SHARE EXCHANGE AGREEMENT

dated the 17th day of November, 2011

AMONG

The Persons Listed on

SCHEDULE "A"

- AND -

ARTICLE 1
         DEFINITIONS AND INTERPRETATION........................................1

                 Definitions...................................................1
                 Interpretation................................................5

ARTICLE 2
         SHARE EXCHANGE........................................................6

                 Purchase and Sale.............................................6
                 Purchase Consideration........................................6
                 Resale Restrictions...........................................7

ARTICLE 3
         REPRESENTATIONS AND WARRANTIES OF NEWCO...............................7

                 Organization and Existence....................................7
                 Authorized Capital............................................7
                 Subsidiaries..................................................8
                 Information...................................................8
                 Authorization and Consents....................................8
                 No Other Agreement to Purchase................................8
                 Agreements or Restrictions on Transfer of Shares..............8
                 Shareholder Loans.............................................8
                 Absence of Certain Changes....................................9
                 Indebtedness and Liens.......................................10
                 Indebtedness to Directors, Officers and Others...............10
                 Taxes........................................................10
                 Material Contracts...........................................11
                 Necessary Licenses and Permits...............................11
                 Compliance with Law..........................................11
                 Employees....................................................11
                 Litigation...................................................12
                 No Material Adverse Change...................................12
                 Employee Benefit Plans.......................................12
                 Insurance....................................................12
                 Location of Office...........................................12
                 Company Documents, Books and Records.........................13
                 No Limitations...............................................13
                 Reporting Issuer Status......................................13
                 Regulatory Compliance........................................13
                 Non-Arm's Length Transactions................................13
                 Environmental Laws...........................................13
                 Enforceability...............................................14

ARTICLE 4
         REPRESENTATIONS AND WARRANTIES OF NEWCO SECURITYHOLDERS..............14

                 Capacity.....................................................14
                 Execution and Delivery.......................................14
                 No Violation.................................................14
                 Securities Laws..............................................15
                 Ownership....................................................15

ARTICLE 5
         REPRESENTATIONS AND WARRANTIES OF ACOR...............................15

                 Organization and Existence...................................15
                 Authorization................................................16
                 Consents.....................................................16
                 Authorized Capital...........................................16
                 No Material Adverse Change...................................16
                 Reporting Issuer Status......................................17
                 OTCBB Listing................................................17
                 Reports and ACOR Financial Statements........................17
                 Absence of Certain Changes...................................17
                 Corporate Documents, Books and Records.......................19
                 Information..................................................19
                 No Other Agreement to Purchase...............................19
                 Shareholder Loans............................................19
                 Indebtedness and Liens.......................................19
                 Indebtedness to Directors, Officers and Others...............19
                 Taxes........................................................20
                 Material Contracts...........................................20
                 Title to Property............................................20
                 Intangible Property..........................................21
                 Necessary Licenses and Permits...............................21
                 Compliance with Law..........................................21
                 Employees....................................................21
                 Litigation...................................................22
                 Employee Benefit Plans.......................................22
                 Insurance....................................................22
                 Location of Office...........................................22
                 No Limitations...............................................23
                 Regulatory Compliance........................................23
                 Non-Arm's Length Transactions................................23
                 Environmental Laws...........................................23
                 Enforceability...............................................23

ARTICLE 6
         SURVIVAL OF REPRESENTATIONS AND WARRANTIES...........................23

                 Survival of Representations and Warranties...................23

ARTICLE 7
         COVENANTS OF THE NEWCO SECURITYHOLDERS...............................24

                 Covenants of the Newco Securityholders.......................24
                          Delivery of Share Certificates......................24
                          Filing of Reports...................................25
                          Representations and Warranties......................25
                          Conditions..........................................25
                 Covenants of Newco...........................................28
                          Representations and Warranties......................28
                          Conditions..........................................28
                          Additional Deliveries by Newco at Closing...........28

ARTICLE 8
         COVENANTS OF ACOR....................................................29

                 Covenants of ACOR............................................29
                          Necessary Consents..................................29
                          Approval of  Financing..............................29
                          Conditions..........................................29
                          Status and Filings..................................29
                          Directors...........................................29
                          Listing.............................................32
                          Representations and Warranties......................32
                          Additional Deliveries by ACOR at Closing............32

ARTICLE 9
         MUTUAL COVENANTS.....................................................33

                          Preparation of Filings..............................33
                          Notice of Material Change...........................33
                          Consummation of the Transaction and the Acquisition.34
                          Other Filings.......................................34
                          Additional Agreements...............................34

ARTICLE 10
         INDEMNIFICATION......................................................34

                 Indemnification by ACOR......................................34
                 Indemnification by Newco.....................................35
                 Indemnification by The Newco Securityholders.................35
                 Limitation on Indemnification................................35
                 Procedure for Indemnification................................35

ARTICLE 11
         CONDITIONS PRECEDENT.................................................36

                 Mutual Conditions Precedent..................................36
                 Condition Precedent for the Benefit of Newco and the
                        Newco Securityholders.................................37
                 Condition Precedent for the Benefit of ACOR..................37

ARTICLE 12
         CLOSING..............................................................38

                 Time of Closing..............................................38
                 Closing Procedures...........................................38

ARTICLE 13
         TERMINATION..........................................................38

                 Termination Rights...........................................38
                 Effect of Termination........................................38

ARTICLE 14
         EXPENSES.............................................................39

                 Professional Fees............................................39

ARTICLE 15
         GENERAL..............................................................39

                 Public Announcement..........................................39
                 Independent Legal Advice.....................................39
                 Standstill...................................................39
                 Entire Agreement.............................................39
                 Further Assurances...........................................40
                 Commercially Reasonable Efforts..............................40
                 Severability.................................................40
                 Applicable Law...............................................40
                 Governing Language...........................................40
                 Attornment...................................................40
                 Successors and Assigns.......................................41
                 Time of Essence..............................................41
                 Notices......................................................41
                 Waiver.......................................................42
                 Amendments...................................................42
                 Remedies Cumulative..........................................42
                 Notice of Untrue Covenants, Representation or Warrant........42
                 Counterparts.................................................43

Schedule "A"              1629518 Alberta Ltd. Shares
Schedule "B"              ACOR Warrants
Schedule "C"              Warrant Certificate

Schedule 5.2              Organization and Existence
Schedule 5.6              Authorized Share Capital
Schedule  5.8  No  Material  Adverse  Change  and Absence of Certain Changes and
Indebtedness and Liens Schedule 5.14(g) Capital Expenditure Requirements

Schedule 5.18             Shareholder Loans
Schedule 5.20             Indebtedness to Directors, Officers and Others
Schedule 5.23             Title to Property
Schedule 5.27             Necessary Licenses and Permits
Schedule 5.31             Litigation
Schedule 5.37             Non-Arm's Length Transactions

SHARE EXCHANGE AGREEMENT

THIS AGREEMENT is dated as of the 17th day of November, 2011.

AMONG:

NEWCO SECURITYHOLDERS (the Persons Listed on Schedule "A")

(Each, individually a "NEWCO SECURITYHOLDER" and collectively, the
"NEWCO SECURITYHOLDERS")

AND:

1629518 ALBERTA LTD., a corporation incorporated under the laws of the Province of Alberta ("NEWCO")

AND:

AUSTRALIAN-CANADIAN OIL ROYALTIES LTD., a corporation incorporated under the laws of the Province of British Columbia and listed on the OTC Bulletin Board ("ACOR")

WHEREAS:

A. The Newco Securityholders will be the registered and beneficial owners of all the issued and outstanding shares of Newco (the "NEWCO SHARES") as of the Closing Date;

B. ACOR is a publicly-traded company trading on the OTC Bulletin Board (the "OTCBB"); and

C. ACOR and the Newco Securityholders wish to exchange shares on a one for one basis and on the terms and conditions herein contained.

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual covenants and agreements herein contained and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1
DEFINITIONS AND INTERPRETATION

DEFINITIONS

1.1 In this Agreement, the following terms have the meanings ascribed thereto as follows:

(a) "ACOR ASSETS" means all assets owned by ACOR;

(b) "ACOR FINANCIAL STATEMENTS" means the audited financial statements for the fiscal year ended December 31, 2010, and the unaudited financial statements for the interim period ended September 30, 2011, including the notes thereto and, as applicable, the report of ACOR's auditors thereon;

(c) "ACOR SHARES" means common shares in the capital of ACOR, as constituted from time to time;

(d) "ACOR WARRANTS" means the performance warrants in substantially the form set forth in Schedule "C" hereto which will be issued to the persons set forth in Schedule "B" hereto in the amounts set forth therein concurrently with completion of the share exchange contemplated herein, or at such other time and to such persons as may be agreed to by Newco and ACOR;

(e) "ACOR WARRANT CERTIFICATE" means the warrant certificate substantially in the form attached hereto as Schedule "C";

(f) "ACQUISITION" means the proposed asset purchase by Chelsea Oil Australia Pty Ltd. pursuant to the terms and conditions of the Purchase Agreement;

(g) "ACQUIRED ASSETS" means those petroleum and natural gas properties and related assets located in Australia to be acquired by Chelsea Oil Australia Pty Ltd pursuant to the Purchase Agreement;

(h) "AGREEMENT" means this definitive Share Exchange Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof;

(i) "AUTHORIZATION" means, with respect to any Person, any order, permit, approval, waiver, license or similar authorization of any Governmental Entity having jurisdiction;

(j) "BUSINESS DAY" means any day, other than a Saturday, Sunday or statutory holiday in Calgary, Alberta, Canada and Cisco, Texas, USA;

(k) "CLAIMS" means any suit, action, dispute, civil or criminal litigation, claim, arbitration or legal, administrative or other proceeding or governmental investigation, including appeals and applications for review;

(l) "CLOSING" means the completion of the transactions contemplated herein;

(m) "CLOSING DATE" means the date on which "Closing" (as such term is defined in the Purchase Agreement) occurs under the Purchase Agreement, or such other date as may be agreed upon in writing by Newco and ACOR;

(n) "EDGAR" means the Electronic Data Gathering, Analysis, and Retrieval System;

(o) "ENVIRONMENTAL LAWS" means all Laws relating to the environment or occupational health and safety or the release of hazardous materials;

(p) "FINANCING" means the non-brokered private placement by ACOR and Newco, or either of them, of up to 6,000,000 subscription receipts at US$0.35 per subscription receipt, being exchangeable for up to 6,000,000 ACOR Shares (on the basis of one subscription receipt for one ACOR Share, subject to adjustment in certain circumstances) upon the satisfaction of all conditions precedent provided for in this Agreement for aggregate gross proceeds of up to US$2,100,000;

(q) "GOVERNMENTAL ENTITY" means any government, parliament, legislature, regulatory authority, governmental department, agency, commission, board, tribunal, crown corporation, court (federal, provincial or local) or other law, rule or regulation-making entity having jurisdiction or exercising executive, legislative, judicial, regulatory or administrative powers on behalf of any federation or nation, or any province, territory, state or other subdivision thereof or any municipality, district or other subdivision thereof;

(r) "INTELLECTUAL PROPERTY" means all (i) trademarks, service marks, trade names and other indications of origin including all goodwill associated with all of the foregoing, and all applications, registrations and renewals in connection with all of the foregoing, in any jurisdiction; (ii) inventions, discoveries and ideas (whether patentable or unpatentable and whether or not reduced to practice), and all patents, applications for patents; (iii) trade secrets, know-how, confidential information, and other proprietary rights and information; (iv) copyrights and works of authorship, whether copyrightable or not, and all applications, registrations and renewals in connection therewith, in any jurisdiction; Internet domain names;
(vi) computer technology, equipment, devices, systems, hardware, software and databases; and (vii) other similar intellectual property or proprietary rights;

(s) "LAWS" means all statutes, codes, ordinance, regulations, statutory rules, published policies, published guidelines and terms and conditions of any order, grant of approval, permission, authority or license of any Governmental Entity, and the term "applicable" with respect to such Laws, and in the context that refers to one or more Persons, means that such Laws apply to such Person or Persons or its or their business, undertaking, property or securities and emanate from a Governmental Entity having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities (all references herein to a specific statute being deemed to include all applicable rules, regulations, rulings, orders and forms made or promulgated under such statute and the published policies and published guidelines of the Governmental Entity administering such statute) and shall include the published rules and policies of the OTCBB;

(t) "LIEN" means any mortgage, charge, pledge, hypothecation, security interest, assignment, lien (statutory or otherwise), charge, title retention agreement or arrangement, restrictive covenant or other encumbrance of any nature or any other arrangement or condition, which, in substance, secures payment, or performance of an obligation;

(u) "MATERIAL ADVERSE EFFECT" means, when used in connection with ACOR or Newco, as applicable, any event, condition or change which individually or in the aggregate constitutes, or could reasonably be expected to have, a material adverse effect on their respective business assets, liabilities, condition (financial or otherwise) or results of operations taken as a whole on a consolidated basis; provided, however, that the determination of whether a material adverse effect has occurred shall be made ignoring any event, change, fact or effect resulting from: (i) any change in U.S. GAAP, or Laws or interpretation thereof; (ii) any generally applicable change or development in economic, regulatory, business or financial market conditions; (iii) any acts of terrorism or war; (iv) the execution or announcement of this Agreement; (v) in respect of ACOR, any breach of this Agreement by Newco or the Newco Securityholders; and (vi) in respect of Newco, any breach of this Agreement by ACOR, provided, however, that with respect to paragraphs (i), (ii) and (iii), such matter does not have a disproportionate effect on ACOR or Newco, as applicable, relative to other comparable companies or entities operating in the industry in which the party operates;

(v) "MATERIAL CONTRACTS" means all contracts or other obligations or rights (and all amendments, modifications and supplements thereto to which any Party or any of its Subsidiaries is a party affecting the obligations of any party thereunder) to which a Party or its Subsidiaries is a party or by which any of their respective properties or assets are bound that are material to the business, properties or assets of a Party or its Subsidiaries taken as a whole;

(w) "MATERIAL FACT" has the meaning ascribed thereto in the Securities Act;

(x) "MISREPRESENTATION" has the meaning ascribed thereto in the Securities Act;

(y) "NEWCO ASSETS" means all assets owned by Newco;

(z) "NEWCO SHARES" means common shares in the capital of Newco, as constituted from time to time;

(aa) "NEWCO SECURITYHOLDERS" means the securityholders of Newco as listed on Schedule "A";

(bb) ORDINARY COURSE" means, with respect to an action taken by a Person, that such action is consistent with the past practices of the Person and is taken in the ordinary course of the normal day to day operations of the Person;

(cc) "OTCBB" means, the OTC Bulletin Board maintained by FINRA;

(dd) "PARTY" means a party to this Agreement and "Parties" means all parties to this Agreement;

(ee) "PERMITS" means in respect of a Party, all permits, licenses, variances, exemptions, orders and approvals of all Governmental Entities necessary for the lawful conduct of the respective businesses of the Party or any of its Subsidiaries;

(ff) "PERMITTED LIENS" means Liens for current Taxes or other governmental charges not yet due and payable or delinquent, the amount or validity of which is being contested in good faith by appropriate proceedings or which may thereafter be paid without penalty or such imperfections of title, easements, encumbrances and mortgages or other Liens, if any, as are not material (alone or in the aggregate) in character, amount or extent and do not materially detract from the value, or materially interfere with the present use, of any property subject thereto or affected thereby;

(gg) "PERSON" means and includes an individual, firm, sole proprietorship, partnership, joint venture, venture capital or hedge fund, association, unincorporated association, unincorporated syndicate, unincorporated organization, estate, group, trust, body corporate (including a limited liability company and an unlimited liability company), a trustee, executor, administrator or other legal representative, Governmental Entity, syndicate or other entity, whether or not having legal status;

(hh) "PUBLIC RECORD" means all information filed by or on behalf of ACOR with the SEC and accessible on EDGAR, including without limitation, the ACOR Financial Statements and any other information filed with any Governmental Entity in compliance, or intended compliance, with any applicable securities laws;

(ii) "PURCHASE AGREEMENT" means the purchase and sale agreement between ACOR, Chelsea Oil Australia Pty Ltd, Brisbane Petroleum Ltd. and Delbaere Associates Pty. Limited dated November 17th, 2011;

(jj) "REGULATORY APPROVALS" means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that permits a transaction to be implemented if a prescribed time lapses following the giving of notice without an objection being made) of any applicable Governmental Entity;

(kk) "SEC" means the United States Securities and Exchange Commission;

(ll) "SECURITIES ACT" means the Securities Act (Alberta) and all blanket rulings, policy statements, orders, rules and notices of the Alberta Securities Commission;

(mm) "SECURITIES AUTHORITIES" means the Financial Industry Regulatory Authority, Inc. ("FINRA") and any applicable securities commissions or similar regulatory authorities in Canada or the United States and each of the provinces and territories thereof;

(nn) "SUBSIDIARY" means, with respect to a specified body corporate, a body corporate of which more than 50% of the outstanding shares ordinarily entitled to elect a majority of the directors thereof, whether or not shares of any other class or classes shall or might be entitled to vote upon the happening of any event or contingency, are at the time owned, directly or indirectly, by such specified body corporate, and includes a body corporate in like relation to a subsidiary;

(oo) "TAX ACT" means the Income Tax Act (Canada), together with any and all regulations promulgated thereunder, as amended from time to time;

(pp) "TAXES" means all present and future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Entity in the nature of a tax, including any interest, additions to tax and penalties applicable thereto;

(qq) "U.S. GAAP" means generally accepted accounting principles in Canada as in effect from time to time, consistently applied; and

(rr) "VENDOR" means collectively, Brisbane Petroleum Ltd and Delbaere Associates Pty. Limited.

