AGREEMENT FOR
ASSIGNMENT OF LEASES

        That, Geo Petroleum, Inc. 25660 Crenshaw Blvd, Suite 201, Torrance, California 90505, hereinafter referred to as Geo, for Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, subject to the terms, reservations, limitations and provisions hereinafter set forth, without warranty of any kind either express or implied, does hereby agree to assign, transfer and convey subject to Geos retained power of termination, unto Saba Petroleum, Inc., 201 North Salsipuedes, Suite 104, Santa Barbara, California 93103, hereinafter referred to as Saba, two thirds (2/3) of Geos right, title and interest in, to and under the oil, gas and mineral leases as set forth in Exhibit A attached hereto and made part thereof.

        A.  The interests to be assigned to Saba hereunder, include all of Geos interests in all presently existing and valid oil, gas or mineral leasehold interests, unitization, pooling, operating and communitization agreements, declarations and orders, and in and to the properties covered and the units created thereby, which are appurtenant to the Leases or lands assigned, as described in Exhibit A.

        B.  The interests to be assigned to Saba hereunder, shall include all of Geos interests in all presently existing and valid oil and gas sales, purchase, exchange and processing agreements, joint venture agreements, partnership agreements, right-of-way easements, permits and surface leases and other contracts, agreements and instruments, including emission credits, insofar as the same are appurtenant to the Leases or lands assigned.

        C.  The interests to be assigned to Saba hereunder, shall include all of Geos interests in all wells, equipment, fixtures and personal property located on the lands described in Exhibit A, which are appurtenant to the Leases or lands assigned, said wells being more specifically described in Exhibit A-1 attached hereto subject to the exclusion of certain wells as also cited in said Exhibit A-1.

        All of the foregoing leases, interests, rights and properties described in the first paragraph and paragraphs A through C above, are herein called the Properties, located in Ventura County, California.

        To have and to hold the properties forever, subject to and on the terms, conditions and limitations contained in the following:

1.   Royalty Purchases

        Saba shall attempt to acquire interests in land, royalty, overriding royalty and mineral interests in the properties subject hereto. Said interests will be acquired for Sabas account at Sabas sole risk cost and expense. Geo has the right to participate as to a one-third (1/3) interest in such acquisitions by reimbursing Saba one-third (1/3) of the cost of acquisition. Upon receipt of written notification of acquisition, Geo shall have fifteen days to elect to join in or decline participation in the acquisition. Should Saba finance the funding for the acquisition of the said interests from a source other than Sabas primary bank or an affiliate, Geo shall have the right to join in with Saba as a co-borrower as to its one-third (1/3) interest.

2.   Operations

        On or before one hundred eighty (180) days from the date hereof or within thirty (30) days after Saba terminates its attempt to acquire the interests identified in paragraph (1) above, whichever shall first occur, Saba shall commence operations upon said properties to produce oil, gas and/or other hydrocarbon substances from the properties by drilling, re-drilling, re-working and/or re-entry operations of existing wells and in new wells utilizing primary or secondary technologies or methods of oil and gas recovery, hereinafter referred to as operations. Geo shall continue to operate the properties for its own account until such time as Saba commences operations. Subsequent thereto, Saba shall be entitled to one-hundred percent (100%) of all revenue generated from the properties and shall maintain and operate the properties at its sole cost and expense subject to and in accordance with paragraph (4) hereof. Saba shall conduct continuous operations on the properties with no cessation of operations for more than a ninety (90) consecutive day period.


 

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