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West Bay Belize Ltd. 11/3/2003



PRODUCTIONSHAIDNGAGREEMENT

THIS AGREEMENT, made and entered into this i~ day of l!.9~k~f. of 2003, by and

between the GOVERNMENT OF BELIZE, (hereinafter referred to as the "Government") acting

tl-M-ough the Minister of Natural Resources, the Environment, Commerce & Industry and

ROBERT E. TUCKER TR. OF WEST BAY EXPLORATION CO., A US COMPANY,

PARENT OF WEST BAY BEUZE UMITED, OF 15 SWASEY STREET, BELMOPAN

CITY, BEUZE C.A. a corporation incorporated under the Companies Act, Chapter 250,

Substantive Laws of Belize, Revised Edition 2000 (hereinafter referred to as the "Contractor").

WHEREAS, the entire property in, and control over all Petroleum resources in or under the

territory of Belize is vested in the Government on behalf of Belize;

AND WHEREAS, no petroleum operations shall be conducted in Belize by any person other

than the Government unless such person has entered into a contract in accordance with the

Petroleum Act Chapter 225 Substantive Laws of Belize, Revised Edition 2000;

AND WHEREAS, the Government wishes to promote the exploration for and production of the

petroleum resources in and throughout the contract area, and the Contractor desires to join and

assist the Government in accelerating the exploration for and production of the petroleum

resources within the contract area;

AND WHEREAS, the Contractor represents that it has the financial resources, technical

competence and professional skills necessary to carry out the petroleum operations hereinafter

described;

AND WHEREAS, the Contractor understands that successful implementation of contractor's

rights and obligations hereunder may involve cross-border hydrocarbon deposits and concomitant

Joint Development Agreement(s) GDAs);

AND WHEREAS, the Government and the Contractor agree that this Agreement is in

compliance with all Belize statutes, regulations and laws which govern or regulate the exploration,

development and production of petroleum in Belize;

AND WHEREAS, the Government and the Contractor agree that this Agreement is bound by all

Belize statutes, regulations and laws which govern or regulate the exploration, development and

production of petroleum in Belize which are in effect at the time this Agreement was signed;

AND WHEREAS, the Government and the Contractor agree that this Agreement was freely

negotiated at arms length;



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AND WHEREAS, both the Government and the Contractor were represented by legal counsel

with respect to the drafting and negotiation of this Agreement;

AND WHEREAS, the Government and the Contractor agree that the geographic area covered

under this Agreement is that of Block(s) 1 referenced by coordinates in exhibit A, attached hereto,

and a map exhibit B, attached hereto;

AND WHEREAS, the Government has accepted the application for Block(s) 1 made by

ROBERT E. TUCKERJR. OF WEST BAY BEliZE UMITED and submitted to the Geology

& Petroleum Department;

AND WHEREAS, the award of Block(s) 1 is dependent on, inter alia, success of negotiation

process and approval of project proposal (work programme) including applicable Environmental

Studies.

NOW, THEREFORE, THE PARTIES HERETO HEREBY AGREE AS FOLLOWS:



ARTICLE I

Definitions



1.1



In this Agreement, the following terms shall have the following

meanmgs:



1.1.1



"affiliated company" means any entity directly or indirectly

effectively controlling, or effectively controlled by, or under direct

or indirect effective common control of, a specified entity. For the

purposes of this definition, "control", when used with respect to any

specified entity, means the power to direct, administer and dictate

policies of such entity (it being understood and agreed that it is not

necessary to own directly or indirectly fifty percent (50%) or more

of such entity's voting securities to have effective control over such

entity, but ownership, direct or indirect, of fifty percent (50%) or

more of such entity's voting securities shall automatically indicate

effective control), and the terms "controlling" and "controlled" have

meanings corresponding to the foregoing;



1.1.2



"appraisal well" means a well drilled within the contract area,

following a discovery, for the purpose of delineating the petroleum

reservoir(s) to which the discovery relates in terms of thickness and

lateral extent and estimating the quantity of recoverable petroleum

therein;



1.1.3



"barrel" means a quantity or unit of crude oil equal to 158.9874



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liters (forty-two (42) United States gallons) at a temperature of sixty

(60) degrees Fahrenheit (15.56 degrees Centigrade) under one

atmosphere of pressure;

1.1.4



"calendar year" means a period of twelve (12) consecutive months,

according to the Gregorian Calendar, starting with the 1st ofJanuary

and ending with the 31 st of December;



1.1.5



"calendar month" or "month" means any of the twelve (12) months

of the calendar year;



1.1.6



"commercial discovery" means a discovery of petroleum which can

be exploited commercially in accordance with accepted practices in

the international petroleum industry;



1.1.7



"continental shelf' means the part of the seabed and subsoil of the

submarine areas adjacent to the coast of Belize, but outside the

territorial waters, over which Belize is entitled by international law

to exercise sovereign rights for the purposes of exploring and

exploiting its natural resources;



1.1.8



"contract area" means a geographical area which is covered by the

contract; and includes the whole of, or such part or parts of, the

original area awarded to a Contractor which shall remain at the

disposal of such Contractor from time to time pursuant to the tenns

of the contract;



1.1.9



"contract year" means a period of twelve (12) consecutive calendar

months, counted from the first day of the first calendar month

following the effective date of this Agreement or from the

anniversary of such first day of such month;



1.1.10



"Contractor" means any person with whom the Government enters

into a contract and includes his agents, representatives and

asSIgnees;



1.1.11



"crude oil" means petroleum which is in liquid state at the well head

or gas/oil separator or which is extracted from natural gas, including

distillate and condensate;



1.1.12



"day" means a calendar day unless otherwise provided herein;



1.1.13



"delivery point" means the FOB point of export in Belize or such

other point which may be agreed between the Government and the



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West Bay Belize Ltd. 11/3/2003



Contractor;

1.1.14



"development and production operations" means operations for or

in connection with the production of petroleum;



1.1.15



"development and production period" means the period referred to

in paragraph 3.4;



1.1.16



"discovery" in relation to petroleum, means petroleum not

previously known to have existed, recovered at the surface in a flow

measurable by conventional petroleum industry testing methods;



1.1.17



"effective date" means the date first above written;



1.1.18



"exploration expenditures" shall mean expenditures made in

conducting exploration operations hereunder, but excluding

expenditures made within the area of a field after a commercial

These expenditures shall be

discovery has been declared.

determined in accordance with the Income and Business Tax Act,

Chapter 55, Substantive Laws of Belize, Revised Edition 2000;



1.1.19



"exploration operations" means operations for or in connection

with exploration for petroleum;



1.1.20



"exploration period" means the period referred to in paragraph 3.1;



1.1.21



"exploration well" means a well other than an appraisal well drilled

in the course of exploration operations;



1.1.22



"field" means an area, as designated by agreement between the

Government and the Contractor, where a commercial discovery of

crude oil or natural gas has been declared;



1.1.23



"gross revenues" means the sum of all proceeds of sales and the

monetary equivalent of the value of other dispositions of petroleum

produced and saved and not used in petroleum operations and any

other proceeds derived from petroleum operations;



1.1.24



"income tax" means that tax imposed on net income pursuant to

the Income and Business Tax Act Chapter 55 Substantive Laws of

Belize, Revised Edition 2000;



1.1.25



"initial commercial production" means the date on which the first

regular shipment of crude oil or natural gas, or both, is made from a



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West Bay Belize Ltd. 11/3/2003



field under a program of regular production and sale;

1.1.26



"Inspector" means the Inspector of Petroleum appointed under

section 4 of the Petroleum Act, Chapter 225 of the Substantive

Laws of Belize, Revised Edition 2000 or any officer of the Geology

& Petroleum Department duly designated in that behalf;



1.1.27



"maximum efficient rate" means the maximum rate of production

of crude oil in a field, without excessive rate of decline of

production or excessive loss of reservoir pressure, and in

accordance with generally accepted practices in the international

petroleum industry and the provisions of paragraph 6.3;



1.1.28



"Minister" means the Minister responsible for petroleum affairs in

the Government of Belize;



1.1.29



"natural gas" means all petroleum which at atmospheric conditions

of temperature and pressure is in a gaseous state, and includes wet

mineral gas, dry mineral gas, wet gas and residue gas remaining after

the extraction, processing or separation of liquid petroleum from

wet gas, as well as non-petroleum gas or gases produced in

association with liquid or gaseous petroleum;



1.1.30



"net petroleum" means the value of the total quantity of petroleum

produced and saved in a given calendar year and not used in

petroleum operations after deductions of the value of the royalties

made in such calendar year and after recovery of petroleum

operations expenditures pursuant to paragraph 9.1;



1.1.31



"net taxable income" means net taxable income as determined in

accordance with the provisions of the Income and Business Tax

Act, Chapter 55, of the Substantive Laws of Belize, Revised Edition

2000;



1.1.32



"petroleum" means all natural organic substances composed of

carbon and hydrogen; and includes crude oil and natural gas, and

all other mineral substances, products, by-products and derivatives

that are found in conjunction with petroleum;



1.1.33



"Petroleum Act" means the Petroleum Act, Chapter 225

Substantive Laws of Belize, Revised Edition 2000, and any

subsidiary legislation made thereunder;



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West Bay Belize Ltd. 11/3/2003



1.1.34



"petroleum operations" means the operations related to the

exploration, development, extraction, production, field separation,

transportation, storage, sale or disposal of petroleum; but does not

include any transportation or other operations (i) beyond the point

of export; or (ii) in the case of petroleum which is processed within

Belize, beyond the point of entry into a refinery or liquefaction or

natural gas treatment plant;



1.1.35



"petroleum operations expenditures" shall mean expenditures

incurred in conducting petroleum operations hereunder,

determined in accordance with the Income and Business Tax Act,

Chapter 55 of the Substantive Laws of Belize, Revised Edition

2000;



1.1.36



"PSA" means Production Sharing Agreement;



1.1.37



"royalty" means the royalty or production payment described

Article VIII;



1.1.38



"quarter" means a period of three (3) consecutive months

commencing with the first day ofJanuary, April, July and October,

respectively, of each calendar year;



1.1.39



"well" means any opening in the ground made or being made by

drilling or boring, or in any other manner, in connection with

exploration operations or development and production operations,

other than a seismic hole;



1.1.40



"work programme" means an itemized statement of the petroleum

operations to be carried out in the contract area in each calendar

year, or to be carried out for specific activities such as drilling of

exploration wells and appraisal wells and development

programmes, all in a form acceptable to the Government;



1.1.41



"work programme budget" means the estimate of the costs of all

items included in the corresponding work programme, including

both capital and operating budgets, all in a form acceptable to the

Government.



III



ARTICLE II

Grant of Rights to

the Contractor



2.1



The Government gTants to the Contractor, subject to the terms and

conditions set forth in this Agreement, the exclusive right to

conduct petroleum operations within the contract area for the term



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of this Agreement. Except as provided in paragraph 11.3, the

Contractor shall have the right, during the term of this Agreement,

to freely lift, dispose of and export its share of the petroleum

produced hereunder.

2.2



Title to petroleum to which the Contractor is entitled hereunder

shall pass to the Contractor at the delivery point.



2.3



The Contractor shall, except as expressly otheIWise provided in this

Agreement, conduct all petroleum operations hereunder at his sole

risk, cost and expense. The Contractor shall look only to the

petroleum to which he is entitled under this Agreement to recover

such costs and expenses, and such petroleum shall be the

Contractor's sole source of compensation thereunder.



2.4



The Contractor shall be responsible to the Government for the

execution of all petroleum operations in accordance with the

provisions of this Agreement. Without prejudice to the Contractor's

position as an independent contractor hereunder, the extent and

character of such work to be done by the Contractor shall be

subject to the general supervision, review and approval of the

Government to which the Contractor shall report and be

responsible as herein set forth. Government approval, as required

pursuant to any provision of this Agreement, shall not be

unreasonably withheld, and unless specified to the contrary in this

Agreement, Government approval will be deemed given if the

Government has not responded to the Contractor in writing within

thirty (30) working days of Contractor's compliance with any

provision of this Agreement.



2.5



The Contractor is authorized to construct pipelines, bridges, ferries,

landing fields, radio, telephone, facsimile and related

communication systems as may be necessary for petroleum

operations but subject to the laws in force in Belize from time to

time for the regulation and control of such installations and their

construction. In the event that the laws or regulations of Belize

change (after the signing of this Agreement) in any manner that

frustrates the purpose of this Agreement, the Government agrees to

use best efforts to take any action necessary to effectuate the

purpose of this Agreement.



2.6



The Government reserves the right to grant licenses to others to

prospect for, explore for and mine minerals other than

hydrocarbons including petroleum within the contract area, and



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West Bay Belize Ltd. 11/3/2003



further reserves to itself the right to so prospect, explore and mine

directly, all subject to the provisions of paragraph 5.3.

ARTICLE III

Term



3.1



The Contractor is authorized to conduct exploration operations

during an exploration period which shall be comprised (i) an initial

exploration period of two (2) contract years ("Initial Exploration

Period"), and (ii) subject to the conditions hereinafter provided,

three (3) successive renewal periods ("First Renewal Period",

"Second Renewal Period" and "Third Renewal Period") of two (2)

years each to the initial exploration period. Such renewal periods

shall be granted to the Contractor upon the Contractor's request

delivered to the Government in writing not later than ninety (90)

days prior to the expiration of the then current period, subject to

the Contractor having fulfilled his obligations hereunder for the

then current period, including the relinquishment provisions of

Article IV, and having submitted with such application a work

programme and work programme budget for the period of renewal

which is consistent with the undertakings set forth in paragraph 6.1.



3.2



If at the end of the exploration period, no commercial discovery

has been made in any part of the contract area, this Agreement shall

automatically terminate in its entirety, provided, however, that the

Government undertakes to grant an extension for such period, and

for such area as may be necessary, in the opinion of the

Government and the Contractor, (i) for the Contractor to complete

the drilling, testing, appraisal or plugging of any well actually being

drilled, tested, appraised or plugged at the end of the exploration

period and (ii) for the Government and the Contractor to

determine that a discovery resulting from such a well is a

commercial discovery pursuant to paragraphs under 6.2.



3.3



If a commercial discovery is made in any portion of the contract

area during the exploration period, the Contractor will commence

development and product operations in that particular portion of

the contract area.



3.4



In the event of a commercial discovery, the extent of the area

capable of production of petroleum from the formation or

formations so identified shall be determined in accordance with the

provisions of the paragraphs under 6.2 or Article XIV. The area so

determined shall thereupon be converted automatically into a field,



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West Bay Beh"ze Ltd. 11/3/2003



with effect from the date of the declaration of the commercial

discovery. The term of the development and production period for

each field shall extend for twenty-five (25) contract years from the

first day of the calendar year commencing after the date of the

declaration of the commercial discovery therein.



ARTICLE IV

Relinquishment



4.1



On or before the end of the initial exploration period, the

Contractor shall relinquish twenty-five percent (25%) of the original

contract area.



4.1.2



On or before the end of the first renewal period the Contractor

shall relinquish an additional twenty-five percent (25%) of the

original contract area.



4.2



On or before the end of the second renewal period the Contractor

shall relinquish an additional area equal to twenty-five percent

(25%) of the original contract area.



4.3



At the end of the exploration period, the Contractor shall relinquish

the remainder of the original contract area not then converted to a

field.



4.4



The size and shape of the portion or portions to be relinquished

shall be determined by the Contractor, provided however, that (a)

the Contractor shall advise the Government at least ninety (90) days

in advance of the date of relinquishment of the description and area

of the portion or portions to be relinquished, (b) the Contractor

shall consult with the Government regarding the shape and size of

each individual portion of the areas being relinquished, (c) the area

being relinquished shall not be divided into more than two portions,

each of which shall be comprised of, and be defined by reference

to, blocks as described in Exhibit B, save where no such area or

areas can be identified for relinquishment in accordance with this

paragraph without including in such area or areas in whole or in

part a field or area in which a discovery has been made which the

Contractor is not otherwise required to relinquish hereunder, and

(d) each such relinquished, individual portion shall be not less than

twenty percent (20%) of the area being relinquished at such time

with sides parallel to the boundaries of the original contract area, to

the extent that the boundaries of the original contract area permit,

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West Bay Belize Ltd. 11/3/2003



and with the longest side not more than three times as long as the

shortest side, and shall in any event be of sufficient size and

convenient shape to enable petroleum operations to be conducted

thereon or thereunder.



