Document:

Unassociated Document

     

    EXHIBIT
10.15

    

    Long Term
Supply Contract

    

    Contract
NO:

    Signed
at: Shanghai

    

    Purchaser:
Perfectenergy (Shanghai) Co., Ltd. (hereafter as “Party A”)

    Address:
No.479 Youdong Road, Shanghai 201100

    Tel:
021-54880958   Fax:021-54888243

    Bank
Details: Bank of China Shanghai Minhang Sub-Branch

    Account
No: 044285-8250-13753708091001

    Tax
Registration No: 310112777606116

    

    Supplier:
Chengdu Jiayang Silicon Materials Technology Co., Ltd. (hereafter as “Party
B”)

    Address:
No 8,Wuke Dong Yi Road, Wuhou District, Chengdu 610045

    Tel:
028-87421958

    

    

    In
accordance with the Economic Contract Law of People’s Republic of China, both
parties enter into the Supply Contract after friendly negotiation, as
follows:

    

    

    I. Both
parties agree that Party B will supply the following product to Party A from
2010 to 2012

    1.           Name
of the product: CZ PV cells

    

    
      	
              2.

            	
              Technical
      specification

            

    

    
      	
               
      

            	
              i.

            	
              Type:
      P ,<100>+-3

            

    

    
      	
               
      

            	
              ii.

            	
              Size;
      125mmx 125mm +- 0.3mm

            

    

    
      	
               
      

            	
              iii.

            	
              Dimension:
      >=165mm+-0.3mm

            

    

    
      	
               
      

            	
              iv.

            	
              Etc.

            

    

    
      	
               
      

            	
              v.

            	
              No
      leaks, wholes and other defects

            

    

    
      	
              3.

            	
              Quantity

            

    

    
      	
               
      

            	
              1.

            	
              1
      Million pieces will be supplied in year
2010

            

    

    
      	
               
      

            	
              2.

            	
              1.2
      Million pieces will be supplied in year
2011

            

    

    
      	
               
      

            	
              3.

            	
              1.5
      Million pieces will be supplied in year
2012

            

    

    

    
      	
              4.

            	
              Unit
      price: Based on the market price with monthly
  adjustment;

            

    

    

    
      	
              5.

            	
              Payment
      term

            

    

    Party B
will deliver the products in batches with advance notice to Party A. Party A
will make 50% payment to Party B within 5 days upon receiving the advance
notice. Party B will deliver the goods after receiving the 50%
payment.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    II.
Quality Requirement:

     

    Party B
guaranteed the goods supplied will meet all requirements on quality,
specification and technology as specified in this agreement.

    

    III.
Place of Delivery:

    Party B
is responsible to delivery the goods to Shanghai.

    

    IV. Time
of Delivery

    On
monthly basis

    

    V.
Packing requirement

    Packing
shall meet all requirements for road transportation rules in PRC

    

    VI.
Inspection and Invoicing

    Party A
shall inspect goods in accordance with the technical specifications set forth in
this contract within 5 days after receiving the goods and shall notify Party B
of the result of inspection and make the remaining 50% payment. VAT invoices
shall be issued by Party B to Party A if the quality inspection
passed.

    VII.
Responsility

    Each
party shall carry out its own duty within the time limited set forth in the
contract. The party who breaches the contract shall compensate the non-breaching
party for any damage caused by the breach.

    VIII.
Dispute Resolution

    Dispute
shall firstly be resolved through consultation between both parties. If no
resolution can be reached through consultation, any party may bring the dispute
to litigation in a local tribunal. The judgment from the local tribunal shall be
final.

    

    IX. This
contract shall be executed into two duplicates. Each duplicate shall be
effective upon signature & company chop.

    

    X.
Validation period of the contract: From the signing date to December 31,
2012

    

    

    Party A:
Perfectenergy (Shanghai) Co., Ltd.

    /s/Signature+Company
Chop

    

    Party B:
Chengdu Jiayang Silicon Materials Technology Co., Ltd.

    /s/Signature+Company
Chop

    

    

    Date:
January 8, 2010EXHIBIT
4.3

     

    Addendum
to the 8% Convertible Debenture

     

    between

     

    
      
        

      

    

     

    and

     

    Scivanta
Medical Corporation

    

    This
Addendum (this “Addendum”) to the 8% Convertible Debenture (as such term is
defined below), entered into as of the 31st day of January, 2010 (the “Addendum
Effective Date”), is by and between ______________ (the “Holder”) and Scivanta
Medical Corporation (the “Company”).  Capitalized terms used herein,
but not otherwise defined herein, shall have the meanings given to such terms in
the 8% Convertible Debenture issued as of February 1, 2007 (the
“Debenture”).

     

    WHEREAS,
the Company promised to pay to the Holder, or its registered assigns, upon due
presentation and surrender of the Debenture, on or after January 31, 2010, the
principal amount of _______________ Dollars ($_________); and

     

    WHEREAS,
the Company and Holder desire to modify the aforementioned Debenture for the
mutual benefit of both parties;

     

    NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:

     

    
      	
              1.

            	
              The
      modifications of the Debenture herein will be effective as of the Addendum
      Effective Date and will remain in effect for the duration of the Debenture
      unless further modified in writing by the parties
  hereto.

            

    

    

    
      	
              2.

            	
              The
      original Maturity Date of January 31, 2010 shall be replaced with January
      31, 2012.

            

    

    

    
      	
              3.

            	
              Other
      than as specifically modified in this Addendum, all other terms,
      conditions and covenants of the Debenture shall remain in full force and
      effect.

            

    

    

    IN
WITNESS WHEREOF, the undersigned have executed this Addendum, effective as of
the Addendum Effective Date.

     

    
      
        	
                SCIVANTA
      MEDICAL CORPORATION

              	 
      	
                HOLDER

              
	 
      	 
      	 
      	 
      
	
                By:  

              	
                   

              	 
      	
                  

              
	
                Name:  

              	
                Thomas
      S. Gifford

              	 
      	
                Holder

              
	
                Title:  

              	
                Executive
      Vice President and

              	 
      	 
      
	 
      	
                Chief
      Financial OfficerUnassociated Document

    

    OPERATING
AGREEMENT

     

    BETWEEN

     

    SCS
CORPORATION

     

    AND

     

    DANA
PETROLEUM (E&P) LIMITED

     

    COVERING:

     

    THE
HYDROCARBON PRODUCTION SHARING CONTRACT DATED SEPTEMBER 22, 2006

     

    OFFSHORE
REPUBLIC OF GUINEA

     

    BASED
ON

     

    THE
2002 MODEL FORM INTERNATIONAL OPERATING AGREEMENT OF

     

    THE
ASSOCIATION OF INTERNATIONAL PETROLEUM NEGOTIATORS (“AIPN”)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

     

    
      
        	
                ARTICLE
      1 DEFINITIONS

              	
                1

              
	
                ARTICLE
      2 EFFECTIVE DATE AND TERM

              	
                5

              
	
                ARTICLE
      3 SCOPE

              	
                5

              
	
                3.1

              	
                Scope

              	
                5

              
	
                3.2

              	
                Participating
      Interest

              	
                6

              
	
                3.3

              	
                Ownership,
      Obligations and Liabilities

              	
                6

              
	
                3.4

              	
                Government
      Participation

              	
                6

              
	
                ARTICLE
      4 OPERATOR

              	
                6

              
	
                4.1

              	
                Designation
      of Operator

              	
                6

              
	
                4.2

              	
                Rights
      and Duties of Operator

              	
                7

              
	
                4.3

              	
                Operator
      Personnel

              	
                8

              
	
                4.4

              	
                Information
      Supplied by Operator

              	
                10

              
	
                4.5

              	
                Settlement
      of Claims and Lawsuits

              	
                11

              
	
                4.6

              	
                Limitation
      on Liability of Operator

              	
                11

              
	
                4.7

              	
                Insurance
      Obtained by Operator

              	
                12

              
	
                4.8

              	
                Commingling
      of Funds

              	
                13

              
	
                4.9

              	
                Resignation
      of Operator

              	
                14

              
	
                4.10

              	
                Removal
      of Operator

              	
                14

              
	
                4.11

              	
                Appointment
      of Successor

              	
                14

              
	
                4.12

              	
                Health,
      Safety and Environment (HSE)

              	
                15

              
	
                ARTICLE
      5 OPERATING COMMITTEE

              	
                 
      16

              
	
                5.1

              	
                Establishment
      of Operating Committee

              	
                16

              
	
                5.2

              	
                Powers
      and Duties of Operating Committee

              	
                16

              
	
                5.3

              	
                Authority
      to Vote

              	
                16

              
	
                5.4

              	
                Subcommittees

              	
                17

              
	
                5.5

              	
                Notice
      of Meeting

              	
                17

              
	
                5.6

              	
                Contents
      of Meeting Notice

              	
                17

              
	
                5.7

              	
                Location
      of Meetings

              	
                17

              
	
                5.8

              	
                Operator’s
      Duties for Meetings

              	
                17

              
	
                5.9

              	
                Voting
      Procedure

              	
                18

              
	
                5.10

              	
                Record
      of Votes

              	
                19

              
	
                5.11

              	
                Minutes

              	
                19

              
	
                5.12

              	
                Voting
      by Notice

              	
                19

              
	
                5.13

              	
                Effect
      of Vote

              	
                20

              
	
                ARTICLE
      6 WORK PROGRAMS AND BUDGETS

              	
                 
      21

              
	
                6.1

              	
                Exploration
      and Appraisal

              	
                21

              
	
                6.2

              	
                Development

              	
                22

              
	
                6.3

              	
                Production

              	
                23

              
	
                6.4

              	
                Itemization
      of Expenditures

              	
                23

              
	
                6.5

              	
                Multi-Year
      Work Program and Budget

              	
                24

              
	
                6.6

              	
                Contract
      Awards

              	
                24

              
	
                6.7

              	
                Authorization
      for Expenditure (AFE) Procedure

              	
                25

              
	
                6.8

              	
                Overexpenditures
      of Work Programs and Budgets

              	
                26

              
	
                ARTICLE
      7 OPERATIONS BY LESS THAN ALL PARTIES

              	
                 
      26

              
	
                7.1

              	
                Limitation
      on Applicability

              	
                26

              
	
                7.2

              	
                Procedure
      to Propose Exclusive Operations

              	
                27

              
	
                7.3

              	
                Responsibility
      for Exclusive Operations

              	
                28

              
	
                7.4

              	
                Consequences
      of Exclusive Operations

              	
                28

              
	
                7.5

              	
                Premium
      to Participate in Exclusive Operations

              	
                30

              
	
                7.6

              	
                Order
      of Preference of Operations

              	
                31

              
	
                7.7

              	
                Stand-By
      Costs

              	
                32

              
	
                7.8

              	
                Special
      Considerations Regarding Deepening and Sidetracking

              	
                33

              
	
                7.9

              	
                Use
      of Property

              	
                33

              

      

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    

    
      
        	
                7.10

              	
                Lost
      Production

              	
                34

              
	
                7.11

              	
                Production
      Bonuses

              	
                34

              
	
                7.12

              	
                Conduct
      of Exclusive Operations

              	
                35

              
	
                ARTICLE
      8 DEFAULT

              	
                36

              
	
                8.1

              	
                Default
      and Notice

              	
                36

              
	
                8.2

              	
                Operating
      Committee Meetings and Data

              	
                36

              
	
                8.3

              	
                Allocation
      of Defaulted Accounts

              	
                37

              
	
                8.4

              	
                Remedies

              	
                38

              
	
                8.5

              	
                Survival

              	
                40

              
	
                8.6

              	
                No
      Right of Set Off

              	
                40

              
	
                ARTICLE
      9 DISPOSITION OF PRODUCTION

              	
                 
      41

              
	
                9.1

              	
                Right
      and Obligation to Take in Kind

              	
                41

              
	
                9.2

              	
                Disposition
      of Crude Oil

              	
                41

              
	
                9.3

              	
                Disposition
      of Natural Gas

              	
                41

              
	
                ARTICLE
      10 ABANDONMENT

              	
                 
      41

              
	
                10.1

              	
                Abandonment
      of Wells Drilled as Joint Operations

              	
                41

              
	
                10.2

              	
                Abandonment
      of Exclusive Operations

              	
                42

              
	
                ARTICLE
      11 SURRENDER, EXTENSIONS AND RENEWALS

              	
                 
      42

              
	
                11.1

              	
                Surrender

              	
                42

              
	
                11.2

              	
                Extension
      of the Term

              	
                43

              
	
                ARTICLE
      12 TRANSFER OF INTEREST OR RIGHTS AND CHANGES IN CONTROL

              	
                 
      43

              
	
                12.1

              	
                Obligations

              	
                43

              
	
                12.2.

              	
                Transfer

              	
                44

              
	
                12.3

              	
                Change
      in Control

              	
                45

              
	
                ARTICLE
      13 WITHDRAWAL FROM AGREEMENT

              	
                 
      46

              
	
                13.1

              	
                Right
      of Withdrawal

              	
                46

              
	
                13.2

              	
                Partial
      or Complete Withdrawal

              	
                46

              
	
                13.3

              	
                Rights
      of a Withdrawing Party

              	
                46

              
	
                13.4

              	
                Obligations
      and Liabilities of a Withdrawing Party

              	
                46

              
	
                13.5

              	
                Emergency

              	
                47

              
	
                13.6

              	
                Assignment

              	
                47

              
	
                13.7

              	
                Approvals

              	
                48

              
	
                13.8

              	
                Security

              	
                48

              
	
                13.9

              	
                Withdrawal
      or Abandonment by all Parties

              	
                48

              
	
                ARTICLE
      14 RELATIONSHIP OF PARTIES AND TAX

              	
                 
      48

              
	
                14.1

              	
                Relationship
      of Parties

              	
                48

              
	
                14.2

              	
                Tax

              	
                48

              
	
                14.3

              	
                United
      States Tax Election

              	
                49

              
	
                ARTICLE
      15 VENTURE INFORMATION - CONFIDENTIALITY - INTELLECTUAL
      PROPERTY

              	
                 
      49

              
	
                15.1

              	
                Venture
      Information

              	
                49

              
	
                15.2

              	
                Confidentiality

              	
                50

              
	
                15.3

              	
                Intellectual
      Property

              	
                51

              
	
                15.4

              	
                Continuing
      Obligations

              	
                51

              
	
                15.5

              	
                Trades

              	
                51

              
	
                ARTICLE
      16 FORCE MAJEURE

              	
                 
      52

              
	
                16.1

              	
                Obligations

              	
                52

              
	
                16.2

              	
                Definition
      of Force Majeure

              	
                52

              
	
                ARTICLE
      17 NOTICES

              	
                 
      52

              
	
                ARTICLE
      18 APPLICABLE LAW - DISPUTE RESOLUTION - WAIVER OF SOVEREIGN
      IMMUNITY

              	
                 
      53

              
	
                18.1

              	
                Applicable
      Law

              	
                53

              
	
                18.2

              	
                Dispute
      Resolution

              	
                53

              
	
                18.3

              	
                Expert
      Determination

              	
                55

              
	
                18.4

              	
                Waiver
      of Sovereign Immunity

              	
                56

              
	
                ARTICLE
      19 ALLOCATION OF COST & PROFIT HYDROCARBONS

              	
                 
      56

              
	
                19.1

              	
                Allocation
      of Total Production

              	
                56

              
	
                19.2

              	
                Allocation
      of Hydrocarbons to Parties

              	
                56

              

      

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    

    
      
        	
                19.3

              	
                Use
      of Estimates

              	
                57

              
	
                19.4

              	
                Principles

              	
                57

              
	
                ARTICLE
      20 GENERAL PROVISIONS

              	
                 
      57

              
	
                20.1

              	
                Conduct
      of the Parties

              	
                57

              
	
                20.2

              	
                Conflicts
      of Interest

              	
                58

              
	
                20.3

              	
                Public
      Announcements

              	
                58

              
	
                20.4

              	
                Successors
      and Assigns

              	
                58

              
	
                20.5

              	
                Waiver

              	
                58

              
	
                20.6

              	
                No
      Third Party Beneficiaries

              	
                59

              
	
                20.7

              	
                Joint
      Preparation

              	
                59

              
	
                20.8

              	
                Severance
      of Invalid Provisions

              	
                59

              
	
                20.9

              	
                Modifications

              	
                59

              
	
                20.10

              	
                Interpretation

              	
                59

              
	
                20.11

              	
                Counterpart
      Execution

              	
                59

              
	
                20.12

              	
                Entirety

              	
                60

              

      

    

    

    Exhibit
A          -           Accounting
Procedure

    Exhibit
B          
-           Contract
Area

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    OPERATING
AGREEMENT

     

    THIS
AGREEMENT is made as of the 28th day of
January 2010 (the “Effective
Date”) among SCS
Corporation, a company existing under the laws of the State of Delaware
(hereinafter referred to as “SCS” or “Operator”) and Dana Petroleum (E&P)
Limited, a company existing under the laws of England, (hereinafter referred to
as “DANA”).  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,
SCS has entered into the Hydrocarbon Production Sharing Contract dated September
22, 2006 with the Republic of Guinea (hereinafter referred to as “Government”)
covering certain areas located in the Offshore Area (the “Contract”)
which Contract is subject to a Memorandum of Understanding dated September 11,
2009 between the Government and SCS; and

     

    WHEREAS,
SCS and DANA are Parties to the Contract; and

     

    WHEREAS,
the Parties desire to define their respective rights and obligations with
respect to their operations under the Contract;

     

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

     

    ARTICLE
1

    DEFINITIONS

     

    As used
in this Agreement, the following words and terms shall have the meaning ascribed
to them below:

     

    
      	
              1.1

            	
              Accounting
      Procedure means the rules, provisions and conditions contained in
      Exhibit A.

            

    

     

    
      	
              1.2

            	
              AFE
      means an authorization for expenditure pursuant to Article
      6.7.

            

    

     

    
      	
              1.3

            	
              Affiliate
      means a legal entity which Controls, or is Controlled by, or which is
      Controlled by an entity which Controls, a
Party.

            

    

     

    
      	
              1.4

            	
              Agreed
      Interest Rate means interest compounded on a monthly basis, at the
      rate per annum equal to the one (1) month term, London Interbank Offered
      Rate (LIBOR rate) for U.S. dollar deposits, as published in London by the
      Financial
      Times or if not published, then by The Wall Street
      Journal, plus two (2) percentage points, applicable on the first
      Business Day prior to the due date of payment and thereafter on the first
      Business Day of each succeeding calendar month.  If the
      aforesaid rate is contrary to any applicable usury law, the rate of
      interest to be charged shall be the maximum rate permitted by such
      applicable law.

            

    

     

    
      	
              1.5

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

            

    

     

    
      	
              1.6

            	
              Appraisal
      Well means any well (other than an Exploration Well or a
      Development Well) whose purpose at the time of commencement of drilling
      such well is to appraise the extent or the volume of Hydrocarbon reserves
      contained in an existing Discovery.

            

    

     

    
      	
              1.7

            	
              Business
      Day means a Day on which both the banks in the United States and
      Scotland are customarily open for
business.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              1.8

            	
              Calendar
      Quarter means a period of three (3) months commencing with
      January 1 and ending on the following March 31, a period of three (3)
      months commencing with April 1 and ending on the following June 30, a
      period of three (3) months commencing with July 1 and ending on the
      following September 30, or a period of three (3) months commencing with
      October 1 and ending on the following December 31, all in accordance with
      the Gregorian Calendar.

            

    

     

    
      	
              1.9

            	
              Calendar
      Year means a period of twelve (12) months commencing with
      January 1 and ending on the following December 31 according to the
      Gregorian Calendar.

            

    

     

    
      	
              1.10

            	
              Commercial
      Discovery means any Discovery that is sufficient to entitle the
      Parties to apply to the Government to commence
    exploitation.

            

    

     

    
      	
              1.11

            	
              Completion
      means an operation intended to complete a well through the Christmas tree
      as a producer of Hydrocarbons in one or more Zones, including the setting
      of production casing, perforating, stimulating the well and production
      Testing conducted in such operation.  “Complete”
      and other derivatives shall be construed
  accordingly.

            

    

     

    
      	
              1.12

            	
              Consenting
      Party means a Party who agrees to participate in and pay its share
      of the cost of an Exclusive
Operation.

            

    

     

    
      	
              1.13

            	
              Consequential
      Loss means any loss, damages, costs, expenses or liabilities caused
      (directly or indirectly) by any of the following arising out of, relating
      to, or connected with this Agreement or the operations carried out under
      this Agreement: (i) reservoir or formation damage; (ii) inability to
      produce, use or dispose of Hydrocarbons; (iii) loss or deferment of
      income; (iv) punitive damages; or (v) other indirect damages or losses
      whether or not similar to the
foregoing.

            

    

     

    
      	
              1.14

            	
              Contract
      means the instrument identified in the recitals to this Agreement and any
      extension, renewal or amendment
thereto.

            

    

     

    
      	
              1.15

            	
              Contract
      Area means as of the Effective Date the area that is described in
      Exhibit B.  The perimeter or perimeters of the Contract Area
      shall correspond to that area covered by the Contract, as such area may
      vary from time to time during the term of validity of the
      Contract.

            

    

     

    
      	
              1.16

            	
              Control
      means the ownership directly or indirectly of more than fifty (50) percent
      of the voting rights in a legal entity.  “Controls”,
      “Controlled
      by” and other derivatives shall be construed
      accordingly.

            

    

     

    
      	
              1.17

            	
              Cost
      Hydrocarbons means that portion of the total production of
      Hydrocarbons which is allocated to the Parties under the Contract and this
      Agreement for the recovery of the costs
      and expenses incurred by the Parties and allowed to be recovered pursuant
      to the Contract.

            

    

     

    
      	
              1.18

            	
              Crude
      Oil means all crude oils, condensates, and natural gas liquids at
      atmospheric pressure which are subject to and covered by the
      Contract.

            

    

     

    
      	
              1.19

            	
              Day
      means a calendar day unless otherwise specifically
    provided.

            

    

     

    
      	
              1.20

            	
              Deepening
      means an operation whereby a well is drilled to an objective Zone below
      the deepest Zone in which the well was previously drilled, or below the
      deepest Zone proposed in the associated AFE (if required), whichever is
      the deeper.  “Deepen”
      and other derivatives shall be construed
  accordingly.

            

    

     

    
      	
              1.21

            	
              Development
      Plan means a plan for the development of Hydrocarbons from an
      Exploitation Area.

            

    

     

    
      	
              1.22

            	
              Development
      Well means any well drilled for the production of Hydrocarbons
      pursuant to a Development Plan.

            

    

     

    
      	
              1.23

            	
              Discovery
      means the discovery of an accumulation of Hydrocarbons whose existence
      until that moment was unproven by
drilling.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
              1.24

            	
              Dispute
      means any dispute, controversy or claim (of any and every kind or type,
      whether based on contract, tort, statute, regulation, or otherwise)
      arising out of, relating to, or connected with this Agreement or the
      operations carried out under this Agreement, including any dispute as to
      the construction, validity, interpretation, enforceability or breach of
      this Agreement.

            

    

     

    
      	
              1.25

            	
              Entitlement
      means that quantity of Hydrocarbons (excluding all quantities used or lost
      in Joint Operations) of which a Party has the right and obligation to take
      delivery pursuant to the terms of this Agreement and the Contract, as such
      rights and obligations may be adjusted by the terms of any lifting,
      balancing and other disposition agreements entered into pursuant to
      Article 9.

            

    

     

    
      	
              1.26

            	
              Environmental
      Loss means any loss, damages, costs, expenses or liabilities (other
      than Consequential Loss) caused by a discharge of Hydrocarbons, pollutants
      or other contaminants into or onto any medium (such as land, surface
      water, ground water and/or air) arising out of, relating to, or connected
      with this Agreement or the operations carried out under this Agreement,
      including any of the following: (i) injury or damage to, or destruction
      of, natural resources or real or personal property; (ii) cost of pollution
      control, cleanup and removal; (iii) cost of restoration of natural
      resources; and (iv) fines, penalties or other
  assessments.

            

    

     

    
      	
              1.27

            	
              Exclusive
      Operation means those operations and activities carried out
      pursuant to this Agreement, the costs of which are chargeable to the
      account of less than all the
Parties.

            

    

     

    
      	
              1.28

            	
              Exclusive
      Well means a well drilled pursuant to an Exclusive
      Operation.

            

    

     

    
      	
              1.29

            	
              Exploitation
      Area means that part of the Contract Area which is established for
      development of a Commercial Discovery pursuant to the Contract or, if the
      Contract does not establish an exploitation area, then that part of the
      Contract Area which is delineated as the exploitation area in a
      Development Plan approved as a Joint Operation or as an Exclusive
      Operation.

            

    

     

    
      	
              1.30

            	
              Exploitation
      Period means any and all periods of exploitation during which the
      production and removal of Hydrocarbons is permitted under the
      Contract.

            

    

     

    
      	
              1.31

            	
              Exploration
      Period means any and all periods of exploration set out in the
      Contract.

            

    

     

    
      	
              1.32

            	
              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.

            

    

     

    
      	
              1.33

            	
              G & G
      Data means only geological, geophysical and geochemical data and
      other similar information that is not obtained through a well
      bore.

            

    

     

    
      	
              1.34

            	
              Government
      means the government of the Republic of Guinea and any political
      subdivision, agency or instrumentality thereof, including the Government
      Oil & Gas Company.

            

    

     

    
      	
              1.35

            	
              Government
      Oil & Gas Company means the oil and gas company formed by the
      Republic of Guinea for the purposes of the Contract under whatever name is
      eventually given to the company.

            

    

     

    
      	
              1.36

            	
              Gross
      Negligence / Willful Misconduct means any act or failure to act
      (whether sole, joint or concurrent) by any person or entity which was
      intended to cause, or which was in reckless disregard of or wanton
      indifference to, harmful consequences such person or entity knew, or
      should have known, such act or failure would have on the safety or
      property of another person or
entity.

            

    

     

    
      	
              1.37

            	
              Hydrocarbons
      means all substances which are subject to and covered by the Contract,
      including Crude Oil and Natural
Gas.

            

    

     

    
      	
              1.38

            	
              Joint
      Account means the accounts maintained by Operator in accordance
      with the provisions of this Agreement, including the Accounting
      Procedure.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              1.39

            	
              Joint
      Operations means those operations and activities carried out by
      Operator pursuant to this Agreement, the costs of which are chargeable to
      all Parties.

            

    

     

    
      	
              1.40

            	
              Joint
      Property means, at any point in time, all wells, facilities,
      equipment, materials, information (subject always to the provisions of
      Article 15.3 below), funds and property (other than Hydrocarbons) held for
      use in Joint Operations.

            

    

     

    
      	
              1.41

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

            

    

     

    
      	
              1.42

            	
              Minimum
      Work Obligations means those work and/or expenditure obligations
      specified in the Contract that must be performed in order to satisfy the
      obligations of the Contract.

            

    

     

    
      	
              1.43

            	
              Natural
      Gas means all gaseous hydrocarbons (including wet gas, dry gas and
      residue gas) which are subject to and covered by the Contract, but
      excluding Crude Oil.

            

    

     

    
      	
              1.44

            	
              Non-Consenting
      Party means each Party who elects not to participate in an
      Exclusive Operation.

