Production Sharing Contract relating to Block EG-24 Offshore Equatorial Guinea between the Republic of Equatorial Guinea, Guinea Ecuatorial de Petroleos and Ophir Equatorial Guinea (EG-24) Limited dated October 2017

BETWEEN:

The State, Ophir Energy, and the National Company, including their transferees as approved under the law and this Contract, may be referred to individually as "Party" and collectively as "Parties."

NOW THEREFORE, in consideration of the commitments and mutual agreements expressed in this document, the Parties agree as follows:

Except where the context dictates another meaning, or as defined in the Hydrocarbons Law or Petroleum Regulations, the following words and expressions will have the following meanings:

individual geological structural or stratigraphic conditions, or unrelated deposits that are developed using a Development and Production Plan. All deposits superimposed, adjacent to, or underlying a Field in the Contract Area will form part of that Field.

1.1.13 The National Company, for the purposes of this Contract, means Guinea Ecuatorial de Petróleos (GEPetrol), as the national petroleum company of Equatorial Guinea, or whatever successor state company.

not been declared a Commercial Discovery prior to the Effective Date and that are measurable by generally accepted international petroleum industry practices.

(a)    the Organisation for the Harmonization of African Business Law (OHADA);

(b)    the Interafrican Conference of Insurance Markets;

(c)    COBAC;

(d)    BEAC;

(e)    CEMAC; and

and shall also include the OHADA Accounting System;

1.1.89 Maximum Efficient Production Rate means the maximum efficient production rate of Hydrocarbons from a Field that does not damage deposit formations and does not cause excessive decline or loss of deposit pressure in accordance with good practices of the international oil industry, and as agreed in accordance with Article 6.4.

The Participation Interest of the National Company is for compliance with Chapter XVIII of the Hydrocarbon Law. The abovementioned Carry Participation of the National Company of twenty percent (20%) will be carried by the Contractor (with the exception of the National Company) until the State approves the Development and Production Plan (Carry Termination Point). The Carry Participation of the National Company will remain subject to all the responsibilities and obligations of the Contractor. The costs attributable to the Carry Participation of the National Company will be paid, subject to Article 8.2, by the entities that make up the Contractor, with the exception of the National Company, and recoverable as specified in Articles 8.2.2 and 8.2.3.

From the Effective Date, the Contractor will be authorized to carry out Exploration Operations in the Contract Area during the initial Exploration Period of four (4) years, as established in Article 1.1.60. Within 60 days from the Effective Date, the Contractor will initiate study and evaluation work.

If the Contractor decides:

this Contract will be automatically terminated.

does not succeed in drilling an Exploratory Well in accordance with Article 3.1.2, the Contractor will then relinquish all of its rights over the entire Contract Area at the end of the Second Exploration Sub-Period.

During the Exploration Period, the Contractor commits itself to executing the following program of minimum work:

(i) $750,000 (seven hundred and fifty thousand US dollars) on signature of this Contract

(ii) $1,000,000 (one million US dollars) on completion of any farm-in by the Contractor to this Contract; and

(iii) $1,798,355 (one million seven hundred and ninety eight thousand three hundred and fifty five US dollars) on date of approval to entry into the Second Sub-period,

and, for the avoidance of doubt, all such existing seismic data will be provided to the Contractor on the payment of the amount set out in Article 3.1.1(b)(i),

All costs of acquisition and reprocessing of information (including escalation fees) will be recoverable. The minimum expenditure for this period will be five million Dollars ($5MM).

With respect to Article 3.2.1(a), and to the extent practicable, if a prudent operator would immediately cease drilling operations, the Contractor will notify the Ministry immediately of its decision, and obtain the Ministry's approval before removing any drilling platform from the area. The Ministry will respond to this request for approval as soon as practicable, but in any case within three (3) Business Days of receiving such a request. Approval may not be unreasonably denied or delayed without reasonable justification, provided that the Ministry has sufficient information to make an informed decision.

If any obligatory Exploratory Well is abandoned due to insurmountable technical problems as set out in Article 3.2.1, items (b), (c) and (d) and, at the time of abandonment, the Exploration Costs for that Well equal or exceed twenty five million Dollars ($25MM), for all purposes of this Contract, the Contractor will be considered to have fulfilled its minimum work obligations for the period in question. If any obligatory Exploratory Well is abandoned due to insurmountable technical problems and if, at the time of abandonment, the Exploration Costs for that Well are less than twenty five million Dollars ($25MM), the Contractor will choose between the following options:

Contractor (except the National Company) do not provide the Ministry with the guarantees demanded by the date established under this Article 3.5.1, this Contract will be considered null and void, if the Contractor does not succeed in remediating the noncompliance within thirty (30) days of being notified of it.

For purposes of Article 3.5, any expenditure of the Paying Parties under Article 8.2 will not be considered an expenditure for the purpose of satisfying the minimum expenditure requirements established in this Article.

No later than ninety (90) days before the beginning of each Calendar Year, or for the first Calendar Year, no later than sixty (60) days after the Effective Date, the Contractor will prepare and present for approval by the Ministry a detailed Annual Work Program divided into Quarters, together with the corresponding Annual Budget for the Contract Area explaining the Petroleum Operations the Contractor proposes to carry out during the Calendar Year. The Annual Budget will be presented in the Ministry's official format.

Each Annual Work Program and corresponding Annual Budget will be broken down into the various Exploration Operations and, as applicable, according to the evaluation operations for each Evaluation Area, and the Development and Production Operations for each Development and Production Area. If no response is received within ninety (90) days of the reception of the Annual Work Program and corresponding Annual Budget, these will be considered approved. The Ministry may propose amendments or modifications to the Annual Work Program and corresponding Annual Budget, by giving notice to the Contractor and including reasons for the amendments or modifications, within sixty (60) days of receiving the Annual Work Program and Annual Budget. In such event, the Ministry and the Contractor will meet as soon as possible to review the amendments or modifications proposed by the Ministry and establish the Annual Work Program and corresponding Annual Budget by mutual agreement. The parts of the Annual Work Program for which the Ministry does not require amendment or modification will be considered approved and the Contractor must implement them within the stated time period, provided they can be undertaken on an individual basis, or with respect to an approved activity that depends technically or financially on an activity that is not approved. With respect to the parts of the Annual Work Program for which the Ministry proposes any amendment

or modification, the date of approval of the Annual Work Program and corresponding Annual Budget will be the date on which the Ministry and the Contractor reach mutual agreement on them. If the Ministry and the Contractor do not reach an agreement about the amendments and modifications proposed by the Ministry before the end of the Calendar Year in which the Annual Work Plan and corresponding Annual Budget are submitted, the Contractor will continue operating in accordance with the most recent Annual Work Plan and corresponding Annual Budget approved by the Ministry until agreement is reached.

