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•	our ability to find, acquire or gain access to other discoveries and prospects and to successfully develop and produce from our current discoveries and prospects;

•	uncertainties inherent in making estimates of our oil and natural gas data;

•	the successful implementation of our and our block partners’ prospect discovery and development and drilling plans;

•	projected and targeted capital expenditures and other costs, commitments and revenues;

•	termination of or intervention in concessions, rights or authorizations granted by the governments of Cote d'Ivoire, Equatorial Guinea, Ghana, Mauritania, Morocco, Sao Tome and Principe, Senegal or Suriname (or their respective national oil companies) or any other federal, state or local governments or authorities, to us;

•	our dependence on our key management personnel and our ability to attract and retain qualified technical personnel;

•	the ability to obtain financing and to comply with the terms under which such financing may be available;

•	the volatility of oil and natural gas prices;

•	the availability, cost, function and reliability of developing appropriate infrastructure around and transportation to our discoveries and prospects;

•	the availability and cost of drilling rigs, production equipment, supplies, personnel and oilfield services;

•	other competitive pressures;

•	potential liabilities inherent in oil and natural gas operations, including drilling and production risks and other operational and environmental risks and hazards;

•	current and future government regulation of the oil and gas industry or regulation of the investment in or ability to do business with certain countries or regimes;

•	cost of compliance with laws and regulations;

•	changes in environmental, health and safety or climate change or greenhouse gas (“GHG”) laws and regulations or the implementation, or interpretation, of those laws and regulations;

•	adverse effects of sovereign boundary disputes in the jurisdictions in which we operate;

•	environmental liabilities;

•	geological, geophysical and other technical and operations problems including drilling and oil and gas production and processing;

•	military operations, civil unrest, outbreaks of disease, terrorist acts, wars or embargoes;

•	the cost and availability of adequate insurance coverage and whether such coverage is enough to sufficiently mitigate potential losses and whether our insurers comply with their obligations under our coverage agreements;

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•	our vulnerability to severe weather events;

•	our ability to meet our obligations under the agreements governing our indebtedness;

•	the availability and cost of financing and refinancing our indebtedness;

•	the amount of collateral required to be posted from time to time in our hedging transactions, letters of credit and other secured debt;

•	the result of any legal proceedings, arbitrations, or investigations we may be subject to or involved in;

•	our success in risk management activities, including the use of derivative financial instruments to hedge commodity and interest rate risks; and

•	other risk factors discussed in the “Item 1A. Risk Factors” section of this annual report on Form 10‑K.

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(1)	For information concerning our estimated proved reserves as of December 31, 2017, see “—Our Reserves.”

(2)

The Jubilee Field straddles the boundary between the West Cape Three Points (“WCTP”) petroleum contract and the Deepwater Tano (“DT”) petroleum contract offshore Ghana. To optimize resource recovery in this field, we entered into the Unitization and Unit Operating Agreement (the “UUOA”) in July 2009 with the Ghana National Petroleum Corporation (“GNPC”) and the other block partners of each of these two blocks. The UUOA governs the interests in and development of the Jubilee Field and created the Jubilee Unit from portions of the WCTP petroleum contract and the DT petroleum contract areas. As a result of the approval of the GJFFDP by Ghana’s Ministry of Energy in October 2017, operatorship for the Mahogany and Teak discoveries transferred to Tullow which are now included in the Jubilee Field.

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(3)	The Greater Tortue resource, which includes the Ahmeyim discovery in Mauritania Block C8 and the Guembeul discovery in the Senegal Saint Louis Offshore Profond Block, straddles the border between Mauritania and Senegal.

(4)	Our paying interest on development activities in the TEN fields is 19%.

(5)

Our paying interest on development activities in this discovery is 26.9%. Our participating interest as of December 31, 2017 is 30.0%. The WCTP partners transferred operatorship of the remaining portions of the WCTP Block, including the Akasa discovery, to Tullow effective February 1, 2018. Kosmos continues to assist Tullow with the transition process, which is expected to extend into the first half of 2018.

(6)	GNPC has the option to acquire additional paying interests in a commercial discovery on the WCTP Block and the DT Block of 2.5% and 5.0%, respectively. These interest percentages do not give effect to the exercise of such options.

(7)	SMHPM has the option to acquire up to an additional 4% paying interests in a commercial development. These interest percentages do not give effect to the exercise of such option.

(8)	PETROSEN has the option to acquire up to an additional 10% paying interests in a commercial development on the Saint Louis Offshore Profond and Cayar Offshore Profond blocks. The interest percentage does not give effect to the exercise of such option.

(9)	Kosmos owns a 50% interest in KTIPI which holds an 85% interest in the Ceiba Field and Okume Complex through its wholly-owned subsidiary, Kosmos-Trident Equatorial Guinea Inc. ("KTEGI"), representing a 40.375% net indirect interest to Kosmos. Kosmos and Trident provide operational management and support to KTEGI, who is operator of the Ceiba Field and Okume Complex.

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(1)	PETROCI has the option to acquire up to an additional 2% paying interests in a commercial development. The interest percentage does not give effect to the exercise of such option.

(2)

These agreements are fully executed, but are pending Presidential ratification. We presently have an 80% interest and are the operator in all three blocks, but pursuant to an agreement with Trident we expect to assign a 40% interest in the blocks to an affiliate of Trident after presidential ratification. The interest percentage gives effect to the 40% interest assignment to Trident. Should a commercial discovery be made, GEPetrol's 20% carried interest will convert to a 20% participating interest for all development and production operations.

(3)

BP is the operator of record while Kosmos provides technical exploration operator services. Should a commercial discovery be made, SMHPM’s 10% carried interest is extinguished and SMHPM will have an option to acquire a participating interest in the discovery area between 10% and 14% (blocks C8, C12 and C13), 10% and 15% (Block C18) and 10% and 18% (Block C6). SMHPM will pay its portion of development and production costs in a commercial development on the blocks. The interest percentage does not give effect to the exercise of such option.

(4)	Kosmos and BP have been awarded the rights to negotiate petroleum contracts for blocks 10 and 13.

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(5)	PETROSEN has the option to acquire up to an additional 10% paying interest in a commercial development on the Saint Louis Offshore Profond and Cayar Offshore Profond blocks. The interest percentage does not give effect to the exercise of such option.

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(1)	Our reserves associated with the Jubilee Field are based on the 54.4%/45.6% redetermination split, between the WCTP Block and DT Block. Totals within the table may not add as a result of rounding.

(2)

These reserves represent the estimated quantities of fuel gas required to operate the Jubilee and TEN FPSOs during normal field operations and the associated gas forecasted to be exported from TEN. This volume of associated gas is included as of December 31, 2017 as a result of the finalization of the TEN Associated-Gas Gas Sales Agreement (TAG GSA). If and when a subsequent gas sales agreement is executed for Jubilee, a portion of the remaining Jubilee gas may be recognized as reserves. If and when a gas sales agreement and the related infrastructure are in place for the TEN fields non-associated gas, a portion of the remaining gas may be recognized as reserves.

(3)

All of our proved undeveloped reserves are expected to be developed within six years or less. Proved undeveloped reserves expected to be developed beyond five years are related to long-term projects which will be completed under a continuous drilling program. As of December 31, 2017, we recognized 24.4 MMBoe of proved undeveloped reserves related to the Jubilee and TEN fields, representing approved future drilling in both fields.

(4)	We disclose our share of reserves that are accounted for by the equity method.

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(1)

PV‑10 represents the present value of estimated future revenues to be generated from the production of proved oil and natural gas reserves, net of future development and production costs, royalties, additional oil entitlements and future tax expense levied at an asset level, using prices based on an average of the first‑day‑of‑the‑months throughout 2017 and costs as of the date of estimation without future escalation, without giving effect to hedging activities, non‑property related expenses such as general and administrative expenses, debt service and depreciation, depletion and amortization, and discounted using an annual discount rate of 10% to reflect the timing of future cash flows. PV‑10 is a non‑GAAP financial measure and often differs from Standardized Measure, the most directly comparable GAAP financial measure, because it does not include the effects of future income tax expense related to proved oil and gas reserves levied at a corporate parent level on future net revenues. However, it does include the effects of future tax expense levied at an asset level. Neither PV‑10 nor Standardized Measure represents an estimate of the fair market value of our oil and natural gas assets. PV‑10 should not be considered as an alternative to the Standardized Measure as computed under GAAP; however, we and others in the industry use PV‑10 as a measure to compare the relative size and value of proved reserves held by companies without regard to the specific corporate tax characteristics of such entities.

(2)

Standardized Measure represents the present value of estimated future cash inflows to be generated from the production of proved oil and natural gas reserves, net of future development and production costs, future income tax expense related to our proved oil and gas reserves levied at a corporate parent and intermediate subsidiary level, royalties, additional oil entitlements and future tax expense levied at an asset level, without giving effect to hedging activities, non‑property related expenses such as general and administrative expenses, debt service and depreciation, depletion and amortization, and discounted using an annual discount rate of 10% to reflect timing of future cash flows and using the same pricing assumptions as were used to calculate PV‑10. Standardized Measure often differs from PV‑10 because Standardized Measure includes the effects of future income tax expense related to our proved oil and gas reserves levied at a corporate parent level on future net revenues. However, as we are a tax exempted company incorporated pursuant to the laws of Bermuda, we do not expect to be subject to future income tax expense related to our proved oil and gas reserves levied at a corporate parent level on future net revenues. Therefore, the year‑end 2017 estimate of PV‑10 is equivalent to the Standardized Measure.

(3)

The unweighted arithmetic average first‑day‑of‑the‑month prices for the prior 12 months was $54.42 for Dated Brent at December 31, 2017. The price was adjusted for crude handling, transportation fees, quality, and a regional price differential. These adjustments are estimated to include a $0.10 premium, a $0.02 premium and a $0.53 discount relative to Dated Brent for the Jubilee Field, TEN fields and our equity method investment, respectively. The adjusted price utilized to derive the Jubilee Field PV‑10, TEN PV-10 and equity method investment PV-10 is $54.52, $54.44 and $53.89, respectively.

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(4)	Future net revenues and PV-10 have been adjusted from the reserve report which is based on the entitlements method as we account for oil and gas revenues under the sales method of accounting.

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(1)	Net acreage based on Kosmos’ participating interest, before the exercise of any options or back‑in rights, except for our net acreage associated with the Jubilee and TEN fields, which are after the exercise of options or back‑in rights. Our net acreage in Ghana may be affected by any redetermination of interests in the Jubilee Unit.

(2)	The Exploration Period of the WCTP petroleum contract and DT petroleum contract has expired. The undeveloped area reflected in the table above represents acreage within our discovery areas that were not subject to relinquishment on the expiry of the Exploration Period.

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(3)	Ratification of the petroleum contracts by the President of Equatorial Guinea is required before the petroleum contracts become effective.

(4)	Represents our 50% interest in KTIPI.

(1)	Of the 11 productive wells, 10 (gross) or 1.70 (net) have multiple completions within the wellbore.

(2)	Represents our 50% interest in KTIPI.

(3)	Of the 96 productive wells, 6 (gross) or 2.42 (net) have multiple completions within the wellbore.

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(1)	As of December 31, 2017, nine exploratory and appraisal wells have been excluded from the table until a determination is made if the wells have found proved reserves. Also excluded from the table are 14 development wells awaiting completion. These wells are shown as “Wells Suspended or Waiting on Completion” in the table below.

(2)	A productive well is an exploratory or development well found to be capable of producing either oil or natural gas in sufficient quantities to justify completion as an oil or natural gas producing well. Productive wells are included in the table in the year they were determined to be productive, as opposed to the year the well was drilled.

(3)	A dry well is an exploratory or development well that is not a productive well. Dry wells are included in the table in the year they were determined not to be a productive well, as opposed to the year the well was drilled.

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•	require the acquisition of various permits before operations commence;

•	enjoin some or all of the operations or facilities deemed not in compliance with permits;

•	restrict the types, quantities and concentration of various substances that can be released into the environment in connection with oil and natural gas drilling, production and transportation activities;

•	limit, cap, tax or otherwise restrict emissions of GHG and other air pollutants or otherwise seek to address or minimize the effects of climate change;

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•	limit or prohibit drilling activities in certain locations lying within protected or otherwise sensitive areas; and

•	require measures to mitigate or remediate pollution, including pollution resulting from our block partners’ or our contractors’ operations.

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•	changes in supply and demand for oil and natural gas;

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•	the actions of the Organization of the Petroleum Exporting Countries;

•	speculation as to the future price of oil and natural gas and the speculative trading of oil and natural gas futures contracts;

•	global economic conditions;

•	political and economic conditions, including embargoes in oil‑producing countries or affecting other oil‑producing activities, particularly in the Middle East, Africa, Russia and Central and South America;

•	the continued threat of terrorism and the impact of military and other action, including U.S. military operations in the Middle East;

•	the level of global oil and natural gas exploration and production activity;

•	the level of global oil inventories and oil refining capacities;

•	weather conditions and natural or man‑made disasters;

•	technological advances affecting energy consumption;

•	governmental regulations and taxation policies;

•	proximity and capacity of transportation facilities;

•	the development and exploitation of alternative fuels or energy sources;

•	the price and availability of competitors’ supplies of oil and natural gas; and

•	the price, availability or mandated use of alternative fuels or energy sources.

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•	the timing and amount of capital expenditures;

•	if the activity is operated by one of our block partners, the operator’s expertise and financial resources;

•	approval of other block partners in drilling wells;

•	the scheduling, pre‑design, planning, design and approvals of activities and processes;

•	selection of technology; and

•	the rate of production of reserves, if any.

•	actual prices we receive for oil and natural gas;

•	actual cost of development and production expenditures;

•	derivative transactions;

•	the amount and timing of actual production; and

•	changes in governmental regulations or taxation.

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•	the scope, rate of progress and cost of our exploration, appraisal, development and production activities;

•	the success of our exploration, appraisal, development and production activities;

•	oil and natural gas prices;

•	our ability to locate and acquire hydrocarbon reserves;

•	our ability to produce oil or natural gas from those reserves;

•	the terms and timing of any drilling and other production‑related arrangements that we may enter into;

•	the cost and timing of governmental approvals and/or concessions; and

•	the effects of competition by larger companies operating in the oil and gas industry.

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•	fires, blowouts, spills, cratering and explosions;

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mechanical and equipment problems, including unforeseen engineering complications. For example, following a February 2016 inspection of the turret area of the Jubilee field FPSO, by SOFEC, Inc., the original turret manufacturer, a potential issue was identified with the turret bearing. As a precautionary measure, additional operating procedures to monitor the turret bearing and reduce the degree of rotation of the vessel have been put in place until this situation has been remediated;

•	uncontrolled flows or leaks of oil, well fluids, natural gas, brine, toxic gas or other pollutants or hazardous materials;

•	gas flaring operations;

•	marine hazards with respect to offshore operations;

•	formations with abnormal pressures;

•	pollution, environmental risks, and geological problems; and

•	weather conditions and natural or man‑made disasters.

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•	severe weather, natural or man‑made disasters or acts of God;

•	delays or decreases in production, the availability of equipment, facilities, personnel or services;

•	delays or decreases in the availability of capacity to transport, gather or process production;

•	military conflicts, civil unrest or political strife; and/or

•	international border disputes.

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•	disrupt our operations;

•	require us to incur greater costs for security;

•	restrict the movement of funds or limit repatriation of profits;

•	lead to U.S. government or international sanctions; or

•	limit access to markets for periods of time.

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•	licenses for drilling operations;

•	tax increases, including retroactive claims;

•	unitization of oil accumulations;

•	local content requirements (including the mandatory use of local partners and vendors); and

•	safety, health and environmental requirements, liabilities and obligations, including those related to remediation, investigation or permitting.

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•	delay or denial of drilling permits;

•	shortening of lease terms or reduction in lease size;

•	restrictions or delays on our ability to obtain additional seismic data;

•	restrictions on installation or operation of gathering or processing facilities;

•	restrictions on the use of certain operating practices;

•	legal challenges or lawsuits;

•	damaging publicity about us;

•	increased regulation;

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•	increased costs of doing business;

•	reduction in demand for our products; and

•	other adverse effects on our ability to develop our properties.

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•	production is less than the volume covered by the derivative instruments;

•	the counter‑party to the derivative instrument defaults on its contract obligations; or

•	there is an increase in the differential between the underlying price and actual prices received in the derivative instrument.

•	our investments, loans and advances and certain of our subsidiaries’ payment of dividends and other restricted payments;

•	our incurrence of additional indebtedness;

•	the granting of liens, other than liens created pursuant to the commercial debt facility, revolving credit facility or the indenture governing the Senior Notes and certain permitted liens;

•	mergers, consolidations and sales of all or a substantial part of our business or licenses;

•	the hedging, forward sale or swap of our production of crude oil or natural gas or other commodities;

•	the sale of assets (other than production sold in the ordinary course of business); and

•	in the case of the commercial debt facility and the revolving credit facility, our capital expenditures that we can fund with the proceeds of our commercial debt facility, and revolving credit facility.

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•	a significant portion or all of our cash flows, when generated, could be used to service our indebtedness;

•	a high level of indebtedness could increase our vulnerability to general adverse economic and industry conditions;

•	the covenants contained in the agreements governing our outstanding indebtedness will limit our ability to borrow additional funds, dispose of assets, pay dividends and make certain investments;

•	a high level of indebtedness may place us at a competitive disadvantage compared to our competitors that are less leveraged and therefore, may be able to take advantage of opportunities that our indebtedness could prevent us from pursuing;

•	our debt covenants may also affect our flexibility in planning for, and reacting to, changes in the economy and in our industry;

•	additional hedging instruments may be required as a result of our indebtedness;

•	a high level of indebtedness may make it more likely that a reduction in our borrowing base following a periodic redetermination could require us to repay a portion of our then‑outstanding bank borrowings; and

•	a high level of indebtedness may impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes.

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•	recoverable reserves;

•	future oil and natural gas prices and their appropriate differentials;

•	development and operating costs; and

•	potential environmental and other liabilities.

•	diversion of our management’s attention to evaluating, negotiating and integrating significant acquisitions and strategic transactions;

•	the challenge and cost of integrating acquired operations, information management and other technology systems and business cultures with those of ours while carrying on our ongoing business;

•	difficulty associated with coordinating geographically separate organizations; and

•	the challenge of attracting and retaining personnel associated with acquired operations.

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•	the price of oil and natural gas;

•	the success of our exploration and development operations, and the marketing of any oil and natural gas we produce;

•	operational incidents;

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•	regulatory developments in Bermuda, the United States and foreign countries where we operate;

•	the recruitment or departure of key personnel;

•	quarterly or annual variations in our financial results or those of companies that are perceived to be similar to us;

•	market conditions in the industries in which we compete and issuance of new or changed securities;

•	analysts’ reports or recommendations;

•	the failure of securities analysts to cover our common shares or changes in financial estimates by analysts;

•	the inability to meet the financial estimates of analysts who follow our common shares;

•	the issuance or sale of any additional securities of ours;

•	investor perception of our company and of the industry in which we compete; and

•	general economic, political and market conditions.

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(1)	Effective December 31, 2015, the Company adopted new guidance on the presentation of debt issuance costs. This guidance was adopted retrospectively and all prior periods have been adjusted to reflect this change in accounting principle.

(2)	Effective December 31, 2015, the Company adopted new guidance on the presentation of deferred taxes. The Company elected to adopt the accounting change using the prospective method. See Note 2 of Notes to the Consolidated Financial Statements.

(1)	Effective December 31, 2016, the Company adopted new guidance on the presentation of restricted cash. This guidance was adopted retrospectively and all prior periods have been adjusted to reflect this change in accounting principle.

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(1)	For the year ended December 31, 2017, we have presented our 50% share of the results of operations from the date of acquisition, November 28, 2017 through December 31, 2017. Under the equity method of accounting, we only recognize our share of the net income of KTIPI, which is recorded in loss on equity method investments, net in the consolidated statement of operations.

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•	execute exploration and appraisal activities in a number of our exploration license areas, including drilling two exploration wells in Suriname, and

•	approximately $110 million for developmental related expenditures offshore Ghana, largely focused on additional drilling in the Jubilee and TEN fields;

•	approximately $50 million for exploration and appraisal activities, including drilling two exploration wells in Suriname;

•	approximately $80 million related to seismic acquisition and processing across our portfolio to mature drilling opportunities;

•	approximately $50 million for new ventures; and

•	approximately $10 million related to corporate and other capital expenditures.

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•	the extension of the maturity date to March 31, 2025 (unless otherwise terminated pursuant to the amended and restated Facility);

•	the extension of the amortization schedule such that amortization of principal is to commence in March 31, 2022 and continue in equal amounts every six months thereafter until the maturity date;

•	commitment fees lowered from 40% to 30% of the applicable interest margin;

•	maintaining interest margin at LIBOR plus 3.25% for the next four years;

•	the inclusion of the Company’s recently acquired producing assets in Equatorial Guinea in the calculation of borrowing base amounts as well as the Company’s option to include the Greater Tortue development in the future following final investment decision, up to $500 million in the aggregate; and

•	the addition of Kosmos Energy Finance International, Kosmos Energy Investments Senegal Limited, Kosmos Energy Equatorial Guinea, Kosmos Energy Senegal and Kosmos Energy Mauritania as additional guarantors and pledged subsidiaries.

•	the field life cover ratio (as defined in the glossary), not less than 1.30x; and

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•	the loan life cover ratio (as defined in the glossary), not less than 1.10x; and

•	the debt cover ratio (as defined in the glossary), not more than 3.5x; and

•	the interest cover ratio (as defined in the glossary), not less than 2.25x.

•	the debt cover ratio (as defined in the glossary), not more than 3.5x; and

•	the interest cover ratio (as defined in the glossary), not less than 2.25x.

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(1)

Includes the scheduled principal maturities for the $525.0 million aggregate principal amount of Senior Notes issued in August 2014 and April 2015 and the Facility. The scheduled maturities of debt related to the Facility are based on the level of borrowings and the estimated future available borrowing base as of December 31, 2017. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter. As of December 31, 2017, there were no borrowings under the Corporate Revolver.

(2)	Based on outstanding borrowings as noted in (1) above and the LIBOR yield curves at the reporting date and commitment fees related to the Facility and Corporate Revolver and interest on the Senior Notes.

(3)	Primarily relates to corporate office and foreign office leases.

(4)	Does not include purchase commitments for jointly owned fields and facilities where we are not the operator and excludes commitments for exploration activities, including well commitments and seismic obligations, in our petroleum contracts.

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(1)

The amounts included in the table represent principal maturities only. The scheduled maturities of debt are based on the level of borrowings and the available borrowing base as of December 31, 2017. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter. As of December 31, 2017, there were no borrowings under the Corporate Revolver.

(2)	Based on outstanding borrowings as noted in (1) above and the LIBOR yield curves plus applicable margin at the reporting date. Excludes commitment fees related to the Facility and Corporate Revolver.

(3)	We expect to pay the fixed rate if 1-month LIBOR is below the cap, and pay the market rate less the spread between the cap and the fixed rate if LIBOR is above the cap, net of the capped interest rate swaps.

(4)	Based on implied forward rates in the yield curve at the reporting date.

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•	the status of our operations in the particular taxing jurisdiction, including whether we have commenced production from a commercial discovery;

•	whether a commercial discovery has resulted in significant proved reserves that have been independently verified;

•	the amounts and history of taxable income or losses in a particular jurisdiction;

•	projections of future income, including the sensitivity of such projections to changes in production volumes and prices;

•	the existence, or lack thereof, of statutory limitations on the period that net operating losses may be carried forward in a jurisdiction; and

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•	the creation and timing of future income associated with the reversal of deferred tax liabilities in excess of deferred tax assets.

•	the engineering and geological interpretation of available data;

•	estimates of the amount and timing of future operating cost, production taxes, development cost and workover cost;

•	the accuracy of various mandated economic assumptions; and

•	the judgments of the persons preparing the estimates.

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(1)	Represents call option contracts sold to counterparties to enhance other derivative positions.

(2)	Fair values are based on the average forward Dated Brent oil prices on December 31, 2017 which by year are: 2018—$64.96 and 2019—$61.00. These fair values are subject to changes in the underlying commodity price. The average forward Dated Brent oil prices based on February 21, 2018 market quotes by year are: 2018—$63.86 and 2019—$60.37.

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•	the engineering and geological interpretation of available data;

•	estimates of the amount and timing of future operating cost, production taxes, development cost and workover cost;

•	the accuracy of various mandated economic assumptions; and

•	the judgments of the persons preparing the estimates.

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(1)	Represents the reduction in basis of suspended well costs associated with the Mauritania and Senegal transactions with BP.

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(1)	The basis difference, which is associated with oil and gas properties and subject to amortization, has been allocated to the Ceiba Field and Okume Complex. We amortize the basis difference using the unit-of-production method.

(1)	Includes $23.6 million and $30.3 million of unamortized deferred financing costs related to the Facility and $18.6 million and $22.8 million of unamortized deferred financing costs and discounts related to the Senior Notes as of December 31, 2017 and December 31, 2016, respectively.

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(1)

Includes the scheduled principal maturities for the $525.0 million aggregate principal amount of Senior Notes issued in August 2014 and April 2015 and the Facility. The scheduled maturities of debt related to the Facility are based on the level of borrowings and the estimated future available borrowing base as of December 31, 2017. Any increases or decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during the next five years and thereafter. As of December 31, 2017, there were no borrowings under the Corporate Revolver.

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(1)	Represents call option contracts sold to counterparties to enhance other derivative positions.

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(1)	Includes net deferred premiums receivable of $0.8 million and net deferred premiums payable of $3.9 million related to commodity derivative contracts as of December 31, 2017 and 2016, respectively.

(2)	Includes net deferred premiums receivable of $0.1 million and net deferred premiums payable of $2.5 million related to commodity derivative contracts as of December 31, 2017 and 2016, respectively.

(3)	Includes zero and $30.9 thousand as of December 31, 2017 and December 31, 2016, respectively which represents our provisional oil sales contract. Also, includes net deferred premiums payable of $5.6 million and $6.2 million related to commodity derivative contracts as of December 31, 2017 and 2016, respectively.

(4)	Includes net deferred premiums payable of $4.8 million and $0.6 million related to commodity derivative contracts as of December 31, 2017 and 2016, respectively.

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(1)	Amounts were reclassified from AOCI into earnings upon settlement.

(2)	Amounts represent the change in fair value of our provisional oil sales contracts.

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(1)	Includes $5.0 million of tax expense related to the expiration of a Moroccan tax loss carryforward; $4.7 million of tax related interest expense incurred in 2017; and other various items.

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(2)	The effective tax rate during the years ended December 31, 2017, 2016 and 2015 were impacted by losses of $164.4 million, $121.4 million and $153.5 million, respectively, incurred in jurisdictions in which we are not subject to taxes and therefore do not generate any income tax benefits.

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(1)

Our service vesting restricted stock awards represent participating securities because they participate in non-forfeitable dividends with common equity owners. Income allocable to participating securities represents the distributed and undistributed earnings attributable to the participating securities. Our restricted stock awards with market and service vesting criteria and all restricted stock units are not considered to be participating securities and, therefore, are excluded from the basic net income (loss) per common share calculation. Our service vesting restricted stock awards do not participate in undistributed net losses because they are not contractually obligated to do so and, therefore, are excluded from the basic net income (loss) per common share calculation in periods we are in a net loss position.

(2)	For the years ended December 31, 2017, 2016 and 2015, we excluded 12.9 million, 11.8 million and 11.2 million outstanding restricted stock awards and restricted stock units, respectively, from the computations of diluted net income per share because the effect would have been anti‑dilutive.

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(1)	Does not include purchase commitments for jointly owned fields and facilities where we are not the operator and excludes commitments for exploration activities, including well commitments, in our petroleum contracts.

(2)	Primarily relates to corporate office and foreign office leases.

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(1)	The sum of proved developed reserves and proved undeveloped reserves may not add to net proved developed and undeveloped reserves as a result of rounding.

(2)	Discoveries are related to the TEN fields being moved from unproved to proved during 2014.

(3)	The increase in proved reserves is a result of a 2 MMBbl increase associated with in-fill drilling results and a 10 MMBbl increase associated with field performance for Jubilee partially offset by 2 MMBbl of negative revisions to the TEN fields due to decreased pricing.

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(4)	The increase in proved reserves is a result of an 8 MMBbl increase associated with positive revisions to the TEN fields as a result of the completion of seven wells along with the initiation of TEN production partially offset by 1 MMBbl of negative revisions to the Jubilee Field due to decreased pricing.

(5)	The increase in proved reserves is a result of a 16 MMBbl increase associated in Jubilee related to the approval of the Greater Jubilee Full Field Development Plan (GJFFDP) and an 8 MMBoe increase associated with positive revisions to the TEN fields.

(6)	The increase in purchase of minerals in place is related to Equatorial Guinea, representing the reserves associated with our equity method investment.

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(1)	Includes Africa, excluding Ghana, Europe and South America.

(2)	Represents 50% interest in KTIPI costs incurred from the date of acquisition through December 31, 2017.

(3)	Represents cash paid to acquire 50% interest in KTIPI.

(4)	Does not include reimbursement of costs associated with exploration expenses incurred in prior years which resulted in a $24.7 million gain on sale in 2015.

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(1)

The Company is a tax exempt company incorporated pursuant to the laws of Bermuda. The Company has not been and does not expect to be subject to future income tax expense related to its proved oil and gas reserves levied at a corporate parent level. Accordingly, the Company’s Standardized Measure for the years ended December 31, 2017, 2016 and 2015, respectively, only reflect the effects of future tax expense levied at an asset level (in the Company’s case, future Ghanaian tax expense).

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(1)

The Company is a tax exempt company incorporated pursuant to the laws of Bermuda. The Company has not been and does not expect to be subject to future income tax expense related to its proved oil and gas reserves levied at a corporate parent level. Accordingly, the Company’s Standardized Measure for the years ended December 31, 2017, 2016 and 2015, respectively, only reflect the effects of future tax expense levied at an asset level (in the Company’s case, future Ghanaian tax expense).

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(1)	The sum of the quarterly earnings per share information may not add to the annual earnings per share information as a result of rounding.

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(a)	The following documents are filed as part of this report:

(1)	Financial statements

(2)	Financial statement schedules

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1.1	"Calendar Year" means a period of twelve (12) consecutive months beginning on the January first (1st) and ending on the following December thirty-first (31st).

1.2	"Contract Year" means a period of twelve (12) consecutive months starting as at the Effective Date or the anniversary of the aforesaid Effective Date.

1.3	"Appendices" mean the appendices of the present Contract consisting of:

1.3.1	Appendix 1 for the Exploration Perimeter

1.3.2	Appendix 2 for the Accounting Procedure

1.3.3	Appendix 3 for the model bank guarantee

1.4	"Exploration Authorization" means the authorization referred to under Article 3 of this Contract by which the State authorizes the Contractor to carry out, on an exclusive basis, all the hydrocarbon exploration and/or research work within the Exploration Perimeter.

1.5	"Exploitation Authorization" means the authorization granted to the Contractor to carry out, on an exclusive basis, all the development and exploitation of the Hydrocarbon deposits within the Exploitation Perimeter.

1.6	"Barrel" means "U.S. barrel", the equivalent of 42 American gallons (159 liters) measured at a temperature of 60°F (15.6 °C) and at atmospheric pressure.

1.7	"BTU" means the British energy unit, "British Thermal Unit" such that a million BTU (MMBTU) is equal to about 1055 joules.

1.8	"Annual Budget" means the detailed estimate of the cost of Petroleum Operations defined in an Annual Work Program.

1.9	"Crude Hydrocarbons Code" refers to law n° 2010-033 dated 20th July 2010 pertaining to the Code Crude Hydrocarbons, its amendments and its implementation provisions.

1.10	"Environment Code" refers to law n° 2000-045 dated 26th July 2000 pertaining to the Environmental Code, its amendments and the laws implementing it.

1.11	"Contractor" means collectively or individually the signatory company/companies of this Contract as well as any entity or company to which an interest would be transferred pursuant to articles 21 and 22 of this Contract.

1.12	"Contract" means this agreement, its appendices and its amendments. In the event of contradiction between the provisions of this agreement and the provision of its appendices, the provisions of this agreement shall prevail.

1.13	"Petroleum Costs" means all the costs and expenses incurred by the Contractor for Petroleum Operations provided for under this Contract and determined according to the Accounting Procedure, set out in Appendix 2 of this Contract.

1.14	"Effective Date" means the commencement date of this Contract as defined in article 30.

1.15	"Dollar'' means the dollar ($) of the United States of America.

1.16	"State" means the Islamic Republic of Mauritania.

1.17	"Gross Negligence" means carelessness or negligence of such gravity as to assume there was malicious intent on the part of the author.

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1.18	"Wet Gas" means Natural Gas containing a fraction of elements becoming liquid at room pressure and temperature, and which justifies the installation of a recovery facility of such liquids.

1.19	"Natural Gas" means all gas hydrocarbons produced from a well including Wet Gas and Dry Gas which can be associated or not associated with liquid hydrocarbons, and waste gas which is obtained after extraction of natural gas liquids.

1.20	"Associated Natural Gas" means Natural Gas existing in a reservoir in solution with Crude Oil or in the form of "Gas Cap" in contact with Crude Oil, and which is produced or can be produced in association with Crude Oil.

1.21	"Non-associated Natural Gas" means Natural Gas other than Associated Natural Gas.

1.22	"Dry Gas" means Natural Gas containing mainly methane, ethane and inert gases.

1.23	"Hydrocarbons" means liquid and gas hydrocarbons or solid hydrocarbons such as bituminous sands and shales.

1.24	"LIBOR" means the annual interbank interest rate applicable for the Dollar as published by the Financial Times or the Wall Street Journal or any other publication of similar standing.

1.25	"Ministry" means the ministry for Crude Hydrocarbons.

1.26	"Minister" means the Minister in charge for Crude Hydrocarbons.

1.27	"Operator" means the company referred to in article 6.2 below responsible for the conduct and performance of Petroleum Operations, or any company which would be substituted to it later on, in accordance with the governing terms and conditions.

1.28

"Petroleum Operations" means all the research, exploitation, storage, transportation and marketing of hydrocarbons, including the evaluations/assessment, development, production, separation, processing operations up to the Point of Delivery, as well as the rehabilitation of the sites and, more generally, all other operations which are directly or indirectly related to the preceding ones and which carried out by the Contractor as part of this Contract, aside from the refining and distribution of petroleum products.

1.29	"Ouguiya" means the currency of the Islamic Republic of Mauritania.

1.30	"Exploitation Perimeter" means all or part of the Exploration Perimeter on which the State, in accordance with the terms of this Contract, grants to the Contractor an Exploitation Authorization in accordance with the provisions of article 9 below.

1.31	"Exploration Perimeter" means the surface defined in Appendix 1, reduced, if applicable, by the relinquished surface as provided for under article 3 and/or reduced by Exploitation Perimeters, on which the State, under the terms of this Contract, grants to the Contractor an Exploration Authorization in accordance with the provisions of article 2.1 below.

1.32	"Crude Oil" means all hydrocarbons which are liquid at a natural state or obtained from natural gas by condensation or separation from asphalt.

1.33	"Delivery Point" means:

1.33.1	For Crude Oil, the F.O.B point of loading of Crude Oil to the export terminal or any other point fixed by mutual agreement of the Parties;

1.33.2	For Natural Gas, the point of delivery fixed by mutual agreement of the Parties in accordance with article 15 of this Contract.

1.34	"Rehabilitation Plan" designates the program of works for the rehabilitation of the sites to be carried out by the Contractor at the expiration, renunciation or cancellation of an Exploitation Authorization in accordance with article 23.2.

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1.35	"Annual Work Program" means the document setting out each element, of the Petroleum Operations to be carried out during a Calendar Year in accordance with the terms of this Contract and which is prepared in accordance with the provisions of articles 4 and 5 below.

1.36	"Affiliated Company" means

1.36.1	any company or any other entity which controls or is controlled, directly or indirectly, by a company or entity, or

1.36.2	any company or any other entity which controls or is controlled, directly or indirectly, by a company or an entity which controls directly or indirectly any company or entity party to this Contract.

1.37	"Third Party" means any natural or legal person, other than the State, the Contractor and the Affiliated Companies of the Contractor.

1.38	"Quarter" means a period of three (3) consecutive months beginning on the first day of January, April, July or October of each Calendar Year.

2.1	This Contract is entered into for the duration of the Exploration Authorization as provided for under article 3 of this Contract, including any of its renewal and possible extension periods and, in the event of commercial discovery, for the duration of the Exploitation Authorizations which would have been granted, as defined in article 9.11 below.

2.2	This Contract will end if, at the expiration of all the phases of the exploration provided for under article 3, the Contractor does not notify the State of its decision to develop a commercial Hydrocarbon reservoir and has not requested an Exploitation Authorization for this field in accordance with the provisions of article 9.5 below.

2.3	The expiration, revocation or termination of this Contract for whatever reason does not release the Contractor from its obligations under this Contract, arising before or at the time of the aforementioned expiration, renunciation or cancellation, which shall have to be carried out by the Contractor.

2.4	The Contractor will be responsible for carrying out the Petroleum Operations provided for under this Contract. It undertakes to carry them out in compliance with good international petroleum industry practice and to comply with the norms and standards developed by the Mauritanian regulation for industrial safety, environmental protection and operational techniques.

2.5

The Contractor shall provide all financial and technical means necessary for the smooth running of the Petroleum Operations and shall fully support all the risks related to the performance of the aforesaid Operations, subject to the provision of article 21 of this Contract. The Petroleum Costs borne by the Contractor shall be recoverable by the Contractor in accordance with the provisions of article 10 below.

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2.6	During the validity period of the Contract, the production resulting from the Petroleum Operations shall be shared between the State and the Contractor in accordance with the provisions of article 10 below.

3.1	The Exploration Authorization inside the Exploration Perimeter defined in Appendix 1 is granted to the Contractor in accordance with the provisions of article 2.1 above for an initial phase of five (5) Contract Years.

3.2

The Contractor shall be entitled to two (2) renewals of the Exploration Authorization for a period of two (2) Contract Years for the first renewal and three (3) Contract Years for the second renewal, if it has fulfilled, as part of the preceding exploration phase, all the work obligations stipulated in article 4 below and has provided the bank guarantee for the renewal period in accordance with article 4.6 below.

3.3	If at the expiration of the phases of the exploration period defined in article 3.2 above, works are in fact being carried out, the Contractor shall be entitled, if it reasonably requests one, to an exceptional extension of that phase for a period not exceeding twelve (12) months.

3.4

If the Contractor discovers one or more Hydrocarbon reservoirs for which it cannot present a declaration of commerciality before the end of the third phase of the period of exploration in accordance with article 9.5 below, due to the distance of the reservoir from the possible points of delivery on the Mauritanian territory and the lack of pipeline transport infrastructures, or the lack of market for the production of Natural Gas, it can request an extension of the Exploration Authorization for a maximum duration of three (3) years for petroleum reservoirs and five (5) years for Natural Gas reservoirs, the Exploration Perimeter thus being reduced to the supposed limits of the reservoirs in question.

3.5	In the event an extension is granted, the Contractor shall submit to the Minister within sixty (60) days of the end of each Calendar Year of the extension period a report showing the commercial character, if any, of the reservoirs concerned, and, in the event of Natural Gas deposit, the results of the works and studies undertaken in accordance with article 15 below.

3.6	For each renewal or extension, the Contractor shall have to make a request to the Minister no later than two (2) months before the expiration of the ongoing exploration phase. The renewals shall be noted by Ministerial order whereas extensions shall be granted by a decree of the Council of Ministers: such acts shall take effect on the day following the expiration of the previous period.

3.7

The Contractor undertakes to return to the State at least twenty-five percent (25%) of the initial surface of the Exploration Perimeter at the time of each its renewal, in order to keep only seventy-five percent (75%) of the initial surface of the Exploration Perimeter during the second phase of the exploration period, and only fifty percent (50%) of the initial surface of the Exploration Perimeter during the third phase of the exploration period.

3.8	For the purposes of article 3.7 above:

3.8.1	Surfaces having previously been the subject of a voluntary return, in accordance with article 3.9, the surfaces already covered by Exploitation Authorizations shall be deducted from the surfaces to be returned;

3.8.2

The Contractor shall have the right to fix the scope, form and site of the portion of the Exploration Perimeter which it intends to keep. However, the returned portion shall have to be made up of a perimeter of simple geometrical form, delimited by North-South and East-West lines or by natural boundaries or borders, in accordance with Land Registry requirements. The surface area is based upon the cadastral apportionment from one of the initial or residual Exploration Perimeter limits and is calculated contiguously.

