental or Regulatory Authority or Taxation Authority;

		
	(c)
	was already in the lawful possession of that Party or its Representatives without any obligation of confidentiality (as evidenced by written records);

		
	(d)
	comes into the public domain other than as a result of a breach by a Party of this Clause 27;

		
	(e)
	lawfully comes into the possession of that Party, its Affiliates or their Representatives from a third party that expressly represents that it has the right to disseminate such information at the time it is acquired by such Party; or

		
	(f)
	receives prior written consent to the disclosure from the other Party,

provided that prior written notice of any confidential information to be disclosed pursuant to this Clause 27 shall be given to the other Parties at least five business days in advance of the disclosure and their reasonable comments taken into account in good faith.
		
	27.4
	The confidentiality restrictions in Clauses 27.1 to 27.3 shall continue to apply after the termination of this Agreement without limit in time.

		
	27.5
	The Parties acknowledge and agree that, to the extent applicable, the Purchasers shall also be bound by the provisions of the Confidentiality Agreement in respect of any “Confidential Information” (as that term is used and defined in the Confidentiality Agreement) that relates  to any member of the Retained Group (other than the Seller), which shall remain in force and full effect in accordance with its terms. If there is any inconsistency between this Agreement and the Confidentiality Agreement, this Agreement shall prevail.

		
	28.
	Costs and expenses

		
	28.1
	Each Party shall pay its own costs and expenses in relation to the negotiations leading up to the sale and purchase of the Shares and the preparation, execution and carrying into effect of this Agreement and the other Transaction Documents. Each Party shall bear and pay the costs and expenses of any advisers, consultants, investment bankers or other parties hired by it in connection with the transaction contemplated in this Agreement and the other Transaction Documents.

		
	28.2
	Each Purchaser shall bear fifty percent (50%) of all stamp duty, stamp duty reserve Tax or other documentary or transaction duties imposed by any Tax Authority of the  Cayman Islands, arising as a result or in consequence of this Agreement (or any other Transaction Document) or of its implementation (including, but not limited to, any Registrar’s fees related to the transfer of Shares envisaged in this Agreement).

		
	29.
	Counterparts

This Agreement may be executed in counterparts and shall be effective when each Party has executed and delivered a counterpart. Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute one and the same instrument.

		
	30.
	Severance and validity

If any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent

and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

		
	31.
	Variations

No variation of this Agreement shall be effective unless in writing and signed by or on behalf of the Parties.

		
	32.
	Remedies and waivers

		
	32.1
	No waiver of any right under this Agreement or any other Transaction Document shall be effective unless in writing. Unless expressly stated otherwise a waiver shall be effective only in the circumstances for which it is given.

		
	32.2
	No delay or omission by any Party in exercising any right or remedy provided by law or  under this Agreement, except in relation to any right or remedy contained in Clause 11 (Seller’s Limitations on Liability), shall constitute a waiver of such right or remedy.

		
	32.3
	The single or partial exercise of a right or remedy under this Agreement shall not preclude  any other nor restrict any further exercise of any such right or remedy.

		
	32.4
	The rights and remedies provided in this Agreement are cumulative and do not exclude any rights or remedies provided by law except as otherwise expressly provided.

		
	32.5
	No Double Recovery

A Party shall not be entitled to recover damages or obtain payment, reimbursement,  restitution or indemnity more than once in respect of any one shortfall, damage, deficiency, breach or other set of circumstances which gives rise to one or more claim under this Agreement. For the purposes of this Clause 32.5, recovery by any Group Companies following Completion shall be deemed to be recovery by the Purchasers.
		
	32.6
	Exclusion of Limitations

Nothing in this Agreement shall apply to limit a claim under this Agreement that arises or is delayed as a result of fraud or Wilful Misconduct by a Party, any other member of a Group, the Retained Group or any Group Company or any of their respective officers or employees.
		
	32.7
	Consequential Loss

Notwithstanding anything to the contrary contained in this Agreement, in no event shall a Party be liable to another Party for any claims for liabilities for any actual or expected:
		
	(a)
	indirect or consequential loss of profits;

		
	(b)
	loss of revenue, loss of goodwill, loss of opportunity, or loss of business, in each case that are indirect or consequential; or

		
	(c)
	any other special, indirect or consequential loss.

		
	33.
	Third party rights

		
	33.1
	Save as expressly provided in Clause 33.2, a person who is not a Party or its successor or permitted assignee shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of the terms of this Agreement.

		
	33.2
	Clauses 9 (Post-completion covenants), 10 (Seller’s warranties), 12 (Purchasers' warranties and undertakings), 13 (Environmental indemnity), 18.2 (Access), 20 (Assurance), 25 (Announcements) and 27 (Confidentiality) are intended to benefit members of the Retained Group and Clause 23 (Entire agreement) is intended to benefit a Party’s Related Persons, and each such Clause shall be enforceable by any of them under the Contracts (Rights of Third Parties) Act 1999, subject to the other terms and conditions of this Agreement.

		
	33.3
	The Parties may amend or vary this Agreement in accordance with its terms without the consent of any other person.

		
	34.
	Governing law and jurisdiction

		
	34.1
	This Agreement, including any non-contractual obligations arising out of or in  connection with this Agreement and any and all other agreements and instruments executed and other documents delivered pursuant hereto, are governed by and shall be construed in accordance with English law.

