FARMOUT AGREEMENT

AMONG

PETROLEUM EXPLORATION (PVT) LIMITED

FRONTIER HOLDINGS LIMITED

GULF PETROLEUM EXPLORATION PAKISTAN (GPXP) LIMITED

22 July 2008

000000 000005 HOUSTON 310128.1

TABLE OF CONTENTS

ARTICLE I DEFINITIONS 3

ARTICLE 2 ASSIGNMENT OF INTEREST 6

ARTICLE 3 CONDITIONS PRECEDENT TO ASSIGNMENT 8

ARTICLE 4 CONSIDERATION 11

ARTICLES UNDERTAKING OF THE PARTIES 13

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE PARTIES 16

ARTICLE 7 [NOT USED]

ARTICLE 8 TAX 23

ARTICLE 9 CONFIDENTIALITY 24

ARTICLE 10 NOTICES 25

ARTICLE 11 LAW AND DISPUTE RESOLUTION 26

ARTICLE 12 REASSIGNMENT OF INTERESTS 27

ARTICLE 13 EXCLUSION OF LIABILITY 27

ARTICLE 14 GENERAL PROVISIONS 27

EXHIBIT A CONCESSIONS

EXHIBIT B CONTRACT AREAS

EXHIBIT C FORM OF ASSIGNMENTS

EXHIBIT D WORK PROGRAMMES, BUDGETS AND AFE’S

EXHIBIT E AGREED PRESS RELEASE

EXHIBIT F FORM OF ESCROW AGREEMENT

FARMOUT AGREEMENT

THIS AGREEMENT is entered into on the 22nd day of July 2008 by and among:

(1) Petroleum Exploration (Pvt) Limited a company existing under the laws of Pakistan(hereinafter referred to as “PEL”);

(2) Frontier Holdings Limited, a company existing under the laws of Bermuda (hereinafterreferred to as “FHL”);

(PEL and FHL, and their respective successors and assignees (if any), are hereinafter referred toindividually as a “Farmor” and collectively as “Farmors”)

and

(3) Gulf Petroleum Exploration Pakistan (GPXP) Limited, a company existing under thelaws of Jersey (hereinafter referred to as “Farmee”).

The companies named above, and their respective successors and assignees (if any), maysometimes individually be referred to as “Party” and collectively as the “Parties”.

WITNESSETH:

A. WHEREAS PEL and FHL entered into farm-in agreements dated April 2006 with respectto the following blocks:

Block No.

(a) Badin IV North 2468-6

(b) Badin IV South 2468-5

(c) Karsal 3272-12

(d) Mirpur Mathelo 2769-9

(e) Salam 2769-13

(f) Kandra 2768-6

B. WHEREAS, as of the date of this Agreement, Farmors hold the following rights andobligations of licensee (and, in the case of Kandra, leaseholder) in the Concessions:

Badin IV North

Badin IV South

Karsal

PEL

50%

50%

50%

FHL

50%

50%

50%

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—.

PEL FHL

Mirpur Mathelo 47.5% 47.5%

Salam 50% 50%

Kandra Exploration Area 47.5% 47.5%; and

C. WHEREAS, each of the Farmors is willing to assign and transfer certain undividedinterests in its rights and obligations in the Concessions to Farmee in accordance with theterms set forth herein and Farmee wishes to acquire such interests.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and obligationsset out below and to be performed, the Farmors and Farmee agree as follows:

ARTICLE 1

DEFINITIONS

As used in this Agreement, the following capitalized words and terms shall have the meaningascribed to them below. Any capitalized term used in this Agreement and not specificallydefined in this Agreement shall have the same meaning as in the Model Contract (save that areference to the “Rules” in the Model Contract shall, for the purposes of this Agreement, beconstrued as a reference to the Pakistan Petroleum (Exploration and Production) Rules, 2001 inrespect of each of the Badin IV North, Badin IV South, Karsal and Salam Contract Areas, and areference to the Pakistan Petroleum (Exploration and Production) Rules, 1986 in respect of eachof the Mirpur Mathelo and Kandra Contract Areas).

1.1 Aj~reement means this Farmout Agreement together with the Exhibits, and any extension,renewal or amendment hereof agreed to in writing by the Parties.

1.2 Assignment means:

(a) in respect of each of the Badin IV North, Badin IV South, Karsal, Mirpur Matheloand Salam Concessions, a document substantially in the form attached at Part 1 ofExhibit C; and

(b) in respect of the Kandra Exploration Area, the document substantially in the formattached at Part 2 of Exhibit C;

by which the Relevant Interests in each of the Concessions is transferred and conveyed tothe Farmee by the Farmors as provided hereunder.

1.3 Completion Date means the date on which all of the Conditions Precedent have beensatisfied.

1.4 Concessions means the Concession Documents, the Joint Property and the ContractAreas taken together, as summarised in Exhibit A.

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1.5 Concession Documents means:

(a) in the case of each of the Badin IV North, Badin IV South, Karsal, MirpurMathelo and Salam Contract Areas, the relevant:

(i) Licence;

(ii) Concession Agreement; and

(iii) Joint Operating Agreement (JOA); and

(b) in the case of the Kandra Exploration Area:

(i) the Kandra Concession Agreement;

(ii) the Kandra Lease (but only insofar as it applies to the Kandra ExplorationArea); and

(iii) the Joint Operating Agreement (JOA) relating to the Kandra ContractArea;

as extended, renewed and/or amended.

1.6 Conditions Precedent means all of the conditions enumerated in Article 3.1.

1.7 Consideration has the meaning given in Article 4.

1.8 Contract Areas means the areas or blocks more particularly described in the attachedExhibit B.

1.9 Effective Date means the date set out in Article 2.3.

1.10 Government means the government of the Islamic Republic of Pakistan and any politicalsubdivision, agency or instrumentality thereof, including Government Holdings (Pvt)Limited.

1.11 Guarantee means such guarantee in respect of the Relevant Interests as may be requiredby the Government pursuant to the Concession Agreements.

1.12 Interim Period means the period commencing from the date of the signature of thisAgreement and ending on the later of:(a) in the case where the Completion Date occurs on or prior to the Longstop Date,

the Completion Date;(b) in the case referred to in Article 3.3(a), the date 30 days after the Longstop Date

or such other date as may be agreed by the Parties;(c) in the case referred to in Article 3.3(b), the Longstop Date; and(d) in the case referred to in Article 3.3(c), the date of the notice served thereunder.

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1.13 Kandra Exploration Area means all horizons comprised within the Kandra Lease exceptthe discovery area (as such discovery area is more particularly described in the KandraLease).