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3.8.3	The request for renewal shall be accompanied by a plan indicating the Exploration Perimeter which is kept as well as report specifying the work carried out on the returned surfaces and the results obtained since the Effective Date.

3.9	The Contractor may at any time, subject to three (3) months' notice, notify to the Minister that it waives all or part of the Exploration Perimeter. In the event of a complete waiver, the Exploration Authorization shall be deemed terminated at the date of the aforesaid notification.

3.10	Except in the event of an extension in accordance with articles 3.3 and 3.4 above, at the expiration of the third exploration period phase, the Contractor shall have to return the remaining surface of the Exploration Perimeter, save for the surfaces already covered by the Exploitation Perimeters.

4.1	During the first phase of the exploration period of five (5) Contract Years defined in article 3.1 above, the Contractor undertakes to carry out the following works:

•	The acquisition of one thousand two hundred (1200) km of 2D seismic;

•	The acquisition of six hundred (600) km2 of 3D seismic.

4.2	During the second phase of the exploration period of two (2) Contract Years defined in article

•	Exploration well drilling: one (1) well to a minimum depth of 2000 meters (below sea level).

4.3	During the third phase of the exploration period of three (3) Contract Years defined in article 3.2, the Contractor undertakes to complete the following works:

•	Exploration well drilling: one (1) well to a minimum depth of 2000 meters (below sea level).

4.4	Each exploration well drilling referred to above shall be carried out up to the minimal depth provided for above, or up to a lesser depth if the Minister authorizes it or if continuation of the drilling, carried out in accordance with good international practice in the petroleum industry, is excluded for any of the following reasons:

4.4.1	The basement is reached at a depth inferior to the minimal depth referred to above;

4.4.2	The continuation of the drilling presents an evident danger because of the existence of a pressure of an abnormal layer;

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4.4.3	Rock formations are reached whose hardness does not allow, in practice, for the progress of the drilling carried out with the appropriate equipment facilities;

4.4.4	Oil-bearing formations are reached whose drilling through requires for their protection the installation of casings making it impossible to reach the minimal depth referred to above.

4.5

If the Contractor, during either the first phase of the exploration period, or the second phase of the exploration period, respectively defined in articles 3.1 and 3.2 above, carries out a number of exploration drillings whose volume is higher than the minimal work obligations stipulated respectively in articles 4.1 and 4.2 above for the aforementioned phase, the surplus exploration drilling requirements can be carried over to the next phase(s) of the exploration shall be deducted from the minimal work obligations stipulated with regard to the aforementioned phases.

4.6

In the thirty (30) days following the Effective Date, the Contractor shall submit to the Minister a bank guarantee from a first ranking international bank, in accordance with Appendix 3 amounting to four million eight hundred thousand Dollars ($4,800,000) for the 2D seismic and three million Dollars ($3,000,000) for the 3D seismic referred to in article 4.1, for its minimal work obligations for the first phase of the exploration period defined in article 4.1 above.

•	ten million Dollars ($10,000,000) per exploration drilling referred to in article 4.2 in respect of a renewal pursuant to Article 3.2 for a second phase of the exploration period covering its minimum work obligations for the phase concerned; and

•	ten million Dollars ($10,000,000) per exploration drilling referred to in article 4.3 in respect of a renewal pursuant to Article 3.2 for a third phase of the exploration period covering its minimum work obligations for the phase concerned.

(a)	four thousand Dollars ($4,000) per kilometre of 2D seismic

(b)	five thousand Dollars ($5,000) per kilometre square of 3D seismic.

(c)	ten million Dollars ($10,000,000) per exploration drilling.

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5.1	No later than two (2) months after the Effective Date, the Contractor shall prepare and submit to the Ministry for approval a detailed Annual Work Program setting out each element of the works as well as the corresponding Annual Budget for the whole Exploration Perimeter by specifying the Petroleum Operations relating to the period from the Effective Date to the following 31st December.

5.2

If the Ministry deems that revisions or modifications of the Annual Work Program and the corresponding Annual Budget are necessary and useful, it must notify the Contractor in writing with all the justifications deemed useful within sixty (60) days following their receipt. In this case, the Ministry and the Contractor shall meet as soon as possible to study the requested revisions or modifications and to establish by mutual agreement the Annual Work Program and the corresponding Annual Budget in their final form, in accordance with good international petroleum industry practice. The date of adoption of the Annual Work Program and the corresponding Annual Budget shall be the date of the mutual agreement referred to above.

5.3	The Parties agree that the results achieved during the course of the work or that particular circumstances may justify changes to the Annual Work Program and to the corresponding Annual Budget. In this case, following notification to the Ministry, the Contractor shall be able to carry out such changes provided that the fundamental objectives of the said Annual Work Program are not modified.

6.1

Without prejudice to the provisions of article 21.1 below, the Contractor shall have to provide all necessary funds and shall purchase or rent all the materials, equipment and material which are necessary for the performance of the Petroleum Operations. The Contractor is responsible for the preparation and execution of the Annual Work Programs which shall have to be performed in the most appropriate manner in compliance with good international petroleum industry practice.

6.2	At the Effective Date of this Contract, Tullow Mauritania Limited is designated as Operator and shall be responsible for the control and execution of the Petroleum Operations. The Operator, for and on behalf of the Contractor, shall provide the Minister with all the reports, information and data referred to in this Contract. Any change of Operator considered by the entities of the

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6.3	The Operator must maintain for the duration of the Contract in Mauritania; a branch which shall have a person in charge and duly authorized to conduct the Petroleum Operations and to whom any notification could be presented under this Contract.

6.4	The Contractor shall have to take all the necessary measures for the protection of the environment during the Petroleum Operations.

6.4.1	make sure that all the installations and equipment used for the Petroleum Operations needs are at any time in good state in conformity with the applicable standards, including those resulting from international conventions ratified by the Islamic Republic of Mauritania and relating to the prevention of pollution;

6.4.2	avoid loss and discharges of:

(A)	Hydrocarbons including Natural Gas flaring, (save as provided in Article 40 of Crude Hydrocarbons Code, under penalty of a fine of which the amount shall be further determined by decree taken by the Council of Ministers, and shall not exceed, under any circumstances, twenty (20) percent of the current market price of Natural Gas in Mauritania);

(B)	muds; or

(C)	any other products used in the Petroleum Operations,

6.4.3	NOT APPLICABLE;

6.4.4	store Hydrocarbons products in installations and receptacles built for this purpose;

6.4.5	dismantle, without prejudice to the provisions of article 23.2 below, the installations which shall no longer be necessary to the Petroleum Operations and clean up the sites; and

6.4.6	generally prevent pollution of the ground and sub-soil, water and atmosphere, as well as degradations of the fauna and flora.

6.5	During the Petroleum Operations, the Contractor shall have to take all the necessary measures to protect the health and safety of people in accordance with good international petroleum industry practice and the existing regulation in Mauritania, and in particular to set up:

6.5.1	suitable means of prevention, quick response and management of risks including risks of blow-out;

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6.5.2	measures for information, training and means adapted to the risks incurred, including personal protective equipment, equipment to control fire as well as means for first aid and prompt evacuation of victims.

6.6	All the works and installations set up by the Contractor under the terms of this Contract shall, according to their nature and the circumstances, be built, specified, set out and equipped so as to allow free and safe passage at all times within the Exploration Perimeter and the Exploitation Perimeter(s).

6.7

In the exercise of its right to build, carry out work and maintain all the installations necessary for the purposes of this Contract, the Contractor shall not occupy land located within five-hundred (500) meters of any structure whether religious, cultural or not, places of burial, walled enclosures, yards and gardens, dwellings, groups of dwellings, villages, agglomerations, wells, water points, tanks, streets, roads, railroads, water pipelines, piping systems, works of public utility, works of art, without the prior agreement of the Minister. The Contractor shall be liable for any damage that its work shall have caused.

6.8	The Contractor undertakes to grant his preference to Mauritanian companies and products, based on equivalent conditions in terms of price, quantity, quality, terms of payment and delivery lead time, and to require a similar commitment from its subcontractors.

6.9	The Contractor undertakes to grant his preference, based on equivalent economic conditions, to the purchase of the goods necessary for Petroleum Operations, according to their lease or any other form of lease, and to require a similar commitment from its subcontractors.

7.1

The Contractor has the exclusive right to carry out the Petroleum Operations inside the Exploration Perimeter and any Exploitation Perimeter derived from it, provided such operations are in conformity with the terms and conditions of this Contract, the Crude Hydrocarbons Code as well as the provisions of the existing laws and regulations in Mauritania, and that they are carried out according to good practice in the international petroleum industry.

7.2	For purposes of the execution of the Petroleum Operations, the Contractor shall bear the rights under article 54 of the Crude Hydrocarbons Code.

7.3	The expenses, allowances, and in general all charges arising from the use of property referred to in articles 55 to 57 of the Crude Hydrocarbons Code shall be borne by the Contractor and shall be recoverable as Petroleum Costs in accordance with the provisions of article 10.2 below.

7.4

The expiration of an Exploration Authorisation or an Exploitation Authorisation or the mandatory or voluntary, partial or total return of an Exploration Perimeter or an Exploitation Perimeter shall have no effect on the rights arising under article 7.2 above for the Contractor, with respect to the works and installations carried out pursuant to the provisions of this article 7 provided the aforementioned works and installations continue to be used as part of the

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7.5	Subject to the provisions of articles 6.8 and 6.9 above, the Contractor has the freedom of choice of the suppliers and subcontractors and shall benefit from the customs procedure under article 18 of this Contract.

7.6	Unless otherwise provided, no restriction shall be made with regard to the entry, residence and freedom of circulation, employment, and repatriation of persons and their families as well as their property, concerning the employees of the Contractor and those of its subcontractors subject to compliance with the labor legislation and regulations as well as the existing social laws in force.

8.1

The Petroleum Operations shall be subject to monitoring by the Ministry in accordance with the provisions of Title VIII of the Crude Hydrocarbons Code. The duly appointed representatives of the Ministry shall have the right to monitor the Petroleum Operations, to inspect the installations, equipment, and materials and to audit procedures, norms, recordings and books related to the Petroleum Operations.

8.2	The Contractor shall regularly inform the Ministry of the progress of the Petroleum Operations. It shall in particular submit to the Ministry the following programs and opinions:

8.2.1

A work program for any geological or geophysical survey at least thirty (30) days before the beginning of the survey in question and specify its precise location, objectives, techniques and equipment used, the name and address of the company which shall carry out the work, the commencement date and the projected duration, the number of kilometers of seismic lines, the estimated costs, and the safety arrangements if the use of explosives is proposed.

8.2.2

A work program for any drilling at least thirty (30) days before the beginning of the drilling in question and specify its precise location, a detailed description of the work proposed, including the drilling techniques and the associated operations, its depth, its geological objective, the commencement date and the projected duration, the estimated costs of the program, a summary of the geological and geophysical data having justified the decision of the Contractor, the name and address of the drilling company as well as the designation of the drilling platform, the name and address of all other subcontractors recruited for this operation, and the security measures considered.

8.2.3	Thirty (30) days’ notice concerning the abandonment of a producing well and seventy- two (72) hours for a non-producing well.

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8.2.4	Seventy-two (72) hours notice concerning any suspension of drilling or any resumption of drilling suspended for more than thirty (30) days.

8.3	The Minister may require that the Contractor finance and perform of all the works necessary to ensure the safety and hygiene in the context of the Petroleum Operations in accordance with article 6.5 above.

8.4	The Minister shall have access to all the original data resulting from the Petroleum Operations undertaken by the Contractor inside the Exploration Perimeter and Exploitation Perimeter(s) such as reports on geological, geophysics, petro-physics, drilling, and preliminary exploitation reports as well as any reports generally required to conduct such Petroleum Operations.

8.5	The Contractor undertakes to submit to the Ministry the following periodic reports:

8.5.1	Daily reports on drilling activities;

8.5.2	Weekly reports on geophysics works;

8.5.3	A detailed report on development activities starting from the granting of an Exploitation Authorization, within fifteen (15) days after the end of each Quarter;

8.5.4

Effective from the commencement of the production, and within fifteen (15) days after the end of each month, an exploitation report specifying each quantity of Hydrocarbons produced, used in the Petroleum Operations, stored, lost or burned, and sold, during the previous month as well as an estimate of each quantity in question for the current month. Concerning Hydrocarbons which are sold, the report shall specify the identity of the purchaser, the quantity sold and the price obtained for each sale.

8.5.5	Within fifteen (15) days after the end of each Quarter, a report relating to the Petroleum Operations carried out during the previous Quarter including, in particular, a description of the Petroleum Operations carried out and a detailed statement of the Petroleum Costs incurred, such costs being broken down by Exploration/Exploitation Perimeter and by nature;

8.5.6

Within three (3) months after the end of each Calendar Year, a report relating to the Petroleum Operations carried out during the previous Calendar Year, as well as a detailed statement of the Petroleum Costs incurred, such costs being broken down by Exploration/Exploitation Perimeter and by nature and a figures of the staff employed by the Contractor, indicating the number of employees, their nationality, their position, the total amount of the wages, the rate of mauritanisation employment as well as a report on medical care and instruction given to them.

8.5.7	Any other report generally required as part of the Petroleum Operations.

8.6	In addition, the following reports, data and documents shall be presented to the Ministry within a month of their preparation or their acquisition:

8.6.1	Two (2) copies of the geological reports created as part of the exploration;

8.6.2	Two (2) copies of the geophysics reports created as part of the exploration. The Ministry shall have access to the originals of all the records made (magnetic tapes or other support) and can obtain copies, upon request;

8.6.3	Two (2) copies of the reports for the implementation and establishment and end of drilling for each well drilled;

8.6.4	Two (2) copies of all measurements, tests, trials and surveys recorded during the drilling (end of drilling reports);

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8.6.5	Two (2) copies of each analysis report (petrography, biostratigraphy, geochemistry or other) carried out on cores, cuttings or fluids collected from each well drilled including the negatives of the various related photographs;

8.6.6	A representative sample of cores taken, of drill cuttings taken from each well as well as samples of fluids produced during the tests or production tests shall also be submitted within a reasonable time;

8.6.7	Moreover, the Contractor shall be able to freely export samples of cores and cuttings taken and fluids produced;

8.6.8	And in general, two (2) copies of all other reports generally required to carry out the Petroleum Operations.

8.7	The Parties undertake to treat as confidential and not to communicate to a Third Party or to be published, save with the prior approval of the Minister, any data and information of technical nature related to the Petroleum Operations and which are not yet in the public domain, throughout the duration of the Contract.

8.8	Notwithstanding the provisions of article 8.7, the State shall be authorized to communicate data and information:

8.8.1	To all service providers and professional consultants involved in the performance of the Petroleum Operations, after obtaining a similar commitment of confidentiality;

8.8.2	To any bank or financial institution from which an entity of the State requests or obtains funding, after obtaining a similar commitment of confidentiality;

8.8.3	As part of any contentious procedure of legal, administrative or arbitral nature.

8.9	Notwithstanding the provisions of article 8.7, the Contractor shall be authorized to communicate the data and information:

8.9.1	to any Affiliated Company bound by a similar commitment of confidentiality;

8.9.2	to all service providers and professional consultants involved in the performance of the Petroleum Operations, after obtaining a similar commitment of confidentiality;

8.9.3	to any company interested in good faith in taking a possible assignment, after obtaining from such company, a commitment to keep confidential this information and data and to use them only for the purposes of the aforesaid assignment;

8.9.4	to any bank, institution or financial entity from which an entity of the Contractor requests or obtains funding, after obtaining a similar commitment of confidentiality;

8.9.5	when and to the extent that the regulations of a recognized stock exchange requires it;

8.9.6	as part of any contentious procedure of legal, administrative or arbitral nature.

8.10	The Contractor shall report to the Minister as soon as possible about all information relating to mineral substances found during the performance of the Petroleum Operations.

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8.11	The Contractor shall take part in the implementation of the Extractive Industry Transparency Initiative (EITI) in accordance with article 98 of the Crude Hydrocarbons Code.

9.1

If the Contractor discovers Hydrocarbons in the Exploration Perimeter, it shall notify the Minister in writing as soon as possible and shall carry out, in accordance with good international petroleum industry practice, the necessary tests. In the thirty (30) days following the date of provisional closing or of abandonment of the discovery well, the Contractor shall submit to the Minister a report giving all information related to the aforementioned discovery and shall provide its recommendations in respect of the continuation of its evaluation.

9.2	If the Contractor wishes to undertake the appraisal of the discovery referred to above, it shall diligently submit to the Minister for approval the appraisal works programme, the timetable of the works and the corresponding budget estimate, no later than six (6) months following the date on which the discovery was notified as set out in article 9.1 above.

9.3

Within three (3) months of the completion of the appraisal works, and no later than thirty (30) days prior to the expiration of the third phase of the exploration period defined in article 3.2, including any extension thereof in accordance with the provisions of articles 3.3 and 3.4 above, the Contractor shall submit to the Minister a detailed report giving all the technical and economic information relating to the reservoir which was discovered and appraised, establishing whether, in the Contractor’s opinion, the aforementioned discovery is commercial or not.

9.4	Any quantity of Hydrocarbons produced from a discovery before it is declared commercial shall be subject to the provisions of article 10 of this Contract, if it is not used for the performance of the Petroleum Operations or it is lost.

9.5

If a reservoir is considered by the Contractor to be commercial it shall be entitled to an Exploitation Authorization. In this case, the Contractor shall submit to the Minister an application for an Exploitation Authorization, within three (3) months after the submission of the report referred to in article 9.3 above, and no later than thirty (30) days before the expiration of the third phase of the exploration period defined in article 3.2, including any extension thereof in accordance with the provisions of articles 3.3 and 3.4 above. The aforementioned application shall specify the lateral and stratigraphic delimitation of the Exploitation Perimeter, which shall only cover the estimated limit(s) of the reservoir discovered and appraised inside the unexpired Exploration Perimeter and shall be supported with the technical justifications necessary for the aforementioned delimitation. The above-mentioned application for an Exploitation Authorization shall be accompanied by a detailed development and production program, including specifically with respect to the reservoir concerned:

9.5.1	An estimate of the proven and probable recoverable reserves and the corresponding production profile, as well as a study on the methods of recovery of Hydrocarbons and valorization of Natural Gas;

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9.5.2	The description of works and installations required for the exploitation of the reservoir, such as the number of wells, the facilities necessary for the production, separation, processing, storage and transport of Hydrocarbons;

9.5.3	The program and schedule for performance of the aforesaid works and facilities, including the date of production start-up;

9.5.4	The estimate of the development investments and operating costs broken down by year, as well as an economic study confirming the commercial nature of the reservoir;

9.5.5	Methods of financing these investments by each entity constituting the Contractor;

9.5.6	The environmental impact assessment of the development project to be undertaken by the Contractor in accordance with the provisions of the Environmental Code;

9.5.7	An indicative diagram of Rehabilitation Plan to rehabilitate the sites at the end of operations.

9.6

The Exploitation Authorization shall be granted by the Minister within forty-five (45) days of the date of adoption of the development and production program by the Parties. The grant of an Exploitation Authorization entails the cancellation of the Exploration Authorization inside the Exploitation Perimeter, but lets it remain valid outside this area until its expiration date without modifying the minimum exploration work commitment provided for under article 4 above for the relevant phase of the exploration period.

9.7	If the Contractor makes several commercial discoveries in the Exploration Perimeter, each shall give rise, in accordance with article 9.5 and 9.6 above, to a separate Exploitation Authorization corresponding to an Exploitation Perimeter.

9.8

If during works performed after the grant of an Exploitation Authorization, it appears that the extent of the reservoir is larger than initially projected pursuant to article 9.5 above, the Minister shall grant to the Contractor under the framework of the Exploitation Authorization already granted, the additional portion provided that the extension forms an integral part of the unexpired Exploration Perimeter and the Contractor provides technical justifications for the extension requested.

9.9

If a reservoir extends beyond the boundary of the unexpired Exploration Perimeter the Minister may require that the Contractor exploit the aforementioned reservoir in partnership with the permit-holder of adjacent perimeter in accordance with the provisions of article 53 of the Crude Hydrocarbons Code. Within twelve (12) months of the written request of the Minister, the Contractor shall put to him, for approval, a draft development and production program for the reservoir in question, prepared in agreement with the permit-holder of the rights to the adjacent perimeter.

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9.10

The Contractor shall start development operations including the necessary studies no later than six (6) months after the grant of the Exploitation Authorization referred to in article 9.6 above and shall monitor them with utmost diligence. The Contractor undertakes to carry out the development and production operations according to good international petroleum industry practice to ensure the optimal recovery of Hydrocarbons contained in the reservoir. The Contractor undertakes to start as soon as possible studies of enhanced recovery in consultation with the Ministry and to use such recovery procedures if, in the Contractor’s opinion, such procedures may result in an improvement in the rate of recovery under economic conditions.

9.11	The duration of the exploitation period during which the Contractor is authorized to produce from a reservoir declared commercial is fixed at twenty-five (25) years if the exploitation relates to reservoirs of Crude Oil and thirty (30) years if the exploitation relates to Natural Gas reservoirs, starting from the date of grant of the corresponding Exploitation Authorization.

9.12	For any reservoir having resulted in the grant of an Exploitation Authorization, the Contractor undertakes, subject to the provisions of article 21 below, to bear the costs of all the Petroleum Operations which are useful and necessary for the exploitation of the reservoir, in accordance with the development and production program adopted.

9.13	The Contractor may at any time, subject to at least a six (6) month prior written notice to the Minister, relinquish all or part of an Exploitation Perimeter, provided it has met all the obligations under this Contract.

9.14

The Contractor undertakes throughout the duration of the Exploitation Authorization to produce annually quantities of Hydrocarbons from each reservoir in accordance with good international petroleum industry standards by principally taking into account the rules of good reservoir preservation and the optimal recovery of Hydrocarbon reserves under economic conditions throughout the duration of the Exploitation Authorizations in question.

9.15	Stoppage of production of a reservoir for a period of over six (6) consecutive months decided by the Contractor without the approval of the Minister, may result in the termination of this Contract under the conditions provided for in article 25 below.

9.16	The Minister may, on three (3) months notice, require the Contractor to relinquish immediately, and without compensation, all its rights over the supposed discovery limits, including

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9.16.1	has not submitted an appraisal work program in respect of the said discovery within the timeframe referred to in article 9.2 above;

9.16.2	has not completed the appraisal work of the said discovery in accordance with the assessment program and within the timeframe referred to in article 9.2 above;

9.16.3	or has not submitted an application for an Exploitation Authorization within the time referred to in article 9.5 above.

10.1	From the start of a regular production of Hydrocarbons under an Exploitation Authorization or an anticipated production authorization, such production shall be shared and marketed in accordance with the provisions below.

10.2

For the purposes of recovery of Petroleum Costs, the Contractor may freely retain, during each Quarter, in respect of each Exploitation Authorization, a portion of the corresponding total production equal to sixty percent (60%) for Crude Oil and to sixty-five percent (65%) for Dry Gas of the total quantity produced which is neither used in the Petroleum Operations, nor lost, or only a lesser percentage which would be necessary and sufficient.

10.3	The quantity of Hydrocarbons, under each Exploitation Authorization, remaining during each Quarter after the Contractor has retained the portion necessary for the recovery of the Petroleum Costs under the provisions of article 10.2 above from the total production, shall be shared between the State and the Contractor as follows, according to the value of the ratio "R" defined below:

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10.4	The State may receive its production defined in article 10.3 above, either in kind, or in cash.

10.5	If the State wishes to receive in kind all or part of its share of production as defined in article

10.6

If the State wishes to receive in cash all or part of its share of production defined in article 10.3 above, or if the Minister has not notified the Contractor of its decision to receive in kind the State's share of production pursuant to article 10.5 above, the Contractor shall market the State's share of production to be taken in cash for the Quarter concerned, to lift this share during this Quarter, and to pay to the State, within the thirty (30) days following each lifting, an amount equal to the quantity corresponding to the State share of production multiplied by the F.O.B sales price less the inherent marketing expenses.

11.1	Each entity constituting the Contractor shall be subject to the business profits tax on their net profits generated in relation to the Petroleum Operations in accordance with articles 66 to 74 of the Crude Hydrocarbons Code and with the provisions of the Accounting Procedure defined in appendix 2 of this Contract.

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11.2	Subject to the provisions of article 21 below, the Contractor shall pay to the State the following surface fees:

11.2.1	two Dollars ($2) per square kilometer and per annum during the first phase of the exploration period;

11.2.2	three Dollars ($3) per square kilometer and per annum during the second phase of the exploration period;

11.2.3	four Dollars ($4) per square kilometer and per annum during the third phase of the exploration period and during any extension provided for under articles 3.3 and 3.4 above;

11.2.4	one hundred and seventy Dollars ($170) per square kilometer and per annum for the effective duration of the Exploitation Authorization.

11.3	The Contractor shall be liable for taxes and duties as well as deductions withheld and other tax obligations applicable to contractors in accordance with Title VI of the Crude Hydrocarbons Code.

11.4	The subcontractors of the Contractor as well as the personnel of the Contractor and of its subcontractors are subject to the existing tax provisions of common law in force, subject to the applicable provisions contained in Title VI of the Crude Hydrocarbons Code.

11.5

Subject to the provisions of article 83 of the Crude Hydrocarbons Code, the shareholders of the entities constituting the Contractor and their Affiliated Companies shall, in addition to the exemptions contained in article 86 of the aforementioned Code, also be exempt from all levies, duties, taxes and contributions relating to the dividends received, debts, loans and interest related to the Petroleum Operations.

11.6

Save for the taxes, contributions and duties provided for under Title VI of the Crude Hydrocarbons Code, surface fees provided for under article 11.2 above, bonuses under article 13 below, and the contribution referred in article 12.2 below, the Contractor shall be exempt from all levies, duties, taxes, fees or contributions of any nature, whether national, regional or communal, current or forthcoming, relating to the Petroleum Operations and any related income, or more generally, the properties, activities or acts of the Contractor, including its establishment, transfers of funds and its activities pursuant to the Contract, given that these exemptions apply only to Petroleum Operations.

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12.1	The Contractor undertakes from the beginning of the Petroleum Operations to ensure priority employment based on equal qualifications for Mauritanian personnel and to contribute to the training of that personnel in order to allow their access to any position of skilled workers, foremen, executives, engineers and managers.

12.2	The Contractor shall also contribute to the training and development of the agents from the Ministry and other entities referred to in article 80 of the Crude Hydrocarbons Code, in accordance with a plan established by the Ministry at the end of each Calendar Year.

13.1	The Contractor shall pay to the State a signature bonus of an amount of one million Dollars ($1,000,000) within thirty (30) days following the Effective Date.

13.2	In addition, the Contractor shall pay to the State the following production bonuses:

13.2.1	four million Dollars ($4,000,000) when the regular marketed production of Hydrocarbons extracted from the Exploitation Perimeters reaches for the first time the average rate of twenty-five thousand (25,000) Barrels of Crude Oil per day during a period of thirty (30) consecutive days;

13.2.2	six million Dollars ($6,000,000) when the regular marketed production of Hydrocarbons extracted from the Exploitation Perimeters reaches for the first time the average rate of fifty thousand (50,000) Barrels of Crude Oil per day during a period of thirty (30) consecutive days;

13.2.3	ten million Dollars ($10,000,000) when the regular marketed production of Hydrocarbons extracted from the Exploitation Perimeters reaches for the first time the average rate of one hundred thousand (100,000) Barrels of Crude Oil per day for a period of thirty (30) consecutive days;

13.2.4	eighteen million Dollars ($18,000,000) when the regular marketed production of Hydrocarbons extracted from the Exploitation Perimeters reaches for the first time the average rate of one hundred fifty thousand (150,000) Barrels of Crude Oil per day for a period of thirty (30) consecutive days.

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13.3	The amounts referred to in articles 13.1 and 13.2 above shall not be considered as recoverable Petroleum Costs under the provisions of article 10.2 above, nor considered as deductible charges for the purpose of calculating the business profits in accordance with article 79 of the Crude Hydrocarbons Code.

14.1	The unit selling price of Crude Oil taken into consideration under articles 10 and 11 above shall be F.O.B. "Market Price" at the Delivery Point expressed in Dollars per Barrel such as below given for each Quarter.

14.2

The Market Price applicable to the liftings of Crude Oil carried out during a Quarter shall be calculated at the end of that Quarter, and shall be equal to the weighted average of the prices obtained by the Contractor and the State for sales of Crude Oil to Third Parties during the relevant Quarter, adjusted to reflect the differences in terms of quality and density as well as in terms of F.O.B delivery and terms of payment, provided that the quantities thus sold to Third Parties during the relevant Quarter represent at least thirty percent (30%) of the total quantities of Crude Oil obtained from all the granted Exploitation Perimeters under this Contract and sold during the said Quarter.

14.3

In the event that such sales to Third Parties are not made during the relevant Quarter, or do not represent at least thirty percent (30%) of the total quantities of Crude Oil obtained from the whole Exploitation Perimeters granted under this Contract and sold during the Quarter in question, the Market Price shall be established during the Quarter considered by comparison with the "Current International Market Price" of Crude Oil produced in Mauritania and in neighboring producing countries, taking into consideration the differences in terms of quality, density, transport and terms of payment.

14.4	The following transactions shall, inter alia, be excluded from the calculation of the Market Price of Crude Oil:

14.4.1	sales in which the buyer is an Affiliated Company of the seller as well as sales between entities constituting the Contractor;

14.4.2	sales in exchange for payment other than payment in freely convertible currencies and sales driven, in whole or part, for reasons other than the usual economic incentives involved in Crude Oil sales on the international market (such as exchange contracts, sales from government to government or to government agencies).

14.5	A committee chaired by the Minister or his delegate and consisting of State representatives and those of the Contractor shall meet upon request of its chair, at the end of each Quarter, to establish, in accordance with the stipulations of this article 14 the Market Price of Crude Oil produced, which shall apply to the previous Quarter. The decisions of the committee shall be taken unanimously.

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14.6	Pending the determination of the price, the Market price provisionally applicable to a Quarter shall be the Market price of the preceding Quarter. Any necessary adjustment shall be made no later than thirty (30) days after the determination of the Market Price for the relevant Quarter.

14.7	The Contractor shall measure all the Hydrocarbons produced after their extraction from water and the related substances, using, with the consent of the Ministry, the instruments and procedures in keeping with the international petroleum industry methods then in force. The Ministry shall have the right to examine these measurements and to control the instruments and procedures used.

14.8	For Dry Gas, the provision of this article 14 shall apply mutatis mutandis without prejudice to the provisions of article 15 below.

15.1

If a discovery as referred to in article 9.1 above relates to a Non-associated Natural Gas reservoir that the Contractor has undertaken to appraise in accordance with article 9.2 above, the Minister and the Contractor shall carry out jointly, and concurrently with the appraisal works of the said discovery, a market research intended to evaluate the possible outlets for this Natural Gas, for the local market and exportation, as well as the necessary means for its marketing, and they shall consider the possibility of jointly marketing their shares of production. The study shall determine in particular the quantities which can definitely be shifted on the local market by virtue of their nature as combustible or as raw material, the installations and arrangements necessary for the movement of this Natural Gas to user companies or government agency responsible for its distribution, as well as the estimated selling price which shall be determined in accordance with the principles provided for under article 15.8 below.

15.2	At the end of the appraisal work, should the Parties jointly decide to exploit this Natural Gas to supply the local market, or should the Contractor decide to exploit it for export, it shall submit before the end of the Exploration Authorization a request for an Exploitation Authorization which the Minister shall grant under the conditions provided in article 9.6 above.

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15.3

In the absence of submission of an appraisal program or of a request for an Exploitation Authorization within the deadlines specified in articles 9.2 and 9.5 above, the surface including the extent of the reservoir of Non-associated Natural Gas shall be returned, at the request of the Minister, to the State which shall carry out for its own account all the works for the exploitation of the reservoir in question.

15.4

In the event of a discovery of a reservoir of Crude Oil which is commercial and which contains Associated Natural Gas, the Contractor shall indicate in the report referred to in article 9.3 above if it considers that the production of this Associated Natural Gas is likely to exceed the quantities necessary to the requirements of the Petroleum Operations related to the production of Crude Oil including re-injection operations, and if it considers that this excess can be produced in commercial quantities. If the Contractor has informed the Minister of such an excess, the Parties shall jointly evaluate the possible outlets for this surplus, both on the local market and for export (including the possibility of a joint marketing of their shares of production of this excess), as well as the means necessary for its marketing.

15.5	Should the Contractor decide not to exploit the excess Associated Natural Gas and should the State, at any time, wish to use it, the Minister shall notify the Contractor thereof, in which case:

15.5.1	The Contractor shall make available to the State, free of charge, upon its exit of the gas separation facilities, all or part of the excess which the State wishes to lift;

15.5.2	The State shall be responsible for the collection, processing, compression and transport of that excess from the separation facilities referred to above, and shall support all the additional costs related thereto;

15.5.3	The construction by the State of the facilities necessary for the operations mentioned in paragraph b) above, as well as the lifting of the excess by the State, shall be carried out in accordance with good international petroleum industry practice in such a way as to not impede with the production, lifting and transportation of Crude Oil by the Contractor.

15.6	Any excess of Associated Natural Gas which would not be utilized under articles 15.4 and 15.5 above shall be reinjected by the Contractor.

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15.7

The Contractor shall have the right to dispose of its share of production of Natural Gas, in accordance with the provisions of this Contract. It shall also have the right to proceed with the separation of the liquids from all Natural Gas produced, and to transport, store as well as to sell on the local market or for export its share of liquid Hydrocarbons thus separated, which shall be regarded as Crude Oil for purposes of sharing between the Parties under article 10 above.

15.8	For the purposes of this Contract, the Market Price of Natural Gas, expressed in Dollars per million BTU, shall be equal:

15.8.1	With respect to the Natural Gas export sales to third parties, to the price obtained from purchasers;

15.8.2	With respect to sales on the local market of Natural Gas as a fuel, to a price agreed by mutual agreement between the Minister (or the national entity in charge of the distribution of gas on the local market) and the Contractor, on the basis of the market price of the rate of a substitute fuel for Natural Gas.

15.9

For the purposes of the application of articles 10.2, 10.3 and 13.2 above, the quantities of Natural Gas available after deduction of the reinjected or flared quantities and those used for the requirements for the Petroleum Operations, shall be expressed in a number of Barrels of Crude Oil such as one hundred and sixty five (165) cubic meters of Natural Gas measured at the temperature of 15.6°C and at the atmospheric pressure of 1,01325 bars are considered equal to one (1) Barrel of Crude Oil, unless otherwise agreed by the Parties.

16.1

The Contractor shall have the right, during the term of the Contract and in the conditions defined in Title V of the Crude Hydrocarbons Code, to process and transport in its own facilities inside the territory of Mauritania and to have products processed and transported while keeping ownership thereof, the products of its exploitation activities or its share of the aforesaid products, to the storage, processing, lifting or major consumption points.

16.2	If conventions for the purposes of allowing or facilitating the transportation of Hydrocarbons through pipelines through other states are entered into between the aforementioned states and the Mauritanian Government, the State shall grant without discrimination to the Contractor all the advantages which could result from the execution of these conventions.

16.3	As part of transportation operations, the Contractor shall have rights and shall be subject to the obligations provided for under Title V of the Crude Hydrocarbons Code.

17.1	The Contractor shall comply with the requirements for domestic consumption of Hydrocarbons in accordance with the provisions of article 41 of the Crude Hydrocarbons Code.

17.2

The Minister shall notify the Contractor in writing, no later than October 1st of each Calendar Year, of the quantities of Hydrocarbons that the State desires to purchase in accordance with this article for the following Calendar Year. The deliveries shall be made to the State or to the beneficiary designated by the Minister, in amounts and at regular intervals during the said Calendar Year in accordance with the terms agreed by the Parties.

17.3	The price of the Hydrocarbons thus sold by the Contractor to the State shall be the market price determined in accordance with the provisions of article 14 and 15.8; it shall be payable to the Contractor in Dollars.

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18.1

The Contractor shall have the right to import into Mauritania, on its behalf or that of its subcontractors, all the goods, materials, machinery, equipment, spare parts and consumables directly necessary for the proper conduct of the Petroleum Operations and specified in a specific customs list established by the Ministry, upon proposal from the Contractor, in accordance with article 92 of the Crude Hydrocarbons Code.

18.2	The imports and re-exportations of the Contractor and its subcontractors are subject to the customs procedure under articles 90 to 96 of the Crude Hydrocarbons Code.

18.3

The Contractor, its customers and their carriers shall have the right, throughout the Contract, to export freely at the point of export chosen for this purpose, free of any duties and taxes and, without prejudice to the foregoing, VAT will be at zero rate and at any time, the share of Hydrocarbons to which the Contractor is entitled in accordance with the provisions of the Contract, after deduction of all the deliveries made to the State. However, the Contractor undertakes at the request of the State, not to sell Mauritanian Hydrocarbons to countries declared hostile to the State.

19.1	The Contractor shall benefit from rights and shall be subject to the obligations under Title VII of the Crude Hydrocarbons Code regarding foreign exchange control and the protection of investments.

20.1	The Contractor shall maintain its records and books in accordance with the accounting regulations generally used in the international petroleum industry in accordance with the existing regulations and the Accounting Procedure defined in Appendix 2 of this Contract.

20.2	The records and books shall be maintained in Arabic, French or English and expressed in Dollars. They shall be materially supported by detailed documentation evidencing the expenditure and receipts of the Contractor under this Contract.

20.3

The original records and books indicated in article 20.1 above shall be maintained at the head office of the Operator, with at least one copy in Mauritania, until the Contractor is granted its first Exploitation Authorization. From the month during which the Contactor is granted the said Exploitation Authorization, the original records and books as well as the supporting documentation shall be maintained in Mauritania.

20.4	After notifying the Contractor in writing, the Minister shall have auditors of choice or his own agents examine and audit the records and books relating to the Petroleum Operations, in accordance with the conditions specified in the Accounting Procedure. He shall have a period

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20.5	The amounts due to the State or the Contractor shall be payable in Dollars or in another convertible currency selected by mutual agreement between the Parties.

21.1

The State shall acquire, as at the Effective Date, through the National Company (Société Mauritanienne des Hydrocarbures) referred to in Article 6 of the Crude Hydrocarbons Code, an interest of ten percent (10%) in the rights and obligations of the Contractor in the Exploration Perimeter. Contractor entities, other than the National Company, shall finance this share in respect of all Petroleum Costs corresponding to the Exploration Petroleum Operations including appraisal / assessment of the discoveries made in the Exploration Perimeter and this for the duration of the Exploration Authorization referred to in article 3 above.

21.2	The State shall have the option, through the National Company, to acquire a share in the Petroleum Operations in any Exploitation Perimeter stemming from the Exploration Perimeter, subject to the provisions of article 21.3 below.

21.3	In the event the option to participate within an Exploitation Perimeter referred to in article 21.2 is exercised by the State, such State participation shall, in any event, be no less than ten percent (10%) and shall not exceed the maximum percentage of fifteen percent (15%).

21.4

No later than six (6) months from the date of grant of an Exploitation Authorization, the Minister shall notify the Contractor in writing the decision of the State to exercise its option to participate, specifying the percentage which it wishes to take, within the limits provided for in article 21.3 above. Such participation will take effect from the date of receipt of notification of the exercise of the State's option.

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21.5	As from the date of receipt of notification of its participation referred to in articles 21.2 to 21.4, the State shall fund the Petroleum Costs in the relevant Exploitation Perimeter proportionally to its participation.

21.6

The State will transfer and will continue to give the Contractor forty five percent (45%) of the production share accruing to it in respect of its participation and in respect of its recovery of Petroleum Costs in accordance with article 10.2 above and the Accounting Procedure set out in Appendix 2, until the sum of these transfers or payments, valued at the provisions of articles 14 and 15 above is equal to one hundred and twelve percent (112%) of the Petroleum Costs referred to in the second paragraph of article 21.5 above.

21.7	For the avoidance of doubt, the reimbursement of Petroleum Costs stipulated in articles 21.5 and

21.8	The reimbursements made by the State under articles 21.5 and 21.6 above, will be paid in kind by the State, which will transfer to the Contractor entities, other than the National Company, a percentage of its quarterly share of the Hydrocarbons production stipulated in the articles, every Quarter, at the Delivery Point.

21.9

The practical arrangements for State participation stipulated in article 21.1 above as well as the rules and obligations applying to the Contractor entities, including the National Company, will be fixed in a joint operating agreement (JOA) to be entered into by these entities and which will enter into force no later than ninety (90) days from the Effective Date. Said joint operating agreement (JOA) will be amended whenever necessary and in particular to take into account, where applicable, the exercise by the State of its option under article 21.2 above.

