Document:

Exhibit 10.3

    
      

    

    

      EXHIBIT
        10.3

      

      

      FARM-OUT
        AGREEMENT

       

      

      THIS
        AGREEMENT
        is dated
        as of September 29th, 2005 by and between Mogul Energy Ltd., a corporation
        organized and existing under the laws of the Province of British Columbia
        Canada
        (“Mogul”)
        and
        Mogul Energy International, Inc., a corporation organized and existing under
        the
        laws of the state of Delaware, USA (“MEI”).

      

      WHEREAS,
        Mogul,
        Dover Investments Limited a corporation organized and existing under the
        laws of
        the Province of Ontario, Canada (“Dover”),
        TransPacific Petroleum Corp., a corporation organized and existing under
        the
        laws of the Province of British Columbia, Canada (“TransPacific”)
        and
        Ghareeb Awad, an individual residing in the City of Richmond British Columbia,
        Canada (“Awad”)
        entered into a binding farm-out agreement dated as of August 6, 2005 (the
        “Dover
        Farm-Out Agreement”)
        a copy
        of which is attached hereto as Exhibit
        A;

      

      WHEREAS,
        Dover
        has
        heretofore entered into a Concession Agreement effective as of July 18, 2002
        (“Concession
        Agreement”).with
        the Egyptian General Petroleum Corporation (“EGPC”)
        and
        the Arab Republic of Egypt (“ARE”)
        for
        the Concession known as East Wadi Araba (“EWA
        Concession”);

      

      WHEREAS, upon
        satisfaction of the terms and conditions set forth in the Dover Farm-Out
        Agreement, Dover has agreed to assign and transfer to Mogul an eight-five
        (85%)
        percent working interest in the EWA Concession and will retain for itself,
        a
        fifteen (15%) percent carried working interest in the EWA
        Concession;

      

      WHEREAS,
        Mogul
        and Transpacific have entered into a binding joint venture agreement dated
        as of
        August 7, 2005 (the “Transpacific
        Joint Venture Agreement”),
        a
        copy of which is attached hereto as Exhibit
        B.

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      WHEREAS,  pursuant
        to the terms of the Transpacific Joint Venture Agreement, and subject further
        to
        the terms of the Dover Farm-Out Agreement, Mogul has agreed to assign to
        Transpacific a twenty-five (25%) percent carried working interest in the
        EWA
        Concession;

      

      WHEREAS,
        Mogul,
        Transpacific and Dover, subject to the fulfilment of the terms and conditions
        set forth in the Dover Farm-Out Agreement, have the following interests in
        the
        EWA Concession:

       

      
        	 	
                Mogul:

              	 	
                60%
                  working interest

              	 
	 	
                Transpacific:

              	 	
                25%
                  carried working interest

              	 
	 	
                Dover:

              	 	
                15%
                  carried working interest;

              	 

      

      

      WHEREAS,
        under
        the terms of the Dover Farm-Out Agreement and the Transpacific Joint Venture
        Agreement, Mogul will be responsible for providing all expenses, costs of
        drilling and completion of all exploratory and development wells, all production
        facilities, Cairo and field offices;

      

      WHEREAS,
        under
        the terms of the Dover Farm-Out Agreement the parties thereto may assign
        and
        transfer their respective rights and obligations thereunder without the consent
        of the other parties thereto, subject however to the approval of the
        EGPC;

      

      WHEREAS,
        Mogul
        desires to assign and transfer to MEI and MEI desires to acquire from Mogul
        a
        twenty (20%) percent working interest in the EWA Concession on the terms
        and
        conditions set forth herein.

      

      NOW,
        THEREFORE,
        the
        parties hereto, in consideration of the mutual covenants set forth herein
        and
        other and good consideration the receipt and sufficiency of which is hereby
        acknowledged, agree as follows:

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      ARTICLE
        I

      ASSIGNMENT
        AND TRANSFER

      

       

      1.1  Pursuant
        and subject to the terms of the Dover Farm-Out Agreement and the Concession
        Agreement, Mogul hereby assigns, conveys and transfers to MEI a twenty (20%)
        working interest in and to the EWA Concession.

       

      1.2  The
        interests in the EWA Concession shall be as follows:

       

      
        	 	
                Mogul:

              	 	
                40%
                  working interest

              	 
	 	
                MEI:

              	 	
                20%
                  working interest

              	 
	 	
                Transpacific:

              	 	
                25%
                  carried working interest

              	 
	 	
                Dover:

              	 	
                15%
                  carried working interest.

              	 

      

      

       

      ARTICLE
        II

      CONSIDERATION

       

      

      2.1   MEI,
        within 14 days of the execution and delivery of this Agreement, shall pay
        Mogul
        the non-refundable sum of $75,000.

      

      2.2   Except
        as
        set forth in 2.3 below, MEI will be responsible for the payment of one-third
        (1/3), and Mogul will be responsible for the payment of two-thirds of, all
        expenses, costs of drilling and completion of all exploratory and development
        wells, all production facilities, Cairo and field offices, the financial
        commitments that are required and which arise by extending the Concession
        Agreement for the third exploration period of two more years and agrees to
        pay
        all costs related thereto right through to production, and of Moguls obligations
        as may arise or contemplated by the Dover Farm-Out Agreement..

       

      
        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

      

       

      2.3   Anything
        herein to the contrary notwithstanding, MEI shall be responsible only for
        its
        for its proportionate share of all costs incurred by any operating company
        formed under the Concession Agreement (or the Dover Farm-Out Agreement or
        Transpacific Joint Venture Agreement) on a commercial discovery being made
        and
        only after commercial production is achieved.

       

      

      2.4   (a)   MEI
        shall
        be responsible for securing one third (1/3) (the “MEI
        Guarantee Obligation”)
        and
        Mogul shall be responsible for securing two-thirds (2/3) (the “Mogul
        Guarantee Obligation”)
        of the
        Two Million US Dollar ($2,000,000 US) letter of guarantee (the “Letter
        of Guarantee”)
        which
        Mogul is required to have issued for the benefit of EGPC, as contemplated
        by the
        Dover Farm-Out Agreement. 

      

      (b)   Each
        of
        the parties hereto shall advise the other at least 15 business days prior
        to the
        due date of the Letter of Guarantee as to whether such party shall be able
        to
        secure its respective guarantee obligation hereunder. If either party (the
        “Defaulting
        Party”)
        indicates that it will not be able to do so, the other party (the “Non-defaulting
        Party”)
        has
        the right, but not the obligation, to secure such portion of the Defaulting
        Party’s guarantee obligation as to which the Defaulting Party indicated it could
        not secure. If the Non-defaulting Party elects to exercise its option hereunder,
        its working interest in the EWA Concession will be automatically increased
        in
        proportion to such party’s total contribution to the Letter of Guarantee. The
        Defaulting Party shall execute any and all instruments and documents to reflect
        such increase in the Non-defaulting party’s working interest.

