Document:

Exhibit 4.66

 

LHD Service Cooperation Contract

 

Party A: Tianjin New Highland Science and Technology Development Co., Ltd.

 

Party B: Hebei Daofu Petroleum Exploration Technology Development Co., Ltd.

 

On the basis of equality and voluntariness, the parties enter into this contract through friendly consultation which concerns with relevant matters that Party A shall provide three LHD units and one testing equipment to Party B, and Party B shall provide LHD technical services jointly with Party A within the specified market area. Both parties shall abide by and execute the following terms of this contract.

 

Article I.                          Scope of Cooperation

 

The cooperation with respect to the LHD technological services between Party B and Party A shall be carried out in Dagang oilfield, Huabei oilfield, Jidong oilfield, Shengli oilfield and Zhongyuan oilfield.

 

Article II.                      Term of Cooperation

 

The term of cooperation is three years, starting from January 1st, 2011 to December 31st, 2013.

 

Article III.                  Each Party’s Responsibilities

(i)                                     Party A’s Responsibilities

1.                                       Responsible for market development and technical exchange;

2.                                       Responsible for working out the construction design for each well;

3.                                       Responsible for technical guidance on on-site construction;

4.                                       Responsible for providing consumables and accessories within the consumption quota free of charge; and responsible for contacting and assigning the suppliers of consumables and accessories in case that the quantity of used consumables has exceeded the quota;

5.                                       Responsible for an annual major repair of the equipments (an annual major repair of the equipment starting from one year after the date of purchase) and bearing relevant expenses;

6.                                       Responsible for providing technical trainings and technology update;

7.                                       Responsible for supervising the quality of construction.

 

(ii)                                  Party B’s Responsibilities

1.                                       Responsible for organizing and completing construction according to the design in the area as agreed in this contract;

2.                                       Responsible for safety and environmental protection control during construction. In case there is any environmental protection issue caused by a user, Party B and the user shall settle it through consultation; Party B shall bear all the consequences of any environment protection issue attributed to itself.

3.                                       Responsible for assigning the suppliers for Party A and bearing relevant expenses in case that the quantity of used consumables and accessories has exceeded the quota;

4.                                       The equipment is owned by Party A. In case there is any damage to the equipment caused by inappropriate use , Party A shall repair it and Party B shall bear the expenses;

5.                                       Responsible for maintaining the relationship with the local network;

 

 

6.                                       Responsible for maintenance of the market and customer relationship;

7.                                       Responsible for appropriately using and preserving the equipment in accordance with the operation guidance book, and assisting Party A with the regular major repair;

8.                                       Responsible for paying the monthly minimum service fee to Party A;

9.                                       Cooperating with Party A in the technological research.

 

Article IV.                  Contract Price

Party A shall charge Party B a minimum service fee on the basis of the units provided: the annual minimum service fee for each LHD unit is RMB50, 000,000; the annual minimum service fee for each testing equipment is RMB2, 000,000.  Party B shall pay an annual minimum service fee to Party A in an amount of RMB152,000,000.  Party B shall pay the minimum service fees on a monthly basis in amount of RMB12, 667,000.

 

Article V.                      Consumption Quota for Consumables and Accessories

With respect to each unit, Party A shall provide the consumables and accessories free for charge monthly in accordance with the following quota. Any part of the following that are spared shall be owned by Party A and any additional consumption that exceeds the quota shall be purchased by Party B from the suppliers designated by Party A at the expense of Party B.

 

	
Continuous   steel pipe:
    	
3500   m
    
	
Spraying   hose:
    	
100   m
    
	
Whipstock:
    	
1
    
	
Sprinkle-nozzle:
    	
10
    
	
Cardan   shaft:
    	
1
    
	
Motor:
    	
1
    

 

Article VI.                  Liquidated Damage

If Party B fails to pay the fees on time, Party B shall pay 1‰ of the delayed payment as the liquidated damage for each day of delay.

 

Article VII.              Confidentiality

During the term of this contract, both parties are obligated to keep the information confidential including all commercial documents, technological papers, data and materials obtained from the other party and not to disclose them to any third party except required by any mandatory provisions of law.