            

    

     

    
      	
              1.45

            	
              Non-Operator
      means each Party to this Agreement other than
  Operator.

            

    

     

    
      	
              1.46

            	
              Operating
      Committee means the committee constituted in accordance with
      Article 5.

            

    

     

    
      	
              1.47

            	
              Operator
      means a Party to this Agreement designated as such in accordance with
      Articles 4 or 7.12(F).

            

    

     

    
      	
              1.48

            	
              Participating
      Interest means as to any Party, the undivided interest of such
      Party (expressed as a percentage of the total interests of all Parties) in
      the rights and obligations derived from the Parties’ interest in the
      Contract and this Agreement.

            

    

     

    
      	
              1.49

            	
              Plugging
      Back means a single operation whereby a deeper Zone is abandoned in
      order to attempt a Completion in a shallower Zone.  “Plug
      Back” and other derivatives shall be construed
      accordingly.

            

    

     

    
      	
              1.50

            	
              Profit
      Hydrocarbons means that portion of the total production of
      Hydrocarbons, in excess of Cost Hydrocarbons, which is allocated to the
      Parties under the terms of the
Contract.

            

    

     

    
      	
              1.51

            	
              Recompletion
      means an operation whereby a Completion in one Zone is abandoned in order
      to attempt a Completion in a different Zone within the existing
      wellbore.  “Recomplete”
      and other derivatives shall be construed
  accordingly.

            

    

     

    
      	
              1.52

            	
              Reworking
      means an operation conducted in the wellbore of a well after it is
      Completed to secure, restore, or improve production in a Zone which is
      currently open to production in the wellbore.  Such operations
      include well stimulation operations, but exclude any routine repair or
      maintenance work, or drilling, Sidetracking, Deepening, Completing,
      Recompleting, or Plugging Back of a well.  “Rework”
      and other derivatives shall be construed
  accordingly.

            

    

     

    
      	
              1.53

            	
              Security
      means (i) a guarantee or standby letter of credit issued by a bank; (ii)
      an on-demand bond issued by a surety corporation; (iii) a corporate
      guarantee; (iv) any financial security required by the Contract or this
      Agreement; and (v) any financial security agreed from time to time by the
      Parties; provided, however, that the bank, surety or corporation issuing
      the guarantee, standby letter of credit, bond or other security (as
      applicable) has a credit rating indicating it has a sufficient worth to
      pay its obligations in all reasonably foreseeable
      circumstances.

            

    

     

    
      	
              1.54

            	
              Senior
      Supervisory Personnel means, with respect to a Party, any
      individual who functions as its senior resident manager who directs all
      operations and activities of such Party in the country or region in which
      he is resident, and any manager who directly reports to such senior
      resident manager in such country or region, but excluding all managers or
      supervisors who are responsible for or in charge of installations or
      facilities, onsite drilling, construction or production and related
      operations, or any other field operations; and, in any of the above
      alternatives, any individual who functions for such Party or one of its
      Affiliates at a management level equivalent to or superior to the tier
      selected, or any officer or director of such Party or one of its
      Affiliates.

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
              1.55

            	
              Sidetracking
      means the directional control and intentional deviation of a well from
      vertical so as to change the bottom hole location unless done to
      straighten the hole or to drill around junk in the hole or to overcome
      other mechanical difficulties.  “Sidetrack”
      and other derivatives shall be construed
  accordingly.

            

    

     

    
      	
              1.56

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

            

    

     

    
      	
              1.57

            	
              Urgent
      Operational Matters has the meaning ascribed to it in Article
      5.12(A)(1).

            

    

     

    
      	
              1.58

            	
              Work
      Program and Budget means a work program for Joint Operations and
      budget therefor as described and approved in accordance with Article 6 and
      shall not necessarily mean, but shall not exclude the minimum exploration
      program required of the Parties under the
  Contract.

            

    

     

    
      	
              1.59

            	
              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

    EFFECTIVE
DATE AND TERM

     

    This
Agreement shall have effect from the Effective Date (as defined in the preamble
to this Agreement) and shall continue in effect until the following occur in
accordance with the terms of this Agreement: the Contract terminates; all
materials, equipment and personal property used in connection with Joint
Operations or Exclusive Operations have been disposed of or removed; and final
settlement (including settlement in relation to any financial audit carried out
pursuant to the Accounting Procedure) has been made.  Notwithstanding
the preceding sentence: (i) Article 10 shall remain in effect until all
abandonment obligations under the Contract have been satisfied; and
(ii) Article 4.5, Article 8, Article 15.2,
Article 18 and the indemnity obligation under Article 20.1 (A) shall remain
in effect until all obligations have been extinguished and all Disputes have
been resolved.  Termination of this Agreement shall be without
prejudice to any rights and obligations arising out of or in connection with
this Agreement which have vested, matured or accrued prior to such
termination.

     

    ARTICLE
3

    SCOPE

     

    
      	
              3.1

            	
              Scope

            

    

     

    
      	
               
      

            	
              (A)

            	
              The
      purpose of this Agreement is to establish the respective rights and
      obligations of the Parties with regard to operations under the Contract,
      including the joint exploration, appraisal, development, production and
      disposition of Hydrocarbons from the Contract
  Area.

            

    

     

    
      	
               
      

            	
              (B)

            	
              For
      greater certainty, the Parties confirm that, except to the extent
      expressly included in the Contract, the following activities are outside
      of the scope of this Agreement and are not addressed
    herein:

            

    

     

    
      	
               
      

            	
              (1)

            	
              construction,
      operation, ownership, maintenance, repair and removal of facilities
      downstream from the delivery point (as determined under Article 9) of the
      Parties’ Entitlements;

            

    

     

    
      	
               
      

            	
              (2)

            	
              transportation
      of the Parties’ Entitlements downstream from the delivery point (as
      determined under Article 9);

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (3)

            	
              marketing
      and sales of Hydrocarbons, except as expressly provided in
      Article 7.12(E), Article 8.4 and Article
9;

            

    

     

    
      	
               
      

            	
              (4)

            	
              acquisition
      of rights to explore for, appraise, develop or produce Hydrocarbons
      outside of the Contract Area (other than as a consequence of unitization
      with an adjoining contract area under the terms of the Contract);
      and

            

    

     

    
      	
               
      

            	
              (5)

            	
              exploration,
      appraisal, development or production of minerals other than Hydrocarbons,
      whether inside or outside of the Contract
Area.

            

    

     

    
      	
              3.2

            	
              Participating
      Interest

            

    

     

    
      	
               
      

            	
              (A)

            	
              The
      Participating Interests of the Parties as of the Effective Date
      are:

            

    

     

    
      
        
          	 	
                  SCS: 

                	
                  77%

                

        

      

    

    
      	 	
              DANA: 

            	
              23%

            

    

    

    
      	
               
      

            	
              (B)

            	
              If
      a Party transfers all or part of its Participating Interest pursuant to
      the provisions of this Agreement and the Contract, the Participating
      Interests of the Parties shall be revised
  accordingly.

            

    

     

    
      	
              3.3

            	
              Ownership,
      Obligations and Liabilities

            

    

     

    
      	
               
      

            	
              (A)

            	
              Unless
      otherwise provided in this Agreement, all the rights and interests in and
      under the Contract, all Joint Property, and any Hydrocarbons produced from
      the Contract Area shall, subject to the terms of the Contract, be owned by
      the Parties in accordance with their respective Participating
      Interests.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Unless
      otherwise provided in this Agreement, the obligations of the Parties under
      the Contract and all liabilities and expenses incurred by Operator in
      connection with Joint Operations shall be charged to the Joint Account and
      all credits to the Joint Account shall be shared by the Parties, in
      accordance with their respective Participating
  Interests.

            

    

     

    
      	
               
      

            	
              (C)

            	
              Each
      Party shall pay when due, in accordance with the Accounting Procedure, its
      Participating Interest share of Joint Account expenses, including cash
      advances and interest, accrued pursuant to this Agreement.  A
      Party’s payment of any charge under this Agreement shall be without
      prejudice to its right to later contest the
  charge.

            

    

     

    
      	
              3.4

            	
              Government
      Participation

            

    

     

    If
Government Oil & Gas Company, elects to participate in the rights and
obligations of Parties pursuant to Article 15 of the Contract, the Parties shall
contribute, in proportion to their respective Participating Interests, to the
interest to be acquired by Government Oil & Gas Company.  The
effective date of the Government’s participation shall be the date of the
adoption of the development plan under Article 7 of the Contract.

     

    The
Parties shall execute such documents as may be necessary to effect such transfer
of interests and the joinder of Government Oil & Gas Company as a Party to
this Agreement.  All payments received for or related to the transfer
of such interests and the joinder of the Government shall be credited to the
Parties in proportion to their Participating Interests.

     

    ARTICLE
4

    OPERATOR

     

    
      	
              4.1

            	
              Designation
      of Operator

            

    

     

    SCS is
designated as Operator and agrees to act as such in accordance with this
Agreement.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	
              4.2

            	
              Rights
      and Duties of Operator

            

    

     

    
      	
               
      

            	
              (A)

            	
              Subject
      to the terms and conditions of this Agreement, Operator shall have all of
      the rights, functions and duties of Operator under the Contract and shall
      have exclusive charge of and shall conduct all Joint
      Operations.  Operator may employ independent contractors and
      agents (which independent contractors and agents may include an Affiliate
      of Operator, a Non-Operator, or an Affiliate of a Non-Operator) in such
      Joint Operations.

            

    

     

    
      	
               
      

            	
              (B)

            	
              In
      the conduct of Joint Operations Operator
shall:

            

    

     

    
      	
               
      

            	
              (1)

            	
              perform
      Joint Operations in accordance with the provisions of the Contract, the
      Laws / Regulations, this Agreement, and the decisions of the Operating
      Committee not in conflict with this
Agreement;

            

    

     

    
      	
               
      

            	
              (2)

            	
              conduct
      all Joint Operations in a diligent, safe and efficient manner in
      accordance with such good and prudent petroleum industry practices and
      field conservation principles as are generally followed by the
      international petroleum industry under similar
    circumstances;

            

    

     

    
      	
               
      

            	
              (3)

            	
              exercise
      due care with respect to the receipt, payment and accounting of funds in
      accordance with good and prudent practices as are generally followed by
      the international petroleum industry under similar
      circumstances;

            

    

     

    
      	
               
      

            	
              (4)

            	
              subject
      to Article 4.6 and the Accounting Procedure, neither gain a profit nor
      suffer a loss as a result of being the Operator in its conduct of Joint
      Operations, provided that Operator may rely upon Operating Committee
      approval of specific accounting practices not in conflict with the
      Accounting Procedure;

            

    

     

    
      	
               
      

            	
              (5)

            	
              perform
      the duties for the Operating Committee set out in Article 5, and prepare
      and submit to the Operating Committee proposed Work Programs and Budgets
      and (if required) AFEs, as provided in Article
  6;

            

    

     

    
      	
               
      

            	
              (6)

            	
              acquire
      all permits, consents, approvals, and surface or other rights that may be
      required for or in connection with the conduct of Joint
      Operations;

            

    

     

    
      	
               
      

            	
              (7)

            	
              upon
      receipt of reasonable advance notice, permit the representatives of any of
      the Parties to have at all reasonable times during normal business hours
      and at their own risk and expense reasonable access to the Joint
      Operations with the right to observe all Joint Operations and to inspect
      all Joint Property and to conduct financial audits as provided in the
      Accounting Procedure;

            

    

     

    
      	
               
      

            	
              (8)

            	
              undertake
      to maintain the Contract in full force and effect in accordance with such
      good and prudent petroleum industry practices as are generally followed by
      the international petroleum industry under similar
      circumstances.  Operator shall timely pay and discharge all
      liabilities and expenses incurred in connection with Joint Operations and
      use its reasonable endeavors to keep and maintain the Joint Property free
      from all liens, charges and encumbrances arising out of Joint
      Operations;

            

    

     

    
      	
               
      

            	
              (9)

            	
              pay
      to the Government for the Joint Account, within the periods and in the
      manner prescribed by the Contract and the Laws / Regulations, all periodic
      payments, royalties, taxes, fees and other payments pertaining to Joint
      Operations but excluding any taxes measured by the incomes of the
      Parties;

            

    

     

    
      	
               
      

            	
              (10)

            	
              carry
      out the obligations of Operator pursuant to the Contract, including
      preparing and furnishing such reports, records and information as may be
      required pursuant to the Contract;

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (11)

            	
              have,
      in accordance with any decisions of the Operating Committee, the exclusive
      right and obligation to represent the Parties in all dealings with the
      Government with respect to matters arising under the Contract and Joint
      Operations, including serving as the Contractor’s representatives on the
      Petroleum Operations Management Committee under Article 9 of the
      Contract.  Operator shall notify the other Parties as soon as
      possible of such meetings.  Subject to the Contract and any
      necessary Government approvals, Non-Operators shall have the right to
      attend any meetings with the Government with respect to such matters, but
      only in the capacity of observers.  Nothing contained in this
      Agreement shall restrict any Party from holding discussions with the
      Government with respect to any issue peculiar to its particular business
      interests arising under the Contract or this Agreement, but in such event
      such Party shall promptly advise the Parties, if possible, before and in
      any event promptly after such discussions, provided that such Party shall
      not be required to divulge to the Parties any matters discussed to the
      extent the same involve proprietary information or matters not affecting
      the Parties;

            

    

     

    
      	
               
      

            	
              (12)

            	
              in
      accordance with Article 9.3 and any decisions of the Operating Committee,
      assess (to the extent lawful) alternatives for the disposition of Natural
      Gas from a Discovery;

            

    

     

    
      	
               
      

            	
              (13)

            	
              in
      case of an emergency (including a significant fire, explosion, Natural Gas
      release, Crude Oil release, or sabotage; incident involving loss of life,
      serious injury to an employee, contractor, or third party, or serious
      property damage; strikes and riots; or evacuations of Operator personnel):
      (i) take all necessary and proper measures for the protection of life,
      health, the environment and property; and (ii) as soon as reasonably
      practicable, report to Non-Operators the details of such event and any
      measures Operator has taken or plans to take in response
      thereto;

            

    

     

    
      	
               
      

            	
              (14)

            	
              establish
      and implement pursuant to Article 4.12 an HSE plan to govern Joint
      Operations which is designed to ensure compliance with applicable HSE
      laws, rules and regulations and this
Agreement;

            

    

     

    
      	
               
      

            	
              (15)

            	
              include,
      to the extent practical, in its contracts with independent contractors and
      to the extent lawful, provisions
which:

            

    

     

    
      	
               
      

            	
              (a)

            	
              establish
      that such contractors can only enforce their contracts against
      Operator;

            

    

     

    
      	
               
      

            	
              (b)

            	
              permit
      Operator, on behalf of itself and Non-Operators, to enforce contractual
      indemnities against, and recover losses and damages suffered by them
      (insofar as recovered under their contracts) from, such contractors;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              require
      such contractors to take insurance required by Article
    4.7(H).

            

    

     

    
      	
              4.3

            	
              Operator
      Personnel

            

    

     

    
      	
               
      

            	
              (A)

            	
              Operator
      shall engage or retain only such employees, Secondees, contractors,
      consultants and agents as are reasonably necessary to conduct Joint
      Operations.  For the purposes of this Article 4.3, “Secondee”
      means an employee of a Non-Operator (or its Affiliate) who is seconded to
      Operator to provide services under a secondment agreement to be negotiated
      and entered into between Operator and such Non-Operator; and “Secondment”
      means placement within Operator’s organization in accordance with this
      Article 4.3 of one or more persons who are employed by a Non-Operator or
      an Affiliate.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Subject
      to the Contract and this Agreement, Operator shall determine the number of
      employees, Secondees, contractors, consultants and agents, the selection
      of such persons, their hours of work, and (except for Secondees) the
      compensation to be paid to all such persons in connection with Joint
      Operations.

            

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (C)

            	
              No
      Secondment may be implemented except (i) in situations requiring
      particular expertise or involving projects of a technical, operational or
      economically challenging nature; and (ii) in the manner set out in
      paragraphs (1) to (7) below.

            

    

     

    
      	
               
      

            	
              (1)

            	
              Any
      Party may propose Secondment for a designated purpose related to Joint
      Operations.  Any proposal for Secondment must include
      the:

            

    

     

    
      	
               
      

            	
              (a)

            	
              designated
      purpose and scope of Secondment, including duties, responsibilities, and
      deliverables;

            

    

     

    
      	
               
      

            	
              (b)

            	
              duration
      of the Secondment;

            

    

     

    
      	
               
      

            	
              (c)

            	
              number
      of Secondees and minimum expertise, qualifications and experience
      required;

            

    

     

    
      	
               
      

            	
              (d)

            	
              work
      location and position within Operator’s organization of each Secondee;
      and

            

    

     

    
      	
               
      

            	
              (e)

            	
              estimated
      costs of the Secondment.

            

    

     

    
      	
               
      

            	
              (2)

            	
              In
      relation to a proposed Secondment meeting the requirements of
      Article 4.3(C)(1), Operator shall as soon as reasonably practicable
      approve (such approval to not be unreasonably withheld) or reject any
      Secondment proposed by a Non-Operator. Without prejudice to Operator’s
      right to conduct Joint Operations in accordance with this Agreement and
      the Contract, Operator shall consider such Secondment proposal in light of
      the: (i) expertise and experience required for the relevant Joint
      Operations; (ii) expertise and experience of Operator’s personnel;
      and (iii) potential benefits of such Secondment to the conduct of Joint
      Operations.

            

    

     

    
      	
               
      

            	
              (3)

            	
              Any
      proposal for one or more Secondment positions approved by Operator is
      subject to: (i) the Operating Committee’s authorization of an appropriate
      budget for such Secondment positions; and (ii) Non-Operators continuing to
      make available to Operator Secondees qualified to fulfill the designated
      purpose and scope of such
Secondment.

            

    

     

    
      	
               
      

            	
              (4)

            	
              As
      to each approved and authorized Secondment position, Operator shall
      request Non-Operators to nominate, by a specified date, qualified
      personnel to be the Secondee for such position.  Each
      Non-Operator has the right (but not the obligation) to nominate for each
      Secondment position one or more proposed Secondees who such Non-Operator
      considers reasonably qualified to fulfill the designated purpose and scope
      of such Secondment.

            

    

     

    
      	
               
      

            	
              (5)

            	
              Following
      the deadline for submitting nominations, Operator shall consider the
      expertise and experience of each such nominee in light of the expertise
      and experience required for the approved and authorized Secondment
      position, and shall select from the nominees the best qualified person,
      unless Operator reasonably demonstrates that no nominee is qualified to
      fulfill the designated purpose and scope of such
    Secondment.

            

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (6)

            	
              Operator
      shall have the right to terminate the Secondment for cause in accordance
      with the secondment agreement provided for under Article
      4.3(D).

            

    

     

    
      	
               
      

            	
              (7)

            	
              Although
      each Secondee shall report to and be directed by Operator, each Secondee
      shall remain at all times the employee of the Party (or its Affiliate)
      nominating such Secondee.

            

    

     

    
      	
               
      

            	
              (D)

            	
              Any
      Secondment under this Agreement shall be in accordance with a separate
      secondment agreement to be negotiated and entered into between Operator
      and the employer of the Secondee, which agreement shall be consistent with
      this Article 4.3.

            

    

     

    
      	
               
      

            	
              (E)

            	
              All
      costs related to Secondment and Secondees that are within the Work Program
      and Budget related to such Secondment position shall be charged to the
      Joint Account.

            

    

     

    
      	
               
      

            	
              (F)

            	
              If
      any Secondee acting as the Senior Supervisory Personnel of Operator or its
      Affiliates engages in Gross Negligence / Willful Misconduct which
      proximately causes the Parties to incur damage, loss, cost, expense or
      liability for claims, demands or causes of action referred to in Articles
      4.6(A) or 4.6(B), then all such damages, losses, costs, expenses and
      liabilities shall be allocated to Operator, in accordance with Article
      4.6.

            

    

     

    
      	
              4.4

            	
              Information
      Supplied by Operator

            

    

     

    
      	
               
      

            	
              (A)

            	
              Operator
      shall provide Non-Operators with the following data and reports (to the
      extent to be charged to the Joint Account) as they are currently produced
      or compiled from Joint Operations:

            

    

     

    
      	
               
      

            	
              (1)

            	
              copies
      of all logs or surveys, including in digitally recorded format if such
      exists;

            

    

     

    
      	
               
      

            	
              (2)

            	
              daily
      drilling reports;

            

    

     

    
      	
               
      

            	
              (3)

            	
              copies
      of all Tests and core data and analysis
reports;

            

    

     

    
      	
               
      

            	
              (4)

            	
              final
      well recap report;

            

    

     

    
      	
               
      

            	
              (5)

            	
              copies
      of plugging reports;

            

    

     

    
      	
               
      

            	
              (6)

            	
              copies
      of final geological and geophysical maps, seismic sections and shot point
      location maps;

            

    

     

    
      	
               
      

            	
              (7)

            	
              engineering
      studies, development schedules and quarterly progress reports on
      development projects;

            

    

     

    
      	
               
      

            	
              (8)

            	
              field
      and well performance reports, including reservoir studies and reserve
      estimates;

            

    

     

    
      	
               
      

            	
              (9)

            	
              as
      requested by a Non-Operator, (i) copies of all material reports relating
      to Joint Operations or the Contract Area furnished by Operator to the
      Government; and (ii) other material studies and reports relating to Joint
      Operations;

            

    

     

    
      	
               
      

            	
              (10)

            	
              gas
      balancing reports under agreements provided for in Article
      9.3;

            

    

     

    
      	
               
      

            	
              (11)

            	
              such
      additional information as a Non-Operator may reasonably request, provided
      that the requesting Party or Parties pay the costs of preparation of such
      information and that the preparation of such information will not unduly
      burden Operator’s administrative and technical personnel.  Only
      Non-Operators who pay such costs will receive such additional information;
      and

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (12)

            	
              other
      reports as directed by the Operating
Committee.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Operator
      shall give Non-Operators access at all reasonable times during normal
      business hours to all data and reports (other than data and reports
      provided to Non-Operators in accordance with Article 4.4(A)) acquired
      in the conduct of Joint Operations, which a Non-Operator may reasonably
      request.  Any Non-Operator may make copies of such other data at
      its sole expense.

            

    

     

    
      	
              4.5

            	
              Settlement
      of Claims and Lawsuits

            

    

     

    
      	
               
      

            	
              (A)

            	
              Operator
      shall promptly notify the Parties of any and all material claims or suits
      that relate in any way to Joint Operations.  Operator shall
      represent the Parties and defend or oppose the claim or
      suit.  Operator may in its sole discretion compromise or settle
      any such claim or suit or any related series of claims or suits for an
      amount not to exceed the equivalent of One Hundred Thousand U.S. dollars
      (US$100,000) exclusive of legal fees.  Operator shall obtain the
      approval and direction of the Operating Committee on amounts in excess of
      the above-stated amount.  Without prejudice to the foregoing,
      each Non-Operator shall have the right to be represented by its own
      counsel at its own expense in the settlement, compromise or defense of
      such claims or suits.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Any
      Non-Operator shall promptly notify the other Parties of any claim made
      against such Non-Operator by a third party that arises out of or may
      affect the Joint Operations, and such Non-Operator shall defend or settle
      the same in accordance with any directions given by the Operating
      Committee.  Those costs, expenses and damages incurred pursuant
      to such defense or settlement which are attributable to Joint Operations
      shall be for the Joint Account.

            

    

     

    
      	
               
      

            	
              (C)

            	
              Notwithstanding
      Article 4.5(A) and Article 4.5(B), each Party shall have the right to
      participate in any such suit, prosecution, defense or settlement conducted
      in accordance with Article 4.5(A) and Article 4.5(B), at its sole cost and
      expense; provided always that no Party may settle its Participating
      Interest share of any claim without first satisfying the Operating
      Committee that it can do so without prejudicing the interests of the Joint
      Operations.

            

    

     

    
      	
              4.6

            	
              Limitation
      on Liability of Operator

            

    

     

    
      	
               
      

            	
              (A)

            	
              NEITHER
      OPERATOR NOR ANY OTHER INDEMNITEE (AS DEFINED BELOW) SHALL BEAR (EXCEPT AS
      A PARTY TO THE EXTENT OF ITS PARTICIPATING INTEREST SHARE) ANY DAMAGE,
      LOSS, COST, EXPENSE OR LIABILITY RESULTING FROM PERFORMING (OR FAILING TO
      PERFORM) THE DUTIES AND FUNCTIONS OF OPERATOR, AND THE INDEMNITEES ARE
      HEREBY RELEASED FROM LIABILITY TO NON-OPERATORS FOR ANY AND ALL DAMAGES,
      LOSSES, COSTS, EXPENSES AND LIABILITIES ARISING OUT OF, INCIDENT TO OR
      RESULTING FROM SUCH PERFORMANCE OR FAILURE TO PERFORM, EVEN THOUGH CAUSED
      IN WHOLE OR IN PART BY A PRE-EXISTING DEFECT, OR THE NEGLIGENCE (WHETHER
      SOLE, JOINT OR CONCURRENT), GROSS NEGLIGENCE, WILLFUL MISCONDUCT, STRICT
      LIABILITY OR OTHER LEGAL FAULT OF OPERATOR (OR ANY SUCH
      INDEMNITEE).

            

    

     

    
      	
               
      

            	
              (B)

            	
              THE
      PARTIES SHALL (IN PROPORTION TO THEIR PARTICIPATING INTERESTS) DEFEND AND
      INDEMNIFY OPERATOR AND ITS AFFILIATES, AND THEIR RESPECTIVE DIRECTORS,
      OFFICERS, AND EMPLOYEES (COLLECTIVELY, THE “INDEMNITEES”),
      FROM ANY AND ALL DAMAGES, LOSSES, COSTS, EXPENSES (INCLUDING REASONABLE
      LEGAL COSTS, EXPENSES AND ATTORNEYS’ FEES) AND LIABILITIES INCIDENT TO
      CLAIMS, DEMANDS OR CAUSES OF ACTION BROUGHT BY OR ON BEHALF OF ANY PERSON
      OR ENTITY, WHICH CLAIMS, DEMANDS OR CAUSES OF ACTION ARISE OUT OF, ARE
      INCIDENT TO OR RESULT FROM JOINT OPERATIONS, EVEN THOUGH CAUSED IN WHOLE
      OR IN PART BY A PRE-EXISTING DEFECT, OR THE NEGLIGENCE (WHETHER SOLE,
      JOINT OR CONCURRENT), GROSS NEGLIGENCE, WILLFUL MISCONDUCT, STRICT
      LIABILITY OR OTHER LEGAL FAULT OF OPERATOR (OR ANY SUCH
      INDEMNITEE).

            

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (C)

            	
              Notwithstanding
      Articles 4.6(A) or 4.6(B), if any Senior Supervisory Personnel of Operator
      or its Affiliates engage in Gross Negligence / Willful Misconduct which
      proximately causes the Parties to incur damage, loss, cost, expense or
      liability for claims, demands or causes of action referred to in Articles
      4.6(A) or 4.6(B), then, in addition to its Participating Interest share,
      Operator shall bear only the actual damage, loss, cost, expense and
      liability to repair, replace and/or remove Joint Property so damaged or
      lost, if any.