       

      (c)   In
        the
        event that the Non-defaulting Party does not exercise the option granted
        under
        this Section 2.4 and Mogul fails to deliver the Letter of Guarantee to EGPC
        within the time set out in the Dover Farm-Out Agreement, this Agreement shall
        be
        at an end and the parties shall have no further obligations hereunder except
        that MEI will forthwith return to Mogul all information that it received
        hereunder pertaining to the EWA Concession and agrees to keep all such
        information confidential.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        III

       

      PARTICIPATION

       

       

      In
        the
        case of establishing a discovery or discoveries in EWA Concession, MEI, Dover,
        Mogul and Transpacific will share proportionately, in accordance with their
        respective interest, all the benefits of the entire cost recovery oil pool,
        and
        the profit oil portion of oil production under the Concession
        Agreement.

       

       

      ARTICLE
        IV

      MISCELLANEOUS

       

      4.1   Joint
        Operating Agreement.
        Within
        one month of the approval of the assignment by the ARE, MEI agrees o sign
        a
        Joint Operating Agreement, based on the Association of International Petroleum
        Negotiators (AIPN) most recent model operating agreement, as contemplated
        by the
        Dover Farm-Out Agreement.

       

      4.2   No
        modification.
        This
        Agreement is the entire agreement between the parties and may not be modified
        except in writing by agreement of the parties hereto. This agreement supersedes
        all prior oral and written representations and agreements with respect to
        EWA
        Concession and becomes effective only after all parties have signed this
        agreement, the non-refundable payment of $75,000 made and the Letter of
        Guarantee is delivered.

       

      4.3   Reassignment.
        In the
        event that MEI fails to perform its obligations hereunder Mogul shall have
        the
        option, exercisable at any time after 10 days from Mogul’s notice to MEI of
        MEI's failure to timely fulfill its obligations hereunder, to require that
        MEI
        reassign MEI's working interest to Mogul free of cost. In this event, MEI
        agrees
        to execute any and all such documents as are necessary for such reassignment
        in
        the same form and manner as the original assignment to MEI.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      

      4.8   Severability.
        Any
        provision of this Agreement that is prohibited or unenforceable in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such prohibition or unenforceability without invalidating the remaining
        provisions hereof, and the parties will attempt to agree upon a valid and
        enforceable provision which shall be a reasonable substitute therefore, and
        upon
        so agreeing, shall incorporate such substitute provision in this Agreement.
        Any
        such prohibition or unenforceability in any jurisdiction shall not invalidate
        or
        render unenforceable such provision in any other jurisdiction.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

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

       

      4.10   Priority
        of Agreement. In
        the
        event of any conflict between the provisions of the main body of this Agreement
        and its Exhibits, the provisions of the main body of the Agreement shall
        prevail. In the event of any conflict between this Agreement and the Documents,
        this Agreement shall prevail. 

      

      4.11   Counterparts.
        This
        Agreement may be executed in any number of counterparts, each of which when
        so
        executed shall be deemed to be an original and, all of which taken together
        shall constitute one and the same Agreement. In the event that any signature
        is
        delivered by facsimile transmission, such signature shall create a valid
        binding
        obligation of the party executing (or on whose behalf such signature is
        executed) the same with the same force and effect as if such facsimile signature
        were the original thereof.

      

      4.12   Public
        Announcements. No
        public
        announcement or statement regarding the terms or existence or this Agreement
        shall be made without prior written consent of all Parties; provided that,
        notwithstanding any failure to obtain such approval, no Party shall be
        prohibited from issuing or making any such public announcement or statement
        to
        the extent it is necessary to do so in order to comply with the applicable
        laws,
        rules or regulations of any government, government agency, court, administrative
        body, or stock exchange having jurisdiction over such Party or its
        Affiliates.

      

      4.13   Entire Agreement.
        This
        Agreement, together with all the exhibits hereto, constitutes and contains
        the
        entire agreement and understanding of the parties with respect to the subject
        matter hereof and supersedes any and all prior negotiations, correspondence,
        agreements, understandings, duties or obligations between the parties respecting
        the subject matter hereof.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      4.14   Third Parties.
        Nothing
        in this Agreement, express or implied, is intended to confer upon any person,
        other than the parties hereto and their successors and assigns, any rights
        or
        remedies under or by reason of this Agreement.

       

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

       

      
        
          	
                  Name:

                	 	
                  Mogul
                    Energy Ltd.

                
	
                  Address:

                	 	
                  1111-207
                    West Hastings Street

                
	 	 	
                  Vancouver,
                    British Columbia, Canada, V6B 1H7

                
	
                  Attention:

                	 	
                  Mr.
                    Parvez Tyab

                
	
                  Facsimile:

                	 	
                  (604)
                    669-6317

                
	
                  Email:

                	 	
                  parveztyab@shaw.ca

                
	
                  Telephone:

                	 	
                  (604)
                    669-6318

                
	 	 	 
	
                  Name:

                	 	
                  Mogul
                    Energy International, Inc.

                
	
                  Address:

                	 	
                  520
                    Pike Tower, Suite 2210

                
	 	 	
                  Seattle,
                    Washington, USA, 98101

                
	
                  Attention:

                	 	
                  Mr.
                    Naeem Tyab

                
	
                  Facsimile:

                	 	
                  (206)
                    357-4220

                
	
                  Email:

                	 	
                  ntyab@shaw.ca

                
	
                  Telephone:

                	 	
                  (206)
                    357-4211

                

        

      

       

      4.16   Successors
        and Assigns.
        This
        agreement shall inure to the benefit of and shall be binding upon the parties
        hereto and their respective successors, heirs and approved assignors. Each
        party
        is free to re-assign all or portion of its interest in this agreement to
        another
        party, without the approval of any of the parties to this agreement, provided
        that EGPC will approve such assignments.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      

      4.17        
        Rules
        of Construction.
        

      

      This
        Agreement shall be construed in accordance with the following rules of
        construction:

      

      (a)   Calculation
        of Time Period. 
        When calculating the period of time before which, within which or following
        which any act is to be done or step taken pursuant to this Agreement, the
        date
        that is the reference date in calculating such period shall be excluded. 
If the last day of such period is a non-Business Day, the period in question
        shall end on the next succeeding Business Day.