1.14 Kandra Lease means the development and production lease no. 171 /PAKI2006.

1.15 Laws/Regulations means those laws, statutes, rules and regulations governing activitiesunder the Concession Documents.

1.16 LIBOR means the London interbank offered rate per annum for one month deposits inUS$ as published in the Financial Times (London edition) on the date on which paymentof an amount under this Agreement was due but not paid or, if such rate is not publishedon the given date, the rate published in the Financial Times (London edition) on thenearest date immediately preceding the given date.

1.17 Lonristop Date means, in respect of the satisfaction of the Conditions Precedent,December 31, 2008 (or such later date as the Parties may agree in writing).

1.18 Minimum Works means:(a) in respect of the Concessions other than the Kandra Exploration Area, the

remaining unfulfilled minimum work obligations set out in the relevant Licencewhich, for the avoidance of doubt, comprise:

Badin IV North 3 Exploration Wells

Badin IV South 4 Exploration Wells

Karsal 150 kms of seismic

Mirpur Mathelo 1 Exploration Well

Salam 1 Exploration Well; and

(b) in the case of the Kandra Exploration Area, the works comprised in the wellcommencement notice issued by the Operator on 10 June 2008 for the drilling ofone Exploration Well.

1.19 Model Contract means the Model Petroleum Concession Agreement 2001 published bythe DGPC.

1.20 Non-Obli,~ation Well means an Exploration Well which is not comprised within theMinimum Works.

1.21 Operator means PEL in its capacity as the entity designated to conduct operations in theContract Areas in accordance with the terms of the JOA.

1.22 Participatina Interest means, as to any party to the Concession Documents for aparticular Contract Area, the undivided interest of such party in the relevant Concession

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expressed as a percentage of the total interest of all parties in the rights and obligations insuch Concession.

1.23 Preferential Rij~hts means a right held by any third party under the terms of theConcession Documents or afforded under applicable Laws/Regulations to pre-empt thetransactions contemplated by this Agreement or affect their terms in any way.

1.24 Relevant Interest means the aggregate 25% Participating Interest in each of theConcessions acquired (or to be acquired) by Farmee from Farmors in accordance withArticle 2.1.

1.25 Workinci Interest means, as to any party to a Concession Document, its ParticipatingInterest together with its Participating Interest share of any carried obligations of anyother party in accordance with such Concession Document.

ARTICLE 2

ASSIGNMENT OF INTEREST

2.1 Grant

Subject to the satisfaction of the Conditions Precedent, and in exchange for theConsideration:

(a) PEL shall assign and transfer to Farmee, and Farmee agrees to accept from PEL, a12.5% Participating Interest in each of the Concessions; and

(b) FHL shall assign and transfer to Farmee, and Farmee agrees to accept from FHL, a12.5% Participating Interest in each of the Concessions;

and the Parties shall execute and deliver the Assignments in accordance with Article2.6(b).

2.2 Simultaneous Transfers

It is the Parties’ intention that the assignment and transfer by Farmors of the RelevantInterests in all of the Concessions shall be made simultaneously, and the Farmors shall useall reasonable endeavours to procure that Government approval is obtained for theAssignments as a package.

2.3 Effective Date

Notwithstanding the date of this Agreement or the date on which the Assignments areexecuted, the effective date of the assignment and transfer of the Relevant Interests shallbe deemed to be April 1, 2008 (the “Effective Date”).

2.4 Bindin~EffectFarmors and Farmee shall be bound by this Agreement as of the date hereof and shall

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fully perform all of their respective obligations under this Agreement.

2.5 OwnershipFollowing the assignment and transfer of the Relevant Interests (and without prejudice toArticle 3.3), the Participating Interests in each of the Concessions shall be as follows:

PEL FHL Farmee GovernmentBadin IV North 37.5% 37.5% 25.0% -

Badin IV South 37.5% 37.5% 25.0% -

Karsal 37.5% 37.5% 25.0% -

MirpurMathelo 35.0% 35.0% 25.0% 5.0%Salam 37.5% 37.5% 25.0% -

Kandra Exploration Area 35.0% 35.0% 25.0% 5.0%

The Parties acknowledge that:

(a) Government’s costs in respect of Mirpur Mathelo and the Kandra ExplorationArea are carried in accordance with the relevant Concession Documents; and

(b) the Parties’ Participating Interests in Mirpur Mathelo and the Kandra ExplorationArea are subject to Government’s right to acquire an additional 20% interest prorata from the Parties upon declaration of a Commercial Discovery in the MirpurMathelo Contract Area and the Kandra Exploration Area respectively, inaccordance with the relevant Concession Documents.

2.6 Approvals and Notices

(a) By no later than the day immediately following the date of signature of thisAgreement, Farmors shall submit such notices under the Concession Documentsas shall be required to enable all parties to the Concession Documents (other thanthe Farmors) to exercise their Preferential Rights.

(b) By no later than eight days following the date of signature of this Agreement,Farmee shall pay, or cause to be paid, into an escrow account the considerationreferred to in Article 4.1(a).

(c) By no later than the day immediately following the earlier of:

(i) the date of receipt of a waiver or other evidence in writing of the non-exercise of the Preferential Rights; and

(ii) the expiration of such Preferential Rights;

and subject to the Farmee having provided to PEL (in its capacity as Operator)such information relating to the Farmee as is required under the Rules to enableGovernment to process the Assignments:

(A) the Parties shall execute the Assignments; and

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(B) Farmors shall submit the Assignments to Government for approval.

2.7 No Transfer of Operatorship

This Agreement does not include the transfer of the rights and obligations of Operatorunder the JOAs or the other Concession Documents and PEL will continue as Operator.

2.8 Post-Completion Matters

(a) Immediately following the execution and delivery of the Assignments by theGovernment, the Parties shall execute a deed of novation, amendment andrestatement in respect of:

(i) each of the JOAs; and

(ii) the Kandra Lease;

so as to enable Farmee to accede to the JOAs and the Kandra Lease.

(b) The Parties shall procure that the Kandra Lease as novated, amended and restatedpursuant to Article 2.8(a) shall promptly be registered at the relevant districtregistry in accordance with applicable Laws/Regulations.

ARTICLE 3

CONDITIONS PRECEDENT TO ASSIGNMENT

3.1 Conditions

The effectiveness of each of the Assignments hereunder is subject to the satisfaction ofeach of the following:(a) Farmors obtaining a waiver or other evidence in writing of the expiration or non-

exercise of any and all Preferential Rights;(b) Farmee receiving evidence of extensions from Government in respect of each of

the Karsal, Mirpur Mathelo and Salam Licences for a specified period extendingbeyond the date on which Government executes the Assignments; and

(c) Goverument formally approving the transfer of the Relevant Interests hereunderand executing each of the Assignments as required under the ConcessionDocuments.