..



4.5



The Contractor shall not be obliged to relinquish, pursuant to

paragraphs 4.1 and 4.2, any part of the original contract area which

has been converted to a field or in which a discovery has been made

which the Contractor is not otherwise required to relinquish

hereunder.



4.6



Upon at least ninety (90) days written notice to the Government

prior to the end of any contract year, the Contractor shall have the

right to relinquish all or any portion of the contract area effective as

of the end of such contract year, subject to the provisions of

paragraph 4.4, and such portion shall then be credited against that

portion of the contract area which the Contractor is next required to

relinquish pursuant to the provisions of paragraphs 4.1 and 4.2.



4.7



No relinquishment made in accordance with this Article IV shall

relieve the Contractor of: (a) its obligations to make payments due

as a result of surface rentals prior to the effective date of any such

relinquishment, or (b) the minimum work and expenditure

commitments undertaken pursuant to paragraphs 6.1.1 and 6.1.2.



4.8



Upon relinquishment of any area, the Contractor shall perform all

necessary clean-up activities in accordance with generally accepted

practices in the international petroleum industry, and shall take all

other action necessary to prevent hazards to human life or third

party property.

ARTICLE V



General Obligations

of the Contractor



5.1



The Contractor shall be responsible for conducting all petroleum

operations within the contract area diligently, expeditiously and

efficiently in accordance with generally accepted practices in the

international petroleum industry and the environmental laws of

Belize and pursuant to work programmes approved in accordance

with paragraph 5.4. The Contractor shall ensure that all equipment,

materials, supplies, plant and installations used by himself, and his

contractors and subcontractors comply with generally accepted

standards in the international petroleum industry and are of proper

construction and kept in optimal working order.



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5.2



5.3



Except as otheIWise provided

shall:



In



this Agreement, the Contractor



(a)



advance all necessary funds and purchase or lease all

equipment, materials and supplies required to be purchased

or leased in connection with petroleum operations;



(b)



furnish all the technical expertise and assistance, including

foreign personnel, required for the conduct of petroleum

operations;



(c)



furnish all other funds for the performance of petroleum

operations as may be required, including payment to foreign

entities that perform services as contractors or

subcontractors to the Contractor;



(d)



appoint a local representative and in his absence, a

replacement therefor, with respect to this Agreement, who

shall have an office and be resident in Belize and who shall

have full authority to represent the Contractor for all

purposes of this Agreement and whose name shall, on

appointment within ninety (90) days after the effective date,

be made known to the Government;



(e)



provide acceptable working conditions and living

accommodations, and access to medical attention and

nursing care, for all personnel employed by him , his

contractors and subcontractors in petroleum operations; and



(0



pay social security for all employees as per the Laws of

Belize.



If, after the effective date, others are granted licenses within the

contract area authorizing prospecting for, exploration for or mining

of any minerals or other substances other than petroleum, or the

Government proceeds with such prospecting, exploration or mining

directly in its own behalf, the Contractor shall use his best efforts to

avoid obstruction or interference with such licensee's or

Government's operations within the contract area.

The

Government shall use its best efforts to ensure that operations of

third parties do not interfere with the Contractor's petroleum

operations within the contract area. Additionally, at the request of

the Contractor the Government shall notify Contractor (and

provide Contractor the name, phone number, and address) of any



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companies which are granted licenses authorizing them to prospect

for, explore for or mine any minerals in the contract area.

5.4



(a)

At least ninety (90) days prior to the beginning of each

calendar year, or at such other time as is mutually agreed by the

parties, the Contractor shall prepare and submit for approval to the

Government an annual work programme and work programme

budget of petroleum operations and petroleum operations

expenditures by quarters for the contract area setting forth the

petroleum operations the Contractor proposes to carry out during

the ensuing calendar year. Such annual work programmes and

work programme budgets shall comply with the minimum work and

expenditure obligations described in paragraphs 6.1. Approval by

the Government of the proposed annual work programme budget

of petroleum operations and petroleum operation expenditures will

not be unreasonably withheld or delayed. The Government and

the Contractor shall have reached agreement upon an annual work

programme and work programme budget for the period from the

effective date until the end of the calendar year in which the

effective date falls or for the ensuing calendar year if the effective

date falls after the 30th day of September.

(b)

Should the Government wish to propose revisions to the

annual work programme or work programme budget, it shall within

thirty (30) days after receipt thereof so notify the Contractor

specifying in reasonable detail its reasons therefor. Promptly

thereafter the parties shall meet and endeavor to agree on the

revisions proposed by the Government. If the Contractor and the

Government fail to agree upon any revisions proposed by the

Government within sixty (60) days of the receipt of the Contractor's

proposals, the points of disagreement shall be resolved as follows:

(i)



all other aspects of the annual work programme and work

programme budget to which the Government proposes

revisions shall be mutually agreed before such aspects of the

annual work programme and work programme budget shall

be adopted.



(c)

It is recognized by the parties that the details of an annual

work programme may require changes in light of then existing

circumstances. In such event, the Contractor may introduce such

changes as may be necessary, following consultation with the

Government, but subject to the following:



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(i)

in the case of changes to an annual work programme

and work programme budget which relate to exploration

operations, such changes may be implemented to the extent

that they are not inconsistent with the undertakings set forth

in paragraph 6.1 or the general objective of such annual

work programme;

(ii)

in the case of changes to an annual work programme

and work programme budget which relate to the

development of a field, such changes may be implemented

to the extent that they are not inconsistent with the

applicable development work programme and work

programme budget adopted pursuant to paragraph 6.2 or

the general objective of such annual work programme;

(iii)

all other changes may be notified in writing to the

Government and shall be mutually agreed before they may

be implemented.

(d)

To the maximum extent practicable, the Contractor shall

involve representatives of the Government in the preparation of the

annual work programme and work programme budget.

(e)

Within thirty (30) days after the end of each quarter, the

Contractor shall submit to the Government a report describing and

summarizing petroleum operations carried out, and petroleum

operations expenditures incurred during such quarter. Such report

shall be in a form acceptable to the Government.



ARTICLE VI

Minimum Work

and Expenditure

Obligations



6.1



The Contractor shall commence petroleum operations hereunder

not later than ninety (90) days after the effective date.



Exploration Period



6.1.1



The amount to be expended by the Contractor in conducting

exploration operations in accordance with approved work

programmes during the exploration period, shall not be less than

the following as adjusted pursuant to paragraph 6.1.4.



6.1.1.1



Initial Exploration Period:



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West Bay Belize Ltd. 11/3/2003



(a) First contract year $50,000.00 US$

(b) Second contract year $100,000.00 US$

6.1.1.2



First renewal period (if requested by the Contractor pursuant to

paragraph 3.1):

(a) First contract year $ 200,000.00 US$

(b) Second contract year $ 400,000.00 US$



6.1.1.3



Second renewal period (if requested by the Contractor pursuant to

paragraph 3.1):

(a) First contract year $ 800,000.00 US$

(b) Second contract year $800,000.00 US$



6.1.1.4



Third renewal period (if requested by the Contractor pursuant to

paragraph 3.1):

(a) First contract year $1,000,000.00 US$

(b) Second contract year $1,000,000.00 US$



6.1.2



The Contractor undertakes to carry out and comply with the



following minimum work commitments.





6.1.2.1



Initial exploration period:



INITIAL PERIOD



(a) First contract year:



Acquire and/or reprocess geophysical data, which may include

seismic, gravity, alo magnetic in any combination. Acquire air

photos in PSA area.

INITIAL PERIOD

(b) Second contract year:



Interpret geophysical data, and interpret petrophysical data on

existing wells inside and immediately adjacent to PSA area.



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Perform geomorphic analysis.

6.1.2.2



FIRST RENEWAL PERIOD

First renewal period (if requested by the Contractor pursuant to

paragraph 3.1):

Combine geophysical, petrophysical, and geological information

into a complete integrated interpretation.

Acquire additional geophysical data as required by integrated

interpretation.



6.1.2.3



SECOND RENEWAL PERIOD

Second 'renewal period (if requested by the Contractor pursuant to

paragraph 3.1):

Drill initial test well.

Perform additional exploratory drilling as required.



6.1.2.4



THIRD RENEWAL PERIOD

Third renewal period (if requested by the Contractor pursuant to

paragraph 3.1):

Perform additional drilling as required.

Perform additional drilling as required.



6.1.3



-



If, during any contract year in the exploration period, the

Contractor should expend more than the required minimum

annual exploration expenditures, the Contractor may subtract an

amount equal to the excess amount spent from the required

minimum exploration expenditures for the ensuing contract year in

the exploration period. If works carried out in any contract year

exceed the minimum work commitment relating to such contract

year as provided in paragraph 6.1.2, the excesses will count towards

the satisfaction of the minimum work commitments for the ensuing

contract year.

Compliance with the required minimum exploration expenditures

for a given contract year shall not relieve the Contractor of his

obligation to comply with the required minimum work



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commitment, nor shall compliance with the required mInImUm

work commitment for a given contract year relieve the Contractor

of his obligation to comply with the required minimum exploration

expenditures for such contract year.

Security



6.1.4



(a) Within ninety (90) days of the effective date and where this

Agreement has been extended pursuant to Regulation 9 of the

Belize Petroleum Regulation S.l. No. 112 of 1992, and within thirty

(30) days of each extension period, the Contractor shall provide

security by means of a bank guarantee, in a form substantially

similar to that set forth in Exhibit C, equal to the total potential

penalties for the initial exploration period, or, as the case may be,

for the first, second and third renewal periods, as set forth in

Upon prior confirmation by independent

paragraph 6.1.1.

accounts acceptable to both the Contractor and the Government of

the exploration expenditures actually incurred, such security shall

be reduced at the end of each contract year in the exploration

period to the extent that the Contractor has spent the prescribed

minimum amounts stipulated in paragraph 6.1.1, provided that the

outstanding balance shall not be less than the required minimum

exploration expenditures for the remaining contract year of the

exploration period in question, as stipulated in paragraph 6.1.1 and

as adjusted pursuant to paragraph 6.1.4.

(b) If, at the expiration of the exploration period, or upon the date

of termination of this Agreement, or upon relinquishment of the

entire contract area by the Contractor pursuant to paragraph 4.6,

whichever first occurs, the Contractor has not expended for

exploration operations sums at least equal to the total minimum

exploration expenditures, as adjusted, required hereunder, the

balance of the security corresponding to the unexpended minimum

exploration expenditures, as adjusted automatically shall be paid to

the Government.



(c) If, at the end of any contract year in the exploration period, the



Contractor has not expended for exploration operations sums at

least equal to the minimum exploration expenditures, as adjusted,

required hereunder for such contract year, a portion of the security

corresponding to the unexpended minimum exploration

expenditures, as adjusted, for such contract year automatically shall

be paid to the Government.

Discovery and

Development Period



6.2



The terms and



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conditions



relating to



the



discovery and



West Bay Belize Ltd. 11/3/2003



development period shall be as follows:

6.2.1



When in the course of petroleum operations, a discovery of

petroleum is made, the Contractor shall immediately notify the

Government in writing accordingly, specifying in such notice all

pertinent information concerning the discovery.



6.2.2



If the Contractor determines to conduct a drill-stem or production

test, in open hole or through perforated casing, with regard to the

discovery, he shall notify the Government that a drill-stem or

production test will be made within twenty-four (24) hours of the

time that such proposed test has been called, and the Government

shall have the right to have a representative present during such test.

Not later than ninety (90) days after completion of such test or tests,

the Contractor shall complete the analysis and interpretation of the

data resulting from such test and submit a report to the

Government which shall contain copies of such data and its analysis

and interpretation thereof, and which shall also contain a written

notification of whether or not, in the Contractor's opinion, such

discovery is of potential commercial interest. If the Contractor

plugs and abandons the well which encountered such discovery

without conducting a drill stem or production test, or fails to

conduct a drill stem or production test with respect to such

discovery within one hundred and eighty (180) days from the date

on which such discovery has been made, it shall be deemed to have

notified the Government that, in the Contractor's opinion, such

discovery is not of potential commercial interest.



6.2.3



If, pursuant to paragraph 6.2.2, the Contractor notifies, or is

deemed to have notified, the Government that such discovery is not

of potential commercial interest, the Government shall have the

option, exercisable by notice in writing to the Contractor, to require

the Contractor to relinquish the area corresponding to such

discovery and forfeit any rights relating to such discovery and any

production therefrom. The area subject to relinquishment shall not

exceed the prospective producing area determined by taking into

account the area of the structural closure of the prospective horizon

and other relevant technical factors. Any such relinquishment by

the Contractor of the area relating to such discovery before the end

of the exploration period shall be carried out in accordance with

paragraphs 4.4, 4.6 and 4.8.



6.2.4



If, pursuant to paragraph 6.2.2, the Contractor notifies the

Government that the discovery is of potential commercial interest,

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West Bay Beljze Ltd. 11/3/2003



the Contractor shall promptly prepare and submit for approval to

the Government a reasonable work programme and work

programme budget for the appraisal of such discovery. Such

appraisal work programme and work programme budget shall

include a complete programme of appraisal operations necessary to

determine whether such discovery is a commercial discovery.

6.2.5



Within fifteen (15) days after the submission of the appraisal work

programme and work programme budget pursuant to paragraph

6.2.4, the Contractor and the Government shall meet with a view to

adopting such work programme and work programme budget or

mutually agreeing upon amendments or additions thereto. Failing

agreement between the Contractor and the Government as to such

work programme and work programme budget at such meeting, or

within fifteen (15) days thereafter, the original appraisal work

programme and work programme budget submitted by the

Contractor, revised in accordance with any agreed amendments or

additions thereto, shall be deemed adopted, and the Contractor

shall immediately commence implementation thereof. On adoption

of the appraisal work programme and work programme budget, the

annual work programme and work programme budget adopted

pursuant to paragraph 5.6 shall be revised accordingly.



6.2.6



If, pursuant to paragraph 6.2.2, the Contractor has notified the

Government that the discovery is of potential commercial interest, it

shall, unless otherwise agreed:

(a) in respect of a discovery of crude oil, advise the Government by

notice in writing, whether or not in its opinion, the discovery is

commercial within a period of agreed eighteen (18) months from

the date on which the Contractor notified the Government that said

discovery was of potential commercial interest:

Provided that in respect of a discovery of crude oil in water

depths of more than 600 feet, such period may be increased by

mutual agreement from eighteen (18) months to twenty-four (24)

months.

(b) in respect of a discovery of non-associated natural gas, advise

the Government by notice in writing, whether or not in its opinion,

the discovery is commercial, within such period as may be

stipulated in an Agreement made pursuant to Article XIV with

respect to such discovery or, in the absence of such Agreement,

within thirty-six (36) months from the date on which the Contractor



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West Bay Belize Ltd. 11/3/2003



notified the Government that said discovery was of potential

commercial interest.

6.2.7



If the Contractor notifies the Government that the discovery is not

commercial, or fails to notify the Government that the discovery is

commercial within the periods prescribed in paragraphs 6.2.6(a)

and (b), the Government shall have the option, exercisable by

notice in writing to the Contractor, to require the Contractor to

relinquish the area corresponding to such discovery and forfeit any

rights relating to such discovery and any production therefrom. The

area subject to relinquishment shall not exceed the prospective

producing area determined by taking into account the area of

structural closure of the prospective horizon and other relevant

technical factors. Any such relinquishment by the Contractor of the

area relating to such discovery before the end of the exploration

period shall be carried out in accordance with paragraphs 4.4, 4.6

and 4.8.