 

Article VIII.     Upon the termination of this contract, Party A has the right of first refusal to continue the cooperation with Party B.

 

Article IX.        If upon the termination of this contract the parties cease the cooperation, Party B undertakes not to engage in the same LHD service within 6 years from the termination date of this contract. Otherwise, Party B shall compensate Party A for the relevant losses of Party A.

 

 

Article X.                     Dispute Resolution

 

Any dispute arising out of or in connection with this contract shall be resolved by Party A and Party B through consultations. In case of failure of the consultation, either party has the right to bring a suit before a people’s court with jurisdiction in the area where Party A is domiciled.

 

Article XI.                 Miscellaneous

1.             The Lateral Hydraulic Drilling Technological Service Contract dated August 25, 2010 between Tianjin New Highland Science and Technology Development Co., Ltd. and Hebei Daofu Petroleum Exploration Technology Development Co., Ltd. is terminated upon the effective date of this contract.

2.             With respect to any unsettled issues or amendment, it shall be determined by the parties in the form of supplementary agreement through consultation which shall be in equal force with this contract.

3.             This contract is made in four copies with each party holding two copies which have equal legal force.

 

Party A: Tianjin New Highland Science and Technology Development Co., Ltd.

 

/company seal/

 

Legal representative or authorized representative:

 

Party B: Hebei Daofu Petroleum Exploration Technology Development Co., Ltd.

 

/company seal/

 

Legal representative or authorized representative:

 

Date: December 30, 2010Exhibit 4.67

 

LHD Unit Supply Contract

 

The Principal: Tianjin New Highland Science and Technology Development Co., Ltd. (hereinafter referred to as Party A)

The Agency: Dongying Luda Petrochemical Equipment Co., Ltd. (hereinafter referred to as Party B)

Place of Signature: Tianjin

Date of Signature: December 1, 2010

 

According to the “Contract Law of the People’s Republic of China” as well as other relevant laws and regulations, on the basis of equality and volition, the Parties agree to reach the following agreement on the appointment from Party A to Party B as to the purchase of long-distance hydraulic perforating drill:

 

Article 1 Scope of Appointment

 

Party B agrees to buy ten (10) sets of drills on behalf of Party A.

 

Article 2 Requirements for the drill and the ancillary equipment

 

A. Unit Speification: suit of Jet-DrillTM Semi Enclosed Skid Shallow Well Unit; and suit of Jet-DrillTM Semi Enclosed Skid Deep Well Unit.

 

B. Party B shall be responsible for the assembly, coordination and testing of the drilling equipment.

 

Article 3 Contract Price

 

The price of each set of the drill is RMB¥43,700,000.00). The total contract price for ten drills is RMB¥437,000,000.00);

Date of Delivery: the drills shall be delivered by three (3) batches:

The 1st batch: 1-2 drills shall be delivered before March 25, 2011;

The 2nd batch: 3-6 drills shall be delivered before July 25, 2011;

The 3rd batch: 7-10 drills shall be delivered before December 25, 2011.

Place of Delivery: Tianjin, all costs related to delivery shall be borne by Party B.

 

Article 4 Payment Terms

 

Payment shall be made on a progressive basis:

A. Party A shall pay Party B the initial amount of RMB262,200,000.00, which is sixty (60) percent of the total contract price, within fifteen (15) days of the signing of this Contract;

 

 

B. Within one (1) month prior to the delivery of the 1st batch of the drills, Party A shall pay Party B the second payment of RMB26,220,000.00 which is thirty (30) percent of the price of the 1st batch of the drills; and within thirty (30) days after the drills are inspected and accepted, Party A shall pay Party B the amount of RMB8,740,000.00 which is ten (10) percent of the price of the 1st batch of the drills;

 

C. Within one (1) month prior to the delivery of the 2nd batch of the drills, Party A shall pay Party B the third payment of RMB52,440,000.00 which is thirty (30) percent of the price of the 2nd batch of the drills; and within thirty (30) days after the drills are inspected and accepted, Party A shall pay Party B the amount of RMB17,480,000.00 which is ten (10) percent of the price of the 2nd batch of the drills;

 

D. Within one (1) month prior to the delivery of the 3rd batch of the drills, Party A shall pay Party B the fourth payment of RMB52,440,000.00 which is thirty (30) percent of the price of the 3rd batch of the drills; and within thirty (30) days after the Units are inspected and accepted, Party A shall pay Party B the amount of RMB17, 480,000.00 which is ten (10) percent of the price of the 3rd batch of the drills.