The Contractor will perform each operation included in an approved Annual Work Program correctly and diligently, in accordance with the terms of this Contract, the Hydrocarbons Law, and the good practices of the international petroleum industry.

If the Contractor discovers Hydrocarbons in the Contract Area it will notify the Ministry as soon as possible, but not later than thirty (30) days after the date of the Discovery. This notice will include all relevant information in accordance with the good practices of the international petroleum industry, including the details of any production testing program that the Contractor has carried out or proposes to carry out during drilling operations

For the purposes of Article 5.3, the Contractor will determine whether it considers that a Discovery or set of Discoveries can be developed commercially. The commercial viability of the Discovery or set of Discoveries will be determined after consideration of all operating, economic, and financial information gathered during performance of the evaluation work program and other sources, including recoverable reserves of Crude Oil and Natural Gas, sustainable Production levels and all other relevant economic factors, according to the good practices of the international petroleum industry.

If the Contractor discovers more than one (1) Field in the Contract Area that are not overlying, adjacent to, or underlying an existing Field, each will be the object of a separate Development and Production Plan, unless the Ministry agrees that the Fields would be better developed with a single Development and Production Plan.

The Contractor commits itself to assuming the expenses and financial risks of all Petroleum Operations required to bring a Field into Production in accordance with the approved Development and Production Plan.

During the Initial Exploration Period, the Extension Periods, and any additional extensions, the Ministry may, provided it gives at least six (6) months’ notice, require the Contractor to promptly relinquish, without any compensation or indemnification, all of its rights to the area encompassing a Discovery, including any rights to Hydrocarbons that may be produced from such Discovery, if the Contractor:

In the event of a relinquishment under Article 5.12, the Ministry may perform or cause to be performed any Petroleum Operations with respect to any Discovery so relinquished without any compensation or indemnification to the Contractor, provided, however, that it will not interfere with the Petroleum Operations undertaken by the Contractor in the part of the Contract Area retained by the Contractor, if any. The Ministry will be permitted to use (free of charge) all facilities and equipment of the Contractor that are not used for continuing Petroleum Operations. If so requested by the Ministry, the Contractor will take charge of all continuing operations on terms and for a fee to be agreed between the Ministry and the Contractor.

In accordance with the good practices of the international petroleum industry and the Hydrocarbons Law, the Contractor will provide all funds necessary to manage Petroleum Operations in the Contract Area, including buying or leasing all facilities, equipment, materials, and other goods required to carry out such Petroleum Operations. It will also supply all technical and operational expertise, including the use of foreign and national personnel required to implement Annual Work Programs. The Contractor will be responsible for the preparation and implementation of all Annual Work Programs, which will be carried out in accordance with this Contract, the Hydrocarbons Law and good practices of the international petroleum industry.

The contractor will provide the Ministry with a copy of the draft Joint Operating Agreement (JOA) no later than one hundred eighty (180) days after the Effective Date, linking the entities making up the Contractor group, and naming the entities designated the Technical Operator and Administrative Operator.

The Contractor will diligently manage Petroleum Operations in accordance with this Contract, the Hydrocarbons Law and the good practices of the international petroleum industry.

The Contractor and the Ministry will agree on the Production programs before Production begins in any Field and establish at that time the Maximum Efficient Production Rate for the Field, and will decide the dates on which the levels will be reexamined and potentially revised.

The Contractor will provide acceptable working conditions and access to medical attention and nursing care for all of its local and international personnel and those of its subcontractors that are working offshore and on land during Petroleum Operations. The Contractor will also provide living quarters for national or international personnel based on offshore installations and an additional housing allowance in the remuneration of land-based personnel.

The Contractor will promptly notify the Ministry of the discovery of other minerals or substances in the Contract Area. If any Persons are granted a permit or license within the Contract Area for the exploration and exploitation of any minerals or substances other than Hydrocarbons, the Ministry will take all reasonable measures to ensure that the operations of such Persons do not obstruct the Contractor's Petroleum Operations. The Contractor will use all reasonable efforts to avoid obstructing the operations of such permit holders or licensees.

In all Material Contracts, the Contractor will:

 

All amendments and/or variations to a Material Contract will require the prior approval of the Ministry, approval that will be considered as conceded if there is no response to a request for approval thirty (30) Days after receipt of a written request.

in the Hydrocarbon extraction sector in Equatorial Guinea. Payments under this Article 6.8.3 will be made to the State and are recoverable as Petroleum Operations Costs in accordance with this Contract, including:

If the national power grid is available to the Contractor for its onshore Petroleum Operations, the Contractor will connect to that network and will not produce any energy for its own use except to the extent that national production or transmission of energy is insufficient or not sufficiently reliable for the Contractor's needs to carry out Petroleum Operations. In such case, the energy produced will not be sold to any Person. The Contractor may utilize the quantities of Crude Oil and/or Natural Gas as fuel in its offshore Petroleum Operations or for the transport of Hydrocarbons to an onshore location.

The Contractor will ensure that all equipment, plants, installations, and materials it uses comply with the Hydrocarbons Law and generally accepted engineering standards, and that they have been duly constructed and are maintained in good condition.

The Natural Gas that the Contractor does not develop in accordance with this Contract and the Hydrocarbons Law or use in its own operations within the Contract Area will be reinjected into the structure of the subsoil. All costs of the reinjection will be recoverable as Petroleum Operations

Costs. Notwithstanding the foregoing, the Ministry may authorize the combustion of Natural Gas for short periods of time in accordance with the Hydrocarbons Law. The Contractor will compensate the State for unauthorized volumes of gas flared. All such Natural Gas not used in Petroleum Operations by the Contractor or not developed in accordance with this Contract and the Hydrocarbons Law will remain the sole property of the State.