6.2.8



(a) The notice submitted to the Government by the Contractor

pursuant to paragraph 6.2.6 (a) and (b) shall be accompanied by a

report on the discovery setting forth all relevant technical and

economic data, including, but not limited to, geological and

geophysical information, areas, thicknesses and extent of the

productive strata, petrophysical properties of the reservoir

formations, PVf data, the reservoir's productivity indices for the

wells tested at various rates of flow, permeability and porosity of the

reservoir formations, the relevant characteristics and qualities of the

petroleum discovered, additional geological data and evaluations

of the reservoir, crude oil and natural gas reserves estimates and any

other relevant characteristics and properties of the reservoirs and

fluids contained therein, as well as all evaluations, interpretations

and analyses of such data and feasibility studies relating to the

discovery prepared by the Contractor, his contractors,

subcontractors and affiliated companies.

(b) In addition, if the Contractor believes that the discovery is

commercial, he shall submit to the Government with the report

described in paragraph 6.2.8 (a) a work programme and work

programme budget for the development of such discovery. Such

development work programme and work programme budget shall

set out detailed proposals, including cost estimates, drilling

schedules, number of wells and well spacing, production forecasts

and a timing schedule, in accordance with generally accepted



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West Bay Belize Ltd. 11/3/2003



engineering practices and economics of the international petroleum

industry, for the establishment and operation of all the facilities,

installations and services required for the production, processing,

storage and transportation of petroleum from the area in which the

discovery is located and any other activities incidental thereto.

Proposals relating to production procedures shall ensure that the

area does not suffer an excessive rate of decline of production or an

excessive loss of reservoir pressure. Such development work

programme and work programme budget shall also contain

particulars of feasible alternatives, if any, considered by the

Contractor for the development and exploitation of the discovery

and economic feasibility studies carried out by or for the Contractor

with respect to the discovery taking into account the location,

meteorological conditions, cost estimates, the price of petroleum

and any other relevant data and evaluations thereof.

6.2.9



The Government shall examine the report and any work

programme and work programme budget submitted pursuant to

paragraph 6.2.8 and may require the Contractor to provide, within a

specified period of time, such additional information and data as it

may reasonably require to evaluate such report, work programme

and work programme budget. As soon as possible after the

submission of the report and any work programme and work

programme budget pursuant to paragraph 6.2.8 or receipt of such

additional information and data, the Government and the

Contractor shall meet (i) to determine at such meeting, or at such

later date as may be mutually agreed, the boundaries of the area to

be delineated as a field, and (ii) to adopt a work programme and

work programme budget for the development of the discovery.



6.2.10



(a) At the meeting described in paragraph 6.2.9, the Contractor

shall carefully consider and take into account the proposals of the

Government and the reasons therefor and shall attempt in good

faith to reach an agreement with the Government on the points at

issue paying particular consideration to the objective of achieving

initial commercial production expeditiously taking into account

generally accepted engineering practices and economics of the

international petroleum industry.

(b) If the Government and the Contractor agree upon the

boundaries of the area to be delineated as a field and upon the

adoption of a work programme and work programme budget for

the development of the discovery, the date upon which such



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West Bay Belize Ltd. 11/3/2003



agreement is reached, as reflected in writing signed by both parties,

shall be the date of the declaration of the commercial discovery for

all purposes of this Agreement. The area so determined shall, on

such date, be automatically converted into a field, and the

Contractor shall, as soon as is practicable, commence development

and production operations in the field according to the adopted

work programme and work programme budget. Upon adoption of

the development work programme and work programme budget,

the annual work programme and work programme budget adopted

pursuant to paragraph 5.6 shall be revised accordingly.

(c) In the event that no agreement is reached between the

Government and the Contractor within one hundred and eighty

(180) days from the date of submission of the report and work

programme and work programme budget pursuant to paragraph

6.2.8 as to (i) matters relating to the adoption of the work

programme and work programme budget for the development of

the discovery or (ii) the boundaries of the area to be delineated as a

field, the Government or the Contractor may refer the matter for

determination pursuant to Article XXIV. The determination in

accordance with Article XXIV shall be final and the work

programme and work programme budget for the development of

the discovery and the boundaries of the area to be delineated as a

field, as the case may be, shall be deemed to have been adopted

and agreed as determined, except that the Contractor may, within

sixty (60) days of receipt of such determination, notify the

Government that the discovery to which such work programme and

work programme budget and area so determined is no longer

considered to be commercial. If the Contractor so notifies the

Government, the provisions of paragraph 6.2.7 shall apply. Failing

such notification, the date after sixty (60) days of the receipt of such

determination shall be deemed to be the date of the declaration of

the commercial discovery for all purposes of this Agreement. The

area so determined shall, on such date, be automatically converted

into a field and the Contractor shall, as soon as is practicable,

commence development and production operations in the field

according to the work programme and work programme budget so

adopted. Upon adoption of the development work programme and

work programme budget as aforesaid, the annual work programme

and work programme budget adopted pursuant to paragraph 5.6

shall be revised accordingly.

6.2.11



Notwithstanding any other provision of this Agreement, in the event



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West Bay Belize Ltd. 11/3/2003



that initial commercial production has not occurred within three (3)

years, in the case of a crude oil discovery on land or in water depths

ofless than six hundred feet (200 m), or five (5) years, in the case of

non-associated natural gas discovery, or such longer period as the

Government may have agreed in the development work

programme and work programme budget, from the date of

declaration of commercial discovery for a field, the Contractor shall

relinquish the area comprising such field and shall forfeit any rights

relating to such field and any production therefrom.

Production Period



6.3



The terms and conditions of the production period shall be as set

out below.



6.3.1



The Contractor shall produce crude oil from the contract area at a

rate below the maximum efficient rate. In conjunction with the

adoption of the development work programme and work

programme budget pursuant to paragraph 6.2.10 the Contractor

and the Government shall establish at that time the maximum

efficient rate of production for crude oil and the production rate for

non-associated natural gas. Such rates shall be reviewed annually at

the time of submission of the annual work programme by the

Contractor pursuant to paragraph 5.4 and revised, if necessary, by

mutual agreement. In the case of non-associated natural gas, the

production rate shall not be required by the Government to be less

than that required to satisfy any contracts then in existence for the

sale of such natural gas.



6.3.2



Not less than ninety (90) days prior to the beginning of each

calendar year following initial commercial production, the

Contractor shall prepare and furnish to the Government for

approval a forecast statement setting forth by quarters the total

quantity of crude oil (by quality, grade and gravity) and natural gas

that the Contractor estimates can be produced, saved and

transported hereunder during such calendar year in accordance

with generally accepted practices in the international petroleum

industry. The Contractor shall endeavor to produce in each

calendar year the forecast quantity. The crude oil shall be run to

storage tanks, constructed, maintained and operated by the

Contractor in accordance with Government Regulations, in which

such crude oil shall be metered or otherwise measured for all

purposes required by this Agreement.



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West Bay Beljze Ltd. 11/3/2003



ARTICLE VII

The Government shall:



Obligations of the

Government

7.1



assist the Contractor in the execution of work programmes by

supplying or otherwise making available all geological, geophysical,

geographical, drilling, well, production and other information,

including well location maps, relating to the contract area in the

possession of the Government or coming into the possession of the

Government;



7.2



provide the right of ingress to and egress from the contract area and

any facilities used in petroleum operations, and, upon application in

the prescribed manner, all necessary visas, work permits, import

licenses and rights of way and easements as may be required by the

Contractor and his contractors and subcontractors and which may

be available from resources within the Government's control.



ARTICLE VIII

Royalty/production

Payment



8.1



The Contractor shall pay to the Government a royalty equal to (i)

seven point five percent (7.5%) of the value of the annual gross

production of crude oil produced and saved in each calendar year

and not used or consumed in petroleum operations and (ii) five

percent (5%) of the value of the annual gross production of natural

gas produced, saved and sold in each calendar year and not used or

consumed in the conduct of petroleum operations.



8.2



The royalty with respect to crude oil shall be payable in cash and/or

kind at the option of the Government. The royalty with respect to

natural gas shall always be paid in cash.



8.3



For the purposes of determining the amount of the royalty due,

crude oil and natural gas shall be valued in accordance with

paragraphs 10.1, 10.2 and 14.4, less such costs as the Government

may reasonably allow for handling and transportation from the

wellhead to the delivery point as described in such paragraphs, and

the royalty shall be payable quarterly within thirty (30) days of the

end of each quarter on the basis of crude oil production or natural

gas sales which occur in each such quarter. Payment shall be

accompanied by a certificate from the Contractor setting forth in

detail the basis for computation of the royalty. Such certificate shall



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West Bay Beh"ze Ltd. 11/3/2003



be in a form acceptable to the Government.

8.4



If the Government elects to take the Royalty with respect to Crude

Oil, or any part thereof, in kind, it shall notify the Contractor in

accordance with the provisions of paragraph 11.2.



ARTICLE IX

Recovery of

Petroleum

Operations

Expenditures:

Production Sharing



9.1



In each calendar year, after discharging its obligation for the royalty

payment due to the Government pursuant to Article VIII, the

Contractor shall be entitled to recover all petroleum operations

expenditures incurred hereunder, out of one hundred percent

(l00%) of the petroleum produced and saved in such calendar year

and not used in petroleum operations by retaining and disposing of

that amount of petroleum equal in value to the unrecovered

petroleum operations expenditures for that calendar year plus all

unrecovered petroleum operations expenditures from prior

calendar years. All such petroleum operations expenditures shall be

recovered without a ceiling in the manner, to the extent provided

for, in the Income and Business Tax Act, Chapter 55 of the

Substantive Laws of Belize, Revised Edition 2000. For the purpose

of determining the value of the quantity of petroleum to which the

Contractor is entitled in each calendar year pursuant to this

paragraph 9.1, the provisions of Article X shall be applied.



9.2



The remaining quantity of petroleum produced and saved in a given

calendar year and not used in petroleum operations, after

deduction of the value of the royalty, payments made in such

calendar year and after recovery by the Contractor of petroleum

operations expenditures pursuant to paragraph 9.1, ("Net

Petroleum") shall be taken and disposed of separately by the

Government and the Contractor in each calendar year in the

following proportions:



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West Bay Belize Ltd. 11/3/2003



Daily Average Production:

Government's Share

Percent (%)



Contractor's Share

Percent (%)



First 50,000 bopd



5



95



Next 50,000 bopd



7.5



92.5



Next 50,000 bopd



10



90



Next 50,000 bopd



15



85



Above 200,000 bopd



20



80

ARTICLE X



Valuation and

Measurement of

Petroleum



10.1



Crude oil sold to third parties shall be valued at the net realized

price at the delivery point, well-head or point of collection III

Belize received by the Contractor for such crude oil.



10.2



Crude oil sold to other than third parties shall be valued as

follows:



10.2.1



By using the weighted average unit price received by the Contractor

from sales to third parties at the delivery point, net of any

commissions and brokerages paid in relation to such third party

sales, during the ninety (90) days preceding such sale, adjusted as

necessary for quality, grade and gravity, and taking into

consideration any special circumstances with respect to such sales,

unless less than fifty percent (50%), by volume, of crude oil sales

during such period are made to third parties, in which case crude

oil sold to other than third parties shall be valued in accordance

with paragraph 10.2.2.



10.2.2



If no third party sales have been made during such period of time,

then (a) on the basis used to value other crude oil from Belize of

similar quality, grade and gravity (or, if not similar, adjusted as

necessary for quality, grade and gravity) and taking into

consideration any special circumstances with respect to sales of such

crude oil, or (b) if there is no other crude oil from Belize, on the

basis used to value crude oil from other sources in the Caribbean,

Central America, Colombia and Venezuela as posted in Platt's Oil



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West Bay BehZe Ltd. 11/3/2003



Gram for Caribbean/Central American Crudes of similar quality,

grade and gravity and taking into consideration any special

circumstances with respect to sales of such similar crude oil.

10.3



Natural gas shall be valued in accordance with the provisions of

paragraph 14.4.



10.4



Third party sales referred to in this Article shall mean sales other

than barter sales made by the Contractor to purchasers who are not

affiliated companies of the Contractor in arms length transactions

and with whom (at the time the same is made) the Contractor has

no contractual interest involving direcdy or indirecdy any joint

interest.



10.5



Commissions or brokerages incurred in connection with sales to

third parties, if any, shall not exceed the customary and prevailing

rate.



10.6



In the event that petroleum operations involve the segregation of

crude oils of different quality, grade or gravity, and if the parties do

not otherwise mutually agree, any and all provisions of this

Agreement concerning valuation of crude oil shall separately apply

to each segregated crude oil. However, in electing to take crude oil

for internal consumption pursuant to paragraph 11.7 and to take

royalty in kind pursuant to paragraph 11.2, the Government shall

have the right to receive, at its own expense and risk, crude oil of

the quality, grade and gravity of its choice.



10.7



The Contractor shall supply, operate and maintain equipment for

measuring the volume and quality of the petroleum produced and

saved hereunder, including gravity, density, temperature and

pressure measuring devices and any other devices that may be

required. All measurement equipment and devices shall, prior to

their installation or usage, be approved by the Inspector of

Petroleum. Such equipment and devices shall at all reasonable

times be available for inspection and testing by the Inspector of

Petroleum or other authorized representatives. Any such inspection

or testing shall not interfere with the normal operation of the

facilities involved. The equipment and devices used or installed

pursuant to this paragraph shall not be replaced or altered without

the prior approval of the Government.



10.8



The Contractor shall undertake to measure the volume and quality

of the petroleum produced and saved hereunder, consistent with



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West Bay Belize Ltd. 11/3/2003



generally accepted practices in the international petroleum industry,

with the frequency and according to procedures which shall be

approved by the Government.

10.9



The Contractor shall give the Inspector of Petroleum timely notice

of its intention to conduct measuring operations and the Inspector

shall have the right to be present at and supervise, either directly or

through authorized representatives, such operations.



10.10



If it is determined, following an inspection or test carried out by the

Government or its representatives, that the equipment, devices or

procedures used for measurement are inaccurate and exceed the

permissible tolerances which shall be established by agreement

between the Government and the Contractor, and such

determination is verified by an independent surveyor acceptable to

both parties, such inaccuracy shall be deemed to have existed for

one-half of the period since the last previous such inspection or test,

unless it is proved that such inaccuracy has been in existence for a

longer or shorter period. Appropriate adjustments covering such

period shall be made within thirty (30) days from the date of such

determination.



ARTICLE XI

Marketing, Production

(Royalty) in Kind and

Domestic

Requirements



11.1



The Contractor shall be obligated to market all crude oil produced

and saved from the contract area, subject to the provisions

hereinafter set forth.



11.2



If the Government elects to take the royalty payment on crude oil in

kind, it shall so notify the Contractor in writing not less than sixty

(60) days prior to the commencement of each six month period of

each calendar year specifying the quantity, and designating the grade

and quality that it elects to take in kind, based upon estimates,

including those contained in the forecast statement furnished

pursuant to paragraph 6.3.2. Final adjustments shall be made

within ninety (90) days of the end of each calendar year on the basis

of actual quantities. Such notice shall be effective for the ensuing

six month semester of that calendar year. Failure to give such notice

shall be conclusively deemed to indicate the election by the

Government not to take in kind.



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West Bay Behie Ltd. 11/3/2003



11.3



Any sale by the Contractor of any part of the Government's share of

crude oil production shall not be for a term expiring more than six

(6) months after the date of execution of the sales contract without

the Government's written consent If the Government so consents,

the Government shall not exercise its rights to receive crude oil in

kind pursuant to paragraph 11.2.



11.4



Any sale by the Contractor of any part of its share of the crude oil

produced and saved from the contract area shall not be for a term

expiring more than twelve (12) months after the date of execution of

the sales contract without the Government's written consent. The

Government shall not exercise its rights under paragraph 11.7 to

require the Contractor to satisfy the internal consumption

requirements of Belize from crude oil which is subject to such

contract.



