ASSIGNMENT CONTRACT OF SHARE RIGHTS OF OMEGA ENERGY COLOMBIA IN THE CARBONERA CONTRACT SHARE AGREEMENT (ENTERED INTO BETWEEN WELL LOGGING LTDA and PETROLEUM EQUIPMENT INTERNATIONAL LTDA) and in consequence IN THE CARBONERA BLOCK IN FAVOR OF PETROSOUTH...
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ASSIGNMENT
CONTRACT OF SHARE RIGHTS OF OMEGA ENERGY
COLOMBIA
IN THE CARBONERA CONTRACT SHARE AGREEMENT
(ENTERED
INTO BETWEEN WELL LOGGING LTDA and PETROLEUM
EQUIPMENT
INTERNATIONAL LTDA) and in consequence IN THE
CARBONERA
BLOCK IN FAVOR OF PETROSOUTH ENERGY
CORPORATION
– COLOMBIAN BRANCH
Between
the undersigning, namely: on the one
hand:XXXX XXXX XXXXXX, of legal age, domiciled and
resident in the city of Bogotá D.C., identified with citizenship card No.
91.241.011 issued in Bucaramanga (Santander), who for purposes
of this act is acting in his capacity of Manager and Legal Representative of
OMEGA ENERGY COLOMBIA, a corporation legally organized through
pubic deed No. two thousand nine hundred and sixty three (#2963) issued on
November twenty ninth (29th) of two
thousand
(2000) under number 70154 of Book 06, a corporation with main domicile in the
city of Bogota, D.C., identified with tax identification number (TIN)
830.081.895-1, all of this certified in the Certificate of
Incorporation and Legal Representation issued for said purpose by the Chamber
of
Commerce of the city of Bogota, which is attached to this contract to be part
thereof (Schedule #1), duly entitled to enter into this Agreement, in accordance
with its by-laws, and who hereinafter and for said purposes shall be called
OMEGA or THE ASSIGNOR, and on the other
hand: PETROSOUTH ENERGY CORPORATION – COLOMBIAN BRANCH, a
corporation legally organized through public deed No. Six hundred and fifty
seven (#00657) of two thousand and seven (2007) issued by the Forty Fifth
Notary’s Office (45th) of the
Circle of
Bogota, domiciled in the city of Bogota, D.C., identified with tax
identification number (TIN) 900.140.614, legally represented by Xx.
XXXXXX XXXXXXXX BARROS, of legal age, domiciled and resident in
the city of Bogota, D.C., identified with citizenship card No. 79.785.924 issued
in Valledupar (Cesar), all of this certified in the Certificate of Incorporation
and Legal Representation issued for said purpose by the Chamber of Commerce
of
the city of Bogota, which is attached to this contract to become part thereof
(Schedule #2), duly entitled to enter into this Agreement by
the Board of Directors of the Corporation, who hereinafter and for all purposes
thereof shall be called PETROSOUTH or THE
ASSIGNEE, have decided to enter into this Share Agreement,
WHEREAS
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I.
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WELL
LOGGING LTDA. (hereinafter WELL LOGGIN), a commercial corporation
duly organized under the laws of the Republic of Colombia, with Tax
Identification Number
(TIN)830.013.746-3, entered into with
ANGENCIA NACIONAL DE HIDROCARBUROS (hereinafter the
XXX) on December twenty eighth (28th)
of two
thousand and five (2005), the Carbonera Exploration and Exploitation
Contract (hereinafter the Carbonera Contract), being it the Operator
thereof.
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II.
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WELL
LOGGING currently has a Private Share Agreement fully in force
with C&C ENERGIA BARBADOS SUCURSAL COLOMBIA, for
which C&C has rights and oblications to contribute
with costs and expenses and to receive Net Incomes that WELL
LOGGING may obtain upon developing the Carbonera Contract by a
twenty five per cent (25%).
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III.
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WELL
LOGGING bound itself as part of the Minimum Exploratory Program
for the First Phase of the Carbonera Contract Exploration Period,
which
expired past April twenty eighth (28th)
of 2007,
to: (i) Acquisition, geological collection and
interpretation of thirty eight (38) kms of 2D seismic, and
(ii) execute the re-entry and assessment of the Cerro Gordo
well
and in the event of not being able to carry out the re-entry, to
drill an
exploratory well up to Xx Xxxx formation
basis.
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IV.
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After
the expiration period on April twenty eighth (28th)
of two
thousand and seven (2007), the XXX provides an automatic
term of two months as of the expiration date to comply with the obligation
set forth in the immediate previous items as provided for in the
Exploration and Exploitation Contract enter into
therewith.
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V.
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Up
to date, WELL LOGGING has acquired, carried out the
geological collection and interpretation of thirty eight (38) kms
of 2D
seismic.
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VI.
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For
compliance with the remaining obligation of the First Phase of the
Carbonera Contract Exploration Period, WELL LOGGING has
decided to carry out re-entry and assessment activities of Cerro
Gordo -1 well, located in the Department of Norte de
Santander.
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VII.