No Well may be drilled to an objective outside the vertical projection of the boundaries of the Contract Area. Directional Wells drilled within the Contract Area from adjacent terrain not covered by this Contract will be considered for all purposes of this Contract as Wells drilled from territory included in the Contract Area, and whose drilling may only be undertaken with the prior approval of the Ministry, and on the terms and conditions the Ministry may establish. No part of this Article intends or may be interpreted as conceding a right of lease, license, servitude or any other right that the Contractor must obtain from the Ministry or other Persons.

The Contractor will notify the Ministry at least ten (10) Working Days before drilling any Well established in an approved Annual Work Program and corresponding Annual Budget, or before resuming work on any Well where work has been suspended for more than six (6) months.

The Contractor will build and maintain all installations necessary to properly comply with this Contract and carry out Petroleum Operations. The Contractor will request authorization from the Ministry and/or other applicable governmental authorities to occupy land necessary for the exercise of corresponding rights and obligations in accordance with this Contract. This authorization will be ruled by the provisions of Article 6.19, the Hydrocarbons Law, and other applicable laws of Equatorial Guinea. The Contractor will repair all damages caused by such circumstances.

No restrictions will be imposed on the entry, residence, free circulation, employment, and repatriation of the Contractor's personnel and those of its subcontractors, the family of such personnel, or the belongings of such personnel and their families, provided the Contractor and its subcontractors comply with all applicable laws, including, among others, the labor and social legislation of Equatorial Guinea. The State commits to expediting without delay the entry, work, or residence permits or other permits or authorizations that may be required by the personnel of the Contractor or any subcontractor in accordance with the Laws of Equatorial Guinea.

The Ministry will collaborate with the Contractor and its subcontractors in obtaining all administrative authorizations and licenses as may reasonably be necessary for proper execution of Petroleum Operations under this Contract.

In accordance with Article 20 of the Hydrocarbons Law, the Contractor (with the exception of the National Company) will, to the extent that it has not already done so, open a branch of a local or foreign company in Equatorial Guinea within six (6) months following the Effective Date, which will continue as a foreign or local company as each member of the Contractor (with the exception of the National Company) chooses, with its presence established in Equatorial Guinea during the entire term of this Contract. This branch office will always be staffed by at least one (1) representative having sufficient authority to make decisions on behalf of the Contractor.

6.22    Offices

After approval of the first Development and Production Plan, the Technical Operator, at the expense and responsibility of the Contractor (with the exception of the National Company) will, to the extent that it has not already done so, construct a prestigious building for its offices in Equatorial Guinea using modern and permanent materials and of an appropriate size and design, as approved by the Ministry. All costs related to such construction will be recoverable as Petroleum Operation Costs under this Contract. Once construction costs have been recovered by the Contractor, the property will be owned solely by the State and the Contractor will have the right to continue to use it for offices during the term of this Contract. When the Contractor has recovered the costs of constructing the building, it will negotiate renting the building with the State. This rent will be market price.

        

The quantity of Total Disposable Production remaining every Year after deduction of Royalties and Cost Recovery Oil will hereinafter be referred to as Net Crude Oil, which will be shared between the State and the Contractor in the following proportions:

7.4    Delivery of State's Participation

The share of the Crude Oil belonging to the State, in accordance with Articles 7.1 and 7.3, will be delivered to and accepted by the State or the Person it designates at the Delivery Point. The Contractor will be free from all responsibility with respect to this Crude Oil from the time it has been delivered. However, the State may require the Contractor to purchase all or part of the State’s share of Total Disposable Production, subject to the provisions of Article 7.5

sale. If three (3) months’ advance notice is not given, or agreement is not reached on the terms and conditions of the sale, the Contractor will not be obligated to buy the Crude Oil

Subject to Article 12 and the Hydrocarbons Law, each Party making up the Contractor has the right to take, receive, and freely export its share of Net Crude Oil and Cost Recovery Oil, provided it uses the services of an Equatoguinean Crude Oil maritime transport company, an international company associated with the National Company or any other local business that is able to provide the services under conditions that are internationally competitive in terms of price, quality, terms of payment, and availability. If such enterprises do not exist, or cannot offer competitive terms with respect to price, quality, terms of payment, and availability, each of the Parties making up the Contractor will have the right to freely take, receive, and export its share of the Net Crude Oil and Cost-Recovery Petroleum through internationally available suppliers.

Ownership of the Contractor’s portion of Net Crude Oil and Cost Recovery Oil will pass to the Contractor at the Delivery Point.

Subject to Article 8.2, the Parties making up the Contractor will fund, pay, and carry all costs and expenses for Petroleum Operations under this Contract and the Joint Operating Agreement in the proportions established in Article 1.3. Each of the Parties that constitute the Contractor will be represented on the operating committee under the JOA, and will have voting rights as the Agreement provides.

the Paying Parties by virtue of this Contract and the Hydrocarbons Law. The Paying Parties will recover the costs and expenses associated with the Carried-Over Participation of the National Company only from fifty percent (50%) of the Cost-Recovery Petroleum. The National Company is entitled to fifty percent (50%) of the Cost-Recovery Petroleum until the Paying Partners have been completely reimbursed for the cost of the Carried-Over Participation of the National Company.

Except as otherwise provided in this Contract, the Contractor, its subcontractors, and their respective employees, agents, consultants, and other personnel will be subject to the Tax Law and all regulations passed in accordance with it, as well as CEMAC (Central African Economic and Monetary Community) and tax and customs laws of Equatorial Guinea.

Crude for the period beginning the fifteenth (15th) day and ending the last day of the Month of the Cargo's Marketing (inclusive). This is expressed in the following Formula:

Price = A + B, where:

If the qualities of crude oil produced from the field do not correspond, within tolerable limits, a 'C' adjustment will be created that takes into account the differences associated with those qualities that do not coincide with A and B. In this case, the Market Price formula will be amended as follows:

Price = A + B + C

If the Crude Oil used to calculate the Market Price is no longer quoted, the Ministry and the Contractor will agree on which Crude Oil is closest to the Crude Oil that is no longer quoted, in order to calculate the Market Price.

designation. The costs and expenses of the expert will be paid proportionately by the Parties on a per capita basis and the Contractor’s share will not be cost recoverable

Subject to Article 7.5, when the Contractor markets Crude Oil belonging to the State for the State and the period of payment is not individually established in a Crude Marketing Agreement with the State, within ten (10) days of each shipment, the Contractor will provide the Ministry with full details of the prices obtained from the sale of each shipment of State Crude Oil and will forward to the State all amounts of such sales within fourteen (14) days of receiving them.