11.5



Crude oil which the Government has elected to take in kind shall

be delivered by the Contractor, free of cost to the Government, at

regularly spaced intervals at the delivery point or to the

Government's storage facilities in the field, or both, at the option of

the Government. The Government shall provide at such delivery

points, at its sole risk and expense, all storage, transportation and

other facilities necessary to receive such crude oil, provided,

however, that if the Government requests, the Contractor shall

provide adequate storage facilities at such places, free of charge, at

the risk of the Government, for a quantity of the Government's

crude oil not exceeding one hundred thousand 000,000) barrels

for each field. If storage exceeds one hundred thousand 000,000)

barrels per field at any time, the Government shall pay to the

Contractor a reasonable storage charge for such excess. If such

storage is provided, and the Government has no need for such

storage capacity, the Contractor has the right to use such storage

capacity for its own use and Government shall not pay any storage

charge for any such period in which Contractor uses the storage

facilities.



11.6



If the Government elects to meet all or part of the requirements of

the domestic market of Belize from crude oil production in Belize,

it shall use its share of production from all crude oil production in

Belize to do so. If in any year there is domestic demand in excess of

the Government's share of such production, the Government may

require the Contractor to sell crude oil in Belize on a pro rata basis

with other producers in Belize, according to the quantity of crude



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West Bay Belize Ltd. 11/3/2003



oil production of each producer in each year. The Government

shall give the Contractor at least three (3) months notice in advance

of such requirement and the term of supply will be on an annual

basis. The price for such sales shall be the price as calculated

pursuant to paragraph 10.2 above.

11.7



If the Government elects to exercise its rights under paragraph 11.6,

it shall notify the Contractor in accordance with the provisions of

paragraph 11.2 relating to the Government's election to take royalty

payment in kind. The amounts to be taken shall be based upon

estimates, including those contained in the forecast statement

furnished pursuant to paragraph 6.3.2, and final adjustments shall

be made within ninety (90) days of the end of each calendar year on

the basis of actual quantities.



11.8



Not less than twelve (12) months prior to initial commercial

production in any field, the Contractor shall submit to the

Government for approval, proposed procedures and related

operating regulations and financial terms covering the scheduling,

storage and lifting of crude oil from such field. The procedures,

regulations and terms shall be in accordance with accepted

standards and practices in the international petroleum industry and

comprehend the subjects necessary to efficient and equitable

operations including, but not limited to:

rights of parties,

notification time, maximum and minimum quantities: duration of

storage, scheduling, conservation, spillage, liabilities of the parties,

and penalties for over and under lifting, safety and emergency

procedures.



ARTICLE XII

PayrnentProcedure



12.1



All payments due to the Government hereunder shall be made in

United States dollars at a bank to be designated by the Government,

or at the Contractor's election, such other currency as is acceptable

to the Government.



12.2



All payments due to the Contractor hereunder shall be made in

United States dollars at a bank to be designated by the Contractor,

or, at the Government's election, such other currency as is

acceptable to the Contractor.



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West Bay Belize Ltd. 11/3/2003



12.3



Except as otherwise expressly provided herein, all payments

required to be made pursuant to this Agreement shall be made

within thirty (30) days following the end of the calendar month in

which the obligation to make such payment occurs.



12.4



First year administrative fees for the Initial Exploration period shall

be paid to the Government of Belize (GOB) via the Inspector of

Petroleum within ninety (90) days of execution of PSA. Fees for

the subsequent years of the Exploration period shall be paid on or

before anniversary of effective date of PSA.



12.5



If any payment is not made when due, such unpaid amount shall

bear interest from and after the due date at an interest rate

compounded annually at two percent (2%) greater than the interest

rate charged by any Commercial Bank in Belize to prime

commercial customers for ninety (90) day loans as in effect from

time to time until the date of payment or prime rate published in

the Wall Street]ournal which is a base rate on corporate loans

posted by at least 75% of the nation's 30 largest banks or LIBOR.



ARTICLE XIII

Surface Rentals



13.1



The Contractor shall be liable for payment of such fees and surface

rentals as are stipulated in the Petroleum Regulations 1992. The

fees payable for each year shall be paid in advance and in

accordance with paragraph 12.4. The fees for the first year shall be

paid within ninety (90) days of the effective date of this Agreement.



ARTICLE XIV

Natural Gas



14.1



The Contractor shall have the right to use associated natural gas for

petroleum operations, including reinjection for pressure

maintenance in the field or adjacent fields of the Contractor.

Associated natural gas which is, in the opinion of both the

Contractor and the Government, not economical, shall be returned

to the subsurface structure, or may be flared with the consent of the

Government. In the event that the Contractor chooses to process

and sell associated natural gas, the Contractor shall notify the

Government of the same and upon such notification, the

Government and the Contractor shall, as soon as practicable



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West Bay Beljze Ltd. 11/3/2003



thereafter, meet together with a view to reaching an agreement on

the production, processing and sale of such gas. In the event the

Contractor chooses not to process and sell associated natural gas,

the Government may elect to off-take at the outlet flange of the gas­

oil separator and use such associated natural gas which is not

required for petroleum operations. There shall be no charge to the

Government for such associated natural gas, provided that the cost

to gather such associated natural gas in the field at the point of being

flared and to process and utilize it shall be for the account of the

Government.

14.2



Where non-associated natural gas is discovered in the contract area

and the Contractor has, pursuant to paragraph 6.2 informed the

Government that the discovery is of potential commercial interest,

the Government and the Contractor will, on completion of the

appraisal programme relating to such discovery, or sooner if so

agreed, meet together with a view to reaching an agreement on the

development, production, processing, utilization, disposition or sale

of such gas.



14.3



In the event that the development, production, processing,

utilization, disposition or sale of natural gas from the contract area is

determined by the parties to be economically feasible in accordance

with this Article XIV, the costs of development and production of

the same from the reservoir to the delivery point, and the revenue

derived therefrom, shall, unless otherwise agreed pursuant to

paragraphs 14.1 and 14.2, be included in petroleum operations

expenditures and gross revenues, respectively, for all purposes of

this Agreement, subject to the accounting procedure outlined in the

Bulletin of the Income Tax Commissioner (Annex 1).



14.4



The price to be paid for natural gas, or the value to be attributed

thereto shall ­



14.4.1



for sales to third parties, be equal to the net realized price obtained

by the Contractor for such Natural Gas at the delivery point;



14.4.2



for sales other than to third parties, be determined by agreement

between the Government and the Contractor, provided, however,

that such price or value shall reflect the following: (i) the quality and

quantity of the natural gas (ii) the price at which sales of natural gas

from other sources in Belize, if any, are then being made, (iii) the

price at which sales, if any, of natural gas imported into Belize are

being made, (iv) the purpose for which the natural gas is to be used,



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West Bay BehZe Ltd. 11/3/2003



and (v) the international market price of competing or alternative

fuels or feedstocks.

14.4.3



Third party sales shall mean sales as described in paragraph 10.4



ARTICLE XV

Taxes



15.1



The Contractor and his contractors and subcontractors shall be

obligated to pay income tax for the applicable calendar year upon

net taxable income derived from petroleum operations pursuant to

the Income and Business Tax Act, Chapter 55 Substantive Laws of

Belize, Revised Edition 2000.



15.2



In each calendar year, the Contractor's income tax shall be payable

to the Government in installments on the last day of each quarter

on the basis of the estimate, and quarterly updates thereto, provided

to the Government. The estimated unpaid liability for income tax

for each calendar year as of the current estimate or quarterly update

shall be payable equally over the remaining quarterly installments

for such calendar year. Adjusting payments or refunds, as the case

may be, shall be made within ninety (90) days of the end of the

calendar year based upon the detailed accounts submitted for such

calendar year pursuant to paragraph 26.2 as approved by the

Government.



15.3



(a) The Contractor shall within ninety (90) days of the end of each

calendar year, notify the Government of any and all amounts paid

to its contractors with respect to operations carried out by them in

Belize and in tum shall notify its contractors that they must similarly

advise the Government within ninety (90) days after the end of each

calendar year of any and all amounts paid to their sub-eontractors

with respect to operations carried out by them in Belize.

The Contractor shall also advise each of its contractors, and

shall require such contractors to likewise notify their subcontractors

that for every six (6) months such contractors and subcontractors

shall furnish to the Government a list of all their Belizean and

expatriate personnel, along with the remuneration received by each

of such personnel, and that they shall be required, prior to leaving

Belize, to establish to the satisfaction of the Government that the

necessary income taxes have been paid.

(b)



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West Bay Behie Ltd. 11/3/2003



15.4



The Contractor and his contractors and subcontractors and their

respective personnel shall be obligated to pay such reasonable

transfer taxes and stamp duties as may be in effect from time to

time at the rates which are generally applicable to all persons or

entities in Belize.



15.5



Except as may be otheIWise agreed in wntmg between the

Government and the Contractor, all transactions giving rise to

revenues, costs or expenses which will be credited or charged to the

books, accounts, records and reports prepared, maintained or

submitted hereunder shall be conducted at arm's length or on such

a basis as will assure that all such revenues, costs or expenses will

not be higher or lower, as the case may be, than would result from a

transaction conducted at arm's length on a competitive basis with

third parties.



ARTICLE XVI

Exemptions from

Custom Duties



16.1



The Contractor and his non-Belizean contractors and

subcontractors engaged in conducting petroleum operations under

this Agreement shall be permitted to import upon application to

and approval by the Minister of Finance for exemptions from

customs duties with respect to the importation of, machinery,

equipment, spare parts, materials, supplies, consumable items,

moveable property, and any other items or articles connected with

petroleum operations, subject to the provisions of paragraph 16.2.



16.2



The exemptions provided in paragraph 16.1 shall not apply to any

imported item when, in the reasonable opinion of the Government,

items of the same, or substantially the same, kind and quality are

manufactured locally and/or are available locally for purchase and

timely delivery at the Contractor's operating base in Belize at a price

equal to the cost of the imported item{s).



16.3



The Government reserves the right to inspect during normal

business hours the records, documentation or the physical item or

items for which an exemption is or has been provided under

paragraph 16.1 to determine that such item or items are being or

have been imported solely for the purpose for which the exemption

was granted.



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West Bay Belize Ltd. 11/3/2003



16.4



The item or items exempt from customs duties hereunder shall not

be sold to third parties (who are not in their own right exempt from

such customs duties) for use or consumption in Belize unless prior

written authorization is obtained from the Government and the

importing party pays the tax or duty due on the assessed value of

such item or items at the time of sale.



16.5



Any of the items imported into Belize, whether exempt or non­

exempt from customs duties, may be exported by the importing

party at any time without the payment of any export duties, taxes or

imposts.



16.6



"Custom duties" as used herein shall include all duties, taxes, or

imposts (except those charges, as may be in force from time to time,

paid to the Government for actual services rendered such as normal

handling and storage charges) which are payable as a result of the

importation of the item or items under consideration.



16.7



The Contractor shall be exempted from any duty, fee or any other

financial imposts (except those charges paid to the Government for

actual services rendered such as normal handling and storage

charges (if any)) in respect of the export of petroleum to which the

Contractor is entitled hereunder.



16.8



The Contractor shall not, directly or indirectly, export any

petroleum produced from the contract area to any country or

person which the Government has by law or official

pronouncement declared to be hostile or unfriendly.



ARTICLEXVn

Exchange and

Currency Controls



17.1



The Contractor shall be subject to the applicable exchange control

legislation and regulations in effect from time to time in Belize,

provided, however, that:

(i) the Contractor shall be permitted to freely dispose of any crude

oil produced after satisfying its obligations of payment of taxes,

bonuses, royalties and other fees to the Government and with the

prior approval of the Central Bank of Belize to receive and hold the

proceeds from the sale of any petroleum, crude oil, natural gas and

casinghead petroleum spirit produced therefrom in its offshore



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West Bay Belize Ltd. 11/3/2003



- banking account;

(ii)

the Contractor shall be permitted to remit any profits,

dividends, capital, or sums owed in repayment of loans including

sums owed to affiliates, which are not required for conducting the

petroleum operations, to their home office or non-resident

shareholders free of any charges, taxes, imposts or other duties;

(iii) the Contractor shall have the right to establish and maintain

local bank accounts which may be denominated in Belize dollars

or, subject to the prevailing conditions of the Central Bank of

Belize, in United States dollars which may be utilized as necessary

for payment of Contractor's obligations in Belize;

(iv) no restriction shall be placed on the importation by the

Contractor of funds necessary for carrying out the petroleum

operations stipulated in this Agreement;

(v) the Contractor shall have the right to pay directly outside of

Belize from its offices abroad for purchases or services for

petroleum operations hereunder, provided, however, that no such

payments shall be made to residents of Belize or to firms using

Belize as their main base of operations (whether natural or juridical)

contrary to the Laws of Belize.



ARTICLE XVIII

Title to Equipment



18.1



All equipment and assets which are fixed installations and are not

exported by the Contractor under paragraph 16.6 shall become the

property of the Government without cost as soon as this Agreement

is terminated.



ARTICLE XIX

Government

Participation



19.1



The Government shall have the option to acquire for itself or for its

designee an undivided and unencumbered equity, working interest

of up to ten percent (lO%) of the total interest of the Contractor in

this Agreement and in return therefore shall furnish its participating

interest share of the funds as provided in paragraphs 19.3.



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West Bay Beh"ze Ltd. 11/3/2003



19.2



Within ninety (90) days following the date of -declaratioll--Of

commercial discovery for any field, the Government, by written

notice to the Contractor, may exercise its option to participate in

this Agreement. If the Government exercises its option to

participate, (a) it shall promptly reimburse the Contractor an

amount, equivalent to that percentage of working interest ten (lo%)

requested by the Government of Belize and not exceeding ten

percent (l0%) of all exploration expenditures incurred prior to the

date of declaration of commercial discovery for such field and (b)

the Contractor (or each corporation, individual or entity comprising

the Contractor at that time pro rata) shall assign and transfer to the

Government or its designee the percentage interest that the

Government has opted to acquire. The Government or its designee

shall assume all rights and obligations of the Contractor pro rata

with its participating interest, in connection with this agreement.



19.3



The Government may, upon giving the Contractor reasonable

written notice, require the Contractor to lend the Government up to

one hundred percent (l00%) of the funds required to pay the

Government's pro-rata share of expenditure. The loan shall bear

interest at U.S. Prime rate plus three percent (3%).

The

Government shall make repayments of the loan on a quarterly basis

in amount equal to eighty-five (85%) of the differences between the

gross revenues attributable to the Government's Participating

Interest in the field and the costs and expenses, including royalty

but excluding income taxes, attributable to the Government's

Participating Interest in the field for Petroleum Operations.

Repayments of the loan shall be applied first to accrued and unpaid

interest and the balance shall be applied in reduction of the

outstanding principal balance.



ARTICLE XX

Training and

Employment



20.1



The Contractor agrees to train and employ qualified nationals of

Belize in its petroleum operations and, after initial commercial

production, will undertake the schooling and training of nationals of

Belize for staff positions, including administrative and executive

management positions. The Contractor will require his contractors

and subcontractors to do the same. The Contractor undertakes to

gradually replace its expatriate staff with qualified nationals of Belize

as they become available. An annual programme for training and

phasing in of nationals of Belize shall be established by the



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West Bay Belize Ltd. 11/3/2003



Contractor and shall be submitted for approval to the Government.

Such programme shall be included in the annual work programmes

submitted by the Contractor pursuant to paragraph 5.4. Within

thirty (30) days of the end of each calendar year, the Contractor

shall submit a written report to the Government describing the

number of personnel employed, their nationality, their positions

and the status of training programmes for nationals of Belize.

20.2



The Contractor shall also be required to establish a programme,

satisfactory to the Government, to train personnel of the

Government to undertake skilled and technical jobs in petroleum

operations for the Government. Such programme shall also include

provisions for involving representatives of the Government in

preparation of the annual work programme and work programme

budgets as required by paragraph 5.4 (d).



