DEPARTMENT OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT INDIAN OIL AND GAS CANADA INDIAN OIL AND GAS ACT INDIAN OIL AND GAS REGULATIONS LEASE NO.

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1 DEPARTMENT OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT INDIAN OIL AND GAS CANADA INDIAN OIL AND GAS ACT INDIAN OIL AND GAS REGULATIONS LEASE NO. OL-* THIS LEASE is made as of the Effective Date. BETWEEN: HER MAJESTY THE QUEEN IN RIGHT OF CANADA, REPRESENTED IN THIS LEASE BY THE EXECUTIVE DIRECTOR OF INDIAN OIL AND GAS CANADA ( LESSOR ) - and - * ( LESSEE ) - and APPROVED BY: * FIRST NATION Page 1 of 22 of OL-**

2 LEASE TERM SHEET RECITALS Lessor, with the approval of the Band Council, is authorised by the Regulations to grant leases in respect of Oil and Gas in Indian lands. The terms of this Lease have been approved by the Band Council and include terms not expressly provided for in the Regulations but which are jointly considered advisable by the Band Council and Lessor. LESSOR AND LESSEE AGREE AS FOLLOWS: 1. LEASE COMPONENTS This Lease consists of this Term Sheet, and the following Appendices: LAND SCHEDULE ROYALTY TERMS GENERAL TERMS OFFICER'S CERTIFICATE (Appendix A ) (Appendix B ) (Appendix C ) (Appendix D ) In addition, this Lease is subject to the Indian Act, the Indian Oil and Gas Act and the Indian Oil and Gas Regulations, PARTIES, TERM AND LANDS First Nation: * Reserve and Number: * Lessee: *, a corporation with offices in the City of *, in the Province of * Lessor: Federal Crown Effective Date: * End Date: * Lease Rights and Lands: As per the Land Schedule (Appendix A ) Page 2 of 22 of OL-**

3 3. LEASE TERMS Issuance Fee: $ Lease Bonus: $* Lease Fee (annual payment): $5.00 per hectare Continuance of this Lease is governed by section 24 of the Regulations. However, continuance shall be restricted to the zone(s) within the Lease Lands that are producing, or capable of producing, oil or gas, in paying quantities. 4. SEISMIC PROGRAM AND RIGHT OF ENTRY RATES PAYABLE TO LESSOR Lessee shall undertake the following Seismic Program in accordance with Article 6.00 of the General Terms: * Issuance Fee (exploratory licence): $ Right of entry fee (2D seismic): $* per kilometre Right of entry fee (3D seismic) - source lines: $* per kilometre - receiver lines: $* per kilometre 5. SURFACE PAYMENTS PAYABLE TO LESSOR 5.1 Issuance Fee (surface lease): $ Initial consideration*: $* Subsequent annual rental: $* The foregoing initial consideration and annual rental rates shall apply to any surface lease issued on or before the End Date and are based on one well per wellsite and access road comprising up to 1.6 hectares. For areas greater than 1.6 hectares, such amounts shall be increased on a pro rated basis as follows: Initial consideration*: Subsequent annual rental: $* per additional hectare $* per additional hectare [*Initial consideration includes first year s rental] 5.2 An entry fee of $1, per hectare shall apply to each surface lease with a maximum entry fee of $5, per surface lease. The entry fee shall also apply to any lands subsequently added to a surface lease. 5.3 If more than one well is drilled on a wellsite, further initial consideration in the amount of $1, per additional well and subsequent annual rental in the amount of $ per additional well shall apply. 6. RIGHT-OF-WAY PAYMENTS PAYABLE TO LESSOR 6.1 Issuance Fee (right of way agreement): $50.00 Initial consideration: $* per hectare The right of way agreement grants the right to install one or more pipelines within the initial construction operation only. 6.2 An entry fee of $1, per hectare shall apply to each right of way agreement with a maximum entry fee of $5, per right of way agreement. The entry fee shall also apply to any lands subsequently added to a right of way agreement. Page 3 of 22 of OL-**

4 7. DRILLING PROGRAM Lessee shall undertake the following Drilling Program in accordance with Article 7.00 of the General Terms: * 8. ROYALTY Lessee shall pay Royalty in accordance with Appendix "B" of this Lease. 9. LESSEE AND BAND COUNCIL ADDRESSES FOR NOTICES Lessor s address is found in Article 17 of the General Terms. Lessee: * * Fax No.: * Band Council: * * Attention: Chief and Council Fax No.: * Page 4 of 22 of OL-**