       

      (b)   Commercially
        Reasonable Efforts. 
        The obligation of a party to use commercially reasonable efforts to accomplish
        an objective does not require an unreasonable expenditure of funds or the
        incurrence of an unreasonable liability on the part of the obligated
        party.

       

      (c)   Gender
        and Number. 
        Any reference in this Agreement to gender shall include all genders, and
        words
        imparting the singular number only shall include the plural and vice
        versa.

       

      (d)   Headings. 
        The headings herein are inserted for convenience only and do not constitute
        a
        part of this Agreement. Whenever the context requires, the gender of any
        word
        used in this Agreement includes the masculine, feminine or neuter, and the
        number of any word includes the singular or plural. Unless the context otherwise
        requires, all references to articles and sections refer to articles and sections
        of this Agreement, and all references to schedules are to schedules attached
        hereto, each of which is made a part hereof for all purposes. The descriptive
        headings of the several articles and sections of this Agreement are inserted
        for
        purposes of reference only, and shall not affect the meaning or construction
        of
        any of the provisions hereof.

       

      (e)   Herein. 
        The words such as “herein,”
        “hereinafter,”
        “hereof,”
and
        “hereunder”
refer
        to this Agreement as a whole and not merely to a subDivision in which such
        words
        appear unless the context otherwise requires.

       

      (f)   Including. 
        The word “including”
or
        any
        variation thereof means “including,
        without limitation”
and
        shall not be construed to limit any general statement that it follows to
        the
        specific or similar items or matters immediately following it.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

      (g)   Knowledge. 
        The word “knowledge”
or
        any
        similar term shall mean with respect to any Person, the actual knowledge
        of such
        Person or such Person’s officers, directors and employees.

       

      (h)   Payments
        and Computations. 
        Except for the payment of the Purchase Price (which shall be paid at the
        Closing), each party shall make each payment due to another party to this
        Agreement not later than 2:00 p.m. New York time on the day when due.  All
        payments shall be measured and paid in U.S. dollars by wire transfer in
        immediately available funds to the account or accounts designated by the
        party
        receiving such payment.  All computations of interest shall be made on the
        basis of a year of 365 days, in each case for the actual number of days
        (including the first day but excluding the last day) occurring in the period
        for
        which such interest is payable.  Whenever any payment under this Agreement
        shall be due on a day other that a Business Day, such payment shall be made
        on
        the next succeeding Business Day, and such extension of time shall be included
        in the computation of payment of interest.

       

      (i)   Schedules
        and Exhibits. 
        Any matter disclosed on any one Schedule or Exfhibit hereto shall be deemed
        disclosed for purposes of all other Schedules to the extent that the relevance
        of such matters to other Sections of this Agreement or other applicable
        Schedules or Exhibits is reasonably apparent to a reader.

       

      (j)   Interpretation
        of Language.
        The
        language and words used in this Agreement will be deemed to be the language
        and
        words chosen by the parties to express their mutual intent and no rules of
        strict construction will be applied against any party.

      

      4.18   Disputes.

       

      (a)   Subject
        to
        paragraph (b) of this Section 10.5, any dispute arising out of or in connection
        with this Agreement which cannot first be settled amicably by mutual
        consultation between the parties, shall be referred to and finally resolved
        by
        arbitration under the auspices of JAMS, in accordance with its rules (“Rules”).
        The arbitration shall take place in New York, New York, unless the parties
        otherwise mutually agree. The rules of procedures not expressly provided
        by the
        Rules shall be determined in accordance with the laws of the State of New
        York,
        whether mandatory or not. An award may be confirmed and judgment on the award
        entered in the Supreme Court of the State of New York.

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (b)   Nothing
        in this Section 14.18 shall be deemed to preclude any Party from commencing
        an
        action for equitable or injunctive relief in any court having jurisdiction
        over
        the matter.

      

      4.19   Governing
        Law.
        All
        questions concerning the construction, validity, enforcement and interpretation
        of this Agreement shall be governed by the internal laws of the State of
        New
        York, without giving effect to any choice of law or conflict of law provision
        or
        rule (whether of the State of New York or any other jurisdictions) that would
        cause the application of the laws of any jurisdictions other than the State
        of
        New York. Each party hereby irrevocably submits to the exclusive jurisdiction
        of
        the state and federal courts sitting in the City of New York, for the
        adjudication of any dispute hereunder or in connection herewith or therewith,
        or
        with any transaction contemplated hereby or discussed herein, and hereby
        irrevocably waives, and agrees not to assert in any suit, action or proceeding,
        any claim that it is not personally subject to the jurisdiction of any such
        court, that such suit, action or proceeding is brought in an inconvenient
        forum
        or that the venue of such suit, action or proceeding is improper. Each party
        hereby irrevocably waives personal service of process and consents to process
        being served in any such suit, action or proceeding by mailing a copy thereof
        to
        such party at the address for such notices to it under this Agreement and
        agrees
        that such service shall constitute good and sufficient service of process
        and
        notice thereof. Nothing contained herein shall be deemed to limit in any
        way any
        right to serve process in any manner permitted by law. EACH
        PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
        REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
        CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
        CONTEMPLATED HEREBY.

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the
        parties hereto caused this Agreement to be duly executed and accepted as
        of the
        dates set forth below.

      

      

        
          	Mogul
                  Energy Ltd.	 	
                  Dated:
                    September 29, 2005

                
	 	 	 	 
	
                  By:

                	
                  /s/
                    Parvez Tyab

                	 	 
	 	
                  Parvez
                    Tyab, President

                	 	 
	 	 	 	 
	 	 	 	 
	Mogul
                  Energy International, Inc.	 	
                  Dated:
                    September 29, 2005

                
	 	 	 	 
	
                  By:

                	
                  /s/
                    Naeem Tyab

                	 	 
	 	
                  Naeem
                    Tyab, President

                	 	 

        

      

    

    
       

       

      12Exhibit 10.4

    
      

    

    

      EXHIBIT
        10.4

       

      
        FARMOUNT
          AGREEMENT

        

        BY
          AND BETWEEN

        

        MOGUL
          ENERGY LTD.

        

        AND

        

        MOGUL
          ENERGY INTERNATIONAL, INC.