            

    

     

    Notwithstanding
the foregoing, under no circumstances shall Operator (except as a Party to the
extent of its Participating Interest) or any other Indemnitee bear any
Consequential Loss or Environmental Loss.

     

    
      	
               
      

            	
              (D)

            	
              Nothing
      in this Article 4.6 shall be deemed to relieve Operator from its
      Participating Interest share of any damage, loss, cost, expense or
      liability arising out of, incident to, or resulting from Joint
      Operations.

            

    

     

    
      	
              4.7

            	
              Insurance
      Obtained by Operator

            

    

     

    
      	
               
      

            	
              (A)

            	
              Operator
      shall procure and maintain for the Joint Account all insurance in the
      types and amounts required by the Contract or the Laws /
      Regulations.

            

    

    

    
      	
               
      

            	
              (B)

            	
              Operator
      shall procure and maintain any further insurance, at reasonable rates, as
      the Operating Committee may from time to time require.  In the
      event that such further insurance is, in Operator’s reasonable opinion,
      unavailable or available only at an unreasonable cost, Operator shall
      promptly notify the Non-Operators in order to allow the Operating
      Committee to reconsider such further
insurance.

            

    

    

    
      	
               
      

            	
              (C)

            	
              Each
      Party will be provided the opportunity to underwrite any or all of the
      insurance to be obtained by Operator under Articles 4.7(A) and 4.7(B),
      through such Party's Affiliate insurance company or, if such direct
      insurance is not so permitted, through reinsurance policies to such
      Party's Affiliate insurance company; provided that the security and
      creditworthiness of such insurance arrangements are satisfactory to
      Operator, and that such arrangements will not result in any part of the
      premiums for such insurance not being recoverable under the Contract, or
      being significantly higher than the market
rate.

            

    

    

    
      	
               
      

            	
              (D)

            	
              Subject
      to the Contract and the Laws / Regulations, any Party may elect not to
      participate in the insurance to be procured under Articles 4.7(A) and
      4.7(B) provided such Party:

            

    

     

    
      	
               
      

            	
               (1)

            	
              gives
      prompt written notice to that effect to
  Operator;

            

    

    

    
      	
               
      

            	
              (2)

            	
              does
      nothing which may interfere with Operator’s negotiations for such
      insurance for the other Parties;

            

    

    

    
      	
               
      

            	
              (3)

            	
              obtains
      insurance prior to or concurrent with the commencement of relevant
      operations and maintains such insurance (in respect of which a current
      certificate of adequate coverage, provided at least once a year, shall be
      sufficient evidence) or other evidence of financial responsibility which
      fully covers its Participating Interest share of the risks that would be
      covered by the insurance to be procured under Article 4.7(A) and/or
      Article 4.7(B), as applicable, and which the Operating Committee
      determines to be acceptable.  No such determination of
      acceptability shall in any way absolve a non-participating Party from its
      obligation to meet each cash call (except, in accordance with Article
      4.7(F), as regards the costs of the insurance policy in which such Party
      has elected not to participate) including any cash call with respect to
      damages and losses and/or the costs of remedying the same in accordance
      with the terms of this Agreement, the Contract and the Laws /
      Regulations.  If such Party obtains other insurance, such
      insurance shall (a) contain a waiver of subrogation in favor of all the
      other Parties, the Operator and their insurers but only with respect to
      their interests under this Agreement; (b) provide that thirty (30) days
      written notice be given to Operator prior to any material change in, or
      cancellation of, such insurance policy; (c) be primary to, and receive no
      contribution from, any other insurance maintained by or on behalf of, or
      benefiting Operator or the other Parties; and (d) contain adequate
      territorial extensions and coverage in the location of the Joint
      Operations; and

            

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (4)

            	
              is
      responsible for all deductibles, coinsurance payments, self-insured
      exposures, uninsured or underinsured exposures relating to its interests
      under this Agreement.

            

    

    

    
      	
               
      

            	
              (E)

            	
              The
      cost of insurance in which all the Parties are participating shall be for
      the Joint Account and the cost of insurance in which less than all the
      Parties are participating shall be charged to the Parties participating in
      proportion to their respective Participating Interests.  Subject
      to the preceding sentence, the cost of insurance with respect to an
      Exclusive Operation shall be charged to the Consenting
      Parties.

            

    

    

    
      	
               
      

            	
              (F)

            	
              Operator
      shall, with respect to all insurance obtained under this Article
      4.7:

            

    

    

    
      	
               
      

            	
              (1)

            	
              use
      reasonable endeavors to procure or cause to be procured such insurance
      prior to or concurrent with, the commencement of relevant operations and
      maintain or cause to be maintained such insurance during the term of the
      relevant operations or any longer term required under the Contract or the
      Laws / Regulations;

            

    

    

    
      	
               
      

            	
              (2)

            	
              promptly
      inform the participating Parties when such insurance is obtained and
      supply them with certificates of insurance or copies of the relevant
      policies when the same are issued;

            

    

    

    
      	
               
      

            	
              (3)

            	
              arrange
      for the participating Parties, according to their respective Participating
      Interests, to be named as co-insureds on the relevant policies with
      waivers of subrogation in favor of all the Parties but only with respect
      to their interests under this
Agreement;

            

    

    

    
      	
               
      

            	
              (4)

            	
              use
      reasonable endeavors to ensure that each policy shall survive the default
      or bankruptcy of the insured for claims arising out of an event before
      such default or bankruptcy and that all rights of the insured shall revert
      to the Parties not in default or bankruptcy;
and

            

    

    

    
      	
               
      

            	
              (5)

            	
              duly
      file all claims and take all necessary and proper steps to collect any
      proceeds and credit any proceeds to the participating Parties in
      proportion to their respective Participating
  Interests.

            

    

    

    
      	
               
      

            	
              (G)

            	
              Operator
      shall use its reasonable endeavors to require all contractors performing
      work with respect to Joint Operations
to:

            

    

    

    
      	
               
      

            	
              (1)

            	
              obtain
      and maintain any and all insurance in the types and amounts required by
      the Contract, the Laws / Regulations or any decision of the Operating
      Committee;

            

    

    

    
      	
               
      

            	
              (2)

            	
              name
      the Parties as additional insureds on the contractor’s insurance policies
      and obtain from their insurers waivers of all rights of recourse against
      Operator, Non-Operators and their insurers;
and

            

    

    

    
      	
               
      

            	
              (3)

            	
              provide
      Operator with certificates reflecting such insurance prior to the
      commencement of their services.

            

    

    

    
      	
              4.8

            	
              Commingling
      of Funds

            

    

     

    Operator
may not commingle with Operator’s own funds the monies which Operator receives
from or for the Joint Account pursuant to this Agreement.  However,
Operator reserves the right to make future proposals to the Operating Committee
with respect to the commingling of funds to achieve financial
efficiency.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    Interest Bearing
Account: The Operating Committee may decide that monies Operator receives
for the Joint Account shall be deposited in an interest-bearing accountat any
time.  Interest earned shall be allocated among the Parties on an
equitable basis taking into account the date of the funding by each Party and
its share of the Joint Account monies.  Operator shall apply such
earned interest to the next succeeding cash call or, if directed by the
Operating Committee, pay it to the Parties.

     

    
      	
              4.9

            	
              Resignation
      of Operator

            

    

     

    Subject
to Article 4.11, Operator may resign as Operator at any time by so notifying the
other Parties at least one hundred and twenty (120) Days prior to the effective
date of such resignation.

     

    
      	
              4.10

            	
              Removal
      of Operator

            

    

     

    
      	
               
      

            	
              (A)

            	
              Subject
      to Article 4.11, Operator shall be removed upon receipt of notice from any
      Non-Operator if:

            

    

     

    
      	
               
      

            	
              (1)

            	
              Operator
      becomes insolvent or bankrupt, or makes an assignment for the benefit of
      creditors;

            

    

     

    
      	
               
      

            	
              (2)

            	
              an
      order is made by a court or an effective resolution is passed for the
      reorganization under any bankruptcy law, dissolution, liquidation, or
      winding up of Operator;

            

    

     

    
      	
               
      

            	
              (3)

            	
              a
      receiver is appointed for a substantial part of Operator’s assets;
      or

            

    

     

    
      	
               
      

            	
              (4)

            	
              Operator
      dissolves, liquidates, is wound up, or otherwise terminates its
      existence.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Subject
      to Article 4.11, Operator may be removed by the decision of the
      Non-Operators if Operator has committed a material breach of this
      Agreement and has either failed to commence to cure that breach within
      thirty (30) Days of receipt of a notice from Non-Operators detailing the
      alleged breach or failed to diligently pursue the cure to
      completion.  Any decision of Non-Operators to give notice of
      breach to Operator or to remove Operator under this Article 4.10(B) shall
      be made by an affirmative vote of two (2) or more of the total number of
      Non-Operators holding a combined Participating Interest of at least
      twenty-five percent (25%).  However, if Operator disputes such
      alleged commission of or failure to cure a material breach and dispute
      resolution proceedings are initiated pursuant to Article 18.2 in relation
      to such breach, then Operator shall remain appointed and no successor
      Operator may be appointed pending the conclusion or abandonment of such
      proceedings, subject to the terms of Article 8.3 with respect to
      Operator’s breach of its payment
obligations.

            

    

     

    
      	
               
      

            	
              (C)

            	
              If
      Operator together with any Affiliates of Operator is or becomes the holder
      of a Participating Interest of less than twenty-five percent (25%), then
      Operator shall be required to promptly notify the other
      Parties.  The Operating Committee shall then vote within thirty
      (30) Days of such notification on whether or not a successor Operator
      should be named pursuant to
Article 4.11.

            

    

     

    
      	
               
      

            	
              (D)

            	
              If
      there is a direct or indirect change in Control of Operator (other than a
      transfer of Control to an Affiliate of Operator), Operator shall be
      required to promptly notify the other Parties.  The Operating
      Committee shall vote pursuant to Article 5.9 within thirty (30) Days of
      such notification on whether or not a successor Operator should be named
      pursuant to Article 4.11.

            

    

     

    
      	
              4.11

            	
              Appointment
      of Successor

            

    

     

    When a
change of Operator occurs pursuant to Article 4.9 or Article
4.10:

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (A)

            	
              The
      Operating Committee shall meet as soon as possible to appoint a successor
      Operator pursuant to the voting procedure of Article 5.9.  No
      Party may be appointed successor Operator against its will.  No
      entity shall be appointed operator unless it can demonstrate to the
      satisfaction of the Operating Committee that it has the requisite
      financial and technical capability and that its appointment would not be
      counter to or violate the law in any of the jurisdictions in which the
      parties are incorporated, have their principal place of business or are
      licensed to do business.

            

    

     

    
      	
               
      

            	
              (B)

            	
              If
      Operator is removed, other than in the case of Article 4.10(C) or Article
      4.10(D), neither Operator nor any Affiliate of Operator shall have the
      right to be considered as a candidate for the successor
      Operator.

            

    

     

    
      	
               
      

            	
              (C)

            	
              The
      resigning or removed Operator shall be compensated out of the Joint
      Account for its reasonable expenses directly related to its resignation or
      removal, except in the case of Article
4.10(B).

            

    

     

    
      	
               
      

            	
              (D)

            	
              The
      resigning or removed Operator and the successor Operator shall arrange for
      the taking of an inventory of all Joint Property and Hydrocarbons, and an
      audit of the books and records of the removed Operator.  Such
      inventory and audit shall be completed, if possible, no later than the
      effective date of the change of Operator and shall be subject to the
      approval of the Operating Committee.  The liabilities and
      expenses of such inventory and audit shall be charged to the Joint
      Account.

            

    

     

    
      	
               
      

            	
              (E)

            	
              Upon
      the effective date of the resignation or removal, the successor Operator
      shall succeed to all duties, rights and authority prescribed for
      Operator.  The former Operator shall transfer to the successor
      Operator custody of all Joint Property, books of account, records and
      other documents maintained by Operator pertaining to the Contract Area and
      to Joint Operations.  Upon delivery of the above-described
      property and data, the former Operator shall be released and discharged
      from all obligations and liabilities as Operator accruing after such
      date.

            

    

     

    
      	
              4.12

            	
              Health,
      Safety and Environment (“HSE”)

            

    

     

    
      	
               
      

            	
              (A)

            	
              With
      the goal of achieving safe and reliable operations in compliance with
      applicable HSE laws, rules and regulations (including avoiding significant
      and unintended impact on the safety or health of people, on property, or
      on the environment), Operator shall in the conduct of Joint
      Operations:

            

    

     

    
      	
               
      

            	
              (1)

            	
              establish
      and implement an HSE plan in a manner consistent with standards and
      procedures generally followed in the international petroleum industry
      under similar circumstances, including Recommended Practice 75 of the
      American Petroleum Institute and provide such plan and any amendments to
      the Operating Committee and to all interest owners as soon as
      practicable;

            

    

     

    
      	
               
      

            	
              (2)

            	
              design
      and operate Joint Property consistent with the HSE plan;
    and

            

    

     

    
      	
               
      

            	
              (3)

            	
              conform
      with locally applicable HSE laws, rules and regulations and other
      HSE-related statutory requirements that may
  apply.

            

    

     

    
      	
               
      

            	
              (B)

            	
              The
      Operating Committee shall from time to time review details of Operator’s
      HSE plan and Operator’s implementation
thereof.

            

    

     

    
      	
               
      

            	
              (C)

            	
              In
      the conduct of Joint Operations, Operator shall establish and implement a
      program for regular HSE assessments.  The purpose of such
      assessments is to periodically review HSE systems and procedures,
      including actual practice and performance, to verify that the HSE plan is
      being implemented in accordance with the policies and standards of the HSE
      plan.  Operator shall, at a minimum, conduct such an assessment
      before entering into significant new Joint Operations and before
      undertaking any major changes to existing Joint
      Operations.  Upon reasonable notice given to Operator,
      Non-Operators shall have the right to participate in such HSE
      assessments.

            

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (D)

            	
              Operator
      shall require its contractors, consultants and agents undertaking
      activities for the Joint Account to manage HSE risks in a manner
      consistent with the requirements of this Article
  4.12.

            

    

     

    
      	
               
      

            	
              (E)

            	
              Operator
      shall establish and enforce rules consistent with those generally followed
      in the international petroleum industry under similar circumstances that,
      at a minimum, prohibit within the Contract Area the
    following:

            

    

     

    
      	
               
      

            	
              (1)

            	
              possession,
      use, distribution or sale of firearms, explosives, or other weapons
      without the prior written approval of senior management of
      Operator;

            

    

     

    
      	
               
      

            	
              (2)

            	
              possession,
      use, distribution or sale of alcoholic beverages without the prior written
      approval of senior management of Operator;
and

            

    

     

    
      	
               
      

            	
              (3)

            	
              possession,
      use, distribution or sale of illicit or non-prescribed controlled
      substances and the misuse of prescribed
drugs.

            

    

     

    
      	
               
      

            	
              (F)

            	
              Without
      prejudice to a Party’s rights under Article 4.2(B)(7), with reasonable
      advance notice, Operator shall permit each Non-Operator to have at all
      reasonable times during normal business hours (and at its own risk and
      expense) the right to conduct its own HSE
audit.

            

    

     

    ARTICLE
5

    OPERATING
COMMITTEE

     

    
      	
              5.1

            	
              Establishment
      of Operating Committee

            

    

     

    To
provide for the overall supervision and direction of Joint Operations, there is
established an Operating Committee composed of representatives of each Party
holding a Participating Interest.  Each Party shall appoint one (1)
representative and one (1) alternate representative to serve on the Operating
Committee.  Each Party shall as soon as possible after the date of
this Agreement give notice in writing to the other Parties of the name and
address of its representative and alternate representative to serve on the
Operating Committee.  Each Party shall have the right to change its
representative and alternate at any time by giving notice of such change to the
other Parties.

     

    
      	
              5.2

            	
              Powers
      and Duties of Operating Committee

            

    

     

    The
Operating Committee shall have power and duty to authorize and supervise Joint
Operations that are necessary or desirable to fulfill the Contract and properly
explore and exploit the Contract Area in accordance with this Agreement and in a
manner appropriate in the circumstances.

     

    
      	
              5.3

            	
              Authority
      to Vote

            

    

     

    The
representative of a Party, or in his absence his alternate representative, shall
be authorized to represent and bind such Party with respect to any matter which
is within the powers of the Operating Committee and is properly brought before
the Operating Committee.  Each such representative shall have a vote
equal to the Participating Interest of the Party such person
represents.  Each alternate representative shall be entitled to attend
all Operating Committee meetings but shall have no vote at such meetings except
in the absence of the representative for whom he is the alternate.  In
addition to the representative and alternate representative, each Party may also
bring to any Operating Committee meetings such technical and other advisors as
it may deem appropriate.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    
      	
              5.4

            	
              Subcommittees

            

    

     

    The
Operating Committee may establish such subcommittees, including technical
subcommittees, as the Operating Committee may deem appropriate.  The
functions of such subcommittees shall be in an advisory capacity or as otherwise
determined unanimously by the Parties.  Each Party shall have the
right to appoint a representative to each subcommittee.  As soon as
practicable upon formation, the Operating Committee shall consider the
establishment of a technical subcommittee for geologic exploration and, upon the
commencement of planning for operations,  a technical subcommittee for
engineering.  The parties shall each be allowed to appoint three (3)
representatives to each subcommittee.

     

    
      	
              5.5

            	
              Notice
      of Meeting

            

    

     

    
      	
               
      

            	
              (A)

            	
              Operator
      may call a meeting of the Operating Committee by giving notice to the
      Parties at least fifteen (15) Days in advance of such
    meeting.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Any
      Non-Operator may request a meeting of the Operating Committee by giving
      notice to all the other Parties.  Upon receiving such request,
      Operator shall call such meeting for a date not less than fifteen (15)
      Days nor more than twenty (20) Days after receipt of the
      request.

            

    

     

    
      	
               
      

            	
              (C)

            	
              The
      notice periods above may only be waived with the unanimous consent of all
      the Parties.

            

    

     

    
      	
              5.6

            	
              Contents
      of Meeting Notice

            

    

     

    
      	
               
      

            	
              (A)

            	
              Each
      notice of a meeting of the Operating Committee as provided by Operator
      shall contain:

            

    

     

    
      	
               
      

            	
              (1)

            	
              the
      date, time and location of the
meeting;

            

    

     

    
      	
               
      

            	
              (2)

            	
              an
      agenda of the matters and proposals to be considered and/or voted upon;
      and

            

    

     

    
      	
               
      

            	
              (3)

            	
              copies
      of all proposals to be considered at the meeting (including all
      appropriate supporting information not previously distributed to the
      Parties).

            

    

     

    
      	
               
      

            	
              (B)

            	
              A
      Party, by notice to the other Parties given not less than seven (7) Days
      prior to a meeting, may add additional matters to the agenda for a
      meeting.

            

    

     

    
      	
               
      

            	
              (C)

            	
              On
      the request of a Party, and with the unanimous consent of all Parties, the
      Operating Committee may consider at a meeting a proposal not contained in
      such meeting agenda.

            

    

     

    
      	
              5.7

            	
              Location
      of Meetings

            

    

     

    All
meetings of the Operating Committee shall be held at the offices of the
Operator, or elsewhere as the Operating Committee may decide.

     

    
      	
              5.8

            	
              Operator’s
      Duties for Meetings

            

    

     

    
      	
               
      

            	
              (A)

            	
              With
      respect to meetings of the Operating Committee and any subcommittee,
      Operator’s duties shall include:

            

    

     

    
      	
               
      

            	
              (1)

            	
              timely
      preparation and distribution of the
agenda;

            

    

     

    
      	
               
      

            	
              (2)

            	
              organization
      and conduct of the meeting; and

            

    

     

    
      	
               
      

            	
              (3)

            	
              preparation
      of a written record or minutes of each
meeting.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Operator
      shall have the right to appoint the chairman of the Operating Committee
      and all subcommittees.

            

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    
      	
              5.9

            	
              Voting
      Procedure

            

    

     

    Except as
otherwise expressly provided in this Agreement, decisions, approvals and other
actions of the Operating Committee on all proposals coming before it shall be
decided as follows.

     

    
      	
               
      

            	
              (A)

            	
              All
      decisions, approvals and other actions for which column (A) below is
      checked shall require the affirmative vote of two (2) or more Parties
      which are not Affiliates then having collectively at least fifty percent
      (50%) of the Participating
Interests.

            

    

     

    
      	
               
      

            	
              (B)

            	
              All
      decisions, approvals and other actions for which column (B) below is
      checked shall require the affirmative vote of two (2) or more Parties
      which are not Affiliates then having collectively at least sixty-seven
      percent (67%) of the Participating
Interests.

            

    

     

    
      	
               
      

            	
              (C)

            	
              All
      decisions, approvals and other actions for which column (C) below is
      checked shall require the affirmative vote of all of
      the  Parties which are not Affiliates then having collectively
      at least one hundred percent (100%) of the Participating
      Interests.

            

    

     

    
      
        
          
            
              
                	 
      	
                        Matter

                      	
                        (A)

                      	
                        (B)

                      	
                        (C)

                      
	
                        (1)

                      	
                        Minimum
      Work Obligations.

                      	 
      	 
      	
                        X

                      
	
                        (2)

                      	
                        Drilling,
      Deepening, Testing, Sidetracking, Plugging Back, Recompleting or Reworking
      Exploration Wells in addition to those contained in the Minimum Work
      Program.

                      	 
      	
                        X

                      	 
      
	
                        (3)

                      	
                        Drilling,
      Deepening, Testing, Sidetracking, Plugging Back, Recompleting or Reworking
      Appraisal Wells.

                      	 
      	
                        X

                      	 
      
	
                        (4)

                      	
                        Development
      Plans.

                      	 
      	
                        X

                      	 
      
	
                        (5)

                      	
                        Completion
      of a well.

                      	 
      	
                        X

                      	 
      
	
                        (6)

                      	
                        Plugging
      and abandoning a well.

                      	 
      	
                        X

                      	 
      
	
                        (7)

                      	
                        Acquisition
      of G & G Data.

                      	 
      	
                        X

                      	 
      
	
                        (8)

                      	
                        Construction
      of processing, treatment, compression, gathering, transportation and other
      downstream facilities.

                      	 
      	
                        X

                      	 
      
	
                        (9)

                      	
                        Contract
      awards (if approval is required).

                      	 
      	
                        X

                      	 
      
	
                        (10)

                      	
                        Determination
      that a Discovery is a Commercial Discovery.

                      	 
      	
                        X

                      	 
      
	
                        (11)

                      	
                        Unitization
      under the terms of the Contract with an adjoining contract
      area.

                      	 
      	 
      	
                        X

                      
	
                        (12)

                      	
                        Establishment
      of an interest bearing account for Joint Account monies.

                      	
                        X

                      	 
      	 
      
	
                        (13)

                      	
                        Acquisition
      and development of Venture Information under terms other than as specified
      in Article 15.

                      	 
      	
                        X

                      	 
      
	
                        (14)

                      	
                        Naming
      of successor operator upon vote under Article 4.11 (D).

                      	 
      	
                        X

                      	 
      
	
                        (15)

                      	
                        Voluntary
      Relinquishment of a portion of the Contract Area

                      	 
      	 
      	
                        X

                      
	
                        (16)

                      	
                        Mandatory
      Relinquishment of a portion of the Contract Area, provided that, in the
      case of insufficient votes for approval, the relinquished portion of the
      Contract Area shall be determined by use of the procedure set forth in
      Article 6.1 (D) as adapted to include the Operating Committee’s inability
      to agree on such relinquishment.

                      	 
      	
                        X

                      	 
      
	
                        (17)

                      	
                        Annual
      Work Programs and Budgets or any amendment thereto

                      	 
      	
                        X

                      	 
      
	
                        (18)

                      	
                        Choice
      of governing law and selection of governing rules for dispute
      resolution.

                      	
                        X

                      	 
      	 
      
	
                        (19)

                      	
                        All
      other matters within the Operating Committee’s authority.

                      	
                        X

                      	 
      	 
      

              

            

             

          

        

      

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
              5.10

            	
              Record
      of Votes

            

    

     

    The
chairman of the Operating Committee shall appoint a secretary who shall make a
record of each proposal voted on and the results of such voting at each
Operating Committee meeting.  Each representative shall sign and be
provided a copy of such record at the end of such meeting, and it shall be
considered the final record of the decisions of the Operating
Committee.

     

    
      	
              5.11

            	
              Minutes

            

    

     

    The
secretary shall provide each Party with a copy of the minutes of the Operating
Committee meeting within fifteen (15) Business Days after the end of the
meeting.  Each Party shall have fifteen (15) Days after receipt of
such minutes to give notice to the secretary of its objections to the
minutes.  A failure to give notice specifying objection to such
minutes within said fifteen (15) Day period shall be deemed to be approval of
such minutes.  In any event, the votes recorded under Article 5.10
shall take precedence over the minutes described above.

     

    
      	
              5.12

            	
              Voting
      by Notice

            

    

     

    
      	
               
      

            	
              (A)

            	
              In
      lieu of a meeting, any Party may submit any proposal to the Operating
      Committee for a vote by notice.  The proposing Party or Parties
      shall notify Operator who shall give each Party’s representative notice
      describing the proposal so submitted and whether Operator considers such
      operational matter to require urgent determination.  Operator
      shall include with such notice adequate documentation in connection with
      such proposal to enable the Parties to make a decision.  Each
      Party shall communicate its vote by notice to Operator and the other
      Parties within one of the following appropriate time periods after receipt
      of Operator’s notice:

            

    

     

    
      	
               
      

            	
              (1)

            	
              Forty
      Eight(48) hours in the case of operations which involve the use of a
      drilling rig that is standing by in the Contract Area and such other
      operational matters reasonably considered by Operator to require by their
      nature urgent determination (such operations and matters being referred to
      as “Urgent
      Operational Matters”); and

            

    

     

    
      	
               
      

            	
              (2)

            	
              Fifteen(15)
      Days in the case of all other
proposals.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Except
      in the case of Article 5.12(A)(1), any Party may, by notice delivered to
      all Parties within five (5) Days of receipt of Operator’s notice, request
      that the proposal be decided at a meeting rather than by
      notice.  In such an event, that proposal shall be decided at a
      meeting duly called for that
purpose.

            

    

     

    
      	
               
      

            	
              (C)

            	
              Except
      as provided in Article 10, any Party failing to communicate its vote in a
      timely manner shall be deemed to have voted against such
      proposal.

            

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (D)

            	
              If
      a meeting is not requested, then at the expiration of the appropriate time
      period, Operator shall give each Party a confirmation notice stating the
      tabulation and results of the vote.

            

    

     

    
      	
              5.13

            	
              Effect
      of Vote

            

    

     

    All
decisions taken by the Operating Committee pursuant to this Article 5 shall be
conclusive and binding on all the Parties, except in the following
cases:

     

    
      	
               
      

            	
              (A)

            	
              If
      pursuant to this Article 5, a Joint Operation has been properly proposed
      to the Operating Committee and the Operating Committee has not approved
      such proposal in a timely manner, then any Party that voted in favor of
      such proposal shall have the right for the appropriate period specified
      below to propose, in accordance with Article 7, an Exclusive Operation
      involving operations essentially the same as those proposed for such Joint
      Operation.

