EMPIRE ENERGY CORPORATION INTERNATIONAL (a Nevada Corporation)

The proceeds of such Note will be used to fund the payment to Terrex Seismic (ACN 090 147 274) for the provision of seismic services already invoiced,

pursuant to Invoice No. G061001, dated October 1, 2006, by Terrex Seismic to GSLM and to fund the Drill Rig Purchase Arrangements, and the remainder will be used to pay closing expenses, including attorney’s fees, for working capital purposes and partial repayment of certain loans to Empire Energy.

Empire Energy, its subsidiaries and, to the knowledge of Empire Energy, Zeehan own, possess or has obtained, and is operating in compliance with, all governmental, administrative and third party licenses (including, without limitation, the SEL 13/98 onshore petroleum license held by GSLM), permits,

certificates, registrations, approvals, consents and other authorizations (including, without limitation, intellectual property rights in respect of (I) the Nanokey ball mill, (II) the Multistack, (III) the energy storage battery and (IV) the geopolymer) (collectively, “Permits”) necessary to own or lease (as the case may be) and operate its properties, and to conduct its businesses or operations as currently conducted, except such Permits the failure of which to obtain would not have a material adverse effect on the business, properties, operations, financial condition or results of operations of Empire Energy, and neither Empire Energy nor any of its subsidiaries has received any notice of proceedings relating to the revocation, modification or suspension of any Permits), if such proceedings would have a material adverse effect on Empire Energy, or any circumstance which would lead it to believe that such proceedings are reasonably likely;

as of their respective filing dates, each report, schedule, registration statement and proxy filed by Empire Energy with the SEC (each, an “SEC Report” and collectively, the “SEC Reports”) (and if any SEC Report filed prior to the date of this Agreement was amended or superseded by a filing prior to the date of this Agreement, then also on the date of filing of such amendment or superseding filing), (i) to Empire Energy’s knowledge where required, were prepared in all material respects in accordance with the requirements of the 1933 Act, or the 1934 Act, as the case may be, and the rules and regulations promulgated under such Acts applicable to such SEC Reports, (ii) did not contain any untrue statements of a material fact and did not omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (iii) to Empire Energy’s knowledge are all the forms, reports and documents required to be filed by Empire Energy with the SEC since that time.

Empire Energy’ subsidiaries are not required to file any reports or other documents with the SEC. Each set of audited consolidated financial statements and unaudited interim financial statements of Empire Energy (including any notes thereto) included in the SEC Reports (i) to Empire Energy’s knowledge, complies as to form in all material respects with the published rules and regulations of the SEC with respect thereto, and (ii) have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis (except as may be indicated therein or in the notes thereto) and fairly present, in all material respects, the financial position of Empire Energy as of the dates thereof and the results of its operations and cash flows for the periods then ended subject, in the case of the unaudited interim financial statements, to normal year-end adjustments which were not or are not expected to be material in amount. To Empire Energy’s knowledge, no events or other factual matters exist which would require Empire Energy to file any amendments or modifications to any SEC Reports which have not yet been filed with the SEC but which are required to be filed with the SEC pursuant to the 1933 Act or the 1934 Act;

Empire Energy has established on its books and records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of Empire Energy or its subsidiaries, if any, except for

taxes not yet due, and there are no audits of any of the tax returns of Empire Energy which are known by Empire Energy’ management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of Empire Energy;

Empire Energy shall prepare and file with the SEC within thirty (30) calendar days after the exercise of any Warrants a registration statement (on Form S-3, SB-2, S-l, or other appropriate registration statement form available to Empire Energy) under the 1933 Act (the “Registration Statement”), at the sole expense of Empire Energy (except as specifically provided in Section 8(c) hereof), in respect of the Purchaser, so as to permit a public offering and resale of the Stock acquirable upon exercise of the Warrants (the “Registrable Securities”) in the United States under the 1933 Act by the Purchaser as selling stockholder and not as underwriter. Empire Energy shall use its best efforts to cause such Registration

Statement to become effective as soon as possible thereafter, but in no event later than one hundred fifty (150) calendar days after the exercise of any Warrants, and within five (5) calendar days of the SEC clearance to request acceleration of effectiveness. Empire Energy will notify the Purchaser of the effectiveness of the Registration Statement (the “Effective Date”) within three (3) Trading Days (days in which the OTCBB is open for quotation) (each, a “Trading Day”).

Prior to the effectiveness of the Registration Statement filed pursuant to Section 8(a), the rights to cause Empire Energy to register Registrable Securities granted to the Purchaser by Empire Energy under this Section 8 may be assigned in full by a Purchaser in connection with a transfer by such Purchaser of not less than 500,000 shares of Stock or not less than 125,000 Warrants, in either case in a single transaction to a single transferee purchasing as principal, provided, however, that (i) such transfer is otherwise effected in accordance with applicable securities laws; (ii) such Purchaser gives prior written notice to Empire Energy;

and (iii) such transferee agrees to comply with the terms and provisions of this Agreement, and such transfer is otherwise in compliance with this Agreement.