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PEI
Expressed its interest in participating in the execution of the Carbonera
Contract as private investor in principle, with a contribution in
kind of
all of the activities needed to carry out the Re-entry and assessment
activities of the Cerro Gordo Well -1. Reason why, through
private document of April twenty fifth (25th)
of two
thousand and seven (2007), it entered into with WELL
LOGGING a share agreement over the sixty five per cent (65%) of
the Carbonera Block (agreement which is attached to and is part of
this
agreement) through which it committed itself to execute before May
twenty eighth (28th)
of two
thousand and seven (2007), by its own means and with is own
personnel, independently and with full technical, directive,
administrative and especially financial autonomy, the Re-entry activities
of Cerro Gordo 1 well located in the Department of Norte de Santander,
employing for said purpose, the equipment described in detail in
Schedule
V of the agreement signed as if it would be a Turn Key mode that
shall
encompass the obligation by PEI to carry out all of the
activities required for the re-entry and assessment of the Cerro
Gordo 1
well, for which PEI shall bear all of the costs and all
of the risks in said contract
terms.
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VIII.
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In
the terms of the Share Agreement of April twenty fifth (25th)
of two
thousand and seven (2007) entered into between PEI
and WELL LOGGING that sets forth as expiration
date May twenty eighth (28th)
of 2007 as
aforementioned, said term is extended by virtue of the two month
automatic
extension granted by XXX until June twenty eighth (28th)
of
2007.
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IX.
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Terms
in item 2.1 of clause two (2) of the Share Agreement of
April twenty fifth (25th)
of two
thousand and seven (2007), entered into between and by
PEI and WELL LOGGING, set forth that
“the obligation to do” under PEI’s responsibility, shall
only be understood fully accomplished for all legal purposes (pursuant
to
the agreement entered into), once Agencia Nacional de
Hidrocarburos (hereinafter XXX) issues a written
communication to WELL LOGGING stating the compliance of the entire
exploratory commitment corresponding to the First Phase of the Carbonera
Contract Exploration Period, being this the essential condition that
shall
grant right to PEI to obtain a percentage of the “Share
Interest” in said contract under those terms described
hereinafter.
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X.
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The
terms in item 2.2 of Clause Two (2) of the Share
Agreement of April twenty fifth (25th)
of two
thousand and seven (2007) entered into between
PEI and WELL LOGGING, set forth that
once the condition set forth in immediately above item has been
accomplished, PEI may request WELL
LOGGING to ask XXX authorization for the
official assignment on its behalf of the rights and obligations in
the
Carbonera Contract in the percentage of the “Share Interests” gained for
complying with the obligation set forth in the immediately previous
item.
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XI.
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PEI
and TC OIL & SERVICES S.A., a corporation legally
organized through public deed number two thousand four hundred and
ninety
twho (#2492) of October eleventh (11th)
of two
thousand and four (2004) issued by the Thirty Ninth (30th)
Notary’s
office, registered on December ninth (9th)
of two
thousand and four (2004) under number 00966026 of Book IX, a corporation
with main domicile in the city of Bogota, D.C. identified with Tax
Identification Number (TIN) 830.509.997-5, entered into
on June 6th
of 2007, an
Share Rights Assignment Contract, corresponding to the 10% of PEI’s share
in the Benefits derived from the Carbonera Contract, subject to compliance
with its obligations set forth in the aforementioned
Agreement.
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XII.
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The
corporation OMEGA ENERGY COLOMBIA, borne on behald of
PEI, “the obligations to do” consisting in the re-entry and interpretation
of the Cerro Gordo 1 well acquired by PEI by entering into the
Agreement.
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XIII.
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As
compensation for the aforementioned works executed by OMEGA, PEI
assigned
in favor or Omega on June 20th
of 2007, the
percentage corresponding to its share in the Carbonera Contract equivalent
to 53%.
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XIV.
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In
this way, PEI at that time, TC OIL,
OMEGA and now PETROSOUTH state that they know,
understand and accept the existence and effectiveness of the Share
Agreement between WELL LOGGING and
C&C.
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XV.
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OMEGA
and PETROSOUTH have decided to set forth the final terms
and conditions in this document, which govern the share assignment
of
OMEGA to PETROSOUTH in the Carbonera Contract pursuant to provisions
under
this Agreement.
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CLAUSE
ONE.-Definitions and
Interpretation: For clarity purposes in the
interpretation of this document, terms used in wording of this contract
shall be understood in the corresponding technical language or, otherwise,
in their natural and obvious sense according to the general use thereof
unless otherwise specify herein. For purposes of this contract
in particular, those terms defined in this Clause shall be understoon
within the scope assigned there to
below:
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Definitions:
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“Agreement”: means
the documents so called “Share Agreement” of April twenty fifth (25th)
of two thousand
and seven (2007), entered into between PEI and
WELL LOGGING, which is part of this contract
(Schedule
# 3).
“Sole
Payment Agreement”: means the private document so called
(Sole Payment Agreement” and its schedule signed on October twentieth (20th) of two
thousand
and six (2006), where the terms for payment, securities, interests and penalties
to be cancelled by PEI and/or QUALITY to TC or TC OIL were set forth for both
pure and simple obligations such as those subject to suspension condition that
PEI and/or Quality (debtors) have up to date. In this definition,
amendment number 1 to the “Sole Payment Agreement” signed by the parties past
April twenty third (23rd) of two
thousand
and seven and its schedule, is included.