            

    

     

    
      	
               
      

            	
              (1)

            	
              For
      proposals related to Urgent Operational Matters, such right shall be
      exercisable for twenty-four (24) hours after the time specified in Article
      5.12(A)(1) has expired or after receipt of Operator’s notice given to the
      Parties pursuant to Article 5.13(D), as
  applicable.

            

    

     

    
      	
               
      

            	
              (2)

            	
              For
      proposals to develop a Discovery, such right shall be exercisable for ten
      (10) Days after the date the Operating Committee was required to consider
      such proposal pursuant to Article 5.6 or Article
  5.12.

            

    

     

    
      	
               
      

            	
              (3)

            	
              For
      all other proposals, such right shall be exercisable for five (5) Days
      after the date the Operating Committee was required to consider such
      proposal pursuant to Article 5.6 or
  Article 5.12.

            

    

     

    
      	
               
      

            	
              (B)

            	
              If
      a Party voted against any proposal which was approved by the Operating
      Committee and which could be conducted as an Exclusive Operation pursuant
      to Article 7, then such Party shall have the right not to participate in
      the operation contemplated by such approval.  Any such Party
      wishing to exercise its right of non-consent must give notice of
      non-consent to all other Parties within five (5) Days (or twenty-four (24)
      hours for Urgent Operational Matters) following Operating Committee
      approval of such proposal.  If a Party exercises its right of
      non-consent, the Parties who were not entitled to give or did not give
      notice of non-consent shall be Consenting Parties as to the operation
      contemplated by the Operating Committee approval, and shall conduct such
      operation as an Exclusive Operation under Article 7; provided, however,
      that any such Party who was not entitled to give or did not give notice of
      non-consent may, by notice provided to the other Parties within five (5)
      Days (or twenty-four (24) hours for Urgent Operational Matters) following
      the notice of non-consent given by any non-consenting Party, require that
      the Operating Committee vote again on the proposal in question. Only the
      Parties which were not entitled to or have not exercised their right of
      non-consent with respect to the contemplated operation shall participate
      in such second vote of the Operating Committee, with voting rights
      proportional to their respective Participating Interest.  If the
      Operating Committee approves again the contemplated operation, any Party
      which voted against the contemplated operation in such second vote may
      elect to be a Non-Consenting Party with respect to such operation, by
      notice of non-consent provided to all other Parties within five (5) Days
      (or twenty-four (24) hours for Urgent Operational Matters) following the
      Operating Committee’s second approval of such contemplated
      operation.

            

    

     

    
      	
               
      

            	
              (C)

            	
              If
      the Consenting Parties to an Exclusive Operation under Article 5.13(A) or
      Article 5.13(B) concur, then the Operating Committee may, at any
      time, pursuant to this Article 5, reconsider and approve, decide or take
      action on any proposal that the Operating Committee declined to approve
      earlier, or modify or revoke an earlier approval, decision or
      action.

            

    

     

    
      	
               
      

            	
              (D)

            	
              Once
      a Joint Operation for the drilling, Deepening, Testing, Sidetracking,
      Plugging Back, Completing, Recompleting, Reworking, or plugging of a well
      has been approved and commenced, such operation shall not be discontinued
      without the consent of the Operating Committee; provided, however, that
      such operation may be discontinued
if:

            

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (1)

            	
              an
      impenetrable substance or other condition in the hole is encountered which
      in the reasonable judgment of Operator causes the continuation of such
      operation to be impractical; or

            

    

     

    
      	
               
      

            	
              (2)

            	
              other
      circumstances occur which in the reasonable judgment of Operator cause the
      continuation of such operation to be unwarranted and the Operating
      Committee, within the period required under Article 5.12(A)(1) after
      receipt of Operator’s notice, approves discontinuing such
      operation.

            

    

     

    On the
occurrence of either of the above, Operator shall promptly notify the Parties
that such operation is being discontinued pursuant to the foregoing, and any
Party shall have the right to propose in accordance with Article 7 an Exclusive
Operation to continue such operation.

     

    ARTICLE
6

    WORK
PROGRAMS AND BUDGETS

     

    
      	
              6.1

            	
              Exploration
      and Appraisal

            

    

     

    
      	
               
      

            	
              (A)

            	
              Within
      ninety (90) Days after the Effective Date, Operator shall deliver to the
      Parties a proposed Work Program and Budget detailing the Joint Operations
      to be performed for the remainder of the current Calendar Year and, if
      appropriate, for the following Calendar Year.  Within thirty
      (30) Days of such delivery, the Operating Committee shall meet to consider
      and to endeavor to agree on a Work Program and
  Budget.

            

    

     

    
      	
               
      

            	
              (B)

            	
              On
      or before the ninetieth (90th)
      Day  before the last day of each Calendar Year, Operator shall
      deliver to the Parties a proposed Work Program and Budget detailing the
      Joint Operations to be performed for the following Calendar
      Year.  Within thirty (30) Days of such delivery, the Operating
      Committee shall meet to consider and to endeavor to agree on a Work
      Program and Budget.

            

    

     

    
      	
               
      

            	
              (C)

            	
              If
      a Discovery is made, Operator shall deliver any notice of Discovery
      required under the Contract and shall as soon as possible submit to the
      Parties a report containing available details concerning the Discovery and
      Operator’s recommendation as to whether the Discovery merits
      appraisal.  If the Operating Committee determines that the
      Discovery merits appraisal, Operator within ninety (90) Days shall deliver
      to the Parties a proposed Work Program and Budget for the appraisal of the
      Discovery.  Within thirty (30) Days of such delivery, or earlier
      if necessary to meet any applicable deadline under the Contract, the
      Operating Committee shall meet to consider, modify and then either approve
      or reject the appraisal Work Program and Budget.  If the
      appraisal Work Program and Budget is approved by the Operating Committee,
      Operator shall take such steps as may be required under the Contract to
      secure approval of the appraisal Work Program and Budget by the
      Government.  In the event the Government requires changes in the
      appraisal Work Program and Budget, the matter shall be resubmitted to the
      Operating Committee for further
consideration.

            

    

     

    
      	
               
      

            	
              (D)

            	
              The
      Work Program and Budget agreed pursuant to this Article shall include at
      least that part of the Minimum Work Obligations required to be carried out
      during the Calendar Year in question under the terms of the
      Contract.  If within the time periods prescribed in this Article
      6.1 the Operating Committee is unable to agree on such a Work Program and
      Budget, then the proposal capable of satisfying the Minimum Work
      Obligations for the Calendar Year in question that receives the largest
      Participating Interest vote (even if less than the applicable percentage
      under Article 5.9) shall be deemed adopted as part of the annual Work
      Program and Budget.  If competing proposals receive equal votes,
      then Operator shall choose between those competing
      proposals.  Any portion of a Work Program and Budget adopted
      pursuant to this Article 6.1(D) instead of Article 5.9 shall contain only
      such operations for the Joint Account as are necessary to maintain the
      Contract in full force and effect, including such operations as are
      necessary to fulfill the Minimum Work Obligations required for the given
      Calendar Year.

            

    

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (E)

            	
              Any
      approved Work Program and Budget may be revised by the Operating Committee
      from time to time.  To the extent such revisions are approved by
      the Operating Committee, the Work Program and Budget shall be amended
      accordingly.  Operator shall prepare and submit a corresponding
      work program and budget amendment to the Government if required by the
      Contract.

            

    

     

    
      	
               
      

            	
              (F)

            	
              Subject
      to Article 6.8, approval of any such Work Program and Budget which
      includes:

            

    

     

    
      	
               
      

            	
              (1)

            	
              an
      Exploration Well, whether by drilling, Deepening or Sidetracking, shall
      include approval for only expenditures necessary for the drilling,
      Deepening or Sidetracking of such Exploration Well, as
      applicable.  When an Exploration Well has reached its authorized
      depth, all logs, cores and other approved Tests have been conducted and
      the results furnished to the Parties, Operator shall submit to the Parties
      in accordance with Article 5.12(A)(1) an election to participate in an
      attempt to Complete such Exploration Well.  Operator shall
      include in such submission Operator’s recommendation on such Completion
      attempt and an AFE for such Completion
costs.

            

    

    

    
      	
               
      

            	
              (2)

            	
              an
      Appraisal Well, whether by drilling, Deepening or Sidetracking, shall
      include approval for - Casing Point
      Election - only expenditures necessary for the drilling, Deepening
      or Sidetracking of such Appraisal Well, as applicable.  When an
      Appraisal Well has reached its authorized depth, all logs, cores and other
      approved Tests have been conducted and the results furnished to the
      Parties, Operator shall submit to the Parties in accordance with Article
      5.12(A)(1) an election to participate in an attempt to Complete such
      Appraisal Well.  Operator shall include in such submission
      Operator’s recommendation on such Completion attempt and an AFE for such
      Completion costs.

            

    

    

    
      	
               
      

            	
              (G)

            	
              Any
      Party desiring to propose a Completion attempt, or an alternative
      Completion attempt, must do so within the time period provided in Article
      5.12(A)(1) by notifying all other Parties.  Any such proposal
      shall include an AFE for such Completion
costs.

            

    

     

    
      	
              6.2

            	
              Development

            

    

     

    
      	
               
      

            	
              (A)

            	
              If
      the Operating Committee determines that a Discovery may be a Commercial
      Discovery, Operator shall, as soon as practicable, deliver to the Parties
      a Development Plan together with the first annual Work Program and Budget
      (or a multi-year Work Program and Budget pursuant to Article 6.5) and
      provisional Work Programs and Budgets for the remainder of the development
      of the Discovery, which shall contain, inter
      alia:

            

    

     

    
      	
               
      

            	
              (1)

            	
              details
      of the proposed work to be undertaken, personnel required and expenditures
      to be incurred, including the timing of same, on a Calendar Year
      basis;

            

    

     

    
      	
               
      

            	
              (2)

            	
              an
      estimated date for the commencement of
  production;

            

    

     

    
      	
               
      

            	
              (3)

            	
              a
      delineation of the proposed Exploitation Area;
  and

            

    

     

    
      	
               
      

            	
              (4)

            	
              any
      other information requested by the Operating
  Committee.

            

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (B)

            	
              After
      receipt of the Development Plan and prior to any applicable deadline under
      the Contract, the Operating Committee shall meet to consider, modify and
      then either approve or reject the Development Plan and the first annual
      Work Program and Budget for the development of a Discovery, as submitted
      by Operator.  If the Operating Committee determines that the
      Discovery is a Commercial Discovery and approves the corresponding
      Development Plan, Operator shall, as soon as possible, deliver any notice
      of Commercial Discovery required under the Contract and take such other
      steps as may be required under the Contract to secure approval of the
      Development Plan by the Government.  In the event the Government
      requires changes in the Development Plan, the matter shall be resubmitted
      to the Operating Committee for further
  consideration.

            

    

     

    
      	
               
      

            	
              (C)

            	
              If
      the Development Plan is approved, such work shall be incorporated into and
      form part of annual Work Programs and Budgets, and Operator shall, on or
      before the ninetieth (90th)
      Day before the last day  of each Calendar Year submit a Work
      Program and Budget for the Exploitation Area, for the following Calendar
      Year.  Subject to Article 6.5, within thirty (30) Days after
      such submittal, the Operating Committee shall endeavor to agree to such
      Work Program and Budget, including any necessary or appropriate revisions
      to the Work Program and Budget for the approved Development
      Plan.

            

    

     

    
      	
              6.3

            	
              Production

            

    

     

    On or
before the ninetieth (90th) Day
before the last day  of each Calendar Year, Operator shall deliver to
the Parties a proposed production Work Program and Budget detailing the Joint
Operations to be performed in the Exploitation Area and the projected production
schedule for the following Calendar Year.  Within thirty (30) Days of
such delivery, the Operating Committee shall agree upon a production Work
Program and Budget, failing which the provisions of Article 6.1(D) shall be
applied mutatis
mutandis.

     

    
      	
              6.4

            	
              Itemization
      of Expenditures

            

    

     

    
      	
               
      

            	
              (A)

            	
              During
      the preparation of the proposed Work Programs and Budgets and Development
      Plans contemplated in this Article 6, Operator shall consult with the
      Operating Committee or the appropriate subcommittees regarding the
      contents of such Work Programs and Budgets and Development
      Plans.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Each
      Work Program and Budget and Development Plan submitted by Operator shall
      contain an itemized estimate of the costs of Joint Operations and all
      other expenditures to be made for the Joint Account during the Calendar
      Year in question and shall, inter
    alia:

            

    

     

    
      	
               
      

            	
              (1)

            	
              identify
      each work category in sufficient detail to afford the ready identification
      of the nature, scope and duration of the activity in
    question;

            

    

     

    
      	
               
      

            	
              (2)

            	
              include
      such reasonable information regarding Operator’s allocation procedures and
      estimated manpower costs as the Operating Committee may
      determine;

            

    

     

    
      	
               
      

            	
              (3)

            	
              comply
      with the requirements of the
Contract;

            

    

     

    (4)           contain
an estimate of funds to be expended by Calendar Quarter; and

     

    
      	
               
      

            	
              (5)

            	
              during
      the Exploration Period, provide a forecast of annual expenditures and
      activities through the end of the following three
      year  period.

            

    

     

    
      	
               
      

            	
              (C)

            	
              The
      Work Program and Budget shall designate the portion or portions of the
      Contract Area in which Joint Operations itemized in such Work Program and
      Budget are to be conducted and shall specify the kind and extent of such
      operations in such detail as the Operating Committee may deem
      suitable.

            

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	
              6.5

            	
              Multi-Year
      Work Program and Budget

            

    

    Any work
that cannot be efficiently completed within a single Calendar Year may be
proposed in a multi-year Work Program and Budget.  Upon approval by
the Operating Committee, such multi-year Work Program and Budget shall, subject
only to revisions approved by the Operating Committee thereafter: (i) remain in
effect as between the Parties (and the associated cost estimate shall be a
binding pro-rata obligation of each Party) through the completion of the work;
and (ii) be reflected in each annual Work Program and Budget.  If
the Contract requires that Work Programs and Budgets be submitted to the
Government for approval, such multi-year Work Program and Budget shall be
submitted to the Government either in a single request for a multi-year approval
or as part of the annual approval process, according to the terms of the
Contract.

     

    
      	
              6.6

            	
              Contract
      Awards

            

    

     

    Subject
to the Contract, Operator shall award each contract for Joint Operations on the
following basis (the amounts stated are in thousands of U.S.
dollars):

     

    
      
        
          
            
              
                
                  
                    
                      	 
      	 
      	
                              Procedure A

                            	 
      	
                              Procedure B

                            	 
      	
                              Procedure C

                            
	 	 	 	 	 	 	 
	
                              Exploration
      and Appraisal Operations

                            	 
      	
                              0
      to $100,000US

                            	 
      	
                              $100,001US   to

                              $1,000,000US

                            	 
      	
                              >$1,000,001US

                            
	 	 	 	 	 	 	 
	
                              Development
      Operations

                            	 
      	
                              0
      to $500,000US

                            	 
      	
                              $500,001US
      to

                              $5,000,000US 

                            	 
      	
                              >$5,000,001US

                            
	 	 	 	 	 	 	 
	
                              Production
      Operations

                            	
                                

                            	
                              0
      to $1,000,000US

                            	
                                

                            	
                              $1,000,001US
      to

                              $2,500,000US

                            	
                                

                            	
                              >$2,500,001US

                            

                    

                  

                

              

            

          

        

      

    

    

    
      	
               
      

            	
              Procedure
      A

            

    

     

    
      	
               
      

            	
              (A)

            	
              Operator
      shall award the contract to the best qualified contractor as determined by
      cost and ability to perform the contract without the obligation to tender
      and without informing or seeking the approval of the Operating Committee,
      except that before entering into contracts with Affiliates of Operator
      exceeding $100,000 U.S. dollars, Operator shall obtain the approval of the
      Operating Committee.

            

    

     

    
      	
               
      

            	
              Procedure
      B

            

    

     

    
      	
               
      

            	
              (B)

            	
              Operator
      shall:

            

    

     

    
      	
               
      

            	
              (1)

            	
              provide
      the Parties with a list of the entities whom Operator proposes to invite
      to tender for the said contract;

            

    

     

    
      	
               
      

            	
              (2)

            	
              add
      to such list any entity whom a Party reasonably requests to be added
      within fourteen (14) Days of receipt of such
  list;

            

    

     

    
      	
               
      

            	
              (3)

            	
              complete
      the tendering process within a reasonable period of
  time;

            

    

     

    
      	
               
      

            	
              (4)

            	
              inform
      the Parties of the entities to whom the contract has been awarded,
      provided that before awarding contracts to Affiliates of Operator which
      exceed $100,000 U.S. dollars, Operator shall obtain the approval of the
      Operating Committee;

            

    

     

    
      	
               
      

            	
              (5)

            	
              circulate
      to the Parties a competitive bid analysis stating the reasons for the
      choice made; and

            

    

     

    
      	
               
      

            	
              (6)

            	
              upon
      the request of a Party, provide such Party with a copy of the final
      version of the contract.

            

    

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              Procedure
      C

            

    

     

    
      	
               
      

            	
              (C)

            	
              Operator
      shall:

            

    

     

    
      	
               
      

            	
              (1)

            	
              provide
      the Parties with a list of the entities whom Operator proposes to invite
      to tender for the said contract;

            

    

     

    
      	
               
      

            	
              (2)

            	
              add
      to such list any entity whom a Party reasonably requests to be added
      within fourteen (14) Days of receipt of such
  list;

            

    

     

    
      	
               
      

            	
              (3)

            	
              prepare
      and dispatch the tender documents to the entities on the list as aforesaid
      and to Non-Operators;

            

    

     

    
      	
               
      

            	
              (4)

            	
              after
      the expiration of the period allowed for tendering, consider and analyze
      the details of all bids received;

            

    

     

    
      	
               
      

            	
              (5)

            	
              prepare
      and circulate to the Parties a competitive bid analysis, stating
      Operator’s recommendation as to the entity to whom the contract should be
      awarded, the reasons therefor, and the technical, commercial and
      contractual terms to be agreed
upon;

            

    

     

    
      	
               
      

            	
              (6)

            	
              obtain
      the approval of the Operating Committee to the recommended bid;
      and

            

    

     

    
      	
               
      

            	
              (7)

            	
              upon
      the request of a Party, provide such Party with a copy of the final
      version of the contract.

            

    

     

    
      	
              6.7

            	
              Authorization
      for Expenditure (“AFE”) Procedure

            

    

     

    
      	
               
      

            	
              (A)

            	
              Prior
      to incurring any commitment or expenditure for the Joint Account, which is
      estimated to be:

            

    

     

    
      	
               
      

            	
              (1)

            	
              in
      excess of $500,000 U.S. dollars in an exploration or appraisal Work
      Program and Budget;

            

    

     

    
      	
               
      

            	
              (2)

            	
              in
      excess of $1,000,000 U.S. dollars in a development Work Program and
      Budget; and

            

    

     

    
      	
               
      

            	
              (3)

            	
              in
      excess of $2,000,000 U.S. dollars in a production Work Program and
      Budget,

            

    

     

    Operator
shall send to each Non-Operator an AFE as described in Article
6.7(C).  Notwithstanding the above, Operator shall not be obliged to
furnish an AFE to the Parties with respect to any Minimum Work Obligations,
workovers of wells and general and administrative costs that are listed as
separate line items in an approved Work Program and Budget.

     

    
      	
               
      

            	
               (B)

            	
              Prior
      to making any expenditures or incurring any commitments for work subject
      to the AFE procedure in Article 6.7(A), Operator shall obtain the
      approval of the Operating Committee.  If the Operating Committee
      approves an AFE for the operation within the applicable time period under
      Article 5.12(A), Operator shall be authorized to conduct the operation
      under the terms of this Agreement.  If the Operating Committee
      fails to approve an AFE for the operation within the applicable time
      period, the operation shall be deemed rejected.  Operator shall
      promptly notify the Parties if the operation has been rejected, and,
      subject to Article 7, any Party may thereafter propose to conduct the
      operation as an Exclusive Operation under Article 7.  When an
      operation is rejected under this Article 6.7(B) or an operation is
      approved for differing amounts than those provided for in the applicable
      line items of the approved Work Program and Budget, the Work Program and
      Budget shall be deemed to be revised
  accordingly.

            

    

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (C)

            	
              Each
      AFE proposed by Operator shall:

            

    

     

    
      	
               
      

            	
              (1)

            	
              identify
      the operation by specific reference to the applicable line items in the
      Work Program and Budget;

            

    

     

    
      	
               
      

            	
              (2)

            	
              describe
      the work in detail;

            

    

     

    
      	
               
      

            	
              (3)

            	
              contain
      Operator’s best estimate of the total funds required to carry out such
      work;

            

    

     

    
      	
               
      

            	
              (4)

            	
              outline
      the proposed work schedule;

            

    

     

    
      	
               
      

            	
              (5)

            	
              provide
      a timetable of expenditures, if known;
and

            

    

     

    
      	
               
      

            	
              (6)

            	
              be
      accompanied by such other supporting information as is necessary for an
      informed decision.

            

    

     

    6.8           Overexpenditures
of Work Programs and Budgets

     

    
      	
               
      

            	
              (A)

            	
              For
      expenditures on any line item of an approved Work Program and Budget,
      Operator shall be entitled to incur without further approval of the
      Operating Committee an overexpenditure for such line item up to ten
      percent (10%) of the authorized amount for such line item; provided that
      the cumulative total of all overexpenditures for a Calendar Year shall not
      exceed five percent (5%) of the total annual Work Program and Budget in
      question.

            

    

     

    
      	
               
      

            	
              (B)

            	
              At
      such time Operator reasonably anticipates the limits of Article 6.8(A)
      will be exceeded, Operator shall furnish to the Operating Committee (Operational AFE
      System) a supplemental AFE for the estimated expenditures for the
      Operating Committee’s approval, and Operator shall provide reasonable
      details of such overexpenditures.  The Work Program and Budget
      shall be revised accordingly and the overexpenditures permitted in Article
      6.8(A) shall be based on the revised Work Program and
      Budget.  Operator shall promptly give notice of the amounts of
      overexpenditures when actually
incurred.

            

    

     

    
      	
               
      

            	
              (C)

            	
              The
      restrictions contained in this Article 6 shall be without prejudice to
      Operator’s rights to make expenditures for Urgent Operational Matters and
      measures set out in Article 13.5 without the Operating Committee’s
      approval.

            

    

     

    ARTICLE
7

    OPERATIONS
BY LESS THAN ALL PARTIES

     

    
      	
              7.1

            	
              Limitation
      on Applicability

            

    

     

    
      	
               
      

            	
              (A)

            	
              No
      operations may be conducted in furtherance of the Contract except as Joint
      Operations under Article 5 or as Exclusive Operations under this Article
      7.  No Exclusive Operation shall be conducted (other than the
      tie-in of Exclusive Operation facilities with existing production
      facilities pursuant to Article 7.10) which conflicts with a previously
      approved Joint Operation or with a previously approved Exclusive
      Operation.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Operations
      which are required to fulfill the Minimum Work Obligations must be
      proposed and conducted as Joint Operations under Article 5, and may not be
      proposed or conducted as Exclusive Operations under this Article
      7.

            

    

     

    
      	
               
      

            	
              Except
      for Exclusive Operations relating to Deepening, Testing, Completing,
      Sidetracking, Plugging Back, Recompletions or Reworking of a well
      originally drilled to fulfill the Minimum Work Obligations, no Exclusive
      Operations may be conducted until the Minimum Work Obligations are
      fulfilled.

            

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (C)

            	
              No
      Party may propose or conduct an Exclusive Operation under this Article 7
      unless and until such Party has properly exercised its right to propose an
      Exclusive Operation pursuant to Article 5.13, or is entitled to conduct an
      Exclusive Operation pursuant to Article
10.

            

    

     

    
      	
               
      

            	
              (D)

            	
              The
      following operations may be proposed and conducted as Exclusive
      Operations, subject to the terms of this Article
  7:

            

    

     

    
      	
               
      

            	
              (1)

            	
              drilling
      and/or Testing of Exploration Wells and Appraisal
  Wells;

            

    

     

    
      	
               
      

            	
              (2)

            	
              Completion
      of Exploration Wells and Appraisal Wells not then Completed as productive
      of Hydrocarbons;

            

    

     

    
      	
               
      

            	
              (3)

            	
              Deepening,
      Sidetracking, Plugging Back and/or Recompletion of Exploration Wells and
      Appraisal Wells;

            

    

     

    
      	
               
      

            	
              (4)

            	
              development
      of a Commercial Discovery;

            

    

     

    
      	
               
      

            	
              (5)

            	
              acquisition
      of G & G Data;

            

    

     

    
      	
               
      

            	
              (6)

            	
              any
      operations specifically authorized to be undertaken as an Exclusive
      Operation under Article 10;
and

            

    

     

    
      	
               
      

            	
              (7)

            	
              operations
      for treating, processing, dehydrating, gathering and transporting
      production. .

            

    

     

    No other
type of operation may be proposed or conducted as an Exclusive
Operation.

     

    
      	
              7.2

            	
              Procedure
      to Propose Exclusive Operations

            

    

     

    
      	
               
      

            	
              (A)

            	
              Subject
      to Article 7.1, if any Party proposes to conduct an Exclusive Operation,
      such Party shall give notice of the proposed operation to all Parties,
      other than Non-Consenting Parties who have relinquished their rights to
      participate in such operation pursuant to Article 7.4(B) or Article 7.4(F)
      and have no option to reinstate such rights under Article
      7.4(C).  Such notice shall specify that such operation is
      proposed as an Exclusive Operation and include the work to be performed,
      the location, the objectives, and estimated cost of such
      operation.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Any
      Party entitled to receive such notice shall have the right to participate
      in the proposed operation.

            

    

     

    
      	
               
      

            	
              (1)

            	
              For
      proposals to Deepen, Test, Complete, Sidetrack, Plug Back, Recomplete or
      Rework related to Urgent Operational Matters, any such Party wishing to
      exercise such right must so notify the proposing Party and Operator within
      twenty-four (24) hours after receipt of the notice proposing the Exclusive
      Operation.

            

    

     

    
      	
               
      

            	
              (2)

            	
              For
      proposals to develop a Discovery, any Party wishing to exercise such right
      must so notify Operator and the Party proposing to develop within sixty
      (60) Days after receipt of the notice proposing the Exclusive
      Operation.

            

    

     

    
      	
               
      

            	
              (3)

            	
              For
      all other proposals, any such Party wishing to exercise such right must so
      notify the proposing Party and Operator within ten (10) Days after receipt
      of the notice proposing the Exclusive
Operation.

            

    

     

    
      	
               
      

            	
              (C)

            	
              Failure
      of a Party to whom a proposal notice is delivered to properly reply within
      the period specified above shall constitute an election by that Party not
      to participate in the proposed
operation.

            

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (D)

            	
              If
      all Parties properly exercise their rights to participate, then the
      proposed operation shall be conducted as a Joint
      Operation.  Operator shall commence such Joint Operation as
      promptly as practicable and conduct it with due
  diligence.