5 EXECUTION BY PARTIES EXECUTED AND DELIVERED as of the Effective Date. EXECUTIVE DIRECTOR INDIAN OIL AND GAS CANADA * SIGNED in the presence of: ) ) Name: ) Position: ) ) ) ) Name: WITNESS ) Position: NOTE: Lessee shall affix its corporate seal or the signature shall be witnessed by at least one person who is not a party to this Lease and the attached affidavit of witness completed before a Notary Public or a Commissioner for taking Oaths. If executed by power of attorney, Lessee shall also provide original power of attorney documentation to Lessor, if not previously provided. Page 5 of 22 of OL-**

6 Affidavit of Witness re: Execution (Signing) of Document Canada Province of I of the City of of the Province of to Wit Make Oath and Say 1. That I was personally present and did see the attached instrument duly executed by. 2. That I know the said party(ies), and that the said party(ies) in my belief is/are the full age of majority for the Province of. 3. That I am the subscribing witness to the said instrument. Signature of Witness. SWORN before me at the City of, Province of, this day of,. A Notary Public, or a Commissioner for taking Oaths, in and for the Province of. My commission expires: Page 6 of 22 of OL-**

7 BAND COUNCIL SIGNATURES Lease No. OL-*, has been jointly considered by Lessor and the Band Council and is HEREBY APPROVED by the Band Council. Chief Page 7 of 22 of OL-**

8 Appendix A LAND SCHEDULE This is the Land Schedule to Lease No. OL-*. Province: * Reserve and No: * Lease Rights and Lands: * from the * to the *, underlying: TWP. *, RGE. * W*M: SECTION: * Containing * hectares, more or less. Excepting thereout any lands which are not Indian lands and subject to any existing rights granted to a person other than Lessee under any agreement or other interest or right in the lands covered by this Lease. Page 8 of 22 of OL-**

9 Appendix B ROYALTY TERMS PREAMBLE. A. Lessor is empowered under section 4(2) of the Indian Oil and Gas Act to enter into a special agreement with Lessee to reduce or increase or vary the basis of calculation of royalties prescribed from time to time by the Indian Oil and Gas Regulations, B. Under this Lease the Lessor has granted the Lessee certain rights subject to the reservation of a Royalty to be calculated in accordance with this Appendix B. 1.0 DEFINITIONS 1.1 The definitions in the General Terms, Regulations, or the Indian Act used in this Appendix B are incorporated into this Appendix B unless the contrary is stated and in this Appendix B : Approved Gas Well means a well designated a gas well under the provincial regulations; Approved Oil Well means a well designated an oil well under the provincial regulations; Authorised Deductions means one or more of the Gas Cost Allowance or Product Costs, as the case may be; Capital Based GCA Methodology means the calculation that uses an Operating Allowance, defined as a fixed percentage of the capital employed in a Facility Cost Centre(s) (FCC), as defined in the Royalty Reporting Guidelines, and prorated for the number of months the FCC was active during the year. The applicant must annually submit only capital additions/retirements and gas volumes in accordance with the Royalty Reporting Guidelines; Condensate means a liquid mixture, consisting mainly of pentanes and heavier hydrocarbons that is a product from an Approved Gas Well and that has been recovered at a separator before the gas is delivered to a gathering system, or that is a product recovered from a gas stream by separation at a gas plant; Crude Bitumen has the meaning given "crude bitumen" in the Indian Oil and Gas Regulations, 1995; Exhibit A attached to this Appendix B provides the rate, the price and the volume factors to be used in the calculation of the royalty payable; Gas Cost Allowance (or GCA) means an allowance approved by the Lessor for the costs incurred by the Lessee for gathering, dehydrating, processing and compressing of the Lessor s royalty share of Gas. Where the Lessee is an owner of the FCC, the GCA will calculated in accordance with the Royalty Reporting Guidelines using the Capital Based GCA Methodology and ten percent (10%) for the Operating Allowance calculation; Marketable Gas means gas, consisting mainly of methane, that meets industry or utility specifications for use as a domestic, commercial or industrial fuel or as an industrial raw material (Indian Oil and Gas Regulations, 1995); Month means a calendar month; Operating Allowance means a component of GCA calculated as a fixed percentage of the FCC s employed capital in accordance with the Royalty Reporting Guidelines; Pentanes Plus means a mixture of hydrocarbons consisting wholly or mainly of pentanes and heavier hydrocarbons and obtained through processing of Gas in a gas plant; Page 9 of 22 of OL-**