		
	34.2
	The Parties agree that any claim, dispute or difference of whatever nature arising under, out of or in connection with this Agreement (including a claim, dispute or difference regarding its existence, termination or validity or any non-contractual obligations arising out of or in connection with this Agreement ) (a “Dispute”), shall be referred to and finally settled by arbitration in accordance with the London Court of International Arbitration (“LCIA”) Rules (the “Rules”) as in force at the date of this Agreement and as modified by this Clause, which Rules shall be deemed incorporated into this Clause. The number of arbitrators shall be three, one of whom shall be nominated by the claimant(s), one by the respondent(s) and the third of whom, who shall act as presiding arbitrator shall be nominated by the two party-nominated arbitrators, provided that if the third arbitrator has not been nominated within thirty days of the nomination of the second party-nominated arbitrator, such third arbitrator shall be appointed by the LCIA Court. The seat of arbitration shall be London, England and the language of arbitration shall be English. Sections 45 and 69 of the Arbitration Act 1996 shall not apply. The Emergency Arbitrator provisions in Article 9B of the Rules shall not apply. Notwithstanding any inconsistencies with the Rules, a Request for Arbitration must be served on all other Parties to the dispute in accordance with Clause 24 (Notices) of this Agreement.

		
	34.3
	In order to facilitate the comprehensive resolution of related disputes, all claims between any of the Parties that arise out of or in connection with this Agreement any other Transfer Document or other instrument executed pursuant to this Agreement, or any of the Assets Documents may be brought in a single arbitration. Upon the request of any Party to an arbitration commenced pursuant to Clause 34.2 (an “Arbitration”), the arbitral tribunal shall consolidate the Arbitration with any other arbitration proceeding relating to this Agreement, any other Transfer Document or other instrument executed pursuant to this Agreement, or to any of the Assets Documents, and in respect of which the arbitral tribunal was constituted  after the constitution of the arbitral tribunal in the Arbitration, if either:

		
	(a)
	all parties concerned agree; or

		
	(b)
	the arbitral tribunal determines that (i) there are issues of fact or law common to the two  proceedings  so  that  a  consolidated  proceeding  would  be  more  efficient than

separate proceedings; and (ii) no party would be prejudiced as a result of such consolidation through undue delay or otherwise.
In the event of an order for consolidation, (i) where the parties in the two proceedings are identical, the tribunal constituted first in time shall serve as the arbitral tribunal for the consolidated arbitration and (ii) where the parties in the two proceedings are not identical, a new arbitral tribunal for the consolidated arbitration shall be constituted in accordance with the provisions of Clause 34.2. Where a new tribunal is so constituted, for the avoidance of doubt, any rulings, directions or orders made by the arbitral tribunal constituted first in time, with the exception of outstanding orders for costs, will be of no effect. For the purpose of the constitution of the arbitral tribunal under this provision, and without prejudice to any party’s rights under applicable limitation periods, the consolidated arbitration will be considered to have been commenced on the date of receipt by all the parties of the order for consolidation.
		
	34.4
	The Parties agree that before the constitution of the arbitral tribunal, any party to an Arbitration may effect joinder by serving notice on any party to this Agreement, the Transfer Documents or any instrument executed pursuant to this Agreement, or any one of the Assets Documents whom it seeks to join, provided that such notice is also sent to all other parties to the Arbitration and the LCIA Court within 30 days of service of the Request for Arbitration. The joined party will become a claimant or respondent party (as appropriate) in the Arbitration and participate in the arbitrator appointment process in Clause 34.2.

		
	34.5
	The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled  to seek an injunction or injunctions to prevent breaches of this Agreement.

		
	34.6
	The Parties irrevocably submit to the non-exclusive jurisdiction of the courts of England to support any arbitration pursuant to this Clause 34 including, if necessary, the grant of interlocutory relief.

		
	35.
	Agent for service of process

		
	35.1
	The Seller and Seller Guarantor irrevocably appoint Maclay Murray & Spens LLP, Trident irrevocably appoints Trident Energy Management Limited (a company incorporated in England and Wales, with company number 10280693 and having its registered office at Suite 1, 3rd Floor 11-12 St. James's Square, London, United Kingdom, SW1Y 4LB), and Kosmos and the Kosmos Guarantor irrevocably appoints Capita Asset Services of 4th Floor, 40 Dukes Place, London EC3A 7NH, United Kingdom, in each case as its agent for service of process  in England.

		
	35.2
	If any person appointed as agent for service of process ceases to act as such the relevant Party shall immediately appoint another person to accept service of process on its behalf in England and notify the other Parties of such appointment. If it fails to do so within ten (10) Business Days the other Parties shall be entitled by notice to the relevant Party to appoint a replacement agent for service of process.

		
	36.
	Purchaser Obligations are several

The liability and obligation of each Purchaser under this Agreement is several, not joint, and neither Purchaser shall have any liability or obligation arising out of a breach by another Purchaser of its obligations, representations, warranties or covenants in this Agreement.
In Witness Whereof each Party has executed this Agreement, or caused this Agreement to be executed by its duly authorised representatives.

Schedule 1

(Details of the Group Companies)

Part 1
(Details of the Company)

Company name    :    Hess International Petroleum, Inc.

Date of incorporation and place of incorporation
 
:    8 September 1994, Cayman Islands

Registration number    :    55991
Registered office address    :    Sterling Trust (Cayman) Limited, Whitehall House,
238 North Church Street, PO Box 1043, George Town, Grand Cayman, KY1-1102, Cayman Islands
Type of company    :    Exempted company with limited liability Authorised share capital    :    USD 50,000 consisting of 50,000 ordinary    shares
with a nominal value of USD 1 each

Shareholding of the Seller    :    100%

Shareholder – number of issued shares
		
	 
:
	Seller  -  35,001  ordinary  shares  with   a  nominal value of USD 1 each (subject to Clause 5.6)

		
	Directors
	:    Gregory P Hill, John P Rielly, John B Hess and Timothy B Goodell (4)

Part 2
(Details of the Subsidiary)

Company name    :    Hess Equatorial Guinea, Inc.