3.2 Acts to be Performed

(a) Each Farmor shall use all reasonable endeavours to execute all documents, and doand procure to be done all such acts and things as are reasonably within its powerto ensure the Conditions Precedent are satisfied as soon as is reasonablypracticable after signature of this Agreement, with a view to achieving satisfactionof the Conditions Precedent by the Longstop Date.

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(b) To the extent each Farmor has any Preferential Rights or any other rights whichmight restrict the assignment and transfer of the Relevant Interests, each Farmorhereby waives any and all such Preferential Rights and other rights.

3.3 Termination and Partial Completion

(a) Subject to the remaining provisions of this Article 3.3, if the Conditions Precedentare not satisfied by the Longstop Date, then this Agreement shall terminate 30days after the Longstop Date unless the Parties otherwise agree.

(b) If, by the Longstop Date, all the Conditions Precedent have been satisfied exceptin respect of Government approvals for the transfer of the Relevant Interests in:

(i) Karsal; and/or

(ii) Salam;

then the Parties shall proceed to consummate the transactions contemplated bythis Agreement save only in respect of Karsal and/or Salam (as relevant).

(c) Notwithstanding Article 3.3(a) and subject to Article 3.3(b), Farmee may, by nolater than 30 days after the Longstop Date, give notice to Farmors of its intentionto proceed to consummate the transactions contemplated by this Agreement inrelation to any or all of the Contract Areas in respect of which Governmentapprovals for the transfer of the Relevant Interests have been obtained as at thedate of such notice, in which case the Parties shall negotiate in good faith and usereasonable endeavours to agree the terms of such transfer.

3.4 Consequences of Termination

In the event of termination pursuant to Article 3.3(a) then:

(a) in respect of those Concessions for which Government approval has not beenobtained as at the date 30 days after the Longstop Date, each of the relevantproposed Assignments shall terminate, be rendered void and have no force oreffect, and Farmee shall have no interest whatsoever in the relevant Concessionsand shall be deemed to have reassigned to Farmors any rights or equitable interestit may have acquired under this Agreement retroactive to the Effective Date; and

(b) in respect of those Concessions for which Government approval has beenobtained as at the date 30 days after the Longstop Date, Farmee shall reassign theRelevant Interests in such Concessions to Farmors and the Parties shall executeany and all documents as shall be necessary to effect such reassignment in thesame form and manner as the original assignment and shall render such assistanceas may be required to obtain Government approval for such reassignment.

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3.5 Consequences ofPartial Completion

(a) In the circumstances referred to in Article 3.3(b):

(i) the relevant proposed Assignments relating to Karsal and/or Salam forwhich Government approval has not been obtained as at the LongstopDate shall terminate, be rendered void and have no force or effect, andFarmee shall have no interest whatsoever in the relevant Concessions andshall be deemed to have reassigned to Farmors any rights or equitableinterest it may have acquired under this Agreement retroactive to theEffective Date; and

(ii) the amounts payable by Farmee pursuant to Article 4 shall be adjusted inaccordance with Article 3.5(b).

(b) For the purposes of effecting the adjustments referred to in Article 3.5(a):

(i) the consideration payable under Article 4.1(a) shall be reduced by theamount(s) set out in the table below opposite the Contract Area in respectof which Farmee will not be acquiring the Relevant Interests:

Karsal US$ 327,072; and

Salam US$ 697,040; and

(ii) the Minimum Works shall be adjusted to exclude the Minimum Works onthe Concessions for which Farmee will not be acquiring the RelevantInterests.

3.6 Interim Period Obligations in respect ofApproved Assignments

For the avoidance of doubt, notwithstanding any approvals obtained from Government inrespect of any of the Assignments, Farmors shall continue:

(a) to pay all amounts in respect of the Minimum Works and the Relevant Interests;and

(b) to perform their obligations under Article 5.1;

in respect of the Concessions for which such approvals have been obtained until the endof the Interim Period.

3.7 Guarantees

Famiee shall promptly, as and when required by Government, provide Government witha Guarantee in respect of each of the Concessions.

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ARTICLE 4

CONSIDERATION

4.1 Past Costs

(a) Farmee shall pay to the Farmors an aggregate amount of US$8.5 million inconsideration of all costs incurred in respect of the Concessions prior to theEffective Date, which amount shall not be subject to adjustment except inaccordance with Article 3.5(b). To the extent that there is any reduction in thecosts referred to in Article 4.1(c), such reduction will be to the benefit of theFarmors.

(b) The consideration referred to in Article 4.1(a) shall be deposited into an escrowaccount in accordance with Article 2.1, which account shall be governed by theterms of an escrow agreement substantially in the form attached as Exhibit F. TheParties shall jointly procure the release of the consideration from the escrowaccount to the Farmors promptly following execution and delivery of theAssignments by the Government, and such release shall be a complete dischargeto Farmee and Farmee shall not be obliged to enquire as to the distribution of theconsideration.

(c) The Parties acknowledge that the consideration referred to in Article 4.1(a) isbased on the agreed understanding that the aggregate costs properly incurred forthe period from April 18, 2006 up to and including March 31, 2008 areUS$15,639,531 (USD fifteen million six hundred and thirty-nine thousand fivehundred and thirty-one), broken down in respect of each of the Contract Areas asfollows:

Badin IV North US$ 3,443,601

Badin IV South US$ 3,688,252

Kandra US$ 3,494,993

Karsal US$ 601,794

Mirpur Mathelo US$ 3,128,376

Salam US$ 1,282,515

Total: US$15,639,531

(d) Save as provided in this Article 4.1, the Parties acknowledge and agree thatFarmee shall have no liability to pay any costs relating to the period prior to theEffective Date, and Farmors shall indemnif~i Farmee against any and all claimsagainst Farmee in respect of such costs.

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4.2 Minimum Works

In addition to paying a contribution towards past costs the Farmee shall pay certainadditional costs in respect of the Minimum Works, the costs of which shall be borne asfollows:

(a) The costs properly incurred in drilling, logging, testing and completing orplugging and abandoning each of the first four Exploration Wells comprisedwithin the Minimum Works drilled after the date of this Agreement shall beborne:

(i) by Farmee up to and including the first US$4,000,000 (USD four million)(but excluding any amounts in excess of the estimated US$500,000 (USDfive hundred thousand) allocated in respect of initial mobilisation costs);

(ii) by Farmors in respect of the next US$2,000,000 (USD two million)(inclusive); and

(iii) by the Parties in proportion to their Working Interests in respect of anyamounts in excess of US$6,000,000 (USD six million).