10 Products means all components of Gas produced, other than Marketable Gas, which includes, but is not limited to ethane, propane, butane, Pentanes Plus (Condensate), sulphur or any combination of these; Product Costs means the actual cost on a Monthly basis of the trucking of Products to a secondary facility for further processing or the actual cost on a Monthly basis of fractionation of Products at a secondary facility, in each case where the product is not sold before being trucked or fractionated; Royalty Reporting Guidelines means the publication issued by Lessor and amended from time to time, providing a guide for royalty payers on the reporting requirements, Gas Cost Allowance, audit and other information related to the royalty reporting, calculation and collection process; Solution Gas means Gas that is dissolved in crude oil or Crude Bitumen under initial reservoir conditions and includes any such gas that evolves as a result of changes in pressure, temperature or both, due to human disturbance; 2.0 SPECIAL AGREEMENT 2.1 This Appendix B is attached to and forms part of this Lease and as such is a special agreement for the purposes and intent of section 4(2) of the Indian Oil and Gas Act. 2.2 The Regulations are applicable to the determination of the royalty payable under this Appendix B, except to the extent the Regulations are superseded by the provisions of this Appendix B. 3.0 ROYALTY 3.1 Subject to clause 3.2, the gross royalty on Oil, Gas and Products produced from or attributable to the Lease Lands shall be calculated in accordance with this Appendix B. 3.2 Royalty on Condensate shall be calculated in accordance with the Pentanes Plus royalty prescribed in this Lease. 4.0 AUTHORISED DEDUCTIONS 4.1 The Lessee shall determine the net royalty payable, by deducting the Authorised Deductions (if any) from the gross royalty. Authorised Deductions may be audited at any time by Lessor on reasonable notice given to Lessee. 4.2 A copy of the Royalty Reporting Guidelines is available from Lessor at Lessee s request. 4.3 Gas Cost Allowances must be applied for prior to May 31st in each year. The Gas Cost Allowance deducted shall not exceed 50% of the Monthly gross Gas royalty. Amounts in excess of 50% may not be carried forward into future Months, nor carried back against previous Months production. Lessee may not transfer amounts in excess of 50% of the Monthly gross Gas royalty in respect of one well or zone and apply such amounts elsewhere. 5.0 FAIR MARKET PRICE 5.1 Where the Lessor determines that Oil, Gas and Products that are royalty payable under this Lease, were sold at a price that was less than the fair market value at the time and place of production, the Lessor, in consultation with the Band Council, may by notice direct that compensation be paid by Lessee, at the time that the next royalty payment is paid pursuant to this Appendix B, in an amount that is equal to the royalty on the difference between the price at which the Oil, Gas or Products were sold and fair market value. (Section 33(6) of the Indian Oil and Gas Regulations, 1995) Page 10 of 22 of OL-**

11 6.0 SALE TO INCLUDE ROYALTY SHARE 6.1 Subject to Article 7.0 of this Appendix B, every sale of Oil, Gas and Products that is produced from or attributable to the Lease Lands shall include the royalty share of the Oil, Gas or Products at the same price and on the same terms as applicable to the sale of the Lessee s share of the Oil, Gas or Products. (Section 33(4) of the Indian Oil and Gas Regulations, 1995) 7.0 NOTICE TO TAKE IN KIND 7.1 At any time after giving reasonable notice in writing to Lessee (and the operator of the well if different from Lessee) and giving due consideration to any obligations Lessee or operator has in respect of the Oil or Gas, the Lessor may, with the approval of the Band Council in the form of a Band Council Resolution, direct that all or part of the Oil or Gas that is royalty payable under this Lease, be paid in kind for a specified or indefinite period or until Lessor directs otherwise. (Section 33(5) of the Indian Oil and Gas Regulations, 1995) 8.0 PAYMENT 8.1 Any cash payment required to be paid by Lessee to Lessor for the royalty share as provided for in this Appendix B shall be paid or tendered in Canadian funds not later than the 25 th day of the Month following the Month in which the Oil, Gas or Products were produced or sold. (Section 33(2) of the Indian Oil and Gas Regulations, 1995) 8.2 Lessee shall, together with each payment under section 8.1, forward to the Lessor a written financial statement and report of the royalty share applicable to the Month for which such payment is made, providing the data required by the Royalty Reporting Guidelines including, (without limitation), volumes of production, inventories and particulars of all sales of Oil, Gas and Products including copies of invoices of sales of all Oil, Gas and Products. The provision of such a statement and report shall not preclude Lessor from carrying out such enquiries and audits as Lessor may require from time to time. (Section 33(3) of the Indian Oil and Gas Regulations, 1995) 9.0 ROYALTY NOT PAYABLE 9.01 No Royalty is payable on reasonable volumes of Oil or Gas that is consumed in operations for the drilling of, production or processing of Oil or Gas that is subject to a Royalty hereunder if the Oil or Gas so consumed is recovered from the same pool as the Oil or Gas processed. This provision shall not apply to Oil or Gas that is consumed in storage banks, flooding and similar recovery operations, steaming operations or the production or processing of heavy oil or Crude Bitumen ROYALTY ON WELL BY WELL BASIS 10.1 Where Oil or Gas is produced from more than one well, the Royalty shall be calculated on a well-by-well basis Where a well produces Oil or Gas from more than one zone, royalties shall be calculated on a segregated basis for each producing zone, each of which shall be metered separately, unless regulatory approval has been obtained to commingle production Where production from two or more leases with different royalty rates is commingled, the higher royalty rate shall apply to the commingled volume SOLUTION GAS 11.1 Where Solution Gas is produced and sold by Lessee from this Lease, a royalty shall be payable thereon to the Lessor in an amount equal to the Marketable Gas Royalty Rate, or if this Lease is an Oil Lease only, the Gas royalty rate shall be negotiated between the parties. Page 11 of 22 of OL-**