Date    of    incorporation   and    place    of incorporation
 
:    30 September 1996, Cayman Islands

Registration number    :    68666
		
	Registered office address
	:     Sterling Trust (Cayman)  Limited, Whitehall House, 238 North Church Street, PO Box 1043, George Town, Grand Cayman, KY1- 1102, Cayman Islands

Type of company    :    Exempted company with limited liability
		
	Authorised share capital
	:     USD   5,000,000.00   divided   into  500,000 ordinary shares with a nominal value of  USD 10 each

Shareholding of the Company    :    100%
Shareholder – number of issued shares    :    Company - 100,001 ordinary shares with    a
nominal value of USD 10 each
		
	Directors
	:     Gregory P Hill, John P Rielly, John   B Hess and Timothy B Goodell (4)

Schedule 2

(Completion Arrangements)

Part 1
(Seller’s Obligations)

At Completion, the Seller shall:
		
	1.
	execute and deliver to the Purchasers counterparts of the Transaction Documents to be executed by the Seller at Completion and procure the execution and delivery of those Transaction Documents (if any) to which a member of the Retained Group or a related person or the Company is a party; and

		
	2.
	deliver to the Purchasers:

Accounts
		
	2.1
	a copy of the Initial Statement of Accounts;

Authorisations
		
	2.2
	a certified copy of each power of attorney under which any document to be delivered to the Purchasers has been executed (if any);

		
	2.3
	a copy of the minutes of the meeting of the board of directors (and, where required under applicable law or the relevant entity's constitutional documents, of the members) of the Seller, the Seller Guarantor, the Company and the Subsidiary (or its equivalent) duly authorising: (x) the execution of this Agreement and other Transaction Documents to which each is a party; and (y) the matters contemplated by this Agreement and the Transaction Document to which each is party (including, without limitation, (i) the transfer of fifty percent (50%) of the  Shares from the Seller to Trident and fifty percent (50%) of the Shares from the Seller to Kosmos; (ii) the issue of a share certificate in the name of the Trident in respect of fifty percent (50%) of the Shares and a share certificate in the name of the Kosmos in respect of fifty percent (50%) of the Shares in each case relating to individually numbered shares; (iii) the changes in the Company's and the Subsidiary's directors (and for this purpose the Purchasers shall notify the Seller of the incoming directors no later than ten Business Days prior to Completion); and (iv) the change in the Company's and the Subsidiary's registered office);

Director and Officer Documents
		
	2.4
	letters of resignation signed by all the directors of the Company and of the Subsidiary, substantially in the form of Schedule 4 (Form of Resignation Letter) (the “Outgoing Directors and Officers”);

		
	2.5
	a certified copy (certified by the registered office service provider of the Company) of the register of directors and officers of the Company maintained by (or on behalf of) the  Company as updated to record the registration therein, as at Completion, of (x) the resignation of the Outgoing Directors and Officers of the Company and (y) the appointment of each Director and each Officer to the Company nominated by the Purchasers;

		
	2.6
	a certified copy (certified by the registered office service provider of the Subsidiary) of the register of directors and officers of the Subsidiary maintained by (or on behalf of) the Subsidiary  as  updated  to  record  the  registration  therein,  as  at  Completion,  of  (x)      the

resignation of the Outgoing Directors and Officers of the Subsidiary and (y) the appointment of each Director and each Officer to the Subsidiary nominated by the Purchasers;
Registered Office Documents
		
	2.7
	evidence that the registered office of the Company and the Subsidiary have been changed from their existing location to such registered office(s) (located in the Cayman Islands) as the Purchasers shall notify the Seller in writing no later than ten Business Days prior to Completion;

Register of Mortgages and Charges
		
	2.8
	a certified copy (certified by the registered office service provider of the Company or the Subsidiary, as applicable) of the register of mortgages and charges of the Company and of the Subsidiary;

Share Documents
		
	2.9
	a copy of the share transfer instruments executed by the Seller for the purposes of transferring fifty percent (50%) of the Shares to Kosmos' share account and fifty percent (50%) of the Shares to Trident's share account;

		
	2.10
	each share certificate as previously issued in the name of the Seller in respect of the Shares, each such share certificate being duly cancelled;

		
	2.11
	a share certificate in the name of the Trident in respect of fifty percent (50%) of the Shares and a share certificate in the name of the Kosmos in respect of fifty percent (50%) of the Shares;

		
	2.12
	a certified copy (certified by the registered office service provider of the Company) of the register of members of the Company maintained by (or on behalf of) the Company as updated to record the registration therein, as at Completion, of the transfer of fifty percent (50%) of  the Shares from the Seller to Trident and fifty percent (50%) of the Shares from the Seller to Kosmos;

		
	2.13
	a share certificate in the name of the Company in respect of one hundred percent of the Subsidiary Shares;

		
	2.14
	a certified copy (certified by the registered office service provider of the Subsidiary) of the register of members of the Subsidiary maintained by (or on behalf of) the Subsidiary  recording the registration of the Company as the holder of one hundred per cent (100%) of the Subsidiary Shares; and

Other
		
	2.15
	the assessment issued in respect of the Subsidiary in accordance with clause 3 of the Settlement Agreement.

The Seller shall, as soon as reasonably practicable following Completion but no later than 5:00 p.m. (local time in the Cayman Islands) on the Completion Date, deliver to the new registered office of the Company and the Subsidiary as notified to the Seller in accordance with paragraph 2.7 above:
		
	1.
	originals of the registers referred to in paragraphs 2.5, 2.6, 2.8, 2.12 and 2.14 above;

		
	2.
	the certificate of incorporation of the Company and of the Subsidiary;

		
	3.
	each certificate of incorporation on change of name of the Company and of the Subsidiary;

		
	4.
	the memorandum of association  of the Company and of the Subsidiary;

		
	5.
	the articles of association of the Company and of the Subsidiary;

		
	6.
	a certificate of good standing in respect of the Company and of the Subsidiary to be dated within twenty (20) days of Completion or such other date as is nominated by the Purchasers;

		
	7.
	the minutes of all meetings of, and all resolutions consented to by, the directors, members, committees of directors and committees of members of the Company and of the Subsidiary;

		
	8.
	the tax exemption certificate of the Company and of the Subsidiary; and

		
	9.
	all common seal(s) of the Company and of the Subsidiary.