        

        DATED

        

        NOVEMBER
          8, 2005 

      

      

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

      

      

        TABLE
          OF CONTENTS

        

        
          	
                  ARTICLE
                    1 DEFINITIONS

                	
                  4

                
	 	 
	
                  ARTICLE
                    2 TRANSFER AND ASSIGNMENT OF INTEREST

                	
                  5

                
	 	 
	
                  ARTICLE
                    3 CONSIDERATION

                	
                  6

                
	 	 
	
                  ARTICLE
                    4 OBLIGATIONS UNDER THE DOCUMENTS

                	
                  7

                
	 	 
	
                  ARTICLE
                    5 REPRESENTATIONS AND WARRANTIES OF THE PARTIES

                	
                  7

                
	 	 
	
                  ARTICLE
                    6 TAX

                	
                  10

                
	 	 
	
                  ARTICLE
                    7 CONFIDENTIALITY

                	
                  11

                
	 	 
	
                  ARTICLE
                    8 NOTICES

                	
                  13

                
	 	 
	
                  ARTICLE
                    9 GENERAL PROVISIONS

                	
                  14

                

        

        

        Exhibits

        

        
          	
                  A.

                	
                  Saskatchewan
                    P&NG Lease PN 46794

                

        

        
          	
                  B.

                	
                  Lease
                    Option Agreement between Mogul Energy Ltd. and Avir Enterprises
                    Ltd.

                

        

        
          	
                  C.
                    

                	
                  Transfer
                    Agreement of Lease to Mogul Energy Ltd. and Transpacific Petroleum
                    Corp.

                

        

        
          	
                  D.

                	
                  Binding
                    Agreement between Mogul Energy Ltd. and Transpacific Petroleum
                    Corp.

                

        

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

        
          FARMOUT
            AGREEMENT

        

        

        This
          Agreement is
          entered into as of the 8th
          day of
          November, 2005 by and between Mogul Energy Ltd., a company existing under
          the
          laws of the Province of British Columbia, Canada ( “Mogul
          Ltd.”)
          and
          Mogul Energy International, Inc. a company existing under the laws of the
          State
          of Delaware, United States of America ( “MEI”).
          The
          companies named above, and their respective successors and assignees (if
          any),
          may sometimes individually be referred to as “Party” and collectively as the
“Parties”.

        
WITNESSETH:

        

        Whereas,
          Mogul
          Ltd. and Avir Enterprises Ltd. (“Avir”)
          entered into an Option for Mogul Ltd. to Acquire P&NG Rights of Aivr’s
          Saskatchewan P&NG Lease PN 46794 (the “Lease”),
          dated
          April 16, 2005 (the “Option”),
          a
          copy of the Lease is attached hereto as Exhibit
          A ,
          and a
          copy of the Option is attached as Exhibit
          B
          hereto;

        

        Whereas,
          by
          Transfer Agreement dated June 2, 2005 (the “Transfer
          Agreement”),
          a
          copy of which is attached hereto as Exhibit
          C,
          Avir
          transferred to Transpacific Petroleum Corp., a company existing under the
          laws
          of the Province of British Columbia, Canada (hereinafter referred to as
          “Transpacific”)
          as to
          25% and Mogul Ltd. as to 75%, 100% of its interest in the Lease; and

        

        Whereas,
          Mogul
          Ltd. and entered in a binding agreement dated April 14, 2005 (the “Binding
          Agreement”),
          a
          copy of which is attached hereto as Exhibit
          D,
          for the
          exploration, development and production of hydrocarbons in the area covered
          by
          the Lease (the “Contract
          Area”)
          and for
          the acquisition of additional crown and free-hold lands in the proximity
          of the
          Contract Area; and

        

        Whereas,
          as of
          the date of this Agreement, Mogul Ltd. holds a seventy-five (75%) working
          interest, and Transpacific’s holds a twenty-five (25%) carried interest in the
          Contract Area subject to the terms of the Lease and the Binding Agreement;
          and

        

        Whereas,
          Mogul
          Ltd. is willing to assign and transfer a certain undivided interest in
          its
          rights and obligations under the Lease and the Binding Agreement to MEI
          in
          accordance with the terms set forth herein and MEI wishes to acquire such
          interest. 

        

        Now,
          Therefore,
          in
          consideration of the premises and the mutual covenants and obligations
          set out
          below and to be performed, the Mogul Ltd. and MEI agree as
          follows:

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

        Article
          1

        

        Definitions

        

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

        

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

        

        Consideration
          has the
          meaning given in Article 3 hereof.

        

        Documents
          refers
          collectively to this Agreement, the Binding Agreement, the Transfer Agreement,
          the Option, and the JOA. 

        

        Effective
          Date is
          the
          date set out in Article 6.

        

        Exploration
          Well
          means
          any well, the purpose of which at the time of the commencement of drilling
          is to
          explore for an accumulation of Hydrocarbons, which accumulation was at
          that time
          unproven by drilling. 

        

        Government
          means
          the government of Saskatchewan and any political subdivision, agency or
          instrumentality thereof.

        

        JOA 
          refers
          to the Joint Operating Agreement to be negotiated by the parties hereto
          and
          Transpacific, pursuant to which Transpacific shall be named as the operator
          with
          respect to any drilling operations in the Contract Area. 

        

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

        

        Operator means
          Transpacific which is the entity designated to conduct operations in the
          Contract Area in accordance with the terms of the Binding
          Agreement.

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        Participating
          Interest
          means as
          to any party to the Contract, the undivided interest (whether a working
          or
          carried interest) of such party expressed as a percentage of the total
          interest
          of all parties in the rights and obligations derived from the
          Lease.

        

        Testing
          means an
          operation intended to evaluate the capacity of a Zone to produce Hydrocarbons.
          "Test" and other derivatives shall be construed accordingly.

        

        Zone
          means a
          stratum of earth containing or thought to contain an accumulation of
          Hydrocarbons separately producible from any other accumulation of
          hydrocarbons.

         

        Article
          2

        

        Transfer
          And Assignment Of Interest

        

        
          	
                  2.1

                	
                  Grant

                

        

        

        Subject
          to the satisfaction of the Conditions Precedent, and in exchange for the
          Consideration, Mogul Ltd. hereby assigns and transfers to MEI, and MEI
          hereby
          accepts accept, a 50% Working Interest in the Contract Area subject to
          the terms
          and conditions set forth in the Documents. Mogul Ltd. shall retain a twenty-five
          (25%) carried interest (without recovery). 