12 12.0 ROYALTY SHARE HELD IN TRUST 12.1 At all times the Lessee is in possession of that share of any substances recovered from the Lease Lands that is attributable to the Royalty reserved and payable under this Lease, the Lessee shall hold such royalty share in trust for the Lessor AUDIT 13.1 The Lessee, its contractors, representatives and agents ( Lessee ) shall keep and retain at all times and make available in Alberta accurate and detailed accounts, books and records including electronic and microfiche data ( Records ) relating to and for the purpose of calculating the Royalty payable under this Lease Such Records shall be retained for a period of six years from the last day of the year in which such Records were rendered or to which such Records pertain The Lessor or its agent or any person conducting an audit on its behalf ( Lessor ) may audit the Records of the Lessee on these terms Lessor may, at any reasonable time, and upon notice given, and when it is reasonable that Lessor be given such access, be granted the right of access to offices where Records are kept, in order to audit or examine them If Lessee fails to retain the Records in respect of a period in which production has occurred, as required by this Article, Lessee shall pay to Lessor additional royalties in lieu of damages for the period for which records were not kept equal to an amount reasonably assessed by Lessor as payable for such period If, following the audit, the Lessor determines that the royalty payable has not been calculated and paid in accordance with the terms of this Lease and the Regulations, the Lessor may recalculate the royalties, on the basis of, without limitation: (a) the volume of Oil or Gas comprising the royalty; and (b) any amounts of money owing with respect to the royalty; and (c) any Authorized Deductions; and (d) the actual selling price of the Oil and Gas recovered from or attributable to the Lease Lands or the Products obtained by processing such Oil or Gas; and (e) the fair market value of the Oil or Gas which is recovered from or attributable to the Lease Lands or is deemed to be produced for the purpose of calculating a compensatory royalty The Lessee shall ensure its contracts with third parties related to operations under this Lease include provisions allowing audit by the Lessor on these terms. Page 12 of 22 of OL-**

13 EXHIBIT A TO APPENDIX B * Page 13 of 22 of OL-**

14 Appendix C GENERAL TERMS 1.00 DEFINITIONS AND INTERPRETATION 1.01 The definitions in the Regulations or the Indian Act, used in this Lease are incorporated into this Lease, unless the contrary is stated, and, where applicable in this Lease, Appendix means one of the Appendices attached to the Term Sheet; Band has the meaning given band in the Indian Act and where used in this Lease means the First Nation named on the Term Sheet; Band Council has the meaning given band council in the Indian Oil and Gas Regulations, 1995; Collateral Agreements are, without limitation, agreements, undertakings, payments, royalties, farmouts, casing point back-ins, carried interests, net profit interests or other benefits of any kind collateral to the terms and conditions of this Lease passing between Lessee and the Band, agents thereof, or other affiliated or related parties; Contract Depth is described in the Term Sheet; Crude Bitumen has the meaning given "crude bitumen" in the Indian Oil and Gas Regulations, 1995; Deadline is a date by which a drilling commitment or seismic commitment shall be met and is specified, where applicable, in the Term Sheet; Direction to Comply is a default notice issued pursuant to section 46 of the Indian Oil and Gas Regulations, 1995; Drilling Program if any, is described in the Term Sheet; Effective Date is described in the Term Sheet; End Date is described in the Term Sheet; Environment means the air, the land and the water, all organic and inorganic matter and living organisms therein and the interacting natural systems variously involving these components; Environmental Event means any event on or about the Lease Lands such as a leak, spill, emission, escape, deposit, or contamination resulting in harm or the reasonable apprehension of harm to the Environment; Federal Crown means Her Majesty the Queen in Right of Canada; Gas means natural gas that is or can be produced from a well, both before and after it has been subjected to any processing, and includes Marketable Gas and all fluid components not defined as Oil (Indian Oil and Gas Act); General Terms means this Appendix C General Terms; Issuance Fee is the fee prescribed in Schedule II to the Indian Oil and Gas Regulations, 1995 for the issuance of an agreement; Page 14 of 22 of OL-**