The Ministry will have the right to audit and verify that the price obtained by the Contractor for each shipment of Crude Oil has been the price determined in accordance with this Contract. The Ministry will have the right to evaluate the marketing practices of the Contractor during a period of two (2) Years from the transaction date, and require the Contractor to pay the State for the difference between the price actually obtained and the Market Price determined in accordance with this Article 10. Differences with respect to the Market Price will be resolved as established in Article 10.2.

The Contractor will pay the State a signing bonus of two million five hundred thousand Dollars ($2.5MM) within thirty (30) days of the Effective Date.

On the date the Contractor notifies the Ministry for the first time that it considers a Discovery to be a Commercial Discovery in compliance with the provisions of Article 5.4, the Contractor will pay the State the sum of five million Dollars ($5MM).

The Contractor will pay the State the following amounts as Production Bonuses:

These payments will be made within thirty (30) days of the date that the obligation is generated.

For the Calendar Year in which any Development and Production Area is granted, the surface lease payment established in Article 11.4.1(a) and (b) will be prorated from the date on which such Development and Production Plan is approved to 31 December of that Calendar Year, and the additional sum will be paid within thirty (30) days after the approval of the Development and Production Area. For succeeding Calendar Years the surface lease payment established in Article 11.4.1(b) will be paid within thirty (30) calendar days after the beginning of each Calendar Year.

In accordance with the Hydrocarbons Law, the Contractor will make meeting the needs of domestic Hydrocarbon consumption in Equatorial Guinea a priority without the obligation to assume oil

investment to produce a progressive increase in production for domestic consumption. . For this purpose, and in accordance with the provisions of Articles 86 and 87 of the Hydrocarbons Law, if the State so requests, the Parties constituting the Contractor (other than the National Company) will sell a portion of their Net Crude Oil and/or Net Natural Gas to the State at the Delivery Point for internal consumption in the country. The price of Natural Gas for internal consumption under Articles 86 and 87 of the Hydrocarbons Law will be established in accordance with Article 49 of the Hydrocarbons Law.

No later than the first day of October of each Calendar Year, the Ministry will notify the Parties constituting the Contractor (other than the National Company) of the quantities of Crude Oil and/or Natural Gas that it wishes to purchase under this Article 12 for the subsequent Calendar Year, when this right has not been waived to ensure exportation of Natural Gas. The Crude Oil and/or Natural Gas will be delivered to the State or to the beneficiary designated by the State during that Calendar Year, according to procedures to be agreed on between the Ministry and the Contractor.

12.3    Conditions under which the rights under Article 12.1 can be waived

Before submission of a Development and Production Plan under Article 5.5, the Contractor will prepare an evaluation of reserves to determine the range of proved and certified Natural Gas reserves in the Development and Production Area.

In cases where long term Natural Gas sales contracts are necessary to finance the project that is the object of the Development and Production Plan, the Government will evaluate and report if it waives Article 12.1 with respect to whether the reserves are sufficient to obtain this financing, The Contractor will have no obligation to carry out the Natural Gas Development or Production Operations if this waiver is not conceded.

Area during the Extended Exploration Period, or (iii) together with Natural Gas discovered but not developed in a nearby area, the Ministry may, with ninety (90) days’ advance notice, require the Contractor to waive all of its rights over the Evaluation Area. In case of a Commercial Discovery, the Contractor will be obligated to comply with the provisions of Article 5.5 and those of Article 73 of the Hydrocarbons Law.

This exemption applies to imports made directly by the Contractor, its subcontractors, and Persons acting on their behalf, on condition that a certificate of end use is issued.

Subject to the provisions of Article 12, the Contractor, its clients, and its transporters will have the right to export at any time the quantities of Cost Recovery Petroleum and Net Crude Oil belonging to the Contractor from the Delivery Point selected for those purposes free and clear of any Customs

duties, taxes, and fees that are not charges for the necessary services to administer Customs regulations.

The Parties shall meet to analyze and agree the application of the new obligations deriving from CEMAC regulations regarding customs tax of Hydrocarbons exportation.

In compliance with the Customs obligations established in this Contract and regulations in force, the Contractor, its subcontractors and Persons acting on their behalf may re-export, free of taxes, import duties, and fees that are not charges for the necessary services to administer Customs regulations, goods imported within the framework of this Contract when they are no longer necessary for Petroleum Operations, provided their ownership has not been transferred to the State in accordance with the terms of this Contract

All imports, exports and re-exports carried out under this Contract will be subject to the formalities required by the Customs Authorities with respect to documentation.

If the Contractor, or its subcontractors, representatives, or agents are considered responsible for payment of fines, penalties, or other legal obligations for any failure to comply with the laws that address the use and enjoyment by the Contractor of the advantages stated in this Article 14, the fines, penalties, and other legal obligations will be excluded from the Contractor's Petroleum Operations Costs.

Subject to Article 14.5, foreign personnel assigned to work in Equatorial Guinea on behalf of the Contractor or its subcontractors, and their families, will be allowed to import their personal effects and domestic articles in bulk shipments free of any kind of Customs encumbrance, tax and fee that are not charges for the necessary services to administer Customs regulations during the first year of their initial entry into Equatorial Guinea, and afterward, every two years. Shipments for later resale are not considered personal effects. Personal effects and domestic articles that have been exempted from Customs duties on importation and fees will also be exempt from Customs duties on exportation and fees when subsequently exported.

The Contractor and the Ministry mutually recognize that the applicable exchange control laws in force in Equatorial Guinea have the purpose of guaranteeing that the companies and personnel who work in the country, within the periods provided, comply with their obligations to pay taxes and other local payment commitments, and the Contractor, its subcontractors and all Persons acting on their behalf must comply with all exchange control laws of Equatorial Guinea that apply to them. However, so long as they meet their respective payment and tax obligations under this Contract and

the laws of Equatorial Guinea, they will have the following rights and benefits with respect to the Petroleum Operations during the term of this Contract:

The expatriate employees of the Contractor and its subcontractors will be free to exchange and transfer to their country of origin, in accordance with the regulations in force in Equatorial Guinea, the savings that result from their salaries as well as any contribution to their retirement or social services paid for or to these employees, provided they have complied with their tax obligations in Equatorial Guinea.