        

        
          	
                  2.2

                	
                  Consideration

                

        

        

        In
          consideration of the assignment to it of a fifty (50%) working interest
          in the
          Lease and the Contract Area, MEI agrees that, except as set forth below,
          MEI
          will be responsible for the payment of one hundred (100%) percent of all
          expenses, costs of drilling and completion of all exploratory and development
          wells, all production facilities, and field offices pertaining to the Contract
          Area, and the costs of abandoning the well(s) if there is no discovery,
          up to
          the amounts specified in Section 3.1 hereof. Anything herein to the contrary
          notwithstanding, upon the completion and equipping or abandonment of the
          Fairlight exploratory well, the acquisition of the crown and freehold lands
          and
          seismic, MEI, Transpacific and Mogul will each be responsible for any further
          investments in accordance with their respective Participation
          Interests.

        

        
          	
                  2.3

                	
                  Joint
                    Operating Agreement

                

        

        

        The
          Parties agree to negotiate in good faith and execute the JOA. Anything
          to the
          contrary notwithstanding the JOA shall provide that Transpacific will be
          presented by one member of a four member operating committee whereby, under
          no
          circumstances, any actions concerning the running of operations, any
          expenditures, dilution, divesture of interests or acquisition will be valid
          or
          legal without the unanimous approval of such operating committee
          members.

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

        
          	
                  2.4

                	
                  Binding
                    Effect

                

        

        

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

        

        
          	
                  2.5

                	
                  Ownership

                

        

        

        After
          given effect to the assignment to MEI hereunder, the Participating Interests
          in the Lease and the Contract Area shall be:

        

        
          	
                  Mogul
                    Ltd.:

                	
                  25%
                    carried interest (not subject to recovery)

                
	
                  MEI:

                	
                  50
                    % working interest 

                
	
                  Transpacific:

                	
                  25%
                    carried interest (not subject to recovery)

                
	
                  Total

                	
                  100%

                

        

        

        
          	
                  2.6

                	
                  Effective
                    Date

                

        

        

        Notwithstanding
          the date of this Agreement or the date on which the Assignment is executed,
          the
          effective date of this Agreement as between the Parties (hereafter the
          "Effective Date") shall be deemed to be November 8, 2005. The consideration
          payable by MEI reflects this Effective Date. 

        

        Article
          3

        

        Consideration

        

        
          	
                  3.1

                	
                  Work
                    Program

                

        

        

        In
          consideration for receiving the assignment of the Participating Interest
          hereunder, MEI agrees to perform or cause to be performed and pay all costs
          under the JOA and the Binding Agreement in the Contract Area, which shall
          include but not be limited to:

        

        
          	 	
                  A.

                	
                  Acquire
                    and process available 2D seismic; and,

                

        

        

        
          	 	
                  B.

                	
                  Drill,
                    log, test and complete or plug and abandon one Exploration Well
                    sufficient
                    to test 3 shallow and one deep Zone or to a depth of 2,000 meters,
                    whichever is first achieved in an area designated as Walpole
                    5-2-11-32
                    W1M. Each well shall be at location(s) mutually agreed by the
                    Parties. All
                    work set out in this Article 4.1 shall be undertaken by MEI or
                    Operator on
                    behalf of the Parties.

                

        

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

        
          	
                  3.2

                	
                  Conditions

                

        

        

        The
          work
          obligations under this Article 3. shall be budgeted at approximately $520,000
          or
          a dry hole and $1,075,000 for a successful, completed and equipped well;
          and,
          shall be completed prior to April 1, 2006 and within the terms provided
          by any
          additional leases obtained in and around the Contract Area and pursuant
          to the
          Binding Agreement. If such work is not completed by April 1, 2006, the
          parties
          acknowledge that Mogul Ltd.’s rights under the lease shall terminate and
          accordingly this Agreement shall terminate and the  parties
          shall have no further liabilities or obligations hereunder.

        

        
          	
                  3.3

                	
                  Discovery
                    or Insurmountable
                    Difficulties

                

        

        

        An
          obligation well(s) to be drilled under Article 3.1.B. above shall also
          be deemed
          satisfied if MEI encounters impenetrable substances, basement, commercial
          quantities of oil or gas at a lesser depth or is forced to abandon a well
          because of difficulties insurmountable by employing modern drilling technology
          in conformity with sound, cost effective practices generally accepted in
          the
          international petroleum industry. 

        

        Article
          4

        

        Obligations
          Under The
          Documents

        

        
          	
                  4.1

                	
                  Acceptance
                    of Prior Terms

                

        

        

        MEI
          hereby ratifies, confirms and accepts the terms of the Lease and the Binding
          Agreement and MEI agrees to abide by the terms of such agreements to the
          extent
          of its Participating Interest. 

        

        Article
          5

        

        Representations
          And Warranties Of The Parties

        

        
          	
                  5.1

                	
                  Mogul
                    Ltd.’s Representations and
                    Warranties

                

        

        

        Except
          as
          otherwise disclosed on the attached schedules, Mogul Ltd. makes the following
          representations and warranties to MEI as of The Effective Date
          hereof:

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

        
          	 	
                  A.

                	
                  Mogul
                    Ltd.'s Rights.

                

        

        

        Mogul
          Ltd. holds the rights to a 75% undivided Participating Interest in the
          Lease,
          subject to the Binding Agreement. The Lease is (and other Documents are)
          in full
          force and effect and no notice of default, termination, or breach under
          the
          Lease (or other Document) has been received by Mogul Ltd. nor, to the knowledge
          of Mogul Ltd., any other party to the Documents. 

        

        
          	 	
                  B.

                	
                  Documents.

                

        

        

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

        

        
          	 	
                  C.

                	
                  Claims
                    and Litigation.

                

        

        

        There
          are
          no material claims, demands, actions, suits, governmental inquiries, or
          proceedings pending or to Mogul Ltd.'s knowledge threatened in connection
          with
          the Documents which would have an adverse effect upon the consummation
          of the
          transactions contemplated by this Agreement.

        

        
          	
                  5.2

                	
                  MEI’s
                    Representations and
                    Warranties

                

        

        

        Except
          as
          otherwise disclosed in the attached schedules, MEI makes the following
          representations and warranties to Mogul Ltd. as of the Effective Date hereof:
          There are no material claims, demands, actions, suits, governmental inquiries,
          or proceedings pending, or to MEI’s knowledge, threatened, against MEI which
          would have an adverse effect upon the consummation of the transactions
          contemplated by this Agreement.

        

        
          	
                  5.3

                	
                  Mutual
                    Representations and
                    Warranties

                

        

        

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

        

        
          	 	
                  A.

                	
                  Corporate
                    Authority.

                

        

        

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

        

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

        

        
          	 	
                  B.

                	
                  Payments.