15 Lease means this Lease as described in the Term Sheet, and includes the Appendices together with all amending, supplemental or confirming instruments; Lease Bonus is described in the Term Sheet; Lease Fee is the annual rental and is described in the Term Sheet; Lease Lands are described in Appendix A ; Lease Operations means any operations conducted by or on behalf of Lessee which are related in any way to this Lease including, without limitation, its operations under any related exploratory licences, surface lease or right of way agreements, or other related agreements; Lease Rights means the Oil and Gas rights specified in Appendix A ; Oil means crude oil and all other hydrocarbons, regardless of gravity, that are produced from an Approved Oil Well in liquid form, (Crude Bitumen may be excluded from the title document); (Adapted from Indian Oil and Gas Act); Option Well is a well Lessee has the right but not the obligation to drill; Regulations means the Indian Oil and Gas Act and the Indian Oil and Gas Regulations, 1995 or either of them; Rig Release means the release of the drilling rig from the applicable wellsite; Royalty is the royalty described in Appendix B to be computed, levied and collected on production obtained from or attributable to the Lease Lands; Seismic Program if any, is described in the Term Sheet; Term is defined in clause 3.00 of the General Terms; Term Sheet means the document entitled Lease Term Sheet to which this Appendix C is attached; Test Well if specified in the Term Sheet as part of the Drilling Program, is a well Lessee is required to drill. In addition, unless the contrary is stated, the definitions in the Indian Act, the Indian Oil and Gas Act and the Indian Oil and Gas Regulations, 1995 for any terms used in this Lease, shall also apply All statutory references in this Lease include both the statute and all associated regulations, guidelines, directives and orders, all future amendments thereto and any instruments passed in the future which have the effect of supplementing or superseding them The headings of articles are inserted for convenience of reference only and do not affect the meaning of this Lease This Lease is to be read with all changes in gender and number as may be required by the context. Page 15 of 22 of OL-**

16 2.00 GRANT AND PAYMENTS 2.01 The Lessor, subject to the terms of this Lease and the reservation of the Royalty, grants the Lessee the right, for the Term, to drill and test for, produce and treat the Lease Rights underlying the Lease Lands, to the extent such rights are vested in the Federal Crown, and to carry on all operations necessarily incidental to such activities Except as otherwise specified, all payments under this Lease shall be made to Lessor The Lessor acknowledges receipt of the following non-refundable amounts: (a) Issuance Fee for this Lease; and (b) Lease Fee for the first year of the Term; and (c) Lease Bonus The Lessee shall pay the Lease Fee, prior to each anniversary of the Effective Date during the Term. The Lease Fee is non-refundable TERM 3.01 Subject to earlier termination or extension, the Term of this Lease is that period of time from the Effective Date to the End Date and continuing beyond the End Date as a result of a continuance as specified in the Term Sheet SURFACE ACCESS 4.01 This Lease does not grant surface rights Prior to conducting any surface operations, including seismic operations, on the Lease Lands, the Lessee shall first obtain all necessary surface rights in accordance with the Indian Oil and Gas Regulations, The Issuance Fees, initial considerations, annual rentals, right of entry fees and entry fees specified in the Term Sheet shall apply to the surface rights referred to in clause Compensation for use by Lessee of Band roads shall be negotiated with and paid to the Band ROYALTY 5.01 Lessee shall pay to the Lessor the Royalty described in Appendix "B", and in accordance with Exhibit "A" to Appendix "B", to be computed, levied and collected on production obtained from or attributable to the Lease Lands SEISMIC PROGRAM AND DATA 6.01 Lessee shall, at its risk and expense, complete the Seismic Program prior to the Deadline specified in the Term Sheet. If no Deadline is specified, the Seismic Program shall be completed on or before the End Date As set forth in the surface rights agreement, Lessee shall inform Lessor in writing as soon as it has completed the Seismic Program and shall provide Lessor with any required seismic data. Page 16 of 22 of OL-**