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“XXX”: means
AGENCIA NACIONAL DE HIDROCARBUROS of Colombia, Special Administrative Units
in
charge of administrating hydrocarbons in Colombia.
“Carbonera
Contract”: means the private document of December twenty
eighth (28th)
of two thousand and five (2005) entered into between WELL LOGGING
and XXX, through which the Carbonera Exploration
and
Exploitation, being WELL LOGGING its Operator.
“PEI
Equipment”: means all of the pieces of equipment, materials,
tools, spare parts and other elements, whether belonging to
PEI, or rented, leased or contracted on its account and
responsibility under any mode legally accepted, all of which shall be used
by
PEI for the execution of its obligations set forth in the
AGREEMENT, as they are duly described in Schedule III thereto. For
all purposes, this definition includes in a special manner, the Workover rig
duly equipped and available to carry our a Re-entry on a timely basis or
“PEI Equipment” such as it is described in Schedule V
thereto.
“Starting
Date”: means the date on which the Rig must be in conditions
to star the Re-entry activities at the Cerro Gordo 1 Well by PEI.
“Net
Incomes”: are the incomes that are actually received by
WELL LOGGING in its capacity of Operator o the Carbonera
Contract (capacity which shall be subsequently taken over by
PEI), corresponding to the sales of the production of
Hydrocarbons obtained after discounting the money amounts corresponding to
:
(i) royalties, (ii) economic rights of XXX,
(iii) taxes inherent to the
hydrocarbon sales applicable at all
times (without including income tax), (iv) operating and
maintenance costs previously approved by the competent body for decision making
under the JOA, including the abandonment provision, and (v)
costs generated for handling and transporting the hydrocarbon production to
the
location where it is traded.
“Share
Interest” means the share percentage in casts, expenses and Net Incomes
of the Carbonera Contract, which in case of PEI, shall
correspond to the sixty five per cent (65%) of said costs,
expenses and Net Incomes, provided that, it has complied with its “obligation to
do” pursuant to the terms of the AGREEMENT.
“Joint
Operating Agreement” or “JOA” means the operation agreement entered
into between WELL LOGGING, C&C, PEI and TC Oil within the
sixty (60) days following the date of the communication by XXX stating the
compliance with the obligation of the First Phase of the Carbonera Contract
Exploration Period in order to regulated the rules that shall govern thereafter
the joint operation thereof.
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“Party”
or “Parties”: is each of the parties described in this
contract heading, considered individually or collectively, and who shall enter
into the contract.
“Assigned
Well”: means the CERRO GORDO 1 well.
“Re-Entry”: means
the re-intervention activities at the Cerro Gordo 1 well, which includes the
use
of a workover unit to drill the abandonment plugs of the well, completion with
production piping and preliminary testing to the well productions potential,
from all of which the corresponding report shall be issued. The
re-entry shall also include the assessment of the Cerro Gordo 1
well.
“Rig”: means
the Equipment and the Drilling Unit of the xxxxx and the rest of associated
equipment, which descriptions and specifications are included in Schedule III
of
the AGREEMENT or pursuant to any modification that may be included.
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Interpretation: The tems used in this
contract shall have the meaning assigned thereto in its text and
as such
must be understood at the time of construing it, being irrelevant
if they
are in capital letters or small letters, in singular or plural,
terms that
have full effect in respect of this contract, schedules and documents
that
so modify it and/or add
it.
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Regulation References: Any reference made
in this contract to any Law, Decree, Resolution, Administrative
Act,
Agreement, Circular, Statute and in general, any legal binding
regulation
for the Parties, shall include its modifications and/or subsequent
additions and new regulations and rules, so that as to the topic
specifically regulated in the Contract, must abide in every case
to the
applicable regulations in
force.
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CLAUSE
TWO.-Purpose of the Contract: THE ASSIGNOR
assignes in favor of THE ASSIGNEE, the six per
cent (6%) over the fifty three per cent (53%) – pursuant to the table
shown at the end of this clause – of the “Share Interests” acquired by virtue of
entering into the “Agreement”, that is, the percentage mentioned on the
percentage on which it is a holder in the Carbonera Block, provided that
THE ASSIGNOR proves fully compliance with the obligation
related to Re-entry and assessment of the Cerro Gordo 1 well set forth in the
aforementioned AGREEMENT. The “Share Interests” of
the Carbonera Contract shall remain as follows:
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PEI
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2%
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WELL
LOGGING
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25%
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C&C
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10%
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TC
OIL & Services S.A.
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10%
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OMEGA
ENERGY COLOMBIA
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47%
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PETROSOUTH
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6%
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TOTAL
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100%
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CLAUSE
THREE.- Scope of the Assignment: THE ASSIGNEE for the
fact of assigning the six per cent (6%) out of the fifty three
per cent (53%) of the “Share Interests” on its behalf, - as shown in the table
at the end of the immediately previous clause - , it bears full right on said
percentage, the rights corresponding to the 6% included in the aforementioned
“Agreement” and that correspond to THE ASSIGNOR, likewise
producing the assignment of shares, rights, privileges, obligations and legal
benefits inherent to the nature and conditions foreseen in the
contract. In this way, one Phase 2 has started, the assignee starts
to participate, in respect to its percentage, in every right and obligation
derived therefrom.