The Purchaser will cooperate with Empire Energy in all respects in connection with this Agreement, including timely supplying all information reasonably requested by Empire Energy (which shall include all information regarding the Purchaser and proposed manner of sale of the Registrable Securities required to be disclosed in any Registration Statement) and executing and returning all documents reasonably requested in connection with the registration and sale of the Registrable Securities and entering into and performing its obligations under any underwriting agreement, if the offering is an underwritten offering, in usual and customary form, with the managing underwriter or underwriters of such underwritten offering. Any delay or delays caused by the Purchaser, or by any other purchaser of securities of Empire Energy having registration rights similar

to those contained herein, by failure to cooperate as required hereunder shall not constitute a breach or default of Empire Energy under this Agreement.

as promptly as practicable after becoming aware of such event, notify the Purchaser, (or, in the event of an underwritten offering, the managing underwriters) of the issuance by the SEC of any stop order or other suspension of the effectiveness of the Registration Statement at the earliest

possible time and take all lawful action to effect the withdrawal, recession or removal of such stop order or other suspension; and

If the registration statement relates to an underwritten offering, and the underwriter shall determine in writing that the total number of shares of equity securities to be included in the offering, including the Registrable Securities, shall exceed the amount which the underwriter deems to be appropriate for the offering, the number of shares of the Registrable Securities shall be reduced in the same proportion as the remainder of the shares in the offering and such participating Purchaser’s Registrable Securities included in such registration statement will be reduced proportionately. For this purpose, if other securities in the registration statement are derivative securities, their underlying shares shall be included in the computation. Each participating Purchaser shall enter into such agreements as may be reasonably required by the underwriters and

each Purchaser shall pay the underwriters commissions relating to the sale of their respective Registrable Securities.

Empire Energy agrees to indemnify and hold harmless each Purchaser, their respective officers, directors, employees, partners, legal counsel and accountants, and each person controlling such Purchaser within the meaning of Section 15 of

the 1933 Act, and each person who controls any underwriter within the meaning of Section 15 of the 1933 Act, from and against any losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) to which such Purchaser or such other indemnified person may become subject (including in settlement of litigation, whether commenced or threatened) insofar as such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) arise out of a claim by any third party, the SEC or other regulatory body (“Third Party Action”), based upon, any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact in the Registration Statement, including all documents filed as a part thereof and information deemed to be a part thereof, on the effective date thereof, or any amendment or supplements thereto, or arise out of any failure by Empire Energy to fulfill any undertaking or covenant included in the Registration Statement. Empire Energy will, as incurred, reimburse such Purchaser, each of its respective officers, directors, employees, partners, legal counsel and accountants, and each person controlling such Purchaser, and each person who controls any such underwriter, for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend, settling, compromising or paying such Third Party action, proceeding or claim; provided, however, that Empire Energy shall not be liable in any such case to the extent that such loss, claim, damage, expense or liability (or action or proceeding in respect thereof) arises out of, or is based upon, (i) the failure of any Purchaser, or any of their agents, affiliates or persons acting on their behalf, to comply with the covenants and agreements contained in this Agreement with respect to the sale of Registrable Securities, (ii) an untrue statement or omission in such Registration Statement in reliance upon and in conformity with written information furnished to Empire Energy by an instrument duly executed by or on behalf of the Purchaser, or any of its agents, affiliates or persons acting on its behalf, and stated to be specifically for use in preparation of the Registration Statement and not corrected in a timely manner by the Purchaser in writing or (iii) an untrue statement or omission in any prospectus that is corrected in any subsequent prospectus, or supplement or amendment thereto, that was delivered to the Purchaser prior to the pertinent sale or sales by such Purchaser and not delivered by the Purchaser to the individual or entity to which it made such sale(s) prior to such sale(s).

The Purchaser agrees to indemnify and hold harmless Empire Energy from and against any losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) to which Empire Energy may become subject (under the 1933 Act or otherwise) insofar as such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) arise out of a Third Party Action, or are based upon (i) the failure of the Purchaser or any of its agents, affiliates or persons acting on its behalf, to comply with the covenants and agreements contained in this Agreement with respect to the sale of Registrable Securities; or (ii) an untrue statement or alleged untrue statement of a material fact or omission to state a material fact in the Registration Statement in reliance upon and in conformity with written information furnished to Empire Energy by an instrument duly executed by or on behalf of such Purchaser and stated to be

specifically for use in preparation of the Registration Statement; provided, however, that the Purchaser shall not be liable in any such case for (i) any untrue statement or alleged untrue statement or omission in any prospectus or Registration Statement which statement has been corrected, in writing, by such Purchaser and delivered to Empire Energy before the sale from which such loss occurred; or (ii) an untrue statement or omission in any prospectus that is corrected in any subsequent prospectus, or supplement or amendment thereto, that was delivered to the Purchaser prior to the pertinent sale or sales by the Purchaser and delivered by the Purchaser to the individual or entity to which it made such sale(s) prior to such sale(s), and the Purchaser, severally and not jointly, will, as incurred, reimburse Empire Energy for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim. Notwithstanding the foregoing, the Purchaser shall not be liable or required to indemnify Empire Energy in the aggregate for any amount in excess of the net amount received by the Purchaser from the sale of the Registrable Securities, to which such loss, claim, damage, expense or liability (or action proceeding in respect thereof) relates.

If the indemnification provided for in this Section 9 is unavailable or insufficient to hold harmless an indemnified party under subsection 9(a) or 9(b) above in respect of any losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the

relative fault of Empire Energy on the one hand and the Purchaser, or its agents, affiliates or persons acting on its behalf, on the other in connection with the statements or omissions which resulted in such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by Empire Energy on the one hand or the Purchaser, or its agents, affiliates or persons acting on its behalf, on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Empire Energy and the Purchaser agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. In any event, the Purchaser shall not be liable or required to contribute to Empire Energy in the aggregate for any amount in excess of the net amount received by the Purchaser from the sale of its Registrable Securities.

all relevant information in Empire or Expedia International Limited’s possession in relation to the intellectual property rights in respect of (a) the Nanokey ball mill, (b) the Multistack, (c) the energy storage battery and (d) the geopolymer, all as referred to in Empire Energy’s corporate filings, press releases and public statements, are duly held by Empire Energy or

Expedia International Limited, as applicable, and the same are in full force and effect;