17 7.00 DRILLING PROGRAM 7.01 Lessee shall, at its sole risk and expense, spud the Test Well at a location of its choice on the Lease Lands and shall thereafter diligently and continuously drill the Test Well to Contract Depth and complete, cap, plug or abandon same. If no Deadline is specified in the Term Sheet, then, subject to clause 7.03, Lessee shall drill the Test Well to Contract Depth and complete, cap, plug or abandon same on or before the End Date When Lessee has completed, capped, plugged or abandoned the minimum number of Test Wells specified in the Term Sheet, Lessee may drill Option Wells on the Lease Lands to Contract Depth and complete, cap, plug or abandon same on or before the End Date If Lessee spuds a Test Well or Option Well prior to the End Date and is diligently and continuously drilling the well to Contract Depth but is unable to reach Contract Depth by the End Date, the Term may be extended for such period as the Executive Director considers to be reasonable in the circumstances to allow Lessee sufficient time to reach Contract Depth and thereafter to complete, cap, plug or abandon the well in a diligent and continuous manner CONFIDENTIALITY 8.01 The confidentiality restrictions in the Regulations shall not apply to information which is in, or becomes part of, the public domain nor to information obtained or obtainable from another source who or which is not bound by confidentiality restrictions ENVIRONMENTAL AND ARCHEOLOGICAL IMPACTS 9.01 Lessee shall promptly report to Lessor in writing, details of any Environmental Event associated with or resulting from Lease Operations which in the opinion of Lessee, reasonably exercised, may adversely affect the Environment. This clause is in addition to and does not replace, preclude or limit the statutory obligations of Lessee regarding Environmental Events Lessee, in consultation with the Band Council, must take all reasonable steps in the conduct of its Lease Operations to prevent or mitigate any anticipated or actual adverse effects with respect to crops, fish, or wildlife or any archeological, historical, cultural, spiritual or other sensitive sites on the Lease Lands EMPLOYMENT OF BAND MEMBERS Terms concerning the employment of Band members are to be negotiated with the Band Council and set out in a collateral agreement with the Band Council and Lessee. A copy of any such agreement shall be promptly provided to Lessor Lessee shall provide Lessor, with a written report prior to each anniversary of the Effective Date, advising as to the nature and status of its employment commitments to the Band, including, without limitation, particulars as to the number of Band members employed, the type of employment offered, and any other information relative to the collateral agreements relating to Band member employment INSURANCE Prior to the commencement of and during Lease Operations, Lessee shall comply with all legislation concerning workers engaged in Lease Operations including without limitation Worker s Compensation legislation Without limiting in any way the liability of Lessee under this Lease, the Lessee represents that it now carries and will continue to carry during the Term of this Lease, and Lessee shall, as a minimum hold and maintain, insurance coverage in the minimum amounts as is prudent and necessary for coverage of the anticipated Lease Operations. These shall include, as a minimum, the following insurance policies from one or more reputable insurers, together with any additional policies (collectively Policies ) as follows: Page 17 of 22 of OL-**

18 (a) (b) (c) Comprehensive general liability insurance with inclusive bodily injury and property damage limit of five million dollars ($5,000,000.00) per occurrence, which shall include, without limitation, occupiers liability, employer s liability, employers contingent liability, contractual liability, contractor s protective liability, products liability, completed operations liability and contractors liability insurance covering without limitation, control of well, expense of re-drilling and recompletion, clean-up expense, seepage pollution and contamination, custody and control property and evacuation expense; and Automobile liability insurance covering all motor vehicles, snowcraft and all-terrain vehicles, owned or non-owned, operated or licenced by Lessee and used in Lease Operations, with inclusive bodily injury, death and property damage limit of one million dollars ($1,000,000.00) per occurrence; and Aircraft liability insurance covering all aircraft, owned or non-owned, operated or licensed, by Lessee with inclusive bodily injury, death and property damage limit of five million dollars ($5,000,000.00) per occurrence; The Policies shall provide that they shall not be cancelled without thirty days prior written notice given to Lessor by the insurer All Policies required by this Article shall include a waiver of subrogation by the insurer, in favour of Lessor Policies may not carry a deductible in excess of five per cent (5%) of the required coverage Lessee shall provide, on demand by Lessor, a copy of the certificates of insurance or statement of insurer describing the required coverage and the effective date of the insurance Lessee shall ensure that any agent, consultant, licensee, operator or contractor performing Lease Operations on behalf of Lessee will carry the types of insurance as is commercially prudent and commensurate with the requirements of this Article STATUTORY RIGHTS AND DUTIES Lessee acknowledges that: (a) (b) Lessor s statutory rights and duties under the Regulations are not diminished in any way by the terms of this Lease; and Some provisions in this Lease give the Lessor contractual rights or impose on the Lessee contractual obligations which are additional to those given or imposed by the Regulations LESSEE'S STANDARD OF CARE Lessee shall at all times during the currency of this Lease carry out its Lease Operations in a good, safe, and workmanlike manner and in accordance with generally accepted industry practices and this Lease. Lessee shall utilize its best judgement and discretion and exercise the degree of care, diligence and skill that a prudent party having the same or similar duties and responsibilities would exercise in comparable circumstances. Page 18 of 22 of OL-**