 

Article 5 Term of Entrustment

 

The term of entrustment shall last from December 1, 2010 to December 31, 2011.

 

Article 6 Transfer of Delegation

 

Party B may not delegate its obligations under this agreement to any third person.

 

Article 7 Inspection

 

Party A shall appoint a representative to inspect the units upon delivery of the equipment by Party B. The appointed representative shall sign on the bill of lading after inspection to confirm that all requirements are met. Party B has the obligation to assist Party A in making claims against the supplier if any defects in quality are discovered during the inspection.

 

Article 8 Party A’s Rights and Obligations

 

A. The right to acquire the drill equipment purchased by Party B for Party A under the Contract;

 

B. The right to be informed of the progress of the affairs entrusted to Party B;

 

C. Party A may not enter into private deals with clients introduced by Party B during the term of entrustment or within three (3) months after the expiration of the term;

 

 

D. Party A shall pay to Party B the contracted price after the Party B has fulfilled its obligations.

 

Article 9 Party B’s Rights and Obligations

 

A. The right to handle relevant procedures for the purchased Units, to complete the agency services under this Contract in a timely manner and to charge the contracted price;

 

B. Party B shall keep Party A informed of all details on the Units in a timely manner so as to protect Party A’s rights, and may not damage Party A’s interests by providing fraudulent information to Party A, withhold information on the actual circumstances of Party B, or conspire with other parties;

 

C. The warranty period for the purchased units is twelve (12) months from the acceptance date of the Units. Party B shall provide free repair and maintenance services on the purchased Units to Party A during the aforementioned warranty period;

 

D. Upon the signing of the Contract, Party B shall not charge Party A for any fees other than the contract price provided herein.

 

Article 10 Default Liability

 

A. Party A shall pay Party B liquidated damages at the daily rate of 1/10000 of the delayed payment in the case that Party A fails to make the payments as stipulated in the Contract;

 

B. Party B shall pay Party A liquidated damages at the daily rate of 1/10000 of the value of the delayed delivery in the case that Party B fails to deliver the purchased drills as stipulated in the Contract.

 

Article 11 Amendment and Termination of the Contract

 

Any Party who wishes to change the terms and conditions of this contract during the period of enforcement shall issue a notice in writing to the other Party. The terms and conditions may be changed or a supplementary agreement may be signed with the consent of the other Party within a period agreed upon by both Parties. The amended terms shall be duly noted.

 

Any supplementary agreements or other written documents signed by both Parties during the execution of the Contract shall constitute a part of this Contract with an equal legal effect.

 

 

Article 12 Dispute Resolution

 

All disputes arising from the execution of or in connection with the Contract shall be settled through friendly consultation between both Parties. In the case that no settlement can be reached between the two Parties, either Party can file a law suit with the competent people’s court that has jurisdiction in Tianjin.

 

Article 13 Miscellaneous

 

This Contract is made in two copies, with each Party holding one copy, and shall enter into effect upon the execution and affixation with seals by both Parties.

 

 

Party A (Seal): Tianjin New Highland Science and Technology Development Co., Ltd.

	
Authorized   Representative:
    	
 
    
	
/s/Guoqiang Xin
    	
 
    
	
/company seal/
    	
 
    

 

 

Party B (Seal): Dongying Luda Petrochemical Equipment Co., Ltd.

	
Authorized   Representative:
    	
 
    
	
/s/Xinkuan Quan
    	
 
    
	
/company seal/

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