                

        

        

        Neither
          Party nor its Affiliates have made, offered, or authorized and will not
          make,
          offer or authorize any payment, gift, promise or other advantage, in connection
          with the matters which are the subject to this Agreement, whether directly
          or
          indirectly through any other person or entity, to or for the use or benefit
          of
          any public official (i.e., any person holding a legislative, administrative
          or
          judicial office, including any person employed by or acting on behalf of
          a
          public agency, a public enterprise or a public international organization)
          or
          any political party or political party official or candidate for office,
          where
          such payment, gift or promise would violate: (a) the applicable Laws of
          the
          country of operations; or (b) the laws of the country of formation of the
          Party
          or such Party's ultimate parent company (or its principal place of business).
          

        

        
          	 	
                  C.

                	
                  Other
                    Representations and
                    Warranties.

                

        

        

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

        

        
          	 	
                  (a)

                	
                  violate
                    any applicable laws/regulations, judgment, decree or
                    award;

                

        

        

        
          	 	
                  (b)

                	
                  contravene
                    the organization documents of a Party;
                    or

                

        

        

        
          	 	
                  (c)

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

                

        

        

        
          	
                  5.4

                	
                  Disclaimer
                    of Other Representations and
                    Warranties

                

        

        

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

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

        Article
          6

        

        Tax

        

        
          	
                  6.1

                	
                  Tax
                    Obligations

                

        

        

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

        

        
          	
                  6.2

                	
                  United
                    States Tax Election

                

        

        

        
          	 	
                  (A)

                	
                  If,
                    for United States federal income tax purposes, this Agreement
                    and the
                    operations under this Agreement are regarded as a partnership
                    and if the
                    Parties have not agreed to form a tax partnership, each Party
                    elects to be
                    excluded from the application of all of the provisions of Subchapter
“K”,
                    Chapter 1, Subtitle “A” of the United States Internal Revenue Code of
                    1986, as amended (the “Code”), to the extent permitted and authorized by
                    Section 761(a) of the Code and the regulations promulgated under
                    the Code.
                    Operator, if it is a U.S. Party, is authorized and directed to
                    execute and
                    file for each Party such evidence of this election as may be
                    required by
                    the Internal Revenue Service, including all of the returns, statements,
                    and data required by United States Treasury Regulations Sections
                    1.761-2
                    and 1.6031(a)-1(b)(5) and shall provide a copy thereof to each
                    U.S. Party.
                    However, if Operator is not a U.S. Party, the Party who holds
                    the greatest
                    Participating Interest among the U.S. Parties shall fulfill the
                    obligations of Operator under this Article. Should there be any
                    requirement that any Party give further evidence of this election,
                    each
                    Party shall execute such documents and furnish such other evidence
                    as may
                    be required by the Internal Revenue Service or as may be necessary
                    to
                    evidence this election.

                

        

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

        
          	 	
                  (B)

                	
                  No
                    Party shall give any notice or take any other action inconsistent
                    with the
                    foregoing election. If any income tax laws of any state or other
                    political
                    subdivision of the United States or any future income tax laws
                    of the
                    United States or any such political subdivision contain provisions
                    similar
                    to those in Subchapter “K”, Chapter 1, Subtitle “A” of the Code, under
                    which an election similar to that provided by Section 761(a)
                    of the Code
                    is permitted, each Party shall make such election as may be permitted
                    or
                    required by such laws. In making the foregoing election or elections,
                    each
                    U.S. Party states that the income derived by it from operations
                    under this
                    Agreement can be adequately determined without the computation
                    of
                    partnership taxable income. 

                

        

        

        
          	 	
                  (C)

                	
                  Unless
                    approved by every Non-U.S. Party, no activity shall be conducted
                    under
                    this Agreement that would cause any Non-U.S. Party to be deemed
                    to be
                    engaged in a trade or business within the United States under
                    United
                    States income tax laws and regulations.

                

        

         

        Article
          7

        

        Confidentiality

        

        
          	
                  7.1

                	
                  Except
                    as otherwise provided in the Documents, each Party agrees that
                    all
                    information disclosed under this Agreement, except information
                    in the
                    public domain or lawfully in possession of a Party prior to the
                    Effective
                    Date, shall be considered confidential and shall not be disclosed
                    to any
                    other person or entity without the prior written consent of the
                    Party
                    which owns such confidential information, unless a Party is advised
                    by its
                    counsel that such disclosure is required by applicable law, rules
                    or
                    regulations. This obligation of confidentiality shall remain
                    in force
                    during the term of the Lease and for a period of one (_1_) year
                    thereafter. Notwithstanding the foregoing, confidential information
                    may be
                    disclosed without consent and without violating the obligations
                    contained
                    in this Article in the following
                    circumstances:

                

        

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

        
          	 	
                  (1)

                	
                  to
                    an Affiliate provided the Affiliate is bound to the provisions
                    of this
                    Article 7 and the Party disclosing is responsible for the violation
                    of an
                    Affiliate; 

                

        

        

        
          	 	
                  (2)

                	
                  to
                    a governmental agency or other entity when required by the provisions
                    of
                    the Documents;

                

        

        

        
          	 	
                  (3)

                	
                  to
                    the extent such information is required to be furnished in compliance
                    with
                    the applicable laws, rules and regulations, or pursuant to any
                    legal
                    proceedings or because of any order of any court binding upon
                    a Party;
                    

                

        

        

        
          	 	
                  (4)

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

                

        

        

        
          	 	
                  (5)

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

                

        

        

        
          	 	
                  (6)

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

                

        

        

        
          	 	
                  (7)

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

                

        

        

        
          	 	
                  (8)

                	
                  to
                    the extent such information must be disclosed pursuant to any
                    rules or
                    requirements of any government or stock exchange having jurisdiction
                    over
                    such Party, or its Affiliates; provided that such Party shall
                    comply with
                    the requirements of Article 12.10
                    hereunder;

                

        

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

        
          	 	
                  (9)

                	
                  to
                    its respective employees, subject to each Party taking sufficient
                    precautions to ensure such information is kept confidential;
                    

                

        

        

        
          	 	
                  (10)

                	
                  to
                    the extent any information which, through no fault of a Party,
                    becomes a
                    part of the public domain; and

                

        

        

        
          	 	
                  (11)

                	
                  to
                    the other parties to the Binding Agreement;

                

        

        

        
          	
                  7.2

                	
                  Disclosure
                    as pursuant to Articles 7.1(5), (6), (7) and (11) shall not be
                    made unless
                    prior to such disclosure the disclosing Party has obtained a
                    written
                    undertaking from the recipient party to keep the information
                    strictly
                    confidential for at least as long as the period set out above
                    and to use
                    the information for the sole purpose described in Articles 7.1(5),
                    (6),
                    (7), and (11), whichever is applicable, with respect to the disclosing
                    Party.