Part 2
(Purchaser’s Obligations)

At Completion, each Purchaser shall:
		
	1.
	procure that fifty percent (50%) of the Initial Adjusted Consideration shall be transferred to the Seller’s Designated Account by wire transfer in immediately available cleared funds and shall deliver to the Seller SWIFT confirmations (in a form satisfactory to the Seller) that the payment of the above stated amount has been made pursuant to this Agreement;

		
	2.
	execute and deliver to the Seller or the Seller’s Lawyers the Transaction Documents to be signed by it or any relevant member of its Group or a Related Person;

		
	3.
	deliver to the Seller or the Seller’s Lawyers:

		
	3.1
	a copy of the minutes of the meeting of the board of directors of it and the Kosmos Guarantor (or the equivalent of the board of directors) and any other necessary corporate approvals authorising its execution of this Agreement and other Transaction Documents to which each  is a party;

		
	3.2
	a certified copy of each power of attorney under which any document to be delivered to the Seller has been executed by it (if any); and

		
	3.3
	a copy of the share transfer instructions executed by it for the purpose of transferring fifty percent (50%) of the Shares to its share account.

Schedule 3

(Seller’s Limitations on Liability)

		
	1.
	Purchasers' Knowledge (actual, constructive and imputed)

		
	1.1
	The Seller shall not be liable to a Purchaser in respect of a Claim (other than a Claim for breach of a Title Warranty) to the extent that the facts and circumstances giving rise to such Claim were:

		
	(a)
	Disclosed before the execution of this Agreement or, in respect of matters arising between execution of this Agreement and Completion, Disclosed before Completion; or

		
	(b)
	otherwise known at the date of this Agreement by it or any member of its Group.

		
	1.2
	If a Purchaser (or any member of its Group or any of their respective Representatives) becomes aware of a matter which might reasonably give rise to a Claim, the Seller shall not  be liable to that Purchaser in respect of it unless written notice of all relevant facts is given by that Purchaser to the Seller as soon as practicable following their so becoming aware and in any event within 

thirty (30) days of such event. If the matter is capable of remedy, the Purchasers shall only be entitled to compensation if the  matter  is  not  remedied  within  thirty (30) days after the date on which such notice served on the Seller.
		
	2.
	Limitations on Quantum

		
	2.1
	The liability of the Seller in respect of any Claim:

		
	(a)
	shall not arise unless and until the amount of such Claim exceeds five hundred thousand Dollars (USD 500,000) (in which case the liability of the Seller shall be for the full amount of the Claim);

		
	(b)
	shall not arise unless and until the amount of all Claims for which it would, in the absence of this provision, be liable exceeds fifteen million Dollars (USD 15,000,000) less an amount equal to the aggregate of any and all Losses suffered or incurred by  the Company and/or the Subsidiary arising out of, relating to or attributable to the MMH Inspection and the Seadrill Claim up to an aggregate amount of two million, five hundred thousand Dollars (USD 2,500,000) (in which case the liability of the Seller shall be for the full amount of the Claim); and

		
	(c)
	shall not (when aggregated with the amount of all other Claims) exceed thirty-five per cent (35%) of the Initial Consideration, other than the liability of the Seller in respect of any Title Warranty which shall not exceed one hundred per cent (100%) of the Initial Consideration.

		
	3.
	Time Limits

		
	3.1
	The Seller shall not be liable in respect of any Claim (other than an Environmental Indemnity Claim or in respect of a Tax Warranty or an ABC Warranty) unless written notice containing full details of such Claim is given by or on behalf of a Purchaser to the Seller by no later than eighteen (18) months from the Completion Date provided that any such Claim shall (if not previously satisfied, settled or withdrawn) be deemed to have been withdrawn and the Seller shall have no liability for such Claim unless arbitration proceedings in respect of it have been properly issued and validly served within six (6) months of such written notice being given to the Seller.

		
	3.2
	The Seller shall not be liable in respect of any Environmental Indemnity Claim unless written notice containing full details of such Environmental Indemnity Claim is given by or on behalf of the Purchaser to the Seller by no later than three (3) years from the Completion Date provided that any such Claim shall (if not previously satisfied, settled or withdrawn) be deemed to have been withdrawn and the Seller shall have no liability for such Claim unless arbitration proceedings in respect of it have been properly commenced within six (6) months of such written notice being given to the Seller.

		
	3.3
	The Seller shall not be liable for a Claim in respect of any Tax Warranty or ABC Warranty unless written notice containing full details of such Claim is given by or on behalf of the Purchaser to the Seller by no later than five (5) years from the Completion Date provided that any such Claim shall (if not previously satisfied, settled or withdrawn) be deemed to have been withdrawn and the Seller shall have no liability for such Claim unless arbitration proceedings in respect of it have been properly commenced within six (6) months of such written notice being given to the Seller.

		
	4.
	Allowances, Provisions or Reserves

The Seller shall not be liable for any Claim to the extent that allowance, provision or reserve has been made in the Accounts for the matter giving rise to such Claim (but only to the extent of such allowance, provision or reserve).
		
	5.
	Contingent Liability

The Seller shall not be liable for any Claim based upon a liability which is contingent unless and until such contingent liability becomes an actual liability.
		
	6.
	Retrospective Legislation

The Seller shall not be liable for any Claim to the extent that the Claim arises (or is increased) as a result of any change in any legislation or any change in the practice (including the withdrawal of any extra-statutory concession) of any Tax Authority or in the judicial interpretation of the law on or after the date of this Agreement.
		