INTERPRETATION

1.2 For the purposes of this Agreement, except as otherwise expressly provided:

(a) a reference to an Article is to an Article of this Agreement, and a reference to a Section followed by a number or some combination of numbers and letters refers to the section, subsection, paragraph, subparagraph, clause or subclause of this Agreement so designated;

(b) the captions, Section numbers and Article numbers appearing in this Agreement are inserted for convenience of reference only and shall in no way define, limit, construe or describe the scope or intent of this Agreement nor in any way affect this Agreement;

(c) the word "including", when following any general statement or term, is not to be construed as limiting the general statement or term to the specific items or matters set forth or to similar items or matters, but rather as permitting the general statement or term to refer to all other items or matters that could reasonably fall within its broadest possible scope;

(d) if any date on which any action is required to be taken hereunder by any of the parties is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day;

(e) a reference to a statute includes all regulations made thereunder, all amendments to the statute or regulation in force from time to time, and every statute or regulation that supplements or supersedes such statute or regulation;

(f) words importing the masculine gender include the feminine or neuter, words in the singular include the plural, a word importing a corporate entity includes an individual, and vice versa;

(g) all dollars amounts, unless otherwise specified, are in Canadian dollars; and

(h) where any matter is stated to be "to the knowledge" or "to the best of the knowledge" of ACOR or Newco or words to like effect in this Agreement, it shall mean the actual knowledge of any of the senior officers of ACOR or Newco after due inquiry.

ARTICLE 2
SHARE EXCHANGE

PURCHASE AND SALE

2.1 Subject to the terms and conditions hereof and in reliance on the representations and warranties set forth or referred to herein, at the Closing Date each of the Newco Securityholders severally agrees to exchange, transfer and assign all Newco Shares he or it owns or will own at the Closing Date (being the number set out opposite his or its name in the attached Schedule "A") to ACOR in consideration of ACOR's issuance to such Newco Securityholder of an equal number of ACOR Shares set out opposite his or its name in the said Schedule "A".

PURCHASE CONSIDERATION

2.2 The exchange, transfer and assignment of Newco Shares for ACOR Shares shall proceed on the basis of one (1) ACOR Share for each one (1) Newco Share.

RESALE RESTRICTIONS

2.3 The ACOR Shares will be issued in accordance with applicable Canadian securities Laws and will be subject to an indefinite hold period in Canada. Each of the Newco Securityholders hereby represents and warrants to ACOR that he or it is an "accredited investor" within the meaning of National Instrument 45-106 - Prospectus and Registration Exemptions or in Section 2(a)(15) the Securities Act of 1933, as amended, as applicable. The ACOR Shares will contain the following legend, and such other legends as may be required by applicable securities Laws.

"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (I) [INSERT DISTRIBUTION DATE], AND (II) THE DATE AUSTRALIAN-CANADIAN OIL ROYALTIES LTD. BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY."

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF NEWCO

3.1 In order to induce ACOR to enter into this Agreement and to consummate the transactions contemplated by this Agreement, Newco and the Newco Securityholders hereby jointly and severally represent and warrant as follows to and in favour of ACOR and acknowledge that ACOR is relying upon such representations and warranties in connection with the transactions contemplated by this Agreement:

ORGANIZATION AND EXISTENCE

3.2 Newco is a company duly formed and organized and existing under the laws of Alberta and has the power to own its properties and to carry on its business as now conducted and currently proposed to be conducted and has made all necessary filings under all applicable company, securities and taxation laws or any other Laws to which Newco is subject, except where the failure to make such filing would not have a Material Adverse Effect on Newco. Newco is not in violation of its articles or by-laws, except where such violation would not have a Material Adverse Effect on Newco. Newco is in good standing under the company or other laws of each province or other jurisdiction in which it carries on business, except where the failure to have such standing would not have a Material Adverse Effect on Newco. No proceedings have been instituted or are pending for the dissolution or liquidation of Newco.

AUTHORIZED CAPITAL

3.3 The authorized capital of Newco consists of an unlimited number of Newco Shares.

3.4 13,278,571 Newco Shares have been duly authorized and validly issued and outstanding as fully paid and non-assessable Newco Shares. None of the Newco Shares have been issued in violation of any Laws, Newco's articles or by-laws or any agreement to which Newco is a party or by which it is bound.

3.5 Each Newco Securityholder has contributed to the capital of Newco the amount of cash or other property set forth opposite his name in the share register contained in the minute book of Newco in consideration for the Newco Shares representing his respective interest in Newco as set forth in the share register contained in the minute book of Newco.

SUBSIDIARIES

3.6 Newco has no Subsidiaries or any other material investments in any other Person.

INFORMATION

3.7 All data and information relating to Newco provided by Newco, at the request of ACOR and its agents and representatives, to ACOR and its agents and representatives in connection with the transactions contemplated by this Agreement was and at the Closing Date will be complete and true and correct in all material respects.

AUTHORIZATION AND CONSENTS

3.8 Newco has the capacity right, authority and power to enter into this Agreement and each agreement, document and instrument to be executed and delivered by Newco pursuant to this Agreement and to carry out the Acquisition and other transactions contemplated hereby or thereby. The execution, delivery and performance by Newco of this Agreement and each such other agreement, document and instrument contemplated herein and therein have been duly authorized by all necessary action of Newco and no other action on the part of Newco is required in connection therewith. The execution, delivery and performance by Newco of this Agreement and each such other agreement, document and instrument contemplated herein and therein does not and will not require the authorization approval or consent of, or any filing with any Governmental Entity or any other Person, and the execution, delivery and performance by Newco of this Agreement and each such other agreement, document and instrument contemplated herein and therein, does not and will not result in: (a) a breach of or conflict with the articles or by-laws of Newco; (b) a breach of or a conflict with any Laws applicable to Newco; (c) a breach of, constitute a default under, accelerate any obligation under, or give rise to a right of termination of any indenture, agreement, contract, instrument, Lien, lease, permit, authorization, order, writ, judgment, injunction, decree, determination or arbitration award to which Newco is a party or by which the property of Newco is bound or affected; (d) result in the creation or imposition of any Lien on any equity interest in Newco; (e) result in the dissolution or winding-up of Newco; or (f) the issuance of any additional securities pursuant to preemptive or similar rights.

NO OTHER AGREEMENT TO PURCHASE

3.9 There are no agreements, options, warrants, rights of conversion or other rights binding upon or which at any time in the future may become binding upon Newco to issue any equity securities or any securities convertible or exchangeable, directly or indirectly, into any equity securities of Newco.

AGREEMENTS OR RESTRICTIONS ON TRANSFER OF SHARES

3.10 To the knowledge of Newco, there are no agreements or restrictions which in any way limit or restrict the transfer to ACOR of any of the Newco Shares and there are no shareholders agreements, pooling agreements, voting trusts or other agreements or understandings with respect to the voting of Newco Shares or any of them.

SHAREHOLDER LOANS

3.11 There are no loans or other liabilities of Newco to the Newco Securityholders or to any previous Newco Securityholders.

ABSENCE OF CERTAIN CHANGES

3.12 Newco has not and will not (except as disclosed in this Agreement):

(a) issued, sold, pledged, hypothecated, leased, disposed of or encumbered any Newco Shares or other securities or any right, option or warrant with respect thereto;

(b) amended or proposed to amend its articles or by-laws;

(c) split, combined or reclassified any of its securities or declared or made any dividend or other distribution;

(d) suffered any material loss relating to litigation or been threatened with litigation;

(e) suffered any adverse change in employee relations which has or is reasonably likely to have a Material Adverse Effect on Newco, or entered into or amended any employment or service contracts with any officer or senior management employee, created or amended any employee benefit plan, made any increases in the base compensation, bonuses, paid vacation time allowed or fringe benefits for any, officer, employee or consultant, other than in the Ordinary Course;

(f) suffered damage, destruction or other casualty, loss, or forfeiture of, any property or assets, whether or not covered by insurance, which would have a Material Adverse Effect on Newco;

(g) made any capital expenditures, additions or improvements or commitments for the same, except those which do not exceed $10,000 per month;

(h) other than in the Ordinary Course: (i) entered into any contract, commitment or agreement under which it has outstanding Indebtedness for borrowed money or for the deferred purchase price of property; or
(ii) made any loan or advance to any Person;

(i) acquired or agreed to acquire (by tender offer, exchange offer, merger, amalgamation, acquisition of shares or assets or otherwise) any Person, corporation, partnership, joint venture or other business organization or division or acquired or agreed to acquire any material assets;

(j) entered into any material contracts regarding its business operations, including joint ventures, partnership or arrangements;

(k) acquired or agreed to acquire (by tender offer, exchange offer, merger, amalgamation, acquisition of shares or assets or otherwise) any Person, corporation, limited liability company, partnership, joint venture or other business organization or division or acquired or agreed to acquire any material assets;

(l) created any securities option or bonus plan, paid any bonuses, deferred or otherwise, or deferred any compensation to any of its officers or employees other than such payments made in the Ordinary Course;

(m) made any material change in accounting procedures or practices;

(n) other than in the Ordinary Course, mortgaged, hypothecated or pledged any of the Newco Assets, or subjected them to any Lien, except a Permitted Lien;

(o) disposed of or permitted to lapse any rights to the use of any Intellectual Property material to Newco, if such action or omission would have a Material Adverse Effect on Newco;

(p) entered into any material contracts regarding its business operations, including joint ventures, partnerships or other arrangements;

(q) sold, leased, subleased or transferred any of the Newco Assets;

(r) entered into any agreement or arrangement granting any rights to purchase, lease, sublease, assign or transfer any of the Newco Assets or requiring the consent of any Person to the transfer, assignment or lease of any such Newco Assets or rights which would have a Material Adverse Effect on Newco;

(s) cancelled, waived or compromised any debts or claims, including accounts payable to and receivable from its Affiliates;

(t) failed to pay or satisfy when due any liability of Newco where the failure to do so would have a Material Adverse Effect on Newco;

(u) disposed or permitted to lapse any Intellectual Property material to Newco or disclosed to any Person any Intellectual Property material to Newco not theretofore a matter of public knowledge, except where such disclosure was made to a recipient who is subject to an obligation of confidentiality; or

(v) entered into any agreement, arrangement or understanding to do any of the foregoing.

INDEBTEDNESS AND LIENS

3.13 Other than in the Ordinary Course, Newco has not incurred any: (i) Indebtedness; or (ii) Liens upon any of the Newco Assets, other than Permitted Liens.

INDEBTEDNESS TO DIRECTORS, OFFICERS AND OTHERS

3.14 Newco is not indebted to any director, officer, employee or consultant of Newco, except for amounts due as normal compensation or reimbursement of ordinary business expenses.

TAXES

3.15 All returns, declarations, reports, estimates, statements, schedules or other information or documents with respect to Taxes (collectively, "TAX RETURNS") required to be filed by or with respect to Newco have been filed within the prescribed time, with the appropriate tax authorities and all such Tax Returns are true, correct, and complete in all material respects. No Tax Return of Newco is being audited by the relevant taxing authority, and there are no outstanding waivers, objections, extensions, or comparable consents regarding the application of the statute of limitations or period of reassessment with respect to any Taxes or Tax Returns that have been given or made by Newco (including the time for filing of Tax Returns or paying Taxes) and Newco has no pending requests for any such waivers, extensions, or comparable consents. Newco has not received a ruling from any taxing authority or signed an agreement with any taxing authority that could reasonably be expected to have a Material Adverse Effect on Newco. Newco does not owe any Taxes to the federal government of Canada, a provincial government, a municipal government or any other governmental authority.

MATERIAL CONTRACTS

3.16 Other than as set out herein, there are no material contracts, agreements, leases or commitments entered into by Newco which are in writing or have been orally agreed to by Newco and which are still in effect.

3.17 All contracts, agreements, leases and commitments set out herein are valid, binding and in full force and effect as to Newco, and the other parties thereto (to Newco's knowledge) and Newco, are not in breach or violation of, or default under, the terms of any such contract, agreement, plan, lease or commitment, except where such breach, violation or default would not have a Material Adverse Effect on Newco, and no event has occurred which constitutes or, with the lapse of time or the giving of notice, or both, would constitute, such a breach, violation or default by Newco or, to Newco's knowledge, the other parties thereto.

NECESSARY LICENSES AND PERMITS

3.18 Newco has all necessary and required licenses, permits, consents, concessions and other authorizations of governmental, regulatory or administrative agencies or authorities, whether foreign, federal, provincial, state or local, required to own and lease its properties and assets and to conduct its business as now conducted, except where the failure to hold the foregoing would not have a Material Adverse Effect on Newco. Newco is not in default, nor has it received any notice of any claim of default, with respect to any such license, permit, consent, concession or authorization. No registrations, filings, applications, notices, transfers, consents, approvals, audits, qualifications, waivers or other action of any kind are required by virtue of the execution and delivery of this Agreement, or of the consummation of the transactions contemplated hereby: (a) to avoid the loss of any license, permit, consent, concession or other authorization or any asset, property or right pursuant to the terms thereof, or the violation or breach of any Law applicable thereto, or
(b) to enable Newco to hold and enjoy the same immediately after the Closing Date in the conduct of its business as conducted prior to the Closing Date.

COMPLIANCE WITH LAW

3.19 Newco is not in default under, or in violation of, and has not violated (and failed to cure) any Law including, without limitation, laws relating to the issuance or sale of securities, the environment and occupational health and safety privacy and intellectual property, or any licenses, franchises, permits, authorizations or concessions granted by, or any judgment, decree, writ, injunction or order of, any governmental or regulatory authority, applicable to its business or any of its properties or assets, except where such default or violation would not have a Material Adverse Effect on Newco. Newco has not received any notification alleging any violations of any of the foregoing with respect to which adequate corrective action has not been taken.

EMPLOYEES

3.20 Newco does not have any employees or independent contractors and there are no agreements, written or oral, between Newco and any other party relating to payment, remuneration or compensation for work performed or services provided or payment relating to a change of control or other event in respect of Newco. Newco is in compliance with all applicable Laws respecting labour, employment, fair employment practices, work place safety and health, terms and conditions of employment, and wages and hours. There are no charges of employment discrimination or unfair labour practices pending or threatened and to the knowledge of Newco, there exists no valid basis for any such claim. There are no pending claims, complaints or charges that have been filed against Newco under any labour or employment laws or dispute resolution procedure (including, but not limited to, any arbitration or similar proceedings) of which Newco has received written notice. Newco has not received any written notice indicating that any of its employment policies or practices is currently being audited or investigated by any federal, provincial, state or local government agency.

LITIGATION

3.21 There are no actions, suits, proceedings or inquiries in existence or, to the knowledge of Newco, pending or threatened against or affecting Newco at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, board, bureau or agency which may in any way materially adversely affects, or in any way may materially adversely affect, the business, operations, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of Newco or its properties or assets or which affects or may affect the transactions contemplated hereby or to duly observe and perform any of its covenants or obligations contained herein and Newco is not aware of any existing ground on which such action, suit, proceeding or inquiry might by commenced with any reasonable likelihood of success.

NO MATERIAL ADVERSE CHANGE

3.22 No change has occurred in the business, operations, results of operations, assets, capitalization or condition (financial or otherwise) of Newco, whether or not in the ordinary course of business, whether separately or in the aggregate with other occurrences or developments, and whether insured against or not, which could reasonably be expected to have a Material Adverse Effect on Newco.

EMPLOYEE BENEFIT PLANS

3.23 Newco does not have any employee benefit plans (or any plan which may be in any way regarded as an employee benefit plan) of any nature whatsoever nor has it ever had any such plans.

INSURANCE

3.24 Newco does not have (nor has it ever had) any insurance of any nature whatsoever relating to it or its directors or officers or otherwise.

3.25  Newco's head office is located at Suite 800, 400-3rd Avenue S.W., Calgary,
      AB,  T2P  4H2,  and,  aside from its counsel's office, such address is the
      only location where its company books and records are located.

COMPANY DOCUMENTS, BOOKS AND RECORDS

3.26 Complete and correct copies of the articles, and of all amendments thereto, of Newco have been previously delivered to ACOR. The corporate records of Newco provided to ACOR contain complete and accurate records in all material respects of all meetings and consents in lieu of meetings of the Newco directors (and its committees) and Newco Securityholders since the formation of Newco, and of all actions, decisions and consents thereof. Except as reflected in such corporate records, there are no material minutes of meetings or consents in lieu of meetings of the Newco directors and Newco Securityholders or actions, decisions or consents thereof.

NO LIMITATIONS

3.27 There is no non-competition, exclusivity or other similar agreement, commitment or understanding in place, whether written or oral, to which Newco is a party or is otherwise bound that would now or hereafter, in any way limit the business, use of assets or operations of Newco.

REPORTING ISSUER STATUS

3.28 Newco is not a "reporting issuer" (or the equivalent status) in any province or territory of Canada and there is not a published market in respect of any of its securities. No order has been issued ceasing or suspending trading or prohibiting the issue of any securities of Newco and no such proceedings are pending, or to the knowledge of Newco, threatened.

REGULATORY COMPLIANCE

3.29 Newco is in compliance with all regulatory orders, directives and decisions that have application to Newco except where such non-compliance would not have a Material Adverse Effect on Newco and Newco has not received notice from any governmental or regulatory authority that Newco is not in compliance with any such regulatory orders, directives or decisions.