21.10

The National Company on the one hand and other entities constituting the Contractor on the other hand, will not be jointly and severally liable for obligations under this Contract. The National Company shall be individually responsible vis-à-vis the State for its obligations as provided in this Contract. Any failure by the National Company to perform any of its obligations shall not constitute a failure of the other entities constituting the Contractor and shall, in no case, be invoked by the State to terminate this Contract. The association of the National Company and the Contractor, shall not, under any circumstances, cancel or affect the rights of other entities constituting the Contractor to have recourse to the arbitration clause provided for in article 28 below.

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22.1	The rights and obligations resulting from this Contract cannot be assigned to a third party, in whole or in part, by one of the entities constituting the Contractor without the prior approval of the Minister.

22.2	Additionally, the Contractor or any entity of the Contractor shall have to submit the following to the prior approval of the Minister:

22.2.1

Any project which would be likely to bring, in particular by means of a new distribution of the registered shares, a change in the direct control of the Contractor or of the entity in question of the Contractor. The following shall be considered elements of control of the Contractor, or of one of its entities: the distribution of the registered capital, the nationality of the majority shareholders, as well as the statutory provisions relating to the head office and to the rights and obligations associated with the registered shares in relation to the majority required in the general meetings. However, the assignments of registered shares to Affiliated Companies shall be free subject to a prior notice being given to the Minister for information purposes and to the application of the provisions of article 24.4 below if necessary. Assignments of registered shares to Third Parties, however, shall be subject to the approval of the Minister only if they have the effect of assigning more than thirty percent (30%) of the capital of the company.

22.2.2	Any project to take security over assets and facilities allocated to Petroleum Operations.

22.3

Where the Contractor consists of several entities, it shall provide the Minister, within a month of its signing, a copy of the joint operating agreement (JOA) entered into by the entities, and of all amendments which may be made to that agreement, and shall specify the name of the company designated as "Operator" for the Petroleum Operations. Any change of Operator shall be subject to the approval of the Minister in accordance with the provisions of article 6.2 above.

22.4	Assignments carried out in breach of the provisions of this article 22 shall be null and void.

23.1	The Contractor will be the owner of the assets, furniture and buildings, which it shall have acquired for the purposes of the Petroleum Operations, and shall maintain their full use, as well as the right to export or to transfer them to Third Parties throughout the duration of the Contract, provided that the State can acquire, free of charge, at the request of the Minister, all or part of

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23.1.1	Upon expiration, waiver or termination of this Contract;

23.1.2

in the event of relinquishment or expiry of an Exploitation Authorization, with respect to the works and facilities located in the Exploitation Perimeter and the equipment assigned exclusively to the Petroleum Operations in the Exploitation Perimeter in question, unless the Contractor wishes to use these assets for Petroleum Operations in other Exploitation Perimeters resulting from the Exploration Perimeter.

23.2	Upon expiry, surrender or termination of any Exploitation Authorization, the Contractor shall carry out all the operations necessary to rehabilitate the sites in accordance with a Rehabilitation Plan established and financed in accordance with the following terms:

23.2.1

At the end of the Quarter during which sixty percent (60%) of the recoverable Hydrocarbon reserves identified in the development program of a reservoir as referred to in article 9.5 shall have been recovered, the Contractor shall prepare and submit to the Minister for approval a Rehabilitation Plan of the site, in conformity with international petroleum industry standard practices, which it proposes to carry out at the end of the operations of production, as well as a corresponding budget. Each year, the Contractor shall make the necessary amendments to the Rehabilitation Plan to take account of the evolution of the technical and financial parameters. The revised Rehabilitation Plan shall become the new Rehabilitation Plan on which bases the payments on the receiving accounts shall be calculated;

23.2.2	The Rehabilitation Plan shall include a detailed description of the removal works and/or of the securitization of the infrastructures such as the rigs, the storage facilities, the wells, etc. necessary to the protection of the environment and people;

23.2.3

The Minister shall propose, in consultation with the Minister for the Environment, amendments or changes to the Rehabilitation Plan, by notifying the Contractor of said revisions and changes in writing to the Contractor with all useful justifications, within ninety (90) days following receipt of the said Plan. The provisions of article 5.2 above shall apply in respect of the adoption of said Plan. When the results achieved during the exploitation justify changes to the Rehabilitation Plan, the aforementioned Plan and the corresponding budget shall be modified in accordance with the aforementioned approval and adoption procedure;

23.2.4	In order to finance the operations provided for in the Rehabilitation Plan, the Contractor shall open a receiver account at an international banking institution approved by the Minister, which it shall supply, starting from the Quarter following the adoption of the Rehabilitation Plan with annual deposits according to a schedule established in agreement with the Minister;

23.2.5

The funds deposited in the receiver account shall be deemed recoverable Petroleum Costs according to the procedures provided for in article 10.2 above, and shall be treated as deductible charges for the calculation of business profits tax. These funds, as well as the interest charged on the receiver accounts, shall be assigned exclusively for the payment of expenditures related to the operations of the Rehabilitation Plan;

23.2.6	The Contractor shall give the Minister prior notice of one hundred and eighty (180) days of its intention to start the operations provided for in the Rehabilitation Plan, save if the Minister notifies the Contractor within thirty (30) days following the above mentioned notification that:

(A)	the exploitation of the reservoir on the Exploitation Perimeter in question shall hereinafter be continued by the State or a Third Party, or

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(B)	the State wishes to preserve the facilities for duly justified reasons.

23.2.7	If the expenditure necessary to the execution of the Rehabilitation Plan would be greater than the amount available in the receiver account, the entire excess shall be the responsibility of the Contractor;

23.2.8	The Contractor shall pay to the State at the expiry of the Exploitation Authorization the remaining sums in the receiver account which were not used for the performance of the Rehabilitation Plan and which have been recovered pursuant to article 10.2 above.

24.1	The Contractor shall indemnify and compensate any person, including the State, for any damage or loss that the Contractor, its employees or its subcontractors and their employees may cause to any person, to the property or the rights of other people, caused by or resulting from Petroleum Operations.

24.2

The Contractor shall take out and maintain in force, and cause to be taken out and maintained in force by its subcontractors, all insurances relating to the Petroleum Operations of such forms and for such amounts used in the international petroleum industry, including (a) an insurance contract in respect of its general civil liability and covering the pecuniary consequences of the physical, material and immaterial damages during the or caused by the performance of Petroleum Operations, (b) an insurance contract covering the environmental risks related to the performance of Petroleum Operations, (c) an insurance contract covering industrial accidents and covering the financial consequences of industrial accidents which their personnel would be victims of, and (d) any other insurance contract whose subscription would be required by the regulations in force.

24.3	When the Contractor consists of several entities, the duties and liabilities of the latter under the terms of this Contract shall be, subject to the provisions of article 21 above, joint, save for their obligations with respect to the tax on business profits.

24.4	If one of the entities of the Contractor transfers all or part of its rights and obligations under this Contract to an Affiliated Company, provided that the latter has lower technical and financial capacities, its parent company shall submit to the approval of the Minister an undertaking to guarantee the proper performance of the obligations arising from this Contract.

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25.1	This Contract may be terminated, without compensation, in either of the following cases:

25.1.1	Serious and/or recurring breach by the Contractor of the provisions of this Contract, of the Crude Hydrocarbons Code, or of the existing regulations applicable to the Contractor;

25.1.2	Non-delivery of the banking guarantee in accordance with article 4.6;

25.1.3	Delay of over three (3) months with respect to the payment due to the State;

25.1.4	Discontinuation of development works with respect to a reservoir for six (6) consecutive months without approval of the Minister;

25.1.5	After the start of the production from a reservoir, stoppage of its exploitation for a duration of more than six (6) months decided by the Contractor without approval of the Minister;

25.1.6	Failure by the Contractor to comply, within the time prescribed, with an arbitral award delivered in accordance with the provisions of article 28 below;

25.1.7	Bankruptcy, judicial settlement or liquidation of the Contractor's assets.

25.2

Save as provided for in paragraph 25.1.7 above, the Minister shall declare the forfeiture provided for in article 25.1 above only after having given formal notice to the Contractor, by registered letter with acknowledgment of delivery, to remedy the breach in question within three months (or within six (6) months with respect to the occurrences set forth in paragraphs 25.1.4 and 25.1.5 above) from the date of receipt of such notice.

26.1	This Contract shall be governed by the laws and regulations of the Islamic Republic of Mauritania, supplemented by the general principles of the international commercial law.

26.2	The Contractor shall be subject at any time to the laws and regulations in force in the Islamic Republic of Mauritania.

26.3	The Contractor shall not be subject to any legislative or regulatory provision arising after the Effective Date of the Contract which could effectively directly or indirectly reduce the rights of the Contractor or increase its obligations under this Contract and under the legislation and the regulations in force at the effective date of this Contract, without prior agreement of the Parties.

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27.1

Any obligation resulting from this Contract which a Party would be totally or partially unable to comply with, save in respect to the payments of which it would be liable, shall not be deemed a breach of this Contract if the aforementioned non performance results from a Force Majeure event, provided, however, that there is a direct cause and effect relationship between the non performance and the Force Majeure event invoked.

27.2

For the purposes of this Contract, Force Majeure events shall mean any unforeseeable event which is irresistible or beyond the control of the Party invoking it, such as earthquakes, accidents, strikes, guerillas, terrorist acts, blockades, riots, insurrections, civil disorders, sabotages, acts of war, subjection of the Contractor to any law, regulation, or any other uncontrolled cause is to delay and render performance of its obligations, in whole or in part, temporarily impossible. The intention of the Parties is that Force Majeure shall be interpreted in accordance with international petroleum industry principles and practices.

27.3

When a Party considers that it is prevented from carrying out any of its obligations because of a Force Majeure event, it must immediately notify it in writing with the other Part by specifying all elements establishing the occurrence of a Force Majeure event and to take, in agreement with the other Party, all useful and necessary measures allowing the normal resumption of the performance of the obligations affected by the Force Majeure as of the suspension of the Force Majeure event.

27.4

If the execution of any of the obligations of this Contract is delayed due to a case of Force Majeure, the duration of the resulting delay, along with the time which may be necessary to make good any damage caused by the Force Majeure event, shall be added to the time stipulated in this Contract for the performance of the aforesaid obligation as well as to the duration of the Contract, the Exploration and Exploitation Authorizations currently in force.

28.1	In the event of any dispute between the State and the Contractor in respect of the interpretation or the application of the provisions of this Contract, the Parties shall endeavor to solve this dispute by amicable agreement.

28.2	The seat of the arbitration shall be Paris (France). The language used during the procedure shall be the French language and the applicable law shall be Mauritanian law as well as the international law rules and practices applicable to the subject matter.

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28.3	The Parties shall conform to any conservatory measures prescribed by the arbitration tribunal. Without prejudice to the capacity of the arbitration tribunal to recommend conservatory measures, each Party shall request temporary or conservatory measures pursuant to the pre arbitration provisory settlement of the ICC.

28.4	A commencement of arbitral proceedings shall give rise to the suspension of the contractual provisions concerning the subject matter of the dispute, but all other rights and obligations of the Parties under this Contract shall remain in force.

28.5	Subject to the provisions of article 21 above, the fees and expenses of the expert referred to in article 28.1 above shall be borne by the Contractor until the grant of the first Exploitation Authorization, and shall thereafter be borne equally by each Party. These costs shall be regarded as recoverable Petroleum Costs in accordance with article 10 of this Contract.

29.1	The Parties hereby agree to cooperate in all possible ways in order to achieve the object of this Contract.

29.2

All the notifications or other communications referring to the present Contract shall be made in writing and shall be regarded as having been validly given or made either as soon as they have been personally delivered and with acknowledgement of receipt to the a qualified representative of the Party concerned at its principal place of business in Mauritania, or shall have been delivered as registered mail with acknowledgment of delivery, or sent by facsimile confirmed by letter and after confirmation of the reception by the recipient with the indication of residence indicated below:

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29.3	The State and the Contractor may at any time change their authorized representatives or amend the addresses mentioned in article 29.2 above, subject to prior notice of at least ten (10) days.

29.4	This Contract may be modified only by mutual agreement between the Parties and by the conclusion of an amendment approved and coming into effect in accordance with the conditions provided in article 30 above.

29.5	Any waiver by the State of the performance of an obligation of the Contractor shall be made in writing and signed by the Minister, and no waiver shall be considered as a precedent if the State waives the exercise of any of its rights which it is entitled to under this Contract.

29.6	The headings in this Contract are inserted for convenience and reference purposes only and shall not in any manner define, restrict or describe the scope or object of the provisions of the Contract.

29.7	Appendices 1, 2 and 3 are an integral part of this Contract. In case of conflict, the provisions of this Contract shall prevail over those of the Appendices.

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1.1	Purpose

1.2	Accounts and Records

1.3	Interpretation

2.1	General Rules and Principles – Categories and Groups

2.1.1

The Contractor shall maintain a specific account set up and reserved for recording Petroleum Costs, which will record in detail the Petroleum Costs actually paid by the Contractor that entitle the Contractor to recovery pursuant to the provisions of this Contract and Appendix, the recovered Petroleum Costs whenever production is allocated for that purpose, and any amounts credited or charged to Petroleum Costs

2.1.2	The Petroleum Costs account must always make evident, in respect of the Exploration Perimeter and any Exploitation Perimeter arising from it:

•	The total Petroleum Costs paid by the Contractor since the Effective Date;

•	The total amount of recovered Petroleum Costs;

•	Amounts    mitigating    or    subtracted    from    Petroleum    Costs    and    the corresponding operations;

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•	The amount of Petroleum Costs remaining to be recovered.

2.1.3	The Petroleum Costs account shall record in the debit column all expenses actually paid and directly related to the Petroleum Operations, pursuant to the Contract and provisions of this Appendix that should be allocated to Petroleum Costs.

•	the actual responsibility of the Contractor;

•	necessary for the satisfactory conduct of Petroleum Operations;

•	justified and substantiated by supporting documentation for effective oversight by the Ministry.

2.1.4	The Petroleum Costs account shall record in the credit column the amount of recovered Petroleum Costs as these are recovered, together with the revenue and proceeds of all kinds, whenever these are collected, that may be deducted from or offset against the Petroleum Costs.

2.1.5	Original copies of contracts, invoices and all other supporting documentation for the Petroleum Costs must be kept at the disposal of the Ministry and presented upon any Ministry request.

2.1.6	Petroleum Costs shall be recovered:

(A)	in accordance with nature of the costs order of priority:

•	Exploitation Petroleum Costs;

•	Development Petroleum Costs;

•	Exploration Petroleum Costs;

(B)	In accordance with the geographical order of priority:

•	The Petroleum Costs incurred in an Exploitation Perimeter shall be first to be recovered from the production resulting from it, in the order specified in paragraph (A) above.

•	The Petroleum Costs incurred outside of an Exploitation Perimeter shall be second to be recovered from the production resulting from it, in the order specified in paragraph (A) above.

•	The Petroleum Costs incurred within the Exploitation Perimeters, other than the one in question, will be recovered before the Petroleum Costs incurred in the Exploration Perimeter in the order specified in paragraph (A) above.

2.1.7	The Petroleum Costs account must be true and sincere; it must be set up, and the books kept and presented such that the related Petroleum Costs may be easily grouped together and identified, in particular with regards to expenses for:

•	exploration,

•	appraisal,

•	development,

•	production of Crude Oil,

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•	production of Natural Gas,

•	removal of Hydrocarbons and storage,

•	related, subsidiary or secondary activities, identifying each;

2.1.8	For each of the activities below, the Petroleum Costs account must plainly identify the expenses for:

(A)	Tangible fixed assets, especially those connected with the acquisition, creation, construction or completion of:

•	land,

•	buildings (workshops, offices, shops, housing, laboratories, etc.);

•	warehouse loading facilities,

•	access roads and general infrastructure,

•	means of transporting Hydrocarbons (drainage systems, tankers, etc.),

•	general equipment,

•	special equipment and facilities,

•	transportation vehicles and civil engineering devices,

•	equipment and tools (the normal length of use of which is more than one year),

•	production wells,

•	other tangible fixed assets.

(B)	With respect to intangible fixed assets, specifically those related to:

•	geological and geophysical field work, laboratory work, studies, reprocessing, etc.),

•	non-productive exploration wells which are not used in relation to the development plan,

•	other intangible fixed assets.

(C)	Consumable equipment and material.

(D)	Operational expenditures:

(E)	Non-operational expenditures or general expenses. These are expenses borne by the Contractor in relation to the Petroleum Operations and directly linked to the management and administration of such operations.

2.1.9	For each expense category listed or defined above in paragraphs (A) to (D) of article 2.1.8, the Petroleum Costs account must also plainly identify payments made to:

•	the Operator for goods and services it provided;

•	entities that make up the Contractor, for goods and services they themselves provided;

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•	Affiliated Companies;

•	Third Parties.

2.2	Analysis of expenses and allocation methods

2.2.1	The Contractor's usual principles of allocation and methods of analysis in terms of distribution and repayment must be applied to all its activities evenly, fairly, and without discrimination. These principles must be disclosed to the Ministry at the Ministry's request.

2.2.2	Tangible assets built, manufactured, created or realised by the Contractor as part of the Petroleum Operations and effectively allocated to such operations, together with day- to-day maintenance, shall be recorded at their construction, manufacturing, creation or realisation cost price.

2.2.3	The equipment, material, and consumable goods required for the Petroleum Operations other than those referred to above are:

(A)	those either acquired for immediate use, subject to shipping time and, if necessary, temporary storage by the Contractor (without being mixed together with its own inventory). For the purposes of allocation to Petroleum Costs, such equipment, material and consumable goods acquired by the Contractor shall be valued at the delivered price where they are used (delivered price in Mauritania)

•	the purchase price after deductions and rebates,

•	the costs of transportation, insurance, transit, handling and customs (and other possible duties and taxes) from the store of the vendor to the store of the Contractor or place of use, whichever is applicable,

(B)	or those provided by the Contractor from its own inventory.

•	New equipment and materials, together with consumable materials, provided by the Contractor from its own inventory shall be valued, for the purposes of allocation, at the last average weighted cost price, calculated in accordance with the provisions of paragraph (A) of this article 2.2.3, hereinafter referred to as the "net cost".

•	The depreciable materials and equipment which have already been used and that were provided by the Contractor from its own inventory or that for its other activities, including its Affiliated Companies, shall be valued for allocation to Petroleum Costs on the following scale:

•	New Material (State "A"): New material which has never been used: 100% (one hundred per cent) of the net cost.

•	Material in good condition (State "B"): Second-hand material in good condition still capable of being used for its initial purpose without repairs: 75% (seventy five per cent) of the net cost of the new material as defined above.

•	Other used material (State "C"): Material which is capable of being used for its initial purpose, but only after repairs and reconditioning:

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•	Material in poor condition (State "D"): Material which is not capable of being used for its initial purpose, but which may be used for other services: 25% (twenty five per cent) of the net cost of the new material as defined above.

•	Scrap and rejects (State "E"): Material incapable of being used and repaired: current scrap price.

2.2.3.1

The Operator does not guarantee the quality of the new material referred to above beyond the guarantee provided by the manufacturer or seller of the material in question. In the event of defective new material, the Contractor shall endeavour to obtain reimbursement or compensation from the manufacturer or from the seller; however, the corresponding credit shall only be recorded upon receipt of reimbursement or compensation.

2.2.3.2	In the event the used material referred to above is defective, the Contractor shall credit the Petroleum Costs account with the sums it has effectively collected as compensation.

2.2.3.3	Use of materials, equipment and facilities belonging to the Contractor itself.

(A)	Maintenance and repairs.

(B)	A share, proportional to the amount of time used for Petroleum Operations, of the depreciations calculated by applying a rate to the historical cost price (non- revalued initial cost) that is not greater than the one set out in article 4.2 below.

(C)	Transportation and running expenses and all other expenses which are not already allocated elsewhere.

2.3	Operating expenses

2.3.1	These expenses shall be allocated to Petroleum Costs at the cost price for the Contractor of relevant services or costs, as the price is recorded in the Contractor's accounts and as it is determined pursuant to the provisions of this Appendix. These expenses include, in particular:

2.3.2	Fees, duties and taxes incurred and paid in Mauritania under applicable regulations and under the provisions of the Contract which are directly linked to the Petroleum Operations.

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2.3.3	Costs of staff and staff surroundings

2.3.3.1	Principles

2.3.3.2	Included Items.

(1)	Wages and activity or holiday pay, overtime, bonuses and other compensation;

(2)	Related employer's contributions arising from laws and regulations, collective bargaining agreements and terms of employment;

(3)	Costs paid for staff surroundings; these include in particular:

•	Costs of medical and hospital care, social contributions and all other specific employee costs of the Contractor,

•	Costs of transportation of employees, their families and personal property, when these costs are assumed by the employer pursuant to the employment contract,

•	Staff housing costs, including the related services when these are assumed by the employer pursuant to the employment contract (water, gas, electricity, telephone, etc.),

•	Allowances paid upon arrival and departure of employees,

•	Costs of administrative staff performing the following services: management and recruitment of local personnel, management of expatriate personnel, professional training, maintenance and operations of offices and lodgings, when these costs are not included in general expenses or other headings,

•	Costs of renting or occupying offices, costs of collective administrative services (secretariat, furniture, office equipment, telephone, etc.).

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2.3.3.3	Allocation conditions.

(4)	Direct costs allocated to the corresponding Petroleum Costs account, or

(5)	Indirect or shared costs allocated to the Petroleum Costs account using cost accounting data determined pro rata to the time dedicated to Petroleum Operations.

2.3.4	Expenses paid for services provided by Third Parties, entities making up the Contractor and Affiliated Companies, including in particular:

2.3.4.1	Services provided by Third Parties and the Parties, shall be allocated at the accounting cost price for the Contractor, i.e. at the price charged by the suppliers, including all possible duties, taxes and supplemental charges; all discounts, reductions, refunds and rebates obtained either directly or indirectly by the Contractor shall be deducted from these cost prices.

2.3.4.2	The technical assistance provided to the Contractor by its Affiliated Companies; this consists of services provided for the benefit of Petroleum Operations by the departments and services of those Affiliated Companies which carry out the following activities:

•	Geology,

•	Geophysics,

•	Engineering,

•	Drilling and production,

•	Fields and study of reservoirs,

•	Economic surveys,

•	Technical contracts,

•	Laboratories,

•	Purchases and transit (save for expenses included in those referred to in 2.2.3 above),

•	Drawings,

•	Certain administrative and legal activities related to well- defined or occasional studies or works and which are not part of the current and regular activity, nor of the legal activity referred to in 2.3.8 below.

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2.3.4.3	When the Contractor uses material, equipment or facilities for Petroleum Operations, which belong exclusively to an entity forming part of the Contractor, it shall allocate to Petroleum Costs, pro rata to the length of use, the corresponding charges determined using its usual methods and pursuant to the principles defined in 2.3.4.2 above. This charge includes, in particular, a share of:

•	the annual depreciation calculated on the original "delivered price in Mauritania" defined in 2.2.3 above;

•	the cost of commissioning, insurance, day-to-day maintenance, financing and periodical revisions;

•	storage costs;

•	storage and handling costs (staffing costs and service operating costs) shall be allocated to Petroleum Costs pro rata to the exit value of the registered goods;

•	transportation costs: the expenses for the transportation of personnel, material, or equipment assigned and allocated to the Petroleum Operations and which have not already been covered by the paragraphs above or which are not integrated in the cost price, shall be allocated to Petroleum Costs.

2.3.5	Damage and losses affecting common goods

2.3.6	Maintenance expenses

2.3.7	Insurance premiums and costs relating to the recovery of claims The following shall be allocated to Petroleum Costs:

(A)	insurance premiums and costs relating to compulsory and contractual insurance contracted to cover the Hydrocarbons extracted, the persons and assets assigned to the Petroleum Operations or to cover the Contractor's civil liability to Third Parties within the scope of said operations;

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(B)	expenses borne by the Contractor as a result of a claim arising in the context of Petroleum Operations, for the settlement of any loss, claim, damage and other ancillary expenses that are not covered by the insurance policy;

(C)	expenses paid for the settlement of losses, claims, damages or legal actions not covered by insurance and for which the Contractor is not required to take out insurance. The amounts recovered from insurance pursuant to policies or guarantees shall be accounted for in accordance with article 2.6.2(G) below;

2.3.8	Legal expenses

2.3.9	Interest, bank and financial charges

2.3.10	Exchange losses

2.3.11	Payments for expenses incurred as part of inspections and audits carried out by the Ministry, in accordance with the provisions of the Contract, shall be included in the Petroleum Costs.

2.3.12

Payments for other expenses, including expenses paid to Third Parties for the transportation of Hydrocarbons to the Delivery Point shall be included in the Petroleum Costs. These are any and all payments made or losses suffered that are connected with or required for the proper performance of Petroleum Operations and for which the allocation to Petroleum Costs is not excluded by the provisions of the Contract or Appendix, provided that they cannot be understood as costs that the Ministry bars from deduction, and provided that these expenses have been approved by the Ministry. In addition, unless otherwise provided by law, the Contractor may, if it wishes, make economic, social, cultural, and athletics contributions, but absolutely may not contribute to any political financing. These contributions shall be debited from the Petroleum Costs account.

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2.4	General Expenses

2.4.1	Expenses paid outside Mauritania

•	before the first Exploitation Authorisation is granted: three per cent (3%) of Petroleum costs excluding general expenses

•	Once the first Exploitation Authorisation has been granted: one and one-half per cent (1.5%) of the Petroleum Costs excluding financial expenses and general expenses.

2.4.2	Expenses paid in Mauritania.

•	General management and general secretariat;

•	Information and communications;

•	General administration (legal services, insurance, tax services, computing services);

•	Accounting and budget;

•	Internal audit.

2.5	Expenses Not Attributable To Petroleum Costs

2.5.1	Capital increase costs;

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2.5.2	Costs for activities conducted beyond the Delivery Point, in particular marketing costs;

2.5.3	Costs relating to the period prior to the Effective Date;

2.5.4	External auditing costs paid by the Contractor within the scope of the particular relationship between the entities that make up the Contractor;

2.5.5	Expenses borne for meetings, studies and works performed within the framework of the relationship between the entities that make up the Contractor, the purpose of which is not the satisfactory performance of Petroleum Operations;

2.5.6	Interest, and bank and financial charges other than those for which allocation is provided in the article 2.3.9 of this Appendix.

2.5.7	Exchange losses which may be incurred other than those for which allocation is permitted by the Contract.

2.5.8	Exchange losses which represent loss of earnings resulting from risks originally linked to working capital and self-financing.

2.6	Items to be credited to the Petroleum Costs Account

2.6.1	The income from the quantities of Hydrocarbons allocated to the Contractor in accordance with the provisions of article 10.2 of the Contract, calculated on the basis of the related Market price as defined in articles 14 and 15 of the Contract.

2.6.2	All other revenue, income and related, subsidiary or ancillary profits or income directly or indirectly linked to the Petroleum Operations received by the Contractor, in particular, when arising out of:

(A)	The sale of related substances;

(B)	The transportation and storage of products owned by Third Parties in the facilities assigned to the Petroleum Operations;

(C)	Reimbursements from insurers;

(D)	Amounts paid for settlements or final judgements;

(E)	Disposals or leases of assets already declared in the Petroleum Costs;

(F)	Rebates, reductions and refunds obtained where they have not been allocated as deductible from the cost price of assets to which they relate;

(G)	All other revenue or income similar to those listed above shall be deducted from the Petroleum Costs.

2.7	Material, Equipment and Facilities Sold By the Contractor.

2.7.1	Material, equipment, facilities and consumables that have not been or cannot be used shall be withdrawn from the Petroleum Operations and shall be either down-graded or considered as "scrap and rejects", or re-purchased by the Contractor for its own needs, or sold to Third Parties or to Affiliated Companies.

2.7.2

In case of a sale to entities making up the Contractor or their Affiliated Companies, prices shall be determined in accordance with the provisions of article 2.2.3 (B) of this Appendix or, if they are higher than those resulting from the application of the said article, shall be agreed between the Parties. When the use of the asset in question for Petroleum Operations has been temporary and does not justify the price reductions set out in the abovementioned article, the asset shall be valued so that a net charge corresponding to the value of the service provided is deducted from the Petroleum Costs.

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2.7.3	Material, equipment, facilities and consumables sold by the Contractor to Third Parties shall be sold at the best price possible. All reimbursement or compensation granted to a purchaser for defective material shall be debited from the Petroleum Costs account to the extent that and at the time they are actually paid by the Contractor.

2.7.4	When an asset is utilised for the benefit of a Third Party or of the Contractor for operations not covered by the Contract, the corresponding royalties shall be calculated at rates which, save with Ministry approval, cannot be calculated on a basis which is less than the cost price.

2.8	Revenue, income and related, subsidiary or ancillary profits or income directly or indirectly linked to the Petroleum Operations, in particular, when arising out of:

3.1	For the purpose of calculating the ratio "R" for the application of article 10.3 of the Contract, the Petroleum Costs falling within the scope of the calculation of the Net Cumulated Income and Cumulated Investments shall be categorised and recorded separately under the following categories.

3.2	Exploration Petroleum Costs

3.2.1	Geophysical, geochemical, paleontological, geological, topographical and seismic surveys together with all related surveys and their interpretations;

3.2.2	Core drilling, exploration wells, appraisal wells and water wells;

3.2.3	Cost of labour, equipment, supplies and services pertaining to the drilling of exploration wells or wells drilled to appraise a discovery that do not become producing wells;

3.2.4	Equipment used exclusively for the purposes set out in articles 3.2.1, 3.2.2 and 3.2.3 above, including access roads and the geological and geophysical information acquired;

3.2.5	The share of the Petroleum Costs for the construction of facilities and installations, general expenses covered by the Exploration Petroleum Costs as calculated for the fair allocation of all of the Petroleum Costs (including general expenses) between the Exploration Petroleum Costs and all of the Petroleum Costs excluding general expenses;

3.2.6	All other Petroleum Costs incurred for exploration purposes between the Effective Date and the date of commencement of the production of commercially viable Hydrocarbons not included in article 3.3 below.

3.3	Development Petroleum Costs

3.3.1	Development and production drilling, including wells drilled to inject water or gas with a view to increasing the rate of recovery of Hydrocarbons and those intended for the conservation and storage of gas;

3.3.2	Wells completed by the installation of casing or equipment after a well has been drilled for the purpose of completing it as a producing well or a well for injecting

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3.3.3

Equipment costs relating to production, transportation and storage upstream of the Delivery Point, such as pipelines, flow-lines, treatment and production units, equipment at the wellhead, underwater equipment, stimulated recovery systems, offshore platforms, floating production units and/or floating production and storage units (FPO and FPSO), storage units, export terminals, port facilities and related installations and access roads relating to production activities;

3.3.4	Engineering and design studies relating to the equipment listed in article 3.3.3;

3.3.5	The portion of the construction Costs and general expenses covered by the Development Petroleum Costs, as shown by the proportion of the Development Petroleum Costs as compared to the total Petroleum Costs without general expenses;

3.3.6	Financial fees relating to the financing of the Development Petroleum Costs are excluded.

3.4	Exploitation Petroleum Costs

3.5	All depreciation of fixed assets carried out for the calculation of the taxable profit pursuant to the provisions of article 4 below shall not be treated as Petroleum Costs and accordingly shall not be included in the calculation of the Ratio "R".

4.1	Deductible expenses

•	the Exploitation Petroleum Costs, as defined in accordance with the provisions of this Accounting Procedure;

•	general expenses, pursuant to the provisions of article 2.4 above of this Appendix;

•	depreciation on the fixed assets comprising the Development Petroleum Costs, pursuant to the provisions of article 4.2 below;

•	interest, bank charges and financial fees, pursuant to the provisions of article 2.3.9 above;

•	losses of equipment or materials resulting from destruction or damage, unrecoverable debts and compensation paid to third parties for losses (save where such losses have been caused by the actions or failure to act of the Contractor);

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•	reasonable and justified provisions paid against specifically defined losses or expenses and made likely by current events;

•	the unaudited amount of losses relating to previous years up to a limit of five (5) years following the year in which the losses were made.

4.2	Depreciation of fixed assets

•	ten (10) Calendar Years for fixed assets comprising the pipeline for the transportation of Hydrocarbons;

•	five (5) Calendar Years for all other fixed assets.

4.3	Exploration Petroleum Costs

5.1	Frequency

5.2	Notices

5.3	Information

6.1	Principles

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6.2	Report on variations of investment accounts and stocks of equipment and consumable materials

6.3	Report on quantities of Crude Oil and Natural Gas transported each month

6.4	Report on the recovery of Petroleum Costs

•	The Petroleum Costs remaining to be recovered at the end of the previous month;

•	The Petroleum Costs pertaining to the activities of the month;

•	The Petroleum Costs recovered over the month, indicating the quantity and value of the production taken off for such purpose;

•	The amounts received from the attenuation or reduction of the Petroleum Costs during the month;

•	The Petroleum Costs remaining to be recovered at the end of the month.

6.5	Ratio "R" calculation report

6.6	Inventory of Crude Oil and Natural Gas stocks.

•	Stocks at the beginning of the month;

•	Additions to stocks during the month;

•	Withdrawals from stocks during the month;

•	Theoretical stocks at the end of the month;

•	Measured stocks at the end of the month;

•	Explanations for any discrepancies.

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6.7	Tax returns.

6.8	Statement on the payment of fees and taxes.

6.9	Specific provisions

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1.	We certify that:

(i)	the Contractor Applicant is in breach of its minimum work obligations under the Contract; and

(ii)	the type and estimated cost of the work that have not been carried out under the Contract are as follows: [insert brief description].

2.	We therefore demand payment of the sum of [    ].

3.	Payment should be made in accordance with the terms of the Guarantee to the following account:

4.	The date of this demand is not later than the Expiry Date.

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(1)	HESS EQUATORIAL GUINEA INVESTMENTS LIMITED, an exempted company incorporated with limited liability under the laws of the Cayman Islands, with company number 219960, and having its registered office at Sterling Trust (Cayman) Limited, Whitehall House, 238 North Church Street, PO Box 1043, George Town, Grand Cayman, KY1-1102, Cayman Islands (the “Seller”);

(2)	HESS CORPORATION, a company incorporated under the laws of the State of Delaware, and having its principal place of business at 1185 Avenue of the Americas, New York, New York 10036, USA (the “Seller Guarantor”);

(3)	KOSMOS ENERGY EQUATORIAL GUINEA, a company incorporated in the Cayman Islands, with company number 269135 and having its registered office at Fourth Floor, Century Yard, Cricket Square, Elgin Avenue, P.O. Box 32322, George Town, KY1-1209, Grand Cayman, Cayman Islands (“Kosmos”);

(4)	KOSMOS ENERGY OPERATING, a company incorporated in Cayman Islands, with company number 231417 and having its registered office at Fourth Floor, Century Yard, Cricket Square, Elgin Avenue, P.O. Box 32322, George Town, KY1-1209, Grand Cayman,

(5)	TRIDENT ENERGY E.G. OPERATIONS, LTD., a company incorporated in the Cayman Islands, with company number 326264 and having its registered office at c/o Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands (“Trident”),

(A)	The Seller has agreed to sell the Shares (as defined below), and the Purchasers (as defined below) have each agreed to purchase and pay for fifty percent (50%) of the Shares, in each case, on the terms of this Agreement.

(B)	Particulars of the Company and its Subsidiary are set out in Part 1 of Schedule 1 (Details of the Company) and Part 2 of Schedule 1 (Details of the Subsidiary).

(C)	The Seller Guarantor has agreed to guarantee the obligations of the Seller on the terms and subject to the conditions of this Agreement and to give the warranties in Clause 26.15.

(D)	The Kosmos Guarantor has agreed to guarantee the obligations of Kosmos to pay the Consideration payable by Kosmos under and in accordance with this Agreement and to give the warranties in Clause 26.14.

(E)	Certain investment funds affiliated with Warburg Pincus LLC have on the Execution Date provided an equity commitment letter in favour of each of Trident and the Seller in respect of the obligations of Trident to pay the Consideration payable by Trident under and in accordance with this Agreement.

1.	Interpretation

1.1	In this Agreement and the Schedules to it:

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(a)	thirty days after (and excluding) the Execution Date; and

(b)	ten (10) Business Days after (and excluding) the day on which the Condition has been satisfied or waived in accordance with this Agreement,

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(a)	all obligations for the reimbursement of any obligation or on any letter of credit, banker’s acceptance or similar credit transaction;

(b)	obligations under any swap, hedge or similar protection device; and

(c)	any other obligations, contingent or otherwise, that, in accordance with US GAAP, should be classified upon the balance sheet as indebtedness;

(a)	listed in the index to, or otherwise subject to the provisions of, the Executive Order;

(b)	named as a “Specially Designated National and Blocked Person” (“SDN”) on the most current list published by OFAC at its official website or any replacement website or other replacement official publication of such list;

(c)	in which an entity on the SDN list has 50% or greater ownership interest or that is otherwise controlled by an SDN; or

(d)	with which the Seller or any member of the Retained Group is prohibited from dealing or otherwise engaging in any transaction by any Sanctions Laws and Regulations;

(a)	in the Disclosure Letter; and/or

(b)	in the Updated Disclosure Letter, as applicable; and/or

(c)	in the Data Room Documents;

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(a)	any country-wide, regional, or industry-wide or other international changes in the social, political, industrial, market, financial or economic conditions in which the Group Companies operate or in which the products of the Group Companies are used or distributed (including changes in energy, electricity or other operating costs);

(b)	any changes in stock markets, commodity prices, currency, exchange rates or interest rates;

(c)	any natural decline in the well production levels, reserves or resources of any of the Group Companies or any reclassification or recalculation of reserves, but in each case excluding a material adverse impact on the reserves or production levels that results from an extraordinary or catastrophic operational incident, blow-out, or similar adverse physical event;

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(d)	any change in laws, regulations or accounting practices, or the enforcement or interpretation thereof, applicable to the Group Companies;

(e)	storms, floods, tornadoes, earthquakes or any other natural disaster (but excluding such event to the extent that it has a material adverse impact on production, reserves or resources of any of the Group Companies);

(f)	any hostilities, acts of war, sabotage, terrorism or military action, other than any such event in or relating to the jurisdiction in which the Group Companies operate; or

(g)	drilling, completion or production results for a Group Company obtained as a result of activities by or on behalf of a Group Company conducted in accordance with the relevant Interest Documents and in the Ordinary Course of Business;

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(a)	the PSC Licence; and

(b)	each JOA;

(a)	First Restated Joint Operating Agreement between Triton Equatorial Guinea, Inc. and Energy Africa Equatorial Guinea Limited dated 1 June 1999 and restated as of 1 January 2000 for operations in Block G offshore Equatorial Guinea; and

(b)

Joint Operating Agreement for Field Development and Production between the Entities Constituting Part of Contractor (as defined therein) in the Field (as defined in the PSC Licence), which at the time of signature were Triton Equatorial Guinea, Inc. and Energy Africa Equatorial Guinea Limited, and/or their respective successors and assigns, which may include the Republic of Equatorial Guinea, effective as of the Effective Date for each Field, being the approval date of the Development Plan (as defined in the PSC Licence) for each such Field under the terms of the PSC Licence.

(a)	Losses suffered or incurred by the Group Companies exceeding, in the aggregate, an amount equal to 20% of the Initial Consideration; or

(b)	a diminution in value of the Shares, in aggregate, in an amount exceeding 20% of the Initial Consideration;

(a)	applicable law and regulations;

(b)	Good and Prudent Oilfield Practices; and

(c)	their by-laws or articles of association;

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(a)

all taxes, assessments, charges, duties, fees, levies or other governmental charges in the nature of a tax, including all national, federal, state, local, municipal, foreign and other income, franchise, profits, gross receipts, capital gains, capital stock, transfer, property, sales, use, value-added, occupational, excise, severance, windfall profits, stamp, licence, payroll, social security, royalties, withholding and other taxes, assessments, charges, duties, fees, levies or other governmental charges in the nature of a tax (whether payable directly or by withholding, whether or not requiring filing, whether chargeable directly or primarily against or attributable directly or primarily to any of the Group Companies or any other person and whether any amount in respect of any of them is recoverable from any other person) imposed by any Tax Authority; and

(b)	all penalties, fines and interest included in or relating to any Taxation falling in paragraph (a) above;

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(a)	this Agreement;

(b)	the Disclosure Letter;

(c)	the Updated Disclosure Letter;

(d)	the Transitional Services Agreement;

1.2	The expression “in the agreed form” means in the form agreed between the Parties and signed for the purposes of identification by or on behalf of the Parties.