            

    

     

    
      
        	
              	
                (E)

              	
                If
      less than all Parties entitled to receive such proposal notice properly
      exercise their rights to participate, then:(1) The
      Party proposing the Exclusive Operation, together with any other
      Consenting Parties, shall have the right exercisable for the applicable
      notice period set out in Article 7.2(B), to instruct Operator (subject to
      Article 7.12(F)) to conduct the Exclusive
  Operation.

              

      

    

     

    
      	
               
      

            	
              (2)

            	
              If
      the Exclusive Operation is conducted, the Consenting Parties shall bear a
      Participating Interest in such Exclusive Operation, the numerator of which
      is such Consenting Party’s Participating Interest as stated in Article
      3.2(A) and the denominator of which is the aggregate of the Participating
      Interests of the Consenting Parties as stated in Article 3.2(A), or
      as the Consenting Parties may otherwise
agree.

            

    

     

    
      	
               
      

            	
              (3)

            	
              If
      such Exclusive Operation has not been commenced within ninety (90) Days
      (excluding (i) unreasonable failure or refusal on the Operator’s
      part  or (ii) any extension specifically agreed by all Parties
      or allowed by the force majeure provisions of Article 16) after the date
      of the instruction given to Operator under Article 7.2(E)(1), the right to
      conduct such Exclusive Operation shall terminate.  If any Party
      still desires to conduct such Exclusive Operation, notice proposing such
      operation must be resubmitted to the Parties in accordance with Article 5,
      as if no proposal to conduct an Exclusive Operation had been previously
      made.

            

    

     

    
      	
              7.3

            	
              Responsibility
      for Exclusive Operations

            

    

     

    
      	
               
      

            	
              (A)

            	
              The
      Consenting Parties shall bear in accordance with the Participating
      Interests agreed under Article 7.2(E) the entire cost and liability of
      conducting an Exclusive Operation and shall indemnify the Non-Consenting
      Parties from any and all costs and liabilities incurred incident to such
      Exclusive Operation (including Consequential Loss and Environmental Loss)
      and shall keep the Contract Area free and clear of all liens and
      encumbrances of every kind created by or arising from such Exclusive
      Operation.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Notwithstanding
      Article 7.3(A), each Party shall continue to bear its Participating
      Interest share of the cost and liability incident to the operations in
      which it participated, including plugging and abandoning and restoring the
      surface location, but only to the extent those costs were not increased by
      the Exclusive Operation.

            

    

     

    
      	
              7.4

            	
              Consequences
      of Exclusive Operations

            

    

     

    
      	
               
      

            	
              (A)

            	
              With
      regard to any Exclusive Operation, for so long as a Non-Consenting Party
      has the option under Article 7.4(C) to reinstate the rights it
      relinquished under Article 7.4(B), such Non-Consenting Party shall be
      entitled to have access concurrently with the Consenting Parties to all
      data and other information relating to such Exclusive Operation, other
      than data obtained in an Exclusive Operation for the purpose of acquiring
      G & G Data.  If a Non-Consenting Party desires to receive
      and acquire the right to use such G & G Data, then such Non-Consenting
      Party shall have the right to do so by paying to the Consenting Parties
      its Participating Interest share as set out in Article 3.2(A) of the cost
      incurred in obtaining such G & G
Data.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Subject
      to Article 7.4(C) and Articles 7.6(E) and 7.8, if selected, each
      Non-Consenting Party shall be deemed to have relinquished to the
      Consenting Parties, and the Consenting Parties shall be deemed to own, in
      proportion to their respective Participating Interests in any Exclusive
      Operation:

            

    

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (1)

            	
              all
      of each such Non-Consenting Party’s right to participate in further
      operations in the well or Deepened or Sidetracked portion of a well in
      which the Exclusive Operation was conducted and on any Discovery made or
      appraised in the course of such Exclusive Operation;
  and

            

    

     

    
      	
               
      

            	
              (2)

            	
              all
      of each such Non-Consenting Party’s right pursuant to the Contract to take
      and dispose of Hydrocarbons produced and
saved:

            

    

     

    
      	
               
      

            	
              (a)

            	
              from
      the well or Deepened or Sidetracked portion of a well in which such
      Exclusive Operation was conducted;
and

            

    

     

    
      	
               
      

            	
              (b)

            	
              from
      any wells drilled to appraise or develop a Discovery made or appraised in
      the course of such Exclusive
Operation.

            

    

     

    
      	
               
      

            	
              (C)

            	
              A
      Non-Consenting Party shall have only the following options to reinstate
      the rights it relinquished pursuant to Article
  7.4(B):

            

    

     

    
      	
               
      

            	
              (1)

            	
              If
      the Consenting Parties decide to appraise a Discovery made in the course
      of an Exclusive Operation, the Consenting Parties shall submit to each
      Non-Consenting Party the approved appraisal program.  For thirty
      (30) Days (or forty-eight (48) hours for Urgent Operational Matters) from
      receipt of such appraisal program, each Non-Consenting Party shall have
      the option to reinstate the rights it relinquished pursuant to Article
      7.4(B) and to participate in such appraisal program.  The
      Non-Consenting Party may exercise such option by notifying Operator within
      the period specified above that such Non-Consenting Party agrees to bear
      its Participating Interest share of the expense and liability of such
      appraisal program, and to pay such amounts as set out in Articles 7.5(A)
      and 7.5(B).

            

    

     

    
      	
               
      

            	
              (2)

            	
              If
      the Consenting Parties decide to develop a Discovery made or appraised in
      the course of an Exclusive Operation, the Consenting Parties shall submit
      to the Non-Consenting Parties a Development Plan substantially in the form
      intended to be submitted to the Government under the
      Contract.  For sixty (60) Days from receipt of such Development
      Plan or such lesser period of time prescribed by the Contract, each
      Non-Consenting Party shall have the option to reinstate the rights it
      relinquished pursuant to Article 7.4(B) and to participate in such
      Development Plan.  The Non-Consenting Party may exercise such
      option by notifying Operator within the period specified above that such
      Non-Consenting Party agrees to bear its Participating Interest share of
      the liability and expense of such Development Plan and such future
      operating and producing costs, and to pay the amounts as set out in
      Articles 7.5(A) and 7.5(B).

            

    

     

    
      	
               
      

            	
              (3)

            	
              If
      the Consenting Parties decide to Deepen, Complete, Sidetrack, Plug Back or
      Recomplete an Exclusive Well and such further operation was not included
      in the original proposal for such Exclusive Well, the Consenting Parties
      shall submit to the Non-Consenting Parties the approved AFE for such
      further operation.  For thirty (30) Days (or forty-eight (48)
      hours for Urgent Operational Matters) from receipt of such AFE, each
      Non-Consenting Party shall have the option to reinstate the rights it
      relinquished pursuant to Article 7.4(B) and to participate in such
      operation.  The Non-Consenting Party may exercise such option by
      notifying Operator within the period specified above that such
      Non-Consenting Party agrees to bear its Participating Interest share of
      the liability and expense of such further operation, and to pay the
      amounts as set out in Articles 7.5(A) and
  7.5(B).

            

    

     

    A
Non-Consenting Party shall not be entitled to reinstate its rights in any other
type of operation.

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (D)

            	
              If
      a Non-Consenting Party does not properly and in a timely manner exercise
      its option under Article 7.4(C), including paying all amounts due in
      accordance with Articles 7.5(A) and 7.5(B), such Non-Consenting Party
      shall have forfeited the options as set out in Article 7.4(C) and the
      right to participate in the proposed program, unless such program, plan or
      operation is materially modified or expanded (in which case a new notice
      and option shall be given to such Non-Consenting Party under Article
      7.4(C)).

            

    

     

    
      	
               
      

            	
              (E)

            	
              A
      Non-Consenting Party exercising its option under Article 7.4(C) shall
      notify the other Parties that it agrees to bear its share of the liability
      and expense of such further operation and to reimburse the amounts set out
      in Articles 7.5(A) and 7.5(B) that such Non-Consenting Party had not
      previously paid.  Such Non-Consenting Party shall in no way be
      deemed to be entitled to any amounts paid pursuant to Articles 7.5(A) and
      7.5(B) incident to such Exclusive Operations.  The Participating
      Interest of such Non-Consenting Party in such Exclusive Operation shall be
      its Participating Interest set out in Article 3.2(A).  The
      Consenting Parties shall contribute to the Participating Interest of the
      Non-Consenting Party in proportion to the excess Participating Interest
      that each received under Article 7.2(E). If all Parties participate
      in the proposed operation, then such operation shall be conducted as a
      Joint Operation pursuant to Article
5.

            

    

     

    
      	
               
      

            	
              (F)

            	
              If
      after the expiry of the period in which a Non-Consenting Party may
      exercise its option to participate in a Development Plan the Consenting
      Parties desire to proceed, Operator shall give notice to the Government
      under the appropriate provision of the Contract requesting a meeting to
      advise the Government that the Consenting Parties consider the Discovery
      to be a Commercial Discovery.  Following such meeting such
      Operator for such development shall apply for an Exploitation Area (if
      applicable in the Contract).  Unless the Development Plan is
      materially modified or expanded prior to the commencement of operations
      under such plan (in which case a new notice and option shall be given to
      the Non-Consenting Parties under Article 7.4(C)), each Non-Consenting
      Party to such Development Plan
shall:

            

    

     

    
      	
               
      

            	
              (1)

            	
              if
      the Contract so allows, elect not to apply for an Exploitation Area
      covering such development and forfeit all interest in such Exploitation
      Area, or

            

    

     

    
      	
               
      

            	
              (2)

            	
              if
      the Contract does not so allow, be deemed to
  have:

            

    

     

    
      	
               
      

            	
              (a)

            	
              elected
      not to apply for an Exploitation Area covering such
      development;

            

    

     

    
      	
               
      

            	
              (b)

            	
              forfeited
      all economic interest in such Exploitation Area;
  and

            

    

     

    
      	
               
      

            	
              (c)

            	
              assumed
      a fiduciary duty to exercise its legal interest in such Exploitation Area
      for the benefit of the Consenting
Parties.

            

    

     

    In either
case such Non-Consenting Party shall be deemed to have withdrawn from this
Agreement to the extent it relates to such Exploitation Area, even if the
Development Plan is modified or expanded subsequent to the commencement of
operations under such Development Plan and shall be further deemed to have
forfeited any right to participate in the construction and ownership of
facilities outside such Exploitation Area designed solely for the use of such
Exploitation Area.

     

    
      	
              7.5

            	
              Premium
      to Participate in Exclusive
Operations

            

    

     

    
      	
               
      

            	
              (A)

            	
              Each
      such Non-Consenting Party shall within thirty (30) Days of the exercise of
      its option under Article 7.4(C), pay in immediately available funds to the
      Consenting Parties in proportion to their respective Participating
      Interests in such Exclusive Operations a lump sum amount payable in the
      currency designated by such Consenting Parties.  Such lump sum
      amount shall be equal to such Non-Consenting Party’s Participating
      Interest share of all liabilities and expenses that were incurred in every
      Exclusive Operation relating to the Discovery (or Exclusive Well, as the
      case may be) in which the Non-Consenting Party desires to reinstate the
      rights it relinquished pursuant to Article 7.4(B), and that were not
      previously paid by such Non-Consenting
Party.

            

    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (B)

            	
              In
      addition to the payment required under Article 7.5(A), immediately
      following the exercise of its option under Article 7.4(C) each such
      Non-Consenting Party shall be liable to reimburse the Consenting Parties
      who took the risk of such Exclusive Operations (in proportion to their
      respective Participating Interests) an amount equal to the total
      of:

            

    

     

    
      	
               
      

            	
              (1)

            	
              Five
      Hundred percent (500%) of such Non-Consenting Party’s Participating
      Interest share of all liabilities and expenses that were incurred in any
      Exclusive Operation relating to the obtaining of the portion of the G
      & G Data which pertains to the Discovery, and that were not previously
      paid by such Non-Consenting Party;
plus

            

    

     

    
      	
               
      

            	
              (2)

            	
              Five
      Hundred percent (500%) of such Non-Consenting Party’s Participating
      Interest share of all liabilities and expenses that were incurred in any
      Exclusive Operation relating to the drilling, Deepening, Testing,
      Completing, Sidetracking, Plugging Back, Recompleting and Reworking of the
      Exploration Well which made the Discovery in which the Non-Consenting
      Party desires to reinstate the rights it relinquished pursuant to Article
      7.4(B), and that were not previously paid by such Non-Consenting Party;
      plus

            

    

     

    
      	
               
      

            	
              (3)

            	
              Four
      Hunderd percent (400%) of the Non-Consenting Party’s Participating
      Interest share of all liabilities and expenses that were incurred in any
      Exclusive Operation relating to the drilling, Deepening, Testing,
      Completing, Sidetracking, Plugging Back, Recompleting and Reworking of the
      Appraisal Well(s) which delineated the Discovery in which the
      Non-Consenting Party desires to reinstate the rights it relinquished
      pursuant to Article 7.4(B), and that were not previously paid by such
      Non-Consenting Party.

            

    

     

    
      	
               
      

            	
              (C)

            	
              Each
      such Non-Consenting Party who is liable for the amounts set out in Article
      7.5(B) shall within thirty (30) Days of the exercise of its option under
      Article 7.4(C), pay in immediately available funds the full amount due
      from it under Article 7.5(B) to such Consenting Parties, in the currency
      designated by such Consenting
Parties.

            

    

     

    
      	
               
      

            	
              (D)

            	
              The
      Non-Consenting Party exercising its option under Article 7.4(C) shall, in
      accordance with Article 19, be entitled to all Cost Hydrocarbons derived
      from reimbursements made under Article 7.5(A).  Such
      Non-Consenting Party shall not be entitled to Cost Hydrocarbons associated
      with payments made under Article 7.5(B), unless the Contract or any
      Laws / Regulations require otherwise.  Each Consenting Party
      shall have the right to refuse to accept all or any portion of its share
      of amounts paid under Articles 7.5(A) and 7.5(B).  In such
      case the refused amount shall be distributed to each non-refusing
      Consenting Party on a pro-rata
basis.

            

    

     

    
      	
              7.6

            	
              Order
      of Preference of Operations

            

    

     

    
      	
               
      

            	
              (A)

            	
              Except
      as otherwise specifically provided in this Agreement, if any Party desires
      to propose the conduct of an operation that will conflict with an existing
      proposal for an Exclusive Operation, such Party shall have the right
      exercisable for five (5) Days (or twenty-four (24) hours for Urgent
      Operational Matters) from receipt of the proposal for the Exclusive
      Operation, to deliver such Party’s alternative proposal to all Parties
      entitled to participate in the proposed operation.  Such
      alternative proposal shall contain the information required under Article
      7.2(A).

            

    

     

    
      	
               
      

            	
              (B)

            	
              Each
      Party receiving such proposals shall elect by delivery of notice to
      Operator and to the proposing Parties within the appropriate response
      period set out in Article 7.2(B) to participate in one of the competing
      proposals.  Any Party not notifying Operator and the proposing
      Parties within the response period shall be deemed to have voted against
      the proposals.

            

    

     

    
      	
               
      

            	
              (C)

            	
              The
      proposal receiving the largest aggregate Participating Interest vote shall
      have priority over all other competing proposals.  In the case
      of a tie vote, Operator shall choose among the proposals receiving the
      largest aggregate Participating Interest vote.  Operator shall
      deliver notice of such result to all Parties entitled to participate in
      the operation within five (5) Days (or twenty-four (24) hours for Urgent
      Operational Matters).

            

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (D)

            	
              Each
      Party shall then have two (2) Days (or twenty-four (24) hours for Urgent
      Operational Matters) from receipt of such notice to elect by delivery of
      notice to Operator and the proposing Parties whether such Party will
      participate in such Exclusive Operation, or will relinquish its interest
      pursuant to Article 7.4(B).  Failure by a Party to deliver such
      notice within such period shall be deemed an election not to participate
      in the prevailing proposal.

            

    

     

    
      	
               
      

            	
              (E)

            	
              Notwithstanding
      the provisions of Article 7.4(B), if for reasons other than the
      encountering of granite or other practically impenetrable substance or any
      other condition in the hole rendering further operations impracticable, a
      well drilled as an Exclusive Operation fails to reach the deepest
      objective Zone described in the notice proposing such well, Operator shall
      give notice of such failure to each Non-Consenting Party who submitted or
      voted for an alternative proposal under this Article 7.6 to drill such
      well to a shallower Zone than the deepest objective Zone proposed in the
      notice under which such well was drilled.  Each such
      Non-Consenting Party shall have the option exercisable for forty-eight
      (48) hours from receipt of such notice to participate for its
      Participating Interest share in the initial proposed Completion of such
      well.  Each such Non-Consenting Party may exercise such option
      by notifying Operator that it wishes to participate in such Completion and
      by paying its Participating Interest share of the cost of drilling such
      well to its deepest depth drilled in the Zone in which it is
      Completed.  All liabilities and expenses for drilling and
      Testing the Exclusive Well below that depth shall be for the sole account
      of the Consenting Parties.  If any such Non-Consenting Party
      does not properly elect to participate in the first Completion proposed
      for such well, the relinquishment provisions of Article 7.4(B) shall
      continue to apply to such Non-Consenting Party’s
  interest.

            

    

     

    
      	
              7.7

            	
              Stand-By
      Costs

            

    

     

    
      	
               
      

            	
              (A)

            	
              When
      an operation has been performed, all tests have been conducted and the
      results of such tests furnished to the Parties, stand by costs incurred
      pending response to any Party’s notice proposing an Exclusive Operation
      for Deepening, Testing, Sidetracking, Completing, Plugging Back,
      Recompleting, Reworking or other further operation in such well (including
      the period required under Article 7.6 to resolve competing proposals)
      shall be charged and borne as part of the operation just
      completed.  Stand by costs incurred subsequent to all Parties
      responding, or expiration of the response time permitted, whichever first
      occurs, shall be charged to and borne by the Parties proposing the
      Exclusive Operation in proportion to their Participating Interests,
      regardless of whether such Exclusive Operation is actually
      conducted.

            

    

     

    
      	
               
      

            	
              (B)

            	
              If
      a further operation related to Urgent Operational Matters is proposed
      while the drilling rig to be utilized is on location, any Party may
      request and receive up to five (5) additional Days after expiration of the
      applicable response period specified in Article 7.2(B)(1) within which to
      respond by notifying Operator that such Party agrees to bear all stand by
      costs and other costs incurred during such extended response
      period.  Operator may require such Party to pay the estimated
      stand by costs in advance as a condition to extending the response
      period.  If more than one Party requests such additional time to
      respond to the notice, stand by costs shall be allocated between such
      Parties on a Day-to-Day basis in proportion to their Participating
      Interests.

            

    

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    
      	
              7.8 

            	
              Special
      Considerations Regarding Deepening and
  Sidetracking

            

    

     

    
      	
               
      

            	
              (A)

            	
              An
      Exclusive Well shall not be Deepened or Sidetracked without first
      affording the Non-Consenting Parties in accordance with this Article 7.8
      the opportunity to participate in such
  operation.

            

    

     

    
      	
               
      

            	
              (B)

            	
              In
      the event any Consenting Party desires to Deepen or Sidetrack an Exclusive
      Well, such Party shall initiate the procedure contemplated by Article
      7.2.  If a Deepening or Sidetracking operation is approved
      pursuant to such provisions, and if any Non-Consenting Party to the
      Exclusive Well elects to participate in such Deepening or Sidetracking
      operation, such Non-Consenting Party shall not owe amounts pursuant to
      Article 7.5(B), and such Non-Consenting Party’s payment pursuant to
      Article 7.5(A) shall be such Non-Consenting Party’s Participating Interest
      share of the liabilities and expenses incurred in connection with drilling
      the Exclusive Well from the surface to the depth previously drilled which
      such Non-Consenting Party would have paid had such Non-Consenting Party
      agreed to participate in such Exclusive Well; provided, however, all
      liabilities and expenses for Testing and Completing or attempting
      Completion of the well incurred by Consenting Parties prior to the
      commencement of actual operations to Deepen or Sidetrack beyond the depth
      previously drilled shall be for the sole account of the Consenting
      Parties.

            

    

     

    
      	
              7.9

            	
              Use
      of Property

            

    

     

    
      	
               
      

            	
              (A)

            	
              The
      Parties participating in any Deepening, Testing, Completing, Sidetracking,
      Plugging Back, Recompleting or Reworking of any well drilled under this
      Agreement shall be permitted to use (free of cost) all casing, tubing and
      other equipment in the well that is not needed for operations by the
      owners of the wellbore, but the ownership of all such equipment shall
      remain unchanged.  On abandonment of a well in which operations
      with differing participation have been conducted, the Parties abandoning
      the well shall account for all equipment in the well to the Parties owning
      such equipment by tendering to them their respective Participating
      Interest shares of the value of such equipment less the cost of
      salvage.

            

    

     

    
      	
               
      

            	
               (B)

            	
              Any
      Party (whether owning interests in the platform or not) shall be permitted
      to use spare slots in a platform constructed pursuant to this Agreement
      for purposes of drilling Exploration Wells and/or Appraisal Wells and
      running tests in the Contract Area and not part of any planned
      development.  No Party except an owner of a platform may drill
      Development Wells or run production from a well (except production
      resulting from initial well tests) from the platform without the prior
      written consent of all platform owners.  If all owners of the
      platform participate in the drilling of a well, then no fee shall be
      payable under this Article 7.9(B).  Otherwise, each time a well
      is drilled from a platform, the Consenting Parties in the well shall pay
      to the owners of the platform until all wells drilled by such Parties have
      been plugged and abandoned a monthly fee equal to (1) that portion of the
      total cost of the platform (including costs of material, fabrication,
      transportation and installation), divided by the number of months of
      useful life established for the platform under the tax law of the host
      country, that one well slot bears to the total number of slots on the
      platform plus (2) that proportionate part of the monthly cost of
      operating, maintaining and financing the platform that the well drilled
      under this Article 7.9(B) bears to the total number of wells served by
      such platform.  Consenting Parties who have paid to drill a well
      from a platform under this Article 7.9(B) shall be entitled to Deepen or
      Sidetrack that well for no additional charge if done prior to moving the
      drilling rig off of location.

            

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (C)

            	
              Spare
      capacity in equipment that is constructed pursuant to this Agreement and
      used for processing or transporting Crude Oil and Natural Gas after it has
      passed through primary separators and dehydrators (including treatment
      facilities, gas processing plants and pipelines) shall be available for
      use by any Party for Hydrocarbon production from the Contract Area on the
      terms set forth below.  All Parties desiring to use such
      equipment shall nominate capacity in such equipment on a monthly basis by
      notice to Operator at least ten (10) Days prior to the beginning of each
      month.  Operator may nominate capacity for the owners of the
      equipment if they so elect.  If at any time the capacity
      nominated exceeds the total capacity of the equipment, the capacity of the
      equipment shall be allocated in the following priority:  (1)
      first, to the owners of the equipment up to their respective Participating
      Interest shares of total capacity, (2) second, to owners of the equipment
      desiring to use capacity in excess of their Participating Interest shares,
      in proportion to the Participating Interest of each such Party and (3)
      third, to Parties not owning interests in the equipment, in proportion to
      their Participating Interests in the Agreement.  Owners of the
      equipment shall be entitled to use up to their Participating Interest
      share of total capacity without payment of a fee under this Article
      7.9(C). Otherwise, each Party using equipment pursuant to this Article
      7.9(C) shall pay to the owners of the equipment monthly throughout the
      period of use an arm’s-length fee based upon third party charges for
      similar services in the vicinity of the Contract Area.  If no
      arm’s-length rates for such services are available, then the Party
      desiring to use equipment pursuant to this Article 7.9(C) shall pay to the
      owners of the equipment a monthly fee equal to (1) that portion of the
      total cost of the equipment, divided by the number of months of useful
      life established for such equipment under the tax law of the host country,
      that the capacity made available to such Party on a fee basis under this
      Article 7.9(C) bears to the total capacity of the equipment plus (2) that
      portion of the monthly cost of maintaining, operating and financing the
      equipment that the capacity made available to such Party on a fee basis
      under this Article 7.9(C) bears to the total capacity of the
      equipment.

            

    

     

    
      	
               
      

            	
              (D)

            	
              Payment
      for the use of a platform under Article 7.9(B) or the use of equipment
      under Article 7.9(C) shall not result in an acquisition of any additional
      interest in the equipment or platform by the paying
      Parties.  However, such payments shall be included in the costs
      which the paying Parties are entitled to recoup under Article
      7.5.

            

    

     

    
      	
               
      

            	
              (E)

            	
              Parties
      electing to use spare capacity on platforms or in equipment pursuant to
      Article 7.9(B) or Article 7.9(C) shall indemnify the owners of
      the equipment or platform against any and all costs and liabilities
      incurred as a result of such use (including any Consequential Loss and
      Environmental Loss) but excluding costs and liabilities for which Operator
      is solely responsible under Article
4.6.

            

    

     

    
      	
              7.10

            	
              Lost
      Production During Tie-In of Exclusive Operation
  Facilities

            

    

     

    If,
during the tie-in of Exclusive Operation facilities with the existing production
facilities of another operation, the production of Hydrocarbons from such other
pre-existing operations is temporarily lessened as a result, then the Consenting
Parties shall compensate the parties to such existing operation for such loss of
production in the following manner.  Operator shall determine the
amount by which each Day’s production during the tie-in of Exclusive Operation
facilities falls below the previous month’s average daily production from the
existing production facilities of such operation.  The so-determined
amount of lost production shall be recovered by all Parties who experienced such
loss in proportion to their respective Participating Interest.  Upon
completion of the tie-in, such lost production shall be recovered in full by
Operator deducting up to one hundred percent (100%) of the production from the
Exclusive Operation, prior to the Consenting Parties being entitled to receive
any such production.

     

    
      	
              7.11

            	
              Royalty

            

    

     

    The
royalty payable by the Parties under Article 13.1 of the Contract (“Royalty”)
shall be charged to the Joint Account if there is no Hydrocarbon production from
an Exclusive Operation at the time it is incurred.  If there is
Hydrocarbon production from one or more Exclusive Operations, then any Royalty
which becomes payable under the Contract shall be borne by the Parties in
accordance with their Participating Interests.

     

    The
Parties in an Exploitation Area shall bear the Production Bonus allocated to
that Exploitation Area in accordance with their Participating Interests in that
Exploitation Area as of the date on which liability for the Production Bonus was
incurred.  Only types, grades and qualities of Hydrocarbons used for
the determination of the Production Bonus under the Contract shall be utilized
in the calculations in this Article 7.11.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      	
              7.12

            	
              Conduct
      of Exclusive Operations

            

    

     

    
      	
               
      

            	
              (A)

            	
              Each
      Exclusive Operation shall be carried out by the Consenting Parties acting
      as the Operating Committee, subject to the provisions of this Agreement
      applied mutatis
      mutandis to such Exclusive Operation and subject to the terms and
      conditions of the Contract.

            

    

     

    
      	
               
      

            	
              (B)

            	
              The
      computation of liabilities and expenses incurred in Exclusive Operations,
      including the liabilities and expenses of Operator for conducting such
      operations, shall be made in accordance with the principles set out in the
      Accounting Procedure.