NON-ARM'S LENGTH TRANSACTIONS

(a) Newco has not made any payment or loan to, or borrowed any monies from or is otherwise indebted to any officer, employee, Newco Shareholder, Newco director or any other Person with whom Newco is not dealing at arm's length (within the meaning of the Income Tax Act) or any Affiliate of any of the foregoing; and

(b) Newco is not a party to any contract or agreement with any officer, employee, Newco Shareholder, Newco director or any other Person with whom Newco is not dealing at arm's length (within the meaning of the Income Tax Act) or any Affiliate of any of the foregoing.

ENVIRONMENTAL LAWS

3.30 Newco does not have liability under, nor has Newco ever violated, any Environmental Law. Newco does not have any property owned, operated, leased, or used by it that has ever been the subject of a violation of any Environmental Law. All facilities and operations of Newco and its Subsidiaries are presently in compliance with all applicable Environmental Laws.

ENFORCEABILITY

3.31 The execution and delivery by Newco of this Agreement and any other agreement contemplated by this Agreement will result in legally binding obligations of Newco enforceable against Newco in accordance with the respective terms and provisions hereof and thereof subject, however, to limitations with respect to enforcement imposed by Law in connection with bankruptcy or similar proceedings and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the court from which they are sought.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF NEWCO SECURITYHOLDERS

4.1 Each of the Newco Securityholders severally (and not jointly or jointly and severally) represents and warrants, but only as to himself or itself, to ACOR as follows:

CAPACITY

4.2 Each Newco Securityholder has the capacity to own the Newco Shares owned by him or it, to enter into this Agreement and to perform his or its obligations under this Agreement.

EXECUTION AND DELIVERY

4.3 This Agreement and any other agreement contemplated by this Agreement has been duly authorized (if the Newco Securityholder is not an individual), executed and delivered by each Newco Securityholder and will result in legally binding obligations of such Newco Securityholder enforceable against such Newco Securityholder in accordance with the respective terms and provisions hereof and thereof subject, however, to approval by shareholders of the Newco Securityholders, as applicable, and to limitations with respect to enforcement imposed by Law in connection with bankruptcy or similar proceedings and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the court from which they are sought.

NO VIOLATION

4.4 The execution and delivery of this Agreement, the transfer of the Newco Shares and the performance, observance or compliance with the terms of this Agreement by such Newco Securityholder will not violate, constitute a default under, conflict with, or give rise to any requirement for a waiver or consent under:

(a) the articles and by-laws of such Newco Securityholder (if the Newco Securityholder is not an individual);

(b) any provision of any agreement, instrument or other obligation to which such Newco Securityholder is a party or by which such Newco Securityholder is bound; or

(c) any Laws applicable to such Newco Shareholder.

SECURITIES LAWS

4.5 With respect to Newco Securityholders not residing in Canada or the United States, the Newco Securityholder is knowledgeable of, or has been independently advised as to, the applicable securities Laws of its jurisdiction of residence or the securities Laws otherwise applicable to the Newco Shareholder, and:

(a) is receiving the ACOR Shares to be issued to him or it pursuant to this Agreement pursuant to exemptions from the prospectus and registration requirements under the securities Laws applicable to the Newco Securityholder or, if such is not applicable, the Newco Securityholder is permitted to receive such ACOR Shares under the securities Laws applicable to the Newco Securityholder without the need to rely on an exemption;

(b) the securities Laws applicable to the Newco Securityholder do not require ACOR to file a prospectus or similar disclosure document or to register the ACOR Shares to be issued to him or it pursuant to this Agreement or to make any filings or seek any approvals of any kind whatsoever from any regulatory authority of any kind whatsoever; and

(c) the delivery of this Agreement and the issuance of the ACOR Shares to be issued to the him or it pursuant to this Agreement comply with all Laws applicable to the Newco Securityholder and will not cause ACOR to become subject to or required to comply with any disclosure, prospectus or other reporting requirements under any such applicable Laws.

OWNERSHIP

4.6 Each Newco Securityholder is, or on the Closing Date will be, the registered and beneficial owner of the Newco Shares set out beside his, her or its name in Schedule "A", free and clear of any Liens. Upon the completion of the Closing, except for the rights of ACOR pursuant to this Agreement with respect to the Newco Shares, there will be no outstanding options, calls, preemptive or other rights of any kind binding on any Newco Securityholder relating to or providing for the purchase, delivery or transfer of any of his or its Newco Shares.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ACOR

5.1 ACOR hereby represents and warrants as follows to and in favour of Newco and the Newco Securityholders and ACOR acknowledges that Newco and the Newco Securityholders are relying upon such representations and warranties in connection with the transactions contemplated by this Agreement.

ORGANIZATION AND EXISTENCE

5.2 ACOR is a corporation duly incorporated, organized and validly existing under the laws of the Province of British Columbia and has the corporate power to own its properties and to carry on its business as now conducted and currently proposed to be conducted and has made all necessary filings under all applicable corporate, securities and taxation laws or any other Laws to which ACOR is subject, except where the failure to make such filing would not have a Material Adverse Effect on ACOR. ACOR is in good standing under the Business Corporations Act (British Columbia). ACOR is not in violation of its articles or by-laws. ACOR does not have any Subsidiaries other than Cooper-Eromanga Oil, Inc. No proceedings have been instituted or are pending for the dissolution or liquidation of ACOR.

AUTHORIZATION

5.3 The execution, delivery and performance by ACOR of this Agreement and the Purchase Agreement and the applicable agreements in relation to the Financing: (i) are within its capacity, corporate power and authority; (ii) have been, or will be duly authorized by all necessary corporate proceedings; and (iii) do not and will not conflict with or result in any breach of any provision of, or the creation of any Lien upon any of the ACOR Assets pursuant to the articles or by-laws of ACOR, any Laws applicable to ACOR or any indenture, lease, agreement, contract, instrument or Lien, to which ACOR is a party or by which the property of ACOR may be bound or affected.

5.4 The ACOR Shares, when delivered to the Newco Securityholders in accordance with the terms of this Agreement or exercised in accordance with the terms of the ACOR Warrants, will be validly issued and outstanding as fully paid and non-assessable ACOR Shares.

CONSENTS

5.5 The execution, delivery and performance by ACOR of this Agreement and the applicable agreements in relation to the Financing does not and will not require the authorization, approval or consent of, or any filing with, any governmental authority or agency or any other Person.

AUTHORIZED CAPITAL

5.6 The authorized capital of ACOR consists of 50,000,000 ACOR Shares and 50,000,000 preferred shares. The issued and outstanding ACOR Shares are set forth on Schedule 5.6 attached hereto and shall constitute 51% of the issued and outstanding shares giving effect to the completion of this Agreement and the Acquisition, however prior to the Financing. Nil preferred shares are issued and outstanding as at the date hereof. ACOR may issue up to an additional 5,000,000 ACOR Shares pursuant to the exercise of the ACOR Warrants. In addition, ACOR may issue additional ACOR Shares or securities convertible into ACOR Shares pursuant to the Financing as contemplated hereunder.

5.7 The ACOR Shares issued and outstanding as of the date hereof have been, and the ACOR Shares issuable on the Closing Date will be, duly authorized and validly issued and outstanding as fully paid and non-assessable shares. The ACOR Warrants will on the Closing Date be duly authorized and will be issued as fully paid securities of ACOR. None of the ACOR Shares, ACOR Warrants or any existing options and warrants have been issued in violation of any Laws, the policies of FINRA or the OTCBB, ACOR's articles or by-laws or any agreement to which ACOR is a party or by which it is bound.

NO MATERIAL ADVERSE CHANGE

5.8 Except with respect to changes in prices of oil and gas and as noted in Schedule 5.8 attached hereto, there has not been any material change in the capital, assets, liabilities or obligations (absolute, accrued, contingent or otherwise) of ACOR from the position set forth in the ACOR Financial Statements that has not otherwise been disclosed in the Public Record and there has not been any adverse material change in the business, operations, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of ACOR since September 30, 2011; and since that date there have been no material facts, transactions, events or occurrences which could materially adversely affect the business, operations, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of ACOR.

REPORTING ISSUER STATUS

5.9 ACOR is not a "reporting issuer" under the securities legislation of any provinces or territories of Canada.

OTCBB LISTING

5.10 The ACOR Shares are quoted on the OTCBB. All continuous and timely disclosure documents, reports, forms, filings and fees required to be made and paid by ACOR pursuant to the applicable securities Laws have been made and paid in accordance with the applicable securities Laws, the information and statements set forth in the Public Record were true, correct, and complete in all material respects and did not contain any misrepresentation, as of the date of such information or statement, and were prepared in accordance with and complied with applicable securities Laws.

REPORTS AND ACOR FINANCIAL STATEMENTS

5.11 ACOR has delivered to Newco and filed with the SEC on EDGAR true and complete copies of the audited financial statements of ACOR for the two years ended December 31, 2009 and 2010 and unaudited financial statements of ACOR as at and for the interim period ended September 30, 2011.

5.12 The ACOR Financial Statements were prepared in accordance with U.S. GAAP,each of the balance sheets included in the ACOR Financial Statements fairly presents the financial condition of ACOR as at the close of business on the date thereof, and each of the statements of loss and deficit and statements of cash flows included in the ACOR Financial Statements fairly presents the results of operations of ACOR for the fiscal period then ended.

5.13 There were no liabilities, contingent, contractual or otherwise, of ACOR as at the balance sheet date of the respective ACOR Financial Statements, other than those disclosed in the ACOR Financial Statements and the notes thereto.

ABSENCE OF CERTAIN CHANGES

5.14 Except as disclosed in the Public Record or in Schedule 5.8 attached hereto, ACOR has not ( and will not as of the Closing Date, except in the Ordinary Course and as disclosed in this Agreement, Schedule 5.14 attached hereto and pursuant to the Financing and the Acquisition):

(a) issued, sold, pledged, hypothecated, leased, disposed of or encumbered any ACOR Shares or other ACOR securities or any right, option or warrant with respect thereto;

(b) amended or proposed to amend its articles or by-laws;

(c) split, combined or reclassified any of its securities or declared or made any dividend or other distribution;

(d) suffered any material loss relating to litigation or been threatened with litigation;

(e) suffered any adverse change in employee relations which has or is reasonably likely to have a Material Adverse Effect on ACOR, or entered into or amended any employment contracts with any director, officer or senior management employee, created or amended any employee benefit plan, made any increases in the base compensation, bonuses, paid vacation time allowed or fringe benefits for any officer, employee or consultant, other than in the Ordinary Course;

(f) suffered damage, destruction or other casualty, loss, or forfeiture of, any property or assets, whether or not covered by insurance, which would have a Material Adverse Effect on ACOR;

(g) made any capital expenditures, additions or improvements or commitments for the same, except those which do not exceed $10,000 per month;

(h) other than in the Ordinary Course: (i) entered into any contract, commitment or agreement under which it has outstanding Indebtedness for borrowed money or for the deferred purchase price of property; or
(ii) made any loan or advance to any Person;

(i) acquired or agreed to acquire (by tender offer, exchange offer, merger, amalgamation, acquisition of shares or assets or otherwise) any Person, corporation, partnership, joint venture or other business organization or division or acquired or agreed to acquire any material assets;

(j) entered into any material contracts regarding its business operations, including joint ventures, partnerships or other arrangements;

(k) created any securities option or bonus plan, paid any bonuses, deferred or otherwise, or deferred any compensation to any of its directors or officers other than such payments made in the Ordinary Course;

(l) made any material change in accounting procedures or practices;

(m) other than in the Ordinary Course, mortgaged, hypothecated or pledged any of the ACOR Assets, or subjected them to any Lien except a Permitted Lien;

(n) disposed of or permitted to lapse any rights to the use of any Intellectual Property material to ACOR, if such action or omission would have a Material Adverse Effect on ACOR;

(o) entered into any other material transaction, or any amendment of any contract, lease, agreement or license which is material to its business;

(p) sold, leased, subleased, assigned or transferred any of the ACOR Assets;

(q) entered into any agreement or arrangement granting any rights to purchase, lease, sublease, assign or transfer any of the ACOR Assets or requiring the consent of any Person to the transfer, assignment or lease of any such ACOR Assets or rights which would have a Material Adverse Effect on ACOR;

(r) cancelled, waived or compromised any debts or claims, including accounts payable to and receivable from its Affiliates;

(s) failed to pay or satisfy when due any liability of ACOR where such failure would have a Material Adverse Effect on ACOR;

(t) disposed or permitted to lapse any Intellectual Property material to ACOR or disclosed to any Person any Intellectual Property material to ACOR not theretofore a matter of public knowledge, except where such disclosure was made to a recipient who is subject to an obligation of confidentiality; or

(u) entered into any agreement, arrangement or understanding to do any of the foregoing.

CORPORATE DOCUMENTS, BOOKS AND RECORDS

5.15 Complete and correct copies of the articles and by-laws, and of all amendments thereto, of ACOR have been previously delivered to Newco. The minute book of ACOR contains complete and accurate records in all material respects of meetings and consents in lieu of meetings of the board of directors (and its committees) and shareholders of ACOR for all material transactions and for this transaction, the Financing and the Acquisition. Except as reflected in such minute book, there are no minutes of meetings or consents in lieu of meetings of the board of directors (or its committees) or of the shareholders of ACOR.

INFORMATION

5.16 All data and information provided by ACOR, at the request of Newco and its agents and representatives, to Newco and/or the Newco Securityholders and its agents and representatives in connection with the transactions contemplated by this Agreement, the Acquisition and the Financing was and is complete and true and correct in all material respects.

NO OTHER AGREEMENT TO PURCHASE

5.17 Other than as set out herein and pursuant to the Financing and the Acquisition, there are no agreements, options, warrants, rights of conversion or other rights binding upon or which at any time in the future may become binding upon ACOR to issue any shares or any securities convertible or exchangeable, directly or indirectly, into any ACOR Shares. There are no shareholders' agreements, pooling agreements, voting trusts, preemptive rights, or other agreements or understandings with respect to the voting of ACOR Shares, or any of them.

SHAREHOLDER LOANS

5.18 Except as set forth on Schedule 5.18 attached hereto and pursuant to the Purchase Agreement, there are no loans or other liabilities of ACOR to any shareholder or to any previous shareholder of ACOR.

INDEBTEDNESS AND LIENS

5.19 Other than in the Ordinary Course or as noted in Schedule 5.8 attached hereto, ACOR has not incurred any: (i) Indebtedness; or (ii) Liens upon any of the ACOR Assets.

INDEBTEDNESS TO DIRECTORS, OFFICERS AND OTHERS

5.20 Except as set forth on Schedule 5.20 attached hereto, ACOR is not indebted to any director, officer, employee or consultant of ACOR.

TAXES

5.21 All Tax Returns required to be filed by or with respect to ACOR have been filed within the prescribed time, with the appropriate tax authorities and all such Tax Returns are true, correct, and complete in all material respects. No Tax Return of ACOR is being audited by the relevant taxing authority, and there are no outstanding waivers, objections, extensions, or comparable consents regarding the application of the statute of limitations or period of reassessment with respect to any Taxes or Tax Returns that have been given or made by ACOR (including the time for filing of Tax Returns or paying Taxes) and ACOR has no pending requests for any such waivers, extensions, or comparable consents. ACOR has not received a ruling from any taxing authority or signed an agreement with any taxing authority that could reasonably be expected to have a Material Adverse Effect on ACOR. ACOR does not owe any Taxes to the federal government, a provincial government, a municipal government or any other governmental authority.

MATERIAL CONTRACTS

5.22 All material contracts required to be disclosed by ACOR pursuant to applicable securities Laws have been disclosed, and are valid, binding and in full force and effect as to ACOR, and ACOR is not in breach or violation of, or default under, the terms of any such agreements, except where such breach, violation or default would not have a Material Adverse Effect on ACOR, and no event has occurred which constitutes or, with the lapse of time or the giving of notice, or both, would constitute, such a breach, violation or default by ACOR.

TITLE TO PROPERTY

5.23 Except as set forth on Schedule 5.23 attached hereto, ACOR does not own any real property.

5.24 Except as set forth on Schedule 5.8 and Schedule 5.27 attached hereto, the ACOR Assets are owned legally and beneficially by ACOR with good and marketable title thereto, free and clear of all Liens whether contingent or absolute, except as disclosed in the ACOR Financial Statements or as provided for herein. ACOR is the sole and unconditional owner of, and has good and marketable title to, the ACOR Assets. ACOR does not have reason to believe that ACOR does not have title to or the right to produce and sell its petroleum, natural gas and related hydrocarbons (for the purpose of this clause, the foregoing are referred to as the "INTEREST") and represents and warrants that the Interest is free and clear of adverse claims created by, through or under ACOR except for oil and gas industry standard "permitted encumbrances", or those arising in the Ordinary Course, and that, to its knowledge, ACOR holds its Interest under valid and subsisting leases, licenses, permits, concessions, concession agreements, contracts, subleases, reservations or other agreements except where the failure to so hold its Interest would not have a Material Adverse Effect on ACOR.

5.25 Except as set forth on Schedule 5.27 attached hereto, ACOR is not aware of any defects, failures or impairments in the title of ACOR to the crude oil, natural gas liquids and natural gas properties, whether or not an action, suit, proceeding or inquiry is pending or threatened or whether or not discovered by any third party, which in aggregate could have a material adverse effect on: (a) the quantity and pre-tax present worth values of crude oil, natural gas liquids and natural gas reserves of ACOR; (b) the current production volumes of ACOR; or (c) the current cash flow of ACOR.

5.26 To the knowledge of ACOR, no event has occurred or condition exists which is reasonably likely to prevent the Acquisition from being completed prior to the date set forth in the Purchase Agreement.