	7.
	Voluntary Acts or Omissions

The Seller shall not be liable to a Purchaser for any Claim to the extent that Claim arises or increases directly or indirectly as a result of any voluntary act or omission of any member of that Purchaser’s Group (including, following Completion, the Group Companies) after the date of this Agreement.
		
	8.
	Cease in Ownership

The Seller shall not be liable to a Purchaser for any Claim arising out of an event, matter, circumstance, act or omission in respect of the Group Companies which occurs after such Group Companies have ceased to be subsidiaries of that Purchaser or of any other member of its Group.
		
	9.
	Reliefs

The Seller shall not be liable for any Claim to the extent that any Tax relief or other deduction arising before Completion is available (or would be available upon the making of a Claim by the relevant Group Company) to reduce or otherwise mitigate the liability of the Group Company which is the subject of such Claim.

		
	10.
	Duty to Mitigate

The Purchasers shall mitigate any loss or damage which it may suffer as a result of a breach by the Seller of this Agreement or as a result of any fact, matter, event or circumstance likely to give rise to a Claim.
		
	11.
	Loss Otherwise Compensated

		
	11.1
	The Seller shall not be liable to a Purchaser for any Claim to the extent that:

		
	(a)
	the matter giving rise to such Claim has been (or is capable of being) made good or is (or is capable of being) otherwise compensated for without loss to that Purchaser; or

		
	(b)
	the Claim is recoverable under any insurance policy.

		
	11.2
	In assessing a Claim, corresponding savings by, or net benefits to, the Purchaser’s Group shall be taken into account (including the amount by which Taxation is actually saved as a result of the Loss which is the subject of the Claim).

		
	12.
	Recovery from Third Parties

Where a Purchaser is entitled to recover from any other person an amount in respect of any matter relating to a Claim, that Purchaser shall promptly notify the Seller in writing and use  its reasonable endeavours to recover such amount. The Purchaser shall keep the Seller fully informed of the progress of such recovery and shall provide copies of all relevant correspondence and documentation. Upon recovery of such amount the Purchaser shall:
		
	12.1
	deduct the full amount from the Claim (if the entitlement of the Purchaser to recover arose before payment is made by the Seller under the Claim); or

		
	12.2
	repay to the Seller the lesser of such amount paid by the Seller to the Purchaser under the Claim or the full amount recovered by that Purchaser (if the entitlement to recover arose after payment had been made by the Seller under the Claim).

		
	13.
	Conduct of Claims

If a Purchaser or any member of its Group becomes aware of any matter which may result in a claim being brought against it by another person (a “Third Party Claim”) which may lead to a Claim, that Purchaser shall and shall procure that each member of its Group shall:
		
	13.1
	make no admission of liability or settle or compromise the Third Party Claim without the  prior consent in writing of the Seller such consent not to be unreasonably withheld or delayed provided that it will take all reasonable action to mitigate any loss that may arise in respect of any resulting Claim;

		
	13.2
	for the duration of the Third Party Claim keep the Seller reasonably informed of all material developments in relation to the Third Party Claim within its knowledge (including reasonable access to premises and personnel and the right to examine and copy at the Seller’s costs and expense all relevant documents and records);

		
	13.3
	subject to the Purchaser being indemnified by the Seller against all reasonable costs which may be incurred by reason of such action, the Purchaser shall consult with and follow the instructions of the Seller in relation to all matters connected with the Third Party Claim and take all such action as the Seller may reasonably request in relation to the Third Party Claim, including commencing, conducting, defending, resisting, settling, compromising or appealing against any proceedings; and

		
	13.4
	subject to paragraph 13.5, permit the Seller at its own cost and expense to have sole conduct  of the Third Party Claim and permit the Seller to take such action as it decides is necessary at any time and in its sole discretion to avoid, defend, dispute, mitigate, appeal, settle or compromise the Third Party Claim.

		
	13.5
	The Seller shall not be entitled to take sole conduct of a Third Party Claim in accordance with paragraph 13.4 to the extent such Third Party Claim has been brought against the Purchaser or Group Company by the EG Government or any Governmental or Regulatory Authority of the Republic of Equatorial Guinea, save that where such Third Party Claim has been brought by a Tax Authority or an Environmental authority the Seller and the Purchasers shall:

		
	(a)
	ensure that the other Parties are kept fully informed of the progress of any such Third Party Claim;

		
	(b)
	ensure that the other Parties receive copies of, or extracts from, all material written correspondence to or from any relevant Tax Authority or Environmental authority which has brought the relevant Third Party Claim; and

		
	(c)
	consult with each other (in good faith and from time to time) as to the appropriate steps to be taken in relation to the conduct of any such Third Party Claim including any decision 

to avoid, defend, dispute, mitigate, appeal, settle or compromise the Third Party Claim (provided that in circumstances where there is any disagreement between the Seller and the Purchasers (each acting reasonably) with regard to any  step proposed to be taken in relation to the conduct of such a Third Party Claim, the Purchasers shall be entitled to take, or procure that there is taken, such step as they consider to be appropriate).
		
	14.
	Purchaser's diligence

Each Purchaser acknowledges that it is an experienced, sophisticated buyer and has conducted its own investigation with respect to the acquisition of the Group Companies.

Schedule 4

(Form of Resignation Letter)

To:    Hess International Petroleum, Inc.
Hess Equatorial Guinea, Inc.