                

        

         

        Article
          8

        

        Notices

        

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

        

        
          	
                  Name:
                    

                	
                  Mogul
                    Energy Ltd.

                
	
                  Address:
                    

                	
                  1111-207
                    West Hastings Street

                
	 	
                  Vancouver,
                    British Columbia, Canada, V6B 1H7

                
	
                  Attention:

                	
                  Mr.
                    Parvez Tyab

                
	
                  Facsimile:

                	
                  (604)
                    669-6317

                
	
                  Email:

                	
                  parveztyab@shaw.ca

                
	
                  Telephone:

                	
                  (604)
                    669-6318

                
	 	 
	
                  Name:
                    

                	
                  Mogul
                    Energy International, Inc.

                
	
                  Address:
                    

                	
                  520
                    Pike Tower, Suite 2210

                
	 	
                  Seattle,
                    Washington, USA, 98101

                
	
                  Attention:

                	
                  Mr.
                    Naeem Tyab

                
	
                  Facsimile:

                	
                  (206)
                    357-4220

                
	
                  Email:

                	
                  ntyab@shaw.ca

                
	
                  Telephone:

                	
                  (206)
                    357-4211

                

        

        

          
            
              
              

            

            
              13

              
                

              

            

            
              
              

            

          

        

         

        ARTICLE
          9

        

        GENERAL
          PROVISIONS

        

        
          	
                  9.1

                	
                  No
                    modification.

                

        

        

        This
          Agreement is the entire agreement between the parties and may not be modified
          except in writing by agreement of the parties hereto. This agreement supersedes
          all prior oral and written representations and agreements with respect
          to the
          Lease and the Contract Area and becomes effective only after all parties
          have
          signed this agreement, the non-refundable payment of $25,000 made and the
          Letter
          of Guarantee is delivered.

        

        
          	
                  9.2

                	
                  Reassignment.

                

        

        

        In
          the
          event that MEI fails to perform its obligations hereunder Mogul shall have
          the
          option, exercisable at any time after 10 days from Mogul Ltd’s notice to MEI of
          MEI's failure to timely fulfill its obligations hereunder, to require that
          MEI
          reassign MEI's working interest to Mogul Ltd. free of cost. In this event,
          MEI
          agrees to execute any and all such documents as are necessary for such
          reassignment in the same form and manner as the original assignment to
          MEI.

        

        
          	
                  9.3

                	
                  Relationship
                    of Parties.

                

        

        

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

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

        
          	
                  9.4

                	
                  Further
                    Assurances.

                

        

        

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

        

        
          	
                  9.5

                	
                  Waiver.

                

        

        

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

        

        
          	
                  9.6

                	
                  Joint
                    Preparation.

                

        

        

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

        

        
          	
                  9.7

                	
                  Severability

                

        

        

        Any
          provision of this Agreement that is prohibited or unenforceable in any
          jurisdiction shall, as to such jurisdiction, be ineffective to the extent
          of
          such prohibition or unenforceability without invalidating the remaining
          provisions hereof, and the parties will attempt to agree upon a valid and
          enforceable provision which shall be a reasonable substitute therefore,
          and upon
          so agreeing, shall incorporate such substitute provision in this Agreement.
          Any
          such prohibition or unenforceability in any jurisdiction shall not invalidate
          or
          render unenforceable such provision in any other jurisdiction.

        

        
          	
                  9.8

                	
                  Modifications.

                

        

        

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

        

        
          	
                  9.9

                	
                  Priority
                    of Agreement.

                

        

        

        In
          the
          event of any conflict between the provisions of the main body of this Agreement
          and its Appendices, Exhibits, or Schedules the provisions of the main body
          of
          the Agreement shall prevail. In the event of any conflict between this
          Agreement
          and the Documents, this Agreement shall prevail. 

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

        
          	
                  9.10

                	
                  Counterparts.

                

        

        

        This
          Agreement may be executed in any number of counterparts, each of which
          when so
          executed shall be deemed to be an original and, all of which taken together
          shall constitute one and the same Agreement. In the event that any signature
          is
          delivered by facsimile transmission, such signature shall create a valid
          binding
          obligation of the party executing (or on whose behalf such signature is
          executed) the same with the same force and effect as if such facsimile
          signature
          were the original thereof.

        

        
          	
                  9.11

                	
                  Public
                    Announcements.

                

        

        

        No
          public
          announcement or statement regarding the terms or existence or this Agreement
          shall be made without prior written consent of all Parties; provided that,
          notwithstanding any failure to obtain such approval, no Party shall be
          prohibited from issuing or making any such public announcement or statement
          to
          the extent it is necessary to do so in order to comply with the applicable
          laws,
          rules or regulations of any government, government agency, court, administrative
          body, or stock exchange having jurisdiction over such Party or its
          Affiliates.

        

        
          	
                  9.12

                	
                  Entire
                    Agreement.

                

        

        

        This
          Agreement, together with all the exhibits hereto, constitutes and contains
          the
          entire agreement and understanding of the parties with respect to the subject
          matter hereof and supersedes any and all prior negotiations, correspondence,
          agreements, understandings, duties or obligations between the parties respecting
          the subject matter hereof.

        

        
          	
                  9.13

                	
                  Third
                    Parties.

                

        

        

        Nothing
          in this Agreement, express or implied, is intended to confer upon any person,
          other than the parties hereto and their successors and assigns, any rights
          or
          remedies under or by reason of this Agreement.

        

        
          	
                  9.14
                    

                	
                  Successors
                    and Assigns.

                

        

        

        This
          agreement shall inure to the benefit of and shall be binding upon the parties
          hereto and their respective successors, heirs and approved assignors. Each
          party
          is free to re-assign all or portion of its interest in this agreement to
          another
          party, without the approval of any of the parties to this agreement, provided
          that EGPC will approve such assignments.

        

        
          	
                  9.15

                	
                  Rules
                    of Construction.

                

        

        

        This
          Agreement shall be construed in accordance with the following rules of
          construction:

        

        
          	 	
                  (a)

                	
                  Calculation
                    of Time Period.

                

        

        

        When
          calculating the period of time before which, within which or following
          which any
          act is to be done or step taken pursuant to this Agreement, the date that
          is the
          reference date in calculating such period shall be excluded.  If the last
          day of such period is a non-Business Day, the period in question shall
          end on
          the next succeeding Business Day.

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

        
          	 	
                  (b)

                	
                  Commercially
                    Reasonable Efforts.