INTANGIBLE PROPERTY

5.27 ACOR does not own any Intellectual Property and no Intellectual Property is required to conduct the business of ACOR as presently conducted or as contemplated to be conducted in the future.

NECESSARY LICENSES AND PERMITS

5.28 Except as set forth on Schedule 5.27 attached hereto, ACOR has all necessary and required licenses, permits, consents, concessions and other authorizations of governmental, regulatory or administrative agencies or authorities, whether foreign, federal, provincial, or local, required to own and lease its properties and assets and to conduct its business as now conducted, except where the failure to hold the foregoing would not have a Material Adverse Effect on ACOR. ACOR is not in default, nor has it received any notice of any claim or default with respect to any such license, permit, consent, concession or authorization. No registrations, filings, applications, notices, transfers, consents, approvals, audits, qualifications, waivers or other action of any kind is required by virtue of the execution and delivery of this Agreement or the Purchase Agreement, or of the consummation of the transactions contemplated hereby: (a) to avoid the loss of any license, permit, consent, concession or other authorization or any asset, property or right pursuant to the terms thereof, or the violation or breach of any Law applicable thereto, or (b) to enable ACOR to hold and enjoy the same immediately after the Closing Date in the conduct of its business as conducted prior to the Closing Date.

COMPLIANCE WITH LAW

5.29 ACOR is not in default under, or in violation of, and has not violated (and failed to cure) any Law including, without limitation, laws relating to the issuance or sale of securities, privacy and intellectual property, or any licenses, franchises, permits, authorizations or concessions granted by, or any judgment, decree, writ, injunction or order of, any governmental or regulatory authority, applicable to its business or any of its properties or assets, except where such default or violation would not have a Material Adverse Effect on ACOR. ACOR has not received any notification alleging any material violations of any of the foregoing with respect to which adequate corrective action has not been taken.

EMPLOYEES

5.30 ACOR has provided Newco with a correct and complete list (the "EMPLOYMENT INFORMATION") of:

(a) each employee, director, independent contractor, consultant and agent of ACOR who currently provides services to the administration, operation, maintenance and management of ACOR, whether actively at work or not, their salaries, wage rates, commissions and consulting fees, bonus arrangements, benefits, positions, ages, status as full-time or part-time employees, location of employment and length of service;

(b) any arrangement or practice of ACOR regarding redundancy or severance payments, whether contractual, customary or discretionary, above the statutory payment;

(c) each written employment practice or policy operated in relation to any of the employees or any group of them, whether contractual, customary or discretionary; and

(d) any collective bargaining agreement, labour contract, letter of understanding, letter of intent, voluntary recognition agreement or legally binding commitment or written communication to any labour union, trade union or employee organization or group which may qualify as a trade union in respect of or affecting Employees or independent contractors.

5.31 Except as disclosed to Newco, there are no agreements, written or oral, between ACOR and any other party relating to payment, remuneration or compensation for work performed or services provided or payment relating to a change of control or other event in respect of ACOR. ACOR is in compliance with all applicable Laws respecting labour, employment, fair employment practices, work place safety and health, terms and conditions of employment, and wages and hours. There are no charges of employment discrimination or unfair labour practices pending or threatened and to the knowledge of ACOR, there exists no valid basis for any such claim. There are no pending claims, complaints or charges that have been filed against ACOR under any labour or employment laws or dispute resolution procedure (including, but not limited to, any arbitration or similar proceedings) of which ACOR has received written notice. ACOR has not received any written notice indicating that any of its employment policies or practices is currently being audited or investigated by any federal, provincial, state or local government agency.

LITIGATION

5.32 Except as set forth on Schedule 5.31 attached hereto, there are no actions, suits, proceedings or inquiries in existence or, to the knowledge of ACOR, pending or threatened against or affecting ACOR at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, board, bureau or agency which may in any way materially adversely affects, or in any way may materially adversely affect, the business, operations, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of ACOR or its properties or assets or which affects or may affect the transactions contemplated hereby or pursuant to the Acquisition or the Financing or to duly observe and perform any of its covenants or obligations contained herein or in the agreements relating to the Acquisition or the Financing and ACOR is not aware of any existing ground on which such action, suit, proceeding or inquiry might by commenced with any reasonable likelihood of success.

EMPLOYEE BENEFIT PLANS

5.33 ACOR does not have any employee benefit plans (or any plan which may be in any way regarded as an employee benefit plan) of any nature whatsoever nor has it ever had any such plans.

INSURANCE

5.34 ACOR does not maintain policies of insurance as of the date hereof.

LOCATION OF OFFICE

5.35 ACOR's head office is located at 1301 Avenue M, Cisco, Texas 76437 and such address is the only location where its corporate books and records are located.

NO LIMITATIONS

5.36 There is no non-competition, exclusivity or other similar agreement, commitment or understanding in place, whether written or oral, to which ACOR is a party or is otherwise bound that would now or hereafter, in any way limit the business, use of assets or operations of ACOR.

REGULATORY COMPLIANCE

5.37 ACOR is in compliance with all regulatory orders, directives and decisions that have application to ACOR except where such non-compliance would not have a Material Adverse Effect on ACOR and ACOR has not received notice from any governmental or regulatory authority that ACOR is not in compliance with any such regulatory orders, directives or decisions.

NON-ARM'S LENGTH TRANSACTIONS

5.38 Except as set forth on Schedule 5.37 attached hereto, ACOR has not made any payment or loan to, or has borrowed any monies from or is otherwise indebted to, any officer, director, employee, shareholder or any other Person with whom ACOR is not dealing at arm's length (within the meaning of the Income Tax Act) or any Affiliate of any of the foregoing; and

5.39 Except as set forth on Schedule 5.37 attached hereto, ACOR is not a party to any contract or agreement with any officer, director, employee, shareholder or any other Person with whom ACOR is not dealing at arm's length (within the meaning of the Income Tax Act) or any Affiliate of any of the foregoing, except for the ACOR Stock Option Agreements.

ENVIRONMENTAL LAWS

5.40 To the best of its knowledge, ACOR does not have liability under, nor has ACOR ever violated, any Environmental Law. ACOR does not have any property owned, operated, leased, or used by it that has been the subject of a violation of any Environmental Law since 1997. All facilities and operations of ACOR and its Subsidiaries are presently in compliance with all applicable Environmental Laws.

ENFORCEABILITY

5.41 The execution and delivery by ACOR of this Agreement and any other agreement contemplated by this Agreement will result in legally binding obligations of ACOR enforceable against ACOR in accordance with the respective terms and provisions hereof and thereof subject, however, to limitations with respect to enforcement imposed by Law in connection with bankruptcy or similar proceedings and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the court from which they are sought

ARTICLE 6
SURVIVAL OF REPRESENTATIONS AND WARRANTIES

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

6.1 The representations and warranties made by the Parties and contained in this Agreement shall continue in full force and effect for the benefit of the respective Party or Parties, as applicable, subject to the following:

(a) except as provided in paragraphs (b) and (c) below, ACOR, Newco and the Newco Securityholders may make or bring any claim for a period of two (2) years after the Closing Date;

(b) any claim which is based upon or relates to the tax liability of Newco or ACOR for a particular taxation year may be made or brought at any time prior to the expiration of the period (if any) during which an assessment, reassessment or other form of recognized document assessing liability for tax, interest or penalties in respect of such taxation year under applicable tax legislation could be issued, assuming that a waiver or similar document extending such period has not been filed; and

(c) any claim which is based upon or relates to the title to Newco Shares in connection with this Agreement or which is based upon an intentional misrepresentation or fraud by Newco or Newco Securityholders may be brought at any time.

After the expiration of the period of time referred to in paragraph
(a), ACOR, Newco and the Newco Securityholders will be released from any and all obligations and liabilities in respect of the representations and warranties made by each of them and contained in this Agreement or in any document or certificate given in order to carry out the transactions contemplated hereby, except with respect to any claims made by any of the Parties in writing prior to the expiration of such period and subject to the rights of each of the Parties to make any claim permitted by paragraphs (b) and (c).

ARTICLE 7
COVENANTS OF THE NEWCO SECURITYHOLDERS

COVENANTS OF THE NEWCO SECURITYHOLDERS

7.1 Each of the Newco Securityholders hereby severally covenants and agrees with ACOR as follows:

Delivery of Share Certificates

(a) The Newco Securityholders are entitled to receive ACOR Shares in exchange for such Newco Shareholder's Newco Shares as set out in Schedule "A", and shall on the Closing Date surrender the certificate or certificates (or other reasonably acceptable evidence) representing the Newco Shares held by it to ACOR and in return, shall be entitled to receive a certificate representing ACOR Shares on the basis set out herein. Until such surrender and exchange, the register of shareholder(s) of Newco shall be evidence of the right for the Newco Securityholders to be registered as holders of ACOR Shares; and

(b) The Newco Securityholder shall transfer and deliver to ACOR on the Closing Date, certificates representing the Newco Shares set out opposite his or its name in the attached Schedule "A" duly endorsed in blank for transfer or accompanied by a duly executed power of attorney for transfer in blank.

Filing of Reports

(c) The Newco Securityholders consents to, and will assist ACOR with, the filing by ACOR from time to time of any reports or other documents required by any Securities Authorities with respect to its receipt of ACOR Shares pursuant to this Agreement.

Representations and Warranties

(d) From the date hereof until the termination of this Agreement, the Newco Securityholders shall not take any action, or fail to take any action, which would or may reasonably be expected to result in the representations and warranties set out in Article 4 being untrue in any material respect at any time prior to the Closing Date or termination of this Agreement, whichever is first.

Conditions

(e) The Newco Securityholders will use their commercially reasonable efforts to ensure compliance with all applicable conditions set forth in Article 11.

7.2 From the date of this Agreement until the Closing Date, the Newco Securityholders will use their commercially reasonable efforts to cause Newco to conduct its business as carried on as of the date hereof in the Ordinary Course. Without limiting the generality of the foregoing, during the period starting on the date of this Agreement and ending on the Closing Date:

(a) The Newco Securityholders shall ensure that:

(i) Newco shall:

(A) carry on its respective business in the Ordinary Course and in a manner consistent with industry practice,

(B) use commercially reasonable efforts to preserve intact its present business organization and material rights, to keep available the services of its current officers and employees and to preserve its relationships with customers, suppliers and others having business dealings with them, and

(C) maintain and keep its material properties and assets in as good repair and condition as at the date hereof, subject to ordinary wear and tear, all to the end that its goodwill and ongoing businesses shall not be impaired in any material respect at the Closing Date;

(ii) Newco shall not, without prior written consent of ACOR (such consent not to be unreasonably withheld):

(A) issue or modify any equity or debt securities or rights to acquire securities;

(B) incur any debt, other than in the Ordinary Course of business consistent with past practice;

(C) declare or pay any dividends or distribute any of its properties or assets to the Newco Securityholders;

(D) enter into any material contract, other than in the Ordinary Course of business consistent with past practice;

(E) alter or amend its articles or by-laws;

(F) engage in any business enterprise or other activity different from that carried on as of the date hereof;

(G) sell, pledge, lease, dispose of, grant any interest in, encumber or agree to sell, pledge, lease, dispose of, grant any interest in or encumber any material portion of its assets;

(H) declare or pay any dividends on, make other distributions or return capital in respect of any of its capital stock or any other equity interests;

(I) reduce its stated capital;

(J) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance or distribution of any other securities in respect or in lieu of or in substitution for, shares of its capital stock;

(K) issue, sell, reserve or set aside any shares of its capital stock or any securities or obligations convertible into, exercisable or exchangeable for, or any rights, warrants, calls, subscriptions or options to acquire, shares of its capital stock, or any of its material assets;

(L) dispose of or encumber, repurchase, redeem or otherwise acquire,
(1) any shares of its capital stock or any securities or obligations convertible into, exercisable or exchangeable for, or any rights, warrants, calls, subscriptions or options to acquire, shares of its capital stock, or (2) any of its material assets;

(M) except as permitted pursuant to paragraph (D) above, enter into or announce any agreement or arrangement with respect to the sale, voting, registration or repurchase of any shares of its capital stock or any security convertible into or exchangeable for such shares or any of its material assets;

(iii) Newco shall not:

(A) (1) incur, assume or prepay any long term or short term debt or issue any debt securities, except in the Ordinary Course; (2) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; (3) make any loans, advances or capital contributions to, or investments in, any other Person; and (4) pledge or otherwise encumber shares of its capital stock or Newco;

(B) enter into any material operating lease or create any mortgages, security interests, Liens or other encumbrances on its property;

(iv) Newco shall not:

(A) increase or modify the amount of (or accelerate the payment or vesting of) any benefit or amount payable under, any contract, agreement, commitment, arrangement, plan or policy providing for compensation or benefits to any former or present director or officer of Newco;

(B) increase or modify (or enter into any contract or arrangement to increase or modify) the compensation or benefits, or otherwise to extend, expand or enhance the engagement or any related rights, of any former or present director, officer or consultant of Newco; or

(C) adopt, establish, enter into or implement or amend any employee benefit plan, policy, severance or termination agreement providing for any form of benefits or other compensation to any former, present or future director, officer or employee of Newco or amend any policy, severance or termination agreement;

(v) Newco shall not pay, discharge, satisfy, compromise or settle any material claims, liabilities or obligations prior to the same being due;

(vi) Newco shall not reorganize, amalgamate or merge with any other Person;

(vii) except as required by applicable Laws, Newco shall not enter into, terminate or waive any provision of, exercise any material option or relinquish any material contractual rights under, or modify or request to modify in any material respect any material contract, agreement, guarantee, lease commitment or arrangement or enter into any contract that would be a material contract if entered into as of the date hereof, in either case other than in the Ordinary Course;

(viii) Newco shall not revalue in any material respect any of its assets;

(ix) Newco shall not make any changes to the existing accounting practices, methods and principles relating to such party;

(x) Newco shall not make or rescind any material tax election;

(xi) Newco shall not make any capital expenditure, other than capital expenditures that are made in the Ordinary Course or which are in accordance with its existing budgets provided to ACOR prior to the date hereof;

(xii) Newco shall not waive, release, assign, settle or compromise any pending or threatened suit, action or claim against it or any other rights, claims or litigation material to it;

(xiii) Newco shall not: (A) enter into any confidentiality or standstill agreement; or

(B) amend or release any third party from its obligations or grant any consent under, any confidentiality or standstill provision or fail to fully enforce any such provision;

(xiv) Newco shall not take or fail to take any action which would render, or that would be reasonably expected to render, any of Newco's representations or warranties hereunder to be untrue or would be reasonably expected to prevent or materially impede, interfere with or delay the transaction contemplated by this Agreement; and

(xv) Newco shall not agree in writing or otherwise to take any of the actions as described above in clauses (ii) through (xiv).

COVENANTS OF NEWCO

7.3 Newco hereby covenants and agrees with ACOR as follows:

Representations and Warranties

(a) From the date hereof until the termination of this Agreement, Newco shall not take any action, or fail to take any action, which would or may reasonably be expected to result in the representations and warranties set out in Article 3 being untrue in any material respect at any time prior to the Closing Date or termination of this Agreement, whichever is first.

Conditions

(b) Newco will use its commercially reasonable efforts to ensure compliance with all applicable conditions set forth in Article 11.

Additional Deliveries by Newco at Closing

(c) In addition to all other documents required hereunder to be delivered by Newco to ACOR to complete the transactions contemplated herein, Newco shall deliver to ACOR at Closing:

(i) a certificate of good standing of Newco;

(ii) a certified copy of the updated register of members showing the transfer of the Newco Shares to ACOR together with the cancelled certificates for all Newco Shares by each Newco Securityholder in blank together with a duly executed power of attorney for transfer;

(iii) a certificate of incumbency in respect of the Newco;

(iv) a certified copy of the resolutions passed by the board of directors of Newco approving this Agreement as well as the consummation of the transactions contemplated hereby; and

(v) a certified copy of the resolutions passed by the board of directors of Newco approving the Acquisition as well as the consummation of the transactions contemplated thereby.

ARTICLE 8
COVENANTS OF ACOR

COVENANTS OF ACOR

8.1 ACOR hereby covenants and agrees with Newco as follows:

Necessary Consents

(a) ACOR shall use its commercially reasonable best efforts to obtain from its directors, shareholders and all appropriate Governmental Entities such approvals, Permits or consents as are required (if any) to complete the transactions contemplated herein, including in respect of the Acquisition.

Approval of Financing

(b) ACOR shall use its reasonable efforts to obtain the Regulatory Approvals (if any) of the Securities Authorities for the securities issued hereunder and the Financing.

Conditions

(c) ACOR will use its commercially reasonable efforts to ensure compliance with all applicable conditions set forth in Article 11.

Status and Filings

(d) ACOR will maintain its corporate status and comply with all applicable corporate and securities Laws and requirements (including any applicable filing requirements) prior to Closing.

Directors

(e) ACOR shall take all required action to appoint each of Jesse Meidl and William Petrie to the board of directors of ACOR at the Closing. The directors shall hold office until the next meeting of the ACOR Shareholders or until their successors are elected or appointed in accordance with the provisions of ACOR's by-laws.