THE
ASSIGNOR shall be responsible before THE ASIGNEE for
the existence and validity of the “Share Agreement” of April twenty fifth
(25th) of two
thousand and seven (2007), entered into between PEI and
WELL LOGGING, which caused the assignment in its favor
by PEI
in the “Share Interests” and that for this act, the 6% is
assigned. THE ASSIGNOR shall also be responsible for
the future compliance with the obligations of WELL LOGGING, for
which THE ASSIGNEE shall notify the delay or the failure to
comply of its obligations to THE ASSIGNOR, within the ten (10)
days subsequent to the fact constituting the delay or the failure to
comply.
CLAUSE
FOUR. Statements and Effects of this
contract:
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a)
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THE
ASSIGNOR expressly states that has not assigned the six
per cent (6%) subject matter of this assignment, corresponding to
the fifty three per cent (53%) of the “Share Interests” acquired in the
Carbonera Block subject matter of this assignment – as shown in the table
of the aforementioned Clause One.
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b)
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THE
ASSIGNEE expresses that it knows the “Share Agreement” of April
twenty fifth (25th)
of two
thousand and seven (2007), entered into between PEI and
WELL LOGGING.
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c)
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The
assignment of the six per cent (6%) of the fifty three
percent (53%) of the “Share Interests” acquired by the Assignor by virtue
of entering into the Assignement in its favor by PEI included in
this
document, implies that THE ASSIGNOR is substituted by
THE ASSIGNEE in said share, which is subject matter of
this assignment in the terms and conditions
thereof.
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d)
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The
assignment included in this document implies that the shares, privileges
and legal benefits inherent to the nature and conditions of the contract,
but it does not transfer those related to cause not under its control
or
in the capacity or condition of the contractors’
personnel.
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e)
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It
is clear and expressly understood that this assignment refers solely
and
exclusively to the six per cent (6%) of the fifty
three per cent (53%) of the “Share Interests” acquired by
THE ASSIGNOR by virtue of entering into the assignment
formerly mentioned herein in its
favor.
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The
foregoing means that THE ASSIGNEE shall acquire the six per
cent (6%) in the Carbonera Block share derived from one part of the Carbonera
Contract and the other part of the assignment, entered into in its favor by
PEI,
as compensation for the amount of four hundred and twenty thousand American
dollars ((USD$420.000). For said reason, the purpose
of entering into this agreement is that THE ASSIGNEE acquires
said share percentage and obtains the credits and debits generated by said
percentage.
CLAUSE
FIVE.- Value and Way of Payment: The total value agreed
by the parties for the percentage subject matter of this assignment is
FOUR HUNDERED AND TWENTY THOUSAND AMERICAN DOLLARS
(USD$420.000), being it the value corresponding to each point
equivalent to seventy thousand American dollars
(USD$70.000,00), in this way said value shall be cancelled in the way
set forth in item 2 as a result of the following procedure:
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1.
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The
Assignee must cancel the amount corresponding to one million American
dollars (USD$1.000.000,oo) on September 10th
of 2007, to
PETROLEUM EQUIPTMENT INTERNATIONAL LTDA., as set forth in
the Memorandum or Understanding of the Buenavista Block, signed by
the
parties hereto on June 7 of 2007.
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1.1
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However,
since the payment corresponding to the aforementioned September 10th
shall be
cancelled on August 14 of 2007, (payable at a MRR of $2006
pesos), a discount over this obligation corresponding to the
amount of fifty thousand American dollars (USD$50.000,oo)
shall proceed.
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1.2
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In
this way, the obligation set forth in Clause 2 Item (iii) of the
Buenavista Block Memorandum or Understanding, referred to in item
1, shall
correspond to nine hundred and fifty thousand American dollars
(USD$950.000,oo) once the discount for advance payment
has been made. The amount shall be allocated as
follows:
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The
assignee shall draw in favor of Bancolombia TIN
890903938-8, the amount corresponding to one hundred thirty three
million
seventy eight thousand Colombian pesos
($133.078.000,oo).
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The
assignee shall draw the remaining amount corresponding to one thousand
eight hundred seventy two million nine hundred and twenty two thousand
Colombian pesos ($1.872.922.000,oo) on a check in favor to OMEGA
ENERGY
COLOMBIA.
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From
this
amount, the Assignor shall proceed to cancel the amount to cover the 60% of
the
80% of it Share Interests in the Talora Block for Seismic.
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2.
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Way
of Payment, corresponding to the 6% assigned in the Carbonera Block
for
the amount of (USD$420.000,oo) shall proceed as
follows:
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2.1
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The
amount discounted from the Assignee’s obligation in the Buenavista Block
equivalent to fifty thousand American dollars (USD$50.000,oo)
shall be allocated as an advance to cancel the obligation
of this
contract “Carbonera Block” on August 14 of
2007.