(b) The costs properly incurred in drilling, logging, testing and completing orplugging and abandoning each of the remaining five Exploration Wells comprisedwithin the Minimum Works shall be borne:

(i) fifty-eight and one third percent (58.33%) by Farmee and the remainder byFarmors up to and including the first US$6,000,000 (USD six million);and

(ii) by the Parties in proportion to their Working Interests in respect of anyamounts in excess of US$6,000,000 (USD six million).

(c) In the event that there are at least four Commercial Discoveries from theExploration Wells drilled pursuant to Articles 4.2(a) and (b), then the costsproperly incurred in drilling, logging, testing and completing or plugging andabandoning each of the next two Exploration Wells under the ConcessionDocuments shall be borne:

(i) fifty percent (5 0%) by Farmee and fifty percent (5 0%) by Farmor up toand including the first US$6,000,000 (USD six million); and

(ii) by the Parties in proportion to their Working Interests in respect of anyamounts in excess of US$6,000,000 (USD six million).

(d) All Exploration Wells shall be drilled at such locations and pursuant to suchdrilling programme as the Parties shall agree. If Farmee agrees to drill a NonObligation Well then, notwithstanding the foregoing provisions of this Article 4.2and to the extent Farmee’s obligations in respect of the four Exploration Wells

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A

referred to in Article 4.2(a) or the next five Exploration Wells referred to inArticle 4.2(b) (as applicable) have not been discharged, the costs properlyincurred in drilling, logging, testing and completing or plugging and abandoningsuch Non-Obligation Well shall be borne by Farmee in accordance with Article4.2(a) or Article 4.2(b) (as applicable), in substitution of its obligations in respectof an Exploration Well under such Article.

(e) The Minimum Works shall be undertaken by the Operator on behalf of theParties.

4.3 Costs properly incurred from Effective Date

(a) Other than costs in respect of the Minimum Works specified in clause 4.2, andsubject to Article 5.2, the Parties shall bear all costs properly incurred from theEffective Date in accordance with their Working Interests.

(b) No later than two weeks following the end of the Interim Period, PEL (in itscapacity as Operator) shall prepare and deliver to Farmee a statement of:(i) all amounts (if any) incurred or cash called by the Operator in respect of

the Minimum Works in accordance with the JOAs during the InterimPeriod and which Farmee has agreed to bear in accordance with Article4.2; and

(ii) all other costs properly incurred which are attributable to the RelevantInterests (and any carried costs relating to the interests of Governmentpursuant to the Concession Documents) for the period between theEffective Date and the end of the Interim Period;

together with an invoice for such amounts and costs. Farmee shall settle suchinvoice within 15 days of receipt, subject to Article 4.3(c).

(c) If Farmee fails to pay the amounts due under Article 4.3(b) by the applicabledates, then such amounts shall accrue interest at a rate of 2% over LIBOR,calculated from the due date until the date of payment.

4.4 Interpretation ofCosts Properly Incurred

For the purposes of this Article 4 and Article 6, a reference to “costs properly incurred” isto costs incurred under and in accordance with the JOAs (including their respectiveAccounting Procedures and, in the case of Articles 4.2(a), (b) and (c), in accordance withthe AFE in respect of each of the relevant Exploration Wells, together with anyamendments to such AFE).

ARTICLE 5

UNDERTAKING OF THE PARTIES

5.1 Farmor Oblif4ations during Interim Period

During the Interim Period, Farmors shall comply with the following obligations:

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(a) Material Developments

Farmors shall promptly notify Farmee and provide all relevant details upon theoccurrence of:

(i) any written notice of default or termination received or given by Farmorswith respect to any of the Concession Documents;

(ii) any written notice of any pending or threatened claim, demand, action,suit, inquiry or proceeding arising out of or in connection with any of theConcession Documents;

(iii) any material damage to, or destruction or loss of, any material assets underany of the Concession Documents; or

(iv) any event or condition that:

(A) has, or could reasonably have, a material adverse effect on any ofthe business, operations, financial condition or results of operationsunder any of the Concession Documents; or

(B) renders, or could reasonably render, impossible or materially moreonerous the acquisition by Farmee of any of the Relevant Interests.

(b) Key Decision Making

Farmors shall:

(i) promptly notify Farmee of any and all proposed meetings of the OperatingCommittee (as defined in the JOAs) or any subcommittee (including thetechnical committee), or of any other meetings or workshops convenedunder or in relation to any of the Concession Documents or the ContractAreas;

(ii) allow, and use all reasonable endeavours to procure that any other party tothe Concession Documents shall allow, Farmee to attend as observer anyand all meetings and workshops referred to in Article 5.l(b)(i); and

(iii) consult with Farmee before voting on all maj or decisions under any of theConcession Documents during the Interim Period; and

(iv) ensure that any decisions which relate to financial and technical matters inrespect of the Relevant Interests and/or the Concessions shall be taken andimplemented only by the consensus of all the Parties.

(c) Conduct of Operations

Farmors shall ensure that all operations in respect of the Concessions are carried

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out in the ordinary and usual course.

5.2 Kandra

(a) The Parties acknowledge and agree that Farmee shall acquire exploration rightsin respect of the Kandra Exploration Area pursuant to Article 2.1, but thatFarmee shall have no right to production from, or liability or obligation eitherdirectly or contingently in respect of, the Sui Main Limestone discovery area.

(b) Farmors shall at all times ensure that:

(i) the operations under the Kandra Lease in respect of the Sui MainLimestone discovery area are carried out separately from the operations inrespect of the Kandra Exploration Area; and

(ii) costs (and revenues, if any) in respect of the Sui Main Limestonediscovery area and the Kandra Exploration Area are separately accountedfor and strictly ringfenced;

and shall use best endeavours to develop and produce the Sui Main Limestonediscovery area in a manner which does not interfere with the Kandra ExplorationArea.

(c) The Parties acknowledge and agree that Farmors shall be entitled to all productionfrom, and shall be liable for all costs arising from or attributable to thedevelopment and production of, the Sui Main Limestone discovery area, andFarmee shall not under any circumstances be liable for any costs thereof(including any costs relating to coring, logging and/or testing within the Sui MainLimestone discovery area and/or completion in respect of any well which iscompleted within the Sui Main Limestone discovery area, and any rig timeassociated with such operations).

(d) Each of the Farmors to the extent of its Working Interest in the Sui MainLimestone discovery area hereby indemnifies Farmee against all costs, claims,losses and liabilities incurred or suffered by Farmee in respect of any third partyclaims (including, for the avoidance of doubt, any claims by the President of theIslamic Republic of Pakistan or by any other party to any Concession Document)brought against Fannee with respect to operations (including development andproduction operations under the Kandra Lease) in the Sui Main Limestonediscovery area.