            

    

     

    
      	
               
      

            	
              (C)

            	
              Operator
      shall maintain separate books, financial records and accounts for
      Exclusive Operations which shall be subject to the same rights of audit
      and examination as the Joint Account and related records, all as provided
      in the Accounting Procedure.  Said rights of audit and
      examination shall extend to each of the Consenting Parties and each of the
      Non-Consenting Parties so long as the latter are, or may be, entitled to
      elect to participate in such Exclusive
  Operations.

            

    

     

    
      	
               
      

            	
              (D)

            	
              Operator,
      if it is conducting an Exclusive Operation for the Consenting Parties,
      regardless of whether it is participating in that Exclusive Operation,
      shall be entitled to request cash advances and shall not be required to
      use its own funds to pay any cost and expense and shall not be obliged to
      commence or continue Exclusive Operations until cash advances requested
      have been made, and the Accounting Procedure shall apply to Operator in
      respect of any Exclusive Operations conducted by
  it.

            

    

     

    
      	
               
      

            	
              (E)

            	
              Should
      the submission of a Development Plan be approved in accordance with
      Article 6.2, or should any Party propose (but not yet have the right to
      commence) a development in accordance with this Article 7 where
      neither the Development Plan nor the development proposal call for the
      conduct of additional appraisal drilling, and should any Party wish to
      drill an additional Appraisal Well prior to development, then the Party
      proposing the Appraisal Well as an Exclusive Operation shall be entitled
      to proceed first, but without the right (subject to the following
      sentence) to future reimbursement pursuant to
      Article 7.5.  If such an Appraisal Well is produced, any
      Consenting Party shall own and have the right to take in kind and
      separately dispose of all of the Non-Consenting Party’s Entitlement from
      such Appraisal Well until the value received in sales to purchasers in
      arm-length transactions equals one hundred percent (100%) of such
      Non-Consenting Party’s Participating Interest shares of all liabilities
      and expenses that were incurred in any Exclusive Operations relating to
      the Appraisal Well.  Following the completion of drilling such
      Appraisal Well as an Exclusive Operation, the Parties may proceed with the
      Development Plan approved pursuant to Article 5.9, or (if applicable) the
      Parties may complete the procedures to propose an Exclusive Operation to
      develop a Discovery.  If, as the result of drilling such
      Appraisal Well as an Exclusive Operation, the Party or Parties proposing
      to develop the Discovery decide(s) not to do so, then each Non-Consenting
      Party who voted in favor of such Development Plan prior to the drilling of
      such Appraisal Well shall pay to the Consenting Party the amount such
      Non-Consenting Party would have paid had such Appraisal Well been drilled
      as a Joint Operation.

            

    

     

    
      	
               
      

            	
              (F)

            	
              If
      Operator is a Non-Consenting Party to an Exclusive Operation to develop a
      Discovery, then  Operator may resign, but in any event shall
      resign on the unanimous request of the Consenting Parties, as Operator for
      the Exploitation Area for such Discovery, and the Consenting Parties shall
      select a Consenting Party to serve as Operator for such Exclusive
      Operation only.

            

    

     

    Any such
resignation of Operator and appointment of a Consenting Party to serve as
Operator for such Exclusive Operation shall be subject to the Parties having
first obtained any necessary Government approvals.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    ARTICLE
8

    DEFAULT

     

    
      	
              8.1

            	
              Default
      and Notice

            

    

     

    
      	
            	
              (A) 

            	
              Any
      Party that fails to:

            

    

     

    
      	
               
      

            	
              (1)

            	
              pay
      when due its share of Joint Account expenses (including cash advances and
      interest); or

            

    

     

    
      	
               
      

            	
              (2)

            	
              obtain
      and maintain any Security required of such Party under the Contract or
      this Agreement;

            

    

     

    shall be
in default under this Agreement (a “Defaulting
Party”). Operator, or any non-defaulting Party in case Operator is the
Defaulting Party, shall promptly give notice of such default (the “Default
Notice”) to the Defaulting Party and each of the non-defaulting
Parties.

     

    
      	
               
      

            	
              (B)

            	
              For
      the purposes of this Article 8, “Default
      Period” means the period beginning five (5) Business Days from the
      date that the Default Notice is issued in accordance with this Article 8.1
      and ending when all the Defaulting Party’s defaults pursuant to this
      Article 8.1 have been remedied in
full.

            

    

     

    
      	
              8.2

            	
              Operating
      Committee Meetings and Data

            

    

     

    
      	
               
      

            	
              (A)

            	
              Notwithstanding
      any other provision of this Agreement, the Defaulting Party shall have no
      right, during the Default Period,
to:

            

    

     

    
      	
               
      

            	
              (1)

            	
              call
      or attend Operating Committee or subcommittee
  meetings;

            

    

     

    
      	
               
      

            	
              (2)

            	
              vote
      on any matter coming before the Operating Committee or any
      subcommittee;

            

    

     

    
      	
               
      

            	
              (3)

            	
              access
      any data or information relating to any operations under this
      Agreement;

            

    

     

    
      	
               
      

            	
              (4)

            	
              consent
      to or reject data trades between the Parties and third parties, nor access
      any data received in such data
trades;

            

    

     

    
      	
               
      

            	
              (5)

            	
              Transfer
      (as defined in Article 12.1) all or part of its Participating Interest,
      except to non-defaulting Parties in accordance with this Article
      8;

            

    

     

    
      	
               
      

            	
              (6)

            	
              consent
      to or reject any Transfer (as defined in Article 12.1) or otherwise
      exercise any other rights in respect of Transfers under this Article 8 or
      under Article 12;

            

    

     

    
      	
               
      

            	
              (7)

            	
              receive
      its Entitlement in accordance with Article
8.4;

            

    

     

    
      	
               
      

            	
              (8)

            	
              withdraw
      from this Agreement under Article 13;
or

            

    

     

    
      	
               
      

            	
              (9)

            	
              take
      assignment of any portion of another Party’s Participating Interest in the
      event such other Party is either in default or withdrawing from this
      Agreement and the Contract.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Notwithstanding
      any other provisions in this Agreement, during the Default
      Period:

            

    

     

    
      	
               
      

            	
              (1)

            	
              unless
      agreed otherwise by the non-defaulting Parties, the voting interest of
      each non-defaulting Party shall be equal to the ratio such non-defaulting
      Party’s Participating Interest bears to the total Participating Interests
      of the non-defaulting Parties;

            

    

     

    
      	
               
      

            	
              (2)

            	
              any
      matters requiring a unanimous vote or approval of the Parties shall not
      require the vote or approval of the Defaulting
  Party;

            

    

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (3)

            	
              the
      Defaulting Party shall be deemed to have elected not to participate in any
      operations that are voted upon during the Default Period, to the extent
      such an election would be permitted by Article 5.13 and Article 7;
      and

            

    

     

    
      	
               
      

            	
              (4)

            	
              the
      Defaulting Party shall be deemed to have approved, and shall join with the
      non-defaulting Parties in taking, any other actions voted on during the
      Default Period.

            

    

     

    
      	
              8.3

            	
              Allocation
      of Defaulted Accounts

            

    

     

    
      	
               
      

            	
              (A)

            	
              The
      Party providing the Default Notice pursuant to Article 8.1 shall include
      in the Default Notice to each non-defaulting Party a statement of: (i) the
      sum of money that the non-defaulting Party shall pay as its portion of the
      Amount in Default; and (ii) if the Defaulting Party has failed to obtain
      or maintain any Security required of such Party in order to maintain the
      Contract in full force and effect, the type and amount of the Security the
      non-defaulting Parties shall post or the funds they shall pay in order to
      allow Operator, or (if Operator is in default) the notifying Party, to
      post and maintain such Security.  Unless otherwise agreed, the
      obligations for which the Defaulting Party is in default shall be
      satisfied by the non-defaulting Parties in proportion to the ratio that
      each non-defaulting Party's Participating Interest bears to the
      Participating Interests of all non-defaulting Parties.  For the
      purposes of this Article 8:

            

    

     

    “Amount in
Default” means the Defaulting Party’s share of Joint Account expenses
which the Defaulting Party has failed to pay when due pursuant to the terms of
this Agreement (but excluding any interest owed on such amount);
and

     

    “Total Amount in
Default” means the following amounts: (i) the Amount in Default;
(ii) third-party costs of obtaining and maintaining any Security incurred
by the non-defaulting Parties or the funds paid by such Parties in order to
allow Operator to obtain or maintain Security, in accordance with Article
8.3(A)(ii); plus (iii) any interest at the Agreed Interest Rate accrued on the
amount under (i) from the date this amount is due by the Defaulting Party until
paid in full by the Defaulting Party and on the amount under (ii) from the date
this amount is incurred by the non-defaulting Parties until paid in full by the
Defaulting Party.

     

    
      	
               
      

            	
              (B)

            	
              If
      the Defaulting Party remedies its default in full before the Default
      Period commences, the notifying Party shall promptly notify each
      non-defaulting Party by facsimile or telephone and by email, and the
      non-defaulting Parties shall be relieved of their obligations under
      Article 8.3(A).  Otherwise, each non-defaulting Party shall
      satisfy its obligations under Article 8.3(A)(i) before the Default Period
      commences and its obligations under Article 8.3(A)(ii) within ten (10)
      Days following the Default Notice.  If any non-defaulting Party
      fails to timely satisfy such obligations, such Party shall thereupon be a
      Defaulting Party subject to the provisions of this Article
      8.  The non-defaulting Parties shall be entitled to receive
      their respective shares of the Total Amount in Default payable by such
      Defaulting Party pursuant to this Article
8.

            

    

     

    
      	
               
      

            	
              (C)

            	
              If
      Operator is a Defaulting Party, then all payments otherwise payable to
      Operator for Joint Account costs pursuant to this Agreement shall be made
      to the notifying Party instead until the default is cured or a successor
      Operator appointed.  The notifying Party shall maintain such
      funds in a segregated account separate from its own funds and shall apply
      such funds to third party claims due and payable from the Joint Account of
      which it has notice, to the extent Operator would be authorized to make
      such payments under the terms of this Agreement.  The notifying
      Party shall be entitled to bill or cash call the other Parties in
      accordance with the Accounting Procedure for proper third party charges
      that become due and payable during such period to the extent sufficient
      funds are not available.  When Operator has cured its default or
      a successor Operator is appointed, the notifying Party shall turn over all
      remaining funds in the account to Operator and shall provide Operator and
      the other Parties with a detailed accounting of the funds received and
      expended during this period.  The notifying Party shall not be
      liable for damages, losses, costs, expenses or liabilities arising as a
      result of its actions under this Article 8.3(C), except to the extent
      Operator would be liable under Article
4.6.

            

    

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    
      	
              8.4

            	
              Remedies

            

    

     

    
      	
               
      

            	
              (A)

            	
              During
      the Default Period, the Defaulting Party shall not have a right to its
      Entitlement, which shall vest in and be the property of the non-defaulting
      Parties.  Operator (or the notifying Party if Operator is a
      Defaulting Party) shall be authorized to sell such Entitlement in an
      arm’s-length sale on terms that are commercially reasonable under the
      circumstances and, after deducting all costs, charges and expenses
      incurred in connection with such sale, pay the net proceeds to the
      non-defaulting Parties in proportion to the amounts they are owed by the
      Defaulting Party as a part of the Total Amount in Default (in payment of
      first the interest and then the principal) and apply such net proceeds
      toward the establishment of the Reserve Fund (as defined in Article
      8.4(C)), if applicable, until all such Total Amount in Default is
      recovered and such Reserve Fund is established.  Any surplus
      remaining shall be paid to the Defaulting Party, and any deficiency shall
      remain a debt due from the Defaulting Party to the non-defaulting
      Parties.  When making sales under this Article 8.4(A), the
      non-defaulting Parties shall have no obligation to share any existing
      market or obtain a price equal to the price at which their own production
      is sold.

            

    

     

    
      	
               
      

            	
              (B)

            	
              If
      Operator disposes of any Joint Property or if any other credit or
      adjustment is made to the Joint Account during the Default Period,
      Operator (or the notifying Party if Operator is a Defaulting Party) shall
      be entitled to apply the Defaulting Party’s Participating Interest share
      of the proceeds of such disposal, credit or adjustment against the Total
      Amount in Default (against first the interest and then the principal) and
      toward the establishment of the Reserve Fund (as defined in Article
      8.4(C)), if applicable.  Any surplus remaining shall be paid to
      the Defaulting Party, and any deficiency shall remain a debt due from the
      Defaulting Party to the non-defaulting
Parties.

            

    

     

    
      	
               
      

            	
              (C)

            	
              The
      non-defaulting Parties shall be entitled to apply the net proceeds
      received under Articles 8.4(A) and 8.4(B) toward the creation of a
      reserve fund (the “Reserve
      Fund”) in an amount equal to the Defaulting Party’s Participating
      Interest share of: (i) the estimated cost to abandon any wells and other
      property in which the Defaulting Party participated; (ii) the
      estimated cost of severance benefits for local employees upon cessation of
      operations; and (iii) any other identifiable costs that the non-defaulting
      Parties anticipate will be incurred in connection with the cessation of
      operations. Upon the conclusion of the Default Period, all amounts held in
      the Reserve Fund shall be returned to the Party previously in
      Default.

            

    

     

    
      	
               
      

            	
              (D)

            	
              Each
      Party grants to each of the other Parties the right and option to acquire
      (the “Buy-Out
      Option”) all of its Participating Interest for a value (the “Appraised
      Value”) as determined in this Article 8.4(D) in the event that
      such Party becomes a Defaulting Party and fails to fully remedy all its
      defaults by the thirtieth (30th) Day following the date of the Default
      Notice.  If a Defaulting Party fails to remedy its default by
      the thirtieth (30th) Day following the date of the Default Notice, then,
      without prejudice to any other rights available to each non-defaulting
      Party to recover its portion of the Total Amount in Default, each
      non-defaulting Party may, but shall not be obligated to, exercise such
      Buy-Out Option by notice to the Defaulting Party and each non-defaulting
      Party (the “Option
      Notice”). The Defaulting Party shall be obligated to transfer,
      pursuant to Article 13.6, effective on the date of the Option Notice, its
      Participating Interest to the non-defaulting Parties having exercised the
      Buy-Out Option (each, an “Acquiring
      Party”). If, within thirty (30) Days after the Buy-Out Option is
      first exercised by an Acquiring Party, other non-defaulting Parties become
      an Acquiring Party, each Acquiring Party shall acquire a proportion of the
      Participating Interest of the Defaulting Party equal to the ratio of its
      own Participating Interest to the total Participating Interests of all
      Acquiring Parties and pay such proportion of the Appraised Value (as
      defined below), unless they otherwise agree.  Each Acquiring
      Party shall specify in its Option Notice a value for the Defaulting
      Party’s Participating Interest.  Within five (5) Days of the
      Option Notice, the Defaulting Party shall (i) notify the Acquiring
      Parties that it accepts, with respect to each Acquiring Party, the value
      specified by such Acquiring Party in its Option Notice (in which case this
      value is, with respect to such Acquiring Party, the “Appraised
      Value”); or (ii) refer the Dispute to an independent expert
      pursuant to Article 18.3 for determination of the value of its
      Participating Interest (in which case the value determined by such expert
      shall be deemed the “Appraised
      Value”).  If the Defaulting Party fails to so notify the
      Acquiring Parties, then the Defaulting Party shall be deemed to have
      accepted, with respect to each Acquiring Party, such Acquiring Party’s
      proposed value as the Appraised
Value.

            

    

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    If the
valuation of the Defaulting Party’s Participating Interest is referred to an
expert, such expert shall determine the Appraised Value which shall be equal to
the fair market value of the Defaulting Party’s Participating Interest, less the
following: (i) the Total Amount in Default; (ii) all costs, including the costs
of the expert, to obtain such valuation; and (iii) ninety percent (90%) of the
fair market value of the Defaulting Party’s Participating Interest.

     

    The
Appraised Value shall be paid to the Defaulting Party in four (4) installments,
each equal to 25% of the Appraised Value as follows:

     

    
      	
               
      

            	
              (1)

            	
              the
      first installment shall be due and payable to the Defaulting Party within
      15 Days after the date on which the Defaulting Party’s Participating
      Interest is effectively transferred to the Acquiring Parties (the “Transfer
      Date”);

            

    

     

    
      	
               
      

            	
              (2)

            	
              the
      second installment shall be due and payable to the Defaulting Party within
      180 Days after the Transfer Date;

            

    

     

    
      	
               
      

            	
              (3)

            	
              the
      third installment shall be due and payable to the Defaulting Party within
      365 Days after the Transfer Date;
and

            

    

     

    
      	
               
      

            	
              (4)

            	
              the
      fourth installment shall be due and payable to the Defaulting Party within
      545 Days after the Transfer Date.

            

    

     

    
      	
               
      

            	
              (E)

            	
              In
      addition to the other remedies available to the non-defaulting Parties
      under this Article 8 and any other rights available to each
      non-defaulting Party to recover its portion of the Total Amount in
      Default, in the event a Defaulting Party fails to remedy its default
      within thirty (30) Days of the Default Notice, the non-Defaulting Parties
      may elect to enforce a mortgage and security interest on the Defaulting
      Party’s Participating Interest as set forth below, subject to the Contract
      and the Laws / Regulations. 

            

    

     

    
      	
               
      

            	
              (1)

            	
              Each
      Party grants to each of the other Parties, in pro rata shares based on
      their relative Participating Interests, a mortgage and security interest
      on its Participating Interest, whether now owned or hereafter acquired,
      together with all products and proceeds derived from that Participating
      Interest (collectively, the “Collateral”)
      as security for (i) the payment of all amounts owing by such Party
      (including interest and costs of collection) under this Agreement; and
      (ii) any Security which such Party is required to provide under the
      Contract. 

            

    

     

    
      	
               
      

            	
              (2)

            	
              Should
      a Defaulting Party fail to remedy its default by the thirtieth (30th) Day
      following the date of the Default Notice, then, each non-defaulting Party
      shall have the option, exercisable at any time thereafter during the
      Default Period, to foreclose its mortgage and security interest against
      its prorata share of the Collateral by any means permitted under the
      Contract and the Laws / Regulations and to sell all or any part of that
      Collateral in public or private sale after providing the Defaulting Party
      and other creditors with any notice required by the Contract or the Laws /
      Regulations, and subject to the provisions of Article
      12.   Except as may be prohibited by the Contract or the
      Laws / Regulations, the non-defaulting Party that forecloses its mortgage
      and security interest shall be entitled to become the purchaser of the
      Collateral sold and shall have the right to credit toward the purchase
      price the amount to which it is entitled under Article
      8.4.   Any deficiency in the amounts received by the
      foreclosing party shall remain a debt due by the Defaulting
      Party.  The foreclosure of mortgages and security interests by
      one non-defaulting Party shall neither affect the amounts owed by the
      Defaulting Party to the other non-defaulting Parties nor in any way limit
      the rights or remedies available to them.  Each Party agrees
      that, should it become a Defaulting Party, it waives the benefit of any
      appraisal, valuation, stay, extension or redemption law and any other
      debtor protection law that otherwise could be invoked to prevent or hinder
      the enforcement of the mortgage and security interest granted
      above.

            

    

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (3)

            	
              Each
      Party agrees to execute such memoranda, financing statements and other
      documents, and make such filings and registrations, as may be reasonably
      necessary to perfect, validate and provide notice of the mortgages and
      security interests granted by this Article
  8.4(E). 

            

    

     

    
      	
               
      

            	
              (F)

            	
              For
      purposes of Articles 8.4(D) and 8.4(E), as elected, the Defaulting Party
      shall, without delay following any request from the non-defaulting
      Parties, do any act required to be done by the Laws / Regulations and any
      other applicable laws in order to render the transfer of its Participating
      Interest legally valid, including obtaining all governmental consents and
      approvals, and shall execute any document and take such other actions as
      may be necessary in order to effect a prompt and valid
      transfer.  The Defaulting Party shall be obligated to promptly
      remove any liens and encumbrances which may exist on its assigned
      Participating Interests.  In the event all Government approvals
      are not timely obtained, the Defaulting Party shall hold the assigned
      Participating Interest in trust for the non-defaulting Parties who are
      entitled to receive it.  Each Party constitutes and appoints
      each other Party its true and lawful attorney to execute such instruments
      and make such filings and applications as may be necessary to make such
      transfer legally effective and to obtain any necessary consents of the
      Government.  Actions under this power of attorney may be taken
      by any Party individually without the joinder of the
      others.  This power of attorney is irrevocable for the term of
      this Agreement and is coupled with an interest.  If requested,
      each Party shall execute a form prescribed by the Operating Committee
      setting forth this power of attorney in more
  detail.

            

    

     

    
      	
               
      

            	
              (G)

            	
              The
      non-defaulting Parties shall be entitled to recover from the Defaulting
      Party all reasonable attorneys’ fees and all other reasonable costs
      sustained in the collection of amounts owing by the Defaulting
      Party.

            

    

     

    
      	
               
      

            	
              (H)

            	
              The
      rights and remedies granted to the non-defaulting Parties in this Article
      8 shall be cumulative, not exclusive, and shall be in addition to any
      other rights and remedies that may be available to the non-defaulting
      Parties, whether at law, in equity or otherwise.  Each right and
      remedy available to the non-defaulting Parties may be exercised from time
      to time and so often and in such order as may be considered expedient by
      the non-defaulting Parties in their sole
  discretion.

            

    

     

    
      	
              8.5

            	
              Survival

            

    

     

    The
obligations of the Defaulting Party and the rights of the non-defaulting Parties
shall survive the surrender of the Contract, abandonment of Joint Operations and
termination of this Agreement.

     

    
      	
              8.6

            	
              No
      Right of Set Off

            

    

     

    Each
Party acknowledges and accepts that a fundamental principle of this Agreement is
that each Party pays its Participating Interest share of all amounts due under
this Agreement as and when required.  Accordingly, any Party which
becomes a Defaulting Party undertakes that, in respect of either any exercise by
the non-defaulting Parties of any rights under or the application of any of the
provisions of this Article 8, such Party hereby waives any right to raise
by way of set off or invoke as a defense, whether in law or equity, any failure
by any other Party to pay amounts due and owing under this Agreement or any
alleged claim that such Party may have against Operator or any Non-Operator,
whether such claim arises under this Agreement or otherwise.  Each
Party further agrees that the nature and the amount of the remedies granted to
the non-defaulting Parties hereunder are reasonable and appropriate in the
circumstances.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    ARTICLE
9

    DISPOSITION
OF PRODUCTION

     

    
      	
              9.1

            	
              Right
      and Obligation to Take in Kind

            

    

     

    Except as
otherwise provided in this Article 9 or in Article 8, each Party shall have the
right and obligation to own, take in kind and separately dispose of its
Entitlement.

     

    
      	
              9.2

            	
              Disposition
      of Crude Oil

            

    

     

    If Crude
Oil is to be produced from an Exploitation Area, the Parties shall in good
faith, and not less than three (3) months prior to the anticipated first
delivery of Crude Oil, as promptly notified by Operator, negotiate and conclude
the terms of a lifting agreement to cover the offtake of Crude Oil produced
under the Contract.  The lifting procedure shall be based on the AIPN
Model Form Lifting Procedure and shall contain all such terms as may be
negotiated and agreed by the Parties, consistent with the Development Plan and
subject to the terms of the Contract.  The Government Oil & Gas
Company may, if necessary and practicable, also be party to the lifting
agreement; if the Government Oil & Gas Company is a party to the lifting
agreement, then the Parties shall endeavor to obtain its agreement to the
principles set forth in this Article 9.2.  If a lifting agreement has
not been entered into by the date of first delivery of Crude Oil, the Parties
shall nonetheless be obligated to take and separately dispose of such Crude Oil
as provided in Article 9.1 and in addition shall be bound by the terms set forth
in the AIPN Model Form Lifting Procedure until a lifting agreement is executed
by the Parties.

     

    
      	
              9.3

            	
              Disposition
      of Natural Gas

            

    

     

    The
Parties recognize that if Natural Gas is discovered it may be necessary for the
Parties to enter into special arrangements for the disposal of the Natural Gas,
which are consistent with the Development Plan and subject to the terms of the
Contract.

     

    ARTICLE
10

    ABANDONMENT

     

    
      	
              10.1

            	
              Abandonment
      of Wells Drilled as Joint
Operations

            

    

     

    
      	
               
      

            	
              (A)

            	
              A
      decision to plug and abandon any well which has been drilled as a Joint
      Operation shall require the approval of the Operating
      Committee.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Should
      any Party fail to reply within the period prescribed in Article 5.12(A)(1)
      or Article 5.12(A)(2), whichever is applicable, after delivery of notice
      of Operator’s proposal to plug and abandon such well, such Party shall be
      deemed to have consented to the proposed
  abandonment.

            

    

     

    
      	
               
      

            	
              (C)

            	
              If
      the Operating Committee approves a decision to plug and abandon an
      Exploration Well or Appraisal Well, subject to the Laws / Regulations, any
      Party voting against such decision may propose (within the time periods
      allowed by Article 5.13(A)) to conduct an alternate Exclusive
      Operation in the wellbore.  If no Exclusive Operation is timely
      proposed, or if an Exclusive Operation is timely proposed but is not
      commenced within the applicable time periods under Article 7.2, such well
      shall be plugged and abandoned.

            

    

     

    
      	
               
      

            	
              (D)

            	
              Any
      well plugged and abandoned under this Agreement shall be plugged and
      abandoned in accordance with the Laws / Regulations and at the cost, risk
      and expense of the Parties who participated in the cost of drilling such
      well.

            

    

     

    
      	
               
      

            	
              (E)

            	
              Notwithstanding
      anything to the contrary in this Article
10.1:

            

    

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (1)

            	
              If
      the Operating Committee approves a decision to plug and abandon a well
      from which Hydrocarbons have been produced and sold, subject to the Laws /
      Regulations, any Party voting against the decision may propose (within
      five (5) Days after the time specified in Article 5.6, Article 5.12(A)(1)
      or Article 5.12(A)(2), whichever is applicable, has expired) to take over
      the entire well as an Exclusive Operation.  Any Party originally
      participating in the well shall be entitled to participate in the
      operation of the well as an Exclusive Operation by response notice within
      ten (10) Days after receipt of the notice proposing the Exclusive
      Operation.

            

    

     

    In such
event, the Consenting Parties shall be entitled to continue producing only from
the Zone open to production at the time they assumed responsibility for the well
and shall not be entitled to drill a substitute well in the event that the well
taken over becomes impaired or fails.

     

    
      	
               
      

            	
              (2)

            	
              Each
      Non-Consenting Party shall be deemed to have relinquished free of cost to
      the Consenting Parties in proportion to their Participating Interests all
      of its interest in the wellbore of a produced well and related equipment
      in accordance with Article 7.4(B).  The Consenting Parties shall
      thereafter bear all cost and liability of plugging and abandoning such
      well in accordance with the Laws / Regulations, to the extent the Parties
      are or become obligated to contribute to such costs and liabilities, and
      shall indemnify the Non-Consenting Parties against all such costs and
      liabilities.

            

    

     

    
      	
               
      

            	
              (3)

            	
              Subject
      to Article 7.12(F), Operator shall continue to operate a produced well for
      the account of the Consenting Parties at the rates and charges
      contemplated by this Agreement, plus any additional cost and charges which
      may arise as the result of the separate allocation of interest in such
      well.