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2.2
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The
Assignee shall cancel ten thousand American dollars
(USD$10.000,oo), to cover Petrophysics activities at the
Carbonera Block.
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2.3
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The
remaining, equivalent to three hundred and sixty thousand American
dollars
(USD$360.000,oo), shall be cancelled once the
communication by XXX through which compliance with the Obligation
consisting in the Re-entry to the Cerro Gordo 1 has been delivered
to the
ASSIGNEE.
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CLAUSE
SIX.- Suspension Condition: As indicated, the assignment
contract is subject to the compliance with the following Suspension
Condition:
On
the
one hand, OMEGA must deliver the next thirtieth (30th)
of September of
two thousand and seven (2007) at the latest, a copy of the communication by
XXX
with which it is understood the “re-entry obligation” referred to in the
recitals herein has been complied with.
In
the
even this condition is not complied with within the maximum periods set forth
herein and/or the delivery of the aforementioned letter, it shall be then
understood that the condition has failed and therefore, things shall go back
to
the previous status, meaning that things shall go back to their initial
status.
CLAUSE
SEVEN.- Notice of the Assignment: Both the
ASSIGNOR and the ASSIGNEE are responsible for
obtaining the authorization of this assignment and signing of this document
in
sign of notification and acceptance thereof, upon compliance with the provisions
set forth in clause thirty three (33) of the “Agreement”.
CLAUSE
EIGHT.- Assignment before XXX: Under the terms of
2.2 of clause two (2) of the “Agreement”, once the condition
referred to in item 2.1 of said clause is complied with, OMEGA
binds itself to deliver and for said purpose, it shall request WELL
LOGGING that through it and before XXX to authorize
the official assignment in its favor and in favor of PETROSOUTH
in the aforementioned percentage and that is subject matter of this contract,
the assignment of rights and obligations are deemed of result
nature.
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CLAUSE
NINE.- Responsibility as to Data, Reports and
Inspections: During the effectiveness of this contract and
any of its extensions, OMEGA shall allow
PETROSOUTH and its employees duly authorized and
authorized
representatives to inspect every work carried our and related to the
Agreement. OMEGA shall keep and authentic and exact
record of the progress of the activities and should inform
PETROSOUTH on the matter.
CLAUSE
TEN.- PEI’s Share in the Carbonera Contract:
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Pursuant
to the purpose of the Agreement, the initial investment of PEI in
the
Carbonera Project is represented in principle by the contribution
in kind
of all of the activities that in accordance with the purpose thereof
it
shall develop for the Re-entry as described in the previous clauses
regulating this activity, included the Cerro Gordo 1 well assessment
as
set forth herein.
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In
the event that the Cerro Gordo 1 well does not provide the expected
result, that is, to be declared non commercial, it shall be
PEI’s obligation to proceed to the technical and legal
abandonment of the well, activity that shall be deemed as part of
the
“obligation to do” pursuant to the Agreement, otherwise, that is, is the
well is a hydrocarbon commercial producer, PEI’s
obligation shall be until the well is under production
activities.
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As
it was pointed out in Clause Two (2) of the Agreement, as soon as
XXX has
informed in writing to WELL LOGGING about the compliance
with the obligation of First Phase of the Cabronera Contract Exploration
Period, PEI shall immediately deem itself owner of the
“Share Interests” equivalent to the duty and right to
contribute with costs and expenses, as well as receiving net incomes
that
might be received for crude oil and/or gas sales from the Cerro Gordo
1
well and from all of the other xxxxx that proportion to the sixty
five
(65%) of the entirety of the rights, interests and obligations of
the
Carbonera Contract
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“Share
Interests” constitiution in a percentage of sixty per cent (65%)
shall be as follows:
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1.
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A
percentage equivalent to the 50% of the Carbonera Contract shares
shall be
discounted from the “Share Interest” of WELL LOGGING in favor of
PEI.
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2.
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A
percentage equivalent to the 15% of the Carbonera Contract shares
shall be
discounted from the “Share Interest” of C&C in favor of
PEI.
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Pursuant
to the foregoing, and by virtue of this assignment, and once PEI
has
received the certificate issued by XXX through which full compliance
with
the “obligation to do” related to the Re-entry and assessment of Cerro
Gordo 1 well by PEI is confirmed, the “Share Interests” of the Carbonera
Contract shall be as follows:
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PEI
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2%
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WELL
LOGGING
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25%
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C&C
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10%
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TC
OIL & Services S.A.
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10%
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OMEGA
ENERGY COLOMBIA
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47%
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PETROSOUTH
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6%
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TOTAL
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100%
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CLAUSE
ELEVEN.- Penal Clause: In the event the aforementioned
suspension condition takes place, that is, that obligations derived from this
contract fully operate, it is expressly agreed that in case of failure to comply
with any of the obligations borne by OMEGA, PETROSOUTH shall be
entitled to demand forthwith an amount equivalent to the TEN PER CENT (10%)
of
the this contract value, amount which may be charged by executive via, without
needing any requirement or default condition, or judicial statement, without
this meaning the exoneration of the main obligation and without any reduction
in
charging the damages that may be derived from the failure to
comply.
