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Farmout Agreement

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Date:
2010
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44K
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FARMOUT AGREEMENT


THIS Farmout Agreement (this “Agreement”) is entered into on effective as of May 31, 2010 (“Effective Date”) between SK Energy, Sucursal Peruana, the Peruvian registered branch of SK Energy Co., Ltd., a company organized and existing under the laws of the Republic of Korea (“Farmor”), and Gulf United Energy Cuenca Trujillo Ltd., a company organized and existing under the laws of the British Virgin Islands (“Farmee”).  Farmor and Farmee are sometimes referred to collectively as the “Parties” and individually as a “Party.”

WITNESSETH:

WHEREAS, Farmor holds one hundred percent (100%) of the Participating Interest under that certain License Contract, dated November 21, 2007, for the Exploration and Exploitation of Hydrocarbons in Block Z-46 (“License Contract”) between Perupetro S.A. (“Perupetro”) and Farmor in the Republic of Peru; and
 
 
WHEREAS, Farmor is willing to assign and transfer a certain undivided interest in its rights and obligations under the License Contract to Farmee in accordance with the terms set forth herein and Farmee wishes to acquire such interest.

NOW THEREFORE, in consideration of the mutual covenants set forth in this Agreement, the Parties agree as follows:

1.           Definitions

The terms defined in the License Contract shall have the same meaning when used in this Agreement unless the context requires otherwise.  Terms defined in the singular shall have the same meaning when used in the plural and vice versa.  A reference to a “Clause” is a reference to a clause of this Agreement unless otherwise specified.

 
1.1
Affiliate” shall have the same meaning as such term is defined the License Contract except the reference to “Parties” as used in that definition shall mean the Parties to this Agreement.

 
1.2
Agreement” means this Farmout Agreement together with the Exhibits, and any extension, renewal or amendment hereof agreed to in writing by the Parties.

 
1.3
Approval Date” means the date on which Perupetro and/or the Government formally approves or endorses the Assignment of the Participating Interest transferred hereunder.

 
 

 
 
1.4
Assignment” means the transfer from Farmor to Farmee of the Farmout Interest.

 
1.5
Assignment Agreement” means the document, of which form is attached hereto as Exhibit A, to be signed by Farmor and Farmee to effect the Assignment.

 
1.6
Business Day” means a day (other than a Saturday or Sunday) on which commercial banks in Texas, United States of America, Seoul, Republic of Korea, and Lima, Republic of Peru are generally open for business.

 
1.7
Closing Date” means the date within fifteen (15) days from execution of the amendment to the License Contract in accordance with Clause 3.1, which date will agreed upon between the Parties.

 
1.8
Consideration” has the meaning given in Clause 2.4.

 
1.9
Contract Area” shall have the same meaning as such term is defined in the License Contract.  The current Contract Area covered by the License Contract is set forth on Exhibit B attached hereto.

 
1.10
Contractor” shall have the same meaning as such term is defined in the License Contract.

 
1.11
Cut-off Date” means the date falling on eighteen (18) months from the date on which this Agreement is signed.

 
1.12
Farmout Interest” means an undivided forty percent (40%) of the rights and obligations of the Contractor under the License Contract.

 
1.13
Government” means the government of the Republic of Peru, and all departments, political subdivisions, instrumentalities, agencies, corporations or commissions under the direct or indirect control thereof or owned thereby and shall include any court, legislature, council or state government or national, regional, municipal or local authorities.

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