Address:    Sterling Trust (Cayman) Limited,
Whitehall House, 238 North Church Street, PO Box 1043, George Town,
Grand Cayman, KY1-1102, Cayman Islands

[     ] 2017

Dear Sirs,
I, [●] hereby resign as a Director and (if appointed as officer) officer of Hess International Petroleum, Inc., (registration number 5991) and Hess Equatorial Guinea, Inc. (registration number 68666), each having its registered office at Sterling Trust (Cayman) Limited, Whitehall House, 238 North Church Street, PO Box 1043, George Town, Grand Cayman, KY1-1102, Cayman Islands, (the “Companies”) with immediate effect.
I acknowledge that I have no claim whatsoever against the Companies in respect of fees, remuneration, expenses, compensation for loss of office, or otherwise arising from my resignation as a director and officer of the Companies, except only for any accrued remuneration and for any reimbursable business expenses incurred up to and including the date of this deed. To the extent that any such claim exists or may exist, I irrevocably and unconditionally waive such claim and release the Companies from any liability in respect thereof. I confirm that no arrangement is outstanding under which the Companies have or may have any obligation to me.

For the avoidance of doubt however, all other terms and conditions under my employment contract dated [●] with [●] (the “Employment Contract”) will remain unaltered by this letter and any actual or potential claim (whether contractual, statutory or otherwise) in connection with my Employment Contract (notwithstanding my resignation as a director and officer of the Companies) pursuant to this letter) will continue in effect until terminated in accordance with the terms therein.

This deed and all contractual and non-contractual obligations arising out of it shall be governed by and construed in accordance with English law.

In witness whereof, this letter is executed as a deed on the date first mentioned.

EXECUTED as a DEED by

[Name of director]

in the presence of:    .........................................................
................................................. Witness
Name Address Occupation

Schedule 5

Part 1
(Initial Statement of Accounts Form)

Column A    Column B
 

Total

Clause    Account    US$    US$
    

Initial Consideration    4.1    x

Permitted Equity Contributions    4.3(a)    x

Permitted Dividends    4.3(b)    (x)

Working Capital Amount    4.3(c)    x

Amounts paid for benefit of Group Company subject to exceptions
 
4.3(d)    x

	
				
	Leakage other than Permitted Leakage
	4.3(e)
	(x)
	 

	Interest to Completion Date
	 
	 
	 

	Permitted Equity Contributions
	4.3(f)
	X
	 

	Working Capital Amount
	4.3(g)
	X
	 

	Permitted Dividends
	4.3(h)
	(x)
	 

	Leakage other than Permitted Leakage
	4.3(i)
	(x)
	 

	Initial Consideration
	4.3(j)
	X
	 

	Initial Adjusted Consideration Due at Completion
	 
	 
	X

Part 2
(Final Statement of Accounts Form)

Column A    Column B
 

Total

Clause    Account    US$    US$
    

Initial Consideration    4.1    x

Permitted Equity Contributions    4.3(a)    x

Permitted Dividends    4.3(b)    (x)

Working Capital Amount    4.3(c)    x

Amounts paid for benefit of Group Company subject to exceptions
 

4.3(d)    x

Leakage other than Permitted Leakage    4.3(e)    (x)

Interest to Completion Date
	
			
	Permitted Equity Contributions
	4.3(f)
	x

	Working Capital Amount
	4.3(g)
	x

	Permitted Dividends
	4.3(h)
	(x)

	Leakage other than Permitted Leakage
	4.3(i)
	(x)

	Initial Consideration
	4.3(j)
	X

Final    Adjusted    Consideration    as  per   Final    X
Statement of Accounts

Less Initial Adjusted Consideration Paid at Completion
 
4.3    (x)

	
			
	Final Settlement Amount
	4.6
	x

	Interest on Final Settlement Amount
	4.6
	x

	

Final Adjusted Consideration to/(from) Seller
	

4.6
	_
X

Schedule 6

(Senior Managers)

Larry Coday (currently General Manager, Hess Equatorial Guinea, Inc., and former Senior Finance Manager, Offshore Americas & West Africa, Hess Corporation and former Planning Manager, Global Production Planning, Hess Corporation)

Dougie McMichael (Former West Africa Asset Director, Hess Corporation) Barsanulio Ndong Mifumu (Government Relations, Hess Equatorial Guinea, Inc.) Peter Blair (Director of International Tax, Hess Corporation)
Mike Shu (Operations Manager, Hess Equatorial Guinea, Inc.)

Segismundo Mengue Nsue (Finance Manager, Hess Equatorial Guinea, Inc.)

Schedule 7 (Affiliate Contract)
		
	1.
	International Transfer of Data Agreement dated 26 December 2009 between Hess Denmark ApS, Shannon LNG Limited, Hess Norge A/S, Hess Services UK Limited, Hess Energy Trading Company (U.K.) Limited and Hess Energy Power & Gas Company (U.K.) and Hess (Rhourde El Rhoun) Limited, Hess Exploration Australia Pty Ltd, Hess (ACG) Limited, Hess Brasil Petroleo Ltda, Hess Egypt West Mediterranean Limited, Hess Equatorial Guinea, Inc., Hess (Indonesia- Pangkah) Limited, Hess 'Libya Exploration Limited, Hess Oil & Gas Sdn Bhd, ZAO Samara - Nafta, Hess Energy Trading Company Singapore PTE. LTD., Hess Oil St Lucia Limited, Fisher Hess St Lucia Limited, Hess (Thailand) Limited, Hess Corporation, Hess Energy Trading Company, LLC, Hovensa L.L.C and Hovic Marketing Corp. Limited, as amended.

		
	2.
	Master International Intercompany Staff Secondment Agreement dated 1 January 2010 between Hess Corporation, Hess Services UK Limited, Hess Norge A/S, Hess Denmark ApS, Hess Exploration Australia PTY Limited Hess (Indonesia- Semai V) Limited, Hess (Indonesia- South Sesulu) Limited, Hess (Malaysia- SB 302) Limited, Hess Oil Company of Thailand Ltd. Co., Hess Egypt West Mediterranean Limited (Cayman), Hess Equatorial Guinea Inc, Hess (GEA) Limited, Hess Libya (Waha) Limited, Hess Libya Exploration Libya, Hess (Indonesia-West Timor) Limited and Hess Oil Company of Thailand (JDA) Limited, amongst others, as amended.