As
a
consequence of the aforementioned default, and without prejudice of charging
the
penal clause set forth in the previous item, the reversion foreseen in the
previous clause six (6) shall apply, that is and in consequence, things shall
go
back to the previous status meaning this that the obligations derived from,
which are responsibility of OMEGA and PETROSOUTH, shall continue as if they
had
never happened.
CLAUSE
TWELVE.- No recognition to oral
provisions: The parties by mutual agreement hereby express
that they shall not recognize any validity whatsoever to oral provisions related
to this contract, which shall constitutes a full and complete agreement that
leaves without effect any other oral or written agreement entered into between
them formerly.
CLAUSE
THIRTEEN.- Schedules: THE ASSIGNOR
delivers to THE ASSINEE, on the date the contract is signed, a
simple copy of the following documents:
12
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1.
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Certificate
of Incorporation and Legal Representation of OMEGA ENERGY COLOMBIA
issued
for said purposes by the Chamber of Commerce of
Bogota.
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2.
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“Share
Agreement” of April twenty fifth (25th)
of two
thousand and seven (2007), entered into between and by PEI and WELL
LOGGING.
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3.
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Exploration
and Exploitation Carbonera Contract entered into between and by WELL
LOGGING and AGENCIA NACIONAL DE HIDROCARBUROS of December twenty
eighth
(28th)
of
two thousand and five (2005).
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4.
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“Share
Agreement” of June six (6) of two thousand and seven (2007), entered into
between and by PEI and TC OIL.
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5.
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“Assignment
Contract” of June twentieth (20th)
of two
thousand and seven (2007), entered into between and by PEI and
OMEGA.
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CLAUSE
FOURTEEN.- Notices: For all purposes of this contract,
the parties hereto shall receive notices at the following
addresses:
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THE
ASSIGNOR:
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OMEGA
ENERGY COLOMBIA
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Calle
113
No.7-21, OF.711.Bogota, D.C.
Telephone
Number: 0000000
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THE
ASSIGNEE:
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PETROSOUTH
ENERGY CORPORATION
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Xxxxxxx
0
Xx.00-00 Xxxx 0
Telephone
Number: 0000000
Notices
or communications that might be required shall be given when such notices or
communications are informed to the parties simultaneously by fax and which
receipt is mentioned thereof, and through post paid mail to the addresses
indicated in the previous clause or to any other address that may be
subsequently informed as replacement or substitution thereof. The
foregoing does not hinder that such notices or communications to be delivered
in
person, provided that the deliveries are made at the addresses indicated and
there is evidence of receipt by the incumbent.
CLAUSE
FIFTEEN.- Expenses and Taxes: The entirety of the
expenses and taxes derived from this assignment shall be in equal shares by
THE ASSIGNOR and THE ASSIGNEE.
This
contract is understood in force as t of the first day (1st) of August
of
2007.
IN
WITNESS HEREOF, in respect of its contents and obligations derived from herein
for each of the parties hereto, this contract is signed in two counter parts
of
the same tenor and delivered to each party with acknowledgement of signature
and
content before a Public Notary in Bogota, Department of Cundinamarca, Republic
of Colombia, this thirteenth (13th) day of
AUGUST of
TWO THOUSAND AND SEVEN (2007).
13
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By
THE ASSIGNOR:
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Xxxx
Xxxx Quiroz
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c.c.91.241.011
issued in Bogota, D.C.
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Legal
Representative
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OMEGA
ENERGY COLOMBIA
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By
THE ASSGINEE
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Xxxxxx
Xxxxxxxx Barros
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c.c.79.785.924
issued in Valledupar (Cesar)
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Legal
Representative
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PETROSOUTH
COLOMBIAN BRANCH
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1
AMENDMENT
No. 1
TO
THE ASSIGNMENT CONTRACT OF SHARE RIGHTS OF OMEGA
ENERGY
COLOMBIA IN THE CARBONERA CONTRACT SHARE
AGREEMENT
(ENTERED INTO BETWEEN WELL LOGGING LTDA and
PETROLEUM
EQUIPMENT INTERNATIONAL LTDA) and in consequence IN
THE
CARBONERA BLOCK IN FAVOR OF PETROSOUTH ENERGY
CORPORATION
– COLOMBIAN BRANCH
Between
the undersigning, namely: XXXX XXXX XXXXXX, of legal
age, domiciled and resident in the city of Bogota D.C., identified with
citizenship card No. 91.241.011 issued in Bucaramanga (Santander), who for
purposes of this act is acting in his capacity of Manager and Legal
Representative of OMEGA ENERGY COLOMBIA, a corporation legally
organized through pubic deed No. two thousand nine hundred and sixty three
(#2963) issued on November twenty ninth (29th) of two
thousand
(2000) by the Forty Fifth Notary’s office (45th) of the
Circle of
Bogota registered on February fifth (5th) of who
thousand
(2000) under number 70154 of Book 06, a corporation with main domicile in the
city of Bogota, D.D., identified with tax identification number (TIN)
830.081.985-1, all of this certified in the Certificate of Incorporation and
Legal Representation issued for said purpose by the Chamber of Commerce of
the
city of Bogota, which is attached to this contract to be part thereof
(Schedule #1), duly entitled to enter into this Agreement, in
accordance with its by-laws, and who hereinafter and for said purposes shall
be
called OMEGA or THE ASSIGNOR, and on the other
hand: PETROSOUTH ENERGY CORPORATION – COLOMBIAN BRANCH, a
corporation legally organized through public deed No. Six hundred and fifty
seven (#00657) of two thousand and seven (2007) issued by the Forty Fifth
Notary’s Office (45th) of the
Circle of
Bogota, domiciled in the city of Bogota, D.C., identified with tax
identification number (TIN) 900.140.614, legally represented by
Xx. XXXXXX XXXXXXXX XXXXXX, of legal age, domiciled and
resident in the city of Bogota, D.C., identified with citizenship card No.