15.3    Notifications

The Contractor and its subcontractors will deliver to a report to the Ministry of Finance and Budgets, within forty-five (45) days of the end of each Quarter, detailing all foreign currency transactions made during the preceding Quarter, including any transactions directly related to Petroleum Operations in accounts opened abroad, and realized in accordance with the provisions of Article 15.1.

Within ninety (90) days after the end of a Calendar Year, the Contractor will present detailed accounts to the Ministry showing the Petroleum Operations Costs that the Contractor has incurred during the Calendar Year. The Contractor may request the approval of the Ministry for an additional extension of up to thirty (30) days; this approval will not be unreasonably denied or delayed. The accounts will be certified by an independent external auditor acceptable to the Ministry and the Contractor. The expenses of the auditor will be paid by the Contractor and will be considered Petroleum Operating Costs.

International Chamber of Commerce in accordance with its Rules for Expertise (ICC Expertise Rules). The decision of the expert will be final and binding on the Parties, and if it cannot be enforced in accordance with the legislation of Equatorial Guinea, the only recourse will be to arbitration under Article 26 to arrive at a definitive and binding decision.. Unless otherwise determined by the expert, the costs and expenses of the expert will be met proportionately by the Parties on a per capita basis and the Contractor's share will not be a Petroleum Operations Cost.

The provisions of Article 16 will apply to Income Tax, Royalty payments, and to any other obligation established in this Contract.

Unless decided otherwise, all payments in accordance with this Contract will be made within thirty (30) days following the date on which the obligation to make the payment arises. In case of default, the amount owed will accrue interest compounded monthly at the rate of LIBOR plus two percent (2%) per annum.

Within two (2) Calendar Years following the Effective Date, to the extent that they have not already done so, each of the Parties comprising the Contractor (other than the National Company), will, comply with Article 120 of OHADA and Equatorial Guinea law applicable to the Hydrocarbons sector and will incorporate an Affiliate under the laws of Equatorial Guinea and will assign all of its rights and obligations in and under this Contract, the Joint Operating Agreement and any other agreement relating to Petroleum Operations to this Affiliate. After this transfer, all of the rights and obligations of the Parties that constitute the Contractor under this Contract, the Joint Operating Agreement, and any other agreements relating to Petroleum Operations will be assumed by the Affiliate(s). Any assignment or transfer under this Article 17.1 will not be subject to the provisions of Articles 17.2, 17.3, and 17.5. The aforementioned assignment or transfer will not affect any parent company or bank guarantee provided in accordance with this Contract.

Notwithstanding the obligation of the Contractor to incorporate an Affiliate in accordance with the paragraph above which carries as a consequence the obligation to pay dividend tax, the Parties agree to grant a tax exemption on dividend tax for 3 years beginning on the date on which the Contractor has fully recovered all of its historical costs.

For the purposes of this Article 17, the transfer of ownership of more than fifty percent (50%) of the net equity of any Party constituting the Contractor (other than the National Company) or a similar transfer that results in a change of Control will be considered an assignment of contractual rights under this Contract and consequently, subject to the terms and conditions of this Article 17, except in cases of transferring ownership of the shares of a wholly owned Affiliate by any Party constituting the Contractor (except the National Company), in which case there is no change of Control.

As established in Article 106 of the Hydrocarbons Law, recourse by any Party constituting the Contractor to third-party funding that involves assignment of the rights that Party has to its portion of the Hydrocarbons under this Contract is not permitted without the prior consent of the Ministry, which will be notified of the terms of that financing. Financing by an Affiliate will not be considered third-party financing.

When any assignment, transfer, or other disposition of any right under this Contract is anticipated that is not to a wholly owned Affiliate, the transferring Party will notify the National Company in writing as soon as possible. The National Company will then have the right to buy the participation under this Contract from the transferring Party that has been offered for the assignment, transfer, or disposition on the same terms and conditions that have been offered in good faith to the transferee. Lack of affirmative response within forty-five (45) days after reception of the notification will be interpreted as the decision not to make the buy, and will terminate the right with respect to the transaction that is the object of the notification. This right exists in addition to any first right of refusal conceded to the National Company under the terms of the Joint Operating Agreement.

18.1.3 The State accepts that the Contractor will not be responsible to the State for losses or reduction of benefits, taxes, liens, fees, or other revenues as a result of carrying out Petroleum Operations, unless it is shown that the loss or reduction was the necessary consequence of an action or omission by the Contractor noncompliant with the Contract or the applicable legislation, owing to the Contractor's negligence or willful misconduct, and that the generation of that loss or reduction should have been foreseen at the time of that action or omission,

Where the Contractor is constituted of more than one Person, the liabilities and obligations of such Persons under this Contract will be joint and several, except for their obligations and liabilities in relation to all taxation levied on their income.

18.3.1 Every Person that constitutes the Contractor will obtain and during the term of this Contract, maintain in full force and effect, insurance for Petroleum Operations of such type and in such amount as is customary and prudent in accordance with generally accepted practice of the international petroleum industry, and whose terms and conditions of coverage will be communicated to the Ministry within thirty (30) days after the Effective Date. Without prejudice to the generality of the foregoing provisions, this insurance will cover:

The members of the Contractor, with the exception of the National Company, will pay the insurance costs with respect to any interests or insured assets associated with a Contract Area subject to the Participation Interests of the National Company only during the period in which the Participation Interest is paid by the members of the Contractor.

in good condition and good working order is guaranteed for use by the Contractor, normal wear and tear excepted. In any case, upon termination, rescission, or cancellation of this Contract, for any reason whatsoever, in relation to all or part of the Contract Area, the ownership of said installations, facilities, goods, equipment, materials, or land, and including those whose costs have not been fully recovered, and any other items acquired and used for Petroleum Operations will become the sole property of the State and will be conveyed directly to it. With respect to tax deductibility, the change in property will not be taken into account for taxation purposes until the goods are fully amortized or until termination of the contract.