8.2 From the date of this Agreement until the Closing Date, ACOR will use its commercially reasonable efforts to conduct its business as carried on as of the date hereof in the Ordinary Course. Without limiting the generality of the foregoing and except as provided for in this Agreement and the Purchase Agreement, during the period starting on the date of this Agreement and ending on the Closing Date:

(a) ACOR shall:

(i) carry on its respective business in the Ordinary Course and in a manner consistent with industry practice;

(ii) use commercially reasonable efforts to preserve intact its present business organization and material rights, to keep available the services of its current officers and employees and to preserve its relationships with customers, suppliers and others having business dealings with them; and

(iii) maintain and keep its material properties and assets in as good repair and condition as at the date hereof, subject to ordinary wear and tear, all to the end that its goodwill and ongoing businesses shall not be impaired in any material respect at the Closing Date.

(b) ACOR shall not, without prior written consent of Newco (such consent not to be unreasonably withheld) and other than as contemplated herein, in the Purchase Agreement or on Schedule 8.2(b) attached hereto:

(i) issue or modify any equity or debt securities or rights to acquire securities;

(ii) incur any debt, other than in the Ordinary Course consistent with past practice;

(iii) declare or pay any dividends or distribute any of its properties or assets to the shareholders of ACOR;

(iv) enter into any material contract, other than in the Ordinary Course consistent with past practice;

(v) alter or amend its articles or by-laws;

(vi) engage in any business enterprise or other activity different from that carried on as of the date hereof;

(vii) sell, pledge, lease, dispose of, grant any interest in, encumber or agree to sell, pledge, lease, dispose of, grant any interest in or encumber any material portion of its assets;

(viii) declare or pay any dividends on, make other distributions or return capital in respect of any of its capital stock or any other equity interests;

(ix) reduce its stated capital;

(x) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance or distribution of any other securities in respect or in lieu of or in substitution for, shares of its capital stock;

(xi) issue, sell, reserve or set aside any shares of its capital stock or any securities or obligations convertible into, exercisable or exchangeable for, or any rights, warrants, calls, subscriptions or options to acquire, shares of its capital stock, or any of its material assets;

(xii) dispose of or encumber, repurchase, redeem or otherwise acquire, (1) any shares of its capital stock or any securities or obligations convertible into, exercisable or exchangeable for, or any rights, warrants, calls, subscriptions or options to acquire, shares of its capital stock, or (2) any of its material assets;

(xiii) except as permitted pursuant to paragraph (D) above, enter into or announce any agreement or arrangement with respect to the sale, voting, registration or repurchase of any shares of its capital stock or any security convertible into or exchangeable for such shares or any of its material assets;

(c) ACOR shall not:

(i) (1) incur, assume or prepay any long term or short term debt or issue any debt securities, except in the Ordinary Course;
(2) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; (3) make any loans, advances or capital contributions to, or investments in, any other Person; and (4) pledge or otherwise encumber shares of its capital stock or Newco;

(ii) enter into any material operating lease or create any mortgages, security interests, Liens or other encumbrances on its property;

(d) ACOR shall not:

(i) increase or modify the amount of (or accelerate the payment or vesting of) any benefit or amount payable under, any contract, agreement, commitment, arrangement, plan or policy providing for compensation or benefits to any former or present director or officer of ACOR;

(ii) increase or modify (or enter into any contract or arrangement to increase or modify) the compensation or benefits, or otherwise to extend, expand or enhance the engagement or any related rights, of any former or present director, officer or consultant of ACOR; or

(iii) adopt, establish, enter into or implement or amend any employee benefit plan, policy, severance or termination agreement providing for any form of benefits or other compensation to any former, present or future director, officer or employee of ACOR or amend any policy, severance or termination agreement;

(e) ACOR shall not pay, discharge, satisfy, compromise or settle any material claims, liabilities or obligations prior to the same being due;

(i) ACOR shall not reorganize, amalgamate or merge with any other Person; (ii) except as required by applicable Laws, ACOR shall not enter into, terminate or waive any provision of, exercise any material option or relinquish any material contractual rights under, or modify or request to modify in any material respect any material contract, agreement, guarantee, lease commitment or arrangement or enter into any contract that would be a material contract if entered into as of the date hereof, in either case other than in the Ordinary Course;

(iii) ACOR shall not revalue in any material respect any of its assets;

(iv) ACOR shall not make any changes to the existing accounting practices, methods and principles relating to such party;

(v) ACOR shall not make or rescind any material tax election;

(vi) ACOR shall not make any capital expenditure, other than capital expenditures that are made in the Ordinary Course or which are in accordance with its existing budgets provided to Newco prior to the date hereof;

(vii) ACOR shall not waive, release, assign, settle or compromise any pending or threatened suit, action or claim against it or any other rights, claims or litigation material to it;

(viii) ACOR shall not:

(A) enter into any confidentiality or standstill agreement; or

(B) amend or release any third party from its obligations or grant any consent under, any confidentiality or standstill provision or fail to fully enforce any such provision;

(ix) ACOR shall not take or fail to take any action which would render, or that would be reasonably expected to render, any of ACOR's representations or warranties hereunder to be untrue or would be reasonably expected to prevent or materially impede, interfere with or delay the transaction contemplated by this Agreement; and

(x) ACOR shall not agree in writing or otherwise to take any of the actions as described above in clauses (ii) through (ix).

Listing

8.3 ACOR shall use its commercially reasonable efforts to have the issuance of all the ACOR Shares issuable pursuant to this Agreement the Purchase Agreement, or as a consequence of the Financing and the ACOR Warrants accepted by the OTCBB. In that regard, ACOR shall provide Newco with all communications sent to or received from FINRA or the OTCBB or any Securities Authorities in connection with this Agreement and the Financing.

Representations and Warranties

8.4 ACOR covenants and agrees that from the date hereof until the termination of this Agreement, ACOR shall not take any action, or fail to take any action, which would or may reasonably be expected to result in the representations and warranties set out in Article 5 being untrue in any material respect at any time prior to the Closing Date or termination of this Agreement, whichever is first.

Additional Deliveries by ACOR at Closing

8.5 In addition to all other documents required hereunder to be delivered by ACOR to Newco to complete the Acquisition and the Financing, ACOR shall deliver to Newco at Closing:

(a) a certificate of status of ACOR;

(b) certificate of incumbency in respect of ACOR; and

(c) a certified copy of the resolutions passed by the board of directors of ACOR approving this Agreement as well as the consummation of the transactions contemplated hereby and the Financing.

ARTICLE 9 MUTUAL COVENANTS

9.1 Each of the Parties covenants and agree that it shall:

Preparation of Filings

(a) ACOR and Newco shall cooperate in the preparation of all applications for all approvals and the preparation of any other documents and taking of all actions reasonably deemed by ACOR and Newco, as the case may be, to be necessary to discharge their respective obligations under applicable Laws in connection with each step of the Acquisition and the Financing and all other matters contemplated in this Agreement. In this regard:

(i) each of ACOR and Newco shall furnish to the other all such information concerning it and its shareholders, as may be required to effect the transaction contemplated in this Agreement; and

(ii) each of ACOR and Newco covenants that no information furnished by it in connection with such actions or otherwise in connection with the consummation of the transaction contemplated in this Agreement will, to the best of its knowledge, contain any untrue statement of a material fact or omit to state a material fact required to be stated in any such document or necessary in order to make any information so furnished for use in any such document not misleading in the light of the circumstances in which it is furnished or to be used;

Notice of Material Change

(b) From the date hereof until the earlier of the Closing Date or the termination of this Agreement, each Party shall promptly notify the other Party in writing of:

(i) any material change (actual, anticipated, contemplated or, to the best of the knowledge of such Party threatened, financial or otherwise) in the business, affairs, operations, assets, liabilities (contingent or otherwise) or capital of such Party taken as whole;

(ii) any change in the facts relating to any applicable representation or warranty set out in Article 3, 4 or 5 hereof, as applicable, which change is or may be of such a nature as to render any such representation or warranty misleading or untrue in a material respect; or

(iii) any material fact which arises and which would have been required to be stated herein had the fact arisen on or prior to the date of this Agreement.

Each of ACOR and Newco shall in good faith discuss with the other any change in circumstances (actual, anticipated, contemplated or threatened, financial or otherwise) which is of such a nature that there may be a reasonable question as to whether notice need be given to the other pursuant to this Section 9.1(b).

Consummation of the Transaction and the Acquisition

(c) Use all commercially reasonable efforts to consummate the transactions contemplated in this Agreement including the Financing and the Acquisition.

Other Filings

(d) The Parties shall, as promptly as practicable hereafter, prepare and file all filings required under any securities Laws, the rules and policies of FINRA and the OTCBB or any other applicable Laws relating to the transaction contemplated in this Agreement.

Additional Agreements

(e) Subject to the terms and conditions of this Agreement and subject to fiduciary obligations under applicable Laws, each of the Parties hereto agrees to use all commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable, the transactions contemplated by this Agreement, the Purchase Agreement and the Financing and to cooperate with each other in connection with the foregoing, including, as applicable, using commercially reasonable efforts:

(i) to obtain all necessary waivers, consents and approvals from other parties to material agreements, leases and other contracts or agreements;

(ii) to defend all lawsuits or other legal proceedings challenging this Agreement, the Purchase Agreement or the consummation of the Financing contemplated hereby;

(iii) to cause to be lifted or rescinded any injunction or restraining order or other order adversely affecting the ability of the Parties to consummate the transactions contemplated by this Agreement, the Purchase Agreement and the Financing contemplated hereby; and

(iv) to effect all necessary registrations and other filings and submissions of information requested by Governmental Authorities.

ARTICLE 10
INDEMNIFICATION

INDEMNIFICATION BY ACOR

10.1 Subject to Section 10.4, ACOR hereby covenants and agrees with Newco and the Newco Securityholders to indemnify and save harmless Newco and the Newco Securityholders from and against any claims which may be made or brought against such Party or which such Party may suffer or incur as a result of, or arising out of any non-fulfillment of any covenant or agreement on the part of ACOR under this Agreement or any incorrectness in or breach of any representation or warranty of ACOR contained in this Agreement.

INDEMNIFICATION BY NEWCO

10.2 Subject to Section 10.4, Newco hereby covenants and agrees with ACOR to indemnify and save harmless ACOR from and against any claims which may be made or brought against it or which it may suffer or incur as a result of, or arising out of non-fulfillment of any covenant or agreement on the part of Newco under this Agreement or any incorrectness in or breach of any representation or warranty of Newco contained in this Agreement.

INDEMNIFICATION BY THE NEWCO SECURITYHOLDERS

10.3 Subject to Section 10.4, the Newco Securityholders hereby covenant and agree on a several basis with ACOR to indemnify and save harmless ACOR from and against any claims which may be made or brought against it or which it may suffer or incur as a result of, or arising out of non-fulfillment of any covenant or agreement on the part of such Newco Securityholder under this Agreement, and the Newco Securityholders covenant and agree with ACOR to indemnify and save harmless ACOR from and against any claims which may be made or brought against it or which it may suffer or incur as a result of, or arising out of non-fulfillment of any incorrectness in or breach of any representation or warranty of Newco contained in this Agreement.

LIMITATION ON INDEMNIFICATION

10.4 The indemnification obligations of each of the Parties pursuant to Section 10.1, Section 10.2 and Section 10.3 shall be subject to the following:

(a) the applicable limitation mentioned in Article 6 respecting the survival of the representations and warranties; and

(b) an Indemnifying Party shall not be required to indemnify an Indemnified Party until the aggregate claims sustained by that Indemnified Party exceeds a value of $10,000, in which case, the Indemnifying Party shall be obligated to the Indemnified Party for all claims.

PROCEDURE FOR INDEMNIFICATION

10.5 The Party or other indemnified person making a claim for indemnification under this Article is referred to as the "Indemnified Party" and the Party providing indemnification is referred to as the "Indemnifying Party" for the purposes of this Article. The following provisions shall apply to any Claims for which an Indemnifying Party may be obligated to indemnify an Indemnified Party pursuant to this Agreement:

(a) upon receipt from a third party by the Indemnified Party of notice of a claim or the Indemnified Party becoming aware of a claim in respect of which the Indemnified Party proposes to demand indemnification from the Indemnifying Party, the Indemnified Party shall give notice to that effect to the Indemnifying Party with reasonable promptness, provided that failure to give such notice shall not relieve the Indemnifying Party from any liability it may have to the Indemnified Party except to the extent that the Indemnifying Party is prejudiced thereby;

(b) in the case of Claims arising from third parties, the Indemnifying Party shall have the right by notice to the Indemnified Party not later than fifteen (15) days after receipt of the notice described in paragraph (a) above to assume the control of the defence, compromise or settlement of the claims, provided that such assumption shall, by its terms, be without costs to the Indemnified Party and the Indemnifying Party shall at the Indemnified Party's request furnish it with reasonable security against any costs or other liabilities to which it may be or become exposed by reason of such defence, compromise or settlement;

(c) upon the assumption of control by the Indemnifying Party as aforesaid, the Indemnifying Party shall diligently proceed with the defence, compromise or settlement of the claims at its sole expense, including employment of counsel reasonably satisfactory to the Indemnified Party and, in connection therewith, the Indemnified Party shall cooperate fully, but at the expense of the Indemnifying Party, to make available to the Indemnifying Party all pertinent information and witnesses under the Indemnified Party's control, make such assignments and take such other steps as in the opinion of counsel for the Indemnifying Party are necessary to enable the Indemnifying Party to conduct such defence; provided always that the Indemnified Party shall be entitled to reasonable security from the Indemnifying Party for any expense, costs or other liabilities to which it may be or may become exposed by reason of such cooperation;

(d) the final determination of any such claims arising from third parties, including all related costs and expenses, will be binding and conclusive upon the Parties as to the validity or invalidity, as the case may be, of such claims against the Indemnifying Party hereunder; and

(e) should the Indemnifying Party fail to give notice to the Indemnified Party as provided in paragraph (b) above, the Indemnified Party shall be entitled to make such settlement of the claims as in its sole discretion may appear reasonably advisable, and such settlement or any other final determination of the claims shall be binding upon the Indemnifying Party.

ARTICLE 11
CONDITIONS PRECEDENT

MUTUAL CONDITIONS PRECEDENT

11.1 The transactions contemplated herein are subject to the following conditions to be fulfilled or performed on or prior to the Closing Date, which conditions are for the mutual benefit of ACOR, the Newco Securityholders and Newco and may be waived by ACOR and Newco, jointly, in writing:

(a) the receipt of all necessary Regulatory Approvals, corporate and third party approvals and compliance with all applicable Laws, regulatory requirements and conditions;

(b) the maintenance of ACOR's listing on the OTCBB;

(c) the confirmation of the representations and warranties of each Party to this Agreement as set out in such Agreement;

(d) the absence of any Material Adverse Effect on the financial and operational condition or the assets of each of ACOR and Newco;

(e) all conditions precedent to the Acquisition set forth in the Purchase Agreement shall have been satisfied or waived (provided any waiver by ACOR or Chelsea Oil Australia Pty Ltd shall have been consented to in writing by Newco, acting reasonably) and the Acquisition shall have been completed;

(f) the completion of the Financing for minimum gross proceeds of not less than US$1,000,000, of which Ely Sakhai has the right to invest up to US$500,000;

(g) original share certificate(s) representing the Newco Shares, set out opposite his or its name in the attached Schedule "A", duly endorsed in blank for transfer or accompanied by a duly executed power of attorney for transfer in blank;

(h) the delivery of standard completion documentation including, but not limited to, officer's certificates, and certificates of good standing as the Parties shall mutually agree, acting reasonably;

(i) no legal action or proceedings shall be pending or threatened by any Person against ACOR or Newco in any jurisdiction and no order or notice will have been issued or delivered by any Governmental Entity or Securities Authority seeking to enjoin or prohibit on a temporary or permanent basis as of the transactions contemplated in this Agreement (including but not limited to the Acquisition or the Financing) or imposing temporary or permanent terms or conditions on such transactions.

CONDITION PRECEDENT FOR THE BENEFIT OF NEWCO AND THE NEWCO SECURITYHOLDERS

11.2 The transactions contemplated herein are subject to the following conditions to be fulfilled or performed on or prior to the Closing Date, which conditions are for the exclusive benefit of Newco and the Newco Securityholders and may be waived in writing, in whole or in part, by Newco in its sole discretion:

(a) there will be no material actions, suits or proceedings, whether or not purportedly on behalf of ACOR, outstanding or, to the best of the management of ACOR's knowledge, pending or threatened by or against ACOR at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, bureau, agency or instrumentality;

(b) the issuance of the ACOR Warrants as set out in Schedule "B" to this Agreement;

(c) the issuance of a renewal of the Authority to Prospect for a new four-year term in respect of ATP 582 from the applicable Queensland regulatory authorities and in accordance with the work program described in Schedule 5.14(g), in form and substance satisfactory to Newco, acting reasonably; and

(d) delivery of original share certificates representing the ACOR Shares to be issued as fully paid and non-assessable to the Newco Securityholders as provided in Schedule "A" hereto and bearing the appropriate restrictive legends.

CONDITION PRECEDENT FOR THE BENEFIT OF ACOR

11.3 The transactions contemplated herein, which include the Acquisition and the Financing, are subject to the following conditions to be fulfilled or performed on or prior to the Closing Date, which conditions are for the exclusive benefit of ACOR and may be waived in writing, in whole or in part, by ACOR in its sole discretion:

(a) there will be no material actions, suits or proceedings, whether or not purportedly on behalf of Newco, outstanding or, to the best of the management of Newco's knowledge, pending or threatened by or against Newco or the Newco Securityholders at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, bureau, agency or instrumentality; and

(b) delivery of certificates by the Newco Securityholders representing the Newco Shares set out opposite his or its name in the attached Schedule "A" duly endorsed in blank for transfer or accompanied by a duly executed power of attorney for transfer in blank.

