DEEPWATER CAPE THREE POINTS WEST OFFSHORE

OPERATOR: ECO ATLANTIC OIL AND GAS – 50.42% interest in block

OTHER CONTRACTING PARTIES:

A-Z Petroleum Products Ghana Limited – 27.88%interest in block
Petrogulf Limited – 4.35% interest in block
GNPC Exploration and Production Company Limited (GNPC EXPLORCO) – 4.35% interest in block
Ghana National Petroleum Corporation (GNPC) – 13% carried interest in block

Contract Area Size: 944 Sq.km

Effective Date: March 22, 2015

Exploration Period: 6½ years

Current Phase of Operations: Initial Exploration Period (2½ years): [ March 22,2015 – Sept. 21, 2017]

Extension (s): + 1½ years [ September 22, 2017 to March 21, 2019].

Minimum Initial Exploration Programme

License approximately 850sqkm of existing 3D Seismic and Well Data over the Contract Area.
Reprocess 850sqkm of 3D Seismic Data
Drill one (1) exploration well; and
Conduct geological studies
Minimum Expenditure Obligation: US$65,000,000

Status of Operations

The operator has undertaken the following:

Licensed existing 2D and 3D seismic data over the block
Commenced reprocessing of seismic data
Undertaken geological studies (identified Leads and prospects in Cenomanian, Turonian and Campanian based on preliminary seismic interpretation)
Requested the assistance of the Commission to commence the pre-tender stages for a drilling rig.
The Petroleum Commission has granted Contractor eighteen (18) months extension to the Initial Exploration Period to enable completion of work obligation.

FISCAL TERMS

Royalty: Twelve and one half percent (12.5%) of the Gross Production of Crude Oil shall be delivered to the State as Royalty.

Royalty to be delivered to the state on Natural Gas shall be at the rate of ten percent (10%) for the annual Gross Production of Natural Gas.

Income Tax: Taxes in accordance with the Petroleum Income Tax Law in force and as may be amended from time to time and income tax shall be levied at the rate of thirty five percent (35%)

Withholding Tax: Contractor shall not be obliged to withhold any amount in respect of tax from any sum due from Contractor to any Subcontractor in respect of work and services for or in connection with this Agreement.

Surface Rental

Additional Oil Entitlement: Refer to the Petroleum Agreement.