19 14.00 LESSEE S LIABILITY AND INDEMNITY Lessee is liable to the Lessor and the Band for any and all of the following to the extent the same arise out of, or are in any way connected with, the conduct or management of any Lease Operations by the Lessee (which term for the purposes of this Article includes its employees, agents, consultants, licensees, operators, contractors, successors or assigns), whether negligent or otherwise, or by reason of anything else done or not done by the aforesaid parties in the exercise, or purported exercise, of the rights, powers, privileges and liberties granted in this Lease: (a) (b) actions, suits, causes of action, claims and demands against the Lessor or the Band or both by or on behalf of any third party in respect of any direct or indirect loss, injury, obligation, liability or damage of any kind or nature whatsoever allegedly suffered or sustained by such third party; and direct or indirect loss, injury, obligation, liability or damage of any kind or nature whatsoever suffered or sustained by the Lessor or the Band or both including, without limitation, damage to crops, fences, corrals and any other real or personal property and the cost of repairing and reconditioning roads or road allowances The Lessee shall promptly indemnify and save the Lessor and Band harmless from and against the claims and damages outlined in clause above The foregoing indemnity shall extend to court costs, legal costs on a solicitor and own client basis and accounting and all other professional expenses REMOVAL OF MATERIAL AND INSTALLATIONS Upon the surrender, expiration or other termination of this Lease, the Lessee shall within 60 days (or such longer period as may be agreed to in writing by the Lessor) apply to the Lessor for approval to abandon all wells on the Lease Lands and, upon receipt of such approval, the Lessee shall thereafter commence and diligently pursue the proper abandonment of all such wells and restore the surface lands in accordance with regulatory requirements, all within the time period stipulated in the approval and, provided Lessee is not in receipt of a Direction to Comply, remove all vehicles, supplies, tools, equipment, machinery, buildings, structures and other material and installations which it has placed on the Lease Lands If Lessee fails to remove any materials and installations within the stipulated period, the Lessor may elect at any time thereafter by notice to the Lessee to take possession of and title to the same without consideration, free and clear of any claim or interest of the Lessee or any parties claiming by, through or under the Lessee COLLATERAL AGREEMENTS Lessee, after due enquiry, represents and warrants, there are no Collateral Agreements existing or contemplated at the time of execution of this Lease other than those (if any) described in the officer s certificate to be provided by Lessee, in the format attached as Appendix D, to Lessor on execution of this Lease NOTICE Addresses for notices are provided in the Term Sheet and in clause Notices shall be in writing and may be served by registered mail or personal service as provided in the Indian Oil and Gas Regulations, 1995, or by facsimile. Any notice served by facsimile shall be deemed received by the addressee on the date of transmission if sent if sent during normal business hours or on the next ensuing business day if transmitted after normal business hours. If postal service in Canada is or is threatened to be interrupted, all notices shall be served by personal service or facsimile. Lessor, Lessee and Band Council may change its mail address, address for personal service or facsimile number by notice to the Lessor, Lessee or Band Council, as the case may be. Page 19 of 22 of OL-**