ARTICLE 12
CLOSING

TIME OF CLOSING

12.1 The Closing of the transactions contemplated herein shall be completed at the offices of Torys LLP, Calgary, Alberta, at a time to be mutually agreed by the Parties on the Closing Date.

CLOSING PROCEDURES

12.2 Subject to satisfaction or waiver by the relevant Party of the conditions of Closing, at Closing, the Newco Securityholder shall transfer and deliver to ACOR on the Closing Date, certificates representing the Newco Shares set out opposite his or its name in the attached Schedule "A" duly endorsed in blank for transfer or accompanied by a duly executed power of attorney for transfer in blank in exchange for certificates representing the ACOR Shares set out opposite his or its name in the attached Schedule "A".

ARTICLE 13 TERMINATION

TERMINATION RIGHTS

13.1 This Agreement may, by notice in writing given prior to or on the Closing Date, be terminated:

(a) by mutual consent of ACOR and Newco; or

(b) by either ACOR or Newco if any of the conditions set forth herein for its benefit has not been fulfilled or waived at or prior to Closing Date, or such other date as may be agreed by ACOR and Newco.

EFFECT OF TERMINATION

13.2 Each Party's right of termination under this Article 13 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. Nothing in Article 13 shall limit or affect any other rights or causes of action the Parties may have with respect to the representations, warranties, covenants and indemnities in its favour contained in this Agreement.

ARTICLE 14
EXPENSES

PROFESSIONAL FEES

14.1 All out-of-pocket cost and expenses incurred by each Party, including legal, accounting and financial advisor expenses shall be paid by each Party respectively.

ARTICLE 15
GENERAL

PUBLIC ANNOUNCEMENT

15.1 Immediately after the execution of this Agreement, Newco and ACOR shall issue a joint public announcement, announcing the entering into of this Agreement, which announcement shall address all matters required by the policies of FINRA and the OTCBB and applicable Laws and shall be in form and substance acceptable to each of them, acting in a commercially reasonable manner. ACOR and Newco shall receive the prior consent, not to be unreasonably withheld, of the other Party prior to issuing or permitting any director, officer, employee or agent to issue, any press release or other written statement with respect to this Agreement or the transactions contemplated hereby. Notwithstanding the foregoing, if either ACOR or Newco is required by law or administrative regulation to make any disclosure relating to the transactions contemplated herein, such disclosure may be made, but that Party will use reasonable commercial efforts to consult with the other Party as to the wording of such disclosure prior to its being made.

INDEPENDENT LEGAL ADVICE

15.2 Each of the Parties acknowledges having been encouraged to seek and has had the opportunity to obtain independent legal advice with respect to the terms of this Agreement.

STANDSTILL

15.3 From the date hereof and until the earlier of the Closing Date or the termination of this Agreement, neither Newco nor ACOR will, directly or indirectly, initiate, discuss or negotiate with any other corporation, firm or person, or entertain, solicit or consider any inquiries or proposals relating to any possible business combination, disposition of all or substantially all of ACOR's or Newco's assets, or shares or other equity interests or furnish to any such entity or person any information in connection therewith, except in connection with the transactions contemplated in this Agreement.

ENTIRE AGREEMENT

15.4 This Agreement constitutes the entire agreement among the Parties hereto and supersedes all prior agreements, letters of intent, representations, warranties, statements, promises, information, arrangements and understandings, whether oral or written, express or implied, with respect to the subject matter hereof. None of the Parties hereto shall be bound or charged with any oral or written agreements, representations, warranties, statements, promises, information, arrangements or understandings not specifically set forth in this Agreement or in the schedules, documents and instruments to be delivered on the Closing Date pursuant to this Agreement. The Parties hereto further acknowledge and agree that, in entering into this Agreement and in delivering the schedules, documents and instruments to be delivered on the Closing Date, they have not in any way relied, and will not in any way rely, upon any oral or written agreements, representations, warranties, statements, promises, information, arrangements or understandings, express or implied, not specifically set forth in this Agreement or in such schedules, documents or instruments.

FURTHER ASSURANCES

15.5 Each of the Parties hereto will from time to time after the Closing Date at the other's request and without further consideration, execute and deliver such other instruments of transfer, conveyance and assignment and take such further action as the other may reasonably require to give effect to any matter provided for herein.

COMMERCIALLY REASONABLE EFFORTS

15.6 For purposes of this Agreement, the obligation to use "commercially reasonable efforts" to obtain waivers, consents and approvals to loan agreements, leases and other contracts shall not include any obligation to agree to a materially adverse modification of the terms of such documents or to prepay or incur additional material obligations to such other parties.

SEVERABILITY

15.7 In the event that any provision or part of this Agreement is determined by any court or other judicial or administrative body to be illegal, null, void, invalid or unenforceable, that provision shall be severed to the extent that it is so declared and the other provisions of this Agreement shall continue in full force and effect.

APPLICABLE LAW

15.8 This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein.

GOVERNING LANGUAGE

15.9 This Agreement is drawn up in the English language. This Agreement may be translated into any language other than English provided however that the English text shall in any event prevail.

ATTORNMENT

15.10 The Parties hereby irrevocably and unconditionally consent to and submit to the non-exclusive jurisdiction of the courts of the Province of Alberta for any actions, suits or proceedings arising out of or relating to this Agreement or the matters contemplated hereby. The Parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the matters contemplated hereby in the courts of the Province of Alberta and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such applicable courts, as the case may be, that any such action, suit or proceeding so brought has been brought in an inconvenient forum.

SUCCESSORS AND ASSIGNS

15.11 This Agreement shall accrue to the benefit of and be binding upon each of the Parties hereto and their respective heirs, executors, administrators and assigns, provided that this Agreement shall not be assigned or transferred by any one of the Parties without the prior written consent of the other Party.

TIME OF ESSENCE

15.12 Time shall be of the essence hereof.

NOTICES

15.13 Any notice required or permitted to be given hereunder shall be in writing and shall be effectively given if (i) delivered personally, (ii) sent prepaid courier service or mail, or (iii) sent prepaid by facsimile transmission or other similar means of electronic communication (confirmed on the same or following day by prepaid mail) addressed as follows:

in the case of notice to ACOR:

Australian-Canadian Oil Royalties Ltd. 1301 Avenue M
Cisco, Texas 76437

Attention: Robert Kamon Telephone: (254) 442-2638 Facsimile: (254) 442-3843 Email: acor@classicnet.net

With a copy to:

Davidoff Malito & Hutcher LLP 605 Third Avenue, 34th Floor New York, NY 10158

Attention: Malcolm S. Taub, Esq.

Telephone: (646) 428-3283

Facsimile: (212) 286-1884 Email: mst@dmlegal.com

in the case of notice to Newco and/or to the Newco Securityholders:

1629518 Alberta Ltd.
c/o Torys LLP
Suite 800, 400-3rd Avenue S.W.

Calgary, Alberta T2P 4H2

Attention: Janan Paskaran

Telephone: (403) 776-3728 Facsimile: (403) 776-3800 Email: jpaskaran@torys.com

Any notice, designation, communication, request, demand or other document given or sent or delivered as aforesaid shall:

(a) if delivered as aforesaid, be deemed to have been given, sent, delivered and received on the date of delivery;

(b) if sent by mail as aforesaid, be deemed to have been given, sent, delivered and received (but not actually received) on the fourth Business Day following the date of mailing, unless at any time between the date of mailing and the fourth Business Day thereafter there is a discontinuance or interruption of regular postal service, whether due to strike or lockout or work slowdown, affecting postal service at the point of dispatch or delivery or any intermediate point, in which case the same shall be deemed to have been given, sent, delivered and received in the ordinary course of the mail, allowing for such discontinuance or interruption of regular postal service; and

(c) if sent by facsimile machine, be deemed to have been given, sent, delivered and received on the date the sender receives the facsimile machine answer back confirming receipt by the recipient.

WAIVER

15.14 Any Party hereto which is entitled to the benefits of this Agreement may, and has the right to, unless otherwise provided, waive any term or condition hereof at any time on or prior to the Closing Date, provided however that such waiver shall be evidenced by written instrument duly executed on behalf of such Party.

AMENDMENTS

15.15 No amendment, modification or supplement to this Agreement shall be effective unless provided in writing and signed by all the Parties hereto and approved by all necessary governmental regulatory authorities.

REMEDIES CUMULATIVE

15.16 The rights and remedies of the Parties under this Agreement are cumulative and in addition to and not in substitution for any rights or remedies provided by law. Any single or partial exercise by any Party hereto of any right or remedy for default or breach of any term, covenant or condition of this Agreement does not waive, alter, affect or prejudice any other right or remedy to which such Party may be lawfully entitled for the same default or breach.

NOTICE OF UNTRUE COVENANTS, REPRESENTATION OR WARRANT

15.17 The Newco Securityholders and Newco shall promptly notify ACOR, and ACOR shall promptly notify the Newco Securityholders and Newco, upon any covenant, representation or warranty made by it contained in this Agreement becoming untrue or incorrect during the period beginning on the date of this Agreement and ending on the Closing Date. Any such notification shall set out particulars of the untrue or incorrect covenant, representation or warranty and details of any actions being taken by the Newco Securityholders and Newco or ACOR, as the case may be, to rectify that state of affairs.

COUNTERPARTS

15.18 This Agreement may be executed in several counterparts (by original or facsimile signature), each of which when so executed shall be deemed to be an original and each of such counterparts, if executed by each of the Parties, shall constitute a valid and enforceable agreement among the Parties.

IN WITNESS WHEREOF this Share Exchange Agreement has been executed by the Parties hereto as of the date first above written.

1629518 ALBERTA LTD.

AUSTRALIAN-CANADIAN OIL ROYALTIES LTD.

By:       /s/ Andre Sakhai                By:    /s/ Janan Paskaran
          -----------------------------          -------------------------------
          Name:    Andre Sakhai                  Name:    Janan Paskaran
          Title:   President                     Title:   Corporate Secretary



/s/                                       /s/ William Petrie, Sr.
---------------------------------------   --------------------------------------
Witness                                   WILLIAM PETRIE, SR.

/s/                                       /s/ William Petrie, Sr.
---------------------------------------   --------------------------------------
Witness                                   WILLIAM PETRIE, JR.

/s/                                       /s/ Jesse Meidl
---------------------------------------   --------------------------------------
Witness                                   JESSE MEIDL

/s/                                       /s/ Dave Meidl
---------------------------------------   --------------------------------------
Witness                                   DAVE MEIDL

/s/                                       /s/ Ian Blades
---------------------------------------   --------------------------------------
Witness                                   IAN BLADES

/s/                                       /s/ Janan Paskaran
---------------------------------------   --------------------------------------
Witness                                   JANAN PASKARAN

EXHIBIT 10.2

PURCHASE AND SALE AGREEMENT

AMONG

BRISBANE PETROLEUM LTD.

- AND -

DELBAERE ASSOCIATES PTY. LIMITED

(COLLECTIVELY AS THE VENDOR)

- AND -

CHELSEA OIL AUSTRALIA PTY LTD

(AS THE PURCHASER)

- AND -

AUSTRALIAN-CANADIAN OIL ROYALTIES LTD.

(FOR THE SOLE PURPOSE OF THE ISSUANCE OF THE CONSIDERATION SHARES)

MADE AS OF THE 17TH DAY OF NOVEMBER 2011

ARTICLE 1
INTERPRETATION.......................................................2

ARTICLE 2
CONDITIONS PRECEDENT................................................14

ARTICLE 3
PURCHASE AND SALE...................................................17

ARTICLE 4
TITLE AND RISK......................................................20

ARTICLE 5
ASSUMED CONTRACTS...................................................20

ARTICLE 6
ON AND AFTER CLOSING................................................22

ARTICLE 7
INTERIM PROVISIONS..................................................23

ARTICLE 8
DUE DILIGENCE.......................................................25

ARTICLE 9
REPRESENTATIONS AND WARRANTIES......................................30

ARTICLE 10
CONFIDENTIALITY.....................................................39

SCHEDULE "A"            -    Lands
                        -    Petroleum and Natural Gas Rights
                        -    Wells

SCHEDULE "B"            -    Facilities
                        -    Leased Tangibles
                        -    Assumed Contracts
SCHEDULE "C"            -    AFEs

SCHEDULE "D"            -    Not Used

SCHEDULE "E"            -    Not Used

SCHEDULE "F"            -    Form of Royalty Deed

SCHEDULE "G"            -    Allocation of Consideration

SCHEDULE "H"            -    Form of Promissory Notes

SCHEDULE "I"            -    Form of Security

SCHEDULE "J"            -    Form of Share Exchange Agreement

PURCHASE AND SALE AGREEMENT

THIS AGREEMENT is made this 17th day of November 2011.

AMONG:

BRISBANE PETROLEUM LTD. ACN 009 065 043,a body corporate incorporated under the laws of Australia, having an office in the City of Sydney, New South Wales (hereinafter referred to as "BPL")

- and -

DELBAERE ASSOCIATES PTY. LIMITED ACN003 197 939,a body corporate incorporated under the laws of Australia, having an office in the City of Sydney, New South Wales (hereinafter referred to as "DAPL")

(BPL and DAPL hereinafter collectively referred to as the "VENDOR")

- and -

CHELSEA OILAUSTRALIA PTY LTD, a body corporate incorporated under the laws of Australia, having an office in the City of Brisbane, Queensland

(hereinafter referred to as the "PURCHASER")

- and -

AUSTRALIAN-CANADIAN OIL ROYALTIES LTD., a body corporate incorporated under the laws of the Province of British Columbia and listed on the OTC Bulletin Board (hereinafter referred to as "ACOR")

WHEREAS the Vendor is the beneficial owner of the Assets;

AND WHEREAS the Purchaser is a wholly-owned subsidiary of ACOR;

AND WHEREAS the Vendor desires to sell and transfer the Assets to the Purchaser and the Purchaser desires to purchase and receive the Assets from the Vendor, subject to and in accordance with the terms and conditions hereof;

AND WHEREAS ACOR is a Party to this Agreement for the sole and limited purpose of the issuance of the Consideration Shares, subject to and in accordance with the terms and conditions hereof;

NOW THEREFORE in consideration of the premises hereto and of the covenants, warranties, representations, agreements and payments herein set forth and provided for, the Parties covenant and agree as follows:

ARTICLE 1
INTERPRETATION

1.1 DEFINITIONS

In this Agreement, unless the context otherwise requires, the words and phrases set forth below shall have the meaning ascribed thereto below, namely:

(a) "ABANDONMENT AND RECLAMATION OBLIGATIONS" means all duties and obligations, whether arising under contract or Applicable Law, relating to:

(i) the abandonment of any Wells and restoration and reclamation of the surface sites thereof and any other lands used to gain access thereto; and

(ii) the closure, decommissioning, dismantling and removal of any structures, buildings, pipelines, facilities, equipment and other, tangible depreciable property and assets forming the Tangibles, together with the restoration and reclamation of the lands on or in which any of the foregoing are or were located and any other lands used to gain access thereto;

(b) "AFES" means the authorities for expenditure, cash calls, operations notices, amounts budgeted and mail ballots, if any, set out in Schedule "C";

(c) "AFFILIATE" of a Person means a corporation or partnership that controls the Person, is controlled by the Person or is controlled by the same Person, corporation or partnership that controls the Person and for which purpose a corporation shall be deemed to be controlled by those persons, corporations or partnerships who own (directly or indirectly) or effectively control, other than by way of a security interest only, sufficient voting shares of the corporation (whether directly through the ownership of shares of the corporation or indirectly through the ownership of shares of another corporation which directly or indirectly owns shares of the corporation) to elect the majority of its board of directors and a partnership shall be deemed to be controlled by those persons, corporations or partnerships that are able to determine policies or material decisions of that partnership, provided that a partnership which is composed solely of corporations which are Affiliates, as described above, shall be deemed to be an Affiliate of each such corporation and its other Affiliates;

(d) "AGREEMENT" means this purchase and sale agreement including the recitals hereto, this clause and each Schedule, as may be amended after the date hereof by written agreement of the Parties;

(e) "APPLICABLE LAW" means, in relation to any Person, property or circumstance, all laws and statutes, including regulations, rules, bylaws, ordinances and other statutory instruments enacted thereunder; all judgments, decrees, rulings and orders of courts, tribunals, commissions and other similar bodies of competent jurisdiction; all orders, rules, directives, policies and guidelines having force of law issued by any Governmental Authority; and all terms and conditions of the Petroleum Tenures and any Permits; that are in effect as of the relevant time and are applicable to such Person, property or circumstance;

(f) "APPROVALS" means the Purchaser's Approvals and the Vendor's Approvals;

(g) "ASSETS" means the Petroleum and Natural Gas Rights, the Tangibles, the Assumed Contracts and the Miscellaneous Interests;

(h) "ASSUMED CONTRACTS" means any and all contracts and agreements relating to the Petroleum and Natural Gas Rights or the Tangibles or either of them, including the agreements set out in Schedule B under the heading "Assumed Contracts";

(i) "BUSINESS DAY" means a day other than a Saturday, a Sunday or a statutory holiday in Brisbane, Queensland or Vancouver, British Columbia;

(j) "CLAIM" means any claim, demand, action, lawsuit, proceeding, arbitration or investigation, in each case, whether asserted, threatened, pending or existing;

(k) "CLAIM NOTICE" has the meaning specified in subclause 11.3(a);

(l) "CLOSING" means the completion of the Transaction in accordance with the terms of this Agreement;

(m) "CLOSING DATE" means the date on which Closing occurs;

(n) "CLOSING TIME" means 10:00 a.m., on the later of:

(i) the 30th day of November, 2011;

(ii) the fifth (5th) Business Day following the day on which all of the Conditions Precedent have been satisfied or waived in accordance with clause Article 2; or

such other date or time as provided for in clause 8.4 or 8.7 or as may be mutually agreed in writing by the Parties;

(o) "CONDITIONS PRECEDENT" means the conditions precedent to Closing set out in clause 2.1;

(p) "CONSIDERATION" means the:

(i) issuance of the Promissory Notes;

(ii) issuance of the Consideration Shares; and

(iii) the execution and delivery of the Royalty Deed;

by the Purchaser in accordance with this Agreement.