1.3	Any reference to “writing” or “written” means any method of reproducing words in a legible and non-transitory form (excluding, for the avoidance of doubt, email).

1.4	References to “include” or “including” are to be construed without limitation.

1.5	References to a “company” include any company, corporation or other body corporate wherever and however incorporated or established.

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1.6	References to a “person” include any individual, company, partnership, joint venture, firm, association, trust, Governmental or Regulatory Authority or other body or entity (whether or not having separate legal personality).

1.7	The expressions “body corporate”, “holding company”, “parent undertaking”, “subsidiary” and “subsidiary undertaking” shall have the meaning given in the Companies Act.

1.8	The table of contents and headings are inserted for convenience only and do not affect the construction of this Agreement.

1.9	Unless the context otherwise requires, words in the singular include the plural and vice versa and a reference to any gender includes all other genders.

1.10	References to Clauses, paragraphs and Schedules are to clauses and paragraphs of, and schedules to, this Agreement. The Schedules form part of this Agreement.

1.11

References to any statute or statutory provision include a reference to that statute or statutory provision as amended, consolidated or replaced from time to time (whether before or after the date of this Agreement) and include any subordinate legislation made under the relevant statute or statutory provision except to the extent that any amendment, consolidation or replacement would increase or extend the liability of the Seller under this Agreement.

1.12	References to any English legal term for any action, remedy, method of financial proceedings, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term.

1.13

All payments required in accordance with this Agreement shall be made in USD. For the purposes of applying a reference to a monetary sum expressed in USD, an amount in a different currency shall be converted into USD on a particular date at an exchange rate equal to the mid-point closing rate for converting that currency into USD on that date as quoted in the New York edition of the Financial Times first next published (or, if no such rate is quoted in the Financial Times, the mid-point closing rate quoted by Barclays Bank PLC in London). In relation to a Claim, the date of such conversion shall be the date of receipt of notice of that Claim in accordance with Schedule 3 (Limitations on Liability).

1.14	This Agreement shall be binding on and be for the benefit of the successors of the Parties.

2.	Sale and purchase

2.1	The Seller shall sell the Shares and the Purchasers shall each purchase fifty percent (50%) of the Shares with all rights attaching or accruing to them at Completion on the terms of this Agreement.

2.2	The Seller shall transfer the title to the Shares to the Purchasers free from all Encumbrances.

2.3	Neither the Seller nor the Purchasers shall be obliged to complete the sale and purchase of any of the Shares unless the sale and purchase of all the Shares is completed simultaneously.

3.	Condition

3.1	The obligations of the Seller and the Purchasers to complete the sale and purchase of the Shares are in all respects conditional on the satisfaction (or waiver, as the case may be) of the following condition:

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(a)	all sums owing by the Contractor (as defined in the Settlement Agreement) to the General Treasury of the State pursuant to clause 4 of the Settlement Agreement having been paid (the “Condition”).

3.2	The Seller shall:

(a)	make an equity contribution to the Company and/or the Subsidiary equal to the sums owing by the Subsidiary to the General Treasury of the State pursuant to clause 4 of the Settlement Agreement; and

(b)	use reasonable endeavours to procure the fulfilment of the Condition as soon as possible and in any event before the Long Stop Date.

3.3	The Seller and the Purchasers may, acting jointly and in writing, waive in whole or in part the Condition.

3.4	The Seller undertakes to notify the Purchasers in writing, and the Purchasers undertake to notify the Seller in writing, of anything which will or may prevent the Condition from being satisfied on or before the Long Stop Date promptly after it comes to its attention.

3.5	Each Party undertakes to notify the other Party as soon as possible on becoming aware that the Condition has been satisfied and in any event within two (2) Business Days of such satisfaction.

3.6	If the Condition is not fulfilled or waived on or before the Long Stop Date, the Parties shall be entitled to treat this Agreement as terminated subject to, and on the basis set out in, Clause 14.2 (Termination).

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4.	Consideration

4.1	The initial consideration for the sale and purchase of the Shares shall be an aggregate amount equal to USD 650,000,000.00 (six hundred and fifty million Dollars) (the “Initial Consideration”), as adjusted pursuant to the provisions of this Clause 4.

4.2	The Seller shall prepare and deliver to the Purchasers, by no later than ten (10) Business Days prior to the Completion Date, the Initial Statement of Accounts, prepared in accordance with Part 1 of Schedule 5 (Statement of Accounts). The Initial Statement of Accounts shall be prepared taking into account reasonable best estimates available at the time of preparation.

4.3	The Initial Consideration shall be modified (as applicable) by the following Adjustments calculated in the Initial Statement of Accounts:

(a)	increased by an amount equal to any and all Permitted Equity Contributions paid by the Seller to the Company;

(b)	decreased by an amount equal to any and all Permitted Dividends paid by the Company to the Seller;

(c)	increased by the Working Capital Amount;

(d)	increased by amounts paid by the Seller or a member of the Retained Group for the benefit of a Group Company after the Economic Date until (and including) the Completion Date to the extent that such amounts:

(i)	are not Permitted Leakage;

(ii)	are reasonably and properly incurred in the Ordinary Course of Business and in accordance with previous business practice; and

(iii)	in aggregate do not exceed US$1 million unless otherwise agreed by the Purchasers;

(e)	decreased by an amount equal to Leakage except for Permitted Leakage;

(f)	increased by an amount equivalent to interest calculated in Dollars, using the Reference Interest Rate, on the Permitted Equity Contribution from the date of payment of the Permitted Equity Contribution until (and inclusive of) the Completion Date;

(g)	increased by an amount equivalent to interest calculated in Dollars, using the Reference Interest Rate, on the Working Capital Amount from (and exclusive of) the Economic Date until (and inclusive of) the Completion Date;

(h)	decreased by an amount equivalent to interest calculated in Dollars, using the Reference Interest Rate, on the Permitted Dividends from the date of payment of the Permitted Dividend until (and inclusive of) the Completion Date; and

(i)	decreased by an amount equivalent to interest calculated in Dollars, using the Reference Interest Rate, on an amount equal to Leakage (other than Permitted Leakage) from the date such Leakage arises until (and inclusive of) the Completion Date; and

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(j)	increased by an amount equivalent to interest calculated in Dollars, using the Reference Interest Rate, on the Initial Consideration from (and exclusive of) the Economic Date until (and inclusive of) the Completion Date.

4.4	At Completion, the Initial Adjusted Consideration shall be calculated by increasing or decreasing the Initial Consideration (as the case may be) in accordance with the Initial Statement of Accounts and in accordance with Clause 4.3 above; provided, however, that the amount of the Initial Consideration shall not be reduced by the Permitted Leakage, if any.

4.5	Payment by each Purchaser to the Seller of fifty percent (50%) of the Initial Adjusted Consideration (based on the Initial Statement of Accounts to be delivered by the Seller to the Purchasers on Completion) shall be made at Completion in accordance with paragraph 1 of Part 2 of Schedule 2 (Completion Arrangements).

4.6

The Initial Adjusted Consideration shall be further adjusted after Completion by the Final Settlement Amount and an amount equivalent to interest calculated in Dollars in accordance with Clause 6, using the Reference Interest Rate, on the Final Settlement Amount as set out in the Final Statement of Accounts, from and including the day on which Completion takes place to and including the date of payment thereof, payable in each case by the Purchasers to the Seller if the Final Adjusted Consideration is greater than the Initial Adjusted Consideration, and payable in each case by the Seller to the Purchasers if the Final Adjusted Consideration is less than the Initial Adjusted Consideration. If an amount is payable by the Purchasers under this clause, each Purchaser shall be liable to pay the Seller fifty percent

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5.	Pre-Completion Obligations

5.1	Subject to Clause 5.2, the Seller shall procure that from the Execution Date until Completion, each Group Company will:

(a)	conduct its business in the Ordinary Course of Business and in substantially the same manner as in the 24 months prior to the Execution Date;

(b)	subject to the non-Affiliated parties to the JOA and any other non-Affiliated committee members providing their prior consent, permit the Purchasers, at the Purchaser’s sole cost to appoint an observer to operating committee meetings and technical committee meetings under a JOA, provided that any such meeting shall proceed irrespective of whether such appointee is in attendance;

(c)	consult with the Purchasers with regard to the PSC Licence prior to any material decision in connection with the PSC Licence which is not in the Ordinary Course of Business;

(d)	procure that each Purchaser is given reasonable access at reasonable times, on reasonable advance notice and at the Purchaser’s sole cost, to all material documents, material information and data reasonably requested by a Purchaser relating to all material facts, matters and things in respect of the Group Companies and the Interest Documents;

(e)	conduct its affairs in relation to the PSC Licence materially in accordance with and in compliance with the Interest Documents (including taking all reasonable steps to ensure that the PSC Licence is protected and maintained); and

(f)	insure the Business and the assets of the Group Company and the PSC Licence and operations at the PSC Licence in the Ordinary Course of Business and substantially in the same manner and to the same extent as prior to the date of this Agreement and pay all premia thereon,

5.2

Notwithstanding Clause 5.1, in the period between the Execution Date and Completion, except as may be required or permitted by this Agreement or as may be required by any applicable law or any Governmental or Regulatory Authority, the Seller shall not and shall procure that, no Group Company shall do any of the following without the prior written consent of each Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):

(a)	declare, make or pay any dividend or other distribution, other than dividends or distributions to another Group Company or Permitted Dividends;

(b)	sell or agree to sell the Shares or the Subsidiary Shares (in whole or in part) to a third party or accept any offer from a third party to purchase the Shares or the Subsidiary Shares (in whole or in part);

(c)	create, allot or issue any shares in a Group Company, or give, create or enter into any option over shares in a Group Company, other than to another Group Company;

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(d)	create or grant, or agree to create or grant, any Encumbrance (other than Permitted Encumbrances) over the Shares or the Subsidiary Shares or over any material assets of a Group Company;

(e)	sell or agree to sell any material assets of a Group Company (in whole or in part);

(f)	in respect of the Group Companies only, grant any guarantees or indemnities for the benefit of any person, other than in the Ordinary Course of Business;

(g)	grant any loans by the Group Companies other than credit under usual terms or write off or release any debts;

(h)	voluntarily surrender, withdraw from or abandon the PSC Licence (in whole or in part);

(i)	amend (in any material respect), terminate or agree to amend or terminate any of the Interest Documents;

(j)	amend, any Affiliate Contract in a manner that would cause Permitted Leakage arising from such Affiliate Contract to be materially increased;

(k)	waive or agree to waive any of its rights or remedies under the Interest Documents in so far as such rights and remedies materially affect the PSC Licence;

(l)	enter into any contract, agreement or arrangement which, once entered into, would be a Material Contract, or amend (in any material respect), terminate or agree to amend or terminate any such Material Contract, in any such case, other than in the Ordinary Course of Business;

(m)	propose any scheme or plan of arrangement, reconstruction, amalgamation, merger or demerger in respect of the Group Companies;

(n)	propose any winding-up or liquidation of the Group Companies;

(o)	make any material change in the nature or organisation of the business of the Group Companies;

(p)	discontinue, cease to operate or wind up, or resolve to do any of the foregoing, as to all or any material part of the business of the Group Companies;

(q)	make any variation to the terms and conditions of employment of any employee of a Group Company other than in the usual course of business;

(r)	appoint, employ or offer to appoint or employ any person other than in the usual course of business;

(s)	dismiss any employee other than in the usual course of business;

(t)	incur or pay any management charge or make any other payment in each case to any member of the Retained Group or their Representatives, other than, for the avoidance of doubt, payments of such fees to another Group Company and payments specified as Permitted Leakage or as Permitted Dividends;

(u)	institute, abandon or settle any material legal proceedings (except debt collection in the Ordinary Course of Business) against or otherwise involving a Group Company or make any admission of material liability by or on behalf of a Group Company;

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(v)	make, revoke or amend any Tax election or, other than as expressly required to satisfy the Condition, settle or compromise any Tax liability or agree to an extension or waiver of the limitation period to any Tax claim made by any Tax Authority or grant any power of attorney with respect to Taxes or enter into any closing agreement with respect to any Tax;

(w)	change any method of accounting for Tax purposes; or

(x)	file any amended income Tax return or other material amended Tax return other than as expressly required to satisfy the Condition.

5.3	Clause 5.2 does not apply in respect of and shall not operate so as to restrict or prevent:

(a)	any matter reasonably undertaken in an emergency or disaster situation with the intention of and to the extent only of those matters strictly required with a view to minimising any adverse effect of such situation (and of which the Purchasers will be promptly notified in writing);

(b)	the completion or performance of any obligations undertaken pursuant to any agreement Disclosed prior to the date of this Agreement and which was entered into prior to the date of this Agreement.

(c)	any matter expressly permitted by, or necessary for performance of, this Agreement (including, for the avoidance of doubt, the satisfaction of the Condition and the performance of Clause 5.6) or any of the other Transaction Documents or necessary for Completion;

(d)	any matter undertaken at the request of the Purchaser (subject to the Seller being able to undertake such matter);

(e)	providing information to any Regulatory Authority in the Ordinary Course of Business;

(f)	any matter to the extent required by applicable law;

(g)	any Permitted Leakage.

5.4	It would be unreasonable for the Purchasers to withhold their consent under Clause 5.2 if the consent being sought is reasonably necessary to maintain the present status or condition of any of the assets of the Group Companies in accordance with Good and Prudent Oilfield Practice and/or in order to comply with its obligations under the Interest Documents as Disclosed prior to the Execution Date.

5.5

The Seller and the Purchasers (each on behalf of the Subsidiary) shall use all reasonable endeavours and shall negotiate in good faith to agree as soon as reasonably practicable after the date of this Agreement, and in any event before Completion, the final form of the Transitional Services Agreement in accordance with the principles and agreed terms set out in Schedule 8 (Transitional Service Agreement Term Sheet). If upon Completion the Seller and the Purchasers (each on behalf of the Subsidiary) have not agreed the final form of the Transitional Services Agreement, and/or the parties thereto have not entered into the Transitional Services Agreement, the Seller shall procure that the Retained Group provides the relevant transitional services to the Subsidiary in accordance with the terms set out in the term sheet set out in Schedule 8.

5.6	No later than five (5) Business Days prior to the Completion Date, the Seller shall:

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(a)	irrevocably surrender one Share for zero consideration (the date of such surrender being the “Surrender Date”), such that on Completion the Company will have 35,000 shares with a par value of USD 1 each in issue; and

(b)	notify the Purchasers that such surrender has taken place and provide to the Purchasers a certified copy of the register of members of the Company evidencing such surrender,

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6.	Final statements of accounts

6.1

The Seller shall prepare and deliver to the Purchasers, by no later than one hundred and twenty (120) days after the Completion Date, the Final Statement of Accounts, prepared in accordance with Part 2 of Schedule 5 (Statement of Accounts). The Final Statement of Accounts shall be based on actual financial results where available, or, in the absence of such results, on reasonable best estimates available at the time of preparation, and shall include any amounts not previously accounted for at Completion pursuant to the Initial Statement of Accounts and/or any necessary correction of amounts accounted for pursuant to the Initial Statement of Accounts.

6.2	During a period of thirty (30) days following the Final Statement of Accounts Date, the Purchasers may verify all amounts in the Final Statement of Accounts.

6.3

If any Purchaser takes exception to any of the figures contained in the Final Statement of Accounts, that Purchaser shall notify the Seller in writing, within forty-five (45) days of the Final Statement of Accounts Date, listing all figures in the Final Statement of Accounts that it disputes or is otherwise unable to verify based upon the Seller’s documentation (or lack thereof) and detailing the basis for each exception, to the extent of the information then available to the Purchaser. In the event that a Purchaser delivers such a written notice of dispute to the Seller within the applicable time limit, the provisions of Clause 6.4 shall apply as to all disputed figures contained in the Final Statement of Accounts.

6.4

Upon a Purchaser delivering a written notice to the Seller pursuant to Clause 6.3, the Seller and the Purchasers shall Reasonably Endeavour to resolve all of the written exceptions, and upon such resolution the Final Statement of Accounts shall be deemed amended accordingly. In the event that the Seller and the Purchasers have not agreed upon the resolution of all outstanding figures in the Final Statement of Accounts within fifty-five (55) days of the Final Statement of Accounts Date, a Purchaser may, by written notice delivered to the Seller within sixty (60) days of the Final Statement of Accounts Date, refer all unresolved figures in the Final Statement of Accounts for binding dispute resolution by an independent expert as provided for in Clause 6.6.

6.5	All figures:

(a)	to which no Purchaser, within the time permitted, takes exception as provided for in Clause 6.3; or

(b)	that are disputed by a Purchaser pursuant to Clause 6.3 within the time permitted but are resolved between the Purchasers and the Seller or not referred by a Purchaser for dispute resolution within sixty (60) days of the Final Statement of Accounts Date as provided for in Clause 6.4,

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6.6

In the event that a Purchaser notifies the Seller, within the applicable time limit, of the referral of any dispute regarding any figures contained in the Final Statement of Accounts for resolution by an independent expert as provided for in Clause 6.4, the Seller and the Purchasers shall Reasonably Endeavour to appoint, by agreement, an independent expert, being a member in good standing for not less than ten (10) years of the American Institute of Certified Public Accountants, with relevant expertise, and without any conflict of interest involving any Party or their Affiliates. In the event that the Seller and the Purchasers do not make such appointment within ten (10) days of delivery of the Purchaser’s referral notice as described in Clause 6.4, then, upon the application of any Party, the appointment shall be referred to the New York Office of the American Arbitration Association. The independent expert shall consider such written documentation and other submittals as he or she may request of the Parties and may seek such specialised consultancy advice as he or she sees fit. The decision of the independent expert so appointed shall be in writing, delivered not later than sixty (60) Business Days from the date of appointment of such independent expert unless otherwise agreed by the Parties and shall, in the absence of fraud or manifest error, be final and binding on the Parties. The payment of any outstanding amount, as determined by such independent expert, plus interest on such amount at the Reference Interest Rate from (and inclusive of) the Completion Date to (and inclusive of) that certain Business Day immediately preceding the date of payment, as determined to be owing by either Party to the other, shall be made within fifteen (15) days of such decision. The costs of the independent expert shall be borne as determined by the independent expert. Such independent expert shall be deemed to be acting as an expert and not as an arbitrator.

6.7

All Adjustments shall be accounted for in Dollars, and any Adjustments not expressly provided herein as Adjustments to be accounted for in Dollars shall be converted to Dollars, with any such exchange rate conversions being made as provided for in the definition thereof in Clause 1.1 of this Agreement and in accordance with the Seller’s normal accounting policies and procedures. Any and all amounts owing pursuant to this Agreement shall be paid on the due date for payment in immediately available funds to the Seller’s Designated Account or in equal parts into the Kosmos Designated Account and the Trident Designated Account (as applicable).

6.8	No item taken into account in calculating any one Adjustment shall be taken into account in calculating any other Adjustment such that it would result in a Party making or receiving payment twice in respect thereof.

6.9	For the avoidance of doubt, all payments made by one Party to another Party pursuant to the Final Statement of Accounts, including any amount that is ultimately determined to be owing by one Party to another Party pursuant to the dispute resolution procedures of Clause 6.6, shall be deemed Adjustments to the Initial Adjusted Consideration.

7.	Leakage

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7.1	Pending Completion, the Seller shall procure that no Group Company shall undertake any act or course of conduct which would result in Leakage. In this Agreement, “Leakage” means:

(a)	the declaration, making or payment of any dividend or other distribution, or making of any redemption, purchase or other acquisition of any of its shares or other ownership interests, other than Permitted Dividends; and

(b)	the making of any payment (including of consulting, advisory or management fees) to the Retained Group or their Representatives, other than, for the avoidance of doubt, payments specified as Permitted Leakage,

(c)	any matter undertaken at the request of the Purchasers (subject to the Seller being able to undertake such matter) or with the Purchasers' consent, such consent not to be unreasonably withheld, conditioned or delayed;

(d)	for the avoidance of doubt, any payment made by a Group Company to the General Treasury of the State (as referred to in the Settlement Agreement) in order to satisfy the Condition; and

(e)	any Permitted Leakage.

7.2	Except where an adjustment is made in respect of Leakage under Clause 4.3 (Initial Adjusted Consideration) or 4.6 (Final Settlement Amount), the Seller shall indemnify and hold each Purchaser harmless from and against all Losses suffered or incurred by it arising from the breach by the Seller of any covenants or undertakings contained in Clause 7.1.

7.3	Any payment pursuant to Clause 7.2 shall be treated as an adjustment to the Initial Adjusted Consideration or Final Adjusted Consideration, as applicable.

8.	Completion

8.1	Completion shall take place on the Completion Date at the offices of the Seller’s Lawyers or at such other place as is agreed in writing by the Seller and Purchasers.

8.2	At Completion the Seller shall do those things listed in Part 1 of Schedule 2 (Completion Arrangements) and the Purchasers shall do those things listed in Part 2 of Schedule 2 (Completion Arrangements).

8.3	If there is a material breach of Clause 8.2 and Schedule 2 (Completion Arrangements) on the Completion Date, the Seller or, as the case may be, the Purchasers may (provided, that the Seller or a Purchaser (as applicable) has not itself materially breached Clause 8.2 and Schedule 2 (Completion Arrangements)):

(a)	defer Completion (with the provisions of this Clause 8 applying to Completion as so deferred);

(b)	proceed to Completion as far as practicable (without limiting its rights and remedies under this Agreement); or

(c)	terminate this Agreement by written notice to the other Parties, provided that the Parties’ accrued rights and obligations under this Agreement (excluding any right of the Purchasers to claim damages for breach of Warranty) and their rights and

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9.	Post-completion covenants

9.1

Following Completion, each Purchaser undertakes to the Seller not to bring (and to procure that no other member of the Kosmos Group (in respect of Kosmos) or the Trident Group (in respect of Trident) (including, for the avoidance of doubt in respect of each of Kosmos or Trident, the Group Companies) shall bring) any action, challenge, claim or proceeding, against all Senior Managers in respect of any action (or inaction), conduct, default or omission of any such person prior to Completion except in the case of fraud or Wilful Misconduct.

9.2

Subject to Clause 9.3, the Seller shall procure that each Affiliate Contract and any other contract or arrangement between a Group Company and any member of the Retained Group shall be terminated at Completion and, except in respect of issuance pursuant to Clause 9.4 and payment of any bona fide invoices issued, the Seller shall, and shall procure that its Affiliates shall, release in full and hold the Group Companies harmless in respect of and the relevant Group Company shall release in full and hold the Seller, and its Affiliates, harmless against all claims and liabilities (other than in respect of third party claims) arising directly under the Affiliate Contracts up to and including the Completion Date. Notwithstanding termination of the Marketing Services Agreement pursuant to this Clause 9.2 (or as otherwise agreed), the Seller shall procure that Hess International Sales LLC or any member of the Retained Group will pay to the Subsidiary all sums that would, but for the termination, have been payable by Hess International Sales LLC to the Subsidiary under the Marketing Services Agreement (or otherwise) in relation to any Sales Agreements (as defined under the Marketing Services Agreement) entered into prior to the date of such termination.

9.3	The Purchasers may request in writing to the Seller at least fifteen (15) Business Days prior to Completion that certain Affiliate Contracts shall remain in place following Completion (the “Maintained Affiliate Contracts”). On receipt of a written request from the Purchasers, the Seller shall procure that each Maintained Affiliate Contract shall not be terminated at Completion.

9.4

If, at Completion, any amounts have been reasonably and properly incurred in accordance with an Affiliate Contract or a Maintained Affiliate Contract but have not been invoiced to the Group Company, within thirty (30) days of Completion the Seller shall or shall procure that its Affiliate shall, issue a final invoice under that Affiliate Contract or the latest invoice under that Maintained Affiliate Contract requesting payment of such outstanding amounts.

10.	Seller’s warranties

10.1

Any Warranties that are qualified by the knowledge, belief or awareness of the Seller shall mean the actual (but not constructive or imputed) knowledge, belief or awareness of the Senior Managers (having made all reasonable enquiries of such other Senior Managers), provided, that, in the event of any breach or claim with respect to the Warranties, such individuals shall not incur any liability under the Agreement on the basis of their responses to such enquiry.

10.2	The Seller warrants to the Purchasers as of the Execution Date and as of the Completion Date that:

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(a)	The Seller and the Group Companies are companies duly incorporated and validly existing under laws of the Cayman Islands and each of the Group Companies have full corporate power and authority to carry on its business as it is now being conducted and to own the assets it now owns.

(b)

The Seller has full power and authority to enter into and perform this Agreement and the Seller has full power and authority to enter into and perform the other Transaction Documents to which it is a party and all other documents executed by the Seller which are to be delivered at Completion (together, the “Documents”), each of which constitutes (when executed) legal, valid and binding obligations of the Seller in accordance with its respective terms.

(c)

The execution, delivery and performance by the Seller of the Documents will not constitute a breach of any laws or regulations in any relevant jurisdiction or result in a breach of or constitute a default under (i) any provision of the memorandum and articles of association of the Seller; (ii) any order, judgment or decree of any court or governmental authority by which the Seller, or the Company is bound; or (iii) any agreement or instrument to which the Seller or any Group is a party or by which it is bound.

(d)

The Seller and any the Group Company are not insolvent or unable to pay its debts within the meaning of the Insolvency Act 1986 (or under the insolvency laws of any applicable jurisdiction) or has stopped paying debts as they fall due. No order has been made, petition presented or resolution passed for the winding up of the Seller or any Group Company. No administrator or any receiver or manager has been appointed by any person in respect of the Seller or any Group Company or all or any of its or their assets and no steps have been taken to initiate any such appointment and no voluntary arrangement has been proposed. The Seller and any Group Company have not become subject to any analogous proceedings, appointments or arrangements under the laws of any applicable jurisdiction.

(e)	The Seller is and will at the Completion Date be the sole legal and beneficial owner of, and has the right to exercise all voting and other rights over, all of the Shares. The Company is and will at the Completion Date be the sole legal and beneficial owner of, and has the right to exercise all voting and other rights over, all of the Subsidiary Shares in the Subsidiary.

(f)	The Shares are and will at the Completion Date constitute the entire allotted and issued share capital of the Company and are fully paid up. The Subsidiary Shares are and will at the Completion Date constitute the entire allotted and issued share capital of the Subsidiary and are fully paid up.

(g)

The Shares are and will at the Completion Date be free from all Encumbrances and there is no agreement or commitment to give or create any Encumbrance over or affecting the Shares and no claim has been made by any person to be entitled to any such Encumbrance. The Subsidiary Shares are and will at the Completion Date be free from all Encumbrances and there is no agreement or commitment to give or create any Encumbrance over or affecting the Subsidiary Shares and no claim has been made by any person to be entitled to any such Encumbrance.

(h)	There are and will be no agreements or commitments outstanding which call for the issue of any shares, loan stock or debentures in or other securities of any Group Company

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(i)	No notices have been received by any of the Seller or any Group Company and so far as the Seller is aware no steps have been taken in relation to any expropriation, nationalisation or dilution or similar of the share capital of any Group Company or the PSC Licence.

(j)	The information relating to the Group Companies set out in Schedule 1 (Details of the Group Companies) is true and accurate in all respects.

(k)	No Group Company has any subsidiary undertakings or any interest in the shares or other capital of any entity, other than, in the case of the Company, the Subsidiary.

(l)	The copies of the constitutional documents of the Group Companies, the PSC Licence, the JOA and, so far as the Seller is aware, the minutes of the Operating Committee (excluding any attachments, annexes or schedules thereto) included in the Data Room Documents are true and complete copies of the originals of such documents.

(m)

The books, registers and records (including all accounting records) of the Group Companies are in all material respects complete and accurate and up to date in accordance with applicable laws and are maintained and retained in accordance and for the period required by applicable laws. All such books, registers and records and other necessary documents and records relating to its affairs are in the possession or under the direct control, and subject to the unrestricted access, of the relevant Group Company. So far as the Seller is aware, the Group Companies have not received any application for rectification of any of its registers, including the register of members.

(n)	So far as the Seller is aware, there is no power of attorney given by any Group Company in force and no outstanding authority by which any person may enter into an agreement, arrangement or obligation to do anything on behalf of any Group Company (other than any authority of its directors, branch manager and certain legal representatives to act in the ordinary and usual course of their duties).

(o)	No Group Company is subject to any actual or contingent liability arising out of or in connection with any production sharing contract or equivalent arrangement (other than the PSC Licence) to which it has been a party or in which it has held an interest.

(p)	The relevant Group Company is the holder of an 80.75% equity participating interest in the PSC Licence, which is burdened by an 85% paying working interest in the PSC Licence, but otherwise free from any Encumbrances (other than the rights in favour of GEPetrol and other Governmental or Regulatory Authority according to the terms of the PSC Licence and applicable laws).

(q)	So far as the Seller is aware, the PSC Licence and the JOA are valid and in full force and effect.

(r)	No Group Company is or, so far as the Seller is aware, has in the past been in default or in breach of any material terms or conditions of any of the PSC Licence or the JOA and no event has occurred or failed to occur which constitutes, or with the giving of notice or lapse of time or both, would constitute, a material breach or default of the PSC Licence or the JOA by a Group Company.

(s)	So far as the Seller is aware, no other party to the JOA is in default or in breach of any material terms or conditions of any of the JOA and so far as the Seller is aware, no

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(t)	So far as the Seller is aware, the Group Companies have paid all material fees and charges imposed by any applicable Governmental or Regulatory Authority, which have become due and payable with respect to the PSC Licence.

(u)	So far as the Seller is aware, no Group Company has received any written notification from any applicable Governmental or Regulatory Authority that any investigation or inquiry is being or has been conducted by any such Governmental or Regulatory Authorities in respect of violations of Environmental Law in relation to the PSC Licence.

(v)	The PSC Licence, together with applicable laws, contains the entirety of the obligation of the relevant Group Company to the Governmental or Regulatory Authorities, and no other understanding or agreement exists between the relevant Group Company and the Governmental or Regulatory Authorities in relation to the subject matter of the PSC Licence.

(w)

The material assets included in the Accounts or acquired by the Group Companies since the Economic Date (other than trading stock disposed of since that date in the ordinary course of business) and all other material assets owned by the Group Companies are the absolute property of the relevant Group Company (save to the extent cost recovered under the PSC Licence) and are free from any Encumbrance.

(x)	The Group Companies do not have any Encumbrances subsisting over the whole or any part of its present or future revenues or material assets.

(y)	All such material assets owned by the Group Companies are not the subject of any leasing, hiring or hire purchase agreement or agreement for payment on deferred terms or assignment or factoring or other similar agreement.

(z)	All such material assets are in the possession or under the control of the relevant Group Company.

(i)	have been prepared by the Group Companies in accordance with the applicable law and US GAAP;

(ii)	have been prepared in accordance with the Group Companies' relevant accounting principles (as Disclosed), and in a manner consistent with the Group Companies' past practice of applying such accounting principles;

(iii)	are accurate in all material respects;

(iv)	show a true and fair view of the financial position, assets, liabilities, profit or loss and cash flows of the Group Companies as of the dates and periods indicated therein; and

(bb)	Save as Disclosed, the Group Companies have no Debt and are not party to nor bound by any agreement relating to Debt. On the Closing Date, no Group Company will have any Debt whatsoever nor be party to nor be bound by any agreement relating to Debt;

(cc)	Save as Disclosed, no Group Company is a plaintiff nor, so far as the Seller is aware, a defendant in or otherwise a party to any litigation, arbitration or administrative proceedings of a material nature;

(dd)	So far as the Seller is aware, no Group Company has received any written notification of any material dispute which in the reasonable opinion of the Seller is likely to give rise to any such litigation, arbitration or administrative proceedings as are referred to in (cc) above.

(ee)

So far as the Seller is aware, each Group Company (i) has carried on, and is carrying on, the Business (including, in the case of the Subsidiary, as Operator and in relation to the ownership of the participating interest in the PSC Licence) in compliance in all material respects with applicable laws and (ii) holds (and is in compliance with) all material authorisations, permissions, licences, permits, consents and approvals from and agreements with any Governmental or Regulatory Authority required under applicable law in relation to its acting as Operator, the conduct of the Business and operations and the ownership of the participating interest in the PSC Licence.

(ff)

Save as Disclosed, (i) there is no ongoing disagreement in writing between any Group Company and any Governmental or Regulatory Authority in relation to cost recovery in respect of a material amount, (ii) so far as the Seller is aware, no Governmental or Regulatory Authority has indicated in writing that any material sums incurred in relation to operations under the PSC Licence are not capable of being cost recovered; and (iii) no written request for an official audit, review or investigation in relation to cost recovery has been received by any Group Company from any Governmental or Regulatory Authority.

(gg)

None of the Seller, any member of the Retained Group nor any of their respective Representatives acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement and other Transaction Documents is or will be at the Completion Date: (i) in violation of any Sanctions Laws and Regulations; (ii) a Designated Person or otherwise the target of Sanctions; (iii) involved in any transactions directly or indirectly, relating to or with entities located in countries subject to U.S. economic sanctions; or (iv) engaged in dealings in or with any property or interest in property blocked pursuant to any Sanctions Laws and Regulations.

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(hh)	Other than those agreements contained in the Data Room Documents, there is no outstanding amount over the amount of USD$25,000 which is due and payable under any material agreement to which any Group Company is a party.

(ii)	Other than as Disclosed, there is no material agreement to which any Group Company is a party, including any area of mutual interest agreement, joint bidding agreement, guarantee, indemnity, credit support or suretyship.

(jj)	The Subsidiary complies and has at all times in the ten years prior to the date of this Agreement complied in all material respects with Environmental Law;

(kk)	So far as the Seller is aware, the Subsidiary has not received in the ten years prior to the date of this Agreement a written complaint or a notice alleging a material breach of, or a material liability under, Environmental Law.

(ll)	So far as the Seller is aware, the Subsidiary has obtained and complies, and at all times in the ten years prior to the date of this Agreement has obtained and complied, in all material respects with each material Environmental permit required to carry on the Business and its operations under the PSC Licence.

(oo)	Save as Disclosed, there are no material disputes with (or claims by) any unions, works councils, staff associations or other employee representative bodies in relation to the employees of the Group Companies so far as the Seller is aware.

(pp)	So far as the Seller is aware, the Group Companies have funded all reserves required by local labour laws in respect of end of service severance payments, retirement funds and other benefit plans and programs.

(qq)

For all periods commencing on or after the Economic Date, each Group Company has complied, in all jurisdictions, in all material respects with all statutory provisions, rules, regulations, orders and directions required of it under any Tax Statute or otherwise required by law, and all Tax Records submitted after the Economic Date which relate to periods commencing on or after the Economic Date remain at the date of this Agreement complete, correct and accurate in all material respects.

(rr)	Each Group Company has complied in all material respects with all statutory provisions, rules, regulations, orders and directions required of it in relation to records, invoices and other information required to be kept in relation to Tax.

(ss)

For all periods commencing on or after the Economic Date, each Group Company has duly and timely paid all Tax (including where required by way of deduction or withholding and including any requirement to account for such deducted or withheld Tax) for which it is liable and no Group Company is liable, nor has for all periods commencing on or after the Economic Date been liable, to pay any interest, fine or other penalty in connection with Tax.

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(i)	no Group Company has been involved in any transaction outside the Ordinary Course of Business which has given or may give rise to a liability to Tax on any Group Company (or would have given or might give rise to such a Tax liability but for the availability of any Tax relief);

(ii)	no accounting period of any Group Company has ended; and

(iii)	there has been no change to the approach taken by any Group Company to matters relating to Tax as compared to any positions taken in any Tax Returns which have been filed prior to the Economic Date save as required by the Settlement Agreement.

(uu)

For all periods commencing on or after the Economic Date, no Group Company has been or is involved in any material dispute with any Tax Authority, and no Group Company is the subject of any enquiry with any Tax Authority concerning any matter other than routine enquiries of a minor nature and the Seller is not aware of any circumstances which would or would be liable to give rise to such a dispute or enquiry.

(vv)	The Company is incorporated, and has its registered office, in the Cayman Islands. No Tax Authority in any jurisdiction considers the Company is resident for Tax purposes in or has a permanent establishment in its jurisdiction. The Company is tax- exempted in the Cayman Islands.

(ww)	The Subsidiary is incorporated, and has its registered office, in the Cayman Islands. No Tax Authority in any jurisdiction (other than the Republic of Equatorial Guinea) considers that the Subsidiary is resident for Tax purposes in or has a permanent establishment in its jurisdiction. The Subsidiary is tax-exempted in the Cayman Islands.

(xx)

Since the Economic Date, all transactions entered into by each Group Company have been entered into on an arm's length basis and the consideration (if any) which has been charged, received or paid by the relevant Group Company on all transactions entered into by it since the Economic Date has been equal to the consideration which would have been expected to be charged, received or paid between independent persons dealings at arm's length.

(yy)	No Group Company is or has been party to any scheme, arrangement, transaction or series of transactions the main purpose, or one of the main purposes of which, was the avoidance of Tax which was either entered into after the Economic Date or otherwise has effect for any period after the Economic Date.

(zz)	No Group Company is bound by or party to any Tax sharing or Tax allocation agreement.

(aaa)

So far as the Seller is aware, no transaction, act, omission or event has occurred in consequence of which any Group Company is or may be held liable for any Tax (including under an indemnity) which Tax is primarily or directly chargeable against or attributable to any person other than any of the Group Companies, whether such liability arises as a result of the operation of law or any agreement entered into by any of the Group Companies.

10.3	Each Purchaser acknowledges and confirms, that:

(a)	it does not rely on and has not been induced to enter into this Agreement on the basis

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(i)	the amount, quality or deliverability of hydrocarbons attributable to any asset of any Group Company;

(ii)	any geological, geophysical, engineering, economic or other interpretations, forecasts or evaluations;

(iii)	any forecast of expenditures, budgets or financial projections (including any projections as to the future profitability or future value of any Group Company);

(iv)	any geological formation, drilling prospect or hydrocarbon reserves;

(v)	the repair, condition, working order, fitness for purpose or future performance or capability of any property, plant or equipment forming part of or relating to the assets of any Group Company; and

(vi)	the future performance of any Group Company (including revenues and costs);

(b)	none of the Seller, any Group Company, any member of the Retained Group nor any of their Representatives have given any such warranties, representations, covenants, undertakings, indemnities or other statements;

(c)	it has carried out such investigations, made such enquiries and taken such advice as is necessary to evaluate the merits and risks of acquiring the Group Companies and to protect its interests in connection with such acquisition; and

(d)	it has had adequate access to information regarding the Business, the Seller, the Retained Group and any Group Companies and it has performed Due Diligence to its full satisfaction and in a manner and to a degree customary with respect to the type and size of transaction contemplated by this Agreement.

10.4	Nothing in Clause 10.3 shall limit the Warranties given by the Seller or the standard of Disclosure required to limit the Seller's liability in respect thereof under Schedule 3 (Seller’s Limitations on Liability).

10.5	Each of the Warranties (subject to Clause 11 (Seller’s limitations on liability) and Schedule 3 (Seller’s Limitations on Liability) below) shall be construed as a separate and independent warranty and shall not be limited or restricted by reference to or inference from the terms of any of the other Warranties.

10.6	Each Purchaser agrees and undertakes that (in the absence of fraud or Wilful Misconduct) it has no rights against and shall not make any claim against any Representative of any member of the Retained Group or any Group Company on whom it may have relied before agreeing to any term of any of the Transaction Documents.