20.3



The Contractor shall be responsible for on-the-job trammg of

Belizean nationals during the exploration and development periods

pursuant to paragraphs 20.1 and 20.2. Commencing with the first

contract year following initial commercial production in the first

field, the Contractor shall undertake responsibility of training not

less than three (3) Belizean nationals per each calendar year in

accordance with paragraphs 20.1.



ARTICLE XXI

Purchases in Belize



21.1



In procurement, the Contractor shall give preference to goods

which are produced or available in Belize and services which are

rendered by nationals of Belize and companies of Belize, provided

such goods and services are offered on terms equal to or better than

imported goods and services with regard to quality, price and

availability at the time and in the quantities required.



21.2



Locally produced or available equipment, materials and supplies

shall be deemed equal in price to imported items if the local cost of

such locally produced or available items at the Contractor's

operating base in Belize is not more than ten percent (10%) higher

than the cost of such imported items before customs duties but after

transportation and insurance costs have been added.



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West Bay Belize Ltd. 11/3/2003



ARTICLEXXn

Unitization



22.1



If a field is designated within the contract area and such field

extends beyond the contract area to other areas of Belize over

which other parties have the right to conduct exploration,

development and production operations, the Government may

require that the development of the field and the production of

petroleum therefrom be carried out in collaboration with the other

contractors consistent with accepted practices in the international

petroleum industry. The same rule shall be applicable if deposits of

petroleum within the contract area, although not equivalent to a

commercial discovery if developed alone, would be deemed to be a

commercial discovery if developed with those parts of the deposits

which extend to areas controlled by other contractors.



22.2



If the Government so requests, the Contractor shall collaborate with

other contractors in preparing a collective proposal for common

development and production of the deposits of petroleum for

approval by the Government.



22.3



If the proposal for common development and production has not

been presented within ninety (90) days of the request described in

paragraph 22.2, or if the Government does not approve such

proposal, the Government may prepare or cause to be prepared,

for the account of the Contractor and the other contractors

involved, a reasonable plan for common development and

production. If the Government adopts such plan, the Contractor

shall comply with all conditions established in such plan.



22.4



The Contractor may within twenty eight (28) days from the date on

which notice in writing of such plan has been given to him by the

Minister refer the matter to arbitration pursuant to Article XXIV.

In such event the plan shall not be implemented until the

arbitrators render a decision or the parties agree on a compromise

plan, whichever occurs first.



22.5



This Article XXII shall also be applicable to discoveries of deposits

of petroleum within the contract area which extend to areas that are

not within the dominion of Belize, provided that in these cases the

Government shall be empowered to impose the special rules and

conditions which may be necessary to satisfy obligations under any

agreements with international organizations or adjacent states with

respect to the development and production of such deposits of



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West Bay Belize Ltd. 11/3/2003



petroleum.

22.6



Within ninety (90) days following the approval or adoption of a

unitization plan for common development and production, the

Contractor shall proceed to operate under any such plan. If a clause

of a cooperative or unitary development and production plan which

by its terms affects the contract area or a part of the same,

contradicts a clause of this Agreement, the clause of the cooperative

or unitary plan shall prevail.



ARTICLE XXIII

Danger to Persons,

Propelty or

Environment



23.1



The Contractor shall undertake relevant studies to identify sources

of potential environmental damage and pollution which may result

as a consequence of petroleum operations under PSA 2 of 2003.

The Contractor shall identify mitigation/prevention measures to be

adopted to minimize the effects(s) of any and all such sources

identified, and shall submit these to the approval of the

Government prior to the execution of any work.



23.2



If the Government reasonably determines that any works or

installations erected by the Contractor or any operations conducted

by the Contractor endanger or may endanger persons or third party

property or cause pollution or harm wild-life or the environment to

a degree that is unacceptable according to international petroleum

standards, the Government may require the Contractor to take

remedial measures within a reasonable period established by the

Government and to repair any damage to the environment that may

be necessary in accordance with international petroleum standards.

In the event that the Contractor fails to take the remedial measures

required by the Government within the time period established by

the Government, the Government may carry out such remedial

measures for the Contractor's account.



ARTICLE XXIV

Arbitration



24.1



If any time during the continuance of this Agreement or any

renewal thereof or after the termination thereof any question,

disagreement or dispute shall arise regarding this Agreement or any

matter or thing connected therewith or the breach thereof or the



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West Bay Beljze Ltd. 11/3/2003



powers, duties, or liabilities of the parties thereunder, the parties

shall first attempt to amicably solve the question, disagyeement or

dispute between themselves by consulting and negotiating with each

other in good faith. If the Government and the Contractor are not

able to amicably resolve their differences within a period of forty­

five (45) days after such difference arises, then the dispute or

differences shall be finally settled by arbitration in accordance with

the Arbitration Rules of the United Nations Commission on

International Trade Law (hereinafter referred to as UNCITRAL

Arbitration Rules).



...



24.2



The number of arbitrators shall be three. The Government shall

appoint one and the Contractor shall appoint one. The two

arbitrators thus appointed shall choose the third arbitrator who will

act as the Presiding Arbitrator. If the two arbitrators cannot come to

an agyeement on the designation of the third, the third arbitrator

shall be designated in accordance with the UNCITRAL Arbitration

Rules.



24.3



The place of arbitration shall be Belmopan, Belize if at the time of

such arbitration, Belize is recognized as a member state of the 1958

Convention on the Recognition and Enforcement of Foreign

Arbitral Awards ("New York Convention"). If Belize is not a

member state of the New York Convention at that time, the place

of arbitration shall be Mexico City, Mexico.



24.4



The language to be used in the arbitration proceeding shall be

English.



24.5



The arbitral tribunal shall decide all questions presented on the

basis of:

(a) the laws and regulations of Belize applicable to this Agreement

and other relevant laws, both national and international;

(b) the provisions of the Agreement, and



(c)

trade usages and customs of the international petroleum

industry.

24.6



Arbitral awards shall be final and binding upon the parties from the

date they are made and judgment upon the award may be entered

in any court having jurisdiction.



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West Bay Beh"ze Ltd. 11/3/2003



ARTICLE XXV

Tennination



25.1



The Government shall have the right to terminate this Agreement

upon giving thirty (30) days written notice of its intention to do so if

the Contractor (a) fails to make any monetary payment required by

law or under this Agreement for a period of thirty (30) days after the

due date for such payment, (b) fails to comply with any other

material obligation that he has assumed under this agreement, or (c)

fails to comply with the Petroleum Act Chapter 225, Substantive

Laws of Belize, Revised Edition 2000 and any lawful acts,

regulations, orders or instructions issued by the Government or any

department or agency of the Government, or (d) becomes

bankrupt, or goes into liquidation because of insolvency or makes a

composition with its creditors.



25.2



If the circumstance or circumstances that result in termination

under paragraph 25.l(a), (b) or (c) are remedied by the Contractor

within the thirty (30) days period following the notice of termination

as aforesaid, such termination shall not become effective.



25.3



If the circumstance or circumstances that would otherwise result in

termination under paragraph 25.1 are the result of force majeure,

then termination shall not take place so long as such force majeure

continue and for such period thereafter as is reasonable.



25.4



The termination of this Agreement for whatever reason shall be

without prejudice to the obligations incurred and not discharged by

the Contractor prior to the date of termination.



25.5



In the event of termination pursuant to paragraph 25.1 or 25.7, the

Government may require the Contractor, where reasonable, for a

period not to exceed one hundred eighty (180) days, to continue,

for the account of the Government at the Government's sole risk

and expense, crude oil or natural gas production activities until the

right to continue such production has been transferred to another

entity.



25.6



Within ninety (90) days after the termination of this Agreement

pursuant to paragraph 25.1 or paragraph 25.7, unless the Minister

has granted an extension of this period, the Contractor shall

complete any reasonably necessary action as directed by the

Government to avoid environmental damage or a hazard to human



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West Bay Belize Ltd. 11/3/2003



life or third party property.

25,7



The Contractor has the right to terminate this Agreement for

material nonperformance of the Government consistent with all

available remedies at law and equity. Additionally, Contractor shall

have the right to terminate this Agreement totally, or partially, (a)

with respect to any part of the contract area other than a field then

producing, or that prior thereto had produced, crude oil or natural

gas upon giving thirty (30) days written notice of its intention to do

so, and (b) with respect to any field then producing, or that prior

thereto had produced crude oil or natural gas upon giving ninety

(90) days written notice of its intention to do so. Upon termination,

the provisions of paragraphs 4.7 and 4.8 shall apply.



ARTICLE XXVI

Books, Accounts and

Audits, Records,

Reports and

Inspections



26.1



The Contractor shall be responsible for keeping complete accounts,

books and records reflecting all petroleum operations expenditures

and gross revenues consistent with generally accepted procedures

and standards in the international petroleum industry and in

accordance with the accounting procedure outlined in the Bulletin

of the Income Tax Commissioner (Annex 1).



26,2



Within ninety (90) days after the expiration of each calendar year,

the Contractor shall submit to the Government detailed accounts

showing all petroleum operations expenditures and all gross

revenues during the past calendar year. Before submission to the

Government, the accounts shall be audited by an independent

chartered accountant or certified public accountant acceptable to

both parties, at the expense of the Contractor. It is understood that

the Government, through the Auditor General's Department,

retains the authority to review and audit the Contractor's accounts,

books and records with respect to petroleum operations conducted

hereunder either directly or through an independent accountant

designated by the Government.



26.3



The Government and its duly authorized representatives shall have

full and complete access to the contract area at all reasonable times

with a right to observe petroleum operations and shall have the right

to inspect all assets, records, books, accounts and data kept by the

Contractor relating to petroleum operations and this Agreement. In

so doing, the Government and its representatives shall not unduly



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West Bay Belize Ltd. 11/3/2003



interfere with the Contractor's petroleum operations. However, the

Government and its representatives may make a reasonable

number of surveys, drawings, tests and copies for the purpose of

implementing this Agreement. In doing so, the Government and its

representatives shall be entitled to make reasonable use of the

equipment and instruments of the Contractor provided that no

damage to the equipment or instruments or impediment to the

petroleum operations hereunder shall result from such use. The

Government shall indemnify and reimburse the Contractor for any

loss or damage which may in fact result from any such use of

equipment and instruments, provided that such loss or damage is

reported to the Government within twenty-four (24) hours from the

time of such inspection. The Government and its representatives

shall be given reasonable assistance by the Contractor for such

functions, and the Contractor shall afford to the Government and

its representatives all facilities and privileges afforded to its own

personnel in the field.

26.4



The Contractor shall prepare and maintain accurate and current

records of its activities in the contract area hereunder. The

Contractor shall furnish the Government in conformity with the

applicable regulations, and as the Government may reasonably

require, information, reports and data concerning its activities and

operations under this Agreement.



26.5



The Contractor shall save and keep for the duration of this

Agreement all unused cores and samples taken from the wells

drilled, which shall be forwarded to the Inspector of Petroleum or

his authorized representatives at such time and in the manner

directed by the Government. All cores and samples acquired by the

Contractor shall be available for inspection by the Inspector of

Petroleum or his authorized representatives at all reasonable times.

Unless previously forwarded to the Government pursuant to

instructions given under this paragraph, the Contractor shall

forward to the Government all remaining cores and samples upon

the expiration or termination of this Agreement.



26.6



Unless otherwise agreed to by the Government, III the case of

exporting any rock or petroleum samples from Belize for the

purpose of testing and analysis, samples equivalent in size and

quantity shall, before such exportation, be delivered to the

Inspector of Petroleum.



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West Bay Belize Ltd. 11/3/2003



26.7



Originals of records and other data can be exported only with the

pennission of the Government, provided, however, that magnetic

tapes and any other data which must be processed or analyzed

outside Belize may be exported if a comparable record is

maintained in Belize and provided that such exported records and

data shall be repatriated to Belize.



26.8



The Contractor shall provide to the Inspector of Petroleum in

appropriate fonn all original data resulting from petroleum

operations, including, but not limited to, geological, geophysical,

petrophysical engineering, well logs, production data and

completion status reports and any other data which the Contractor

may compile during the tenn hereof including all reports, analyses,

interpretations, maps and evaluations thereof prepared by the

Contractor and any contractors, subcontractors or consultants to the

Contractor or by affiliated companies, and cuttings of all samples

that have been obtained or compiled during the tenn hereof

("data"), The Government shall have title to all such data. Such

data shall not be disclosed to third parties by the Government prior

to relinquishment of the area to which they relate, or prior to the

end of the exploration period if such area is not sooner

relinquished, provided, however, that the Government may make

copies available to professional consultants, legal counsel,

accountants, underwriters, lenders and such Government entities as

may need to be made aware thereof or have the right to require

disclosure. In any event, the Contractor may retain copies of all

such data. The Contractor shall not disclose such data to any third

parties without the Government's prior written consent, provided,

however, that the Contractor may make copies available to

professional consultants, legal counsel, accountants, underwriters,

lenders, affiliated companies and contractors and subcontractors of

the Contractor and such government entities as may need to be

made aware thereof or have the right to require disclosure. Any

data which are disclosed by the Government or the Contractor to

third parties pursuant to this paragraph (26.8) shall be disclosed on

tenns which ensure that such data are treated as confidential by the

recipient. To the extent that there is any inconsistency between the

provisions of this paragraph (26.8) and the provisions of Article

XXXIII, the provisions of this paragraph (26.8) shall govern.



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West Bay BehZe Ltd. 11/3/2003



ARTICLE XXVII

Insurance and

Indemnification



27.1



To ensure that the Contractor shall meet his obligations to third

parties, or to Government agencies, that might arise in the event of

damage or injury (including environmental damage or injury,

removal of wrecks and cleaning up caused by accidents) caused by

petroleum operations, notwithstanding that the damage is

accidental, the Contractor shall maintain in force a third party

liability insurance policy covering the activities of himself, his

contractors and subcontractors and the employees of all such

parties. Such insurance policy shall include the Government as an

additional insured, shall waive subrogation against the Government

and shall provide that it may not be cancelled except upon thirty

(30) days prior written notice to the Government. A certificate

evidencing such insurance policy shall be furnished to the

Government within ninety (90) days of the effective date. The

limits, coverage, deductibles and other terms thereof shall be

subject to approval in writing by the Government. To the extent

that such third party liability insurance is unavailable or is not

obtained, or does not cover part or all of any claims or damage

caused by or resulting from petroleum operations, the Contractor

shall remain fully responsible and shall defend, indemnify and hold

the Government harmless against all such nature whatsoever. The

Contractor shall maintain in force a third party liability insurance

policy covering the activities of himself, his contractors and

subcontractors and the employees of all such parties. Such

insurance policy shall include the Government as an additional

insured, shall waive subrogation against the Government, and shall

provide that it may not be canceled except upon thirty (30) days

prior written notice to the Government. A certificate evidencing

such insurance policy shall be furnished to the Government within

ninety (90) days of the effective date. The Contractor shall procure

at his own expense and maintain in full force at all times, where

applicable and available, the following:

1. Workmen's Compensation Insurance in full compliance with

the laws of the applicable country and state of hire.



2. Employer's liability Insurance.

3. Commercial General Liability Insurance with Bodily Injury

(other than automobile)

4. Pollution Liability; Sudden and accidental pollution liability on



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West Bay Belize Ltd. 11/3/2003



a claims made basis.

Excess liability

5. Umbrella Liability or Excess Insurance:

insurance pursuant to an "umbrella" policy covering claims III

excess of the underlying insurance as set forth in (3) above.

6. Automobile Liability: Coverage with Bodily Insurance and

Property Damage with combined Single Limit per Occurrence.

7. Energy Exploration and Development Policy: Blowout insurance

covering cost of well control, redrilling and pollution liability.

Such insurance will be purchased within limits that are mutually

agreed to and acceptable based on international industry standards.

Originals of all insurances obtained under Article XXVII, this para.

27.1 shall be lodged with the Inspector of Petroleum within thirty

(30) days of execution of insurances.

27.2



The Contractor shall indemnify, defend and hold the Government

harmless against claims, losses and damages, without limitation,

claims for loss or damage to property or injury or death to persons

caused by or resulting from only petroleum operations conducted

by or on behalf of the Contractor, provided that the Contractor

shall not be held responsible to the Government under this

paragraph 27.2 for any loss, claim, damage or injury caused by or

resulting from any negligent action of personnel of the Government



27.3



The Contractor shall contribute one tenth of one percent (0.10%)

of the value of the annual gross production of crude oil and/or

natural gas produced and saved in each calendar year and not used

or consumed in petroleum operations to a Common Fund to be

held in trust by the Government and managed for the sole purpose

of indemnification against any or all environmental damages caused

during the petroleum operations.



27.4



Nothing contained in paragraph 27.3 above shall be construed to

relieve the Contractor of his obligations of indemnification as set

elsewhere out in this Agreement.



ARTICLE XXVIII

Assignment



28.1



The Contractor may assign, transfer, conveyor otherwise dispose of



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West Bay Beh"ze Ltd. 11/3/2003



any part or all of its rights or interest under this Agreement with the

prior written consent of the Government, which consent shall not

be unreasonably withheld.

28.2



Notwithstanding the provisions of paragraph 28.1, if the Contractor

assigns to any affiliated company, the Contractor shall remain fully

liable for the performance of this Agreement and shall be fully

liable for the performance of any such assignee.



28.3



In the case of an assignment to any non-affiliated company, the

Contractor shall provide to the Government an unconditional

undertaking by the assignee to assume all obligations of the

Notwithstanding such

Contractor under this Agreement

undertaking, the Contractor shall remain jointly and severally liable

with the assignee for performance of the obligations of the

Contractor unless the Contractor assigns his entire interest under

this Agreement.



ARTICLE XXIX

Law of the Agreement



29.1



This Agreement shall be construed under, governed by and

interpreted in accordance with the laws of Belize and such

principles of international law as may be applicable.



ARTICLE XXX

Force Majeure



30.1



Except as otherwise provided in this Article, each party shall be

excused from complying with the terms of this Agreement, if such

compliance is prevented by strikes, wars (declared or undeclared),

acts of God, governmental intervention not otherwise addressed in

this Agreement, third-party intervention, or by any act or cause that

is reasonably beyond the control of such party, such causes being

herein called "force majeure". In the event that either party hereto

is rendered unable, wholly or in part, by any of these causes to carry

out its obligations under this Agreement, such party shall give notice

and details of force majeure in writing to the other party within

thirty (30) days after the party giving notice of such force majeure is

aware of its occurrence. In such cases, the obligations of the party

giving the notice shall be suspended during the continuance of any

inability so caused. The Government and Contractor will do all



- 49­



West Bay Beljze Ltd. 11/3/2003



that is reasonably within their power to remove such cause.



ARTICLE XXXI

Entire Agreement and

Amendments



31.1



This Agreement is based on the principles of pactil. sunt observanda

and rebus sic stantibus. Since this Agreement embodies the entire

agreement and understanding between the Contractor and the

Government relative to the subject matter hereof, and supercedes

and replaces any provisions on the same subject in any other

Agreement between the parties, whether written or oral, prior to the

date of this agreement. Therefore, this Agreement may not be

amended, modified, varied or supplemented except by an

instrument in writing signed by the Contractor and the

Government.



ARTICLE XXXII

Waiver



32.1



Performance of any condition or obligation to be performed

hereunder shall not be deemed to have been waived or postponed

except by an instrument in writing signed by the party which is

claimed to have granted such waiver or postponement.



32.2



No waiver by any party of anyone or more obligations or defaults

by any other party in the performance of this Agreement shall

operate or be construed as a waiver of any other obligations or

defaults whether of a like or of a different character.



ARTICLE XXXIII

Confidentiality



33.1



This Agreement and any confidential information of any party

hereto which becomes known to the other party in connection with

the performance of this Agreement shall not be published or

disclosed to third parties without the former party's written consent,

except as otherwise provided herein, and provided however that

such other party may communicate confidential information to legal

counsel, accountants, other professional consultants, underwriters,

lenders, agents, contractors or shipping companies to the extent

necessary in connection with this Agreement, with the obligation of



- 50­



West Bay Belize Ltd. 11/3/2003



the parties receiving such infonnation to maintain confidentiality, or

to an agency of the Government of the country of the Contractor

having authority to require such disclosure.

The tenn "confidential infonnation", as used herein shall mean

infonnation identified as "confidential" by the party originally in

possession of it and disclosed to the other party, excluding

infonnation previously known to the other party or infonnation

which is publicly known (except through disclosure of the other

party in violation of this Article XXXIII) or infonnation that comes

into the legitimate possession of such other party.



.



33.2



The confidentiality obligations of this Article XXXIII shall expire

upon relinquishment of the area to which the information relates.



ARTICLE XXXIV

Notices



34.1



All notices and other communications required or permitted

hereunder or any notices that one party may desire to give to the

other party shall be in writing in the English language and deemed

to have been properly delivered if personally handed to an

authorized representative of the party for whom intended, or sent

by registered ainnail, cable, telex, facsimile and/or e-mail, at or to

the address of such party for whom intended, or such other

addresses as any party may from time to time designate by notice in

writing to the other party.



- 51 ­



West Bay Belize Ltd. 11/3/2003



EXHIBIT "A"



THIS EXHIBIT "A" is attached to and is incoIJlorated as part of the award and delivery of

acreage dated this



~



day of



---JJ e\3 ~\ae--r



, 2003



from Government of Belize



(GOB) to Robert E. Tucker Jr. for West Bay Belize Limited, covering Block 1 Sub-sectors or

44.1,086.5 acres more or less.



ACREAGE DESCRIPTION



SECTOR



SUBSECTORS



NO. OF



ACRES



SUBSECTORS

56

57

58

59

77

78

79

80

81

98

99

100

101

118

119

120

121

138

153

154

155

156

157

172

173

174

175



S,T,W,x,Y; Parts ofj,M,N,O,Q,R,V

B-E,G-Y; Parts of A,F

A-Y

A-Y

D,E,!J; Parts of A,B,C,H,M,N,O

A-J,L-O,Q-T,W-Y; Parts ofK,P,U,V

A-Y

A-Y

A-Y

C-E,HJ,M-O,R-T,W-Y; Parts ofB,G,L,Q,V

A-Y

A-Y

A-Y

A-Y

A-Y

A-Y

A-Y

A,U; Parts ofB,F,G,K,L,P,Q,V

B-D, G-J, L-O, Q-T, V-Y; Parts of A,F,K,P,U

U-W; Parts ofP,Q,R

Y

O,R,S,T,U,V,W; Parts ofEJ,N,Q,X,Y

A,F,K,P; Parts ofB,G,L,Q,U,V

B-E; Part of A

A-E

A-E

Parts of A,B,C,D



TOTAL:



8.7135

24.5894

25

25

7.5581

23.8779

25

25

25

15.2225

25

25

25

25

25

25

25

7.805

19.7159

4.5

1

10.2268

8.3792

4.2450

5

5

0.4225



8,612.6

24,304.6

24,710.4

24,710.4

7,470.6

23,601.3

24,710.4

24,710.4

24,710.4 .

15,046.2

24,710.4

24,710.4

24,710.4

24,710.4

24,710.4

24,710.4

24,710.4

7,714.6

19,487.5

4,447.9

988.4

10,108.3

8,282.1

4195.8

4,942.1

4,942.1

417.6

441,086.5



- 52­



West Bay Belize Ltd. 11/3/2003



EXHmIT-B"



MAP OF CONTRACT AREA



37



39



62



96



116



4



135



/36



97



102



1/7



137



155



/72



157



m<



- 53­



/39



140



/41



158



159



160



West Bay Beljze Ltd. 11/3/2003



EXHIBIT"C"



SECURITY - BANK GUARANTEE





Ministry of Finance,

Government of Belize,

Belmopan, Belize



Gendemen,

RE: OUR LETTER OF GUARANTEE



In compliance with the request of WEST BAY BELIZE LTD. ("the Contractor"), we, WEST

BAY EXPLORATION COMPANY, 13685 S. West Bay Shore, Suite 200, Traverse City,

Michigan 49684, issue this unconditional irrevocable Letter of Guarantee in your favour for a sum

not exceeding One Hundred and Fifty Thousand United States Dollars (US $150,000.00), which

represents the total minimum exploration expenditures set forth in paragraph 6.1.1. of the Agree­

ment ("Agreement"),- dated _ ~I/D~~1!!...4~~__, 2003, between the Contractor and the

Government of Belize ("Government"), relating to petroleum exploration, development and

production in the territory of Belize, to guarantee the Contractor's faithful performance of its

minimum exploration expenditures obligations as provided for in the Agreement, the said sum of

One Hundred and Fifty Thousand United States Dollars (US $150,000.00) to be reduced at the

end of each contract year, as defined in the Agreement, by the amount stipulated to be expended

in such contract year, if such amount is in fact expended as evidenced by a signed certificate from

the Government, provided, however, that said sum shall under no circumstances be reduced below

the stipulated minimum exploration expenditures for the remaining contract year of the initial

exploration period, as set forth in paragraph 6.1.1 of the Agreement, as evidenced by a, signed

certificate from the Government.



- 54­



West Bay Belize Ltd. 11/3/2003



The terms and conditions of this Letter of Guarantee are as follows:



1.



The said amount, or any part thereof, shall be paid to you upon our receipt of your written

statement that the amount claimed is duly payable under the Agreement.



2.



We hereby waive diligence, presentment, demand for payment, protest, any requirement

that the Government exhaust any right or power or take any action against the Contractor, all

notices {whether of non-payment by the Contractor, dishonour, protest or otherwise} and all

demands whatsoever. Our obligations hereunder are continuing, absolute and unconditional,

and will not in any way affected by giving of time or any forbearance by the Government, the

waiver or consent by the Government with respect to any provisions of the Agreement, and

irrespective of the validity, regularity, enforceability or value of the Agreement, or by any

other circumstances which might otherwise constitute a legal or equitable discharge or

defense of a surety or guarantor, all of which are hereby expressly waived.



3.



Our obligations hereunder shall be paid in United States Dollars to the bank account

designated by the Government, free and clear of and without reduction by reason of any and

all present and future taxes, levies, assessed, imposed or collected with respect thereto by the

Government of or any political subdivision or taxing authority thereof of therein. We shall

bear connection with this Letter of Guarantee.



4.



In order to give effect to this Letter of Guarantee, we hereby declare that the Government

shall be at liberty to act as though we were the principal debtor, and we hereby waive all and

any of the rights as surety which may at any time be inconsistent with any of the above



5.



Any claim or demand under this Letter of Guarantee shall be presented to us on or before

the expiration of the date of the validity of the Letter of Guarantee.



- 55­



West Bay Belize Ltd. 11/3/2003



6.



This Letter of Guarantee shall be effective immediately and expire ninety (90) days after

the end of the Initial Exploration period as



West Bay Beljze Ltd. 11/3/2003



IN WITNESS WHEREOF, the Government and the Contractor have hereunto set their hands

and seals the day and year first herein before written.

SIGNED, SEALED AND DELIVERED BY

the above-named JOHN BRICENO

for and on behalf

of the Government of Belize

in the presence of:



000 Briceiio

M' . te of Natural Resources,

Environm n Commerce & Industry



1~~~~;£~:!U-



WITNESS



SIGNED, SEALED AND DELIVERED BY



~~

Robert E. Tucl(er



Robert E. Tucker

For West Bay Belize Limited



For West Bay Belize limited

in the presence of:

(~~.



~J)



.



c:- '"'.<~ ci ' L).~



------------



WITNESS



I, _.:J_~hb_~~~~.Q... of Belmopan, hereby acknowledge that I did sign, seal and deliver the

within-written document as my act and deed.

Acknowledged at BELMOPAN this



.!l~- day of _~Pd~·~,J.o!(; 2003.

J 00 Briceiio

f Natural Resources,

ommerce & Industry



- 57­



West Bay Beh"ze Ltd. 11/3/2003



Before me,



BE IT REMEMBERED, that on the



_i4tA



day of



_~~~~~\(""



, 2003 personally



appeared before me the within named John Briceno and acknowledged before me that he did

sign, seal and deliver the within-written instrument as his act and deed and that the signature of

John Briceno is in his writing.



- 58­



West Bay Belize Ltd. 11/3/2003



I, Evadne L. Wade MAKE OATH AND SAY as follows:

1.



I am subscribing witness to the execution of this agreement by Robert E. Tucker Jr. of



West Bay Belize Limited.

2.



I was present and did see Robert E. Tucker Jr. of West Bay Belize Limited sign, seal, and



deliver this agreement as his act and deed.

3.



The signature



,,6l-..~ ( ~



" is in the proper handwriting of Robert E.



Tucker Jr. of West Bay Belize Limited and the signature"



f J~



cI C.J ..~~



"is my own



proper handwriting.



SWORN AT BELMOPAN

THIS _l{~:~ DAY OF _MI;}~\{2003



Before me,



BE IT REMEMBERED that on the



:l.~_ day of _~~~be:<: 2003, personally appeared before



me the within-named Evadne L. Wade and made oath that she was a subscribing witness to the

execution of this AGREEMENT by Robert E. Tucker Jr. of West Bay Belize Limited and was

present and did se~ Robert E. Tucker Jr. of



W.est Bay ~elize Limited sigp,. seal an? deliver. ~s



agreement as her/his act and deed and that the SIgnature

his proper handwritings.



~~'Z... '/[.L..A:lJ

J



r "



IS m



M~

VOFFICER



ECUT.l



- 59­



West Bay Belize Ltd. 11/3/2003



I hereby certify that I have count the within-written document and that it contains two hundred

ninety-five (295) folios of seventy-two words each and twenty three (23) words over and no more.



AS WITNESS my hand this ~ of ~\)e~2003.



___~;c

THIS DOCUMENT was prepared in the Geology & Petroleum Department for the Inspector of

Petroleum for and on behalf of the Government of Belize



- 60­



West Bay BehZe Ltd. 11/3/2003



Annex -I



INCOME TAX COMMISSIONER'S BUlLETIN



Article I General Provisions

1.1

Definitions



1.2

Inconsistency



1.3

Accounting Records and Reports



1.4

Language - and Units of Account



Tax Accounting Principles



1.5

1.6

Accrual Basis



1.7

Definitions of Capital and Operating Expenditures



1.8

Depreciation



1.9

Ann's Length Transactions



1.10 General Exclusions



1.11 Currency Exclusions



1.12 Revision of the Accounting Procedure



1.13 Acceptance of Costs





Article II Petroleum Operations Expenditures

2.1



Definition for the Purpose of Detennining Compliance with the Minimum Exploration



Expenditures Commitment





2.2



Definition for the Purpose of Article IX





Article III Accounting Methods and Principles

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9



Labour Costs



Material Costs



Technical Services Costs



Insurance and Claims



Legal and Litigation Costs



General Administration and Services



Interest, etc



Office Costs, etc. in Belize



Example of Production Share Calculation





- 61 ­



West Bay Belize Ltd. 11/3/2003



INCOME TAX COMMISSIONER'S BUlLETIN



ARTICLE I

DEFINITIONS



1.1



The Accounting Procedure described herein is to be

followed and obseIVed in the performance of both

parties' obligations under this Agreement The

definitions appearing in Article I of this Agreement

shall also apply to this Exhibit.



INCONSISTENCY



1.2



In the event of any inconsistency or conflict between

the provisions of this Exhibit and the other

provisions of this Agreement, then the other

provisions of this Agreement shall prevail.



ACCOUNTING

RECORDS

AND

REPORT



1.3



(a) The Contractor shall establish and maintain at its

business office in Belize complete accounts, books

and records of all revenues, costs and expenses

relating to all Petroleum Operations hereunder in

accordance with generally accepted procedures and

standards in the international petroleum industry.

Such account books, records and reports will be

available for the inspection and use of the

Government and its representatives in carrying out

its supervisory function under the Agreement.

(b) Within thirty (30) days of the Effective Date of

this Agreement, the Contractor shall submit to and

discuss with the Government a proposed outline of

charts of accounts, books, records and reports,

which outline shall be in accordance with generally

accepted and recognized accounting systems and

consistent with modem petroleum industry practices

and procedures. Within ninety (90) days of receiving

the above submission, the Government shall either

indicate its approval of the proposal or request

revisions to the proposal. Within one hundred and

eighty (180) days after the Effective Date of the

Agreement, the Contractor and the Government

shall agree on the outline of charts of accounts,

books, records and reports which shall describe the



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West Bay Belize Ltd. 11/3/2003



basis of the accounting system and procedure to be

developed and used under this Agreement.

Following such agreement, the Contractor shall

expeditiously prepare and provide the Government

with formal copies of the comprehensive charts of

accounts and manuals related to the accounting,

recording and reporting functions, and procedures

which are, and shall be, observed under this

Agreement.

(a) All reports and statements will be prepared in

accordance with this Agreement, the laws of Belize,

and where there are no relevant provisions of either

of these, in accordance with generally accepted

practices in the international petroleum industry.

LANGUAGE - AND UNITS OF

ACCOUNT



1.4



Unless otherwise agreed, all accounts, records,

books and reports shall be maintained and prepared

in the English language and shall be recorded in

United States dollars.



TAX ACCOUNTING

PROCEDURES



1.5



The following tax accounting principles shall apply:



1.5.1



In the event that the Contractor at any time

comprises more than one corporation, individual or

entity, in the form of a partnership, joint venture,

unincorporated association or other combination of

entities or individuals, Income Tax shall in all cases

be calculated and assessed on the basis of the Net

Taxable Income of each corporation, individual,

partner, joint venture, associate or other entity

comprising the Contractor.



1.5.2



Commencing with the Calendar Year in which Initial

Commercial Production first occurs, any allowable

deductions for Income Tax purposes with respect to

Petroleum Operations Expenditures, the Production

Payment and the Government's share of Crude Oil

production which remain unrecovered in any

Calendar Year from Gross Revenue shall be treated

as an operating loss and may be carried forward as



CARRY FORWARD OF LOSSES



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West Bay Belize Ltd. 11/3/2003



an allowable deduction to subsequent Calendar

Years until fully recovered from Gross Revenues. In

the event that an operating loss remains unrecovered

upon the termination of this Agreement, such loss

may be carried over and deducted from other

revenues of the Contractor from Petroleum

Operations in Belize

ACCRUAL BASIS



1.6



All books, accounts and records shall be prepared

on an accrual basis. Revenues shall be attributed to

the accounting period in which they are earned, and

costs and expenses to the accounting period in which

they are incurred, without the need to distinguish

whether cash is received or disbursed in connection

with a particular transaction. Costs and expenses

shall be deemed to have been incurred, in the case

of physical items, in the accounting period when title

thereto passes, and in the case of services, in the

accounting period when such services are

performed.



DEFINITION OF

PETROLEUM

OPERATIONS

EXPENDITURES



1.7



Petroleum Operations Expenditures may consist of

capital and operating expenditures as follows:



1.7.1



Capital

expenditures

are

those

Petroleum

Operations Expenditures for assets that normally

have a useful life which extends beyond the year in

which the assets was acquired.



CAP I TAL EXPENDITURES



In addition to expenditures relating to assets that

normally have a useful life beyond the year in which

the asset was acquired, the costs of development and

production drilling operations, as described in

paragraph 1.7.1 (e) of this Exhibit, will be classified

as capital expenditures.

Capital expenditures include, but are not limited to,

the following:

(a) Construction utilities, but are not limited to, the

following: water facilities, warehouses, and field



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West Bay Beh"ze Ltd. 11/3/2003



roads. Cost of Crude Oil treating plants and

equipment, secondary recovery systems, natural gas

plants and steam systems,

(b) Construction housing and welfare housing ­

recreational facilities and other tangible property

incidental to construction,

(c) Production facilities - production rigs (including

the costs of labor, fuel, hauling and supplies for both

the offsite fabrication and onsite installation of rigs,

and other construction costs in erecting rigs and

installing pipelines), wellhead equipment, subsurface

lifting equipment, production tubing, sucker rods,

surface pumps, flow lines, gathering equipment,

delivery lines and storage facilities,

(d) Movables - surface and subsurface drilling and

production tools, equipment and instruments,

barges, floating craft, automotive equipment, aircraft,

construction equipment, furniture and office

equipment and miscellaneous equipment,

(e) Development and production drilling - labor,

materials and services used in drilling wells with the

object of penetrating a proven reservoir, including

the drilling of delineation wells as well as redrilling,

deepening or recompleting wells, and access roads, if

any, leading directly to wells,

OPERATING EXPENDITURES





1.7.2



Operating expenditures are all

Petroleum

Operations Expenditures other than capital

expenditures.

Operational expenditures include, but are not

limited to, the following:

(a) Exploration drilling - labor, materials and

services used in the drilling of wells with the object of

finding unproven reservoirs of crude oil and natural

gas, and access roads, if any, leading directly to wells.



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West Bay Belize Ltd. 11/3/2003



(b) Surveys - labor, materials and services used in

aerial, geological, topographical, geophysical and

seismic surveys, and core hole drilling, and

(c) Other exploration expenditures -auxiliary or

temporary facilities having lives of one year or less

used in exploration and purchased geological and

geophysical information.

DEPRECIATION



ARM'S LENGTH

TRANSACTIONS



1.7.3



Capital expenditures, as defined in paragraph 1.7 of

this Exhibit, shall be depreciated only for the

purpose of the calculation of Income Tax. For the

purpose of determining the amount of depreciation

which is allowable as a deduction in each calendar

year,

the

following principles shall apply,



1.8.1



Capital expenditures will be depreciated usmg the

straight line method over five (5) years,



1.8.2



A full year's depreciation may be taken in the first

calendar year in which such depreciation is

allowable,



1.8.3



Deductions with respect to depreciation of capital

be

allowable

expenditures

incurred

shall

commencing with (A) the calendar year in which the

capital asset is placed into service, or, if the capital

expenditure does not relate to an asset that normally

has a useful life beyond the year in which it is placed

in service, the calendar year in which the capital

expenditure is incurred, or (B) the calendar year in

which Initial Commercial Production first occurs,

whichever is later.



1.9



Except as may be otherwise agreed in wntmg

between the Government and the Contractor, all

transactions giving rise to revenues, costs or expenses

which will be credited or charged to the books,

accounts, records and reports prepared, maintained

or submitted hereunder shall be conducted at arm's

length or on such a basis as will assure that all such



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West Bay Beh'ze Ltd. 11/3/2003



revenues, costs or expenses will not be higher or

lower, as the case may be, than would result from a

transaction conducted at arm's length on a

competitive basis with third parties.

GE N ERA L EXCLUSIONS



1.10



The following expenditures shall not be included in

Petroleum Operations Expenditures:

(a) costs and expenses incurred at any time prior to

the Effective Date,

(b) costs relating to petroleum marketing

transportation beyond the Delivery Point,

(c) contributions and donations

approved by the Government,



except



or



those



(d) gifts or rebates to suppliers, and gifts or

commissions to intermediaries arranging service or

supply contracts,

(e) any interest, fines, monetary corrections or

increases in expenses resulting from the Contractor's

failure to comply with its obligations under this

Agreement, applicable law or agreements with third

parties, and

(f) any other expenditures not directly related to

Petroleum Operations or not in compliance with the

provisions of this Exhibit

CURRENCY EXCHANGE

RATES



1.11



For conversion purposes between any other

currency and United States dollars, the average of

the buying and selling rate of exchange shall be used

as issued by the Central Bank of Belize on the first

day of the month in which the revenues, costs or

expenses are recorded. Any realized or unrealized

gains or losses from the exchange of currency shall

be charged or credited to Petroleum Expenditures.

A record of the exchange rates used in converting

other currencies into United States dollars shall be

kept by the Contractor.



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West Bay Beh"ze Ltd. 11/3/2003



REVISION OF

THE ACCOUNTING

PROCEDURE



1.12



By mutual agreement between the Government and

the Contractor this Accounting Procedure may be

revised from time to time.



ACCEPTANCE OF COSTS



1.13



The acceptance by the Government of the values

and treatment proposed by the Contractor relating to

all costs and expenses may be conditional upon the

presentation by the Contractor, following a request

by the Government or its representatives, of all

records and original documents supporting such

costs and expenses, such as invoices, cash vouchers,

debit notes, price lists or similar documentation

verifying the value and treatment proposed.



Article II

Petroleum Operations Expenditures

DEFINTION FOR

THE PURPOSE OF

DETERMINING

COMPLIANCE

WITH THE

MINIMUM

EXPLORATION

EXPENDITURES

COMMITMENT



2.1



DEFINITION FOR

THE PURPOSE OF

ARTICLE IX



2.2

2.2.1



In determining the Contractor's compliance with the

minimum Exploration Expenditures obligations

undertaken pursuant to this Agreement, Petroleum

Operations Expenditures shall include all costs and

expenses incurred in the performance of exploration

operations in accordance with approved work

programmes, but excluding those incurred in the

performance of development and production

operations in the contract year in question without

the need to distinguish, between capital and

operating expenditures, provided, however, that

expenditures incurred in training nationals of Belize

pursuant to paragraphs 20.1 and 20.2 of this

Agreement and the value of stock listed in inventory

shall be excluded from petroleum operations

expenditures for the purpose of this subparagraph.



For each calendar year, including any calendar year

prior to the calendar year in which initial commercial

production first occurs, petroleum operations

expenditures, for the purposes of Article IX of this

Agreement, shall include all petroleum operations



- 68­



West Bay Beljze Ltd. 11/3/2003



expenditures incurred

contract area.

2.2.2



III



that calendar year in the



The following costs and expenses shall not be

included in petroleum operations expenditures for

the purposes of Article IX of this Agreement

(a) surface rentals payable pursuant to Article XIII

of this Agreement,

(b) any costs relating to the provision of the security

described in paragraph 6.1.6 of this Agreement

including payments made to the Government

pursuant to such security or otherwise for failure to

incur the minimum exploration expenditures in

accordance with paragraph 6.1 of this Agreement,

and



(c) any interest, fees, duties, taxes and other financial

charges, referred to in paragraph 3.7 of this Exhibit,

relating to loans and credits obtained by the

Contractor to acquire funds for the execution of its

obligations under this Agreement.

DEFINillON FOR THE

PURPOSE OF THE INCOME

TAX



2.2.3



For each calendar year, commencing with the

calendar year in which initial commercial production

first occurs, petroleum operations expenditures

which shall be deductible for the purpose of the

calculation of Income Tax payable shall consist of

the sum of:

(1) the

current

calendar

year's

operating

expenditures incurred, including the current

calendar year's allowable deductions for depreciation

of capital expenditures determined in accordance

with subparagraphs 1.5.2 of this Exhibit.



Article III

Accounting Methods and Principles

Petroleum operations expenditures incurred

hereunder shall be calculated and accounted for in a



- 69­



West Bay Belize Ltd. 11/3/2003



manner consistent with the following principles and

definitions and shall include:

LABOUR COSTS



MATERIAL COSTS



3.1



3.2



Costs of salaries and wages of the Contractor' s

employees directly engaged in petroleum operations,

including costs of holidays, vacations, sickness, living

and housing allowances, travel time, bonuses and

other established plans for employee benefits

customarily granted to the Contractor's employees

and their families in similar ventures,

Costs of materials, equipment, machines, tools and

any other goods of a similar nature used or

consumed in petroleum operations subject to the

following:



(a) Acquisition - the Contractor shall only supply or

purchase materials for use in petroleum operations

that may be used in the foreseeable future. The

accumulation of surplus stocks and inventory shall

be avoided. Inventory levels shall, however, take into

account the time lag for replacement, emergency

needs and similar considerations,

(b) Components of costs - costs of materials

purchased by the Contractor for use in petroleum

operations may include, in addition to the invoice

price (subtracting the discounts given, if any), freight

costs and costs of transportation between the supply

point and delivery point (provided that such costs are

not included in the invoice price), inspection costs,

insurance, custom duties, taxes and other items that

may be charged to imported materials or to materials

purchased in the Belize,



(c) Accounting - such materials costs shall be

charged to the accounting records and books based

on the "First in-First Out" (FIFO) method,

(d) Supply of Materials by Affiliated Companies ­

materials supplied by the Contractor's Affiliated



- 70­



West Bay Belize Ltd. 11/3/2003



Companies shall be charged to the accounting

records and books at prices no higher than the

prices comparable material purchased on a

competitive basis from third party suppliers. This

criterion shall apply to both new and used materials,

(e) Inventories - the Contractor shall maintain both a

physical and accounting inventory of all materials in

stock in accordance with generally accepted practices

in the international petroleum industry. The

Contractor shall make a physical inventory of all

such materials at least twice in any Contract Year.

The Government may carry out total or partial

inventories whenever it deems it necessary. The

costs of non capital items purchased for inventory

shall be charged to operating expenditure when

issued from stock for consumption,

TECHNICAL SERVICE COSTS



3.3



The value of technical services costs relating to

Petroleum Operations shall be:

(a) In the case of technical services performed by

third parties directly subcontracted, including outside

consultants, contractors and utilities, the price paid

by the Contractor, provided that such prices are no

higher than the prices charged by other suppliers for

comparable work and services, and

(b) In the case of technical services performed by

the Contractor or its Affiliated Companies, prices

which are no higher than the most favorable prices

charged to other Affiliated Companies of the

Contractor and to third parties for comparable

servIces.



INSURANCE AND CLAIMS



3.4



Costs relating to insurance, provided such insurance

is customary, affords prudent protection against risks

and is at a premium no higher than that charged on a

competitive basis by insurance companies which are

not Affiliated Companies of the Contractor. The

proceeds of any insurance or claim shall be credited

against Petroleum Operations Expenditures. Except



- 71 ­



West Bay Belize Ltd. 11/3/2003



in cases where insurance coverage is required

pursuant to Article XXV of this Agreement, if no

insurance is carried for a particular risk, all costs

incurred by the Contractor in settlement of any

related loss, claim, damage or judgment, including

legal services, shall be includable in Petroleum

Operations Expenditures provided that such costs

did not result from the Contractor's gross negligence.

LEGAL AND

LITIGATION

COSTS



3.5



Costs and expenses of litigation and legal or related

services necessary or expedient for the protection of

the Contract area. Any damages or compensation

received shall be credited against Petroleum

Operations Expenditures. Under no circumstances

may the Contractor's costs incurred in the course of

arbitration, entered into under Article XXII of this

Agreement, be included in Petroleum Operations

Expenditures,



GENERAL

ADMINISTRATION

AND SERVICES

OVERHEAD COSTS



3.6



General services and administrative costs, other than

direct costs, including, but not limited to:

(a) The Contractor's personnel and services costs,

outside of Belize relating to administration, legal,

accounting, treasury, auditing, taxation, planning,

employee relations, purchasing and other functions

required for Petroleum Operations under this

Agreement, and

(b) Reasonable travel expenses of the Contractor's

personnel in the general and administrative

categories listed in (a) above for the purpose of

inspection and supervision of Petroleum Operations

in Belize shall be allocable to Petroleum Operations

Expenditures according to methods agreed to by the

Contractor and the Government. The methods

agreed shall result from a detailed study and the

methods selected following such study shall be

applied each year consistently unless otherwise

agreed by the parties. In the case of Exploration

Operations, these general administration and

services overhead costs shall not exceed three



- 72­



West Bay Beljze Ltd. 11/3/2003



percent (3%) of the direct costs incurred in such

operations in each Calendar Year. Following the

date of declaration of Commercial Discovery in the

first Field, the Government and the Contractor shall

agree upon the level of General Administration and

Services Overhead Costs which may be allocable to

Petroleum Operations Expenditures and the

percentage of direct costs ceiling shall be reduced

accordingly.

INTEREST, ETC.



3.7



Interest, fees, duties, taxes and other financial

charges relating to loans and credits obtained by the

Contractor to acquire funds for the execution of its

obligations under this Agreement at rates not

exceeding the prevailing commercial rates may be

charged to Petroleum Operations Expenditures.

Details of any financing plan, and amounts thereof,

shall be included in each annual Work Programme

Budget



OFFICE COSTS, ETC. IN

BELIZE



3.8



St Staffing and maintenance of the Contractor's head

office in Belize and other offices in Belize, including

rent, telephone, telex and radio expenses, as well as

the expenses of general facilities such as shore bases,

warehouses, water, power and communications

systems, roads and bridges.



EXAMPLE OF

PRODUCfION

SHARE

CALCULATION



3.9



The examples below shows the application of the

scale of Production Sharing for fields producing

360,000 bbls per day on an average in the course of

a quarter.



- 73­



West Bay Belize Ltd. 11/3/2003



Example-l (offshore)

Production Share Table

Daily Average Production



(bbl/d)





Government Share



0-50,000



50,000 - 150,000



150,000 - 250,000



250,000 - 350,000



,350,000





10

15



(%)



20

25



30



Gross Value of 360,000 bbl/d @ $20/bbl



100% Recovery of expenses

Balance in dollars



$ 7,200,000

$ 2,880,000

$ 4,320,000



Government's Share of the Balance:

[(50,000 bbls x 10% + 100,000 bbls x 15%

+ 100,000 bbls x 20% + 100,000 bbls x 2596

+ 10,000 bbls X 30%) / (360,000 bbls)]

X



$ 4,320,000



Contractor's Share

$ 4,320,000 - $ 816,000



- $ 816,000



- $3,504,000



-74 ­



Contractor Share

(96)



90

85

80

75

70



West Bay Belize Ltd. 11/3/2003



Example-2 (onshore)

Production Share Table



Daily Average Production

(bbVd)

0-50,000

50,000 - 100,000

100,000 - 150,000

> 150,000



Government Shore

(%)



10

20

30



40



Gross Value of 360,000 bbVd @ $20/bbl

100% Recovery of Expenses

Balance in dollars



$7,200,000

$1,620,000

$5,580,000



Government's Share of the Balance:



(50,000 bbls x 10% + 50,000 bbls x 20% +



50,000 bbls x 30% + 210,000 bbls x 40%)f360,OOObbls)]



x 5,580,000

- $1,767,000



- $3,813,000



- 75­



Contractor Share



(%)





90



80



70



60





BE LIZ E:

PRODUCTION SHARING AGREEMENT



MODIFICATION AGREEMENT





. #.

THIS MODIFICATION AGREEMENT is made this



7



day of



.

te--b~l.A.A.{i



2006 between THE GOVERNMENT OF BELIZE (acting through the Minister of

Natural Resources, Local Government and the Environment) (hereinafter referred to as

"the Government") of the one part and WEST BAY BELIZE LIMITED, a company duly

incorporated under the laws of Belize, with registered address at No. 91 North Front

Street, Belize City, Belize, C.A. (hereinafter referred to as "the Contractor") of the other

part.



WHEREAS on the 4th day of November 2003 the Government and the Contractor,

through its authorized representative, Robert E. Tucker Jr., entered into a Production

Sharing Agreement (hereinafter referred to as "the Principal Agreement") for the conduct

of petroleum operations by the Contractor in the area of Belize described in Exhibit A

and Exhibit B of the Principal Agreement;



AND WHEREAS the Contractor has made an application for other acreage, in addition

to the area described in the Exhibit A and Exhibit B of the Principal Agreement, within

which to conduct petroleum operations under the Principal Agreement;



AND WHEREAS the Government is desirous of granting such application subject to the

provisions herein contained;



NOW THEREFORE TillS AGREEMENT WITNESSETH as follows:



1.



The words used in this Agreement shall have the same meaning as the definition

of such words in Article I of the Principal Agreement.



2.



The Principal Agreement is hereby amended by repealing and replacing Exhibit A

and Exhibit B thereof with Exhibit A and Exhibit B hereof.



3.



The Principal Agreement shall be construed as if though Exhibit A and Exhibit B

hereof were originally included in the Principal Agreement instead of the repealed

Exhibit A and Exhibit B.



4.



Without prejudice to paragraphs 3 and 8 hereof, the Contractor shall revise the

current annual work programme of petroleum operations and work programme

budget of petroleum operations expenditures (providedfor in paragraph 5.4 ofthe

Principal Agreement) in light of the new contract area and submit the same within



forty-five (45) days from the date hereof, for approval, which approval shall be

determined in accordance with paragraph 5.4 ofthe Principal Agreement and any

other applicable paragraphs.



5.



The Principal Agreement is hereby amended as follows:



(a) In paragraph 6.1.2.3 of Article VI thereof, which said paragraph is captioned

"SECOND RENEWAL PERIOD", by deleting the sentence "Drill initial test

well." occurring therein; and



(b) In paragraph 6.1.2.2 of Article VI thereof, which said paragraph is captioned



"FIRST RENEWAL PERIOD", by adding the following new sentence

immediately after the sentence "Acquire additional geophysical data as

required by integrated interpretation." occurring therein:



"Commence drilling of initial test well by the end of the second

&



6.



quarter of the second year of the first renewal period"



The Principal Agreement is hereby amended by repealing and replacing paragraph

8.1 of Article vm thereof, with the following:



"8.1



(a) Subject to paragraphs 8.1(b) and 8. 1(c) below, the Contractor

shall pay to the Government a royalty equal to (i) seven point five

percent (7.5%) of the value of the annual gross production of crude

oil produced and saved in each calendar year and not used or

consumed in petroleum operations, and (ii) five percent (5%) of

the value of the annual gross production of natural gas produced,

saved and sold in each calendar year and not used or consumed in

the conduct ofpetroleum operations.



(b) With respect to crude oil produced from any part of the contract

area coloured pink in Exhibit B, and more particularly described in

Part IT of Exhibit A, the Contractor shall pay to the Government

royalty equal to twenty percent (200.10) of the value of the annual

gross production of crude oil produced and saved in each calendar

year and not used or consumed in petroleum operations.



(c) With respect to natural gas produced from any part of the

contract area coloured pink in Exhibit B, and more particularly

described in Part II of Exhibit A, the Contractor shall pay to the

Government royalty equal to ten percent (10%) of the value of the

annual gross production of natural gas produced, saved and sold in

each calendar year and not used or consumed in petroleum

operations."

7.



The Principal Agreement is hereby amended by repealing and replacing

paragraphs 9.1 and 9.2 of Article IX thereof, with the following:



"9.1



(a) In each calendar year, after discharging its obligation



for the royalty payment due to the Government pursuant to Article

VITI, the Contractor shall be entitled to recover all petroleum

operations expenditures incurred hereunder, out of one hundred



percent (100%) of the petroleum produced and saved in such

calendar year and not used in petroleum operations by retaining

and disposing of that amount of petroleum equal in value to the

unrecovered petroleum operations expenditures for that calendar

year plus all unrecovered petroleum operations expenditures from

prior calendar years:

Provided that petroleum operations expenditures incurred

in respect of the conduct of petroleum operations in or relating to

that part ofthe contract area coloured green in Exhibit B and more

particularly described in Part I of Exhibit A shall be recovered

solely out of the petroleum produced from within that part, and that

petroleum operations expenditures incurred in respect of the

conduct of petroleum operations in or relating to that part of the

contract area coloured pink in Exhibit B and more particularly

described in Part II of Exhibit A shall be recovered solely out of

the petroleum produced from within that other part.

(b) All such petroleum operations expenditures referred to in



paragraph (a) above shall be recovered without a ceiling in the

manner and to the extent provided for in the Income and Business

Tax Act, Chapter 55 of The Substantive Laws of Belize, Revised

Edition 2000. For the purpose of determining the value of the

quantity of petroleum to which the Contractor is entitled in each

calendar year pursuant to this paragraph 9.1, the provisions of

Article X shall be applied.

9.2



Any remaining quantity of petroleum produced and saved



in a given calendar year and not used in petroleum operations, that

is, after payment of royalty pursuant to Article VIII and paragraph

9.1 above and recovery by the Contractor of petroleum operations



expenditures pursuant to the said paragraph 9.1, (Net Petroleum),

shall be taken and disposed of separately by the Government and

Contractor in each calendar year in the following shares:



(a)



In respect of petroleum produced from that part of the



contract area coloured green in Exhibit B and more particularly

described in Part I of Exhibit A:



Daily Average Production:

Government's Share



Contractor's Share



Percent (%)



Percent (%)



First 50,000 bopd



5



95



Next 50,000 bopd



7.5



92.5



Next 50,000 bopd



10



90



Next 50,000 bopd



15



85



Above 200,000 bopd



20



80.



(b)



In respect of petroleum produced from that part of the



contract area coloured pink in Exhibit B and more particularly

described in Part IT ofExhibit A:



Daily Average Production:

Government's Share



Contractor's Share



Percent (%)



Percent (%)



First 10,000 bopd



25



75



Next 10,000 bopd



30



70



Next 10,000 bopd



35



65



Next 10,000 bopd



40



60



Above 40,000 bopd



45



55.



9.3



(a) In the event of commercial discoveries in both said parts



of the contract area (coloured green in Exhibit B and more

particularly described in Part I of Exhibit A and coloured pink in

Exhibit B and more particularly described in Part IT of Exhibit A.,

respectively) the Contractor shall develop and produce each said

part of the contract area independently of each other, including

establishing separate production facilities.

(b) Without prejudice to paragraph 9.3(a) above, where the

boundaries of a field extend into both said parts of the contract area

the Contractor shall, within the term of the development and

production period for a field as prescribed in paragraph 3.4,

develop and produce that portion of the field that extends into one

part independent of, but simultaneous with, the development and

production of that portion of the field that extends into the other

part of the contract area, including establishing separate production

facilities.



The matters required to be set forth in the report



required under paragraph 6.2.8(a) and the work programme and

work programme budget pertaining to the development of the field

required under paragraph 6.2.8(b) shall be set forth in respect of

each said portions of the field as if though such portion were the

entire field.

9.4



In respect of each said parts of the contract area coloured



green and pink in Exhibit B and more particularly described in Part

I and Part IT of Exhibit A., respectively, the Contractor shall keep

separate books, accounts and records, which are required to be kept

pursuant to Article XXVI and any other applicable provisions

hereof and where necessary or as required by the Government,

provide a detailed explanation of the apportionment of any



petroleum operations expenditures between the said two parts of

the contract area."

8.



All other terms and conditions of the Principal Agreement shall remain the same.



SCHEDULE I





EXHIBIT "A"



ACREAGE DESCRIPTION





PART I

SECTOR



SUB-SECTORS



NO. OF



ACRES



SUB-SECTORS

56

57

58

59

77



78

79

80

81

98

99

100

101

118

119

120

121

138

153

154

155

156

157

172

173

174

175



SUB-TOTAL



S,T,W,x,Y; Parts of J,M,N,O,Q,R,V

B-E,G-Y; Parts of A,F

A-Y

A-Y

D,E,I,J; Parts of A,B,C,H,M,N,O

A-J,L-O,Q-T,W-Y; Parts ofK,P,U,V

A-Y

A-Y

A-Y

C-E,H-J,M-O,R-T,W-Y; Parts ofB,G,L,Q,V

A-Y

A-Y

A-Y

A-Y

A-Y

A-Y

A-Y

A,U; Parts ofB,F,G,K,L,P,Q,V

B-D, G-J, L-O, Q-T, V-V; Parts of A,F,K,P,U

U-W; Parts ofP,Q,R

Y

O,R,S,T,U,V,W; Parts ofE,J,N,Q,x,Y

A,F,K,P; Parts ofB,G,L,Q,U,V

B-E; Part of A

A-E

A-E

Parts of A,B,C,D



8.7135

24.5894

25

25

7.5581

23.8779

25

25

25

15.2225

25

25

25

25

25

25

25

7.805

19.7159

4.5

1

10.2268

8.3792

4.2450

5

5

0.4225



8,612.6

24,304.6

24,710.4

24,710.4

7,470.6

23,601.3

24,710.4

24,710.4

24,710.4

15,046.2

24,710.4

24,710.4

24,710.4

24,710.4

24,710.4

24,710.4

24,710.4

7,714.6

19,487.5

4,447.9

988.4

10,108.3

8,282.1

4195.8

4,942.1

4,942.1

417.6

441,086.5



PART II





SUB-SECTORS



NO. OF SUB-SECTORS



ACRES



S,T,V,W,x,Y; Parts of J,M,N,O,P,Q,R,U



9.03



8,925.42



9.96



9,841.29



23.69



23,418.92



13.55



13,397.18



25



24,710.44



25



24,710.44



1.98



1,955.23



SECfOR

13



A,B,F,G,K,L,P,Q,U,V

14

20



36



B,C,D,E,G,H,I,J,K,L,M,N,O,P,

Q,R,S,T,U,V,W,x,Y; Parts of

A,F

J,N,O,R,S,T,V,W,x,Y; Parts of

E,I,L,M,Q,U

A-Y



37

A-Y

38

All those Jands situated north of Sector

36 and west of Sector 20 Jying in the

territory of BeJize



SUB-TOTAL



106,958.92



TOTAL



548,045.42



SCHEDULEll

EXHIBIT "B"





MAP OF CONTRACT AREA









...........



., »



..



..



i



IN WITNESS WHEREOF the parties hereto have set their hands and seals the day and

year first herein before written.



SIGNED, SEALED AND DELIVERED



)



by JOHN BRICENO, Minister ofNatural



)



Resources, Local Government and the



)



Environment for and on behalf ofthe



)



Government of Belize



)



In the presence of:



SIGNED, SEALED AND DELIVERED



)



by MORRIS MICELI



)



for and on behalf of West Bay Belize Ltd.



)



In the presence of:



~."."'.'



..- ..

~



",""'-



...".., ,~.".



..



--..;;s



WITNESS

Name:



Sct""ck,r ~ ~cJ'-eA\s



Address:



1 f> SwC\..se.i S~,



()e-\'-o~

~hl..-e...





MORRIS MICELI



I, JOHN BRICENO, Minister of Natural Resources, Local Government and the



Environment hereby acknowledge that I did sign, seal and deliver the within written



document as my act and deed.



Acknowledge at BELMOPAN this



'l~



day of~~V\."-\11



2006.





JO

MINISTER OF NA



OJ ....



BRICENO



T"'~LJ RESOURCES,



LOC



RNMENTAND



ENVIRONMENT



Before me,



ClllEF EXECUTIVE OFFICER



BE IT REMEMBERED that on the



t ~



t



day of



e.-~·""{>""1



2006



personally appeared before me the within named JOHN BRICENO and acknowledged

before me that he did sign, seal a



deliv



t)1e

'!hin-~itten docume.nt as his act and



deed and that the signature "

handwriting.



.. .;.



is i



.S



.oper



.



ClllEF EXECUTIVE OFFICER



I, MORRIS MICELi, hereoy aCKnowleoge



WeU .1 UIU ~)10U,



.,,,


u"". . . "".



• ••_





written document as my act and deed for and on behalfof West Bay Belize Ltd.



Acknowledge at BELMOPAN this



,~



day of



-:t~. . . . o...,"'f



2006.



Before me,



CHIEF EXECUTIVE OFFICER



BE IT REMEMBERED that on the



I



~



day of



~ eJ'~<~\f1



2006



personally appeared before me the within named MORRIS MICELI and acknowledged

before me that he did sign, seal and deliver the within-written document as his act and

deed for and on behalf of West Bay Belize Ltd. and that the signature

"



~ ~)" is in his own proper handwri .



g..



CHIEF EXECUTIVE OFFICER





I hereby certify that I have counted the within-written document and that it contains

twenty-nine (29) folios of seventy-two words each and seventeen words over and no

more.



Witness my hand this l~ dayof ~e,...-~nAcw'f



2006.



......._ ...~-?





WITNESS



This Document was prepared and drawn in the Ministry of Natural Resources, Local

Government and the Environment.



INSPECTOR OF PETROLEUM