(q) "CONSIDERATION SHARES" means8,571,429 fully paid common shares in the share capital of ACOR; 4,688,319 of which shall be issued to BPL or its designated nominee and 3,883,110 of which shall be issued to DAPL or its designated nominee;

(r) "DEVELOPMENT PLAN" means, in respect of a Petroleum Tenure, the development plan approved under the P&G Act or the Petroleum Act, as applicable;

(s) "DISCLOSURE LETTER" means the letter from the Vendor to the Purchaser dated the date of this Agreement and containing disclosures to the Warranties;

(t) "DOLLAR" or "$" means a U.S. dollar;

(u) "ENCUMBRANCE" means any royalty, overriding royalty, profit interest, production payment or similar burden on production, mortgage, charge, pledge, lien, attachment, hypothecation or other encumbrance, security interest, deferred purchase, title retention, leasing, sale and purchase, sale and leaseback arrangement, call or put option, co-sale or tag-along right, farmout agreements under which the right to earn an interest has not yet expired or other Third Party rights of whatever nature or interest or any agreement for any of the same;

(v) "ENVIRONMENT" means the components of the earth, alone or in combination, and includes ambient air, land, surface and sub-surface strata, groundwater, surface water, all layers of the atmosphere, all organic and inorganic matter and living organisms, including plants, animals and humans, and the interacting natural systems that include such components;

(w) "ENVIRONMENTAL AUTHORITIES" means environmental authorities numbered PEN200030407 (PL18), PEN20029909 (PL40) and PEN200313009 (PL280) granted under the EP Act which authorise the holder of the Petroleum Tenures to carry out the activities which the holder is permitted to carry out under the Petroleum Tenures.

(x) "ENVIRONMENTAL DEFECT" means, in respect of any particular Asset, any existing Environmental Liabilities, excluding Abandonment and Reclamation Obligations arising in the ordinary course of business;

(y) "ENVIRONMENTAL DEFECT AFFECTED ASSET" has the meaning specified in subclause 8.5(b);

(z) "ENVIRONMENTAL LIABILITIES" means all past, present and future Losses and Liabilities, Claims and other duties and obligations, whether arising under contract, Applicable Law or otherwise, arising from or associated with:

(i) Abandonment and Reclamation Obligations;

(ii) any damage to, or contamination of, the Environment howsoever and by whomsoever caused and regardless of whether such damage, contamination or other adverse situations occur or arise in whole or in part prior to, at or subsequent to the date of this Agreement;

(iii) the release, emission or discharge of Petroleum Substances, oilfield wastes, water, hazardous substances, environmental contaminants and all other substances and materials regulated under any Applicable Law, including any forms of energy; (iv) compliance with or the consequences of any non-compliance with, or violation

or breach of, any Applicable Law pertaining to the Environment or to the protection of the Environment;

(v) sampling, monitoring or assessing the Environment or any potential impacts thereon from any past, present or future activities or operations; or

(vi) the protection, reclamation, remediation or restoration of the Environment;

that relate to or arise by virtue of the Assets or the ownership thereof or any past, present or future operations and activities conducted in connection with the Assets;

(aa) "EP ACT" means the Environmental Protection Act 1994 (Qld);

(bb) "EP AUTHORITY" means the Environmental Protection Authority constituted under the EP Act;

(cc) "EXPIRY DATE"means January 31, 2012 or such later date agreed in writing by the Parties.

(dd) "FACILITIES" means the facility or facilities, if any, set forth and described in Schedule "B" under the heading "Facilities";

(ee) "FINANCING" has the meaning ascribed to such term in the Share Exchange Agreement;

(ff) "GOVERNMENTAL AUTHORITY" means any:

(i) governmental entity or authority of any nature, including any governmental ministry, agency, branch, department or official, and any court, regulatory board or other tribunal; or

(ii) individual or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, regulatory or taxing authority or power of any nature;

having or purporting to exercise jurisdiction or power over any Person, property, operation, transaction or other matter or circumstance;

(gg) "INDEMNIFIED PERSON" has the meaning specified in clause 11.3;

(hh) "INDEMNIFYING PERSON" has the meaning specified in clause 11.3;

(ii) "INDEPENDENT EXPERT" means a Person appointed jointly by the Vendor and the Purchaser or if they do not agree on the Person to be appointed within three (3) Business Days of either the Vendor or the Purchaser requesting appointment, then a Person appointed by the President of the Institute of Chartered Accountants in Australia (Queensland branch) at the request of either the Vendor or the Purchaser.

(jj) "INTERIM PERIOD" means the period from and including the date hereof up to but not including the day of Closing;

(kk) "LANDS" means the lands set forth and described in Schedule "A" under the heading "Lands";

(ll) "LEASED SUBSTANCES" means all Petroleum Substances, rights to or in respect of which are granted, reserved or otherwise conferred by or under, or evidenced by the grant of, the Petroleum Tenures;

(mm) "LOSSES AND LIABILITIES" means in respect of a Party and in relation to a matter, any and all:

(i) losses, costs, damages, expenses and charges (including all penalties, assessments and fines) which such Party suffers, sustains, pays or incurs in connection with such matter and includes reasonable costs of legal counsel and other professional advisors and reasonable costs of investigating and defending Claims arising from the matter, regardless of whether such Claims are sustained and includes taxes payable on any settlement payment or damage award in respect of such matter; and

(ii) liabilities and obligations (whether under Applicable Law or otherwise; whether tortious, contractual, vicarious, statutory or otherwise; whether absolute or contingent; and whether based on fault, strict liability or otherwise) which such Person incurs as a result of such matter or in connection therewith;

excluding indirect, special, aggravated, consequential, exemplary or punitive damages, whether in an action in contract or tort, or for any other reason whatsoever;

(nn) "MATERIAL ENVIRONMENTAL DEFECT" means any Environmental Defect identified by the Purchaser where the value by which the Assets affected by the Environmental Defect has been reduced as a consequence of such Environmental Defect, is estimated by the Purchaser, acting reasonably and in good faith, to exceedfifty thousand Dollars ($50,000.00);

(oo) "MATERIAL TITLE DEFECT" means any Title Defect identified by the Purchaser where the value by which the Assets affected by the Title Defect has been reduced as a consequence of the Title Defect, is estimated by the Purchaser, acting reasonably and in good faith, to exceed fifty thousand Dollars ($50,000.00);

(pp) "MINISTER" means the Minister of the State of Queensland who administers the P&G Act and the Petroleum Act;

(qq) "MISCELLANEOUS INTERESTS" means, subject to any and all limitations and exclusions provided for in this definition, the Vendor's right, title and interest in and to all property, assets, interests and rights pertaining to the Petroleum and Natural Gas Rights and the Tangibles, or either of them, but only to the extent that such property, assets, interests and rights pertain to the Petroleum and Natural Gas Rights and the Tangibles, or either of them, including any and all of the following:

(i) rights to enter upon, use or occupy, the surface of the Lands;

(ii) the Wells, including the wellbores and any and all casing;

(iii) the Permits; and

(iv) records, files, reports, data, correspondence and other information, including lease, contract, well, production and facilities files and records;

(rr) "P&G ACT" means the Petroleum and Gas (Production and Safety) Act 2004 (Qld);

(ss) "PARTY" means a Person who is bound by this Agreement;

(tt) "PERMITS" means all licences, permits, approvals and authorizations granted or issued by any Governmental Authorities that relate to the exploration, construction, ownership, use or operation of the Assets, including the Environmental Authorities, but does not include the Petroleum Tenures;

(uu) "PERMITTED ENCUMBRANCES" means:

(i) liens for taxes, assessments and governmental charges that are not due and payable or not delinquent or the validity of which is being diligently contested in good faith;

(ii) liens incurred or created in the ordinary course of business as security in favour of the Person who is conducting the development or operation of the property to which such liens relate, that are not due and payable or not delinquent or the validity of which is being diligently contested in good faith;

(iii) mechanics', builders' and materialmen's liens in respect of services rendered or goods supplied for which payment is not due or delinquent or the validity of which is being diligently contested in good faith;

(iv) easements, rights of way, servitudes and other similar rights in land (including rights of way and servitudes for highways and other roads, railways, sewers, drains, gas and oil pipelines, gas and water mains, electric light, power, telephone, telegraph and cable television conduits, poles, wires and cables) which do not materially impair the use of the Assets affected thereby;

(v) the right reserved to or vested in any municipality or Governmental Authority by the terms of any lease, licence, franchise, grant or permit or by any statutory provision, to terminate any such lease, licence, franchise, grant or permit or to require annual or other periodic payments as a condition of the continuance thereof;

(vi) rights of general application reserved to or vested in any Governmental Authority to levy taxes of any kind or type, including imposts, custom duties and excises, stamp duties or similar duties on the Leased Substances or any of them or the income therefrom, and governmental requirements and limitations of general application as to production rates on the operations of any property;

(vii) royalties which are or may become payable for any reason under any Applicable Law, including the P&G Act and the Petroleum Act, which relate to the production, extraction, sale or transfer of Leased Substances or otherwise relate to the Petroleum Tenures;

(viii) statutory exceptions to title;

(ix) any security held by any Third Party encumbering the Vendor's interest in and to the Assets or any part or portion thereof, in respect of which the Vendor delivers a discharge or no interest letter to the Purchaser at or prior to Closing, in a form that is satisfactory to the Purchaser acting reasonably;

(x) the terms and conditions of the Petroleum Tenures; and

(xi) all Encumbrances set out and described in Schedule "A";

(vv) "PERSON" means any individual, body corporate, partnership (limited or general), trust, trustee, executor or similar official, Governmental Authority or other entity;

(ww) "PETROLEUM ACT" means the Petroleum Act 1923 (Qld);

(xx) "PETROLEUM AND NATURAL GAS RIGHTS" means all of the Vendor's right, title, interest in and to the Leased Substances and the Petroleum Tenures, including:

(i) a one hundred percent (100%) interest in PL18;

(ii) a one hundred percent (100%) interest in PL40; and

(iii) a fifty percent (50%) interest in PL280;

(yy) "PETROLEUM SUBSTANCES" means any of crude oil, crude bitumen and products derived therefrom, synthetic crude oil, petroleum, natural gas, natural gas derived from coal, natural gas liquids, and any and all other substances related to any of the foregoing, whether liquid, solid or gaseous, and whether hydrocarbons or not;

(zz) "PETROLEUM TENURES" means PL18, PL40 and PL280;

(aaa) "PL18" means petroleum lease number 18 granted under the Petroleum Act and includes any variation, renewal, permit, license or other interest issued in substitution thereof and any other petroleum tenure or rights to explore for or produce Petroleum Substances which may be granted to the Vendor in lieu of or related to the same area covered by petroleum lease number 18;

(bbb) "PL40" means petroleum lease number 40 granted under the Petroleum Act and includes any variation, renewal, permit, license or other interest issued in substitution thereof and any other petroleum tenure or rights to explore for or produce Petroleum Substances which may be granted to the Vendor in lieu of or related to the same area covered by petroleum lease number 40;

(ccc) "PL280" means petroleum lease number 280 granted under the P&G Act and includes any variation, renewal, permit, license or other interest issued in substitution thereof and any other petroleum tenure or rights to explore for or produce Petroleum Substances which may be granted to the Vendor in lieu of or related to the same area covered by petroleum lease number 280;

(ddd) "PRRT" means the petroleum resource rent tax imposed pursuant to the PRRT Act and assessed pursuant to the Petroleum Resource Rent Tax Assessment Act 1987 (Cth) (as amended from time to time);

(eee) "PRRT ACT" means Petroleum Resource Rent Tax Act 1987 (Cth) (as amended from time to time) and any associated regulations and legislative determinations;

(fff) "PROJECT INTERESTS" means an interest in relation to a petroleum project or an exploration right for the purposes of the PRRT Act;

(ggg) "PROMISSORY NOTES" means an original promissory note from the Purchaser to each of the entities comprising the Vendor in the form set forth in Schedule "H" in an aggregate amount equal to three million Dollars ($3,000,000.00);

(hhh) "PURCHASER'S APPROVALS" means the satisfaction, or approval by the relevant authority or party, of a matter the subject of the Conditions Precedent in Article 2;

(iii) "PURCHASER'S LOSSES" means Losses and Liabilities of the Purchaser and its Related Parties;

(jjj) "RELATED PARTIES" means, in reference to a Party, its Affiliates, successors and assigns and its or its Affiliates' respective directors, officers and employees;

(kkk) "REPRESENTATIVES" means, in reference to a Party, its and its Related Parties' representatives, agents, legal counsel, accountants, consultants and advisors;

(lll) "ROYALTY DEED" means a deed substantially in the form set forth in Schedule "F";

(mmm) "SECURITY" means the Mortgage of Petroleum and Natural Gas Rights substantially in the form set forth in Schedule "I";

(nnn) "SHARE EXCHANGE AGREEMENT" means the share exchange agreement among ACOR, 1629518 Alberta Ltd. and others dated on or about the date hereof, substantially in the form set forth in Schedule "J";

(ooo) "STARTING BASE"means the starting base which is immediately deductible or uplifted at the relevant rate when carried forward under the PRRT Act and which is calculated by reference to the market or book value of assets or to expenditure under a 'look back' method or by any other method specified in the PRRT Act;

(ppp) "TAKE OR PAY OBLIGATIONS" means obligations to sell or deliver Petroleum Substances or any of them, without being entitled in due course to receive and retain full payment for such Petroleum Substances;

(qqq) "TANGIBLES" means all of the Vendor's right, title and interest in and to the Facilities and any and all tangible depreciable property and assets other than the Facilities which are located within, upon or in the vicinity of the Lands and which have been used, are being used, are capable of being used or are intended to be used to produce, process, gather, treat, measure, make marketable or inject the Leased Substances or any of them or in connection with water injection or removal operations that pertain to the Petroleum and Natural Gas Rights, including any and all gas plants, oil batteries, buildings, well heads, production equipment, pipelines, pipeline connections, meters, generators, motors, compressors, treaters, dehydrators, scrubbers, separators, pumps, tanks, boilers, improvements, communication equipment and other equipment and apparatus;

(rrr) "THIRD PARTY" means any Person other than any of the Parties and their Related Parties;

(sss) "THIRD PARTY CLAIM" has the meaning specified in subclause 11.3(a);

(ttt) "TITLE DEFECT" means, in respect of any particular Asset:

(i) that the Vendor holds a smaller beneficial interest in and to such particular Asset than as attributed to it in Schedule "A";

(ii) that such particular Asset as described in Schedule "A" is subject to an Encumbrance that is either not described in or is misdescribed in Schedule "A" where such omission or misdescription is adverse to the value of such particular Asset;

(iii) that the interest of the Vendor in and to such particular Asset is subject to a reduction or penalty that has not been disclosed in Schedule "A"; or

(iv) any other adverse defect, omission, deficiency or discrepancy in or affecting the title of the Vendor in and to such particular Asset;

provided that notwithstanding the foregoing, a "Title Defect" excludes:

(v) the Permitted Encumbrances; and

(vi) all Environmental matters;

(uuu) "TITLE DEFECT AFFECTED ASSET" has the meaning specified in subclause 8.2(b);

(vvv) "TRANSACTION" means the purchase of the Assets by the Purchaser from the Vendor on and subject to the terms and conditions, and as more fully described, in this Agreement;

(www) "VENDOR'S APPROVALS" means the satisfaction, or approval by the relevant authority or party, of a matter the subject of the Conditions Precedent in Article 2;

(xxx) "VENDOR'S LOSSES" means Losses and Liabilities of the Vendor and its Related Parties;

(yyy) "WARRANTIES" means the representations and warranties given by the Vendor under clauses 9.1 and 9.2;

     (zzz) "WARRANTY CLAIM" means a Claim by the Purchaser against the Vendor
          (or either of them) arising as a result of a breach of a Warranty; and

     (aaaa) "WELLS" means the well(s) identified in Schedule "A" under the
          heading "Wells" and all other wells which are located on the Lands
          which are, may be or were used in connection with the Petroleum and
          Natural Gas Rights, including producing, shut-in, suspended,
          abandoned, water source, injection or disposal wells.

1.2              SCHEDULES

The  following schedules (the "SCHEDULES") are attached to, form part of and are

incorporated in this Agreement:

(a) SCHEDULE "A" - Lands, Petroleum and Natural Gas Rights, Wells, Encumbrances;

(b) SCHEDULE "B" - Facilities, Leased Tangibles, Assumed Contracts;

(c) SCHEDULE "C" - AFEs;

(d) SCHEDULE "D" - Not Used;

(e) SCHEDULE "E" - Not Used;

(f) SCHEDULE "F" - Form of Royalty Deed;

(g) SCHEDULE "G" - Allocation of Consideration;

(h) SCHEDULE "H" - Form of Promissory Notes;

(i) SCHEDULE "I" - Form of Security; and

(j) SCHEDULE "J" - Form of Share Exchange Agreement.