79.785.924 issued in Valledupar (Cesar), all of this certified in the
Certificate of Incorporation and Legal Representation issued for said purpose
by
the Chamber of Commerce of the city of Bogota, which is attached to this
contract to become part thereof (Schedule #2), duly entitled to
enter into this Agreement by the Board of Directors of the Corporation, who
hereinafter and for all purposes thereof shall be called PETROSOUTH
or THE ASSIGNEE, have decided to enter into this Share
Agreement,
WHEREAS
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I.
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WELL
LOGGING LTDA. (hereinafter WELL LOGGIN), a commercial corporation
duly organized under the laws of the Republic of Colombia, with Tax
Identification Number (TIN) 830.013.746-3, entered into
with ANGENCIA NACIONAL DE HIDROCARBUROS (hereinafter the
XXX) on December twenty eighth (28th)
of two
thousand and five (2005), the Carbonera Exploration and Exploitation
Contract (hereinafter the Carbonera Contract), being it the Operator
thereof.
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2
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II.
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WELL
LOGGING currently has a Private Share Agreement fully in force
with C&C ENRGIA BARBADOS SUCURSAL COLOMBIA, for which
C&C has rights and obligations to contribute with
costs and expenses and to receive Net Incomes that WELL LOGGING
may obtain upon developing the Carbonera Contract by a twenty
five per cent (25%).
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III.
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PEI
and WELL LOGGING enter into the Share Agreement
of April twenty fifth (25th)
of 2007, through which it was set forth that the “obligation to
do” by PEI shall only be understood fully complied with
for all legal purposes (in accordance with the agreement entered
into)
once Agencia Nacional de Hidrocarburos (hereinafter so
called XXX) has issued a written communication to WELL
LOGGING where full compliance with the exploratory commitment
corresponding to First Phase of the Carbonera Contract Exploration
Period
is confirmed, being this the essential condition that shall entitle
PEI to obtain a percentage in the “Share Interest” in
said contract under those terms described
hereinafter.
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IV.
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The
terms in item 2.2 of clause Two (2) of the Share
Agreement of April twenty fifth (25th)
of two thousand and seven (2007) entered into between
PEI and WELL LOGGING, set forth that
once the condition set forth in the immediately above item has been
accomplished, PEI may request WELL
LOGGING to ask XXX authorization for the
official assignment on its behalf of the rights and obligations in
the
Carbonera Contract in the percentage of the “Share Interest” gained for
complying with the obligation set forth in the immediately previous
item.
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V.
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PEI
assigned in favor of OMEGA, on June 20th
of 2007, the
percentage corresponding to its share in the Carbonera Contract equivalent
to the 53% as compensation for the “obligations to do” consisting in the
re-entry and assessment of the Cerro Gordo 1 well acquired by PEI
by
entering into the Agreement.
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VI.
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OMEGA
and PETROSOUTH entered into, on August 13th
of 2007, the
Assignment Contract of Share Rights in the Carbonera Contract share
agreement (entered into between WELL LOGGING LTDA and PETROLEUM EQUIPTMENT
INTERNATIONAL LTDA) and therefore, the Carbonera Block in favor of
PETROSOUTH ENERGY CORPORATION – Colombian
branch.
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3
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VII.
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Clause
Five of the aforementioned Assignment Contract set forth the Value
and Way
of Payment corresponding to the 6% of the assignment as
follows:
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“The
total value agreed by the parties for the percentage subject matter of this
assignment is FOUR HUNDRED AND TWENTY THOUSAND AMERICAN DOLLARS
(USD$420.000), being it the value corresponding to each point
equivalent to seventy thousand American dollars (USD70.000,oo),
in this way said value shall be cancelled in the way set forth in item 2 as
a
result of the following procedure:
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1.
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The
Assignee must cancel the amount corresponding to one million American
dollars (USD$1.000.000,oo) on September 10th
of 2007, to
PETROLEUM EQUIPMENT INTERNTIONAL LTDA., as set forth in
the Memorandum of Understanding of the Buenavista Block, signed by
the
parties hereto on June 7 of 2007.
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1.1
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However,
since the payment corresponding to the aforementioned September 10th
shall be
cancelled on August 14 of 2007, (payable at a MRR of $2006
pesos), a discount over this obligation corresponding to the
amount of fifty thousand American dollars (USD$50.000,00)
shall proceed.
