Common use of Production Sharing Clause in Contracts

Production Sharing. 1. The total Crude Oil produced and saved in a Quarter from each Commercial Discovery and its Development Area and not used in Petroleum Operations less the Cost Recovery Crude Oil from the same Development Area, as provided in Article 11, shall be referred to as “Development Area Profit Oil” or “Profit Oil” and shall be shared between Sonangol and Contractor Group according to the after tax, nominal rate of return achieved at the end of the preceding Quarter by Contractor Group in the corresponding Development Area as follows: Less than to less than to less than to less than 2. Beginning at the date of Commercial Discovery, Contractor Group's rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for each Development Area, using the following procedure: (a) The Contractor Group's net cash flow computed in U.S. dollars for a Development Area for each Quarter is: (i) The sum of Contractor Group's Cost Recovery Crude Oil and share of Development Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Market Price; (ii) Minus Petroleum Income Tax; (iii) Minus Development Expenditures and Production Expenditures; (b) For this computation, neither any expenditure incurred prior to the date of Commercial Discovery for a Development Area nor any Exploration Expenditure shall be included in the computation of Contractor Group's net cash flow. (c) The Contractor Group's net cash flows for each Quarter are compounded and accumulated for each Development Area from the date of the Commercial Discovery according to the following formula: ACNCF (Current Quarter) = where: ACNCF = accumulated compounded net cash flow NCF = net cash flow DQ = quarterly compound rate (in percent). The formula will be calculated using quarterly compound rates (in percent) of %, %, % and % which correspond to annual compound rates ("DA") of %, %, % and %, respectively, as referred to in Article 12.1. 3. The Contractor Group's rate of return in any given Quarter for each Development Area shall be deemed to be between the largest DA which yields a positive or zero ACNCF and the smallest DA which causes the ACNCF to be negative. 4. The sharing of Profit Oil from each Development Area between Sonangol and Contractor Group in a given Quarter shall be in accordance with the scale in paragraph 1 above using the Contractor Group's deemed rate of return as per paragraph 3 in the immediately preceding Quarter. 5. In a given Development Area it is possible for the Contractor Group's deemed rate of return to decline as a result of negative cash flow in a Quarter with the consequence that Contractor Group's share of Profit Oil from that Development Area would increase in the subsequent Quarter. 6. Pending finalization of accounts, Profit Oil from Development Areas shall be shared on the basis of provisional estimates, if necessary, of deemed rate of return as approved by the Operating Committee. Adjustments shall be subsequently effected in accordance with the procedure to be established by the Operating Committee.

Production Sharing. 1. The total Crude Oil produced and saved in a Quarter from each Commercial Discovery and its Development Area and not used in Petroleum Operations less the Cost Recovery Crude Oil from the same Development Area, as provided in Article 1111 above, shall be referred to as “Development Area Profit Oil” or “Profit Oil” and shall be shared between Sonangol the Concessionaire and the Contractor Group according to the after tax, nominal rate of return achieved at the end of the preceding Quarter by Contractor Group in the corresponding Development Area as follows: Accumulated Production Oil Barrel) Sonangol’s share - % Contractor Group share - % Less than XX% XX XX From XX to less than XX XX XX From FF to less than XX XX XX From XX to less thanthan XX XX XX more than XX XX XX 2. Beginning at the date of a Commercial Discovery, Contractor Group's rate of return shall be determined at the end of each Quarter on the basis of the accumulated compounded net cash flow for each Development Area, using the following procedure: (a) The Contractor Group's net cash flow computed in U.S. dollars Dollars for a Development Area for each Quarter is: (i) The sum of Contractor Group's Cost Recovery Crude Oil and share of Development Area Profit Oil regarding the Petroleum actually lifted in that Quarter at the Market agreed Crude Oil Price; (ii) Minus Petroleum Income Tax; (iii) Minus Development Expenditures and Production Expenditures; (b) For this computation, neither any expenditure incurred prior to the date of Commercial Discovery for a Development Area nor any Exploration Expenditure shall be included in the computation of Contractor Group's net cash flow. (c) The Contractor Group's net cash flows for each Quarter are compounded and accumulated for each Development Area from the date of the Commercial Discovery according to the following formula: ACNCF (Current Quarter) = where: ACNCF = accumulated compounded net cash flow NCF = net cash flow DQ = quarterly compound rate (in percent). The formula will be calculated using quarterly compound rates (in percent) of %, %, % and % which correspond to annual compound rates ("DA") of %, %, % and %, respectively, as referred to in Article 12.1. 3. The Contractor Group's rate of return in any given Quarter for each Development Area shall be deemed to be between the largest DA which yields a positive or zero ACNCF and the smallest DA which causes the ACNCF to be negative. 4. The sharing of the Profit Oil from each Development Area between Sonangol and the Contractor Group in a given Quarter shall be in accordance with the scale table in paragraph 1 above using the Contractor Group's deemed rate of return as per paragraph 3 in the immediately preceding Quarter. 5. In a given Development Area it is possible for the Contractor Group's deemed rate of return to decline as a result of negative cash flow in a Quarter with the consequence that Contractor Group's share of Profit Oil from that Development Area would increase in the subsequent Quarter. 6. Pending finalization of accounts, Profit Oil from Development Areas shall be shared on the basis of provisional estimates, if necessary, of deemed rate of return as approved by the Operating Committee. Adjustments shall be subsequently effected in accordance with the procedure to be established by the Operating Committee.