		
	3.
	Marketing Services Agreement dated 15 December 2016 between Hess International Sales LLC and Hess Equatorial Guinea, Inc.

		
	4.
	Any payments properly due and payable by the Group Companies to either the Seller or any  of its Affiliates (as applicable) in respect of general and administrative costs, actual time writing costs, and other costs, including in respect of any insurance costs, incurred by the Seller or any of its other Affiliates (as applicable) and made in the Ordinary Course of Business and in accordance with past practice.

Schedule 8    (Transitional Services Agreement Term Sheet)

	
		
	Parties
	1.    Hess   Equatorial   Guinea,   Inc.   (to   be   renamed) (“Subsidiary”)
2.    Hess Equatorial Guinea Investments Limited (“Seller”)

	Term
	•    This Agreement shall enter into force on the date of Completion under the SPA and shall remain in full force and effect until the earlier of the signing of a Transition Services Agreement by the parties or the end of the month during which the 90th day after Completion occurs. Upon mutual agreement, the Parties may agree to extend the  term of this Agreement in one month increments for a maximum of three additional months (or a maximum of six additional months for Services relating to ERP). Services may be terminated early by Subsidiary. To terminate early, Subsidiary must provide written notice to Seller at least 10 days prior to the end of a month or must pay the following month’s Service Fee.

	Services to be Provided
	•    Annex 1 shall be used as a framework for discussion in the Workshop (defined below) to set out the services to be provided by the Seller and the cost of those Services (“Services”).
•    Until otherwise agreed by the Parties, the Services shall include the work currently done on behalf of the Seller (within the most recent six months), including without limitation marketing, accounting, tax, finance, human resources, supply chain, information services and information technology, and which are generally identified in Annex 1, but specifically excluding  geology, geophysics and reservoir engineering.
•    The parties may agree that the Seller will provide additional services to the Subsidiary.
•    Seller, its Affiliates and/or regular outside consultants or contractors which render Services shall employ its/their relevant tested know-how and technical and organizational experience in performing such Services.
•    Any Services provided by the Seller’s Affiliates shall be provided on the terms of this Agreement until the Transition Services Agreement is entered into between the parties.
•    The Seller shall use its employees, employees of Seller’s Affiliates and regular outside consultants or contractors to provide the Services.
Any Services reasonably determined by Seller to be necessary in an emergency to protect health, safety, life or the environment, provided that Seller will  notify Subsidiary as soon as practicable of any such emergency.

	Process for Requesting Services
	•    Subsidiary shall provide Seller with a written request for the Services as soon as practicable, including details of the exact  Service  to  be  provided  and  expected  duration for

	
		
	 
	each Service and reasonable guidance on Subsidiary’s needs for specific individuals.
Where the Subsidiary requests services that are additional to the Services set out in Annex 1 the Seller shall confirm in writing whether it will perform these additional services and the additional cost for such services.

	Cost of Services
	•    Unless otherwise agreed, the monthly cost for the Services shall be $2,100,000. (“Service Fee”). Subsidiary may notify Seller of specific services to be excluded, and the parties will negotiate in good faith to agree to a reduction to the Service Fee that is consistent with that reduction in Services and with the costs reflected in the cost tracker (such negotiation to include any related or similar Services that Seller reasonably believes should be excluded alongside the Services to be excluded as requested by Subsidiary). For avoidance of doubt, this Service Fee does not include reservoir engineering, geology or geophysics support.
•    Marketing costs to be charged in accordance with the Hess International Sales contract dated 15 December 2016.
•    Service Fee for Services performed for any  partial calendar month, shall be prorated for the number of days the Services are performed in that month (based on a thirty-day calendar month).
•    The Service Fee is intended to compensate Seller fully for all direct, indirect, general and administrative and internal overhead costs only (including but not limited to internal office overhead, field overhead and employee salaries, whether or not such costs are cost-recoverable or billable under any applicable Operating Agreement), and there shall be no separate charges from Seller to Subsidiary for such expenses.
•    Subsidiary shall reimburse Seller for all reasonable and documented actual out-of-pocket costs and  actual expenses incurred in the performance of Services.
•    Those costs and expenses incurred by the Seller prior to the Completion Date under the SPA, or immediately thereafter, in the normal handover of ownership shall not be charged to the Subsidiary under this Agreement. Subsidiary has the right to audit all costs billed to Subsidiary by the Seller in connection with the provision of the Services and any additional services within six months of the end of the term of the Transition Services Agreement or this term sheet.

	Invoicing and Payment for Services
	•    Subsidiary will pay the Service Fee for each month on or before the 15th day of the month for which the Service Fee applies. If Completion occurs after the 12th day of a  month, Subsidiary will pay for that partial month on or before the 15th day of the following month. Payment shall be notwithstanding Subsidiary’s right to later audit any charges in an invoice.
•    Seller will invoice Subsidiary for any additional costs within 30 days of the end of each calendar month and

	
		
	 
	payment will be due to Seller within 15 days of delivery of the invoice.
Subsidiary will gross up all payments for  any withholdings required by EG law, such that Seller is paid the full amount invoiced.

	Currency
	All amounts payable under this Agreement will be paid in US dollars.