            

    

     

    
      	
              10.2

            	
              Abandonment
      of Exclusive Operations

            

    

     

    This
Article 10 shall apply mutatis
mutandis to the abandonment of an Exclusive Well or any well in which an
Exclusive Operation has been conducted (in which event all Parties having the
right to conduct further operations in such well shall be notified and have the
opportunity to conduct Exclusive Operations in the well in accordance with the
provisions of this Article 10).

     

    ARTICLE
11

    SURRENDER,
EXTENSIONS AND RENEWALS

     

    
      	
              11.1

            	
              Surrender

            

    

     

    
      	
               
      

            	
              (A)

            	
              If
      the Contract requires the Parties to surrender any portion of the Contract
      Area, Operator shall advise the Operating Committee of such requirement at
      least one hundred and twenty (120) Days in advance of the earlier of the
      date for filing irrevocable notice of such surrender or the date of such
      surrender.  Prior to the end of such period, the Operating
      Committee shall determine pursuant to Article 5 the size and shape of the
      surrendered area, consistent with the requirements of the
      Contract.  If a sufficient vote of the Operating Committee
      cannot be attained, then the proposal supported by a simple majority of
      the Participating Interests shall be adopted.  If no proposal
      attains the support of a simple majority of the Participating Interests,
      then the proposal receiving the largest aggregate Participating Interest
      vote shall be adopted.  In the event of a tie, Operator shall
      choose among the proposals receiving the largest aggregate Participating
      Interest vote.  The Parties shall execute any and all documents
      and take such other actions as may be necessary to effect the
      surrender.  Each Party renounces all claims and causes of action
      against Operator and any other Parties on account of any area surrendered
      in accordance with the foregoing but against its recommendation if
      Hydrocarbons are subsequently discovered under the surrendered
      area.

            

    

     

    
      	
               
      

            	
              (B)

            	
              A
      surrender of all or any part of the Contract Area which is not required by
      the Contract shall require the unanimous consent of the
      Parties.

            

    

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    
      	
              11.2

            	
              Extension
      of the Term

            

    

     

    
      	
               
      

            	
              (A)

            	
              A
      proposal by any Party to enter into or extend the term of any Exploration
      or Exploitation Period or any phase of the Contract, or a proposal to
      extend the term of the Contract, shall be brought before the Operating
      Committee pursuant to Article 5.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Any
      Party shall have the right to enter into or extend the term of any
      Exploration or Exploitation Period or any phase of the Contract or to
      extend the term of the Contract, regardless of the level of support in the
      Operating Committee.  If any Party takes such action, any Party
      not wishing to extend shall have a right to withdraw, subject to the
      requirements of Article 13.

            

    

     

    ARTICLE
12

    TRANSFER
OF INTEREST OR RIGHTS AND CHANGES IN CONTROL

     

    
      	
              12.1

            	
              Obligations

            

    

     

    
      	
            	
              (A) 

            	
              Subject
      to the requirements of the
Contract,

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      Transfer (except Transfers pursuant to Article 7, Article 8 or Article 13)
      shall be effective only if it satisfies the terms and conditions of
      Article 12.2; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              a
      Party subject to a Change in Control must satisfy the terms and conditions
      of Article 12.3.

            

    

     

    Should a
Transfer subject to this Article or a Change in Control occur without
satisfaction (in all material respects) by the transferor or the Party subject
to the Change in Control, as applicable, of the requirements hereof, then each
other Party shall be entitled to enforce specific performance of the terms of
this Article, in addition to any other remedies (including damages) to which it
may be entitled.  Each Party agrees that monetary damages alone would
not be an adequate remedy for the breach of any Party's obligations under this
Article.

    

    
      	
            	
              (B) 

            	
              For
      purposes of this Agreement:

            

    

    

    “Cash
Transfer” means any Transfer where the sole consideration (other than the
assumption of obligations relating to the transferred Participating Interest)
takes the form of cash, cash equivalents, promissory notes or retained interests
(such as production payments) in the Participating Interest being transferred;
and

     

    “Cash
Value” means the portion of the total monetary value (expressed in U.S.
dollars) of the consideration being offered by the proposed transferee
(including any cash, other assets, and tax savings to the transferor from a
non-cash deal) that reasonably should be allocated to the Participating Interest
subject to the proposed Transfer or Change in Control.

     

    “Change in
Control” means any direct or indirect change in Control of a Party
(whether through merger, sale of shares or other equity interests, or otherwise)
through a single transaction or series of related transactions, from one or more
transferors to one or more transferees, in which the market value of the Party's
Participating Interest represents more than fifty percent (50%) of the aggregate
market value of the assets of such Party and its Affiliates that are subject to
the change in Control.   For the purposes of this definition,
market value shall be determined based upon the amount in cash a willing buyer
would pay a willing seller in an arm's length transaction.

     

    “Encumbrance”
means an assignment or transfer in security.  “Encumber” and other
derivatives shall be construed accordingly.

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    “Transfer”
means any sale, assignment, Encumbrance or other disposition by a Party of any
rights or obligations derived from the Contract or this Agreement (including its
Participating Interest), other than its Entitlement and its rights to any
credits, refunds or payments under this Agreement, and excluding any direct or
indirect change in Control of a Party.

     

    
      	
              12.2.

            	
              Transfer

            

    

     

    
      	
               
      

            	
              (A)

            	
              Except
      in the case of a Party transferring all of its Participating Interest, no
      Transfer shall be made by any Party which results in the transferor or the
      transferee holding a Participating Interest of less than nine percent (9%)
      or any interest other than a Participating Interest in the Contract and
      this Agreement.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Subject
      to the terms of Articles 4.9 and 4.10, the Party serving as Operator
      shall remain Operator following Transfer of a portion of its Participating
      Interest.  In the event of a Transfer of all of its
      Participating Interest, except to an Affiliate, the Party serving as
      Operator shall be deemed to have resigned as Operator, effective on the
      date the Transfer becomes effective under this Article 12, in which
      event a successor Operator shall be appointed in accordance with
      Article 4.11.  If Operator transfers all of its
      Participating Interest to an Affiliate, that Affiliate shall automatically
      become the successor Operator, provided that the transferring Operator
      shall remain liable for its Affiliate's performance of its
      obligations.

            

    

     

    
      	
               
      

            	
              (C)

            	
              Both
      the transferee, and, notwithstanding the Transfer, the transferring Party,
      shall be liable to the other Parties for the transferring Party’s
      Participating Interest share of any obligations (financial or otherwise)
      which have vested, matured or accrued under the provisions of the Contract
      or this Agreement prior to such Transfer.  Such obligations,
      shall include any proposed expenditure approved by the Operating Committee
      prior to the transferring Party notifying the other Parties of its
      proposed Transfer and shall also include costs of plugging and abandoning
      wells or portions of wells and decommissioning facilities in which the
      transferring Party participated (or with respect to which it was required
      to bear a share of the costs pursuant to this sentence) to the extent such
      costs are payable by the Parties under the
  Contract.

            

    

     

    
      	
               
      

            	
              (D)

            	
              A
      transferee shall have no rights in the Contract or this Agreement (except
      any notice and cure rights or similar rights that may be provided to a
      Lien Holder (as defined in Article 12.2(E)) by separate instrument signed
      by all Parties) unless and until:

            

    

     

    
      	
               
      

            	
              (1)

            	
              it
      expressly undertakes in an instrument reasonably satisfactory to the other
      Parties to perform the obligations of the transferor under the Contract
      and this Agreement in respect of the Participating Interest being
      transferred and obtains any necessary Government approval for the Transfer
      and furnishes any guarantees required by the Government or the Contract on
      or before the applicable deadlines;
and

            

    

     

    
      	
               
      

            	
              (2)

            	
              except
      in the case of a Transfer to an Affiliate, each Party has consented in
      writing to such Transfer, which consent shall be denied only if the
      transferee fails to establish to the reasonable satisfaction of each Party
      its financial capability to perform its payment obligations under the
      Contract and this Agreement.

            

    

     

    No
consent shall be required under this Article 12.2(D)(2) for a Transfer to an
Affiliate if the transferring Party agrees in an instrument reasonably
satisfactory to the other Parties to remain liable for its Affiliate’s
performance of its obligations.

     

    
      	
               
      

            	
              (E)

            	
              Nothing
      contained in this Article 12 shall prevent a Party from Encumbering all or
      any undivided share of its Participating Interest to a third party (a
      “Lien Holder”)
      for the purpose of security relating to finance, provided
      that:

            

    

     

    
      	
               
      

            	
              (1)

            	
              such
      Party shall remain liable for all obligations relating to such
      interest;

            

    

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (2)

            	
              the
      Encumbrance shall be subject to any necessary approval of the Government
      and be expressly subordinated to the rights of the other Parties under
      this Agreement; and

            

    

     

    
      	
               
      

            	
              (3)

            	
              such
      Party shall ensure that any Encumbrance shall be expressed to be without
      prejudice to the provisions of this
Agreement.

            

    

     

    
      	
               
      

            	
              (F)

            	
              Any
      Transfer (other than a Transfer to an Affiliate and the granting of an
      Encumbrance as provided in Article 12.2(E)) shall be subject to the
      following procedure.

            

    

     

    
      	
               
      

            	
              (1)

            	
              In
      the event that a Party wishes to transfer any part or all of its
      Participating Interest, prior to the transferor entering into a written
      agreement providing for such a Transfer (whether or not such agreement is
      binding) the transferor shall send the other Parties notice of its
      intention and invite them to submit offers for the Participating Interest
      subject to the Transfer.  The other Parties shall have thirty
      (30) Days from the date of such notification to deliver a
      counter-notification with a binding offer in accordance with
      Article 12.2(F)(3).  If the transferor notifies the
      offering Party or Parties that the binding offer presents an acceptable
      basis for negotiating a Transfer agreement, the transferor and that
      offering Party or Parties shall have the next sixty (60) Days in which to
      negotiate in good faith and execute the terms and conditions of a mutually
      acceptable Transfer agreement.  If the transferor does not find
      that any Party's offer presents an acceptable basis for negotiating a
      Transfer agreement, or if the above sixty (60) Days elapse and the
      transferor in its sole discretion believes that a fully negotiated
      agreement based on the offer deemed acceptable by the transferor with all
      offering Parties is not imminent, the transferor shall be entitled for a
      period of one hundred eighty (180) Days from the expiration of the thirty
      (30) Day offer period or the sixty (60) Day negotiation period,
      respectively, plus such additional period as may be necessary to secure
      governmental approvals, to Transfer all or such portion of its
      Participating Interest to a third party, subject to the obligations set
      forth in this Article 12.

            

    

     

    
      	
               
      

            	
              (2)

            	
              If
      more than one Party counter-notifies the transferor that it intends to
      acquire the Participating Interest subject to the proposed Transfer, then
      each such Party shall acquire a proportion of the Participating Interest
      to be transferred equal to the ratio of its own Participating Interest to
      the total Participating Interests of all the counter-notifying Parties,
      unless the counter-notifying Parties otherwise
  agree.

            

    

     

    
      	
               
      

            	
              (3)

            	
              All
      Parties desiring to give such a counter-notice shall meet to formulate a
      joint offer.  Each such Party shall make known to the other
      Parties the highest price or value that it is willing to offer to the
      transferor.  The proposal with the highest price or value shall
      be offered to the transferor as the joint proposal of the Parties still
      willing to participate in such offer under the provisions of
      Article 12.2(F)(1) above.

            

    

     

    
      	
               
      

            	
              (G)

            	
              Notwithstanding
      anything to the contrary contained therein, the terms of
      Article 12.2(F) shall only apply to Cash Transfers and shall not
      apply to Transfers that are not Cash
Transfers.

            

    

     

    
      	
              12.3

            	
              Change
      in Control

            

    

     

    
      	
               
      

            	
              (A)

            	
              A
      Party subject to a Change in Control shall notify the Government with
      respect to the Change in Control.

            

    

     

    
      	
               
      

            	
               (B)

            	
              A
      Party subject to a Change in Control shall provide evidence reasonably
      satisfactory to the other Parties that following the Change in Control
      such Party shall continue to have the financial capability to satisfy its
      payment obligations under the Contract and this
      Agreement.  Should the Party that is subject to the Change in
      Control fail to provide such evidence, any other Party, by notice to such
      Party, may require such Party to provide Security satisfactory to the
      other Parties with respect to its Participating Interest share of any
      obligations or liabilities which the Parties may reasonably be expected to
      incur under the Contract and this Agreement during the then-current
      Exploration or Exploitation Period or phase of the
    Contract.

            

    

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    ARTICLE
13

    WITHDRAWAL
FROM AGREEMENT

     

    
      	
              13.1

            	
              Right
      of Withdrawal

            

    

     

    
      	
               
      

            	
              (A)

            	
              Subject
      to the provisions of this Article 13 and the Contract, any Party not in
      default may at its option withdraw from this Agreement and the Contract by
      giving notice to all other Parties stating its decision to
      withdraw.  Such notice shall be unconditional and irrevocable
      when given, except as may be provided in Article
  13.7.

            

    

     

    
      	
               
      

            	
              (B)

            	
              The
      effective date of withdrawal for a withdrawing Party shall be the end of
      the calendar month following the calendar month in which the notice of
      withdrawal is given, provided that if all Parties elect to withdraw, the
      effective date of withdrawal for each Party shall be the date determined
      by Article 13.9.

            

    

     

    
      	
              13.2

            	
              Partial
      or Complete Withdrawal

            

    

     

    
      	
               
      

            	
              (A)

            	
              Within
      thirty (30) Days of receipt of each withdrawing Party’s notification, each
      of the other Parties may also give notice that it desires to withdraw from
      this Agreement and the Contract.  Should all Parties give notice
      of withdrawal, the Parties shall proceed to abandon the Contract Area and
      terminate the Contract and this Agreement.  If less than all of
      the Parties give such notice of withdrawal, then the withdrawing Parties
      shall take all steps to withdraw from the Contract and this Agreement on
      the earliest possible date and execute and deliver all necessary
      instruments and documents to assign their Participating Interest to the
      Parties which are not withdrawing, without any compensation whatsoever, in
      accordance with the provisions of Article
13.6.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Any
      Party withdrawing under Article 11.2 or under this Article 13 shall at its
      option, (1) withdraw from the entirety of the Contract Area, or (2)
      withdraw only from all exploration activities under the Contract, but not
      from any Exploitation Area, Commercial Discovery, or Discovery (whether
      appraised or not) made prior to such withdrawal.  Such
      withdrawing Party shall retain its rights in Joint Property, but only
      insofar as they relate to any such Exploitation Area, Commercial Discovery
      or Discovery, and shall abandon all other rights in Joint
      Property.

            

    

     

    
      	
              13.3

            	
              Rights
      of a Withdrawing Party

            

    

     

    A
withdrawing Party shall have the right to receive its Entitlement produced
through the effective date of its withdrawal.  The withdrawing Party
shall be entitled to receive all information to which such Party is otherwise
entitled under this Agreement until the effective date of its
withdrawal.  After giving its notification of withdrawal, a Party
shall not be entitled to vote on any matters coming before the Operating
Committee, other than matters for which such Party has financial
responsibility.

     

    
      	
              13.4

            	
              Obligations
      and Liabilities of a Withdrawing
Party

            

    

     

    
      	
               
      

            	
              (A)

            	
              A
      withdrawing Party shall, following its notification of withdrawal, remain
      liable only for its share of the
following:

            

    

     

    
      	
               
      

            	
              (1)

            	
              costs
      of Joint Operations, and Exclusive Operations in which it has agreed to
      participate, that were approved by the Operating Committee or Consenting
      Parties as part of a Work Program and Budget (including a multi-year Work
      Program and Budget under Article 6.5) or AFE prior to such Party’s
      notification of withdrawal, regardless of when they are
      incurred;

            

    

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (2)

            	
              any
      Minimum Work Obligations for the current period or phase of the Contract,
      and for any subsequent period or phase which has been approved pursuant to
      Article 11.2 and with respect to which such Party has failed to timely
      withdraw under Article 13.4(B);

            

    

     

    
      	
               
      

            	
              (3)

            	
              expenditures
      described in Articles 4.2(B)(13) and 13.5 related to an emergency
      occurring prior to the effective date of a Party’s withdrawal, regardless
      of when such expenditures are
incurred;

            

    

     

    
      	
               
      

            	
              (4)

            	
              all
      other obligations and liabilities of the Parties or Consenting Parties, as
      applicable, with respect to acts or omissions under this Agreement prior
      to the effective date of such Party’s withdrawal for which such Party
      would have been liable, had it not withdrawn from this Agreement;
      and

            

    

     

    
      	
               
      

            	
              (5)

            	
              in
      the case of a partially withdrawing Party, any costs and liabilities with
      respect to Exploitation Areas, Commercial Discoveries and Discoveries from
      which it has not withdrawn.

            

    

     

    The
obligations and liabilities for which a withdrawing Party remains liable shall
specifically include its share of any costs of plugging and abandoning wells or
portions of wells in which it participated (or was required to bear a share of
the costs pursuant to Article 13.4(A)(1)) to the extent such costs of plugging
and abandoning are payable by the Parties under the Contract.  Any
mortgages, liens, pledges, charges or other encumbrances which were placed on
the withdrawing Party’s Participating Interest prior to such Party’s withdrawal
shall be fully satisfied or released, at the withdrawing Party’s expense, prior
to its withdrawal.  A Party’s withdrawal shall not relieve it from
liability to the non-withdrawing Parties with respect to any obligations or
liabilities attributable to the withdrawing Party under this Article 13 merely
because they are not identified or identifiable at the time of
withdrawal.

     

    
      	
               
      

            	
              (B)

            	
              Notwithstanding
      the foregoing, a Party shall not be liable for any operations or
      expenditures it voted against (other than operations and expenditures
      described in Article 13.4(A)(2) or Article 13.4(A)(3)) if it
      sends notification of its withdrawal within five (5) Days (or within
      twenty-four (24) hours for Urgent Operational Matters) of the Operating
      Committee vote approving such operation or
      expenditure.  Likewise, a Party voting against voluntarily
      entering into or extending of an Exploration Period or Exploitation Period
      or any phase of the Contract or voluntarily extending the Contract shall
      not be liable for the Minimum Work Obligations associated therewith
      provided that it sends notification of its withdrawal within thirty (30)
      Days of such vote pursuant to Article
11.2.

            

    

     

    
      	
              13.5

            	
              Emergency

            

    

     

    If a well
goes out of control or a fire, blow out, sabotage or other emergency occurs
prior to the effective date of a Party’s withdrawal, the withdrawing Party shall
remain liable for its Participating Interest share of the costs of such
emergency, regardless of when they are incurred.

     

    
      	
              13.6

            	
              Assignment

            

    

     

    A
withdrawing Party shall assign its Participating Interest free of cost to each
of the non-withdrawing Parties in the proportion which each of their
Participating Interests (prior to the withdrawal) bears to the total
Participating Interests of all the non-withdrawing Parties (prior to the
withdrawal), unless the non-withdrawing Parties agree otherwise.  The
expenses associated with the withdrawal and assignments shall be borne by the
withdrawing Party.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    
      	
              13.7

            	
              Approvals

            

    

     

    A
withdrawing Party shall promptly join in such actions as may be necessary or
desirable to obtain any Government approvals required in connection with the
withdrawal and assignments.  The non-withdrawing Parties shall use
reasonable endeavors to assist the withdrawing Party in obtaining such
approvals.  Any penalties or expenses incurred by the Parties in
connection with such withdrawal shall be borne by the withdrawing
Party.  If the Government does not approve a Party’s withdrawal and
assignment to the other Parties, then the withdrawing Party shall at its option
either (1) retract its notice of withdrawal by notice to the other Parties and
remain a Party as if such notice of withdrawal had never been sent, or (2) hold
its Participating Interest in trust for the sole and exclusive benefit of the
non-withdrawing Parties with the right to be reimbursed by the non-withdrawing
Parties for any subsequent costs and liabilities incurred by it for which it
would not have been liable, had it successfully withdrawn.

     

    
      	
              13.8

            	
              Security

            

    

     

    A Party
withdrawing from this Agreement and the Contract pursuant to this Article 13
shall provide Security satisfactory to the other Parties to satisfy any
obligations or liabilities for which the withdrawing Party remains liable in
accordance with Article 13.4, but which become due after its withdrawal,
including Security to cover the costs of an abandonment, if
applicable.

     

    
      	
              13.9

            	
              Withdrawal
      or Abandonment by All Parties

            

    

     

    In the
event all Parties decide to withdraw, the Parties agree that they shall be bound
by the terms and conditions of this Agreement for so long as may be necessary to
wind up the affairs of the Parties with the Government, to satisfy any
requirements of the Laws / Regulations and to facilitate the sale, disposition
or abandonment of property or interests held by the Joint Account, all in
accordance with Article 2.

     

    ARTICLE
14

    RELATIONSHIP
OF PARTIES AND TAX

     

    
      	
              14.1

            	
              Relationship
      of Parties

            

    

     

    The
rights, duties, obligations and liabilities of the Parties under this Agreement
shall be individual, not joint or collective.  It is not the intention
of the Parties to create, nor shall this Agreement be deemed or construed to
create, a mining or other partnership, 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.

     

    
      	
              14.2

            	
              Tax

            

    

     

    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.

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    
      	
              14.3

            	
              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 U.S. 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 U.S. 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
      14.3.  Should there be any requirement that any U.S. Party give
      further evidence of this election, each U.S. 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.

            

    

     

    
      	
               
      

            	
              (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 U.S. 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.

            

    

     

    
      	
               
      

            	
              (D)

            	
              A
      Non-U.S. Party shall not be required to do any act or execute any
      instrument which might subject it to the taxation jurisdiction of the
      United States.

            

    

     

    
      	
               
      

            	
              (E)

            	
              For
      the purposes of this Article 14.3, “U.S.
      Party” shall mean any Party that is subject to the income tax law
      of the United States in respect with operations under this
      Agreement.  “Non-U.S.
      Party” shall mean any Party that is not subject to such income tax
      law.

            

    

     

    ARTICLE
15

    VENTURE
INFORMATION - CONFIDENTIALITY - INTELLECTUAL PROPERTY

     

    
      	
              15.1

            	
              Venture
      Information

            

    

     

    
      	
               
      

            	
              (A)

            	
              Except
      as otherwise provided in this Article 15 or in Articles 4.4 and 8.4(A),
      each Party will be entitled to receive all Venture Information related to
      operations in which such party is a participant.  “Venture
      Information” means any information and results developed or
      acquired as a result of Joint Operations and shall be Joint Property,
      unless provided otherwise in accordance with this Agreement and the
      Contract.  Each Party shall have the right to use all Venture
      Information it receives without accounting to any other Party, subject to
      any applicable patents and any limitations set forth in this Agreement and
      the Contract. For purposes of this Article 15, such right to use shall
      include the rights to copy, prepare derivative works, disclose, license,
      distribute, and sell.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Each
      Party may, subject to any applicable restrictions and limitations set
      forth in the Contract, extend the right to use Venture Information to each
      of its Affiliates which are obligated to terms not less restrictive that
      this Article 15.

            

    

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (C)

            	
              The
      acquisition or development of Venture Information under terms other than
      as specified in this Article 15 shall require the approval of the
      Operating Committee.  The request for approval submitted by a
      Party shall be accompanied by a description of, and summary of the use and
      disclosure restrictions which would be applicable to, the Venture
      Information, and any such Party will be obligated to use all reasonable
      efforts to arrange for rights to use which are not less restrictive than
      specified in this Article 15.

            

    

    

    
      	
               
      

            	
              (D)

            	
              All
      Venture Information received by a Party under this Agreement is received
      on an “as is” basis without warranties, express or implied, of any kind.
      Any use of such Venture Information by a Party shall be at such Party’s
      sole risk.

            

    

    

    
      	
              15.2

            	
              Confidentiality

            

    

     

    
      	
               
      

            	
              (A)

            	
              Subject
      to the provisions of the Contract and this Article 15, the Parties agree
      that all information in relation with Joint Operations or Exclusive
      Operations shall be considered confidential and shall be kept confidential
      and not be disclosed during the term of the Contract and for a period of
      three (3) years thereafter to any person or entity not a Party to this
      Agreement, except:

            

    

    

    
      	
               
      

            	
              (1)

            	
              to
      an Affiliate pursuant to Article
15.1(B);

            

    

    

    
      	
               
      

            	
              (2)

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

            

    

    

    
      	
               
      

            	
              (3)

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

            

    

    

    
      	
               
      

            	
              (4)

            	
              to
      prospective or actual attorneys engaged by any Party where disclosure of
      such information is essential to such attorney’s work for such
      Party;

            

    

    

    
      	
               
      

            	
              (5)

            	
              to
      prospective or actual contractors and consultants 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 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 if any Party desires to
      disclose information in an annual or periodic report to its or its
      Affiliates' shareholders and to the public and such disclosure is not
      required pursuant to any rules or requirements of any government or stock
      exchange, then such Party shall comply with Article
  20.3;

            

    

    

    
      	
               
      

            	
              (9)

            	
              to
      its respective employees for the purposes of Joint Operations or Exclusive
      Operations as the case may be, subject to each Party taking customary
      precautions to ensure such information is kept confidential;
      and

            

    

    

    
      	
               
      

            	
              (10)

            	
              any
      information which, through no fault of a Party, becomes a part of the
      public domain.

            

    

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              (B)

            	
              Disclosure
      as pursuant to Articles 15.2(A)(5), (6), and (7) 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 three (3) years and to use the information for
      the sole purpose described in Articles 15.2(A)(5), (6), and (7), whichever
      is applicable, with respect to the disclosing
  Party.

            

    

    

    
      	
              15.3

            	
              Intellectual
      Property

            

    

     

    
      	
               
      

            	
              (A)

            	
              Subject
      to Articles 15.3(C) and 15.5 and unless provided otherwise in the
      Contract, all intellectual property rights in the Venture Information
      shall be Joint Property.  Each Party and its Affiliates have the
      right to use all such intellectual property rights in their own operations
      (including joint operations or a production sharing arrangement in which
      the Party or its Affiliates has an ownership or equity interest) without
      the approval of any other Party.  Decisions regarding obtaining,
      maintaining and licensing such intellectual property rights shall be made
      by the Operating Committee, and the costs thereof shall be for the Joint
      Account.  Upon unanimous consent of the Operating Committee as
      to ownership, licensing rights, and income distribution, the ownership of
      intellectual property rights in the Venture Information may be assigned to
      the Operator or to a Party.

            

    

    

    
      	
               
      

            	
              (B)

            	
              Nothing
      in this Agreement shall be deemed to require a Party to (i) divulge
      proprietary technology to any of the other Parties; or (ii) grant a
      license or other rights under any intellectual property rights owned or
      controlled by such Party or its Affiliates to any of the other
      Parties.

            

    

    

    
      	
               
      

            	
              (C)

            	
              If
      in the course of carrying out activities charged to the Joint Account, a
      Party or an Affiliate of a Party makes or conceives any inventions,
      discoveries, or improvements which primarily relate to or are primarily
      based on the proprietary technology of such Party or its Affiliates, then
      all intellectual property rights to such inventions, discoveries, or
      improvements shall vest exclusively in such Party and each other Party
      shall have a perpetual, royalty-free, irrevocable license to use such
      inventions, discoveries, or improvements, but only in connection with the
      Joint Operations.