(e) If a Discovery is made in the Kandra Exploration Area, then the Parties shall useall reasonable endeavours to procure that a separate Lease is granted in respect ofthe Kandra Exploration Area. The Parties agree to approach Government with aview to procuring the grant of such Lease, failing which the Parties shall seek toagree with Government an alternative means of securing that the KandraExploration Area be developed and produced separately from the Sui MainLimestone discovery area.

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(f) If no Discovery is declared in respect of the Exploration Well for the KandraExploration Area referred to in the Minimum Works (or in respect of any Non-Obligation Well for Kandra which Farmee may agree to drill), then Farmee shallbe entitled, within six (6) months of the abandonment of such Exploration Well(or within six (6) months of the abandonment of the last of the Non-ObligationWells, if later) and subject to bearing its Working Interest share of any reasonabledecommissioning or abandonment costs which relate solely to such ExplorationWell (and the relevant Non-Obligation Well(s), if any), to reassign to Farmors itsParticipating Interest in the Kandra Lease (including the Kandra ExplorationArea), and the Parties shall execute any and all documents as shall be necessary toeffect such reassignment in the same form and manner as the original assignmentand shall render such assistance as may be required to obtain Governmentapproval for such reassignment, the reasonable costs of which shall be borne byFarmee. Farmee shall bear its Working Interest share of any liabilities orobligations in respect of the Kandra Exploration Area up to the effective date ofsuch reassignment.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

6.1 Farmor Representations and Warranties

(a) Each of the Farmors represents and warrants in respect of itself to Farmee (forFarmee itself and as trustee for its successors and assignees) that, save asotherwise disclosed in writing in a letter addressed to Farmee prior to the datehereof:

(i) in the case of PEL, each of the statements in Articles 6.2 and 6.5 is trueand accurate and not misleading; and

(ii) in the case of FHL, each of the statements in Articles 6.3 and 6.5 is trueand accurate and not misleading.

(b) The representations and warranties:

(i) in Articles 6.2 and 6.5 by PEL; and

(ii) in Articles 6.3 and 6.5 by FHL;

are made as at the date of this Agreement and shall be deemed to be repeated byPEL and FHL respectively on the Completion Date (or, in the case whereapprovals to any of the Assignments are obtained separately, on the date of therelevant approvals).

(c) Each of the representations and warranties in this Article 6 is separate andindependent and shall not be limited by reference to any other warranty or anyother provision of this Agreement.

(d) Farmors acknowledge and accept that Farmee is entering into this Agreement inreliance on the representations and warranties set out in Articles 6.2, 6.3 and 6.5.

6.2 PEL ‘s Representations and Warranties

(a) PEL’s Rights

PEL has good title to the Participating Interests set out in the column headed‘PEL’ in recital B, and holds such Participating Interests free and clear of anyliens, claims, burdens or encumbrances.

(b) Documents

(i) Farmee has been provided with complete and correct copies of allConcession Documents and there are no other material documents relatingto the Contract Areas and PEL’s Participating Interests apart from thedocuments referred to in Article 6.2(b)(iv) and such documents to whichFarmee will become a party as at the Completion Date.

(ii) The Concession Documents are in full force and effect and:

(A) no notice of default, termination, or breach under the any of theConcession Documents has been received by PEL nor, to theknowledge of PEL, any other party to the Concession Documents;and

(B) no event has occurred which, with the passage of time or giving ofnotice, would constitute a breach of any of the ConcessionDocuments.

(iii) There has been no change in the JOAs to the quorum and votingprovisions for meetings of the Operating Committee (as defined in theJOA5), which:

(A) in the case of the quorum, still require the Operator and one Non-Operator (as such terms are defined in the Concession Documents)holding at least the following total working interest related to thematter under consideration to be present for business to betransacted:

(1) in the case of the Badin IV North, Badin IV South, Kandra,Mirpur Mathelo and Salam Concessions, 76% (seventy-sixpercent) or more; and

(2) in the case of the Karsal Concession, 86% (eighty-sixpercent) or more; and

17

(B) in the case of decisions, still require the approval of parties holdingmore than the following total working interests:

(1) in the case of the Badin IV North, Badin IV South, Kandra,Mirpur Mathelo and Salam Concessions, 76% (seventy-sixpercent); and

(2) in the case of the Karsal Concession, 86% (eighty-sixpercent).

(iv) The Concession Documents, together with:

(A) the Pakistan Petroleum (Exploration and Production) Rules, 1986in respect of the Kandra and Mirpur Mathelo ConcessionDocuments; and

(B) the Pakistan Petroleum (Exploration and Production) Rules, 2001in respect of the Badin IV North, Badin IV South, Karsal andSalam Concession Documents;

contain the entirety of the obligations of PEL to the Government, and noother understanding or agreement exists between PEL and theGovernment in relation to the subject matter of the ConcessionDocuments.

(v) The information set out at Exhibit D represents the most recent approvedjoint venture work programme, budgets and AFE’s in respect of eachConcession for the calendar year 2008.

(vi) There is no information which has not been disclosed to Farmee which is,or is likely to be, material to PEL’s Participating Interests, or to Farmee’sevaluation of PEL’s Participating Interests and whether to acquire thesame, or the terms which Farmee would offer to do so.

(c) Claims and Litigation and Accounting Adjustments

(i) No notice has been received by PEL of any material claims, demands,actions, suits, governmental inquiries, or proceedings and, to PEL’sknowledge (having made due and careful enquiry of its directors), nomaterial claims, demands, actions, suits, governmental inquiries, orproceedings are pending or threatened in connection with the ConcessionDocuments which would have an adverse effect upon the consummationof the transactions contemplated by this Agreement, Farmee’s evaluationof PEL’s Participating Interests and whether to acquire the same, or theterms which Farmee would offer to do so.

(ii) There is no outstanding or unresolved audit, accounting or other financialissue as between Farmors in relation to the costs referred to in Article

18

4.1(c) (or to any element comprised within such costs) for the period up toand including 30 June 2007 and, as between Farmors, no claims oradjustments in respect of such costs shall at any time be made.

(d) Past Costs

The relevant amounts set out in Article 4.1(c) represent the Farmor& bestestimate, as at the date of this Agreement, of the costs properly incurred in respectof the Concessions for the period from April 18, 2006 up to and including March31, 2008, made on the basis of reasonable assumptions and given in good faith.