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11.	Seller’s limitations on liability

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12.	Purchasers' warranties and undertakings

12.1	Each Purchaser warrants to the Seller on the Execution Date and on the Completion Date (in respect of itself only) that:

(a)	it has the requisite power and authority, and has received all necessary approvals, to enter into and perform its obligations under this Agreement and the other Transaction Documents to which it is party;

(b)

its obligations under this Agreement and the other Transaction Documents will when delivered constitute binding obligations of it in accordance with their respective terms except as enforceability may be limited by bankruptcy, insolvency, reorganisation, moratorium or other laws affecting creditors' rights generally and general principles of equity (whether considered in a proceeding at law or in equity);

(c)

the execution and delivery of, and the performance by it of its obligations under, this Agreement and the other Transaction Documents will not: (i) result in a material breach of any provision of the constitutional documents of it; (ii) result in a material breach of, or constitute a default under, any instrument to which it is a party or by which it is bound; (iii) so far as it is aware, result in a material breach of any order, judgment or decree of any court or governmental agency to which it is a party or by which it is bound; or (iv) require the consent of its shareholders;

(d)	it is not nor will it be required to give any notice to or make any filing with or obtain any permit, consent, waiver or other authorisation from any Governmental or Regulatory Authority in connection with the execution, delivery and performance of the Transaction Documents;

(e)

no order has been made, petition presented or resolution passed for the winding up of it. No administrator nor any receiver or manager has been appointed by any person in respect of it or all or any of its assets and, so far as it is aware, no steps have been taken to initiate any such appointment and no voluntary arrangement has been proposed. It has not become subject to any analogous proceedings, appointments or arrangements under the laws of any applicable jurisdiction;

(f)	all information, including, without limitation, any financial information, supplied by any member of its Group or any of their respective Representatives in connection with the transactions contemplated in the Transaction Documents was when given and remains true and accurate in all respects and not misleading;

(g)	it has and will have at Completion immediately available on an unconditional basis (subject only to Completion) the cash resources required to meet in full its obligations under the Transaction Documents;

(h)

none of it, any member of its Group nor any of their respective Representatives acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement and other Transaction Documents is or will be at the Completion Date: (i) in violation of any Sanctions Laws and Regulations; (ii) a Designated Person or otherwise the target of Sanctions; (iii) involved in any transactions directly or indirectly, relating to or with entities located in countries subject to U.S. economic sanctions; or (iv) engaged in dealings in or with any property or interest in property blocked pursuant to any Sanctions Laws and Regulations; and

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(i)

none of the it, any member of the its Group, nor any of their respective Representatives acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement and other Transaction Documents: (i) will permit the Company to engage in any transactions with or relating to countries or persons subject to Sanctions; and (ii) none of the proceeds used in connection with the acquisition of the shares in the Company will be derived from or in any way related directly or indirectly to business with countries or persons subject to Sanctions.

12.2	Kosmos warrants to the Seller and Trident on the Execution Date and on the Completion Date that it is a company duly incorporated and organised and validly existing under the laws of the Cayman Islands.

12.3	Trident warrants to the Seller and Kosmos on the Execution Date and on the Completion Date that it is a company duly incorporated and organised and validly existing under the laws of the Cayman Islands.

12.4	Each Purchaser shall at its own cost procure that no later than six (6) months following Completion:

(a)	no member of its Group shall use "Hess" or any other mark, logo, name, symbol or design which, in the opinion of the Seller, is capable of being confused with Hess; and

(b)	all references to any member of the Retained Group wherever and however any such reference is made by its Group in connection with the Business are removed,

12.5

If Completion does not take place, each Purchaser undertakes to the Seller that it shall forthwith hand over, or procure the handing over of, all books, records, documents and papers of or relating to the Retained Group which shall have been made available to it and all copies or other records derived from such materials and that it shall remove any information derived from such materials or otherwise concerning the subject matter of this Agreement from any computer, word processor or other device containing information.

13.	Environmental indemnity

13.1	Subject to Completion occurring, and other than as set out in Clause 13.2, the Purchasers agree that no member of the Retained Group shall have any liability to any member of the Trident Group, any member of the Kosmos Group, or to any Group Company in respect of any Environmental Liabilities of whatsoever nature and howsoever arising whether before, on or after the Economic Date.

13.2	Subject to Completion occurring, the Seller hereby indemnifies each Purchaser against any and all Losses suffered or incurred by it and in respect of any Claims arising out of, relating to or attributable to any breach of any of the Environmental Warranties.

14.	Termination

14.1	This Agreement shall terminate and, subject to Clause 14.3, each Party’s rights and obligations shall cease to have force and effect from such termination if at any time prior to Completion a Purchaser gives written notice of termination to the Seller following:

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(a)	a breach by the Seller of any of the Title Warranties, in which case this Agreement shall terminate with immediate effect on the date set out in the notice;

(b)

the occurrence and continuance of a MAC Event, in which case this Agreement shall terminate with effect from the earlier of (i) the Business Day following the day on which the Condition has been satisfied or waived in accordance with this Agreement, unless the Purchasers notify the Seller that the MAC Event has been cured to their reasonable satisfaction or no longer exists; and (ii) the Long Stop Date; provided that if the MAC

14.2	Save for the Parties’ express right to terminate in this Clause 14 and Clauses 3.6 (Condition), 8.3(c) (Completion) and 16(f) (Mutual Warranties) , the Parties shall not be entitled to rescind or terminate this Agreement, whether before or after Completion. Nothing in this Clause 14 shall operate to limit or exclude any liability for fraud.

14.3	If this Agreement is terminated by a Party in accordance with:

(a)	Clause 3.6 (Condition);

(b)	Clause 8.3(c) (Completion);

(c)	Clause 14.1 (Termination); or

(d)	Clause 16(f) (Mutual Warranties),

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15.	Non-solicitation of employees

16.	Mutual warranties

(a)

Each Party warrants that, since January 1, 2012, and except as otherwise Disclosed, it, its Affiliates, its Associated Persons, its directors, officers, employees, agents, or consultants, or any other person acting for, or on behalf of the Party or its Affiliates, and except as set forth in subsection (a)(iii) below in connection with this Agreement and the Agreement’s subject matter (and in the case of the Seller, in connection with the PSC Licence, the Seller’s and Seller Guarantor’s activities in Equatorial Guinea including Block G, and the activities of any Group Company), directly or indirectly:

(i)	have not violated or committed any act that would constitute a violation of, or an offence under, any Anti-Bribery Laws or Sanctions Laws and Regulations, irrespective of whether the Anti-Bribery Laws or Sanctions Laws and Regulations apply;

(ii)	have not paid, offered, promised, or authorised the payment, directly or indirectly, of any monies or anything of value to any person for the purpose of improperly influencing any act or decision by that person, or by a Government Official, to obtain, retain, or direct business or to secure an improper advantage;

(iii)

have not, to the knowledge of the Party, been the subject of any actual, pending or threatened, legal, administrative, arbitral or other proceeding, claim, suit, inquiry, or action against, or government investigation in connection with any Anti-Bribery Laws or Sanctions Laws and Regulations in or concerning any jurisdiction, whether or not relating to operations or activities in Equatorial Guinea, nor, so far as the Party is aware, are there any circumstances likely to give rise to any such investigation, inquiry or proceeding in or concerning activities or operations in Equatorial Guinea; or

(iv)	have no injunction, order, judgment, ruling, or decree against them by or before any government in connection with any Anti-Bribery Laws or Sanctions Laws or Regulations.

(b)

In connection with the Agreement, each Party warrants and undertakes that it, its Affiliates, its directors, officers, employees, agents or consultants, and any other person acting for, or on behalf of, such Party, directly or indirectly shall not violate any Anti-Bribery Law or Sanctions Law or Regulation, or engage any act, practice, or conduct that would constitute a violation of, or an offence under, the Anti-Bribery Laws or Sanctions Laws and Regulations, as if those laws applied to it.

(c)

Each Party shall defend, indemnify and hold the other Party and its Affiliates harmless from and against any and all claims and Losses (including all Losses, suffered or incurred in investigating, settling or disputing any such action (actual or potential) and/or the reasonable costs of obtaining advice as to any such action (actual or potential)) which the other Party or its Affiliates may suffer or incur or which may be brought against it in any jurisdiction arising, directly or indirectly, out of, in respect of, or in connection with any breach of the warranties and undertakings under this Clause 16.

(d)	Notwithstanding anything in this Agreement to the contrary, no provision shall be interpreted or applied so as to require any Party to do, or refrain from doing, anything which would constitute a violation of any law or regulation applicable to such Party.

(e)

For the term of this Agreement and for a period of five (5) years thereafter, each Party shall reasonably cooperate in good faith with any reasonable request of any other Party to be entitled to review relevant documentation, and further each Party agrees to encourage its representatives, management and/or staff to engage in interviews at the request of any other Party, in order to verify compliance with the terms of this Clause

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(f)	Notwithstanding anything in this Agreement to the contrary, each Party shall have the right to suspend or terminate this Agreement and any payments hereunder if the other Party has failed to materially comply with any of the terms of Clause 16(a) and Clause 16(b).

17.	Withholding

17.1	Any payments made or due from a Party (the "Payer") under this Agreement shall be effected by the Payer without any deduction or withholding of any Tax unless required by law. In the event that the Payer is obliged to deduct or withhold any such Tax under applicable law when effecting any such payment, the Payer shall:

(a)	make the deduction or withholding and account to the relevant Tax Authority for the amount deducted or withheld within the time allowed and in the minimum amount required by law and promptly provide the Party receiving the relevant payment (the "Payee") with evidence reasonably satisfactory to the Payee that it has done so; and

(b)	(other than where the relevant payment is, or is in respect, of the Consideration) increase the amount payable to the Payee to the extent necessary to ensure that after making the required deduction or withholding the Payee receives the payment in the amount it would have received had the Payer had no obligation to make the required deduction or withholding.

17.2	The Payer covenants to pay to the Payee on demand an amount equal to any Losses incurred or suffered by the Payee as a result of any failure by the Payer to comply with its obligations under Clause 17.1(a).

18.	Access

18.1

The Purchasers shall make available to the Seller copies of any Books and Records of the Group Companies (or, if practicable, the relevant parts of those Books and Records) which are reasonably required by the Seller for the purpose of dealing with its Tax or accounting affairs and/or in preparation of the Final Statement of Accounts in accordance with Clause 6.1 (Statements of accounts) and, accordingly, the Purchasers shall, upon being given reasonable notice by the Seller and subject to the Seller giving such undertaking as to confidentiality as the Purchasers shall reasonably require, procure that such Books and Records are made available to the Seller and its Representatives for inspection (during Working Hours) and copying (at the Seller’s expense) for and only to the extent necessary for such purpose and for a period of five (5) years from Completion.

18.2

The Seller shall make available to the Purchasers copies of any Books and Records of members of the Retained Group (or, if practicable, the relevant parts of those Books and Records) which are reasonably required by the Purchasers for the purpose of dealing with its Tax or accounting affairs and, accordingly, the Seller shall, upon being given reasonable notice by the Purchasers and subject to the Purchasers giving such undertaking as to confidentiality as the Seller shall reasonably require, procure that such Books and Records are made available to the Purchasers and their Representatives for inspection (during Working Hours) and copying (at the Purchasers' expense) for and only to the extent necessary for such purpose and for a period of five (5) years from Completion.

18.3	In the event that any proceeding, enquiry or investigation of any judicial or Governmental or Regulatory Authority is pending at the time of expiry of the period of five (5) years from Completion, or if at such time the Seller or the Purchasers (as applicable) is in the process of

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19.	Effect of completion

20.	Assurance

20.1	Each Purchaser, for itself and its successors and assigns, covenants that, at any time and from time to time on or after Completion, it and they will execute and deliver all such instruments of assumption and acknowledgements or take such other action as the Seller may reasonably request in order to give full effect to this Agreement and the Transaction Documents.

20.2	The Seller, for itself and its successors and assigns, covenants that, at any time and from time to time on or after Completion, it and they will execute and deliver all such instruments of assumption and acknowledgements or take such other action as the Purchasers may reasonably request in order to give full effect to this Agreement and the Transaction Documents.

21.	Insurance

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22.	Assignment

22.1	Subject to Clause 22.2, a Purchaser may not assign, transfer, charge, declare a trust of or otherwise dispose of all or any part of its rights and benefits under this Agreement or any other Transaction Documents (including any cause of action arising in connection with any of them) or of any right or interest in any of them without the prior written consent of the Seller and the other Purchaser.

22.2	A Purchaser may assign all or any of its rights under any Transaction Document by way of security or charge (or both of the foregoing) for the benefit of:

(a)	any bank(s), and/or financial institution(s), and/or holder(s) of debt securities or any other person lending money or making other banking or credit facilities available to such Purchaser and/or its Affiliates (including in connection with any refinancing or replacement of such facilities) in connection with the transaction contemplated by this Agreement; and/or

(b)	any person from time to time appointed by any bank(s), and/or financial institution(s), and/or holder(s) of debt securities or any other person referred to in Clause 22.2(a) to act on its/their behalf as facility or security agent, security trustee, arranger of finance, receiver or person fulfilling a similar or related role in connection with the transaction contemplated by this Agreement,

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23.	Entire agreement

23.1	This Agreement, together with the Transaction Documents and any other documents referred to in this Agreement or any Transaction Document, constitutes the whole agreement between the Parties and supersedes any previous arrangements or agreements between them relating to the sale and purchase of the Shares.

23.2	A Party’s only right or remedy in respect of any provision of this Agreement or any other Transaction Document shall be for breach of this Agreement or that Transaction Document.

23.3	Save in relation to breach of this Agreement or any other Transaction Document, no Party nor any of its Related Persons shall have any right or remedy, or make any claim, against another Party nor any of its Related Persons in connection with the sale and purchase of the Shares.

23.4

In this Clause 23, “Related Persons” means, in relation to a Party, members of the Retained Group (in respect of the Seller), the Kosmos Group (in respect of Kosmos) or the Trident Group (in respect of Trident) (as applicable) and the Representatives of that Party and of members of the Retained Group (in respect of the Seller), the Kosmos Group (in respect of Kosmos) or the Trident Group (in respect of Trident) (as applicable).

23.5	Nothing in this Clause 23 shall operate to limit or exclude any liability for fraud.

24.	Notices

24.1

Any notice or other communication to be given under or in connection with this Agreement shall be in the English language in writing and signed by or on behalf of the Party giving it. A notice may be delivered personally or sent by fax, pre-paid recorded delivery or international courier to the address or fax number provided in Clause 24.3, and marked for the attention of the person specified in that Clause.

24.2	A notice shall be deemed to have been received:

(a)	at the time of delivery if delivered personally;

(b)	at the time of transmission if sent by fax;

(c)	two (2) Business Days after the time and date of posting if sent by pre-paid recorded delivery; or

(d)	three (3) Business Days after the time and date of posting if sent by international courier,

24.3	Notices under this Agreement shall be sent to a Party at its address or number and for the attention of the individual set out below:

Address:	care of Hess Corporation, 1501 McKinney, Houston, Texas 77010, USA

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with a copy to:	care of Hess Corporation, 1185 Avenue of the Americas, New York, NY 10036, USA

Address:	1185 Avenue of the Americas, New York, New York 10036, USA

Address:	8176 Park Lane, Suite 500 Dallas, Texas 75231 U.S.A.

Address:	c/o Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands

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Address:	c/o Kosmos Energy LLC 8176 Park Lane, Suite 500 Dallas, Texas 75231 U.S.A.

24.4	A Party shall notify the other Parties of any change to its details in Clause 24.3 in accordance with the provisions of this Clause 24, provided that such notification shall only be effective on the later of the date specified in the notification and five (5) Business Days after deemed receipt.

25.	Announcements

26.	Guarantees

26.1

In consideration of the Seller entering into this Agreement, the Kosmos Guarantor irrevocably and unconditionally guarantees to the Seller punctual performance by Kosmos of its obligations to pay all monies owed by Kosmos to the Seller in connection with the purchase of the Shares on the terms and subject to the conditions of this Agreement (the “Guaranteed Obligations”), and undertakes to the Seller that whenever Kosmos does not fulfil a Guaranteed Obligation, the Kosmos Guarantor shall immediately on demand pay that amount as if it was the principal obligor so that the same benefits are conferred on the Seller as it would have received if such obligation had been performed and satisfied by Kosmos (the “Kosmos Guarantee”).

26.2

The Kosmos Guarantor, as principal obligor and as a separate and independent obligation and liability from its obligations and liabilities under the Kosmos Guarantee, undertakes to indemnify and hold the Seller harmless from and against any Loss suffered or incurred by it arising directly or indirectly out of, as a result of or in connection with the non-performance by Kosmos of any of the Guaranteed Obligations.

26.3	The Kosmos Guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by Kosmos under the Guaranteed Obligations, regardless of any intermediate payment or discharge in whole or in part.

26.4	In consideration of each of the Purchasers entering into this Agreement, the Seller Guarantor irrevocably and unconditionally guarantees to each of the Purchasers punctual performance by the Seller of all of the Seller’s obligations under this Agreement and undertakes to each Purchaser that:

(a)	whenever the Seller does not pay any amount when due under or in connection with this Agreement and any other Transaction Document, the Seller Guarantor shall immediately on demand pay that amount to the Purchasers as if it was the principal obligor; and

(b)	whenever the Seller fails to perform any other obligations under this Agreement or any other Transaction Document, the Seller Guarantor shall immediately on demand perform (or procure performance of) and satisfy (or procure the satisfaction of) that obligation,

26.5

The Seller Guarantor, as principal obligor and as a separate and independent obligation and liability from its obligations and liabilities in Clause 26.4, undertakes to indemnify and hold each Purchaser harmless from and against any Loss suffered or incurred by it arising directly or indirectly out of, as a result of or in connection with the non-performance by the Seller of any of its obligations in accordance with the Seller Guarantee.

26.6	The Seller Guarantee is a continuing guarantee and will extend to any sums payable by the Seller to the Purchasers under this Agreement, regardless of any intermediate payment or discharge in whole or in part.

26.7	The obligations of the Kosmos Guarantor and/or the Seller Guarantor, as the case may be, will not be affected by any act, omission, matter or thing which, but for this Clause 26.7 would reduce, release or prejudice any of its obligations under this Agreement or any other Transaction Document including:

(a)	any time, waiver or consent granted to the Purchasers, Seller (as the case may be) or any other person;

(b)	the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against any guaranteed Party under this Agreement or any other Transaction Document;

(c)	the insolvency (or similar proceedings) of the Seller or Kosmos (as applicable), any incapacity or lack of power, authority or legal personality of the Seller or Kosmos (as applicable) or change in control, ownership or status of the Seller or Kosmos (as applicable);

(d)	any amendment to this Agreement or any other Transaction Document;

(e)	any illegality, invalidity or unenforceability of any obligation of any person under this Agreement or any other Transaction Document; or

(f)	any other act, event or omission which might operate to discharge, impair or otherwise affect any of the obligations of the Kosmos Guarantor or Seller Guarantor

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26.8	The Kosmos Guarantor waives any right which it may have to first require the Seller to proceed against Kosmos before claiming from the Kosmos Guarantor. The Seller Guarantor also waives any right which it may have to first require the Purchasers to proceed against the Seller before claiming from the Seller Guarantor, in each case under this Clause 26.

26.9	Until all amounts which may be or become payable:

(a)	by Kosmos to the Seller under the Guaranteed Obligations have been irrevocably paid in full:

(i)	the Kosmos Guarantor will not make demand for the payment of any sum from Kosmos connected with or in relation to the sum demanded by the Seller or claim any set-off or counterclaim against Kosmos;

(ii)	if Kosmos is insolvent or in liquidation, the Kosmos Guarantor will not prove in any such insolvency or liquidation in competition with the Seller;

(iii)	the Seller shall not be obliged to apply any sums held or received by it from the Kosmos Guarantor towards payment of Kosmos’s obligations; and

(iv)	the Kosmos Guarantor will not exercise any rights which it may have to be indemnified by the Seller or otherwise claim from the Seller any sums which may be owing to it from the Seller.

(b)	by the Seller to the Purchasers under or in connection with this Agreement and any other Transaction Document have been irrevocably paid in full:

(i)	the Seller Guarantor will not make demand for the payment of any sum from the Seller connected with or in relation to the sum demanded by the Purchasers or claim any set-off or counterclaim against the Seller;

(ii)	if the Seller is insolvent or in liquidation, the Seller Guarantor will not prove in any such insolvency or liquidation in competition with the Purchasers;

(iii)	the Purchasers shall not be obliged to apply any sums held or received by them from the Seller Guarantor towards payment of the Seller’s obligations; and

(iv)	the Seller Guarantor will not exercise any rights which they may have to be indemnified by the Purchasers or otherwise claim from the Purchaser any sums which may be owing to it from either Purchaser.

26.10	The Kosmos Guarantor undertakes to hold any security taken from Kosmos in connection with the Kosmos Guarantee and any monies or rights received by the Kosmos Guarantor from Kosmos as trustee on trust for the Seller pending discharge in full of all of the Kosmos Guarantor’s obligations under the Kosmos Guarantee.

26.11	The Seller Guarantor undertakes to hold any security taken from the Seller in connection with the Seller Guarantee and any monies or rights received by the Seller Guarantor from the Seller as trustee on trust for the Purchasers pending discharge in full of all of the Seller Guarantor’s obligations under the Seller Guarantee.

26.12	The Seller Guarantor agrees that:

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(a)

if any payment received by the Purchasers from the Seller in relation to its obligations under this Agreement is avoided or set aside on the subsequent insolvency or liquidation of the Seller any amount received by the Purchasers and subsequently repaid, shall not discharge or diminish the liability of the Seller Guarantor under this Clause 26, and this Clause 26 shall apply as if such payment had at all times remained owing by the Seller; and

(b)	after a demand has been made by the Purchasers under this Clause 26 and until the amount demanded has been paid in full, the Purchasers may take such action as it thinks fit against the Seller to recover all sums due and payable to it under this Agreement, without affecting the obligations of the Seller Guarantor under this Clause 26.

26.13	The Kosmos Guarantor agrees that:

(a)

if any payment received by the Seller from Kosmos in relation to its obligations under this Agreement is avoided or set aside on the subsequent insolvency or liquidation of Kosmos any amount received by the Seller and subsequently repaid, shall not discharge or diminish the liability of the Kosmos Guarantor under this Clause 26, and this Clause 26 shall apply as if such payment had at all times remained owing by Kosmos; and

(b)	after a demand has been made by the Seller under this Clause 26 and until the amount demanded has been paid in full, the Seller may take such action as it thinks fit against Kosmos to recover all sums due and payable to it under this Agreement, without affecting the obligations of the Kosmos Guarantor under this Clause 26.

26.14	The Kosmos Guarantor warrants to the Seller as of the Execution Date and as of the Completion Date in the terms of Clause 10.2(a) to 10.2(d) (inclusive) (with all references to “the Seller” and/or the “Group Companies” deemed to be references to the “Kosmos Guarantor”).

26.15	The Seller Guarantor warrants to the Purchasers as of the Execution Date and as of the Completion Date in the terms of Clause 10.2(a) to 10.2(d) (inclusive) (with all references to “the Seller” and/or the “Group Companies” deemed to be references to the “Seller Guarantor”).

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27.	Confidentiality

27.1

Save as expressly provided in Clause 27.3, the Seller shall and shall procure that each member of the Retained Group shall treat as confidential the provisions of the Transaction Documents, all information they possess relating to each Group Company and all information they have received or obtained relating to the Purchasers' Group as a result of negotiating or entering into the Transaction Documents.

27.2	Save as expressly provided in Clause 27.3, each Purchaser shall, and shall procure that each member of its Group shall, treat as confidential the provisions of the Transaction Documents and all information it has received or obtained about the Retained Group as a result of negotiating or entering into the Transaction Documents.

27.3	A Party may disclose, or permit the disclosure of, information which would otherwise be confidential if and to the extent that it:

(a)	is disclosed to Representatives of that Party or its Affiliates, if this is reasonably required in connection with this Agreement (and provided that such persons are required to treat that information as confidential);

(b)	is required to do so by law or any securities exchange, or by compulsory process issued by any Governmental or Regulatory Authority or Taxation Authority;

(c)	was already in the lawful possession of that Party or its Representatives without any obligation of confidentiality (as evidenced by written records);

(d)	comes into the public domain other than as a result of a breach by a Party of this Clause 27;

(e)	lawfully comes into the possession of that Party, its Affiliates or their Representatives from a third party that expressly represents that it has the right to disseminate such information at the time it is acquired by such Party; or

(f)	receives prior written consent to the disclosure from the other Party,

27.4	The confidentiality restrictions in Clauses 27.1 to 27.3 shall continue to apply after the termination of this Agreement without limit in time.

27.5

The Parties acknowledge and agree that, to the extent applicable, the Purchasers shall also be bound by the provisions of the Confidentiality Agreement in respect of any “Confidential Information” (as that term is used and defined in the Confidentiality Agreement) that relates to any member of the Retained Group (other than the Seller), which shall remain in force and full effect in accordance with its terms. If there is any inconsistency between this Agreement and the Confidentiality Agreement, this Agreement shall prevail.

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28.	Costs and expenses

28.1

Each Party shall pay its own costs and expenses in relation to the negotiations leading up to the sale and purchase of the Shares and the preparation, execution and carrying into effect of this Agreement and the other Transaction Documents. Each Party shall bear and pay the costs and expenses of any advisers, consultants, investment bankers or other parties hired by it in connection with the transaction contemplated in this Agreement and the other Transaction Documents.

28.2

Each Purchaser shall bear fifty percent (50%) of all stamp duty, stamp duty reserve Tax or other documentary or transaction duties imposed by any Tax Authority of the Cayman Islands, arising as a result or in consequence of this Agreement (or any other Transaction Document) or of its implementation (including, but not limited to, any Registrar’s fees related to the transfer of Shares envisaged in this Agreement).

29.	Counterparts

30.	Severance and validity

31.	Variations

32.	Remedies and waivers

32.1	No waiver of any right under this Agreement or any other Transaction Document shall be effective unless in writing. Unless expressly stated otherwise a waiver shall be effective only in the circumstances for which it is given.

32.2	No delay or omission by any Party in exercising any right or remedy provided by law or under this Agreement, except in relation to any right or remedy contained in Clause 11 (Seller’s Limitations on Liability), shall constitute a waiver of such right or remedy.

32.3	The single or partial exercise of a right or remedy under this Agreement shall not preclude any other nor restrict any further exercise of any such right or remedy.

32.4	The rights and remedies provided in this Agreement are cumulative and do not exclude any rights or remedies provided by law except as otherwise expressly provided.

32.5	No Double Recovery

32.6	Exclusion of Limitations

32.7	Consequential Loss

(a)	indirect or consequential loss of profits;

(b)	loss of revenue, loss of goodwill, loss of opportunity, or loss of business, in each case that are indirect or consequential; or

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(c)	any other special, indirect or consequential loss.

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33.	Third party rights

33.1	Save as expressly provided in Clause 33.2, a person who is not a Party or its successor or permitted assignee shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of the terms of this Agreement.

33.2

Clauses 9 (Post-completion covenants), 10 (Seller’s warranties), 12 (Purchasers' warranties and undertakings), 13 (Environmental indemnity), 18.2 (Access), 20 (Assurance), 25 (Announcements) and 27 (Confidentiality) are intended to benefit members of the Retained Group and Clause 23 (Entire agreement) is intended to benefit a Party’s Related Persons, and each such Clause shall be enforceable by any of them under the Contracts (Rights of Third Parties) Act 1999, subject to the other terms and conditions of this Agreement.

33.3	The Parties may amend or vary this Agreement in accordance with its terms without the consent of any other person.

34.	Governing law and jurisdiction

34.1	This Agreement, including any non-contractual obligations arising out of or in connection with this Agreement and any and all other agreements and instruments executed and other documents delivered pursuant hereto, are governed by and shall be construed in accordance with English law.

34.2

The Parties agree that any claim, dispute or difference of whatever nature arising under, out of or in connection with this Agreement (including a claim, dispute or difference regarding its existence, termination or validity or any non-contractual obligations arising out of or in connection with this Agreement ) (a “Dispute”), shall be referred to and finally settled by arbitration in accordance with the London Court of International Arbitration (“LCIA”) Rules (the “Rules”) as in force at the date of this Agreement and as modified by this Clause, which Rules shall be deemed incorporated into this Clause. The number of arbitrators shall be three, one of whom shall be nominated by the claimant(s), one by the respondent(s) and the third of whom, who shall act as presiding arbitrator shall be nominated by the two party-nominated arbitrators, provided that if the third arbitrator has not been nominated within thirty days of the nomination of the second party-nominated arbitrator, such third arbitrator shall be appointed by the LCIA Court. The seat of arbitration shall be London, England and the language of arbitration shall be English. Sections 45 and 69 of the Arbitration Act 1996 shall not apply. The Emergency Arbitrator provisions in Article 9B of the Rules shall not apply. Notwithstanding any inconsistencies with the Rules, a Request for Arbitration must be served on all other Parties to the dispute in accordance with Clause 24 (Notices) of this Agreement.

34.3

In order to facilitate the comprehensive resolution of related disputes, all claims between any of the Parties that arise out of or in connection with this Agreement any other Transfer Document or other instrument executed pursuant to this Agreement, or any of the Assets Documents may be brought in a single arbitration. Upon the request of any Party to an arbitration commenced pursuant to Clause 34.2 (an “Arbitration”), the arbitral tribunal shall consolidate the Arbitration with any other arbitration proceeding relating to this Agreement, any other Transfer Document or other instrument executed pursuant to this Agreement, or to any of the Assets Documents, and in respect of which the arbitral tribunal was constituted after the constitution of the arbitral tribunal in the Arbitration, if either:

(a)	all parties concerned agree; or

(b)	the arbitral tribunal determines that (i) there are issues of fact or law common to the two proceedings so that a consolidated proceeding would be more efficient than

34.4

The Parties agree that before the constitution of the arbitral tribunal, any party to an Arbitration may effect joinder by serving notice on any party to this Agreement, the Transfer Documents or any instrument executed pursuant to this Agreement, or any one of the Assets Documents whom it seeks to join, provided that such notice is also sent to all other parties to the Arbitration and the LCIA Court within 30 days of service of the Request for Arbitration. The joined party will become a claimant or respondent party (as appropriate) in the Arbitration and participate in the arbitrator appointment process in Clause 34.2.

34.5	The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement.

34.6	The Parties irrevocably submit to the non-exclusive jurisdiction of the courts of England to support any arbitration pursuant to this Clause 34 including, if necessary, the grant of interlocutory relief.

35.	Agent for service of process

35.1

The Seller and Seller Guarantor irrevocably appoint Maclay Murray & Spens LLP, Trident irrevocably appoints Trident Energy Management Limited (a company incorporated in England and Wales, with company number 10280693 and having its registered office at Suite 1, 3rd Floor 11-12 St. James's Square, London, United Kingdom, SW1Y 4LB), and Kosmos and the Kosmos Guarantor irrevocably appoints Capita Asset Services of 4th Floor, 40 Dukes Place, London EC3A 7NH, United Kingdom, in each case as its agent for service of process in England.

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35.2

If any person appointed as agent for service of process ceases to act as such the relevant Party shall immediately appoint another person to accept service of process on its behalf in England and notify the other Parties of such appointment. If it fails to do so within ten (10) Business Days the other Parties shall be entitled by notice to the relevant Party to appoint a replacement agent for service of process.

36.	Purchaser Obligations are several

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Directors	:    Gregory P Hill, John P Rielly, John B Hess and Timothy B Goodell (4)

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Registered office address	: Sterling Trust (Cayman) Limited, Whitehall House, 238 North Church Street, PO Box 1043, George Town, Grand Cayman, KY1- 1102, Cayman Islands

Authorised share capital	: USD 5,000,000.00 divided into 500,000 ordinary shares with a nominal value of USD 10 each

Directors	: Gregory P Hill, John P Rielly, John B Hess and Timothy B Goodell (4)

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1.	execute and deliver to the Purchasers counterparts of the Transaction Documents to be executed by the Seller at Completion and procure the execution and delivery of those Transaction Documents (if any) to which a member of the Retained Group or a related person or the Company is a party; and

2.	deliver to the Purchasers:

2.1	a copy of the Initial Statement of Accounts;

2.2	a certified copy of each power of attorney under which any document to be delivered to the Purchasers has been executed (if any);

2.3

a copy of the minutes of the meeting of the board of directors (and, where required under applicable law or the relevant entity's constitutional documents, of the members) of the Seller, the Seller Guarantor, the Company and the Subsidiary (or its equivalent) duly authorising: (x) the execution of this Agreement and other Transaction Documents to which each is a party; and (y) the matters contemplated by this Agreement and the Transaction Document to which each is party (including, without limitation, (i) the transfer of fifty percent (50%) of the Shares from the Seller to Trident and fifty percent (50%) of the Shares from the Seller to Kosmos; (ii) the issue of a share certificate in the name of the Trident in respect of fifty percent (50%) of the Shares and a share certificate in the name of the Kosmos in respect of fifty percent (50%) of the Shares in each case relating to individually numbered shares; (iii) the changes in the Company's and the Subsidiary's directors (and for this purpose the Purchasers shall notify the Seller of the incoming directors no later than ten Business Days prior to Completion); and (iv) the change in the Company's and the Subsidiary's registered office);

2.4	letters of resignation signed by all the directors of the Company and of the Subsidiary, substantially in the form of Schedule 4 (Form of Resignation Letter) (the “Outgoing Directors and Officers”);

2.5

a certified copy (certified by the registered office service provider of the Company) of the register of directors and officers of the Company maintained by (or on behalf of) the Company as updated to record the registration therein, as at Completion, of (x) the resignation of the Outgoing Directors and Officers of the Company and (y) the appointment of each Director and each Officer to the Company nominated by the Purchasers;

2.6	a certified copy (certified by the registered office service provider of the Subsidiary) of the register of directors and officers of the Subsidiary maintained by (or on behalf of) the Subsidiary as updated to record the registration therein, as at Completion, of (x) the

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2.7	evidence that the registered office of the Company and the Subsidiary have been changed from their existing location to such registered office(s) (located in the Cayman Islands) as the Purchasers shall notify the Seller in writing no later than ten Business Days prior to Completion;

2.8	a certified copy (certified by the registered office service provider of the Company or the Subsidiary, as applicable) of the register of mortgages and charges of the Company and of the Subsidiary;

2.9	a copy of the share transfer instruments executed by the Seller for the purposes of transferring fifty percent (50%) of the Shares to Kosmos' share account and fifty percent (50%) of the Shares to Trident's share account;

2.10	each share certificate as previously issued in the name of the Seller in respect of the Shares, each such share certificate being duly cancelled;

2.11	a share certificate in the name of the Trident in respect of fifty percent (50%) of the Shares and a share certificate in the name of the Kosmos in respect of fifty percent (50%) of the Shares;

2.12	a certified copy (certified by the registered office service provider of the Company) of the register of members of the Company maintained by (or on behalf of) the Company as updated to record the registration therein, as at Completion, of the transfer of fifty percent (50%) of the Shares from the Seller to Trident and fifty percent (50%) of the Shares from the Seller to Kosmos;

2.13	a share certificate in the name of the Company in respect of one hundred percent of the Subsidiary Shares;

2.14	a certified copy (certified by the registered office service provider of the Subsidiary) of the register of members of the Subsidiary maintained by (or on behalf of) the Subsidiary recording the registration of the Company as the holder of one hundred per cent (100%) of the Subsidiary Shares; and

2.15	the assessment issued in respect of the Subsidiary in accordance with clause 3 of the Settlement Agreement.

1.	originals of the registers referred to in paragraphs 2.5, 2.6, 2.8, 2.12 and 2.14 above;

2.	the certificate of incorporation of the Company and of the Subsidiary;

3.	each certificate of incorporation on change of name of the Company and of the Subsidiary;

4.	the memorandum of association of the Company and of the Subsidiary;

5.	the articles of association of the Company and of the Subsidiary;

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6.	a certificate of good standing in respect of the Company and of the Subsidiary to be dated within twenty (20) days of Completion or such other date as is nominated by the Purchasers;

7.	the minutes of all meetings of, and all resolutions consented to by, the directors, members, committees of directors and committees of members of the Company and of the Subsidiary;

8.	the tax exemption certificate of the Company and of the Subsidiary; and

9.	all common seal(s) of the Company and of the Subsidiary.

1.	procure that fifty percent (50%) of the Initial Adjusted Consideration shall be transferred to the Seller’s Designated Account by wire transfer in immediately available cleared funds and shall deliver to the Seller SWIFT confirmations (in a form satisfactory to the Seller) that the payment of the above stated amount has been made pursuant to this Agreement;

2.	execute and deliver to the Seller or the Seller’s Lawyers the Transaction Documents to be signed by it or any relevant member of its Group or a Related Person;

3.	deliver to the Seller or the Seller’s Lawyers:

3.1	a copy of the minutes of the meeting of the board of directors of it and the Kosmos Guarantor (or the equivalent of the board of directors) and any other necessary corporate approvals authorising its execution of this Agreement and other Transaction Documents to which each is a party;

3.2	a certified copy of each power of attorney under which any document to be delivered to the Seller has been executed by it (if any); and

3.3	a copy of the share transfer instructions executed by it for the purpose of transferring fifty percent (50%) of the Shares to its share account.

1.	Purchasers' Knowledge (actual, constructive and imputed)

1.1	The Seller shall not be liable to a Purchaser in respect of a Claim (other than a Claim for breach of a Title Warranty) to the extent that the facts and circumstances giving rise to such Claim were:

(a)	Disclosed before the execution of this Agreement or, in respect of matters arising between execution of this Agreement and Completion, Disclosed before Completion; or

(b)	otherwise known at the date of this Agreement by it or any member of its Group.

1.2	If a Purchaser (or any member of its Group or any of their respective Representatives) becomes aware of a matter which might reasonably give rise to a Claim, the Seller shall not be liable to that Purchaser in respect of it unless written notice of all relevant facts is given by that Purchaser to the Seller as soon as practicable following their so becoming aware and in any event within

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2.	Limitations on Quantum

2.1	The liability of the Seller in respect of any Claim:

(a)	shall not arise unless and until the amount of such Claim exceeds five hundred thousand Dollars (USD 500,000) (in which case the liability of the Seller shall be for the full amount of the Claim);

(b)

shall not arise unless and until the amount of all Claims for which it would, in the absence of this provision, be liable exceeds fifteen million Dollars (USD 15,000,000) less an amount equal to the aggregate of any and all Losses suffered or incurred by the Company and/or the Subsidiary arising out of, relating to or attributable to the MMH Inspection and the Seadrill Claim up to an aggregate amount of two million, five hundred thousand Dollars (USD 2,500,000) (in which case the liability of the Seller shall be for the full amount of the Claim); and

(c)	shall not (when aggregated with the amount of all other Claims) exceed thirty-five per cent (35%) of the Initial Consideration, other than the liability of the Seller in respect of any Title Warranty which shall not exceed one hundred per cent (100%) of the Initial Consideration.

3.	Time Limits

3.1

The Seller shall not be liable in respect of any Claim (other than an Environmental Indemnity Claim or in respect of a Tax Warranty or an ABC Warranty) unless written notice containing full details of such Claim is given by or on behalf of a Purchaser to the Seller by no later than eighteen (18) months from the Completion Date provided that any such Claim shall (if not previously satisfied, settled or withdrawn) be deemed to have been withdrawn and the Seller shall have no liability for such Claim unless arbitration proceedings in respect of it have been properly issued and validly served within six (6) months of such written notice being given to the Seller.

3.2

The Seller shall not be liable in respect of any Environmental Indemnity Claim unless written notice containing full details of such Environmental Indemnity Claim is given by or on behalf of the Purchaser to the Seller by no later than three (3) years from the Completion Date provided that any such Claim shall (if not previously satisfied, settled or withdrawn) be deemed to have been withdrawn and the Seller shall have no liability for such Claim unless arbitration proceedings in respect of it have been properly commenced within six (6) months of such written notice being given to the Seller.

3.3

The Seller shall not be liable for a Claim in respect of any Tax Warranty or ABC Warranty unless written notice containing full details of such Claim is given by or on behalf of the Purchaser to the Seller by no later than five (5) years from the Completion Date provided that any such Claim shall (if not previously satisfied, settled or withdrawn) be deemed to have been withdrawn and the Seller shall have no liability for such Claim unless arbitration proceedings in respect of it have been properly commenced within six (6) months of such written notice being given to the Seller.

4.	Allowances, Provisions or Reserves

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5.	Contingent Liability

6.	Retrospective Legislation

7.	Voluntary Acts or Omissions

8.	Cease in Ownership

9.	Reliefs

10.	Duty to Mitigate

11.	Loss Otherwise Compensated

11.1	The Seller shall not be liable to a Purchaser for any Claim to the extent that:

(a)	the matter giving rise to such Claim has been (or is capable of being) made good or is (or is capable of being) otherwise compensated for without loss to that Purchaser; or

(b)	the Claim is recoverable under any insurance policy.

11.2	In assessing a Claim, corresponding savings by, or net benefits to, the Purchaser’s Group shall be taken into account (including the amount by which Taxation is actually saved as a result of the Loss which is the subject of the Claim).

12.	Recovery from Third Parties

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12.1	deduct the full amount from the Claim (if the entitlement of the Purchaser to recover arose before payment is made by the Seller under the Claim); or

12.2	repay to the Seller the lesser of such amount paid by the Seller to the Purchaser under the Claim or the full amount recovered by that Purchaser (if the entitlement to recover arose after payment had been made by the Seller under the Claim).