All data, technical information, and interpretations obtained, acquired, or derived as a result of Petroleum Operations will be the sole property of the State. However, the Contractor may retain copies of all these materials while this Contract is in force only, including, among others, geological, geophysical, petrophysical and engineering reports, Well reports, termination reports, samples, and any other information that the Contractor may have obtained or compiled during the term of this Contract. The Contractor will forward the data, technical information, and interpretations to the Ministry as soon as they are acquired, derived, or compiled and will also provide the Ministry on an annual basis with a report that itemizes all data, technical information, and interpretations that have been assembled during the Year. Unless previously provided, at the termination of this Contract or at any time of relinquishment, the Contractor will return to the Ministry all original data, technical information and interpretations relating to the areas relinquished and will remove all copies from the Contractor’s files, archives, computers, and data storage mechanisms.

provided that the disclosing Party is responsible for any violation of this Article by those Persons, and on condition that all disclosures to the Persons referred to in items (f) and (g) mentioned above will be limited to those Persons who are under an obligation of confidentiality similar to that contained in this Article 20.1.

The State will not reveal to any third parties information pertinent to the Contractor’s proprietary technology that is protected by patents or contractual agreements, or which the State has received under license for a period of two (2) Years after termination of this Contract.

Any Party ceasing to own a Participation Interest in this Contract during the term of this Contract will nonetheless remain bound by the obligations of confidentiality stipulated in this Article 20.

In order to explore and exploit areas adjoining or related to the Contract Area, the State and the Ministry may, notwithstanding what is stated in this Article 20, disclose to any third parties all data and information relating to part or parts of the Contract Area and Petroleum Operations under this Contract.

In addition to any other actions contemplated here, this Contract may be terminated without compensation to the Contractor on any of the following grounds:

The Ministry may terminate this Contract for one of the Parties constituting the Contractor, if the circumstances established in Article 21.1 apply only to that Party in the manner established in Article 21.2.

If a Hydrocarbons deposit located within the Contract Area extends beyond that area, the Contractor must carry out all Development and Production of this Hydrocarbons deposit, in accordance with the Hydrocarbons Law. The Contractor will exert all reasonable efforts to reach a mutually acceptable unitization agreement and program with all other affected Persons.

If the Petroleum Operations that are the object of this Contract are suspended for negotiations arising over a unitization situation for a specific Discovery, the provisions of Article 5.3 for this Discovery will be extended for a period of time equal to the duration of the suspension.

The Contractor will comply with the National Content Regulations promulgated by the Ministry in Ministerial Order 1/2014 of 26 September 2014, complying with the obligations established in this Article 23. For all nonmaterial contracts, the Contractor, without the obligation to bid and without obtaining the approval of the Ministry (whose approval is considered granted by the Hydrocarbons Law ):

23.2.2 During the period in force of this Contract, the Parties comprising the Contractor (other than the National Company) will spend (i) a minimum of one hundred fifty thousand Dollars ($150,000) per Calendar Year during the Exploration Period; and (ii) a minimum of three hundred thousand Dollars ($300,000) per Calendar Year during the Development and Production Period, to provide a mutually agreed number of Ministry and National Company personnel with practical training at institutions abroad, chosen by the Ministry, that include training in the areas of earth sciences, engineering, technology, accounting, economics and other related fields of oil and gas exploration and exploitation.

Additionally, during the term of this Contract, the Parties constituting the Contractor will transfer to the Ministry (i) two hundred thousand Dollars ($200,000) per Calendar Year during the Exploration Period, and (ii) three hundred and fifty thousand Dollars ($350,000) per Calendar Year during the Development and Production Period; the Ministry will use these sums at its sole discretion to educate and train Equatoguinean personnel selected by the Ministry at universities, colleges, or other training institutions selected by the Ministry and for other general training and educational purposes.

Moreover, once the Development and Production Plan is approved, the Contractor will provide continuous training for periods of 12 months in the form of service commissions to professional technicians of the Ministry in the installations of the Technical Operator in Malabo and London (UK) (two technicians in each location). Procedures and remuneration for the service commissions or Internships will be subject to an agreement between the Technical Operator and the Ministry.

23.2.4 Given that Equatoguinean civil society is a part of the National Content in oil and gas contracts, the Contractor will contribute to and cooperate with nongovernmental organizations in beneficial works of social development, sports activities, and health programs to fight and prevent disease, as well as other non-profit activities. The type of projects the Contractor contributes to, and the amounts the Contractor contributes, will be at the sole discretion of the Contractor. When these

contributions have been separately approved beforehand by the Ministry, they will be recoverable as Petroleum Operations Costs.

b) three hundred thousand Dollars ($300,000.00) per Calendar Year during the period in which the Contractor is producing Hydrocarbons in a Development and Production Area.

23.4.2 Support for the Creation of a Ministry of Mines and Hydrocarbons Database

During the period in force of this Contract, the Contractor will spend on creation of a Ministry of Mines and Hydrocarbons Database:

Ophir Energy will cover all Costs and Expenses including technicians' honoraria and travel expenses (as here defined) of the Technical and Legal Assessments identified by the State in writing (the State's consultants) and any value added tax and any other applicable tax to be paid for the services provided by the State’s consultants in relation to this Contract. Travel expenses mean the reasonable and good-faith expenses of the Ministry's representatives and State consultants, including airline tickets, accommodation, maintenance and other travel-related expenses.

The Ministry will have the consultants send all invoices to the Ministry for review and approval. In turn, the Ministry will send the approved invoices to the company for payment. The Parties agree that all approved and paid invoices will be recoverable costs under this Contract as Petroleum Operations Costs.

On receiving the Ministry’s notice referred to in Article 24.1.1 or by dismantling any Field, the Ministry will have the right to take control of any Discovery or Field whose dismantling the Contractor proposes. If the Ministry does not communicate its desire to take over the oil operations within three (3) months of receiving the relevant notice, the Ministry will be considered to have chosen not to assume the operations.

as recoverable cost and used for such removal, disposal, and salvage operations before more than two (2) years passes since the beginning of the initial commercial production of the Field.