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1.2
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In
this way, the obligation set forth in Clause 2 Item (iii) of the
Buenavista Block Memorandum of Understanding, referred to in item
1, shall
correspond to nine hundred and fifty thousand American dollars
(USD$950.000,oo) once the discount for advance payment
has been made. The amount shall be allocated as
follows:
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The
assignee shall draw in favor of Bancolombia TIN
890903938-8, the amount corresponding to one hundred thirty three
million
seventy eight thousand Colombian pesos
($133.078.00,oo)
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The
assignee shall draw the remiaing amount corresponding to one thousand
eight hundred sevety two million nin hundred and twenty two thousand
Colombian pesos ($1.872.922.000,oo) on a check in favor
to OMEGA ENERGY COLOMBIA.
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From
this
amount, the Assignor must proceed to cancel the amount to cover the 60% of
the
80% of its Share Interests in the Talora Block for Seismic.
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2.
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Way
of Payment, corresponding to the 6% assigned in the Carbonera Block
for
the amount of (USD$420.00,oo) shall proceed as
follows:
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4
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2.1
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The
amount discounted from the Assignee’s obligation in the Buenavista Block
equivalent to fifty thousand American dollars (USD$50.000,oo) shall
be
allocated as an advance to cancel the obligation of this contract
“Carbonera Block” on August 14 of
2007.
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2.2
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The
Assignee shall cancel ten thousand American dollars (USD$10.000,oo),
to
cover Petrophysics activities at the Carbonera
Block.
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2.3
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The
remaining, equivalent to three hundred and sixty thousand American
dollars
(USD#360.00.oo), shall be cancelled once the communication by XXX
through
which compliance with the Obligation consisting in the Re-entry to
the
Cerro Gordo 1 has been delivered to the
ASSIGNEE.
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After
the
above considerations, the “Assignment Contract of the Share Rights of OMEGA
ENERGY COLOMBIA in the Carbonera Contract Share Agreement (entered into between
WELL LOGGING LTDA and PETROLEUM EQUIPMENT INTERNATIONAL LTDA) and therefore
in
the Carbonera block in favor of PETROSOUTH ENERGY CORPORATION – COLOMBIAN
BRANCH” is modified under the following terms:
CLAUSE
ONE.-The parties hereto agree to modify Clause Five in the
Assignment Contract of OMEGA ENERGY COLOMBIA to PETROSOUTH ENERGY CORPORATION
–
COLOMBIAN BRANCH, of the Carbonera Block, for clarifying the following payments
and allocations
1.2…
“The
assignee shall draw the remaining amount corresponding to one thousand eight
hundred seventy two million nine hundred and twenty two thousand Colombian
pesos
($1.872.922.000,oo) on a check in favor to OMEGA ENERGY
COLOMBIA.
From
this
amount, the Assignor shall proceed to cancel the amount to cover the 60% of
the
80% of its Share Interests in the Talora Block for Seismic.
The
percentage which should have been allocated for seismic activities at the Talora
Block by the ASSIGNOR, OMEGA ENERGY COLOMBIA, shall not be allocated for said
purpose since it was determined that it was not convenient to carry out Seismic
activities at the Talora Block
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2.3
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The
remaining equivalent to three hundred and sixty thousand American
dollars
(USD#360.000.oo), shall be cancelled once the
communication by XXX through which compliance with the Obligation
consisting in the Re-entry to the Cerro Gordo 1 has been delivered
to the
ASSIGNEE.
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The
percentage equivalent to the amount of (USD$360.000), shall be
cancelled by PETROSOUTH on October 8th of 2007,
on behalf
of OMEGA ENERGY COLOMBIA, to cancel the remaining payment corresponding to
the
6% of the share rights acquired by PETROSOUTH in the Carbonera Block with check
No.0000000 of Citibank.
5
Accordingly,
the percentage corresponding to the 6% of the share interest of OMEGA ENERGY
COLOMBIA in the Carbonera Block acquired and fully cancelled by PETROSOUTH
are
clear of any encumbrance whatsoever.
CLAUSE
TWO.- CONTINUANCE: The parties hereto express that the
other clauses of the “Assignment Contract of Share Rights of OMEGA
ENERGY COLOMBIA in the Carbonera Contract Share Agreement (entered into
between WELL LOGGING LTDA and PETROLEUM EQUIPMENT
INTERNATIONAL LTDA) and therefore in the Carbonera block in favor of
PETROSOUTH ENERGY CORPORATION – COLOMBIAN BRANCH” entered into
on August 13th
of 2007, continue in force in all their content.
IN
WITNESS HEREOF, in respect of its content and obligations derived from herein
for each of the parties hereto, this contract is signed in two counter parts
of
the same tenor and delivered to each party in Bogota, Department of
Cundinamarca, Republic of Colombia, this fourth day of October of
2007
By
THE
ASSIGNOR:
Xxxx
Xxxx
Quiroz
c.c.91.241.011
issued in Bogota, D.C.
Legal
Representative
OMEGA
ENERGY COLOMBIA
By
THE
ASSIGNEE
Xxxxxx
Xxxxxxxx Barros
c.c.79.785.924
issued in Valledupar (Cesar)
Legal
Representative
PETROSOUTH
COLOMBIAN BRANCH