13.	Conduct of Claims

13.1	make no admission of liability or settle or compromise the Third Party Claim without the prior consent in writing of the Seller such consent not to be unreasonably withheld or delayed provided that it will take all reasonable action to mitigate any loss that may arise in respect of any resulting Claim;

13.2	for the duration of the Third Party Claim keep the Seller reasonably informed of all material developments in relation to the Third Party Claim within its knowledge (including reasonable access to premises and personnel and the right to examine and copy at the Seller’s costs and expense all relevant documents and records);

13.3

subject to the Purchaser being indemnified by the Seller against all reasonable costs which may be incurred by reason of such action, the Purchaser shall consult with and follow the instructions of the Seller in relation to all matters connected with the Third Party Claim and take all such action as the Seller may reasonably request in relation to the Third Party Claim, including commencing, conducting, defending, resisting, settling, compromising or appealing against any proceedings; and

13.4	subject to paragraph 13.5, permit the Seller at its own cost and expense to have sole conduct of the Third Party Claim and permit the Seller to take such action as it decides is necessary at any time and in its sole discretion to avoid, defend, dispute, mitigate, appeal, settle or compromise the Third Party Claim.

13.5

The Seller shall not be entitled to take sole conduct of a Third Party Claim in accordance with paragraph 13.4 to the extent such Third Party Claim has been brought against the Purchaser or Group Company by the EG Government or any Governmental or Regulatory Authority of the Republic of Equatorial Guinea, save that where such Third Party Claim has been brought by a Tax Authority or an Environmental authority the Seller and the Purchasers shall:

(a)	ensure that the other Parties are kept fully informed of the progress of any such Third Party Claim;

(b)	ensure that the other Parties receive copies of, or extracts from, all material written correspondence to or from any relevant Tax Authority or Environmental authority which has brought the relevant Third Party Claim; and

(c)	consult with each other (in good faith and from time to time) as to the appropriate steps to be taken in relation to the conduct of any such Third Party Claim including any decision

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14.	Purchaser's diligence

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1.

International Transfer of Data Agreement dated 26 December 2009 between Hess Denmark ApS, Shannon LNG Limited, Hess Norge A/S, Hess Services UK Limited, Hess Energy Trading Company (U.K.) Limited and Hess Energy Power & Gas Company (U.K.) and Hess (Rhourde El Rhoun) Limited, Hess Exploration Australia Pty Ltd, Hess (ACG) Limited, Hess Brasil Petroleo Ltda, Hess Egypt West Mediterranean Limited, Hess Equatorial Guinea, Inc., Hess (Indonesia- Pangkah) Limited, Hess 'Libya Exploration Limited, Hess Oil & Gas Sdn Bhd, ZAO Samara - Nafta, Hess Energy Trading Company Singapore PTE. LTD., Hess Oil St Lucia Limited, Fisher Hess St Lucia Limited, Hess (Thailand) Limited, Hess Corporation, Hess Energy Trading Company, LLC, Hovensa L.L.C and Hovic Marketing Corp. Limited, as amended.

2.

Master International Intercompany Staff Secondment Agreement dated 1 January 2010 between Hess Corporation, Hess Services UK Limited, Hess Norge A/S, Hess Denmark ApS, Hess Exploration Australia PTY Limited Hess (Indonesia- Semai V) Limited, Hess (Indonesia- South Sesulu) Limited, Hess (Malaysia- SB 302) Limited, Hess Oil Company of Thailand Ltd. Co., Hess Egypt West Mediterranean Limited (Cayman), Hess Equatorial Guinea Inc, Hess (GEA) Limited, Hess Libya (Waha) Limited, Hess Libya Exploration Libya, Hess (Indonesia-West Timor) Limited and Hess Oil Company of Thailand (JDA) Limited, amongst others, as amended.

3.	Marketing Services Agreement dated 15 December 2016 between Hess International Sales LLC and Hess Equatorial Guinea, Inc.

4.

Any payments properly due and payable by the Group Companies to either the Seller or any of its Affiliates (as applicable) in respect of general and administrative costs, actual time writing costs, and other costs, including in respect of any insurance costs, incurred by the Seller or any of its other Affiliates (as applicable) and made in the Ordinary Course of Business and in accordance with past practice.

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•	In accordance with the provisions of article 2 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, all Fields or natural accumulations of Hydrocarbons in the soil or the subsoil of the Republic of Côte d’Ivoire territory, its territorial waters, its exclusive economic zone and continental shelf, whether or not discovered, are and remain the exclusive property of the State;

•	The discovery and production of Hydrocarbons are important for the interests and economic development of the country and its inhabitants;

•	In accordance with the provisions of article 5 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, the State may authorise Ivoirian or foreign legal entities to engage in the exploration, production, transport, storage, transformation and sale of

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•	In accordance with the provisions of article 6 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, the State designated PETROCI to participate in the Petroleum Operations under this Agreement;

•	The Government hopes to develop and promote the Delimited Region, and the Contractor wishes to cooperate with the Government by helping it explore and develop the potential resources of the Delimited Region and thereby encourage the economic expansion of the country;

•	In accordance with Article 1 of Decree No. 2014-248 dated 8 May 2014 which delegated the powers to sign petroleum contracts, the Minister in charge of Petroleum, the Minister of Economy and Finance and the Minister in charge of the Budget have delegated powers to jointly sign the petroleum contracts on the Government’s behalf;

•	The Contractor states that it has the capital, technical capacity and organizational skills necessary to successfully perform the Petroleum Operations specified below in the Delimited Region;

•	The Council of Ministers, in its session held on 20 December 2017, granted its approval for the signing of this Agreement;

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•	a company or any other entity that controls or is controlled, directly or indirectly, by any entity comprising the Contractor;

•	or a company or any other entity that controls or is controlled, directly or indirectly, by a company or entity that itself directly or indirectly controls any entity comprising the Contractor.

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•	Acquisition, processing and interpretation of new 3D seismic covering a minimum of three thousand one hundred km² (3,100 km²).

•	Geological, geophysical (G&G) and engineering studies;

•	One (1) exploration well, firm.

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•	Geological, geophysical (G&G) and engineering studies;

•	One (1) exploration well, firm.

a)	Seven million Dollars (US $7,000,000) during the first exploration period defined in article 3.1;

b)	Eighteen million Dollars (US $ 18,000,000) during the second exploration period defined in article 3.2;

c)	Eighteen million Dollars (US $ 18,000,000) during the third exploration period defined in article 3.3.

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a)	Within no more than sixty (60) days after the Effective Date, the Contractor shall provide a bank guarantee in the amount of seven million Dollars (US$ 7,000,000) to guarantee performance of the minimum exploration work program for the first exploration period in accordance with article 4.2.

-	fifty percent (50%) of the original amount, i.e., three and a half million Dollars (US $3,500,000) following delivery by the Operator to the Government of a copy of the contract for seismic data acquisition;

-	twenty-five percent (25%) of the original amount, i.e. one million and seven hundred and fifty thousand Dollars (US $1,750,000) following the start of said acquisition work;

-	twenty-five percent (25%)of the original amount, i.e. one million and seven hundred and fifty thousand Dollars (US $1,750,000) following completion of said acquisition work and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the first exploration period.

b)

As of the start date of the second exploration period, the Contractor shall provide a bank guarantee for an amount of eighteen million Dollars (US $ 18,000,000) to guarantee performance of the minimum exploration work program indicated in article 4.3. The amount of the bank guarantee, adjusted to reflect the exploration wells drilled in advance during the previous exploration period and carried forward to the next exploration period in accordance with article 4.7, will be reduced by:

-	fifty percent (50%) of the original amount, i.e., nine million Dollars (US $9,000,000) following delivery by the Operator to the Government of a copy of the contract for drilling;

-	twenty-five percent (25%) of the original amount; i.e., four million and five hundred thousand Dollars (US $4,500,000) following the start of said drilling works;

-	twenty-five percent (25%)of the original amount; i.e. four million and five hundred thousand Dollars (US $4,500,000) following completion of the drilling works and after the Operator sends the Government all reports and documents

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c)

As of the start date of the third exploration period, the Contractor shall provide a bank guarantee for an amount of eighteen million Dollars (US$18,000,000) to guarantee performance of the minimum exploration work program indicated in article 4.4. The amount of the bank guarantee, adjusted to reflect the exploration wells drilled in advance during the previous exploration period and carried forward to the next exploration period in accordance with article 4.7, will be reduced by:

-	fifty percent (50%) of the original amount, i.e., nine million Dollars (US $9,000,000) following delivery by the Operator to the Government of a copy of the contract for drilling;

-	twenty-five percent (25%) of the original amount, i.e., four million and five hundred thousand Dollars (US $4,500,000) following the start of said drilling works;

-	twenty-five percent (25%) of the original amount, i.e. four million and five hundred thousand Dollars (US $4,500,000) following completion of the drilling works and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the third period and, approved by the Government in accordance with this Agreement.

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•	all necessary funds,

•	all required machinery, equipment and materials,

•	all technical support, including the necessary personnel, subject to the provisions of article 30.

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a)	ensure the protection of aquifers encountered during the course of its work;

b)	perform the tests necessary to determine the value of significant shows encountered during drilling and the commercial nature of discoveries of any Hydrocarbons;

c)	prevent losses and discarding of Hydrocarbons produced and losses and discarding of oil-based mud or any other product used in the Petroleum Operations according to Best Industry Practice in the international petroleum industry.

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a)	to manage and control, under its entire responsibility, the Petroleum Operations in the Delimited Region;

b)	to access any location within the interior of the Delimited Region in order to perform the Petroleum Operations;

c)

to perform all acts, facilities, work, and operations necessary to perform the Petroleum Operations both inside and outside of the Delimited Region. The Contractor may choose the location of the facilities during the exploration periods in accordance with the regulations in force in the Republic of Côte d’Ivoire at such a location subject to (i) approval by the Government, which shall not be refused without a valid reason and (ii) conditions of article 2.3 and articles 6.4 to 6.6; and

d)	to exercise the rights conferred hereunder, through agents and independent contractors, and consequently to pay all of the related fees and expenses in the currency of choice of the Contractor, in accordance with the provisions of article 23.

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a)	daily reports on the drilling activities;

b)	weekly reports on geophysical activities;

c)	within thirty (30) days following each Calendar Quarter, a report on the Petroleum Operations performed, as well as a detailed statement of Petroleum Costs for the previous Calendar Quarter;

d)	before the end of February of each Calendar Year, an annual report on the Petroleum Operations performed, as well as a detailed statement of the Petroleum Costs for the previous Calendar Year.

a)	a copy of the geological study and summary reports as well as the related maps;

b)	a copy of the geophysical surveys, reports on measurements, studies and geophysical interpretation, maps, profiles, sections or other related documents, and, upon the request of the Government, the original or an official copy of the recorded seismic magnetic tapes;

c)	a copy of the installation and test bore completion reports for each wellbore, as well as a full set of recorded logs;

d)	a copy of the test reports or production test reports as well as any study related to the bringing of a well on-stream or into production;

e)	a copy of reports related to analyses performed on core bores and fluid analysis.

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i.	to any company interested in good faith in a potential assignment/acquisition or in an assistance in respect of the Petroleum Operations, after obtaining from this company, a commitment to keep such data and information confidential and to use them for the sole purpose of the aforesaid assignment or assistance;

ii.	to any Affiliated Company of an entity comprising the Contractor, as well as to any external professional advisor, taking part in the Petroleum Operations, after obtaining a similar confidentiality commitment from the latter;

iii.	to any bank or financial institution from which the Contractor seeks or obtains financing, after obtaining a similar confidentiality commitment from such institution;

iv.	when and to the extent that the regulations of a recognized stock exchange or of a supervising or auditing administrative authority require it from one of the entities comprising the Contractor or one of its Affiliated Companies;

v.	in the context of any judiciary, administrative or arbitral litigation procedure or if required by applicable law.

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a)	the planned boundaries of the Production Perimeter requested by the Contractor, so that it covers the area defined by the enclosure of the field identified in article 11.1, as well as all technical justification concerning the scope of said Field;

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b)	an estimate of the reserves in place, recoverable, proven and probable reserves, and the corresponding annual production, as well as a study of any recovery and enhancement methods for Crude Oil associated products, such as Associated Natural Gas;

c)	an item-by-item description of the facilities and work necessary for production, such as the number of development wells, the number and characteristics of pads, pipelines, production, processing, storage and loading facilities;

d)	the estimated performance schedule and the planned date to begin production, and

e)	the estimated investments and production expenses, as well as an economic evaluation confirming the commercial nature of the discovery identified in article 11.1.

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a)	monthly test of production and of gas/oil ratio, and

b)	semi-annual measurement of the reservoir pressure of the Field.

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•	for a Crude Oil price between $50 and $200 per barrel:

•	for a price of Crude Oil less than $50 per barrel: H = 1.08

•	for a price of Crude Oil greater than $200 per barrel: H = 0.88

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•	62% - (62% x 0.5%) = 61.69% multiplied by H

•	61.69% - (61.69% x 1%) = 61.0731% multiplied by H

•	61.0731% - (61.0731% x 1%) = 60.462369% multiplied by H

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•	60.462369% - (60.462369% x 1%) = 59.85774531% multiplied by H

•	59.85774531% - (59.85774531% x 1%) = 59.2591678569% multiplied by H

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a)	the gross annual revenue of the Contractor reported in its accounting books, from the sale of the quantity of Hydrocarbons it has pursuant to the articles 16.2, 16.3 and 21.3.1.

b)	all other revenue or proceeds related to the Petroleum Operations, especially including those from:

•	the sale of related substances;

•	the processing, transportation or storage of products for Third Parties at the facilities allocated to the Petroleum Operations.

•

Subject to article 17.7, gains realised at the time of assigning or transferring any assets of the Contractor, or the full or partial assignment of the rights and obligations arising out of this Agreement. Nevertheless, a gain cannot result from any transfer (i) that does not entail an actual payment in cash or kind by the transferee to the transferor or recovery of a liability already booked by the transferor or (ii) that cannot be considered in any way a financial profit;

•	foreign exchange gains realised from the Petroleum Operations.

c)	the value of the share of Hydrocarbons taken by the Government, in accordance with the last section of article 16.3 and the penultimate section of article 21.3.1, in payment of the income tax indicated in article 17.1 for the Fiscal Year in question.

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a)	Besides the charges explicitly indicated below in this article 17.4, all other Petroleum Costs, including the cost of supplies, personnel and labour expenses, and the cost of services provided to the Contractor for the Petroleum Operations. Nevertheless:

•	the cost of supplies, personnel and services provided by Affiliated Companies shall be deductible insofar as they do not exceed those normally invoiced under free market conditions between an independent buyer and seller for the identical or similar services.

•

fixed asset expenses shall be amortised as of the start of commercial production in the Delimited Region. The amortisation deductible for the Fiscal Year in question shall be equal, at most, to the difference, if positive, between the amount of the Petroleum Costs recovered for the Fiscal Year in question pursuant to article 16.2, and the total of other amounts charged to the production and income account in accordance with this article 17.4.

b)	The overheads related to the Petroleum Operations performed within the context of this Agreement, including in particular:

•	the leasing expenses for movable and immovable property and insurance premiums, and

•

a reasonable share, in relation to the services rendered for the Petroleum Operations performed in the Republic of Côte d’Ivoire, wages and salaries paid to directors and employees residing abroad, and administrative overheads of the central offices of the Contractor and the Affiliated Companies working on its behalf, located abroad, and the indirect expenses incurred by said central offices abroad on their behalf. The overheads paid abroad may not under any circumstances be greater than the limits established in the Accounting Procedure.

c)

The actual amount of interest and commission fees paid to the creditors of the Contractor, within the limits established in the Accounting Procedure. Shareholders and Affiliated Companies shall not be considered as “third parties” pursuant to article 72.3 of the Petroleum Code and, as a result, any advances and loans made to them outside of the Republic of Côte d’Ivoire shall not be submitted for approval by the petroleum administration indicated in said article, but shall be declared to it and, in accordance with the previous section, shall also be subject to the limitations established in the Accounting Procedure.

d)	Losses of equipment or assets resulting from destruction or damage, assets to be waived or abandoned during the year, irrecoverable receivables, compensation paid to Third Parties for damages.

e)	Reasonable and justified provisions established to cover clearly identified subsequent losses or expenses that are likely according to current situations, especially provisions for abandonment costs established pursuant to article 20.8.

f)	Any other losses or charges directly related to the Petroleum Operations, as well as bonuses and amounts paid during the Fiscal Year pursuant to article 19 and articles 30.2, 30.3 and 30.4, with the exception of the amount of direct income tax determined in accordance with the provisions of this article.

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g)	The uncleared amount of losses from prior Fiscal Years in accordance with the legislation of the Republic of Côte d’Ivoire.

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a)	sales in which the buyer is an Affiliated Company of the seller and the sales between entities comprising the Contractor;

b)	sales on the Ivorian domestic market pursuant to article 27.1, and

c)	sales entailing compensation other than payment in freely convertible currency and sales motivated, in whole or in part, by considerations other than the economic incentives that are usual in sales of Crude Oil on the international market (such as foreign exchange contracts, government to government sales or to governmental agencies).

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a)	for all sales to independent buyers, the price applicable to this sale shall be the price obtained for the Crude Oil for said sale, adjusted to reflect the F.O.B. terms of delivery and the payment terms at thirty (30) days;

b)	for all quantities lifted other than those quantities sold to independent buyers, the price applicable to this quantity lifted shall be the Market Price in effect in the previous Calendar Quarter or, if this Market Price has not been determined, a price established by mutual agreement between the Government and Contractor or, in the absence thereof, the last known Market Price.

a)	the recovery by the Contractor of all of the corresponding Petroleum Costs; or

b)	the waiver of any or all of the Delimited Region; or

c)	upon expiration of this Agreement, or

d)	upon termination of this Agreement.

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a)	either request the Government to hold this Field for a period of five (5) years to allow it to research sufficient outlets for profitable production of said Field; this period may be renewed provided that the Contractor justifies its efforts to achieve this objective. After this period ends, the Contractor shall abandon all of its rights to the area surrounding the discovery;

b)	or immediately abandon its rights to the area surrounding the discovery.

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a)	The Contractor shall make available to the Government, free of charge, at the exit of the Crude Oil and Natural Gas separation facilities, some or all of the surplus Associated Natural Gas that the Government wants to lift;

b)	The Government shall be responsible for collection, processing, compression and transportation of this surplus, from the above-mentioned separation facilities, and shall bear all additional related costs, and

c)	The construction of the facilities necessary for the operations indicated in section b) above, as well as lifting of this surplus by the Government, shall be performed in accordance with the Best Industry Practice in the international petroleum industry and

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a)	sales in which the buyer is an Affiliated Company of the seller as well as sales between entities comprising the Contractor, and

b)	sales entailing compensation other than payment in freely convertible currency and sales motivated, in whole or in part, by considerations other than economic incentives that are usual in sales of Natural Gas.

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a)	PETROCI shall be entitled to obtain an additional participating interest (hereinafter referred to as “Additional Participating Interest”) of two percent (2%) which the Operator cannot refuse.

b)

Within four (4) months from the date of granting an exclusive production permit, PETROCI shall notify the other entities comprising the Contractor of its desire to exercise its option to increase its Participating Interest relative to the related Production Perimeter, specifying the percentage of its Additional Participating Interest for said Production Perimeter. If it does not make said notification within four (4) months, PETROCI’s participating interest for this Production Perimeter shall remain the same as its Initial Participating Interest.

c)	The Additional Participating Interest shall become effective, for the Production Perimeter in question, from the date of notification indicated in article 22.2.b) above.

d)

Upon receipt of the written notification from PETROCI, all of the entities comprising the Contractor other than PETROCI shall transfer to PETROCI, immediately and jointly, each pro rata to its Participating Interest at that time, a percentage of their participating interest in the Production Perimeter in question, the total of which shall be equal to the percentage of the Additional Participating Interest of PETROCI.

e)	As of the date of its Additional Participating Interest, or in the absence of the notification indicated in article 22.2.b), PETROCI:

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•	shall participate, pro rata to its Additional Participating Interest, in the Petroleum Costs relating to the corresponding Production Perimeter, with regard to the relevant exclusive production permit;

•	If the permit in question is the first exclusive production permit, as indicated in article 22.2.g) PETROCI shall reimburse the other entities comprising the Contractor the percentage of its Additional Participating Interest in the Petroleum Costs not yet recovered, incurred from the Effective Date up to the date of notification of its Additional Participating Interest, and

•

For each subsequent exclusive production permit, as indicated in article 22.2.g), PETROCI shall reimburse the other entities comprising the Contractor the percentage of its Additional Participating Interest in the Petroleum Costs relating to the new Production Perimeter not yet recovered, incurred from the date of notification of the Additional Participating Interest relating to the previous exclusive production permit up to the date of notification of the Additional Participating Interest for the new exclusive production permit.

f)

Taking into account the previous work already undertaken in the Delimited Region, PETROCI’s Initial Participating Interest shall entail for PETROCI, throughout the duration of this Agreement, neither the financing nor the reimbursement of its share of the Petroleum Costs, which Petroleum Costs are borne and recoverable by the other entities comprising the Contractor, in accordance with articles 16.2, 21.1.5 and 21.2.4, each pro rata to its Participating Interest.

g)	As indicated in article 22.2.e) PETROCI shall reimburse the other entities comprising the Contractor the amounts due for its Participating Interest, as follows, at PETROCI’s option:

•	either within six (6) months from the date of notification of the increase in its Participating Interest, by payments in Dollars or through payments in Crude Oil appraised in accordance with the provisions of article 18;

•

or in kind, by way of withholding, by the other entities constituting the Contractor, taking a portion of PETROCI’s share of Hydrocarbons under Articles 16.3 and 21.3, at a rate of fifty percent (50%) of said share, the value of this portion being calculated in accordance with the provisions of article 18, until the value of these withholdings taken is equal to the remaining balance due plus interest as indicated below. The balance of the remaining amount due upon expiration of the period of six (6) months as indicated above shall accrue interest, from this date until the date of reimbursement, at the annual LIBOR (London Interbank Offered Rate) for Dollar deposits at six (6) months as published electronically by ICE Benchmark Administration Limited for the last business day prior to the date of payment plus one percentage (1) point, compounded annually.

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a)	The association of PETROCI with the Contractor may not under any circumstances cancel or affect the rights of the other entities comprising the Contractor to use the arbitration clause set forth in article 32, which is not applicable to disputes between the Government and PETROCI but only to disputes between the Government and the other entities comprising the Contractor.

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a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

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a)	information on all development and production operations performed during the past Calendar Year, including the quantities of Hydrocarbons produced and sold, if applicable;

b)	information on all transportation operations and sales, as well as the location of the principal facilities constructed by the Contractor, if applicable, and

c)	a statement indicating the number of employees and operations, with their qualifications, nationality, their given name and surnames, their number and employment start date.

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a)	Development Expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations relative to a Production Perimeter excluding Production Expenses and Financial Expenses

b)	Appraisal Expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations relative to an Appraisal Perimeter.

c)

Production Expenses are all costs and expenses borne and paid by the Contractor for producing and maintaining the wells, equipment and related facilities relative to a Field from the start of production of said Field. The Production Expenses shall also include all costs and expenses borne and paid by the Contractor for producing and maintaining the pipelines, generators, warehouses, pools and other facilities that the Contractor acquires, builds or installs in accordance with the provisions of article 7.2. of the Agreement for performing the Petroleum Operations.

d)	Exploration expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations (especially including the costs and expenses indicated in article 2.2.13 of this Accounting Procedure), excluding Appraisal Expenses, Development Expenses, Production Expenses, Financial Expenses, Overheads in the Republic of Côte d’Ivoire and Overheads Abroad.

e)	Financial Expenses means the interest and fees indicated in article 2.2.10 of this Accounting Procedure.

f)	Overheads in the Republic of Côte d’Ivoire means the costs and expenses indicated in article 2.2.2 of this Accounting Procedure.

g)	Overheads Abroad means the costs and expenses indicated in article 2.2.3 of this Accounting Procedure.

a)	the Exploration Expenses;

b)	the Appraisal Expenses;

c)	the Development Expenses;

d)	the Production Expenses;

e)	the Financial Expenses;

f)	the Overheads in the Republic of Côte d’Ivoire;

g)	the Overheads abroad;

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h)	the abandonment reserve funds:

i)	national needs, and

j)	training, equipment and social works expenses.

a)	the total amount of Petroleum Costs since the Effective Date;

b)	the total amount of Petroleum Costs recovered;

c)	the total amount credited to the Petroleum Costs Account pursuant to article 2.4.b) of this Accounting Procedure, and

d)	the total amount of Petroleum Costs still to be recovered.

a)	production expenses of a Field incurred and effectively paid from the start date of regular production;

b)	financial expenses, and

c)	other Petroleum Costs.

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a)	before granting an exclusive production permit: five percent (5%) of the expenses allocated to the Petroleum Costs Account excluding overhead for the Calendar Year in question;

b)	as of the time of granting the first exclusive production permit: three percent (3%) of the expenses allocated to the Petroleum Costs Account excluding bonuses and overhead for the Calendar Year in question.

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a)	the expenses relative to the period prior to the Effective Date save for the provisions in article 16.7;

b)	all expenses relative to the Operations performed beyond the Point of Delivery, such as transportation and marketing expenses;

c)	the financial expenses relative to financing the Petroleum Exploration Operations, and those relative to the portion of financing the Development Expenses exceeding seventy-five percent (75%) of the total amount of the Development Expenses;

d)	the bonuses defined in article 19 of this Agreement.

e)	foreign exchange losses other than those indicated in article 2.2.13 of this Accounting Procedure.

a)	revenue derived from selling the quantity of Hydrocarbons available to the Contractor, in accordance with articles 16 and 21 of this Agreement, for recovery of the Petroleum Costs;

b)	all other revenue or income related to the Petroleum Operations, especially those derived from:

•	the sale of related substances;

•	all services rendered to Third Parties using the facilities allocated to the Petroleum Operations, especially the processing, transportation and storage of products for Third Parties in these facilities;

•	the transfer of assets of the Contractor, and the transfer of some or all of the rights and obligations of the Contractor according to article 35 of this Agreement;

•	foreign exchange gains actually realised by the Contractor in performing the Petroleum Operations.

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a)	New equipment

b)	Equipment in good condition

c)	Other used equipment

d)	Equipment in poor condition

e)	Scrap and waste

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a)	the amount of Petroleum Costs still to be recovered at the beginning of the Calendar Quarter;

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b)	the amount of Petroleum Costs relative to the Calendar Quarter in question, recoverable according to the provisions of the Agreement;

c)	the quantity and the value of the production of Hydrocarbons taken during the Calendar Quarter by the Contractor to recover Petroleum Costs;

d)	the amount of income or proceeds credited pursuant to article 2.4.b) of this Accounting Procedure during the quarter;

e)	the amount of Petroleum Costs still to be recovered at the end of the Calendar Quarter.

a)	in stock at the beginning of the month;

b)	lifted during the month;

c)	lost and used for the needs of the Petroleum Operations;

d)	in stock at the end of the month.

(A)	The company, a company incorporated under the laws of…, hereinafter referred to as “……………,” represented herein by Mr………….., entered into a

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(B)	In accordance with article 4.8 of the PSA, the Contractor agrees to provide the Government with a bank guarantee for performance of the minimum exploration work programs as defined in article 4 of the PSA.

(C)	The Bank, at the request of the Contractor, agrees to provide this bank guarantee in favour of the Government, for the Guaranteed Amount as defined in article 3 below.

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•	In accordance with the provisions of article 2 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, all Fields or natural accumulations of Hydrocarbons in the soil or the subsoil of the Republic of Côte d’Ivoire territory, its territorial waters, its exclusive economic zone and continental shelf, whether or not discovered, are and remain the exclusive property of the State;

•	The discovery and production of Hydrocarbons are important for the interests and economic development of the country and its inhabitants;

•	In accordance with the provisions of article 5 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, the State may authorise Ivoirian or foreign legal entities to engage in the exploration, production, transport, storage, transformation and sale of

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•	In accordance with the provisions of article 6 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, the State designated PETROCI to participate in the Petroleum Operations under this Agreement;

•	The Government hopes to develop and promote the Delimited Region, and the Contractor wishes to cooperate with the Government by helping it explore and develop the potential resources of the Delimited Region and thereby encourage the economic expansion of the country;

•	In accordance with Article 1 of Decree No. 2014-248 dated 8 May 2014 which delegated the powers to sign petroleum contracts, the Minister in charge of Petroleum, the Minister of Economy and Finance and the Minister in charge of the Budget have delegated powers to jointly sign the petroleum contracts on the Government’s behalf;

•	The Contractor states that it has the capital, technical capacity and organizational skills necessary to successfully perform the Petroleum Operations specified below in the Delimited Region;

•	The Council of Ministers, in its session held on 20 December 2017, granted its approval for the signing of this Agreement;

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•	a company or any other entity that controls or is controlled, directly or indirectly, by any entity comprising the Contractor;

•	or a company or any other entity that controls or is controlled, directly or indirectly, by a company or entity that itself directly or indirectly controls any entity comprising the Contractor.

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•	Acquisition, processing and interpretation of new 3D seismic covering a minimum of two thousand km² (2,000 km²).

•	Geological, geophysical (G&G) and engineering studies;

•	One (1) exploration well, firm.

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•	Geological, geophysical (G&G) and engineering studies;

•	One (1) exploration well, firm.

a)	Four million Dollars (US $4,000,000) during the first exploration period defined in article 3.1;

b)	Eighteen million Dollars (US $ 18,000,000) during the second exploration period defined in article 3.2;

c)	Eighteen million Dollars (US $ 18,000,000) during the third exploration period defined in article 3.3.

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a)	Within no more than thirty (30) days after the Effective Date, the Contractor shall provide a bank guarantee in the amount of four million Dollars (US$ 4,000,000) to guarantee performance of the minimum exploration work program for the first exploration period in accordance with article 4.2.

-	fifty percent (50%) of the original amount, i.e., two million Dollars (US $2,000,000) following delivery by the Operator to the Government of a copy of the contract for seismic data acquisition;

-	twenty-five percent (25%) of the original amount, i.e. one million Dollars (US $1,000,000) following the start of said acquisition work;

-	twenty-five percent (25%)of the original amount, i.e. one million Dollars (US $1,000,000) following completion of said acquisition work and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the first exploration period.

b)

As of the start date of the second exploration period, the Contractor shall provide a bank guarantee for an amount of eighteen million Dollars (US $ 18,000,000) to guarantee performance of the minimum exploration work program indicated in article 4.3. The amount of the bank guarantee, adjusted to reflect the exploration wells drilled in advance during the previous exploration period and carried forward to the next exploration period in accordance with article 4.7, will be reduced by:

-	fifty percent (50%) of the original amount, i.e., nine million Dollars (US $9,000,000) following delivery by the Operator to the Government of a copy of the contract for drilling;

-	twenty-five percent (25%) of the original amount; i.e., four million and five hundred thousand Dollars (US $4,500,000) following the start of said drilling works;

-	twenty-five percent (25%)of the original amount; i.e. four million and five hundred thousand Dollars (US $4,500,000) following completion of the drilling works and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the

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c)

As of the start date of the third exploration period, the Contractor shall provide a bank guarantee for an amount of eighteen million Dollars (US$18,000,000) to guarantee performance of the minimum exploration work program indicated in article 4.4. The amount of the bank guarantee, adjusted to reflect the exploration wells drilled in advance during the previous exploration period and carried forward to the next exploration period in accordance with article 4.7, will be reduced by:

-	fifty percent (50%) of the original amount, i.e., nine million Dollars (US $9,000,000) following delivery by the Operator to the Government of a copy of the contract for drilling;

-	twenty-five percent (25%) of the original amount, i.e., four million and five hundred thousand Dollars (US $4,500,000) following the start of said drilling works;

-	twenty-five percent (25%) of the original amount, i.e. four million and five hundred thousand Dollars (US $4,500,000) following completion of the drilling works and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the third period and, approved by the Government in accordance with this Agreement.

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•	all necessary funds,

•	all required machinery, equipment and materials,

•	all technical support, including the necessary personnel, subject to the provisions of article 30.

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a)	ensure the protection of aquifers encountered during the course of its work;

b)	perform the tests necessary to determine the value of significant shows encountered during drilling and the commercial nature of discoveries of any Hydrocarbons;

c)	prevent losses and discarding of Hydrocarbons produced and losses and discarding of oil-based mud or any other product used in the Petroleum Operations according to Best Industry Practice in the international petroleum industry.

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a)	to manage and control, under its entire responsibility, the Petroleum Operations in the Delimited Region;

b)	to access any location within the interior of the Delimited Region in order to perform the Petroleum Operations;

c)

to perform all acts, facilities, work, and operations necessary to perform the Petroleum Operations both inside and outside of the Delimited Region. The Contractor may choose the location of the facilities during the exploration periods in accordance with the regulations in force in the Republic of Côte d’Ivoire at such a location subject to (i) approval by the Government, which shall not be refused without a valid reason and (ii) conditions of article 2.3 and articles 6.4 to 6.6; and

d)	to exercise the rights conferred hereunder, through agents and independent contractors, and consequently to pay all of the related fees and expenses in the currency of choice of the Contractor, in accordance with the provisions of article 23.

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a)	daily reports on the drilling activities;

b)	weekly reports on geophysical activities;

c)	within thirty (30) days following each Calendar Quarter, a report on the Petroleum Operations performed, as well as a detailed statement of Petroleum Costs for the previous Calendar Quarter;

d)	before the end of February of each Calendar Year, an annual report on the Petroleum Operations performed, as well as a detailed statement of the Petroleum Costs for the previous Calendar Year.

a)	a copy of the geological study and summary reports as well as the related maps;

b)	a copy of the geophysical surveys, reports on measurements, studies and geophysical interpretation, maps, profiles, sections or other related documents, and, upon the request of the Government, the original or an official copy of the recorded seismic magnetic tapes;

c)	a copy of the installation and test bore completion reports for each wellbore, as well as a full set of recorded logs;

d)	a copy of the test reports or production test reports as well as any study related to the bringing of a well on-stream or into production;

e)	a copy of reports related to analyses performed on core bores and fluid analysis.

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i.	to any company interested in good faith in a potential assignment/acquisition or in an assistance in respect of the Petroleum Operations, after obtaining from this company, a commitment to keep such data and information confidential and to use them for the sole purpose of the aforesaid assignment or assistance;

ii.	to any Affiliated Company of an entity comprising the Contractor, as well as to any external professional advisor, taking part in the Petroleum Operations, after obtaining a similar confidentiality commitment from the latter;

iii.	to any bank or financial institution from which the Contractor seeks or obtains financing, after obtaining a similar confidentiality commitment from such institution;

iv.	when and to the extent that the regulations of a recognized stock exchange or of a supervising or auditing administrative authority require it from one of the entities comprising the Contractor or one of its Affiliated Companies;

v.	in the context of any judiciary, administrative or arbitral litigation procedure or if required by applicable law.

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a)	the planned boundaries of the Production Perimeter requested by the Contractor, so that it covers the area defined by the enclosure of the field identified in article 11.1, as well as all technical justification concerning the scope of said Field;

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b)	an estimate of the reserves in place, recoverable, proven and probable reserves, and the corresponding annual production, as well as a study of any recovery and enhancement methods for Crude Oil associated products, such as Associated Natural Gas;

c)	an item-by-item description of the facilities and work necessary for production, such as the number of development wells, the number and characteristics of pads, pipelines, production, processing, storage and loading facilities;

d)	the estimated performance schedule and the planned date to begin production, and

e)	the estimated investments and production expenses, as well as an economic evaluation confirming the commercial nature of the discovery identified in article 11.1.

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a)	monthly test of production and of gas/oil ratio, and

b)	semi-annual measurement of the reservoir pressure of the Field.

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•	for a Crude Oil price between $50 and $200 per barrel:

•	for a price of Crude Oil less than $50 per barrel: H = 1.08

•	for a price of Crude Oil greater than $200 per barrel: H = 0.88

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•	62% - (62% x 0.5%) = 61.69% multiplied by H

•	61.69% - (61.69% x 1%) = 61.0731% multiplied by H

•	61.0731% - (61.0731% x 1%) = 60.462369% multiplied by H

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•	60.462369% - (60.462369% x 1%) = 59.85774531% multiplied by H

•	59.85774531% - (59.85774531% x 1%) = 59.2591678569% multiplied by H

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a)	the gross annual revenue of the Contractor reported in its accounting books, from the sale of the quantity of Hydrocarbons it has pursuant to the articles 16.2, 16.3 and 21.3.1.

b)	all other revenue or proceeds related to the Petroleum Operations, especially including those from:

•	the sale of related substances;

•	the processing, transportation or storage of products for Third Parties at the facilities allocated to the Petroleum Operations.

•

Subject to article 17.7, gains realised at the time of assigning or transferring any assets of the Contractor, or the full or partial assignment of the rights and obligations arising out of this Agreement. Nevertheless, a gain cannot result from any transfer (i) that does not entail an actual payment in cash or kind by the transferee to the transferor or recovery of a liability already booked by the transferor or (ii) that cannot be considered in any way a financial profit;

•	foreign exchange gains realised from the Petroleum Operations.

c)	the value of the share of Hydrocarbons taken by the Government, in accordance with the last section of article 16.3 and the penultimate section of article 21.3.1, in payment of the income tax indicated in article 17.1 for the Fiscal Year in question.

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a)	Besides the charges explicitly indicated below in this article 17.4, all other Petroleum Costs, including the cost of supplies, personnel and labour expenses, and the cost of services provided to the Contractor for the Petroleum Operations. Nevertheless:

•	the cost of supplies, personnel and services provided by Affiliated Companies shall be deductible insofar as they do not exceed those normally invoiced under free market conditions between an independent buyer and seller for the identical or similar services.

•

fixed asset expenses shall be amortised as of the start of commercial production in the Delimited Region. The amortisation deductible for the Fiscal Year in question shall be equal, at most, to the difference, if positive, between the amount of the Petroleum Costs recovered for the Fiscal Year in question pursuant to article 16.2, and the total of other amounts charged to the production and income account in accordance with this article 17.4.

b)	The overheads related to the Petroleum Operations performed within the context of this Agreement, including in particular:

•	the leasing expenses for movable and immovable property and insurance premiums, and

•

a reasonable share, in relation to the services rendered for the Petroleum Operations performed in the Republic of Côte d’Ivoire, wages and salaries paid to directors and employees residing abroad, and administrative overheads of the central offices of the Contractor and the Affiliated Companies working on its behalf, located abroad, and the indirect expenses incurred by said central offices abroad on their behalf. The overheads paid abroad may not under any circumstances be greater than the limits established in the Accounting Procedure.

c)

The actual amount of interest and commission fees paid to the creditors of the Contractor, within the limits established in the Accounting Procedure. Shareholders and Affiliated Companies shall not be considered as “third parties” pursuant to article 72.3 of the Petroleum Code and, as a result, any advances and loans made to them outside of the Republic of Côte d’Ivoire shall not be submitted for approval by the petroleum administration indicated in said article, but shall be declared to it and, in accordance with the previous section, shall also be subject to the limitations established in the Accounting Procedure.

d)	Losses of equipment or assets resulting from destruction or damage, assets to be waived or abandoned during the year, irrecoverable receivables, compensation paid to Third Parties for damages.

e)	Reasonable and justified provisions established to cover clearly identified subsequent losses or expenses that are likely according to current situations, especially provisions for abandonment costs established pursuant to article 20.8.

f)	Any other losses or charges directly related to the Petroleum Operations, as well as bonuses and amounts paid during the Fiscal Year pursuant to article 19 and articles 30.2, 30.3 and 30.4, with the exception of the amount of direct income tax determined in accordance with the provisions of this article.

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g)	The uncleared amount of losses from prior Fiscal Years in accordance with the legislation of the Republic of Côte d’Ivoire.

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a)	sales in which the buyer is an Affiliated Company of the seller and the sales between entities comprising the Contractor;

b)	sales on the Ivorian domestic market pursuant to article 27.1, and

c)	sales entailing compensation other than payment in freely convertible currency and sales motivated, in whole or in part, by considerations other than the economic incentives that are usual in sales of Crude Oil on the international market (such as foreign exchange contracts, government to government sales or to governmental agencies).

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a)	for all sales to independent buyers, the price applicable to this sale shall be the price obtained for the Crude Oil for said sale, adjusted to reflect the F.O.B. terms of delivery and the payment terms at thirty (30) days;

b)	for all quantities lifted other than those quantities sold to independent buyers, the price applicable to this quantity lifted shall be the Market Price in effect in the previous Calendar Quarter or, if this Market Price has not been determined, a price established by mutual agreement between the Government and Contractor or, in the absence thereof, the last known Market Price.

a)	the recovery by the Contractor of all of the corresponding Petroleum Costs; or

b)	the waiver of any or all of the Delimited Region; or

c)	upon expiration of this Agreement, or

d)	upon termination of this Agreement.