(e) Financing

PEL has sufficient cash, available lines of credit or other sources of funds toenable it to fulfill all of its obligations under the Concession Documents and thisAgreement.

6.3 FHL ‘s Representations and Warranties

(a) FHL’s Rights

FHL has good title to the Participating Interests set out in the column headed‘FilL’ in recital B, and holds such Participating Interests free and clear of anyliens, claims, burdens or encumbrances

(b) Documents

(i) Farmee has been provided with complete and correct copies of allConcession Documents and there are no other material documents relatingto the Contract Areas and FHL’s Participating Interests apart from thedocuments referred to in Article 6.3(b)(iv) and such documents to whichFarmee will become a party as at the Completion Date.

(ii) The Concession Documents are in full force and effect and:

(A) no notice of default, termination, or breach under the any of theConcession Documents has been received by FHL nor, to theknowledge of FHL, any other party to the Concession Documents;and

(B) no event has occurred which, with the passage of time or giving ofnotice, would constitute a breach of any of the ConcessionDocuments.

(iii) There has been no change in the JOAs to the quorum and votingprovisions for meetings of the Operating Committee (as defined in theJOAs), which:

19

(A) in the case of the quorum, still require the Operator and one Non-Operator (as such terms are defined in the Concession Documents)holding at least the following total working interest related to thematter under consideration to be present for business to betransacted:

(1) in the case of the Badin IV North, Badin IV South, Kandra,Mirpur Mathelo and Salam Concessions, 76% (seventy-sixpercent) or more; and

(2) in the case of the Karsal Concession, 86% (eighty-sixpercent) or more; and

(B) in the case of decisions, still require the approval of parties holdingmore than the following total working interests:

(1) in the case of the Badin IV North, Badin IV South, Kandra,Mirpur Mathelo and Salam Concessions, 76% (seventy-sixpercent); and

(2) in the case of the Karsal Concession, 86% (eighty-sixpercent).

(iv) The Concession Documents, together with:

(A) the Pakistan Petroleum (Exploration and Production) Rules, 1986in respect of the Kandra and Mirpur Mathelo ConcessionDocuments; and

(B) the Pakistan Petroleum (Exploration and Production) Rules, 2001in respect of the Badin IV North, Badin IV South, Karsal andSalam Concession Documents;

contain the entirety of the obligations of FHL to the Government, and noother understanding or agreement exists between FHL and theGovernment in relation to the subject matter of the ConcessionDocuments.

(v) The information set out at Exhibit D represents the most recent approvedjoint venture work programme, budgets and AFE’s in respect of eachConcession for the calendar year 2008.

(vi) There is no information which has not been disclosed to Farmee which is,or is likely to be, material to FHL’s Participating Interests, or to Farmee’sevaluation of FHL’s Participating Interests and whether to acquire thesame, or the terms which Farmee would offer to do so.

20

1~~

(c) Claims and Litigation and Accounting Adjustments

(i) No notice has been received by FHL of any material claims, demands,actions, suits, governmental inquiries, or proceedings and, to FHL’sknowledge (having made due and careful enquiry of its directors), nomaterial claims, demands, actions, suits, governmental inquiries, orproceedings are pending or threatened in connection with the ConcessionDocuments which would have an adverse effect upon the consummationof the transactions contemplated by this Agreement, Farme&s evaluationof FHL’s Participating Interests and whether to acquire the same, or theterms which Farmee would offer to do so.

(ii) There is no outstanding or unresolved audit, accounting or other financialissue as between Farmors in relation to the costs referred to in Article4.1(c) (or to any element comprised within such costs) for the period up toand including 30 June 2007 and, as between Farmors, no claims oradjustments in respect of such costs shall at any time be made.

(d) Past Costs

The relevant amounts set out in Article 4.1(c) represent the Farmor& bestestimate, as at the date of this Agreement, of the costs properly incurred in respectof the Concessions for the period from April 18, 2006 up to and including March31, 2008, made on the basis of reasonable assumptions and given in good faith.

(e) Financing

FHL has sufficient cash, available lines of credit or other sources of funds toenable it to fulfill all of its obligations under the Concession Documents and thisAgreement.

6.4 Farmee ‘s Representations and Warranties

Farmee represents and warrants to each Farmor that, save as otherwise disclosed inwriting in a letter addressed to the Farmors prior to the date hereof, each of the statementsin this Article 6.4 and in Article 6.5 is true and accurate and not misleading.

(a) Claims and Litigation

No notice has been received by Farmee of any material claims, demands, actions,suits, governmental inquiries, or proceedings and, to Farmee’s knowledge, nomaterial claims, demands, actions, suits, governmental inquiries, or proceedingsare pending or threatened against Farmee which would have a material adverseeffect upon the consummation of the transactions contemplated by thisAgreement.

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(b) Financing

Farmee has sufficient cash, available lines of credit or other sources of funds toenable it to fulfill all of its obligations under the Concession Documents and thisAgreement.

(c) Technical Capability

Farmee has the technical capability, personnel and resources to fulfill itsobligations under this Agreement.

The representations and warranties made by Farmee in this Article 6.4 and in Article 6.5are made as at the date of this Agreement and shall be deemed to be repeated on theCompletion Date (or, in the case where approvals to any of the Assignments are obtainedseparately, on the date of the relevant approvals).

6.5 Mutual Representations and Warranties

Each Party represents and warrants in respect of itself as follows.

(a) Corporate Authority

(i) It is duly organized and validly existing under the laws of the countrywhere it is organized.

(ii) It is qualified to conduct business in the jurisdiction as necessary to holdits Participating Interests and perform its obligations under the ConcessionDocuments.

(iii) It has all requisite corporate power and authority to enter into thisAgreement, to perform its obligations hereunder, and to consummate thetransactions contemplated hereby.

(iv) This Agreement and the Assignments, when signed by it, shall be dulyexecuted and delivered by it.

(v) This Agreement and the Assignments constitute its legal, valid andbinding obligations, enforceable against it in accordance with their terms.

(b) Other Representations and Warranties

The signature, delivery, and performance of this Agreement and the Assignmentsby it, the consummation of the transactions contemplated hereby, and thecompliance with the provisions hereof will not, to the best of its knowledge andbelief:

(i) violate any applicable Laws/Regulations, judgment, decree or award;

(ii) contravene its constitutional documents; or

(iii) result in a violation of a term or provision, or constitute a default oraccelerate the performance of an obligation under any other contracts oragreements executed by it.

6.6 Undertakings

During the Interim Period each of the Farmors and Farmee undertakes not to take anyaction, or fail to take any action, or allow or procure any act or omission, which would:

(a) result in a breach of any of its representations and warranties under thisAgreement; or

(b) where relevant, render any of the representations and warranties untrue,inaccurate or misleading if repeated as at the Completion Date (or, in the casewhere approvals to any of the Assignments are obtained separately, on the date ofthe relevant approvals).