            

    

    

    
      	
               
      

            	
              (D)

            	
              Subject
      to Article 4.6(B), all costs and expenses of defending, settling or
      otherwise handling any claim which is based on the actual or alleged
      infringement of any intellectual property right shall be for the account
      of the operation from which the claim arose, whether Joint Operations or
      Exclusive Operations.

            

    

    

    
      	
              15.4

            	
              Continuing
      Obligations

            

    

     

    Any Party
ceasing to own a Participating Interest during the term of this Agreement shall
nonetheless remain bound by the obligations of confidentiality in Article 15.2,
and any disputes in relation thereto shall be resolved in accordance with
Article 18.2.

     

    
      	
              15.5

            	
              Trades

            

    

     

    Operator
may, with approval of the Operating Committee, make well trades and data trades
for the benefit of the Parties, with any data so obtained to be furnished to all
Parties who participated in the cost of the data that was
traded.  Operator shall cause any third party to such trade to enter
into an undertaking to keep the traded data confidential.

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    ARTICLE
16

    FORCE
MAJEURE

     

    
      	
              16.1

            	
              Obligations

            

    

     

    If as a
result of Force Majeure any Party is rendered unable, wholly or in part, to
carry out its obligations under this Agreement, other than the obligation to pay
any amounts due or to furnish Security, then the obligations of the Party giving
such notice, so far as and to the extent that the obligations are affected by
such Force Majeure, shall be suspended during the continuance of any inability
so caused and for such reasonable period thereafter as may be necessary for the
Party to put itself in the same position that it occupied prior to the Force
Majeure, but for no longer period.  The Party claiming Force Majeure
shall notify the other Parties of the Force Majeure within a reasonable time
after the occurrence of the facts relied on and shall keep all Parties informed
of all significant developments.  Such notice shall give reasonably
full particulars of the Force Majeure and also estimate the period of time which
the Party will probably require to remedy the Force Majeure.  The
affected Party shall use all reasonable diligence to remove or overcome the
Force Majeure situation as quickly as possible in an economic manner but shall
not be obligated to settle any labor dispute except on terms acceptable to it,
and all such disputes shall be handled within the sole discretion of the
affected Party.

     

    
      	
              16.2

            	
              Definition
      of Force Majeure

            

    

     

    For the
purposes of this Agreement, “Force
Majeure” shall mean circumstances which were beyond the reasonable
control of the Party concerned and shall include strikes, lockouts and other
industrial disturbances even if they were not “beyond the reasonable control” of
the Party.

     

    ARTICLE
17

    NOTICES

     

    Except as
otherwise specifically provided, 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 contains a binding electronic signature or other
demonstration of authenticity, and addressed to such Parties.  Oral
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 17 shall mean actual delivery of the notice to the
address of the Party specified hereunder or to be thereafter notified in
accordance with this Article 17.  Each Party shall have the right to
change its address at any time and/or designate that copies of all such notices
be directed to another person at another address, by giving written notice
thereof to all other Parties.

     

    Ray
Leonard, President and Chief Executive Officer

    SCS
Corporation

    One Sugar
Creek Center Blvd., Suite 125

    Sugar
Land, Texas 77478, USA

    Telephone
+1 713.353.9400

    Facsimile
+1 713.353.9434

    

    With copy
to:

    Robert P.
Thibault

    Robert B.
Bearman

    PATTON
BOGGS LLP

    1801
California Street

    Suite
4900

    Denver,
CO 80218

    Tel: 303
894 6191

    Facsimile:
303 894 9239

     

    Dana
Petroleum (E&P) Limited

    John
Downey

    Manager
International Business and New Ventures

    17 Carden
Place

    Aberdeen,
AB10 1UR, Scotland

    UK
Telephone +44 1224 652 400

    Facsimile:
+44 1224 652 401

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    ARTICLE
18

    APPLICABLE
LAW - DISPUTE RESOLUTION - WAIVER OF SOVEREIGN IMMUNITY

     

    
      	
              18.1

            	
              Applicable
      Law

            

    

     

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

     

    
      	
              18.2

            	
              Dispute
      Resolution

            

    

     

    
      	
               
      

            	
              (A)

            	
              Notification.  A
      Party who desires to submit a Dispute for resolution shall commence the
      dispute resolution process by providing the other parties to the Dispute
      written notice of the Dispute (“Notice of
      Dispute”).  The Notice of Dispute shall identify the
      parties to the Dispute and contain a brief statement of the nature of the
      Dispute and the relief requested. The submission of a Notice of Dispute
      shall toll any applicable statutes of limitation related to the Dispute,
      pending the conclusion or abandonment of dispute resolution proceedings
      under this Article 18.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Negotiations.  The
      parties to the Dispute shall seek to resolve any Dispute by negotiation
      between Senior Executives.  A “Senior
      Executive” means any individual who has authority to negotiate the
      settlement of the Dispute for a Party.  Within thirty (30) Days
      after the date of the receipt by each party to the Dispute of the Notice
      of Dispute (which notice shall request negotiations among Senior
      Executives), the Senior Executives representing the parties to the Dispute
      shall meet at a mutually acceptable time and place to exchange relevant
      information in an attempt to resolve the Dispute.  If a Senior
      Executive intends to be accompanied at the meeting by an attorney, each
      other party’s Senior Executive shall be given written notice of such
      intention at least three (3) Days in advance and may also be accompanied
      at the meeting by an attorney.  Notwithstanding the above, any
      Party may initiate arbitration proceedings pursuant to Article 18.2 (D) or
       mediation
      proceedings pursuant to Article 18.2 (C) concerning such Dispute within
      thirty (30) Days after the date of receipt of the Notice of
      Dispute.

            

    

     

    
      	
               
      

            	
              (C)

            	
              Mediation.  Upon
      mutual agreement, the parties to the Dispute shall seek to resolve the
      Dispute by mediation. Within thirty (30) Days after the date of the
      receipt by each party to the Dispute of the Notice of Dispute, any party
      to the Dispute may initiate such mediation pursuant to the American
      Arbitration Association mediation rules then in effect, as modified
      herein] by sending all other parties to the Dispute a written request that
      the Dispute be mediated.  The Parties receiving such written
      request will promptly respond to the requesting Party so that all parties
      to the Dispute may jointly select a neutral mediator and schedule the
      mediation session.  The mediator shall meet with the parties to
      the Dispute to mediate the Dispute within thirty (30) Days after the date
      of receipt of the written request for mediation. Notwithstanding the
      above, any Party may initiate arbitration proceedings pursuant to Article
      18.2 (D) concerning such Dispute within thirty (30) Days after the date of
      receipt of the Notice of Dispute

            

    

     

    
      	
               
      

            	
              (D)

            	
              Arbitration.  Any
      Dispute not finally resolved by alternative dispute resolution procedures
      set forth in Articles 18.2(B) and 18.2(C) shall be exclusively and
      definitively resolved through final and binding arbitration, it being the
      intention of the Parties that this is a broad form arbitration agreement
      designed to encompass all possible
disputes.

            

    

     

    
      	
               
      

            	
              (1)

            	
              Rules.  The
      arbitration shall be conducted in accordance with the following
      arbitration rules (as then in effect) (the “Rules”):
      International Arbitration Rules of the American Arbitration Association
      (AAA).

            

    

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (2)

            	
              Number of
      Arbitrators.  The arbitration shall be conducted by three
      arbitrators, unless all parties to the Dispute agree to a sole arbitrator
      within thirty (30) Days after the filing of the arbitration. For greater
      certainty, for purposes of this Article 18.2(D), the filing of the
      arbitration means the date on which the claimant's request for arbitration
      is received by the other parties to the
Dispute.

            

    

     

    
      	
               
      

            	
              (3)

            	
              Method of Appointment
      of the Arbitrators.  If the arbitration is to be
      conducted by a sole arbitrator, then the arbitrator will be jointly
      selected by the parties to the Dispute.  If the parties to the
      Dispute fail to agree on the arbitrator within thirty (30) Days after the
      filing of the arbitration, then American Arbitration Association shall
      appoint the arbitrator.

            

    

     

    If the
arbitration is to be conducted by three arbitrators and there are only two
parties to the Dispute, then each party to the Dispute shall appoint one
arbitrator within thirty (30) Days of the filing of the arbitration, and the two
arbitrators so appointed shall select the presiding arbitrator within thirty
(30) Days after the latter of the two arbitrators has been appointed by the
parties to the Dispute.  If a party to the Dispute fails to appoint
its party-appointed arbitrator or if the two party-appointed arbitrators cannot
reach an agreement on the presiding arbitrator within the applicable time
period, then the American Arbitration Association shall appoint the remainder of
the three arbitrators not yet appointed.

     

    If the
arbitration is to be conducted by three arbitrators and there are more than two
parties to the Dispute, then within thirty (30) Days of the filing of the
arbitration, all claimants shall jointly appoint one arbitrator and all
respondents shall jointly appoint one arbitrator, and the two arbitrators so
appointed shall select the presiding arbitrator within thirty (30) Days after
the latter of the two arbitrators has been appointed by the parties to the
Dispute.  If either all claimants or all respondents fail to make a
joint appointment of an arbitrator or if the party-appointed arbitrators cannot
reach an agreement on the presiding arbitrator within the applicable time
period, then American Arbitration Association shall appoint the remainder of the
three arbitrators not yet appointed.

     

    
      	
               
      

            	
              (4)

            	
              Consolidation.  If
      the Parties initiate multiple arbitration proceedings, the subject matters
      of which are related by common questions of law or fact and which could
      result in conflicting awards or obligations, then all such proceedings may
      be consolidated into a single arbitral
  proceeding.

            

    

     

    
      	
               
      

            	
              (5)

            	
              Place of
      Arbitration.  Unless otherwise agreed by all parties to
      the Dispute, the place of arbitration shall be Houston,
    Texas.

            

    

     

    
      	
               
      

            	
              (6)

            	
              Language.  The
      arbitration proceedings shall be conducted in the English language and the
      arbitrator(s) shall be fluent in the English
  language.

            

    

     

    
      	
               
      

            	
              (7)

            	
              Entry of
      Judgment.  The award of the arbitral tribunal shall be
      final and binding.  Judgment on the award of the arbitral
      tribunal may be entered and enforced by any court of competent
      jurisdiction.

            

    

     

    
      	
               
      

            	
              (8)

            	
              Notice.  All
      notices required for any arbitration proceeding shall be deemed properly
      given if sent in accordance with Article
17.

            

    

     

    
      	
               
      

            	
              (9)

            	
              Qualifications and
      Conduct of the Arbitrators.  All arbitrators shall be and
      remain at all times wholly impartial, and, once appointed, no arbitrator
      shall have any ex parte
      communications with any of the parties to the Dispute concerning
      the arbitration or the underlying Dispute other than communications
      directly concerning the selection of the presiding arbitrator, where
      applicable.

            

    

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (10)

            	
              Interim
      Measures.  Notwithstanding any requirements for
      alternative dispute resolution procedures as set forth in Articles 18 (C),
      any party to the Dispute may apply to a court for interim measures (i)
      prior to the constitution of the arbitral tribunal (and thereafter as
      necessary to enforce the arbitral tribunal’s rulings); or (ii) in the
      absence of the jurisdiction of the arbitral tribunal to rule on interim
      measures in a given jurisdiction.  The Parties agree that
      seeking and obtaining such interim measures shall not waive the right to
      arbitration.  The arbitrators (or in an emergency the presiding
      arbitrator acting alone in the event one or more of the other arbitrators
      is unable to be involved in a timely fashion) may grant interim measures
      including injunctions, attachments and conservation orders in appropriate
      circumstances, which measures may be immediately enforced by court
      order.  Hearings on requests for interim measures may be held in
      person, by telephone, by video conference or by other means that permit
      the parties to the Dispute to present evidence and
    arguments.

            

    

     

    
      	
               
      

            	
              (11)

            	
              Costs and Attorneys’
      Fees.  The arbitral tribunal is authorized to award costs
      and attorneys’ fees and to allocate them between the parties to the
      Dispute.  The costs of the arbitration proceedings, including
      attorneys’ fees, shall be borne in the manner determined by the arbitral
      tribunal.

            

    

     

    
      	
               
      

            	
              (12)

            	
              Interest.  The
      award shall include interest, as determined by the arbitral award, from
      the date of any default or other breach of this Agreement until the
      arbitral award is paid in full.  Interest shall be awarded at
      the Agreed Interest Rate.

            

    

     

    
      	
               
      

            	
              (14)

            	
              Currency of
      Award.  The arbitral award shall be made and payable in
      United States dollars, free of any tax or other
  deduction.

            

    

     

    
      	
               
      

            	
              (15)

            	
              Exemplary
      Damages.  The Parties waive their rights to claim or
      recover, and the arbitral tribunal shall not award, any punitive,
      multiple, or other exemplary damages (whether statutory or common law)
      except to the extent such damages have been awarded to a third party and
      are subject to allocation between or among the parties to the
      Dispute.

            

    

     

    
      	
               
      

            	
              (16)

            	
              Waiver of Challenge to
      Decision or Award.  To the extent permitted by law, any
      right to appeal or challenge any arbitral decision or award, or to oppose
      enforcement of any such decision or award before a court or any
      governmental authority, is hereby waived by the Parties except with
      respect to the limited grounds for modification or non-enforcement
      provided by any applicable arbitration statute or
  treaty.

            

    

     

    
      	
               
      

            	
              (E)

            	
              Confidentiality.  All
      negotiations, mediation, arbitration, and expert determinations relating
      to a Dispute (including a settlement resulting from negotiation or
      mediation, an arbitral award, documents exchanged or produced during a
      mediation or arbitration proceeding, and memorials, briefs or other
      documents prepared for the arbitration) are confidential and may not be
      disclosed by the Parties, their employees, officers, directors, counsel,
      consultants, and expert witnesses, except (in accordance with Article
      15.2) to the
      extent necessary to enforce this Article 18 or any arbitration award, to
      enforce other rights of a Party, or as required by law or pursuant to any
      rules or requirements of any government or stock exchange; provided,
      however, that breach of this confidentiality provision shall not void any
      settlement, expert determination or
award.

            

    

     

    
      	
              18.3

            	
              Expert
      Determination

            

    

     

    For any
decision referred to an expert, the Parties hereby agree that such decision
shall be conducted expeditiously by an expert selected unanimously by the
parties to the Dispute.  The expert is not an arbitrator of the
Dispute and shall not be deemed to be acting in an arbitral capacity. The Party
desiring an expert determination shall give the other parties to the Dispute
written notice of the request for such determination.  If the parties
to the Dispute are unable to agree upon an expert within ten (10) Days after
receipt of the notice of request for an expert determination, then, upon the
request of any of the parties to the Dispute, the International Centre for
Expertise of the International Chamber of Commerce (ICC) shall appoint such
expert and shall administer such expert determination through the ICC’s Rules
for Expertise.  The expert, once appointed, shall have no ex parte communications with
any of the parties to the Dispute concerning the expert determination or the
underlying Dispute.  All Parties agree to cooperate fully in the
expeditious conduct of such expert determination and to provide the expert with
access to all facilities, books, records, documents, information and personnel
necessary to make a fully informed decision in an expeditious
manner.  Before issuing his final decision, the expert shall issue a
draft report and allow the parties to the Dispute to comment on
it.  The expert shall endeavor to resolve the Dispute within thirty
(30) Days (but no later than sixty (60) Days) after his appointment, taking into
account the circumstances requiring an expeditious resolution of the matter in
dispute.  The expert's decision shall be final and binding on the
parties to the Dispute unless challenged in an arbitration pursuant to Article
18.2(D) within sixty (60) Days of the date the expert’s final decision is
received by the parties to the Dispute and until replaced by such subsequent
arbitral award. In such arbitration (i) the expert determination on the specific
matter shall be entitled to a rebuttable presumption of correctness; and (ii)
the expert shall not (without the written consent of the parties to the Dispute)
be appointed to act as an arbitrator or as adviser to the parties to the
Dispute.

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    
      	
              18.4

            	
              Waiver
      of Sovereign Immunity

            

    

     

    Any Party
that now or hereafter has a right to claim sovereign immunity for itself or any
of its assets hereby waives any such immunity to the fullest extent permitted by
the laws of any applicable jurisdiction.  This waiver includes
immunity from (i) any expert determination, mediation, or arbitration proceeding
commenced pursuant to this Agreement; (ii) any judicial, administrative or
other proceedings to aid the expert determination, mediation, or arbitration
commenced pursuant to this Agreement; and (iii) any effort to confirm, enforce,
or execute any decision, settlement, award, judgment, service of process,
execution order or attachment (including pre-judgment attachment) that results
from an expert determination, mediation, arbitration or any judicial or
administrative proceedings commenced pursuant to this Agreement.  Each
Party acknowledges that its rights and obligations hereunder are of a commercial
and not a governmental nature.

     

    ARTICLE
19

    ALLOCATION
OF COST & PROFIT HYDROCARBONS

     

    
      	
              19.1

            	
              Allocation
      of Total Production

            

    

     

    
      	
               
      

            	
              (A)

            	
              The
      total quantity of Hydrocarbons produced and measured at the delivery point
      (as determined in accordance with Article 9) from each Exploitation Area
      and to which the Parties are collectively entitled under the Contract
      shall be composed of Cost Hydrocarbons and Profit Hydrocarbons in
      accordance with the provisions of the
Contract.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Operator
      shall develop and the Operating Committee shall approve procedures for
      allocating such Cost Hydrocarbons and Profit Hydrocarbons during each
      Calendar Quarter among the individual Exploitation Areas based upon the
      following principles.

            

    

     

    
      	
               
      

            	
              (1)

            	
              Cost
      Hydrocarbons shall be allocated in the following order: (1) current period
      operating expenses, (2) current and prior period exploration expense, (3)
      development capital expenditures and (4) any unrecovered costs carried
      forward from prior period across the contract
  area.

            

    

     

    
      	
               
      

            	
              (2)

            	
              All
      allocations made pursuant to this Article 19 shall incorporate adjustments
      to reflect differences in value if different qualities of Hydrocarbons are
      produced.

            

    

     

    
      	
              19.2

            	
              Allocation
      of Hydrocarbons to Parties

            

    

     

    
      	
               
      

            	
              (A)

            	
              Cost
      Hydrocarbons and Profit Hydrocarbons allocated to Exploitation Areas
      pursuant to Article 19.1 shall be allocated to the Parties in proportion
      to their Participating Interests in each such Exploitation
      Area.

            

    

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (B)

            	
              Notwithstanding
      anything to the contrary contained in this Article 19, and to the extent
      allowed under the Contract, Cost Hydrocarbons which are not specifically
      attributable to an Exploitation Area, if any, shall be allocated to the
      Parties in proportion to their respective participation in the operations
      which underlie any such Cost Hydrocarbons, provided, however, that the
      rights of a Party to Cost Hydrocarbons or Profit Hydrocarbons from an
      Exploitation Area to which it is a participant shall not be impaired by
      the rights of any other Party to recover Cost Hydrocarbons which are not
      specifically attributable to such Exploitation
  Area.

            

    

     

    
      	
              19.3

            	
              Use
      of Estimates

            

    

     

    
      	
               
      

            	
              Initial
      distribution of Hydrocarbons pursuant to this Article 19 shall be based
      upon estimates furnished by Operator pursuant to Article 9, with
      adjustments for actual figures to be made in kind within forty-five (45)
      Days after the end of the Calendar Quarter and at any later date when
      adjustments must be made with the Government under the
      Contract.

            

    

     

    
      	
              19.4

            	
              Principles

            

    

     

    If no
allocation procedure is approved by the Operating Committee in accordance with
Article 19.1, the Parties shall nonetheless be bound by the principles set forth
in this Article 19 with regard to the allocation of Cost Hydrocarbons and Profit
Hydrocarbons.

     

    ARTICLE
20

    GENERAL
PROVISIONS

     

    
      	
              20.1

            	
              Conduct
      of the Parties

            

    

     

    
      	
               
      

            	
              (A)

            	
              Each
      Party warrants that it and its Affiliates have not made, offered, or
      authorized and will not make, offer, or authorize with respect to the
      matters which are the subject of this Agreement, any payment, gift,
      promise or other advantage, whether directly or 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, promise or advantage would violate (i) the applicable laws of
      Republic of Guinea; (ii) the laws of the country of incorporation of such
      Party or such Party’s ultimate parent company and of the principal place
      of business of such ultimate parent company; or (iii) the principles
      described in the Convention on Combating Bribery of Foreign Public
      Officials in International Business Transactions, signed in Paris on
      December 17, 1997, which entered into force on February 15, 1999, and the
      Convention’s Commentaries.  Each Party shall defend, indemnify
      and hold the other Parties harmless from and against any and all claims,
      damages, losses, penalties, costs and expenses arising from or related to,
      any breach by such first Party of such warranty.  Such indemnity
      obligation shall survive termination or expiration of this
      Agreement.  Each Party shall in good time (i) respond in
      reasonable detail to any notice from any other Party reasonably connected
      with the above-stated warranty; and (ii) furnish applicable documentary
      support for such response upon request from such other
    Party.

            

    

     

    
      	
               
      

            	
              (B)

            	
              Each
      Party agrees to (i) maintain adequate internal controls; (ii) properly
      record and report all transactions; and (iii) comply with the laws
      applicable to it.  Each Party must rely on the other Parties’
      system of internal controls, and on the adequacy of full disclosure of the
      facts, and of financial and other data regarding the Joint Operations
      undertaken under this Agreement.  No Party is in any way
      authorized to take any action on behalf of another Party that would result
      in an inadequate or inaccurate recording and reporting of assets,
      liabilities or any other transaction, or which would put such Party in
      violation of its obligations under the laws applicable to the operations
      under this Agreement.

            

    

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    
      	
              20.2

            	
              Conflicts
      of Interest

            

    

     

    
      	
               
      

            	
              (A)

            	
              Operator
      undertakes that it shall avoid any conflict of interest between its own
      interests (including the interests of Affiliates) and the interests of the
      other Parties in dealing with suppliers, customers and all other
      organizations or individuals doing or seeking to do business with the
      Parties in connection with activities contemplated under this
      Agreement.

            

    

     

    
      	
               
      

            	
              (B)

            	
              The
      provisions of the preceding paragraph shall not apply to:  (1)
      Operator’s performance which is in accordance with the local preference
      laws or policies of the Government; or (2) Operator’s acquisition of
      products or services from an Affiliate, or the sale thereof to an
      Affiliate, made in accordance with the terms of this
      Agreement.

            

    

     

    
      	
               
      

            	
              (C)

            	
              Unless
      otherwise agreed, the Parties and their Affiliates are free to engage or
      invest (directly or indirectly) in an unlimited number of activities or
      businesses, any one or more of which may be related to or in competition
      with the business activities contemplated under this Agreement, without
      having or incurring any obligation to offer any interest in such business
      activities to any Party.

            

    

     

    
      	
              20.3

            	
              Public
      Announcements

            

    

     

    
      	
               
      

            	
              (A)

            	
              Operator
      shall be responsible for the preparation and release of all public
      announcements and statements regarding this Agreement or the Joint
      Operations; provided that no public announcement or statement shall be
      issued or made unless, prior to its release, all the Parties have been
      furnished with a copy of such statement or announcement and the approval
      of at least two (2) Parties which are not Affiliates of Operator holding
      fifty percent (50%) or more of the Participating Interests not held by
      Operator or its Affiliates has been obtained.  Where a public
      announcement or statement becomes necessary or desirable because of danger
      to or loss of life, damage to property or pollution as a result of
      activities arising under this Agreement, Operator is authorized to issue
      and make such announcement or statement without prior approval of the
      Parties, but shall promptly furnish all the Parties with a copy of such
      announcement or statement.

            

    

     

    
      	
               
      

            	
              (B)

            	
              If
      a Party wishes to issue or make any public announcement or statement
      regarding this Agreement or the Joint Operations, it shall not do so
      unless, prior to the release of the public announcement or statement, such
      Party furnishes all the Parties with a copy of such announcement or
      statement, and obtains the approval of at least two (2) Parties which are
      not Affiliates holding fifty percent (50%) or more of the Participating
      Interests not held by such announcing Party or its Affiliates; provided
      that, notwithstanding any failure to obtain such approval, no Party shall
      be prohibited from issuing or making any such public announcement or
      statement if it is necessary to do so in order to comply with the
      applicable laws, rules or regulations of any government, legal proceedings
      or stock exchange having jurisdiction over such Party or its Affiliates as
      set forth in Article 15.2.

            

    

     

    
      	
              20.4

            	
              Successors
      and Assigns

            

    

     

    Subject
to the limitations on Transfer contained in Article 12, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the
Parties.

     

    
      	
              20.5

            	
              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 rights
under this Agreement unless such Party has expressly stated, in writing, that it
does waive, release or modify such right.

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

     

    
      	
              20.6

            	
              No
      Third Party Beneficiaries

            

    

     

    Except as
provided under Article 4.6 (B), the interpretation of this Agreement shall
exclude any rights under legislative provisions conferring rights under a
contract to persons not a party to that contract.

     

    
      	
              20.7

            	
              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.

     

    
      	
              20.8 

            	
              Severance
      of Invalid Provisions

            

    

    

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

     

    
      	
              20.9

            	
              Modifications

            

    

     

    Except as
is provided in Articles 11.2(B) and 20.8, there shall be no modification of this
Agreement or the Contract except by written consent of all Parties.

     

    
      	
              20.10

            	
              Interpretation

            

    

     

    
      	
               
      

            	
              (A)

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

            

    

     

    
      	
               
      

            	
              (B)

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

            

    

     

    
      	
               
      

            	
              (C)

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

            

    

     

    
      	
               
      

            	
              (D)

            	
              Article.  Unless
      otherwise provided, reference to any Article or an Exhibit means an
      Article or Exhibit of this
Agreement.

            

    

     

    
      	
               
      

            	
              (E)

            	
              Include.  “include”
      and “including”
      shall mean include or including without limiting the generality of the
      description preceding such term and are used in an illustrative sense and
      not a limiting sense.

            

    

     

    
      	
              20.11

            	
              Counterpart
      Execution

            

    

     

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

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

    
      	
              20.12

            	
              Entirety

            

    

     

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

     

    IN
WITNESS of their agreement each Party has caused its duly authorized
representative to sign this instrument on the date indicated below such
representative’s signature.

     

    
      
        
          
            	
                    SCS
      CORPORATION

                  
	 
      	 
      
	
                    By:

                  	
                    /s/ Ray Leonard

                  
	 
      	
                    Ray
      Leonard

                  
	
                    Title:

                  	
                    President
      and Chief Executive Officer

                  
	
                    Date:

                  	
                    January
      28, 2010

                  
	 
      
	
                    DANA
      PETROLEUM (E&P) LIMITED

                  
	 
      	 
      
	
                    By:

                  	
                    /s/ Stuart M. Paton

                  
	 
      	
                    Stuart
      M. Paton

                  
	
                    Title: 

                  	
                    Technical
      & Commercial Director

                  
	
                    Date:

                  	
                    January
      28, 2010  

                  

          

        

      

    

     

    
      
         

      

      
        60

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]