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a)	either request the Government to hold this Field for a period of five (5) years to allow it to research sufficient outlets for profitable production of said Field; this period may be renewed provided that the Contractor justifies its efforts to achieve this objective. After this period ends, the Contractor shall abandon all of its rights to the area surrounding the discovery;

b)	or immediately abandon its rights to the area surrounding the discovery.

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a)	The Contractor shall make available to the Government, free of charge, at the exit of the Crude Oil and Natural Gas separation facilities, some or all of the surplus Associated Natural Gas that the Government wants to lift;

b)	The Government shall be responsible for collection, processing, compression and transportation of this surplus, from the above-mentioned separation facilities, and shall bear all additional related costs, and

c)	The construction of the facilities necessary for the operations indicated in section b) above, as well as lifting of this surplus by the Government, shall be performed in accordance with the Best Industry Practice in the international petroleum industry and

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a)	sales in which the buyer is an Affiliated Company of the seller as well as sales between entities comprising the Contractor, and

b)	sales entailing compensation other than payment in freely convertible currency and sales motivated, in whole or in part, by considerations other than economic incentives that are usual in sales of Natural Gas.

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a)	PETROCI shall be entitled to obtain an additional participating interest (hereinafter referred to as “Additional Participating Interest”) of two percent (2%) which the Operator cannot refuse.

b)

Within four (4) months from the date of granting an exclusive production permit, PETROCI shall notify the other entities comprising the Contractor of its desire to exercise its option to increase its Participating Interest relative to the related Production Perimeter, specifying the percentage of its Additional Participating Interest for said Production Perimeter. If it does not make said notification within four (4) months, PETROCI’s participating interest for this Production Perimeter shall remain the same as its Initial Participating Interest.

c)	The Additional Participating Interest shall become effective, for the Production Perimeter in question, from the date of notification indicated in article 22.2.b) above.

d)

Upon receipt of the written notification from PETROCI, all of the entities comprising the Contractor other than PETROCI shall transfer to PETROCI, immediately and jointly, each pro rata to its Participating Interest at that time, a percentage of their participating interest in the Production Perimeter in question, the total of which shall be equal to the percentage of the Additional Participating Interest of PETROCI.

e)	As of the date of its Additional Participating Interest, or in the absence of the notification indicated in article 22.2.b), PETROCI:

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•	shall participate, pro rata to its Additional Participating Interest, in the Petroleum Costs relating to the corresponding Production Perimeter, with regard to the relevant exclusive production permit;

•	If the permit in question is the first exclusive production permit, as indicated in article 22.2.g) PETROCI shall reimburse the other entities comprising the Contractor the percentage of its Additional Participating Interest in the Petroleum Costs not yet recovered, incurred from the Effective Date up to the date of notification of its Additional Participating Interest, and

•

For each subsequent exclusive production permit, as indicated in article 22.2.g), PETROCI shall reimburse the other entities comprising the Contractor the percentage of its Additional Participating Interest in the Petroleum Costs relating to the new Production Perimeter not yet recovered, incurred from the date of notification of the Additional Participating Interest relating to the previous exclusive production permit up to the date of notification of the Additional Participating Interest for the new exclusive production permit.

f)

Taking into account the previous work already undertaken in the Delimited Region, PETROCI’s Initial Participating Interest shall entail for PETROCI, throughout the duration of this Agreement, neither the financing nor the reimbursement of its share of the Petroleum Costs, which Petroleum Costs are borne and recoverable by the other entities comprising the Contractor, in accordance with articles 16.2, 21.1.5 and 21.2.4, each pro rata to its Participating Interest.

g)	As indicated in article 22.2.e) PETROCI shall reimburse the other entities comprising the Contractor the amounts due for its Participating Interest, as follows, at PETROCI’s option:

•	either within six (6) months from the date of notification of the increase in its Participating Interest, by payments in Dollars or through payments in Crude Oil appraised in accordance with the provisions of article 18;

•

or in kind, by way of withholding, by the other entities constituting the Contractor, taking a portion of PETROCI’s share of Hydrocarbons under Articles 16.3 and 21.3, at a rate of fifty percent (50%) of said share, the value of this portion being calculated in accordance with the provisions of article 18, until the value of these withholdings taken is equal to the remaining balance due plus interest as indicated below. The balance of the remaining amount due upon expiration of the period of six (6) months as indicated above shall accrue interest, from this date until the date of reimbursement, at the annual LIBOR (London Interbank Offered Rate) for Dollar deposits at six (6) months as published electronically by ICE Benchmark Administration Limited for the last business day prior to the date of payment plus one percentage (1) point, compounded annually.

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a)	The association of PETROCI with the Contractor may not under any circumstances cancel or affect the rights of the other entities comprising the Contractor to use the arbitration clause set forth in article 32, which is not applicable to disputes between the Government and PETROCI but only to disputes between the Government and the other entities comprising the Contractor.

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a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

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a)	information on all development and production operations performed during the past Calendar Year, including the quantities of Hydrocarbons produced and sold, if applicable;

b)	information on all transportation operations and sales, as well as the location of the principal facilities constructed by the Contractor, if applicable, and

c)	a statement indicating the number of employees and operations, with their qualifications, nationality, their given name and surnames, their number and employment start date.

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a)	Development Expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations relative to a Production Perimeter excluding Production Expenses and Financial Expenses

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b)	Appraisal Expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations relative to an Appraisal Perimeter.

c)

Production Expenses are all costs and expenses borne and paid by the Contractor for producing and maintaining the wells, equipment and related facilities relative to a Field from the start of production of said Field. The Production Expenses shall also include all costs and expenses borne and paid by the Contractor for producing and maintaining the pipelines, generators, warehouses, pools and other facilities that the Contractor acquires, builds or installs in accordance with the provisions of article 7.2. of the Agreement for performing the Petroleum Operations.

d)	Exploration expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations (especially including the costs and expenses indicated in article 2.2.13 of this Accounting Procedure), excluding Appraisal Expenses, Development Expenses, Production Expenses, Financial Expenses, Overheads in the Republic of Côte d’Ivoire and Overheads Abroad.

e)	Financial Expenses means the interest and fees indicated in article 2.2.10 of this Accounting Procedure.

f)	Overheads in the Republic of Côte d’Ivoire means the costs and expenses indicated in article 2.2.2 of this Accounting Procedure.

g)	Overheads Abroad means the costs and expenses indicated in article 2.2.3 of this Accounting Procedure.

a)	the Exploration Expenses;

b)	the Appraisal Expenses;

c)	the Development Expenses;

d)	the Production Expenses;

e)	the Financial Expenses;

f)	the Overheads in the Republic of Côte d’Ivoire;

g)	the Overheads abroad;

h)	the abandonment reserve funds:

i)	national needs, and

j)	training, equipment and social works expenses.

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a)	the total amount of Petroleum Costs since the Effective Date;

b)	the total amount of Petroleum Costs recovered;

c)	the total amount credited to the Petroleum Costs Account pursuant to article 2.4.b) of this Accounting Procedure, and

d)	the total amount of Petroleum Costs still to be recovered.

a)	production expenses of a Field incurred and effectively paid from the start date of regular production;

b)	financial expenses, and

c)	other Petroleum Costs.

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a)	before granting an exclusive production permit: five percent (5%) of the expenses allocated to the Petroleum Costs Account excluding overhead for the Calendar Year in question;

b)	as of the time of granting the first exclusive production permit: three percent (3%) of the expenses allocated to the Petroleum Costs Account excluding bonuses and overhead for the Calendar Year in question.

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a)	the expenses relative to the period prior to the Effective Date save for the provisions in article 16.7;

b)	all expenses relative to the Operations performed beyond the Point of Delivery, such as transportation and marketing expenses;

c)	the financial expenses relative to financing the Petroleum Exploration Operations, and those relative to the portion of financing the Development Expenses exceeding seventy-five percent (75%) of the total amount of the Development Expenses;

d)	the bonuses defined in article 19 of this Agreement.

e)	foreign exchange losses other than those indicated in article 2.2.13 of this Accounting Procedure.

a)	revenue derived from selling the quantity of Hydrocarbons available to the Contractor, in accordance with articles 16 and 21 of this Agreement, for recovery of the Petroleum Costs;

b)	all other revenue or income related to the Petroleum Operations, especially those derived from:

•	the sale of related substances;

•	all services rendered to Third Parties using the facilities allocated to the Petroleum Operations, especially the processing, transportation and storage of products for Third Parties in these facilities;

•	the transfer of assets of the Contractor, and the transfer of some or all of the rights and obligations of the Contractor according to article 35 of this Agreement;

•	foreign exchange gains actually realised by the Contractor in performing the Petroleum Operations.

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a)	New equipment

b)	Equipment in good condition

c)	Other used equipment

d)	Equipment in poor condition

e)	Scrap and waste

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a)	the amount of Petroleum Costs still to be recovered at the beginning of the Calendar Quarter;

b)	the amount of Petroleum Costs relative to the Calendar Quarter in question, recoverable according to the provisions of the Agreement;

c)	the quantity and the value of the production of Hydrocarbons taken during the Calendar Quarter by the Contractor to recover Petroleum Costs;

d)	the amount of income or proceeds credited pursuant to article 2.4.b) of this Accounting Procedure during the quarter;

e)	the amount of Petroleum Costs still to be recovered at the end of the Calendar Quarter.

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a)	in stock at the beginning of the month;

b)	lifted during the month;

c)	lost and used for the needs of the Petroleum Operations;

d)	in stock at the end of the month.

(A)	The company, a company incorporated under the laws of…, hereinafter referred to as “……………,” represented herein by Mr………….., entered into a Hydrocarbons Production Sharing Agreement relative to block CI-…… (hereinafter referred to as the “PSA”) with the Government on ……[date]……….

(B)	In accordance with article 4.8 of the PSA, the Contractor agrees to provide the Government with a bank guarantee for performance of the minimum exploration work programs as defined in article 4 of the PSA.

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(C)	The Bank, at the request of the Contractor, agrees to provide this bank guarantee in favour of the Government, for the Guaranteed Amount as defined in article 3 below.

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•	In accordance with the provisions of article 2 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, all Fields or natural accumulations of Hydrocarbons in the soil or the subsoil of the Republic of Côte d’Ivoire territory, its territorial waters, its exclusive economic zone and continental shelf, whether or not discovered, are and remain the exclusive property of the State;

•	The discovery and production of Hydrocarbons are important for the interests and economic development of the country and its inhabitants;

•	In accordance with the provisions of article 5 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, the State may authorise Ivoirian or foreign legal entities to engage in the exploration, production, transport, storage, transformation and sale of

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•	In accordance with the provisions of article 6 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, the State designated PETROCI to participate in the Petroleum Operations under this Agreement;

•	The Government hopes to develop and promote the Delimited Region, and the Contractor wishes to cooperate with the Government by helping it explore and develop the potential resources of the Delimited Region and thereby encourage the economic expansion of the country;

•	In accordance with Article 1 of Decree No. 2014-248 dated 8 May 2014 which delegated the powers to sign petroleum contracts, the Minister in charge of Petroleum, the Minister of Economy and Finance and the Minister in charge of the Budget have delegated powers to jointly sign the petroleum contracts on the Government’s behalf;

•	The Contractor states that it has the capital, technical capacity and organizational skills necessary to successfully perform the Petroleum Operations specified below in the Delimited Region;

•	The Council of Ministers, in its session held on 20 December 2017, granted its approval for the signing of this Agreement;

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•	a company or any other entity that controls or is controlled, directly or indirectly, by any entity comprising the Contractor;

•	or a company or any other entity that controls or is controlled, directly or indirectly, by a company or entity that itself directly or indirectly controls any entity comprising the Contractor.

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•	Acquisition, processing and interpretation of new 3D seismic covering a minimum of two thousand five hundred km² (2,500 km²).

•	Geological, geophysical (G&G) and engineering studies;

•	One (1) exploration well, firm.

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•	Geological, geophysical (G&G) and engineering studies;

•	One (1) exploration well, firm.

a)	Five million Dollars (US $5,000,000) during the first exploration period defined in article 3.1;

b)	Eighteen million Dollars (US $ 18,000,000) during the second exploration period defined in article 3.2;

c)	Eighteen million Dollars (US $ 18,000,000) during the third exploration period defined in article 3.3.

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a)	Within no more than thirty (30) days after the Effective Date, the Contractor shall provide a bank guarantee in the amount of five million Dollars (US$ 5,000,000) to guarantee performance of the minimum exploration work program for the first exploration period in accordance with article 4.2.

-	fifty percent (50%) of the original amount, i.e., two and a half million Dollars (US $2,500,000) following delivery by the Operator to the Government of a copy of the contract for seismic data acquisition;

-	twenty-five percent (25%) of the original amount, i.e. one million and two hundred and fifty thousand Dollars (US $1,250,000) following the start of said acquisition work;

-	twenty-five percent (25%)of the original amount, i.e. one million and two hundred and fifty thousand Dollars (US $1,250,000) following completion of said acquisition work and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the first exploration period.

b)

As of the start date of the second exploration period, the Contractor shall provide a bank guarantee for an amount of eighteen million Dollars (US $ 18,000,000) to guarantee performance of the minimum exploration work program indicated in article 4.3. The amount of the bank guarantee, adjusted to reflect the exploration wells drilled in advance during the previous exploration period and carried forward to the next exploration period in accordance with article 4.7, will be reduced by:

-	fifty percent (50%) of the original amount, i.e., nine million Dollars (US $9,000,000) following delivery by the Operator to the Government of a copy of the contract for drilling;

-	twenty-five percent (25%) of the original amount; i.e., four million and five hundred thousand Dollars (US $4,500,000) following the start of said drilling works;

-	twenty-five percent (25%)of the original amount; i.e. four million and five hundred thousand Dollars (US $4,500,000) following completion of the drilling works and after the Operator sends the Government all reports and documents

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c)

As of the start date of the third exploration period, the Contractor shall provide a bank guarantee for an amount of eighteen million Dollars (US$18,000,000) to guarantee performance of the minimum exploration work program indicated in article 4.4. The amount of the bank guarantee, adjusted to reflect the exploration wells drilled in advance during the previous exploration period and carried forward to the next exploration period in accordance with article 4.7, will be reduced by:

-	fifty percent (50%) of the original amount, i.e., nine million Dollars (US $9,000,000) following delivery by the Operator to the Government of a copy of the contract for drilling;

-	twenty-five percent (25%) of the original amount, i.e., four million and five hundred thousand Dollars (US $4,500,000) following the start of said drilling works;

-	twenty-five percent (25%) of the original amount, i.e. four million and five hundred thousand Dollars (US $4,500,000) following completion of the drilling works and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the third period and, approved by the Government in accordance with this Agreement.

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•	all necessary funds,

•	all required machinery, equipment and materials,

•	all technical support, including the necessary personnel, subject to the provisions of article 30.

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a)	ensure the protection of aquifers encountered during the course of its work;

b)	perform the tests necessary to determine the value of significant shows encountered during drilling and the commercial nature of discoveries of any Hydrocarbons;

c)	prevent losses and discarding of Hydrocarbons produced and losses and discarding of oil-based mud or any other product used in the Petroleum Operations according to Best Industry Practice in the international petroleum industry.

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a)	to manage and control, under its entire responsibility, the Petroleum Operations in the Delimited Region;

b)	to access any location within the interior of the Delimited Region in order to perform the Petroleum Operations;

c)

to perform all acts, facilities, work, and operations necessary to perform the Petroleum Operations both inside and outside of the Delimited Region. The Contractor may choose the location of the facilities during the exploration periods in accordance with the regulations in force in the Republic of Côte d’Ivoire at such a location subject to (i) approval by the Government, which shall not be refused without a valid reason and (ii) conditions of article 2.3 and articles 6.4 to 6.6; and

d)	to exercise the rights conferred hereunder, through agents and independent contractors, and consequently to pay all of the related fees and expenses in the currency of choice of the Contractor, in accordance with the provisions of article 23.

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a)	daily reports on the drilling activities;

b)	weekly reports on geophysical activities;

c)	within thirty (30) days following each Calendar Quarter, a report on the Petroleum Operations performed, as well as a detailed statement of Petroleum Costs for the previous Calendar Quarter;

d)	before the end of February of each Calendar Year, an annual report on the Petroleum Operations performed, as well as a detailed statement of the Petroleum Costs for the previous Calendar Year.

a)	a copy of the geological study and summary reports as well as the related maps;

b)	a copy of the geophysical surveys, reports on measurements, studies and geophysical interpretation, maps, profiles, sections or other related documents, and, upon the request of the Government, the original or an official copy of the recorded seismic magnetic tapes;

c)	a copy of the installation and test bore completion reports for each wellbore, as well as a full set of recorded logs;

d)	a copy of the test reports or production test reports as well as any study related to the bringing of a well on-stream or into production;

e)	a copy of reports related to analyses performed on core bores and fluid analysis.

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i.	to any company interested in good faith in a potential assignment/acquisition or in an assistance in respect of the Petroleum Operations, after obtaining from this company, a commitment to keep such data and information confidential and to use them for the sole purpose of the aforesaid assignment or assistance;

ii.	to any Affiliated Company of an entity comprising the Contractor, as well as to any external professional advisor, taking part in the Petroleum Operations, after obtaining a similar confidentiality commitment from the latter;

iii.	to any bank or financial institution from which the Contractor seeks or obtains financing, after obtaining a similar confidentiality commitment from such institution;

iv.	when and to the extent that the regulations of a recognized stock exchange or of a supervising or auditing administrative authority require it from one of the entities comprising the Contractor or one of its Affiliated Companies;

v.	in the context of any judiciary, administrative or arbitral litigation procedure or if required by applicable law.

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a)	the planned boundaries of the Production Perimeter requested by the Contractor, so that it covers the area defined by the enclosure of the field identified in article 11.1, as well as all technical justification concerning the scope of said Field;

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b)	an estimate of the reserves in place, recoverable, proven and probable reserves, and the corresponding annual production, as well as a study of any recovery and enhancement methods for Crude Oil associated products, such as Associated Natural Gas;

c)	an item-by-item description of the facilities and work necessary for production, such as the number of development wells, the number and characteristics of pads, pipelines, production, processing, storage and loading facilities;

d)	the estimated performance schedule and the planned date to begin production, and

e)	the estimated investments and production expenses, as well as an economic evaluation confirming the commercial nature of the discovery identified in article 11.1.

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a)	monthly test of production and of gas/oil ratio, and

b)	semi-annual measurement of the reservoir pressure of the Field.

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•	for a Crude Oil price between $50 and $200 per barrel:

•	for a price of Crude Oil less than $50 per barrel: H = 1.08

•	for a price of Crude Oil greater than $200 per barrel: H = 0.88

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•	62% - (62% x 0.5%) = 61.69% multiplied by H

•	61.69% - (61.69% x 1%) = 61.0731% multiplied by H

•	61.0731% - (61.0731% x 1%) = 60.462369% multiplied by H

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•	60.462369% - (60.462369% x 1%) = 59.85774531% multiplied by H

•	59.85774531% - (59.85774531% x 1%) = 59.2591678569% multiplied by H

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a)	the gross annual revenue of the Contractor reported in its accounting books, from the sale of the quantity of Hydrocarbons it has pursuant to the articles 16.2, 16.3 and 21.3.1.

b)	all other revenue or proceeds related to the Petroleum Operations, especially including those from:

•	the sale of related substances;

•	the processing, transportation or storage of products for Third Parties at the facilities allocated to the Petroleum Operations.

•

Subject to article 17.7, gains realised at the time of assigning or transferring any assets of the Contractor, or the full or partial assignment of the rights and obligations arising out of this Agreement. Nevertheless, a gain cannot result from any transfer (i) that does not entail an actual payment in cash or kind by the transferee to the transferor or recovery of a liability already booked by the transferor or (ii) that cannot be considered in any way a financial profit;

•	foreign exchange gains realised from the Petroleum Operations.

c)	the value of the share of Hydrocarbons taken by the Government, in accordance with the last section of article 16.3 and the penultimate section of article 21.3.1, in payment of the income tax indicated in article 17.1 for the Fiscal Year in question.

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a)	Besides the charges explicitly indicated below in this article 17.4, all other Petroleum Costs, including the cost of supplies, personnel and labour expenses, and the cost of services provided to the Contractor for the Petroleum Operations. Nevertheless:

•	the cost of supplies, personnel and services provided by Affiliated Companies shall be deductible insofar as they do not exceed those normally invoiced under free market conditions between an independent buyer and seller for the identical or similar services.

•

fixed asset expenses shall be amortised as of the start of commercial production in the Delimited Region. The amortisation deductible for the Fiscal Year in question shall be equal, at most, to the difference, if positive, between the amount of the Petroleum Costs recovered for the Fiscal Year in question pursuant to article 16.2, and the total of other amounts charged to the production and income account in accordance with this article 17.4.

b)	The overheads related to the Petroleum Operations performed within the context of this Agreement, including in particular:

•	the leasing expenses for movable and immovable property and insurance premiums, and

•

a reasonable share, in relation to the services rendered for the Petroleum Operations performed in the Republic of Côte d’Ivoire, wages and salaries paid to directors and employees residing abroad, and administrative overheads of the central offices of the Contractor and the Affiliated Companies working on its behalf, located abroad, and the indirect expenses incurred by said central offices abroad on their behalf. The overheads paid abroad may not under any circumstances be greater than the limits established in the Accounting Procedure.

c)

The actual amount of interest and commission fees paid to the creditors of the Contractor, within the limits established in the Accounting Procedure. Shareholders and Affiliated Companies shall not be considered as “third parties” pursuant to article 72.3 of the Petroleum Code and, as a result, any advances and loans made to them outside of the Republic of Côte d’Ivoire shall not be submitted for approval by the petroleum administration indicated in said article, but shall be declared to it and, in accordance with the previous section, shall also be subject to the limitations established in the Accounting Procedure.

d)	Losses of equipment or assets resulting from destruction or damage, assets to be waived or abandoned during the year, irrecoverable receivables, compensation paid to Third Parties for damages.

e)	Reasonable and justified provisions established to cover clearly identified subsequent losses or expenses that are likely according to current situations, especially provisions for abandonment costs established pursuant to article 20.8.

f)	Any other losses or charges directly related to the Petroleum Operations, as well as bonuses and amounts paid during the Fiscal Year pursuant to article 19 and articles 30.2, 30.3 and 30.4, with the exception of the amount of direct income tax determined in accordance with the provisions of this article.

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g)	The uncleared amount of losses from prior Fiscal Years in accordance with the legislation of the Republic of Côte d’Ivoire.

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a)	sales in which the buyer is an Affiliated Company of the seller and the sales between entities comprising the Contractor;

b)	sales on the Ivorian domestic market pursuant to article 27.1, and

c)	sales entailing compensation other than payment in freely convertible currency and sales motivated, in whole or in part, by considerations other than the economic incentives that are usual in sales of Crude Oil on the international market (such as foreign exchange contracts, government to government sales or to governmental agencies).

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a)	for all sales to independent buyers, the price applicable to this sale shall be the price obtained for the Crude Oil for said sale, adjusted to reflect the F.O.B. terms of delivery and the payment terms at thirty (30) days;

b)	for all quantities lifted other than those quantities sold to independent buyers, the price applicable to this quantity lifted shall be the Market Price in effect in the previous Calendar Quarter or, if this Market Price has not been determined, a price established by mutual agreement between the Government and Contractor or, in the absence thereof, the last known Market Price.

a)	the recovery by the Contractor of all of the corresponding Petroleum Costs; or

b)	the waiver of any or all of the Delimited Region; or

c)	upon expiration of this Agreement, or

d)	upon termination of this Agreement.

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a)	either request the Government to hold this Field for a period of five (5) years to allow it to research sufficient outlets for profitable production of said Field; this period may be renewed provided that the Contractor justifies its efforts to achieve this objective. After this period ends, the Contractor shall abandon all of its rights to the area surrounding the discovery;

b)	or immediately abandon its rights to the area surrounding the discovery.

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a)	The Contractor shall make available to the Government, free of charge, at the exit of the Crude Oil and Natural Gas separation facilities, some or all of the surplus Associated Natural Gas that the Government wants to lift;

b)	The Government shall be responsible for collection, processing, compression and transportation of this surplus, from the above-mentioned separation facilities, and shall bear all additional related costs, and

c)	The construction of the facilities necessary for the operations indicated in section b) above, as well as lifting of this surplus by the Government, shall be performed in accordance with the Best Industry Practice in the international petroleum industry and

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a)	sales in which the buyer is an Affiliated Company of the seller as well as sales between entities comprising the Contractor, and

b)	sales entailing compensation other than payment in freely convertible currency and sales motivated, in whole or in part, by considerations other than economic incentives that are usual in sales of Natural Gas.

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a)	PETROCI shall be entitled to obtain an additional participating interest (hereinafter referred to as “Additional Participating Interest”) of two percent (2%) which the Operator cannot refuse.

b)

Within four (4) months from the date of granting an exclusive production permit, PETROCI shall notify the other entities comprising the Contractor of its desire to exercise its option to increase its Participating Interest relative to the related Production Perimeter, specifying the percentage of its Additional Participating Interest for said Production Perimeter. If it does not make said notification within four (4) months, PETROCI’s participating interest for this Production Perimeter shall remain the same as its Initial Participating Interest.

c)	The Additional Participating Interest shall become effective, for the Production Perimeter in question, from the date of notification indicated in article 22.2.b) above.

d)

Upon receipt of the written notification from PETROCI, all of the entities comprising the Contractor other than PETROCI shall transfer to PETROCI, immediately and jointly, each pro rata to its Participating Interest at that time, a percentage of their participating interest in the Production Perimeter in question, the total of which shall be equal to the percentage of the Additional Participating Interest of PETROCI.

e)	As of the date of its Additional Participating Interest, or in the absence of the notification indicated in article 22.2.b), PETROCI:

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•	shall participate, pro rata to its Additional Participating Interest, in the Petroleum Costs relating to the corresponding Production Perimeter, with regard to the relevant exclusive production permit;

•	If the permit in question is the first exclusive production permit, as indicated in article 22.2.g) PETROCI shall reimburse the other entities comprising the Contractor the percentage of its Additional Participating Interest in the Petroleum Costs not yet recovered, incurred from the Effective Date up to the date of notification of its Additional Participating Interest, and

•

For each subsequent exclusive production permit, as indicated in article 22.2.g), PETROCI shall reimburse the other entities comprising the Contractor the percentage of its Additional Participating Interest in the Petroleum Costs relating to the new Production Perimeter not yet recovered, incurred from the date of notification of the Additional Participating Interest relating to the previous exclusive production permit up to the date of notification of the Additional Participating Interest for the new exclusive production permit.

f)

Taking into account the previous work already undertaken in the Delimited Region, PETROCI’s Initial Participating Interest shall entail for PETROCI, throughout the duration of this Agreement, neither the financing nor the reimbursement of its share of the Petroleum Costs, which Petroleum Costs are borne and recoverable by the other entities comprising the Contractor, in accordance with articles 16.2, 21.1.5 and 21.2.4, each pro rata to its Participating Interest.

g)	As indicated in article 22.2.e) PETROCI shall reimburse the other entities comprising the Contractor the amounts due for its Participating Interest, as follows, at PETROCI’s option:

•	either within six (6) months from the date of notification of the increase in its Participating Interest, by payments in Dollars or through payments in Crude Oil appraised in accordance with the provisions of article 18;

•

or in kind, by way of withholding, by the other entities constituting the Contractor, taking a portion of PETROCI’s share of Hydrocarbons under Articles 16.3 and 21.3, at a rate of fifty percent (50%) of said share, the value of this portion being calculated in accordance with the provisions of article 18, until the value of these withholdings taken is equal to the remaining balance due plus interest as indicated below. The balance of the remaining amount due upon expiration of the period of six (6) months as indicated above shall accrue interest, from this date until the date of reimbursement, at the annual LIBOR (London Interbank Offered Rate) for Dollar deposits at six (6) months as published electronically by ICE Benchmark Administration Limited for the last business day prior to the date of payment plus one percentage (1) point, compounded annually.

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a)	The association of PETROCI with the Contractor may not under any circumstances cancel or affect the rights of the other entities comprising the Contractor to use the arbitration clause set forth in article 32, which is not applicable to disputes between the Government and PETROCI but only to disputes between the Government and the other entities comprising the Contractor.

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a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

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a)	information on all development and production operations performed during the past Calendar Year, including the quantities of Hydrocarbons produced and sold, if applicable;

b)	information on all transportation operations and sales, as well as the location of the principal facilities constructed by the Contractor, if applicable, and

c)	a statement indicating the number of employees and operations, with their qualifications, nationality, their given name and surnames, their number and employment start date.

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a)	Development Expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations relative to a Production Perimeter excluding Production Expenses and Financial Expenses

b)	Appraisal Expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations relative to an Appraisal Perimeter.

c)

Production Expenses are all costs and expenses borne and paid by the Contractor for producing and maintaining the wells, equipment and related facilities relative to a Field from the start of production of said Field. The Production Expenses shall also include all costs and expenses borne and paid by the Contractor for producing and maintaining the pipelines, generators, warehouses, pools and other facilities that the Contractor acquires, builds or installs in accordance with the provisions of article 7.2. of the Agreement for performing the Petroleum Operations.

d)	Exploration expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations (especially including the costs and expenses indicated in article 2.2.13 of this Accounting Procedure), excluding Appraisal Expenses,

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e)	Financial Expenses means the interest and fees indicated in article 2.2.10 of this Accounting Procedure.

f)	Overheads in the Republic of Côte d’Ivoire means the costs and expenses indicated in article 2.2.2 of this Accounting Procedure.

g)	Overheads Abroad means the costs and expenses indicated in article 2.2.3 of this Accounting Procedure.

a)	the Exploration Expenses;

b)	the Appraisal Expenses;

c)	the Development Expenses;

d)	the Production Expenses;

e)	the Financial Expenses;

f)	the Overheads in the Republic of Côte d’Ivoire;

g)	the Overheads abroad;

h)	the abandonment reserve funds:

i)	national needs, and

j)	training, equipment and social works expenses.

a)	the total amount of Petroleum Costs since the Effective Date;

b)	the total amount of Petroleum Costs recovered;

c)	the total amount credited to the Petroleum Costs Account pursuant to article 2.4.b) of this Accounting Procedure, and

d)	the total amount of Petroleum Costs still to be recovered.

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a)	production expenses of a Field incurred and effectively paid from the start date of regular production;

b)	financial expenses, and

c)	other Petroleum Costs.

a)	before granting an exclusive production permit: five percent (5%) of the expenses allocated to the Petroleum Costs Account excluding overhead for the Calendar Year in question;

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b)	as of the time of granting the first exclusive production permit: three percent (3%) of the expenses allocated to the Petroleum Costs Account excluding bonuses and overhead for the Calendar Year in question.

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a)	the expenses relative to the period prior to the Effective Date save for the provisions in article 16.7;

b)	all expenses relative to the Operations performed beyond the Point of Delivery, such as transportation and marketing expenses;

c)	the financial expenses relative to financing the Petroleum Exploration Operations, and those relative to the portion of financing the Development Expenses exceeding seventy-five percent (75%) of the total amount of the Development Expenses;

d)	the bonuses defined in article 19 of this Agreement.

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e)	foreign exchange losses other than those indicated in article 2.2.13 of this Accounting Procedure.

a)	revenue derived from selling the quantity of Hydrocarbons available to the Contractor, in accordance with articles 16 and 21 of this Agreement, for recovery of the Petroleum Costs;

b)	all other revenue or income related to the Petroleum Operations, especially those derived from:

•	the sale of related substances;

•	all services rendered to Third Parties using the facilities allocated to the Petroleum Operations, especially the processing, transportation and storage of products for Third Parties in these facilities;

•	the transfer of assets of the Contractor, and the transfer of some or all of the rights and obligations of the Contractor according to article 35 of this Agreement;

•	foreign exchange gains actually realised by the Contractor in performing the Petroleum Operations.

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a)	New equipment

b)	Equipment in good condition

c)	Other used equipment

d)	Equipment in poor condition

e)	Scrap and waste

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a)	the amount of Petroleum Costs still to be recovered at the beginning of the Calendar Quarter;

b)	the amount of Petroleum Costs relative to the Calendar Quarter in question, recoverable according to the provisions of the Agreement;

c)	the quantity and the value of the production of Hydrocarbons taken during the Calendar Quarter by the Contractor to recover Petroleum Costs;

d)	the amount of income or proceeds credited pursuant to article 2.4.b) of this Accounting Procedure during the quarter;

e)	the amount of Petroleum Costs still to be recovered at the end of the Calendar Quarter.

a)	in stock at the beginning of the month;

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b)	lifted during the month;

c)	lost and used for the needs of the Petroleum Operations;

d)	in stock at the end of the month.

(A)	The company, a company incorporated under the laws of…, hereinafter referred to as “……………,” represented herein by Mr………….., entered into a Hydrocarbons Production Sharing Agreement relative to block CI-…… (hereinafter referred to as the “PSA”) with the Government on ……[date]……….

(B)	In accordance with article 4.8 of the PSA, the Contractor agrees to provide the Government with a bank guarantee for performance of the minimum exploration work programs as defined in article 4 of the PSA.

(C)	The Bank, at the request of the Contractor, agrees to provide this bank guarantee in favour of the Government, for the Guaranteed Amount as defined in article 3 below.

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•	In accordance with the provisions of article 2 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, all Fields or natural accumulations of Hydrocarbons in the soil or the subsoil of the Republic of Côte d’Ivoire territory, its territorial waters, its exclusive economic zone and continental shelf, whether or not discovered, are and remain the exclusive property of the State;

•	The discovery and production of Hydrocarbons are important for the interests and economic development of the country and its inhabitants;

•	In accordance with the provisions of article 5 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, the State may authorise Ivoirian or foreign legal entities to engage in the exploration, production, transport, storage, transformation and sale of

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•	In accordance with the provisions of article 6 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, the State designated PETROCI to participate in the Petroleum Operations under this Agreement;

•	The Government hopes to develop and promote the Delimited Region, and the Contractor wishes to cooperate with the Government by helping it explore and develop the potential resources of the Delimited Region and thereby encourage the economic expansion of the country;

•	In accordance with Article 1 of Decree No. 2014-248 dated 8 May 2014 which delegated the powers to sign petroleum contracts, the Minister in charge of Petroleum, the Minister of Economy and Finance and the Minister in charge of the Budget have delegated powers to jointly sign the petroleum contracts on the Government’s behalf;

•	The Contractor states that it has the capital, technical capacity and organizational skills necessary to successfully perform the Petroleum Operations specified below in the Delimited Region;

•	The Council of Ministers, in its session held on 20 December 2017, granted its approval for the signing of this Agreement;

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•	a company or any other entity that controls or is controlled, directly or indirectly, by any entity comprising the Contractor;

•	or a company or any other entity that controls or is controlled, directly or indirectly, by a company or entity that itself directly or indirectly controls any entity comprising the Contractor.

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•	Acquisition, processing and interpretation of new 3D seismic covering a minimum of three thousand km² (3,000 km²).

•	Geological, geophysical (G&G) and engineering studies;

•	One (1) exploration well, firm.

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•	Geological, geophysical (G&G) and engineering studies;

•	One (1) exploration well, firm.

a)	Six million Dollars (US $6,000,000) during the first exploration period defined in article 3.1;

b)	Eighteen million Dollars (US $ 18,000,000) during the second exploration period defined in article 3.2;

c)	Eighteen million Dollars (US $ 18,000,000) during the third exploration period defined in article 3.3.

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a)	Within no more than thirty (30) days after the Effective Date, the Contractor shall provide a bank guarantee in the amount of six million Dollars (US$ 6,000,000) to guarantee performance of the minimum exploration work program for the first exploration period in accordance with article 4.2.

-	fifty percent (50%) of the original amount, i.e., three million Dollars (US $3,000,000) following delivery by the Operator to the Government of a copy of the contract for seismic data acquisition;

-	twenty-five percent (25%) of the original amount, i.e. one million five hundred thousand Dollars (US $1,500,000) following the start of said acquisition work;

-	twenty-five percent (25%)of the original amount, i.e. one million five hundred thousand Dollars (US $1,500,000) following completion of said acquisition work and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the first exploration period.

b)

As of the start date of the second exploration period, the Contractor shall provide a bank guarantee for an amount of eighteen million Dollars (US $ 18,000,000) to guarantee performance of the minimum exploration work program indicated in article 4.3. The amount of the bank guarantee, adjusted to reflect the exploration wells drilled in advance during the previous exploration period and carried forward to the next exploration period in accordance with article 4.7, will be reduced by:

-	fifty percent (50%) of the original amount, i.e., nine million Dollars (US $9,000,000) following delivery by the Operator to the Government of a copy of the contract for drilling;

-	twenty-five percent (25%) of the original amount; i.e., four million and five hundred thousand Dollars (US $4,500,000) following the start of said drilling works;

-	twenty-five percent (25%)of the original amount; i.e. four million and five hundred thousand Dollars (US $4,500,000) following completion of the drilling works and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the

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c)

As of the start date of the third exploration period, the Contractor shall provide a bank guarantee for an amount of eighteen million Dollars (US$18,000,000) to guarantee performance of the minimum exploration work program indicated in article 4.4. The amount of the bank guarantee, adjusted to reflect the exploration wells drilled in advance during the previous exploration period and carried forward to the next exploration period in accordance with article 4.7, will be reduced by:

-	fifty percent (50%) of the original amount, i.e., nine million Dollars (US $9,000,000) following delivery by the Operator to the Government of a copy of the contract for drilling;

-	twenty-five percent (25%) of the original amount, i.e., four million and five hundred thousand Dollars (US $4,500,000) following the start of said drilling works;

-	twenty-five percent (25%) of the original amount, i.e. four million and five hundred thousand Dollars (US $4,500,000) following completion of the drilling works and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the third period and, approved by the Government in accordance with this Agreement.

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•	all necessary funds,

•	all required machinery, equipment and materials,

•	all technical support, including the necessary personnel, subject to the provisions of article 30.

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a)	ensure the protection of aquifers encountered during the course of its work;

b)	perform the tests necessary to determine the value of significant shows encountered during drilling and the commercial nature of discoveries of any Hydrocarbons;

c)	prevent losses and discarding of Hydrocarbons produced and losses and discarding of oil-based mud or any other product used in the Petroleum Operations according to Best Industry Practice in the international petroleum industry.

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a)	to manage and control, under its entire responsibility, the Petroleum Operations in the Delimited Region;

b)	to access any location within the interior of the Delimited Region in order to perform the Petroleum Operations;

c)

to perform all acts, facilities, work, and operations necessary to perform the Petroleum Operations both inside and outside of the Delimited Region. The Contractor may choose the location of the facilities during the exploration periods in accordance with the regulations in force in the Republic of Côte d’Ivoire at such a location subject to (i) approval by the Government, which shall not be refused without a valid reason and (ii) conditions of article 2.3 and articles 6.4 to 6.6; and

d)	to exercise the rights conferred hereunder, through agents and independent contractors, and consequently to pay all of the related fees and expenses in the currency of choice of the Contractor, in accordance with the provisions of article 23.

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a)	daily reports on the drilling activities;

b)	weekly reports on geophysical activities;

c)	within thirty (30) days following each Calendar Quarter, a report on the Petroleum Operations performed, as well as a detailed statement of Petroleum Costs for the previous Calendar Quarter;

d)	before the end of February of each Calendar Year, an annual report on the Petroleum Operations performed, as well as a detailed statement of the Petroleum Costs for the previous Calendar Year.

a)	a copy of the geological study and summary reports as well as the related maps;

b)	a copy of the geophysical surveys, reports on measurements, studies and geophysical interpretation, maps, profiles, sections or other related documents, and, upon the request of the Government, the original or an official copy of the recorded seismic magnetic tapes;

c)	a copy of the installation and test bore completion reports for each wellbore, as well as a full set of recorded logs;

d)	a copy of the test reports or production test reports as well as any study related to the bringing of a well on-stream or into production;

e)	a copy of reports related to analyses performed on core bores and fluid analysis.