8.1 Tax Oblij~ations

ARTICLE 7

[Not used.]

ARTICLE 8

TAX

Each Party shall be responsible for reporting and discharging its own tax measured by theprofit or income of the Party and the satisfaction of such Party’s share of all contractobligations under the Concession Documents, and under this Agreement. Each Partyshall protect, defend and indemnify each other Party from any and all loss, cost orliability arising from the indemnifying Party’s failure to report and discharge such taxesor satisfy such obligations. The Parties intend that all income and all tax benefits(including deductions, depreciation, credits and capitalization) with respect to theexpenditures made by the Parties hereunder will be allocated by the Government taxauthorities to the Parties based on the share of each tax item actually received or borne byeach Party, save as provided in Article 8.3. Operator shall provide each Party, in a timelymanner and at such Party’s sole expense, with such information with respect to JointOperations as such Party may reasonably request for preparation of its tax returns orresponding to any audit or other tax proceeding.

8.2 Joint Levy

If interpretation or enforcement of the Concession Documents by the Governmentimposes joint and several liability on the Parties for any levy, charge or tax, the Partiesagree to cross indemnify each other to the extent that such levy, charge or tax is owed byone Party individually.

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8.3 Tax Claims in respect ofReimbursed or Carried Costs

(a) The Parties agree that a Party (for the purposes of this Article 8, the ‘ClaimingParty”) who has reimbursed past costs in respect of the relevant Concessions andwho has carried costs on behalf of any other Party or Parties shall, subject to theClaiming Party not having been subsequently reimbursed those costs by anotherParty, be the only Party entitled to claim those costs against revenue in respect ofany profit or gain on which tax is payable by the Claiming Party. In the casewhere Farmee is the Claiming Party, it is acknowledged and agreed that such pastcosts and carried costs include:

(i) the entirety of the consideration paid by Farmee pursuant to Article 4.1(a);and

(ii) the entirety of the costs and amounts paid by Farmee pursuant to clause4.2.

(b) Each Party shall render such reasonable assistance to the Claiming Party and shalldo all such reasonable things (including executing all such instruments andrefraining from submitting or making any claims or deductions in respect of theamounts referred to in Article 8.3(a) as may be reasonably requested by theClaiming Party) to enable the amounts referred to in Article 8.3(a) to be claimedfor adjustment against the Claiming Party’s income for tax purposes.

ARTICLE 9

CONFIDENTIALITY

9.1 Except as otherwise provided in the Concession Documents, each Party agrees that allinformation disclosed under this Agreement, except information in the public domain orlawfully in possession of a Party prior to the Effective Date, shall be consideredconfidential and shall not be disclosed to any other person or entity without the priorwritten consent of the Party which owns such confidential information. This obligation ofconfidentiality shall remain in force during the term of the Concession Documents andfor a period of two years thereafter. Notwithstanding the foregoing, confidentialinformation may be disclosed without consent and without violating the obligationscontained in this Article in the following circumstances:

(1) to an Affiliate provided the Affiliate is bound by the provisions of thisArticle 9 and the Party disclosing is responsible for the violation of anAffiliate;

(2) to a governmental agency or other entity when required by any of theConcession Documents;

(3) to the extent such information is required to be furnished in compliancewith the applicable Laws/Regulations, or pursuant to any legalproceedings or because of any order of any court binding upon a Party;

24

(4) to professional advisers engaged, or proposed to be engaged, by any Partywhere disclosure of such information is essential to such professionaladvisers’ work for such Party and such professional advisers are bound byan obligation of confidentiality;

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

(6) to a bona fide prospective transferee of a Party’s Participating Interest, orportion thereof, to the extent appropriate in order to allow the assessmentof such Participating Interest (including an entity with whom a Partyand/or its Affiliates are conducting bona fide negotiations directed towarda merger, consolidation or the sale of a majority of its or an Affiliate’sshares);

(7) to a bank or other financial institution to the extent appropriate to a Partyarranging for funding;

(8) to the extent such information must be disclosed pursuant to any rules orrequirements of any government or stock exchange having jurisdictionover such Party, or its Affiliates; provided that such Party shall complywith the requirements of Article 14.10 hereunder;

(9) to its respective employees, subject to each Party taking sufficientprecautions to ensure such information is kept confidential;

(10) to the extent any information which, through no fault of a Party, becomesa part of the public domain; and

(11) to the other parties to the Concession Documents and the Governmentsolely to the extent as may be required to satisfy the Conditions Precedent.

9.2 Disclosure as pursuant to Articles 9.1(5), (6), (7) and (11) shall not be made unless priorto such disclosure the disclosing Party has obtained a written undertaking from therecipient party to keep the information strictly confidential for at least as long as theperiod set out above and to use the information for the sole purpose described in Articles9.1(5), (6), (7), and (11), whichever is applicable, with respect to the disclosing Party.

ARTICLE 10

NOTICES

All notices authorized or required between the Parties by any of the provisions of this Agreementshall be in writing (in English) and delivered in person or by courier service or by any electronicmeans of transmitting written communications which provides written confirmation of completetransmission, and properly addressed to the other Party. Verbal communication does notconstitute notice for purposes of this Agreement, and e-mail addresses and telephone numbers

25

for the Parties are listed below as a matter of convenience only. A notice given under anyprovision of this Agreement shall be deemed delivered only when received by the Party to whomsuch notice is directed, and the time for such Party to deliver any notice in response to suchoriginating notice shall run from the date the originating notice is received. “Received” forpurposes of this Article shall mean actual delivery of the notice to the address of the Partyspecified hereunder.

Name: Petroleum Exploration (Pvt) Frontier Holdings Limited Gulf Petroleum ExplorationLimited Pakistan (GPXP) Limited

Address: 15, Nazimuddin Road #227, 200 Barclay Parade SW Third Floor, Mielles HouseSector F-i 0/4 La Rue des MiellesP0 Box 1440 St Helier

Islamabad, Pakistan Calgary, Alberta T2P 4R5 Jersey, JE2 3QDChannel Islands

Attention: Mr. Zaheeruddin President & CEO CEO

Copy to: Frontier Holdings Limited Gulf Petroleum ExplorationSuite 123, Umm Suqeim Bldg InternationalSheikh Zayed Road 11th floor Gulf TowerP0 Box 37174 Al QiblaDubai, United Arab Emirates P0 Box 26725

Al Safat— 13128Kuwait City, Kuwait

Facsimile: +92 51 2299027 +1 (403) 266-6365 +965 224 3847Email: pepl@isb.paknet.com.pk ggarner@iuraenergy.com mcrnurtry(~gpxkw.com

sobbi~gpxkw.cornTelephone: +92 51 2299031 +1 (403) 266-6364 +965 224 3844

ARTICLE 11

LAW AND DISPUTE RESOLUTION

11.1 Governinf!Law

The substantive laws of England, exclusive of any conflicts of laws principles that couldrequire the application of any other law, shall govern this Agreement for all purposes,including the resolution of disputes between or among Parties.