	Standard of Performance of Services
	•    Seller shall perform the Services in a good, competent, professional and safe manner consistent with recent past practice prior to Closing in accordance with applicable laws and regulations, standards and practices of the international petroleum industry, and under the supervision and direction of the Subsidiary, subject to the below.
•    Subsidiary must request any change in practice for any of the Services in writing to the Seller. The Seller may refuse any change at its reasonable discretion.
•    Subsidiary shall be responsible for any increase in costs incurred by the Seller, including any costs that would be part of the Service Fee, caused by any change in practice of any Service as requested by the Subsidiary.
•    Seller shall control the selection of staff to provide the Services provided that such staff shall have the required qualifications and experience to perform the Services.
•    Seller recognizes the value of continuity of staff in providing the Services and will make reasonable efforts to make the individuals identified in Annex 1 (if any) available to provide the Services; provided however,  Seller shall be under no obligation to offer any retention, incentives or otherwise bear any increase in costs to do so, and further provided that Seller may consider its other business needs in determining which individuals are to be provided. In relation to Services where no individuals are specified, the Seller will use reasonable endeavors to maintain the current staff, to the extent practicable, but without diminishing the Seller’s right to select its staff. Subsidiary reserves the right to provide services similar to the Services for itself or to obtain similar services from third parties and is under no obligation to request the Services from the Seller.

	Indemnities
	•    A knock-for-knock indemnity between Subsidiary and Seller, regardless of cause, for all claims arising out of personal injury, illness, death, or property loss or damage by any member of each of Subsidiary’s and Seller’s group.
•    Subsidiary shall be liable for and indemnify Seller group from and against all claims arising out of personal injury, illness, death, or property loss or damage by any third party. Notwithstanding the previous sentence, Seller group shall be liable for and indemnify Subsidiary from and against all claims arising out of personal injury, illness, death, or property loss of damage by any third party, to the extent attributable to the Gross Negligence (as defined in the JOA) of Seller’s Senior Supervisory Personnel (to    be

	
		
	 
	defined in the Transitional Services Agreement).
•    Neither party shall be liable for any consequential loss or damage.
Subsidiary agrees to indemnify Seller for Equatorial Guinea taxes on Services provided under this Agreement.

	Miscellaneous
	•    Confidentiality as per the SPA or as agreed
•    Governing Law – England and Wales Disputes resolved under LCIA as per SPA

	Workshop
	Parties agree to a meet within fifteen days of signing of SPA to further define the scope, cost and structure of this term sheet or to agree the Transition Services Agreement. This meeting will also define the timeline and/or milestones to transition away from Seller group’s enterprise systems and licenses. Seller will discontinue providing email and Microsoft-related services as soon as practicable after Completion, and in any event before the expiration of the 90-day term of this Agreement. Seller  will provide reasonable notice of that discontinuance. Seller and Subsidiary will discuss this timeline, and the needs of Subsidiary, at or before the Workshop.

Annex 1
Transition Services Agreement - Scope of Services

	
					
	No.
	Line item of Service
	Term (if less than full term)
	Service Provider (if not Subsidiar y)
	Specific Individual (if any)

	 
	Support and management of the Transition Services Seller (Hess) transition manager: Ryan Lamothe Subsidiary transition manager: Francois Raux (T); Taran Smith (K)
	•
	•
	•

	1.
	[Operational services]
Seller to provide Operational and EHS continuity to run the business as-is until designated hand-over dates of Operations Services and Support Services to Subsidiary
Examples:
•    Operational management
•    Maintenance, Reliability and Integrity support to the business
•    Production Engineering support to the business
•    Design intent of systems and any known technical limitations of these systems, if required, beyond handover procedures
•    Shadowing period
	•
	•
	•

	2.
	Crude marketing and sales services under PSC
•    Market entitlement for one lifting after Completion for buyers (Specifics to be
	•
	•
	•

	
					
	 
	discussed regarding timing of liftings, sales agreed prior to signing and during the interim period)
	 
	 
	 

	3.
	Accounting Services: Seller’s Houston Shared Services team to provide Accounting Services for Subsidiary in a manner substantially consistent with the applicable current general practices prior to the Execution Date.
Examples: (i) payment of invoices and billing of same to Working Interest owners; (ii) collection of accounts receivable, including revenue and joint interest billings; (iii) disbursement of revenue proceeds to applicable third parties; (iv) maintaining the general ledger and accounts thereof
	•
	•
	•

	4.
	[Hydrocarbon accounting]
	•
	•
	•

	5.
	[Tax services] (To be discussed)
	•
	•
	•

	6.
	[IT services] Examples:
•    Provide secure access to infrastructure and applications required to support day to day operations
•    SAP and related applications
•    Local Network connection
•    Telephone services
•    Desktop applications
•    Operations applications
•    Note: Seller is not obligated to provide Subsidiary with a license to use its proprietary or enterprise applications
	•
	•
	•

	7.
	[Continuation of remediation and environmental response services]
Examples:
•    Emergency Response and Crisis Management
•    Evacuation services
•    Security support
•    Transfer of EHS regulatory compliance information
	•
	•
	•

	8.
	Vendor Management Supply Chain Management
[Consultancy Services – access to Hess’ retained employees to ensure an effective transition]
•    [Transfer of materials/contracts]
•    [Administration and closeout of Requisitions, POs, etc.]
•    Operational Logistics Management
•    Contract Management and project control
	•
	•
	•

	9.
	Consultation and Availability of Employees
•    To provide reasonable access at reasonable
	•
	•
	•

	
					
	 
	times during normal business hours to employees for consultation concerning matters related to the Services while each such Service is being provided
	 
	 
	 

Signed for and on behalf
of HESS EQUATORIAL GUINEA INVESTMENTS LIMITED
 

................................................................
Authorised signatory

Signed for and on behalf
of HESS CORPORATION    ................................................................
Authorised signatory

Signed for and on behalf
of KOSMOS ENERGY EQUATORIAL
GUINEA    ................................................................
Director / Authorised signatory

Signed for and on behalf
of KOSMOS ENERGY OPERATING
 

................................................................
Authorised signatory

Signed for and on behalf
of TRIDENT ENERGY E.G.
OPERATIONS, LTD.    ................................................................
Director / Authorised signatory

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