20 17.03 Notices to Lessor shall be addressed to: Indian Oil and Gas Canada Suite Chiila Boulevard Tsuu T ina, AB T2W 6H6 Attention: General Manager, Land Fax: (403) MISCELLANEOUS DUTY TO CONSULT AND INFORM Where Lessee reasonably believes Lease Operations may adversely affect the Band, Lessee shall meet with the Band Council and any Band members who might reasonably be expected to be so affected and fully explain the proposed operation together with all expected impacts. Response from Band Council and Band members should be documented and given consideration so as to mitigate any impact to the extent reasonably possible. Lessee shall keep Lessor and Band Council fully informed of all proposed activities (such as, without limitation, site preparation, seismic operations, rig set up, drilling, pipeline laying, flaring and trucking) and any unusual incidents which have occurred (such as without limitation, leaks, explosions, blow outs, spills, emissions, escapes, deposits, or contamination) SURVIVAL Where this Lease is cancelled, surrendered, terminates or otherwise expires, any liabilities (including without limitation indebtedness, abandonment and reclamation obligations or other environmental liabilities) which remain outstanding at such a time shall survive such cancellation, surrender, termination or expiry CUMULATIVE REMEDIES No remedy in this Lease or in the Regulations conferred on or reserved to the Lessor is intended to be exclusive or in lieu of any other remedy in this Lease, or in the Regulations, or otherwise provided by law or in equity, and these rights or remedies are cumulative and are in addition to every other right or remedy in this Lease or existing at law or in equity LIMITATIONS Notwithstanding anything to the contrary express or implied, in the Regulations, or specified in federal or provincial laws providing statutory limitation periods, (including without restricting the foregoing, the Alberta Limitations Act), the limitation period applicable to any claim arising under this agreement shall be the later of six years from the end of the year in which (a) the claim arose, or (b) the claim first came to the claimants knowledge WAIVER No waiver of the provisions of this Lease or the Regulations is binding on the Lessor unless the waiver is evidenced in writing and signed by the Lessor s lawful representative. A waiver only applies to the particular breach or obligation waived and not to any other breaches or obligations, whether or not similar. A waiver by the Lessor does not constitute a continuing waiver unless it expressly says so. A delay or omission on the part of the Lessor in exercising a right or power under this Lease or the Regulations does not impair the Lessor s ability to exercise the right or power nor is it a waiver of, or acquiescence to, any breach TIME OF ESSENCE Time is of the essence in this Lease. Page 20 of 22 of OL-**

21 18.07 SET OFF Lessor may, at its sole discretion, set-off against Lessee for any monies due and owing under this Lease, so that any monies owed by Lessor to Lessee either under this Lease or another agreement (between the parties to this Lease and involving the Reserve(s) described in Appendix "A" and whether executed before or after this Lease) may be applied toward the repayment of the Lessee s indebtedness under this Lease LAWS The Lessee will comply with the Regulations and all other applicable federal laws (including without limitation, the Canadian Environmental Assessment Act and Canadian Environmental Protection Act) and applicable provincial laws, and waives all rights, prerogatives, privileges and immunities that have the effect of exempting the Lessee from complying with these laws ENTIRE AGREEMENT This Lease supersedes all prior agreements or understandings whether written or verbal, between the Lessor and the Lessee or between Lessee and the Band Council, concerning the matters dealt with in this Lease and comprises the entire agreement concerning such matters ASSURANCES Each party shall from time to time and at all times do such further acts and execute and deliver all such further deeds and documents as may be reasonably required in order to fully perform and carry out the terms of this Lease SEVERANCE If any term or provision of this Lease is adjudged invalid, illegal or incapable of being enforced by any rule of law, equity or public policy, all other terms and provisions of this Lease shall nevertheless remain in full force and effect HOUSE OF COMMONS No member of the House of Commons shall be admitted to any share or part of this Lease or any benefit to arise from it SUCCESSORS This Lease is binding upon and enures to the benefit of the parties and their respective successors and permitted assignees COUNTERPART This Lease may be executed in one or more counterparts, each of which is considered to be an original but all of which together constitute one and the same instrument. In addition, facsimile copies of executed counterparts are conclusively regarded for all purposes as originally executed counterparts pending the delivery of the originals. Page 21 of 22 of OL-**

22 Appendix D OFFICER S CERTIFICATE OFFICER S CERTIFICATE (format) I, the undersigned, being an officer of (the Company ), do hereby certify for and on behalf of the Company and not in my personal capacity, after due enquiry, that the representation and warranty made by the Company, in clause in the General Terms of Oil and Gas Lease number between the Company, as Lessee and her Majesty the Queen in Right of Canada, as Lessor, and dated the day of, 200, is true and correct to the best of my knowledge and belief. Dated this day of 200. Name: Title: Officer of the Company COLLATERAL AGREEMENTS: Page 22 of 22 of OL-**