11.2 Dispute Resolution

Except as may be otherwise agreed in the JOA, any and all claims, demands, causes ofaction, disputes, controversies and other matters in question arising out of or relating tothis Agreement, including any question regarding its breach, existence, validity ortermination, which the Parties do not resolve amicably within a period of 30 days, shallbe resolved by three arbitrators in accordance with the Arbitration Rules of the LondonCourt of International Arbitration (LCIA). Each Party shall appoint one arbitrator within

26

thirty (30) days of the filing of the arbitration. If a Party fails to appoint its Party-appointed arbitrator within the applicable time period, then the LCIA shall appoint theremainder of the three arbitrators not yet appointed. The seat of arbitration shall beLondon, United Kingdom. The proceedings shall be in the English language. Theresulting arbitral award shall be final and binding, and judgment upon such award may beentered in any court having jurisdiction thereof. A dispute shall be deemed to have arisenwhen either Party notifies the other Party in writing to that effect. Any monetary awardissued by the arbitrator shall be payable in US Dollars. It is expressly agreed that thearbitrator shall have no authority to award special, indirect, consequential, exemplary orpunitive damages.

The Parties waive any right to refer any question of law and any right of appeal on thelaw andior merits to any court.

ARTICLE 12

REASSIGNMENT OF INTERESTS

Without prejudice to the JOA and any other rights available to Farmors, in the event thatFarmee fails to perform its obligations under Article 4 herein, each of Farmors shall havethe option, exercisable at any time after 30 days from such Farmo?s notice to Farmee ofFarmee’s failure to timely fulfill its obligations under Article 4 (provided such failure hasnot been remedied and is subsisting), to require that Farmee reassign Farmee’sParticipating Interest to such Farmor free of cost. In this event, Farmee agrees to executeany and all such documents as are necessary for such reassignment in the same form andmanner as the original assignment; and, assist in obtaining and required Governmentapproval of such reassignment.

ARTICLE 13

EXCLUSION OF LIABILTY

No Party shall be liable to the others, whether under contract, in tort or otherwise, for anyspecial or punitive damages, loss of anticipated profits, or any other indirect orconsequential losses.

14.1 Relationship ofParties

ARTICLE 14

GENERAL PROVISIONS

The rights, duties, obligations and liabilities of the Parties under this Agreement shall beindividual, not joint or collective. It is not the intention of the Parties to create, nor shallthis Agreement be deemed or construed to create, a mining or other partnership, jointventure or association or (except as explicitly provided in this Agreement) a trust. ThisAgreement shall not be deemed or construed to authorize any Party to act as an agent,

27

servant or employee for any other Party for any purpose whatsoever except as explicitlyset forth in this Agreement. In their relations with each other under this Agreement, theParties shall not be considered fiduciaries except as expressly provided in thisAgreement.

14.2 Further Assurances

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

14.3 Waiver

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

14.4 Joint Preparation

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

14.5 Severance ofInvalid Provisions

If and for so long as any provision of this Agreement shall be deemed to be judgedinvalid for any reason whatsoever, such invalidity shall not affect the validity oroperation of any other provision of this Agreement except only so far as shall benecessary to give effect to the construction of such invalidity, and any such invalidprovision shall be deemed severed from this Agreement without affecting the validity ofthe balance of this Agreement.

14.6 Modifications

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

14.7 Priority ofAc,’reement

In the event of any conflict between the provisions of the main body of this Agreementand its Exhibits, the provisions of the main body of the Agreement shall prevail. In theevent of any conflict between this Agreement and the JOAs, this Agreement shall prevail.In the event of any conflict between this Agreement and any of the ConcessionDocuments other than the JOAs, this Agreement shall prevail unless such would be inviolation of the laws of Pakistan or the terms of such Concession Documents.

28

14.8 Interpretation(a) Headings. The topical headings used in this Agreement are for convenience only

and shall not be construed as having any substantive significance or as indicatingthat all of the provisions of this Agreement relating to any topic are to be found inany particular Article.

(b) Singular and Plural. Reference to the singular includes a reference to the plural andvice versa.

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

(d) Article. Unless otherwise provided, reference to any Article or an Exhibit means anArticle or Exhibit of the Agreement.

(e) Include. The words “include” and “including” shall mean to be inclusive withoutlimiting the generality of the description preceding such term and are used in anillustrative sense and not a limiting sense.

14.9 Counterpart Signature

This Agreement may be signed in any number of counterparts and each such counterpartshall be deemed an original of this Agreement for all purposes; provided that no Partyshall be bound to this Agreement unless and until all Parties have signed a counterpart.

14.10 Public Announcements

FHL shall be entitled, following signature of this Agreement, to issue a press releaseworded substantially as set out in Exhibit E, which the Parties have agreed. No otherpublic announcement or statement regarding the terms or existence or this Agreementshall be made prior to the end of the Interim Period without the prior written consent ofall Parties; provided that, notwithstanding any failure to obtain such approval, no Partyshall be prohibited from issuing or making any such public announcement or statement tothe extent it is necessary to do so in order to comply with the applicable laws, rules orregulations of any government, legal proceedings or stock exchange having jurisdictionover such Party or its affiliates.

14.11 Entirety

This Agreement constitutes the entire agreement of the Parties in respect of the subjectmatter contained herein and supersedes all prior understandings and negotiations of theParties.

14.12 ThirdPartv Rights

The Parties do not intend that any term of this Agreement shall be enforceable solely byvirtue of the Contracts (Rights of Third Parties) Act 1999 by any person who is not aparty to this Agreement.

29

IN WITNESS of their agreement each Party has caused its duly authorized representative to signthis instrument on the date set out in the first sentence of this Agreement.

PET~~XPLORATION (PVT) LIMITED

Zaheeruddin

Witness:

FRONTIER HOLDINGS LIMITED

Witness:

Witness:

30

Graham GarnerExecutive Vice President

GULF PETROLEUM EXPLORATION PAKISTAN(GPXP) LIMITED

r—

Dr. Michael McMurtryChief Executive Officer

‘Witness:

\‘,‘

31