For the purpose of dismantling a Field, the Contractor will contribute to a reserve fund for the estimated dismantling costs (the Reserve Fund), in accordance with the Hydrocarbons Law and the approved dismantling plan. The Ministry and the Contractor will establish the form for the commencement of contributions and the institution that will keep these contributions. The contributions will be held by an international bank having at least a Standard and Poor’s qualification. All the contributions mentioned will be deductible for tax purposes and will be considered as a Cost of Petroleum Operations in the year in which they were provided.

The State commits itself not to interfere with the carrying out of Petroleum Operations in the Contract Area that the Contractor retains if the State chooses to take over a Discovery or Field in accordance with the provisions of Article 24.2. If the Ministry asks the Contractor and the Contractor has ongoing Petroleum Operations under this Contract in the area of State operations under Article 2.4.2, the Contractor will be responsible for continuing all operations for a fee and under terms that the Ministry and the Contractor agree on

The Contractor will duly cap all Wells and dismantle all installations and equipment to prevent pollution and damage to the environment, as well as possible damage to the deposit, in accordance with the Hydrocarbons Law, the other laws of Equatorial Guinea, and with generally accepted practices of the international petroleum industry.

the Parties will meet and take appropriate measures to achieve the necessary economic balance, based on the principle that the Contractor will be substantially restored to the same economic condition as if no change had occurred. This restoration of the Contractor will not exceed the benefits received by the State and by other third parties benefiting from the Change in the Law as a result of the change.

This rule will never be construed as meaning that the Contractor is denied the advantages from which it may benefit as a result of any new law, Decree, standard, order, or regulation approved by the State.

The headquarters of arbitration will be New York, USA. The languages of the arbitration proceedings, and of all orders, decisions, and the award, will be Spanish and English. All of the arbitrators will be fluent in Spanish as well as English.

The arbitral tribunal will be constituted by three (3) arbitrators selected according to the following procedure:

None of the arbitrators will be a citizen of the countries of origin of any of the Parties to the Dispute (or in the case where the Party is a company or another entity, any country or countries of nationality of the Party, including the country of its ultimate parent).

The arbitration procedures initiated under this Contract will be realized under the arbitration rules in effect for ICC on the filing date of the request for arbitration, which rules are considered to be incorporated by reference in this Article 26.

The arbitration award will be final and binding on the Parties and will be immediately enforceable, subject to the remedies provided in the arbitration rules of ICC. The Parties waive any right they may have, in any court, to refer any question of law, and/or based on the merits. It is expressly agreed that the arbitrators will have no authority to award aggravated, exemplary or punitive damages

The costs of arbitration will be charged in accordance with the directions of the arbitration tribunal, and failing that, will be distributed per capita among the Parties to the Dispute. The costs of the Parties constituting the Contactor will not be Petroleum Operations Costs, and therefore, not recoverable.

Any monetary award issued will be expressed and payable in Dollars.

Any obligation or condition arising or derived from this Contract that any Party is unable to meet, whether in whole or in part, will not be considered a violation of or noncompliance of its obligations under this Contract if the violation or noncompliance is caused by an event of Force Majeure, provided that there is a direct cause-and-effect relationship between the noncompliance and the event of Force Majeure. Notwithstanding the foregoing, all payment obligations owed by any Party to another must be satisfied when due.

For the purposes of this Contract, an event will be considered an event of Force Majeure if it meets the following conditions:

Such an event will include acts of God, earthquakes, inclement weather, strikes, riots, insurrections, civil unrest, blockades, sabotage, and acts of war (whether declared or not). The Parties agree that the term of Force Majeure will be interpreted in accordance with the principles and practices of the international petroleum industry.

If one of the Parties is unable to comply with any obligation or condition stipulated in this Contract due to Force Majeure, it will notify the other Parties in writing as soon as possible, and in any event no later than fourteen (14) days after the event in question, giving the reason for its noncompliance and the details of the Force Majeure, as well as the affected obligation or condition. The Party affected by the Force Majeure will exert all reasonable efforts to remove the cause, keep the other Parties fully informed of the situation and the current evolution of the Force Majeure event, and will promptly notify the other Parties as soon as the Force Majeure event is over and no longer prevents it from complying with its obligations or conditions under this Contract.

All obligations, other than those affected by the event of Force Majeure, will continue to be met in accordance with this Contract

On cessation of the Force Majeure event, the relevant Party will undertake and complete, as soon as practicable and within a time frame mutually agreed on by the Parties, all obligations suspended because of the Force Majeure.

When a Force Majeure situation lasts more than ninety (90) days, the Parties will consult to examine the situation and implications for Petroleum Operations, in order to establish the appropriate course of action to comply with contractual obligations in the circumstances of the Force Majeure. In such case, the period of this Contract will be extended by the same amount of time that the Force Majeure has lasted.

All notices, approvals, or other communications authorized or required between the Parties by any of the provisions of this Contract will be in writing (in Spanish and English), addressed to the Parties and delivered in person by courier service or by any electronic means of transmitting written communications that provides written confirmation of complete transmission. For purposes of this Contract, oral communication does not constitute notice or approval, and e-mail addresses and telephone numbers for the Parties are listed below as a matter of convenience only. A notification or approval given under any provision of this Contract will be considered delivered only when actually received by the Party to whom such notice or approval is directed, and the time for such Party to deliver any communication in response to such originating notice or approval will run from the date the originating notice or approval is received. Each Party will have the right to change its address at any time and/or designate another Person or address that copies of all such notifications or approvals be directed to by notification in writing of this change to all other Parties.

MINISTRY OF MINES AND HYDROCARBONS

Carretera Autovía Malabo II

Malabo, Bioko Norte

República de Guinea Ecuatorial

To the attention of: His Excellency, the Minister of Mines and Hydrocarbons

Copy to the attention of: Director General of Hydrocarbons

GUINEA ECUATORIAL DE PETRÓLEOS

Calle

Apartado Postal 965

Malabo

Guinea Ecuatorial

To the attention of the Director General

OPHIR EQUATORIAL GUINEA (EG-24) LIMITED

123 Victoria Street

London, SW1E 6DE

UK

To the attention of the General Counsel

This Contract may only be amended in writing and by mutual agreement between the Parties; any amendments made in contravention of this provision will not be valid.

This Contract will not be interpreted to create an association, joint venture, or partnership between the Parties or to impose any partnership obligations or responsibilities of association on the Parties.