                

        

        

        The
          obligation of a party to use commercially reasonable efforts to accomplish
          an
          objective does not require an unreasonable expenditure of funds or the
          incurrence of an unreasonable liability on the part of the obligated
          party.

        

        
          	 	
                  (c)

                	
                  Gender
                    and Number.

                

        

        

        Any
          reference in this Agreement to gender shall include all genders, and words
          imparting the singular number only shall include the plural and vice
          versa.

        

        
          	 	
                  (d)

                	
                  Headings.

                

        

        

        The
          headings herein are inserted for convenience only and do not constitute
          a part
          of this Agreement. Whenever the context requires, the gender of any word
          used in
          this Agreement includes the masculine, feminine or neuter, and the number
          of any
          word includes the singular or plural. Unless the context otherwise requires,
          all
          references to articles and sections refer to articles and sections of this
          Agreement, and all references to schedules are to schedules attached hereto,
          each of which is made a part hereof for all purposes. The descriptive headings
          of the several articles and sections of this Agreement are inserted for
          purposes
          of reference only, and shall not affect the meaning or construction of
          any of
          the provisions hereof.

        

        
          	 	
                  (e)

                	
                  Herein.

                

        

        

        The
          words
          such as “herein,”
          “hereinafter,”
          “hereof,”
and
          “hereunder”
refer
          to this Agreement as a whole and not merely to a subDivision in which such
          words
          appear unless the context otherwise requires.

        

        
          	 	
                  (f)

                	
                  Including.

                

        

        

        The
          word
“including”
or
          any
          variation thereof means “including,
          without limitation”
and
          shall not be construed to limit any general statement that it follows to
          the
          specific or similar items or matters immediately following it.

        

        
          	 	
                  (g)

                	
                  Knowledge.

                

        

        

        The
          word
“knowledge”
or
          any
          similar term shall mean with respect to any Person, the actual knowledge
          of such
          Person or such Person’s officers, directors and employees.

        

        
          	 	
                  (h)

                	
                  Payments
                    and Computations.

                

        

        

        Except
          for the payment of the Purchase Price (which shall be paid at the Closing),
          each
          party shall make each payment due to another party to this Agreement not
          later
          than 2:00 p.m. Pacific time on the day when due. All payments shall be
          measured
          and paid in U.S. dollars by wire transfer in immediately available funds
          to the
          account or accounts designated by the party receiving such payment.  All
          computations of interest shall be made on the basis of a year of 365 days,
          in
          each case for the actual number of days (including the first day but excluding
          the last day) occurring in the period for which such interest is payable.
          Whenever any payment under this Agreement shall be due on a day other that
          a
          Business Day, such payment shall be made on the next succeeding Business
          Day,
          and such extension of time shall be included in the computation of payment
          of
          interest.

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

        
          	 	
                  (i)

                	
                  Schedules
                    and Exhibits.

                

        

        

        Any
          matter disclosed on any one Schedule or Exfhibit hereto shall be deemed
          disclosed for purposes of all other Schedules to the extent that the relevance
          of such matters to other Sections of this Agreement or other applicable
          Schedules or Exhibits is reasonably apparent to a reader.

        

        
          	 	
                  (j)

                	
                  Interpretation
                    of Language.

                

        

        

        The
          language and words used in this Agreement will be deemed to be the language
          and
          words chosen by the parties to express their mutual intent and no rules
          of
          strict construction will be applied against any party.

        

        
          	
                  9.16

                	
                  Disputes.

                

        

        

        
          	 	
                  (a)

                	
                  Subject
                    to paragraph (b) of this Section 10.5, any dispute arising out
                    of or in
                    connection with this Agreement which cannot first be settled
                    amicably by
                    mutual consultation between the parties, shall be referred to
                    and finally
                    resolved by arbitration under the auspices of JAMS, in accordance
                    with its
                    rules (“Rules”). The arbitration shall take place in New York, New York,
                    unless the parties otherwise mutually agree. The rules of procedures
                    not
                    expressly provided by the Rules shall be determined in accordance
                    with the
                    laws of the State of New York, whether mandatory or not. An award
                    may be
                    confirmed and judgment on the award entered in the Supreme Court
                    of the
                    State of New York.

                

        

        

        
          	 	
                  (b)

                	
                  Nothing
                    in this Section 9.16 shall be deemed to preclude any Party from
                    commencing
                    an action for equitable or injunctive relief in any court having
                    jurisdiction over the matter.

                

        

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

           

        

        
          	
                  9.17

                	
                  Governing
                    Law.

                

        

        

        All
          questions concerning the construction, validity, enforcement and interpretation
          of this Agreement shall be governed by the internal laws of the State of
          New
          York, without giving effect to any choice of law or conflict of law provision
          or
          rule (whether of the State of New York or any other jurisdictions) that
          would
          cause the application of the laws of any jurisdictions other than the State
          of
          New York. Each party hereby irrevocably submits to the exclusive jurisdiction
          of
          the state and federal courts sitting in the City of New York, for the
          adjudication of any dispute hereunder or in connection herewith or therewith,
          or
          with any transaction contemplated hereby or discussed herein, and hereby
          irrevocably waives, and agrees not to assert in any suit, action or proceeding,
          any claim that it is not personally subject to the jurisdiction of any
          such
          court, that such suit, action or proceeding is brought in an inconvenient
          forum
          or that the venue of such suit, action or proceeding is improper. Each
          party
          hereby irrevocably waives personal service of process and consents to process
          being served in any such suit, action or proceeding by mailing a copy thereof
          to
          such party at the address for such notices to it under this Agreement and
          agrees
          that such service shall constitute good and sufficient service of process
          and
          notice thereof. Nothing contained herein shall be deemed to limit in any
          way any
          right to serve process in any manner permitted by law. EACH
          PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
          REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
          IN
          CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
          CONTEMPLATED HEREBY.

        

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      In
        Witness Whereof,
        the
        parties hereto caused this Agreement to be duly executed and accepted as
        of the
        dates set forth below.

      

      
        	Mogul
                Energy Ltd.	 	
                Dated: 
                  November 8, 2005

              
	 	 	 	 
	
                By:

              	
                /s/
                  Parvez Tyab

              	 	 
	Parvez
                Tyab, President	 	 
	 	 	 	 
	 	 	 	 
	Mogul
                Energy International, Inc.	 	
                Dated: 
                  November 8, 2005

              
	 	 	 	 
	
                By:

              	
                /s/
                  Naeem Tyab

              	 	 
	Naeem
                Tyab, President	 	 

      

       

    

     

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