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i.	to any company interested in good faith in a potential assignment/acquisition or in an assistance in respect of the Petroleum Operations, after obtaining from this company, a commitment to keep such data and information confidential and to use them for the sole purpose of the aforesaid assignment or assistance;

ii.	to any Affiliated Company of an entity comprising the Contractor, as well as to any external professional advisor, taking part in the Petroleum Operations, after obtaining a similar confidentiality commitment from the latter;

iii.	to any bank or financial institution from which the Contractor seeks or obtains financing, after obtaining a similar confidentiality commitment from such institution;

iv.	when and to the extent that the regulations of a recognized stock exchange or of a supervising or auditing administrative authority require it from one of the entities comprising the Contractor or one of its Affiliated Companies;

v.	in the context of any judiciary, administrative or arbitral litigation procedure or if required by applicable law.

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a)	the planned boundaries of the Production Perimeter requested by the Contractor, so that it covers the area defined by the enclosure of the field identified in article 11.1, as well as all technical justification concerning the scope of said Field;

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b)	an estimate of the reserves in place, recoverable, proven and probable reserves, and the corresponding annual production, as well as a study of any recovery and enhancement methods for Crude Oil associated products, such as Associated Natural Gas;

c)	an item-by-item description of the facilities and work necessary for production, such as the number of development wells, the number and characteristics of pads, pipelines, production, processing, storage and loading facilities;

d)	the estimated performance schedule and the planned date to begin production, and

e)	the estimated investments and production expenses, as well as an economic evaluation confirming the commercial nature of the discovery identified in article 11.1.

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a)	monthly test of production and of gas/oil ratio, and

b)	semi-annual measurement of the reservoir pressure of the Field.

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•	for a Crude Oil price between $50 and $200 per barrel:

•	for a price of Crude Oil less than $50 per barrel: H = 1.08

•	for a price of Crude Oil greater than $200 per barrel: H = 0.88

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•	62% - (62% x 0.5%) = 61.69% multiplied by H

•	61.69% - (61.69% x 1%) = 61.0731% multiplied by H

•	61.0731% - (61.0731% x 1%) = 60.462369% multiplied by H

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•	60.462369% - (60.462369% x 1%) = 59.85774531% multiplied by H

•	59.85774531% - (59.85774531% x 1%) = 59.2591678569% multiplied by H

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a)	the gross annual revenue of the Contractor reported in its accounting books, from the sale of the quantity of Hydrocarbons it has pursuant to the articles 16.2, 16.3 and 21.3.1.

b)	all other revenue or proceeds related to the Petroleum Operations, especially including those from:

•	the sale of related substances;

•	the processing, transportation or storage of products for Third Parties at the facilities allocated to the Petroleum Operations.

•

Subject to article 17.7, gains realised at the time of assigning or transferring any assets of the Contractor, or the full or partial assignment of the rights and obligations arising out of this Agreement. Nevertheless, a gain cannot result from any transfer (i) that does not entail an actual payment in cash or kind by the transferee to the transferor or recovery of a liability already booked by the transferor or (ii) that cannot be considered in any way a financial profit;

•	foreign exchange gains realised from the Petroleum Operations.

c)	the value of the share of Hydrocarbons taken by the Government, in accordance with the last section of article 16.3 and the penultimate section of article 21.3.1, in payment of the income tax indicated in article 17.1 for the Fiscal Year in question.

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a)	Besides the charges explicitly indicated below in this article 17.4, all other Petroleum Costs, including the cost of supplies, personnel and labour expenses, and the cost of services provided to the Contractor for the Petroleum Operations. Nevertheless:

•	the cost of supplies, personnel and services provided by Affiliated Companies shall be deductible insofar as they do not exceed those normally invoiced under free market conditions between an independent buyer and seller for the identical or similar services.

•

fixed asset expenses shall be amortised as of the start of commercial production in the Delimited Region. The amortisation deductible for the Fiscal Year in question shall be equal, at most, to the difference, if positive, between the amount of the Petroleum Costs recovered for the Fiscal Year in question pursuant to article 16.2, and the total of other amounts charged to the production and income account in accordance with this article 17.4.

b)	The overheads related to the Petroleum Operations performed within the context of this Agreement, including in particular:

•	the leasing expenses for movable and immovable property and insurance premiums, and

•

a reasonable share, in relation to the services rendered for the Petroleum Operations performed in the Republic of Côte d’Ivoire, wages and salaries paid to directors and employees residing abroad, and administrative overheads of the central offices of the Contractor and the Affiliated Companies working on its behalf, located abroad, and the indirect expenses incurred by said central offices abroad on their behalf. The overheads paid abroad may not under any circumstances be greater than the limits established in the Accounting Procedure.

c)

The actual amount of interest and commission fees paid to the creditors of the Contractor, within the limits established in the Accounting Procedure. Shareholders and Affiliated Companies shall not be considered as “third parties” pursuant to article 72.3 of the Petroleum Code and, as a result, any advances and loans made to them outside of the Republic of Côte d’Ivoire shall not be submitted for approval by the petroleum administration indicated in said article, but shall be declared to it and, in accordance with the previous section, shall also be subject to the limitations established in the Accounting Procedure.

d)	Losses of equipment or assets resulting from destruction or damage, assets to be waived or abandoned during the year, irrecoverable receivables, compensation paid to Third Parties for damages.

e)	Reasonable and justified provisions established to cover clearly identified subsequent losses or expenses that are likely according to current situations, especially provisions for abandonment costs established pursuant to article 20.8.

f)	Any other losses or charges directly related to the Petroleum Operations, as well as bonuses and amounts paid during the Fiscal Year pursuant to article 19 and articles 30.2, 30.3 and 30.4, with the exception of the amount of direct income tax determined in accordance with the provisions of this article.

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g)	The uncleared amount of losses from prior Fiscal Years in accordance with the legislation of the Republic of Côte d’Ivoire.

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a)	sales in which the buyer is an Affiliated Company of the seller and the sales between entities comprising the Contractor;

b)	sales on the Ivorian domestic market pursuant to article 27.1, and

c)	sales entailing compensation other than payment in freely convertible currency and sales motivated, in whole or in part, by considerations other than the economic incentives that are usual in sales of Crude Oil on the international market (such as foreign exchange contracts, government to government sales or to governmental agencies).

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a)	for all sales to independent buyers, the price applicable to this sale shall be the price obtained for the Crude Oil for said sale, adjusted to reflect the F.O.B. terms of delivery and the payment terms at thirty (30) days;

b)	for all quantities lifted other than those quantities sold to independent buyers, the price applicable to this quantity lifted shall be the Market Price in effect in the previous Calendar Quarter or, if this Market Price has not been determined, a price established by mutual agreement between the Government and Contractor or, in the absence thereof, the last known Market Price.

a)	the recovery by the Contractor of all of the corresponding Petroleum Costs; or

b)	the waiver of any or all of the Delimited Region; or

c)	upon expiration of this Agreement, or

d)	upon termination of this Agreement.

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a)	either request the Government to hold this Field for a period of five (5) years to allow it to research sufficient outlets for profitable production of said Field; this period may be renewed provided that the Contractor justifies its efforts to achieve this objective. After this period ends, the Contractor shall abandon all of its rights to the area surrounding the discovery;

b)	or immediately abandon its rights to the area surrounding the discovery.

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a)	The Contractor shall make available to the Government, free of charge, at the exit of the Crude Oil and Natural Gas separation facilities, some or all of the surplus Associated Natural Gas that the Government wants to lift;

b)	The Government shall be responsible for collection, processing, compression and transportation of this surplus, from the above-mentioned separation facilities, and shall bear all additional related costs, and

c)	The construction of the facilities necessary for the operations indicated in section b) above, as well as lifting of this surplus by the Government, shall be performed in accordance with the Best Industry Practice in the international petroleum industry and

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a)	sales in which the buyer is an Affiliated Company of the seller as well as sales between entities comprising the Contractor, and

b)	sales entailing compensation other than payment in freely convertible currency and sales motivated, in whole or in part, by considerations other than economic incentives that are usual in sales of Natural Gas.

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a)	PETROCI shall be entitled to obtain an additional participating interest (hereinafter referred to as “Additional Participating Interest”) of two percent (2%) which the Operator cannot refuse.

b)

Within four (4) months from the date of granting an exclusive production permit, PETROCI shall notify the other entities comprising the Contractor of its desire to exercise its option to increase its Participating Interest relative to the related Production Perimeter, specifying the percentage of its Additional Participating Interest for said Production Perimeter. If it does not make said notification within four (4) months, PETROCI’s participating interest for this Production Perimeter shall remain the same as its Initial Participating Interest.

c)	The Additional Participating Interest shall become effective, for the Production Perimeter in question, from the date of notification indicated in article 22.2.b) above.

d)

Upon receipt of the written notification from PETROCI, all of the entities comprising the Contractor other than PETROCI shall transfer to PETROCI, immediately and jointly, each pro rata to its Participating Interest at that time, a percentage of their participating interest in the Production Perimeter in question, the total of which shall be equal to the percentage of the Additional Participating Interest of PETROCI.

e)	As of the date of its Additional Participating Interest, or in the absence of the notification indicated in article 22.2.b), PETROCI:

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•	shall participate, pro rata to its Additional Participating Interest, in the Petroleum Costs relating to the corresponding Production Perimeter, with regard to the relevant exclusive production permit;

•	If the permit in question is the first exclusive production permit, as indicated in article 22.2.g) PETROCI shall reimburse the other entities comprising the Contractor the percentage of its Additional Participating Interest in the Petroleum Costs not yet recovered, incurred from the Effective Date up to the date of notification of its Additional Participating Interest, and

•

For each subsequent exclusive production permit, as indicated in article 22.2.g), PETROCI shall reimburse the other entities comprising the Contractor the percentage of its Additional Participating Interest in the Petroleum Costs relating to the new Production Perimeter not yet recovered, incurred from the date of notification of the Additional Participating Interest relating to the previous exclusive production permit up to the date of notification of the Additional Participating Interest for the new exclusive production permit.

f)

Taking into account the previous work already undertaken in the Delimited Region, PETROCI’s Initial Participating Interest shall entail for PETROCI, throughout the duration of this Agreement, neither the financing nor the reimbursement of its share of the Petroleum Costs, which Petroleum Costs are borne and recoverable by the other entities comprising the Contractor, in accordance with articles 16.2, 21.1.5 and 21.2.4, each pro rata to its Participating Interest.

g)	As indicated in article 22.2.e) PETROCI shall reimburse the other entities comprising the Contractor the amounts due for its Participating Interest, as follows, at PETROCI’s option:

•	either within six (6) months from the date of notification of the increase in its Participating Interest, by payments in Dollars or through payments in Crude Oil appraised in accordance with the provisions of article 18;

•

or in kind, by way of withholding, by the other entities constituting the Contractor, taking a portion of PETROCI’s share of Hydrocarbons under Articles 16.3 and 21.3, at a rate of fifty percent (50%) of said share, the value of this portion being calculated in accordance with the provisions of article 18, until the value of these withholdings taken is equal to the remaining balance due plus interest as indicated below. The balance of the remaining amount due upon expiration of the period of six (6) months as indicated above shall accrue interest, from this date until the date of reimbursement, at the annual LIBOR (London Interbank Offered Rate) for Dollar deposits at six (6) months as published electronically by ICE Benchmark Administration Limited for the last business day prior to the date of payment plus one percentage (1) point, compounded annually.

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a)	The association of PETROCI with the Contractor may not under any circumstances cancel or affect the rights of the other entities comprising the Contractor to use the arbitration clause set forth in article 32, which is not applicable to disputes between the Government and PETROCI but only to disputes between the Government and the other entities comprising the Contractor.

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a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

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a)	information on all development and production operations performed during the past Calendar Year, including the quantities of Hydrocarbons produced and sold, if applicable;

b)	information on all transportation operations and sales, as well as the location of the principal facilities constructed by the Contractor, if applicable, and

c)	a statement indicating the number of employees and operations, with their qualifications, nationality, their given name and surnames, their number and employment start date.

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a)	Development Expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations relative to a Production Perimeter excluding Production Expenses and Financial Expenses

b)	Appraisal Expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations relative to an Appraisal Perimeter.

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c)

Production Expenses are all costs and expenses borne and paid by the Contractor for producing and maintaining the wells, equipment and related facilities relative to a Field from the start of production of said Field. The Production Expenses shall also include all costs and expenses borne and paid by the Contractor for producing and maintaining the pipelines, generators, warehouses, pools and other facilities that the Contractor acquires, builds or installs in accordance with the provisions of article 7.2. of the Agreement for performing the Petroleum Operations.

d)	Exploration expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations (especially including the costs and expenses indicated in article 2.2.13 of this Accounting Procedure), excluding Appraisal Expenses, Development Expenses, Production Expenses, Financial Expenses, Overheads in the Republic of Côte d’Ivoire and Overheads Abroad.

e)	Financial Expenses means the interest and fees indicated in article 2.2.10 of this Accounting Procedure.

f)	Overheads in the Republic of Côte d’Ivoire means the costs and expenses indicated in article 2.2.2 of this Accounting Procedure.

g)	Overheads Abroad means the costs and expenses indicated in article 2.2.3 of this Accounting Procedure.

a)	the Exploration Expenses;

b)	the Appraisal Expenses;

c)	the Development Expenses;

d)	the Production Expenses;

e)	the Financial Expenses;

f)	the Overheads in the Republic of Côte d’Ivoire;

g)	the Overheads abroad;

h)	the abandonment reserve funds:

i)	national needs, and

j)	training, equipment and social works expenses.

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a)	the total amount of Petroleum Costs since the Effective Date;

b)	the total amount of Petroleum Costs recovered;

c)	the total amount credited to the Petroleum Costs Account pursuant to article 2.4.b) of this Accounting Procedure, and

d)	the total amount of Petroleum Costs still to be recovered.

a)	production expenses of a Field incurred and effectively paid from the start date of regular production;

b)	financial expenses, and

c)	other Petroleum Costs.

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a)	before granting an exclusive production permit: five percent (5%) of the expenses allocated to the Petroleum Costs Account excluding overhead for the Calendar Year in question;

b)	as of the time of granting the first exclusive production permit: three percent (3%) of the expenses allocated to the Petroleum Costs Account excluding bonuses and overhead for the Calendar Year in question.

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a)	the expenses relative to the period prior to the Effective Date save for the provisions in article 16.7;

b)	all expenses relative to the Operations performed beyond the Point of Delivery, such as transportation and marketing expenses;

c)	the financial expenses relative to financing the Petroleum Exploration Operations, and those relative to the portion of financing the Development Expenses exceeding seventy-five percent (75%) of the total amount of the Development Expenses;

d)	the bonuses defined in article 19 of this Agreement.

e)	foreign exchange losses other than those indicated in article 2.2.13 of this Accounting Procedure.

a)	revenue derived from selling the quantity of Hydrocarbons available to the Contractor, in accordance with articles 16 and 21 of this Agreement, for recovery of the Petroleum Costs;

b)	all other revenue or income related to the Petroleum Operations, especially those derived from:

•	the sale of related substances;

•	all services rendered to Third Parties using the facilities allocated to the Petroleum Operations, especially the processing, transportation and storage of products for Third Parties in these facilities;

•	the transfer of assets of the Contractor, and the transfer of some or all of the rights and obligations of the Contractor according to article 35 of this Agreement;

•	foreign exchange gains actually realised by the Contractor in performing the Petroleum Operations.

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a)	New equipment

b)	Equipment in good condition

c)	Other used equipment

d)	Equipment in poor condition

e)	Scrap and waste

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a)	the amount of Petroleum Costs still to be recovered at the beginning of the Calendar Quarter;

b)	the amount of Petroleum Costs relative to the Calendar Quarter in question, recoverable according to the provisions of the Agreement;

c)	the quantity and the value of the production of Hydrocarbons taken during the Calendar Quarter by the Contractor to recover Petroleum Costs;

d)	the amount of income or proceeds credited pursuant to article 2.4.b) of this Accounting Procedure during the quarter;

e)	the amount of Petroleum Costs still to be recovered at the end of the Calendar Quarter.

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a)	in stock at the beginning of the month;

b)	lifted during the month;

c)	lost and used for the needs of the Petroleum Operations;

d)	in stock at the end of the month.

(A)	The company, a company incorporated under the laws of…, hereinafter referred to as “……………,” represented herein by Mr………….., entered into a Hydrocarbons Production Sharing Agreement relative to block CI-…… (hereinafter referred to as the “PSA”) with the Government on ……[date]……….

(B)	In accordance with article 4.8 of the PSA, the Contractor agrees to provide the Government with a bank guarantee for performance of the minimum exploration work programs as defined in article 4 of the PSA.

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(C)	The Bank, at the request of the Contractor, agrees to provide this bank guarantee in favour of the Government, for the Guaranteed Amount as defined in article 3 below.

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•	In accordance with the provisions of article 2 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, all Fields or natural accumulations of Hydrocarbons in the soil or the subsoil of the Republic of Côte d’Ivoire territory, its territorial waters, its exclusive economic zone and continental shelf, whether or not discovered, are and remain the exclusive property of the State;

•	The discovery and production of Hydrocarbons are important for the interests and economic development of the country and its inhabitants;

•	In accordance with the provisions of article 5 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, the State may authorise Ivoirian or foreign legal entities to engage in the exploration, production, transport, storage, transformation and sale of

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•	In accordance with the provisions of article 6 of Law No. 96-669 dated 29 August 1996 establishing the Petroleum Code, the State designated PETROCI to participate in the Petroleum Operations under this Agreement;

•	The Government hopes to develop and promote the Delimited Region, and the Contractor wishes to cooperate with the Government by helping it explore and develop the potential resources of the Delimited Region and thereby encourage the economic expansion of the country;

•	In accordance with Article 1 of Decree No. 2014-248 dated 8 May 2014 which delegated the powers to sign petroleum contracts, the Minister in charge of Petroleum, the Minister of Economy and Finance and the Minister in charge of the Budget have delegated powers to jointly sign the petroleum contracts on the Government’s behalf;

•	The Contractor states that it has the capital, technical capacity and organizational skills necessary to successfully perform the Petroleum Operations specified below in the Delimited Region;

•	The Council of Ministers, in its session held on 20 December 2017, granted its approval for the signing of this Agreement;

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•	a company or any other entity that controls or is controlled, directly or indirectly, by any entity comprising the Contractor;

•	or a company or any other entity that controls or is controlled, directly or indirectly, by a company or entity that itself directly or indirectly controls any entity comprising the Contractor.

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•	Acquisition, processing and interpretation of new 3D seismic covering a minimum of one thousand four hundred km² (1,400 km²).

•	Geological, geophysical (G&G) and engineering studies;

•	One (1) exploration well, firm.

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•	Geological, geophysical (G&G) and engineering studies;

•	One (1) exploration well, firm.

a)	Three million Dollars (US $3,000,000) during the first exploration period defined in article 3.1;

b)	Eighteen million Dollars (US $ 18,000,000) during the second exploration period defined in article 3.2;

c)	Eighteen million Dollars (US $ 18,000,000) during the third exploration period defined in article 3.3.

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a)	Within no more than thirty (30) days after the Effective Date, the Contractor shall provide a bank guarantee in the amount of three million Dollars (US$ 3,000,000) to guarantee performance of the minimum exploration work program for the first exploration period in accordance with article 4.2.

-	fifty percent (50%) of the original amount, i.e., one million five hundred Dollars (US $1,500,000) following delivery by the Operator to the Government of a copy of the contract for seismic data acquisition;

-	twenty-five percent (25%) of the original amount, i.e. seven hundred fifty thousand Dollars (US $750,000) following the start of said acquisition work;

-	twenty-five percent (25%)of the original amount, i.e. seven hundred fifty thousand Dollars (US $750,000) following completion of said acquisition work and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the first exploration period.

b)

As of the start date of the second exploration period, the Contractor shall provide a bank guarantee for an amount of eighteen million Dollars (US $ 18,000,000) to guarantee performance of the minimum exploration work program indicated in article 4.3. The amount of the bank guarantee, adjusted to reflect the exploration wells drilled in advance during the previous exploration period and carried forward to the next exploration period in accordance with article 4.7, will be reduced by:

-	fifty percent (50%) of the original amount, i.e., nine million Dollars (US $9,000,000) following delivery by the Operator to the Government of a copy of the contract for drilling;

-	twenty-five percent (25%) of the original amount; i.e., four million and five hundred thousand Dollars (US $4,500,000) following the start of said drilling works;

-	twenty-five percent (25%)of the original amount; i.e. four million and five hundred thousand Dollars (US $4,500,000) following completion of the drilling works and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the

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c)

As of the start date of the third exploration period, the Contractor shall provide a bank guarantee for an amount of eighteen million Dollars (US$18,000,000) to guarantee performance of the minimum exploration work program indicated in article 4.4. The amount of the bank guarantee, adjusted to reflect the exploration wells drilled in advance during the previous exploration period and carried forward to the next exploration period in accordance with article 4.7, will be reduced by:

-	fifty percent (50%) of the original amount, i.e., nine million Dollars (US $9,000,000) following delivery by the Operator to the Government of a copy of the contract for drilling;

-	twenty-five percent (25%) of the original amount, i.e., four million and five hundred thousand Dollars (US $4,500,000) following the start of said drilling works;

-	twenty-five percent (25%) of the original amount, i.e. four million and five hundred thousand Dollars (US $4,500,000) following completion of the drilling works and after the Operator sends the Government all reports and documents derived from performance of the minimum exploration work program for the third period and, approved by the Government in accordance with this Agreement.

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•	all necessary funds,

•	all required machinery, equipment and materials,

•	all technical support, including the necessary personnel, subject to the provisions of article 30.

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a)	ensure the protection of aquifers encountered during the course of its work;

b)	perform the tests necessary to determine the value of significant shows encountered during drilling and the commercial nature of discoveries of any Hydrocarbons;

c)	prevent losses and discarding of Hydrocarbons produced and losses and discarding of oil-based mud or any other product used in the Petroleum Operations according to Best Industry Practice in the international petroleum industry.

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a)	to manage and control, under its entire responsibility, the Petroleum Operations in the Delimited Region;

b)	to access any location within the interior of the Delimited Region in order to perform the Petroleum Operations;

c)

to perform all acts, facilities, work, and operations necessary to perform the Petroleum Operations both inside and outside of the Delimited Region. The Contractor may choose the location of the facilities during the exploration periods in accordance with the regulations in force in the Republic of Côte d’Ivoire at such a location subject to (i) approval by the Government, which shall not be refused without a valid reason and (ii) conditions of article 2.3 and articles 6.4 to 6.6; and

d)	to exercise the rights conferred hereunder, through agents and independent contractors, and consequently to pay all of the related fees and expenses in the currency of choice of the Contractor, in accordance with the provisions of article 23.

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a)	daily reports on the drilling activities;

b)	weekly reports on geophysical activities;

c)	within thirty (30) days following each Calendar Quarter, a report on the Petroleum Operations performed, as well as a detailed statement of Petroleum Costs for the previous Calendar Quarter;

d)	before the end of February of each Calendar Year, an annual report on the Petroleum Operations performed, as well as a detailed statement of the Petroleum Costs for the previous Calendar Year.

a)	a copy of the geological study and summary reports as well as the related maps;

b)	a copy of the geophysical surveys, reports on measurements, studies and geophysical interpretation, maps, profiles, sections or other related documents, and, upon the request of the Government, the original or an official copy of the recorded seismic magnetic tapes;

c)	a copy of the installation and test bore completion reports for each wellbore, as well as a full set of recorded logs;

d)	a copy of the test reports or production test reports as well as any study related to the bringing of a well on-stream or into production;

e)	a copy of reports related to analyses performed on core bores and fluid analysis.

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i.	to any company interested in good faith in a potential assignment/acquisition or in an assistance in respect of the Petroleum Operations, after obtaining from this company, a commitment to keep such data and information confidential and to use them for the sole purpose of the aforesaid assignment or assistance;

ii.	to any Affiliated Company of an entity comprising the Contractor, as well as to any external professional advisor, taking part in the Petroleum Operations, after obtaining a similar confidentiality commitment from the latter;

iii.	to any bank or financial institution from which the Contractor seeks or obtains financing, after obtaining a similar confidentiality commitment from such institution;

iv.	when and to the extent that the regulations of a recognized stock exchange or of a supervising or auditing administrative authority require it from one of the entities comprising the Contractor or one of its Affiliated Companies;

v.	in the context of any judiciary, administrative or arbitral litigation procedure or if required by applicable law.

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a)	the planned boundaries of the Production Perimeter requested by the Contractor, so that it covers the area defined by the enclosure of the field identified in article 11.1, as well as all technical justification concerning the scope of said Field;

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b)	an estimate of the reserves in place, recoverable, proven and probable reserves, and the corresponding annual production, as well as a study of any recovery and enhancement methods for Crude Oil associated products, such as Associated Natural Gas;

c)	an item-by-item description of the facilities and work necessary for production, such as the number of development wells, the number and characteristics of pads, pipelines, production, processing, storage and loading facilities;

d)	the estimated performance schedule and the planned date to begin production, and

e)	the estimated investments and production expenses, as well as an economic evaluation confirming the commercial nature of the discovery identified in article 11.1.

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a)	monthly test of production and of gas/oil ratio, and

b)	semi-annual measurement of the reservoir pressure of the Field.

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•	for a Crude Oil price between $50 and $200 per barrel:

•	for a price of Crude Oil less than $50 per barrel: H = 1.08

•	for a price of Crude Oil greater than $200 per barrel: H = 0.88

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•	62% - (62% x 0.5%) = 61.69% multiplied by H

•	61.69% - (61.69% x 1%) = 61.0731% multiplied by H

•	61.0731% - (61.0731% x 1%) = 60.462369% multiplied by H

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•	60.462369% - (60.462369% x 1%) = 59.85774531% multiplied by H

•	59.85774531% - (59.85774531% x 1%) = 59.2591678569% multiplied by H

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a)	the gross annual revenue of the Contractor reported in its accounting books, from the sale of the quantity of Hydrocarbons it has pursuant to the articles 16.2, 16.3 and 21.3.1.

b)	all other revenue or proceeds related to the Petroleum Operations, especially including those from:

•	the sale of related substances;

•	the processing, transportation or storage of products for Third Parties at the facilities allocated to the Petroleum Operations.

•

Subject to article 17.7, gains realised at the time of assigning or transferring any assets of the Contractor, or the full or partial assignment of the rights and obligations arising out of this Agreement. Nevertheless, a gain cannot result from any transfer (i) that does not entail an actual payment in cash or kind by the transferee to the transferor or recovery of a liability already booked by the transferor or (ii) that cannot be considered in any way a financial profit;

•	foreign exchange gains realised from the Petroleum Operations.

c)	the value of the share of Hydrocarbons taken by the Government, in accordance with the last section of article 16.3 and the penultimate section of article 21.3.1, in payment of the income tax indicated in article 17.1 for the Fiscal Year in question.

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a)	Besides the charges explicitly indicated below in this article 17.4, all other Petroleum Costs, including the cost of supplies, personnel and labour expenses, and the cost of services provided to the Contractor for the Petroleum Operations. Nevertheless:

•	the cost of supplies, personnel and services provided by Affiliated Companies shall be deductible insofar as they do not exceed those normally invoiced under free market conditions between an independent buyer and seller for the identical or similar services.

•

fixed asset expenses shall be amortised as of the start of commercial production in the Delimited Region. The amortisation deductible for the Fiscal Year in question shall be equal, at most, to the difference, if positive, between the amount of the Petroleum Costs recovered for the Fiscal Year in question pursuant to article 16.2, and the total of other amounts charged to the production and income account in accordance with this article 17.4.

b)	The overheads related to the Petroleum Operations performed within the context of this Agreement, including in particular:

•	the leasing expenses for movable and immovable property and insurance premiums, and

•

a reasonable share, in relation to the services rendered for the Petroleum Operations performed in the Republic of Côte d’Ivoire, wages and salaries paid to directors and employees residing abroad, and administrative overheads of the central offices of the Contractor and the Affiliated Companies working on its behalf, located abroad, and the indirect expenses incurred by said central offices abroad on their behalf. The overheads paid abroad may not under any circumstances be greater than the limits established in the Accounting Procedure.

c)

The actual amount of interest and commission fees paid to the creditors of the Contractor, within the limits established in the Accounting Procedure. Shareholders and Affiliated Companies shall not be considered as “third parties” pursuant to article 72.3 of the Petroleum Code and, as a result, any advances and loans made to them outside of the Republic of Côte d’Ivoire shall not be submitted for approval by the petroleum administration indicated in said article, but shall be declared to it and, in accordance with the previous section, shall also be subject to the limitations established in the Accounting Procedure.

d)	Losses of equipment or assets resulting from destruction or damage, assets to be waived or abandoned during the year, irrecoverable receivables, compensation paid to Third Parties for damages.

e)	Reasonable and justified provisions established to cover clearly identified subsequent losses or expenses that are likely according to current situations, especially provisions for abandonment costs established pursuant to article 20.8.

f)	Any other losses or charges directly related to the Petroleum Operations, as well as bonuses and amounts paid during the Fiscal Year pursuant to article 19 and articles 30.2, 30.3 and 30.4, with the exception of the amount of direct income tax determined in accordance with the provisions of this article.

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g)	The uncleared amount of losses from prior Fiscal Years in accordance with the legislation of the Republic of Côte d’Ivoire.

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a)	sales in which the buyer is an Affiliated Company of the seller and the sales between entities comprising the Contractor;

b)	sales on the Ivorian domestic market pursuant to article 27.1, and

c)	sales entailing compensation other than payment in freely convertible currency and sales motivated, in whole or in part, by considerations other than the economic incentives that are usual in sales of Crude Oil on the international market (such as foreign exchange contracts, government to government sales or to governmental agencies).

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a)	for all sales to independent buyers, the price applicable to this sale shall be the price obtained for the Crude Oil for said sale, adjusted to reflect the F.O.B. terms of delivery and the payment terms at thirty (30) days;

b)	for all quantities lifted other than those quantities sold to independent buyers, the price applicable to this quantity lifted shall be the Market Price in effect in the previous Calendar Quarter or, if this Market Price has not been determined, a price established by mutual agreement between the Government and Contractor or, in the absence thereof, the last known Market Price.

a)	the recovery by the Contractor of all of the corresponding Petroleum Costs; or

b)	the waiver of any or all of the Delimited Region; or

c)	upon expiration of this Agreement, or

d)	upon termination of this Agreement.

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a)	either request the Government to hold this Field for a period of five (5) years to allow it to research sufficient outlets for profitable production of said Field; this period may be renewed provided that the Contractor justifies its efforts to achieve this objective. After this period ends, the Contractor shall abandon all of its rights to the area surrounding the discovery;

b)	or immediately abandon its rights to the area surrounding the discovery.

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a)	The Contractor shall make available to the Government, free of charge, at the exit of the Crude Oil and Natural Gas separation facilities, some or all of the surplus Associated Natural Gas that the Government wants to lift;

b)	The Government shall be responsible for collection, processing, compression and transportation of this surplus, from the above-mentioned separation facilities, and shall bear all additional related costs, and

c)	The construction of the facilities necessary for the operations indicated in section b) above, as well as lifting of this surplus by the Government, shall be performed in accordance with the Best Industry Practice in the international petroleum industry and

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a)	sales in which the buyer is an Affiliated Company of the seller as well as sales between entities comprising the Contractor, and

b)	sales entailing compensation other than payment in freely convertible currency and sales motivated, in whole or in part, by considerations other than economic incentives that are usual in sales of Natural Gas.

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a)	PETROCI shall be entitled to obtain an additional participating interest (hereinafter referred to as “Additional Participating Interest”) of two percent (2%) which the Operator cannot refuse.

b)

Within four (4) months from the date of granting an exclusive production permit, PETROCI shall notify the other entities comprising the Contractor of its desire to exercise its option to increase its Participating Interest relative to the related Production Perimeter, specifying the percentage of its Additional Participating Interest for said Production Perimeter. If it does not make said notification within four (4) months, PETROCI’s participating interest for this Production Perimeter shall remain the same as its Initial Participating Interest.

c)	The Additional Participating Interest shall become effective, for the Production Perimeter in question, from the date of notification indicated in article 22.2.b) above.

d)

Upon receipt of the written notification from PETROCI, all of the entities comprising the Contractor other than PETROCI shall transfer to PETROCI, immediately and jointly, each pro rata to its Participating Interest at that time, a percentage of their participating interest in the Production Perimeter in question, the total of which shall be equal to the percentage of the Additional Participating Interest of PETROCI.

e)	As of the date of its Additional Participating Interest, or in the absence of the notification indicated in article 22.2.b), PETROCI:

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•	shall participate, pro rata to its Additional Participating Interest, in the Petroleum Costs relating to the corresponding Production Perimeter, with regard to the relevant exclusive production permit;

•	If the permit in question is the first exclusive production permit, as indicated in article 22.2.g) PETROCI shall reimburse the other entities comprising the Contractor the percentage of its Additional Participating Interest in the Petroleum Costs not yet recovered, incurred from the Effective Date up to the date of notification of its Additional Participating Interest, and

•

For each subsequent exclusive production permit, as indicated in article 22.2.g), PETROCI shall reimburse the other entities comprising the Contractor the percentage of its Additional Participating Interest in the Petroleum Costs relating to the new Production Perimeter not yet recovered, incurred from the date of notification of the Additional Participating Interest relating to the previous exclusive production permit up to the date of notification of the Additional Participating Interest for the new exclusive production permit.

f)

Taking into account the previous work already undertaken in the Delimited Region, PETROCI’s Initial Participating Interest shall entail for PETROCI, throughout the duration of this Agreement, neither the financing nor the reimbursement of its share of the Petroleum Costs, which Petroleum Costs are borne and recoverable by the other entities comprising the Contractor, in accordance with articles 16.2, 21.1.5 and 21.2.4, each pro rata to its Participating Interest.

g)	As indicated in article 22.2.e) PETROCI shall reimburse the other entities comprising the Contractor the amounts due for its Participating Interest, as follows, at PETROCI’s option:

•	either within six (6) months from the date of notification of the increase in its Participating Interest, by payments in Dollars or through payments in Crude Oil appraised in accordance with the provisions of article 18;

•

or in kind, by way of withholding, by the other entities constituting the Contractor, taking a portion of PETROCI’s share of Hydrocarbons under Articles 16.3 and 21.3, at a rate of fifty percent (50%) of said share, the value of this portion being calculated in accordance with the provisions of article 18, until the value of these withholdings taken is equal to the remaining balance due plus interest as indicated below. The balance of the remaining amount due upon expiration of the period of six (6) months as indicated above shall accrue interest, from this date until the date of reimbursement, at the annual LIBOR (London Interbank Offered Rate) for Dollar deposits at six (6) months as published electronically by ICE Benchmark Administration Limited for the last business day prior to the date of payment plus one percentage (1) point, compounded annually.

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a)	The association of PETROCI with the Contractor may not under any circumstances cancel or affect the rights of the other entities comprising the Contractor to use the arbitration clause set forth in article 32, which is not applicable to disputes between the Government and PETROCI but only to disputes between the Government and the other entities comprising the Contractor.

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a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

a)	one-hundred and fifty thousand Dollars (US$150,000) in the exploration period and

b)	six-hundred thousand Dollars (US$ 600,000) in the production period.

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a)	information on all development and production operations performed during the past Calendar Year, including the quantities of Hydrocarbons produced and sold, if applicable;

b)	information on all transportation operations and sales, as well as the location of the principal facilities constructed by the Contractor, if applicable, and

c)	a statement indicating the number of employees and operations, with their qualifications, nationality, their given name and surnames, their number and employment start date.

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a)	Development Expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations relative to a Production Perimeter excluding Production Expenses and Financial Expenses

b)	Appraisal Expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations relative to an Appraisal Perimeter.

c)

Production Expenses are all costs and expenses borne and paid by the Contractor for producing and maintaining the wells, equipment and related facilities relative to a Field from the start of production of said Field. The Production Expenses shall also include all costs and expenses borne and paid by the Contractor for producing and maintaining the pipelines, generators, warehouses, pools and other facilities that the Contractor acquires, builds or installs in accordance with the provisions of article 7.2. of the Agreement for performing the Petroleum Operations.

d)	Exploration expenses means all costs and expenses borne and paid by the Contractor for performing the Petroleum Operations (especially including the costs and expenses indicated in article 2.2.13 of this Accounting Procedure), excluding Appraisal Expenses, Development Expenses, Production Expenses, Financial Expenses, Overheads in the Republic of Côte d’Ivoire and Overheads Abroad.

e)	Financial Expenses means the interest and fees indicated in article 2.2.10 of this Accounting Procedure.

f)	Overheads in the Republic of Côte d’Ivoire means the costs and expenses indicated in article 2.2.2 of this Accounting Procedure.

g)	Overheads Abroad means the costs and expenses indicated in article 2.2.3 of this Accounting Procedure.

a)	the Exploration Expenses;

b)	the Appraisal Expenses;

c)	the Development Expenses;

d)	the Production Expenses;

e)	the Financial Expenses;

f)	the Overheads in the Republic of Côte d’Ivoire;

g)	the Overheads abroad;

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h)	the abandonment reserve funds:

i)	national needs, and

j)	training, equipment and social works expenses.

a)	the total amount of Petroleum Costs since the Effective Date;

b)	the total amount of Petroleum Costs recovered;

c)	the total amount credited to the Petroleum Costs Account pursuant to article 2.4.b) of this Accounting Procedure, and

d)	the total amount of Petroleum Costs still to be recovered.

a)	production expenses of a Field incurred and effectively paid from the start date of regular production;

b)	financial expenses, and

c)	other Petroleum Costs.

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a)	before granting an exclusive production permit: five percent (5%) of the expenses allocated to the Petroleum Costs Account excluding overhead for the Calendar Year in question;

b)	as of the time of granting the first exclusive production permit: three percent (3%) of the expenses allocated to the Petroleum Costs Account excluding bonuses and overhead for the Calendar Year in question.

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a)	the expenses relative to the period prior to the Effective Date save for the provisions in article 16.7;

b)	all expenses relative to the Operations performed beyond the Point of Delivery, such as transportation and marketing expenses;

c)	the financial expenses relative to financing the Petroleum Exploration Operations, and those relative to the portion of financing the Development Expenses exceeding seventy-five percent (75%) of the total amount of the Development Expenses;

d)	the bonuses defined in article 19 of this Agreement.

e)	foreign exchange losses other than those indicated in article 2.2.13 of this Accounting Procedure.

a)	revenue derived from selling the quantity of Hydrocarbons available to the Contractor, in accordance with articles 16 and 21 of this Agreement, for recovery of the Petroleum Costs;

b)	all other revenue or income related to the Petroleum Operations, especially those derived from:

•	the sale of related substances;

•	all services rendered to Third Parties using the facilities allocated to the Petroleum Operations, especially the processing, transportation and storage of products for Third Parties in these facilities;

•	the transfer of assets of the Contractor, and the transfer of some or all of the rights and obligations of the Contractor according to article 35 of this Agreement;

•	foreign exchange gains actually realised by the Contractor in performing the Petroleum Operations.

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a)	New equipment

b)	Equipment in good condition

c)	Other used equipment

d)	Equipment in poor condition

e)	Scrap and waste

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a)	the amount of Petroleum Costs still to be recovered at the beginning of the Calendar Quarter;

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b)	the amount of Petroleum Costs relative to the Calendar Quarter in question, recoverable according to the provisions of the Agreement;

c)	the quantity and the value of the production of Hydrocarbons taken during the Calendar Quarter by the Contractor to recover Petroleum Costs;

d)	the amount of income or proceeds credited pursuant to article 2.4.b) of this Accounting Procedure during the quarter;

e)	the amount of Petroleum Costs still to be recovered at the end of the Calendar Quarter.

a)	in stock at the beginning of the month;

b)	lifted during the month;

c)	lost and used for the needs of the Petroleum Operations;

d)	in stock at the end of the month.

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(A)	The company, a company incorporated under the laws of…, hereinafter referred to as “……………,” represented herein by Mr………….., entered into a Hydrocarbons Production Sharing Agreement relative to block CI-…… (hereinafter referred to as the “PSA”) with the Government on ……[date]……….

(B)	In accordance with article 4.8 of the PSA, the Contractor agrees to provide the Government with a bank guarantee for performance of the minimum exploration work programs as defined in article 4 of the PSA.

(C)	The Bank, at the request of the Contractor, agrees to provide this bank guarantee in favour of the Government, for the Guaranteed Amount as defined in article 3 below.

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1.	I have reviewed this annual report on Form 10‑K of Kosmos Energy Ltd.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

1.	I have reviewed this annual report on Form 10‑K of Kosmos Energy Ltd.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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(1)	completion intervals which are open at the time of the estimate, but which have not started producing;

(2)	wells which were shut-in for market conditions or pipeline connections; or

(3)	wells not capable of production for mechanical reasons.

(i)	Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.