With respect to the subjects it addresses, this Contract (i) constitutes the entire agreement of the Parties and (ii) supersedes all previous agreements and negotiations between the Parties.

If one Party exonerates any other Party from one or several instances of noncompliance with the stipulations of this Contract, such exoneration will not be interpreted or have the effect of exonerating the same Party from past or future noncompliance, whether similar or different. Unless expressly provided otherwise in this Contract, no Party will be considered to have waived, eliminated, or modified any of its rights under this Contract unless the Party has expressly stated, in writing, that it waives, eliminates, or modifies that right.

This Contract is entered into by the State as a commercial transaction, and is of a commercial nature.

The State will immediately take all necessary measures to formalize approval of this Contract by means of an Act by which it will have legal validity equivalent to a Law and establishing that this Contract has the force of law. This Contract will become effective on the date the Contractor receives notification in writing of its ratification by the President of Equatorial Guinea.

IN WITNESS WHEREOF, the Parties have signed this Contract in __ (_________________) originals in Spanish, and __ (_________________) originals in English. In case of any conflict, the text in Spanish will prevail.

This Annex is an integral part of this Contract between the Republic of Equatorial Guinea and the Contractor.

On the Effective Date, the initial Contract Area covered an estimated area of 3,537 (three thousand five hundred and thirty seven) square kilometers (km)² or 353,700 (three hundred fifty three thousand seven hundred)) hectares for the purposes of Article 11.4.

The Contract Area is described on the map provided in Annex B. The points indicated on that map are defined below, by reference to the Greenwich meridian and their geographic coordinates:

This Annex is attached to this Contract between the Republic of Equatorial Guinea and the Contractor and forms an integral part of it.

This map is included for illustrative purposes only and in the event of any discrepancy or conflict, the Contract Area will be defined by the geographical co-ordinates specified in Annex A.

This Annex forms an integral part of the Contract between the Republic of Equatorial Guinea and the Contractor. Annex C follows this page.

The object of this Accounting Procedure is to establish equitable criteria and methods of calculation and accounting applicable to the provisions of the Contract, and in particular, to:

For purposes of this Accounting Procedure, the terms used here and defined in the Contract will have the same meaning when used in this Accounting Procedure. In the event of any discrepancy or conflict between the provisions of this Accounting Procedure and any other provisions of the Contract, the provisions of the Contract will prevail.

Within sixty (60) days of receiving the above proposal, the Ministry will either provide notification of its approval of the proposal, or request in writing that revisions be made.

Within one hundred eighty (180) days after the Effective Date, the Contractor and the Ministry will agree on the scheme for the chart of accounts, books, records, and reports that will describe the basis of the procedures and accounting system to be developed and used in accordance with this Accounting Procedure. Following the agreement, the Contractor will immediately prepare and provide the Ministry with formal copies of the detailed and complete chart of accounts and manuals related to the procedures, and a list of the records and information to be posted, recorded, reported, and that will be monitored under the Contract

Within forty-five days of the close of the economic year, the Contractor will present to the Ministry the budget implementation as well as the annual accounts (the balance sheet, the cash flow statement, and the income statement). The internal audit report will be attached for the trustworthiness of the information.

Unless otherwise agreed, all accounts, records, books and reports will be prepared and maintained in Spanish and English and will be expressed in Dollars. Additionally, Contractor may maintain accounts and records in other languages and currencies for information purposes only.

The Contractor will make every effort to provide records and accounts from any of its Affiliates or other Persons necessary to support their charges.

For charges made based on units of time, the Contractor will see that its Affiliate(s) present a report of an internationally recognized independent accounting firm certifying that the charges invoiced by the Affiliate represent a reasonable assignment, complete and accurate charges to Petroleum Operations, excluding any element of profit and duplication of costs, and that apply consistently to all activities of the Affiliate. If the Ministry does not conduct an audit within the time stipulated in accordance with Article 16.3 of the Contract, the Contractor’s accounts, books and records will be considered correct and final.

While audit-related issues are still outstanding, the Contractor will preserve any relevant documents and allow the Ministry access to them until the issue is finally resolved.

The exchange rate will be determined monthly, based on the arithmetic average of the closing buy and sell rates for the Dollar against the CFA (Communauté Financière Africaine, or African Financial Community) currency unit for the month, as published by the Bank of Central African States (BEAC).

The exchange rate of the preceding calendar month will be used for exchange transactions and for the purpose of determining the counter value of Dollars in the Equatoguinean currency unit for the next month.

All books and accounts will be prepared on an accrual accounting basis. Revenues will be posted to the accounting period in which they were earned, without any need to recognize whether a given transaction results in a disbursement or cash receipt. Expenses and costs will be regarded as incurred, in the case of physical items, during the accounting period in which the relevant title is transferred to the Contractor and in the case of services, during the accounting period in which the services are provided. Nevertheless, allocation of accountable revenues and expenditures will be carried out according to the Accrual Accounting Principle contemplated in the General Accounting Plan of Equatorial Guinea, within the framework of OHADA.

By mutual agreement, the Ministry and the Contractor may periodically review this Accounting Procedure at the request of one of the Parties.

All costs related to Petroleum Operations will be classified in accordance with their end use Classification criteria will be included in the approved Annual Work Program and Annual Budget for the Calendar Year in which the expenditure is made. All Petroleum Operations Costs will be classified, defined, and allocated as stated below.

Any and all direct, general, and administrative costs incurred during Hydrocarbon Exploration and Appraisal activities in an area that is part of the Contract Area, including but not limited to:

Development and Production Costs are all approved direct, general, and administrative costs incurred during Development and Production activities, including, among others, the following:

Any general, administrative and service costs, and any other Petroleum Operations Costs incurred from the approval date of any relevant Development and Production Plan, and from the beginning of depositing funds for the Reserve Fund.

Any costs incurred to export Hydrocarbons to the Delivery Point.

With the exception of general and administration costs incurred in Equatorial Guinea that can be directly assigned to the Annual Budget, the general and administration expenditures incurred by the Contractor outside the national territory with respect to Petroleum Operations will be determined in

accordance with the sliding scale set out below, based on total Petroleum Operations Costs actually incurred during the Year and duly justified by the Contractor and approved by the Ministry: