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THIS BASIC AGREEMENT is made this 5th day of May I9H6 between


ALCORN (PRODUCTION) PHILIPPINES, INC., ALCORN (PHILIPPINES)


INC. , ORIENTAL PETROLEUM & MINERALS CORPORATION,


PHILIPPINE-OVERSEAS DRILLING AND OIL DEVELOPMENT CORPORATION,


BASIC PETROLEUM 5 MINERALS, INC., AND LANDOIL RESOURCES


CORPORATION (collectively the "Matinloc Oil Production Complex1'


Consortium - MOPC Consortium) and Alcorn (Palawan) Production, Inc. as


Operator of Service Contract-6.








WITNESSETH: That








WHEREAS, a pipeline will be constructed and laid by the Service


Contract-6 Consortium - which will connect >e Cadlao Oil Field with the


Motinloc Oil Production Complex for the purpose, among others, of


extending the economic lives of both fields by reducing operating costs for


both fields; and





WHEREAS, the MOPC Consortium desires to secure crude oil storage


and offloading facilities and services;





NOW, THEREFORE, the parties hereto -itjree as follows:


1. Allocation of Costs and Payments -■ The necessary Operating





Budget for Service Contracts G and 14 shall be agreed upon by the


members of each Service .Contract on a yearly basis. Such budget shall,


among others, allocate expenditures for the pipeline, crude oil storage and


offloading facilities and services which wi,l he correspondingly charged


through monthly cash calls.


I


7. Governing_Law - This Agreement shall be governed by and


interpreted (or all purposes according to Ihe laws of the Republic of the


Philippines.

















- 1 -


'N WITNESS WHEREOF, the undersigned have caused this Basic


Agreement to be executed by their undersigned duly authorized


representatives as of the date and year first above written.








MO PC CONSORTIUM CON FORME:











ORIENTAL PETROLEUM & MINERALS BASIC PETROLEUM & MINERALS


OC RPORATION , a Philippine INC., a Philippine


C rporation Corporation














Name: PDUARDO F. HERNANDEZ Name: MARIO M, USON


Title: President Title: lixeeut ive Vice-President








PH ! LI PPI N E-QVERSEAS DRILLING & LANDOIL RESOURCES CORPORATION


OIL DEVELOPMENT CORPORATION, a Philippine Corporation


a Philippine Corporation














Name: MARIO M. USON


Title: President Kyrr.iitive Vice President





ALCORN (PHILIPPINES), INC.


ALCORN (PRODUCTION) PHILIPPINES,


INC., a Delaware Corporation a Delaware Corporatiori ]

















Title: Executive Vice Prescient Title: Executive Vice President














SERVICE CONTRACT-6 OPERATOR CONFORME:








ALCORN (PALAWAN) PRODUCTION,


INC. a Delaware Corporation














Hw ‘ *


 FARM-OUT AGREEMENT








ALL. MEN BY THESE PRESENTS:


This Af:ret)mpn t is made and entered into by and between:





A).CORN (PHILIPPINES), INC., and ALCORN




.it- l.tcii i 's.p d 1' o dr- bv s:i ness j n the Pb.i 1ippines


-i.r, ; i , r f i ces a I. i he Solidhank Ur > lding,


»b» Roxas. Maksn v, Metro Maui la,


PVi l. ippines , represented in this act by its


A ; Iy authorized Executive Vice President &


CifMiera) Manager, E. M. McGUITtE. hereinafter


sailed ALCORN;


- Mi> ^





ORIENTAL PETROLEUM S- MINERALS CORPORATION,





'■-cm'ikc at ion duly organized in accordance with


,,h.i J j.ppj no laws, with principal offices at


Or j n Liu an Plaza, Paseo rie Ftoxas , Makati, Metro


Manila, Philippines, represented in this act by


its duly authorized President, EDUARDO F.


HERNANDE*:.. hereinafter called ORIENTAL;





\\ l T N K S 5 E T H: That


'ViiLHEi-.o, last August 28, 1986, in Houston, Texas, ALCORN





11!' i:"l FPT.A} entered into a Memorandum of Agreement, under


1 . ■■ viluable considerstion and under certain terms and


1,1 ' »•.tv A COHN assigned and conveyed certain interests in


’ ; a on trac! I'io. 6 and Service Con.tr act No. 14 with the


’huh:: of j.Rf. Philippines.


:kMV, , THEREFORE, pursuant to said AgreementALCORN hereby





1 :,,,vs to ORIENTAL: (l) 35% of the 50% working interest in


‘ r‘f' 1 r.>n ran \o (i held by . Amoco Philippines at the. ti:.


1 ' - ‘' oorpo.rbii ion v.is acaiuirod from Amoco Production


'■* ' i A?:v'co‘; b AT-CORN (Pa iav/an) on February 5, 1986; (2) 35%


.U: . ,»7R% iv •■jM-i.np1 nterost n the Matin Pa; Oil Production


/ ■ 0 ;• AV - •' the 5 2.48 3% wording i.n ter out in the NIDO


C ■ , -,i '■ pirrua.nl to Service Contract No. 1.4 and held by PCS I


;t ■ 1 » rm- such corporal: ion was acquired by ALCORN (Philippines)


y11 [hl cumber 5 . i985; and (3) 35% of the 8-1/3% interest of Husky


iu Service Contract. No. 6 acquired by ALCORN (Palawan) from


Minsk v





Upon approval bv the Bureau of Energy Development of this


^Mjrrunent, the parties will own the fol I owi ng 'undivided working


!,i teres 1 j.n all rights and obligations under the Service Contract.





SERVICE CONTRACT-3.4____ ____________ ______SERVICE CQNTKACT-6








Nido Matinloc Cad'lao


'• i -u>rn ( Product i.on ) 34 114% 25.724% Alcorn (Palawan) 32.500%


Uh3 1 ] ppj no:: . Tnc . Production, Inc.


Alcorn (Philippinoo), Alcorn (Palawan),


Inc. - 32.932% Inc. 30.416%


Oriental Petroleum k Oriental Petroleum


Minerals Corp. 51.415%. 16.851% & Minerals Corp. 20.417%


 tlie


event of silence, conflict or inconsistency between the terms


H[r ■ -'em aiH the foregoing Memorandiun of Agreement executed in Houston,


' 'V.


’ll i - hereby agree that i;hc said Mcrnorandurn of Agreement will








r,u i ii Wj. 1TJLSS WHEREOF, the parties hereto liavc hereunto signed these


^ li _ J____ „C s- . .


Jv- dav of 19R6 at

















ORIENTAL PETROLEUM S


MIN [PALS CORPORATION


(ORIENTAL)





BY:





EDUARDO F. HEANANDEZ


President












































•<.





' ' '!) ">am]a, 8EF0!H; HE, a Notary Pub YthUc tor and in the(Municij>:iiity oi: Makati,


Philippines, this *W\y day of * * 1986, personally


|r,i rollc^'ing:








E.H. iW/HIRL, with Hi: IKirt No. ZIOOO/'SO, issued at


H mi la , on December H 118/. the duly authorised


Executive Vice Pn-rudent 6 Ocnervil flanagor of Alcorn


(Philippines), Inc. and Alcorn (Palawan), Inc ; and





HlXWi r. HERMAWI'i:./,, with Ke:,. Cert:. A-17724711,


-j- s..ur*« ! .ai Makati, on April LM, 1986, the duly autho-


ri zed i->evident ^ Oriental Petroleum ^ Minerals


’ ~'rporat K-n;





r^'th knew to me and to me known to i m


lor^oinfl instrument and^actoowiedn^iV ^ ^ i*f*wny'w^ executed the


tnd vo Lun l:ary acl^omd deed and the V t0 ^ 11a(- t K’ r^ine 1S f:,V5*r ^roe


ooryxjrat ion/ they rccpmetl vely .rJJrJ voIuntarV anrJ d^ed of the


'if





V/] TO ESS MY HAND AND SEAL on the date and place, first above-





mentioned.








c





l 'h. (f JAIME M. VIBAH


Pa:v’ Mo. (L i Notary Public


. ■ / ; Until December 31, 1087


Seri': •s Oi 1186. PTR Vo. 873,.nai/l-7-SG/Mak’<«l





IMP No. 208857/'-*- kl‘r" '