1.3 INTERPRETATION

Unless otherwise stated or the context otherwise necessarily requires, in this Agreement:

(a) the headings of Articles, clauses, subclauses, sections, subsections and Schedules herein are inserted for convenience of reference only and shall not affect or be considered to affect the construction or interpretation of the provisions hereof;

(b) the word "including" and like words used in this Agreement shall be deemed to mean "including, without limitation";

(c) whenever the singular or masculine or neuter is used in this Agreement or in the Schedules, each shall be interpreted as meaning the plural or feminine or body politic or corporate or vice versa, as the context requires;

(d) the provisions contained in all documents and agreements collateral hereto shall at all times be read subject to the provisions of the body of this Agreement and, in the event of conflict between the provisions contained in any Schedule; and any documents or agreements collateral hereto and the provisions of the body of this Agreement, the provisions of the body of this Agreement shall prevail unless otherwise expressly provided herein;

(e) "this Agreement", "herein", "hereby", "hereunder", "hereof" and similar expressions refer to this Agreement as a whole and not to any particular Article, clause, subclause, section or subsection or other provision hereof and references herein to any agreement or instrument, including this Agreement, shall be a reference to the agreement or instrument as varied, amended, renewed, modified, or supplemented or replaced from time to time;

(f) a reference to an Article, clause, subclause, section, subsection or Schedule is a reference to an Article, clause, subclause, section or subsection in, or a Schedule to, this Agreement and unless otherwise stated or the context so requires, a reference in a clause to a subclause is a reference to a subclause of that clause;

(g) except as otherwise expressly provided herein, references in this Agreement to any statute, statutory provision or other legislation include a reference to that statute, statutory provision or legislation as amended, extended, re-enacted, consolidated or replaced from time to time (whether before or after the date of this Agreement) and include any order, regulation, instrument or other subordinate legislation made under the relevant statute, statutory provision or legislation;

(h) if Closing does not occur, each provision of this Agreement which presumes the Purchaser has acquired the Assets shall be construed as having been contingent upon Closing having occurred;

(i) any references to time herein shall be references to [Brisbane] time; and

     (j)  the knowledge or awareness of the Vendor consists of the actual
          knowledge or awareness of its current officers and employees who are
          primarily responsible for the matter in question in the course of
          their normal duties (other than those employees employed in the field
          who do not have management responsibilities), after reasonable inquiry
          of the Vendor's applicable files and records. Knowledge and awareness
          does not include the knowledge of any Third Party or constructive
          knowledge.

                                   ARTICLE 2
                              CONDITIONS PRECEDENT

2.1              CONDITIONS PRECEDENT

     Closing is conditional on the satisfaction of, or the waiver of, the
     following Conditions Precedent:

 CONDITION                                             PARTY ENTITLED TO BENEFIT
--------------------------------------------------------------------------------
(a)  Obtaining indicative approval of the Minister:       Purchaser and Vendor

     (i)  under section 80H of the Petroleum Act
          to the transfer to the Purchaser of the
          Vendor's interests in PL18 and the grant
          of the Security;

     (ii) under section 80H of the Petroleum Act
          to the transfer to the Purchaser of the
          Vendor's interests in PL40 and the grant
          of the Security; and

     (iii) under section 571 of the P&G Act to the
           transfer to Purchaser of BPL's interests
           in PL280 and the grant of the Security,

          and such indicative approvals being notified
          to the Purchaser and the Vendor.

--------------------------------------------------------------------------------
(b)  Obtaining  any consent or approval of any person             Vendor
     (other than the Minister) required in respect
     of the grant of the Security.

--------------------------------------------------------------------------------
(c)  Obtaining  the consent (on such terms as are             Purchaser and BPL
     satisfactory to BPL and the Purchaser) of
     Longreach Oil Limited ACN 000 131 797
     ("LONGREACH") to the transfer of PL280, and
     the corresponding Environmental Authority, to the
     Purchaser  including the due execution by
     Longreach of the application for transfer
     in registrable form of PL280 and the
     corresponding Environmental Authority.

(i) the Purchaser receiving a written notice issued by or on behalf of the Treasurer of the Commonwealth of Australia pursuant to the Foreign Acquisitions and Takeovers Act 1975 (Cth) stating that the Australian Government does not object to the proposed acquisition by the Purchaser of the Assets unconditionally or on terms acceptable to the Purchaser acting reasonably; or

(ii) following written notice of the proposed acquisition of the Assets having been given by the Purchaser to the Treasurer of the Commonwealth of Australia pursuant to the Foreign Acquisitions and Takeovers Act 1975 (Cth), the Treasurer of the Commonwealth of Australia ceasing to be empowered to make any order under Part II of that Act because of lapse of time or otherwise.

(g) The completion of the Financing for Vendor and Purchaser minimum gross proceeds of not less than US$1,000,000.00 at 35c per ACOR share.

2.2            WAIVER OF CONDITIONS


    (a)  A Condition Precedent may only be waived in writing by a Party
         entitled to the benefit of that Condition Precedent (as set out in the
         table in clause 2.1) and will be effective only to the extent
         specifically set out in that waiver.

    (b)  If both the Vendor and the Purchaser are entitled to the benefit of a
         Condition Precedent (as set out in the table in clause 2.1), that
         Condition Precedent may only be waived in writing by agreement between
         the Vendor and the Purchaser.

2.3              CONDUCT OF THE PARTIES

     (a)  The Purchaser must at its sole cost apply for the Purchaser's
          Approvals immediately following execution of this Agreement and
          thereafter with the reasonable assistance of the Vendor, do all things
          reasonably necessary to obtain the Purchaser's Approvals as soon as
          reasonably practicable after execution of this Agreement and in any
          event before 5.00pm on the Expiry Date.

     (b)  The Vendor must at its sole cost apply for the Vendor's Approvals
          immediately following execution of this Agreement and thereafter with
          the reasonable assistance of the Purchaser, do all things reasonably
          necessary to obtain the Vendor's Approvals as soon as reasonably
          practicable after execution of this Agreement and in any event before
          5.00pm on the Expiry Date.

     (c)  Each Party must keep the other Parties informed as to the status of
          and notify the other Parties immediately on the outcome of each
          application for an Approval and provide the other Parties with a copy
          of each Approval.

     (d)  If a notice received from the relevant authority or Person (as the
          case may be) specifies conditions to an Approval, each Party must
          notify the other Parties whether or not any conditions are reasonably
          acceptable to it. If any Party notifies that such conditions are not
          reasonably acceptable, the Approval is deemed not to have been
          granted.

     (e)  If any Party fails to notify the other Parties that conditions to an
          Approval are not reasonably acceptable within 14 days after receipt of
          a notice from another Party accepting such conditions, the conditions
          are deemed to be accepted by all Parties and the relevant Condition
          Precedent in clause 2.1 is deemed to have been satisfied.

     (f)  If a condition to an Approval is acceptable or is deemed acceptable to
          all of the Parties, the Parties must execute any documents and do all
          things as are reasonably necessary in satisfaction of the conditions
          to an Approval.

2.4              FAILURE OF CONDITION

If a Party has complied with its obligations under clause 2.3, it may terminate this Agreement by giving notice in writing to the other Parties if:

(a) a Condition Precedent is or becomes incapable of being satisfied;

(b) each Condition Precedent is not satisfied, or waived by each Party entitled to the benefit of that Condition Precedent, before 5.00pm on the Expiry Date; or

(c) a Condition Precedent, having been satisfied, does not remain satisfied in all respects at all times before Closing.

2.5 EFFECT OF TERMINATION

On termination of this Agreement under clause 2.4:

(a) clauses 2.5 (Effect of termination), Article 1 (Interpretation), Article 10 (Confidentiality) and 15.4 (Governing Law) continue to apply;

(b) accrued rights and remedies of a Party are not affected; and

(c) subject to clauses 2.5(a) and 2.5(b), the Parties are released from further performing their obligations under this Agreement.

2.6 ACKNOWLEDGEMENT REGARDING CONDITIONS PRECEDENT

The Purchaser acknowledges that the transfer of the Environmental Authority in relation to PL18, PL40 and PL 280 will require an application to the relevant Governmental Authority under section 311C of the EP Act and that, upon such application, the relevant Governmental Authority may require an audit statement and may amend the conditions of the Environmental Authority as a condition of approving the transfer of the Environmental Authority.

ARTICLE 3
PURCHASE AND SALE

3.1 PURCHASE AND SALE

The Vendor shall sell and convey the Assets to the Purchaser and the Purchaser shall purchase the Assets from the Vendor at the Closing Time, for the Consideration, subject to and in accordance with the terms and conditions of this Agreement.

3.3              PURCHASER'S OBLIGATIONS

     (a)  At Closing, the Purchaser must:

          (i)  deliver to each Vendor the Promissory Note (applicable to such
               Vendor entity) duly executed by the Purchaser;

          (ii) cause the Consideration Shares to be issued to each Vendor or
               their designated nominee;

          (iii) deliver to each Vendor the Royalty Deed duly executed by the
               Purchaser;

          (iv) deliver to each Vendor the Security duly executed by the
               Purchaser; and

          (v)  deliver to the Vendor any and all other documents which are
               required to be delivered by the Purchaser pursuant to this
               Agreement;

     (b)  All deliveries of the Purchaser shall, except as otherwise stated, be
          in a form acceptable to the Vendor and its counsel, acting reasonably.

3.4              VENDOR'S OBLIGATIONS

      (a) At Closing, the Vendor must deliver to the Purchaser:

          (i)  possession and control of the Assets;

          (ii) a copy of the notice of indicative approval of the Minister under
               section 80H of the Petroleum Act to the transfer of the Vendor's
               interests in PL18 and PL40, and under section 571 of the P&G Act
               to the transfer of the Vendor's interests in PL280 to the
               Purchaser;

          (iii) an application for transfer in registrable form executed by the
               Vendor in respect of the Vendor's interests in each of PL18, PL40
               and PL280, and executed by Longreach Oil Limited ACN 000 131 797
               respect of PL 280, together with the original instrument of title
               for each of PL18, PL40 and PL280 and any other accompanying
               documents required to register the transfer of the Vendor's
               interests in PL18, PL40 and PL280 in the name of the Purchaser
               and to vest the Vendor's interests in PL18, PL40 and PL280 in the
               Purchaser;

          (iv) duly executed by the Vendor, and by Longreach Oil Limited ACN 000
               131 797 in respect of the Environmental Authority corresponding
               to PL280, duly completed (except for stamping) applications for
               transfer in favour of the Purchaser in respect of any
               Environmental Authorities corresponding to the Vendor interests
               in each of PL18, PL40 and PL280;

          (v)  the Royalty Deed duly executed by the Vendor;

          (vi) any assignment and assumption agreements relating to any
               landholder compensation agreements or native title agreements in
               the name of the Vendor (if any)]; and

          (vii) any and all other documents which are required to be delivered
               by the Vendor pursuant to this Agreement.

     (b)  All deliveries of the Vendor shall, except as otherwise stated, be in
          a form acceptable to the Purchaser and its counsel, acting reasonably.

3.5 ALLOCATION OF CONSIDERATION

The Consideration shall be allocated as set out in Schedule G.

3.6 SIMULTANEOUS ACTIONS AT CLOSING

In respect of Closing:

(a) the obligations of the Parties under this Agreement are interdependent;

(b) all actions required to be performed will be taken to have occurred simultaneously on the Closing Date; and

(c) completion of the sale and purchase of each Asset is dependent on the completion of the sale and purchase of each other Asset.

3.7 CLOSING OBLIGATIONS BREACHED

If by 5:00 pm on the Closing Date:

(a) the Purchaser has not complied in any material respect with any of its obligations under clause 3.3, the Vendor is entitled, at its discretion; or

(b) if the Vendor has not complied in any material respect with any of its obligations under clause 3.4, the Purchaser is entitled, at its discretion,

in either case:

(c) to defer Closing to any subsequent Business Day falling not more than five (5) Business Days after the scheduled Closing Date or any later date set for Closing in accordance with this clause (in such event, this clause will apply to the scheduled Closing Date so deferred);

(d) if applicable, to waive the requirement to fulfill those obligations, in whole or in part, and following such waiver to complete the sale and purchase of the Assets;

(e) so far as practicable, to complete the sale and purchase of the Assets; or

(f) to terminate this Agreement.

3.8 CLOSING UNDER THIS AGREEMENT AND SHARE EXCHANGE AGREEMENT

Despite anything to the contrary in this Agreement, Closing under this Agreement and closing under the Share Exchange Agreement are conditional upon each other's closing and must be completed simultaneously. If there is a failure to close under the Share Exchange Agreement, any Party may terminate this Agreement and each Party will do everything reasonably required by the other Parties to reverse any action taken under this Article 3.

                          ARTICLE 5 ASSUMED CONTRACTS

5.1              ASSIGNMENT

     (a)  Subject to Closing, and on and with effect from the Closing Date, the
          Vendor assigns and the Purchaser accepts an assignment of all of the
          Vendor's rights under, benefits of and interests in ("Benefits") and
          assumes the burden of the Assumed Contracts in accordance with this
          Article 5.

     (b)  This Agreement does not constitute an assignment or an attempted
          assignment of an Assumed Contract if an assignment or attempted
          assignment requires the consent of the counterparty to the Assumed
          Contract and would constitute a breach of that Assumed Contract if an
          assignment were made without that consent.

5.2              CONSENT TO TRANSFER OF ASSUMED CONTRACTS

     (a)  If the consent of any Third Party is required for the transfer of an
          Assumed Contract to the Purchaser under clause 5.1, the Vendor and the
          Purchaser must use their reasonable endeavours to obtain that consent
          by or as soon as reasonably practicable after Closing.

     (b)  Pending the transfer of an Assumed Contract to the Purchaser under
          clause 5.1, the Vendor must:

          (i)  hold the Benefits of the Assumed Contract in trust for the
               Purchaser and account to the Purchaser promptly after receipt by
               it for the value of any Benefit of the Assumed Contract that
               arises (or relates to the period) after the Closing Date;

          (ii) enforce the Assumed Contract against any counterparty to it in
               the manner that the Purchaser directs (and promptly following
               such direction) from time to time, at the expense of the
               Purchaser; and

          (iii) not agree to any termination, amendment or variation of or
               waiver of any of the Vendor's rights under the Assumed Contract
               without the prior written approval of the Purchaser.

5.3              PERFORMANCE OF ASSUMED CONTRACTS

     (a)  The Vendor must perform and observe all obligations of the Vendor
          under the Assumed Contract which are due to be performed (or relate to
          the period) on or before the Closing Date.

     (b)  The Purchaser must, to the extent it lawfully can, assume, perform and
          observe all obligations of the Vendor under the Assumed Contract which
          are due to be performed (or relate to the period) after Closing.

     (c)  The Vendor must, at the request and expense of and with the assistance
          of the Purchaser, use its reasonable endeavours to perform any
          obligation of it under the Assumed Contract which arises (or relates
          to the period) from Closing which the Purchaser cannot lawfully
          assume, perform or observe.

5.4              VENDOR TO COOPERATE GENERALLY

Pending the transfer of an Assumed Contract to the Purchaser under clause 5.1 and to give effect to the allocation of responsibility for performance of and liabilities and obligations under an Assumed Contract under clauses 5.3, 5.5 and 5.6, the Vendor must fully cooperate with the Purchaser in any reasonable arrangements designed to provide for the Purchaser the Benefits of the Assumed Contract subject to the Purchaser assuming the burden of the Assumed Contract.

5.5 VENDOR'S INDEMNITY

Subject to Closing occurring, the Vendor indemnifies the Purchaser from and against all Losses and Liabilities suffered, paid or incurred by the Purchaser from:

(a) any breach, non-performance or non-observance of any obligation of the Vendor under an Assumed Contract which is due to be performed (or relates to the period) on or before the Closing Date;

(b) any Claim made by a counterparty under an Assumed Contract arising from events, acts or omissions occurring on or before the Closing Date;

(c) any breach, non-performance or non-observance of any obligation of the Vendor under an Assumed Contract which is due to be performed (or relates to the period) after the Closing Date incurred from acts, omissions or events caused or contributed to by the Vendor, other than at the direction of the Purchaser; and

(d) any breach by the Vendor of clauses 5.2(b), 5.3 or 5.4.

5.6 PURCHASER'S INDEMNITY

Subject to Closing occurring, the Purchaser indemnifies the Vendor from and against all Losses and Liabilities suffered, paid or incurred by the Vendor from:

(a) any breach, non-performance or non-observance of any obligation of the Purchaser under an Assumed Contract which is due to be performed (or relates to the period) after the Closing Date except to the extent that any such Loss or Liability is suffered, paid or incurred from acts, omissions of or events caused or contributed to by the Vendor (other than at the direction of the Purchaser);

(b) any Claim made by a counterparty under an Assumed Contract arising from events, acts or omissions occurring after the Closing Date except to the extent that any such Loss or Liability is suffered, paid or incurred from acts, omissions of or events caused or contributed to by the Vendor (other than at the direction of the Purchaser); and

(c) any breach by the Purchaser of clause 5.3.

ARTICLE 6
ON AND AFTER CLOSING

6.1 PURCHASERS' OBLIGATIONS

The Purchaser:

(a) must, as soon as practicable after Closing, lodge for registration:

(i) under the Petroleum Act and the P&G Act, the instruments of transfer of the Petroleum Tenures; and

(ii) under the EP Act, the instruments of transfer in respect of any Environmental Authorities corresponding to the Petroleum Tenures,

received by it on Closing, and thereafter to do all commercially reasonable things as may be necessary to facilitate registration of those instruments of transfer;

(b) must, as soon as practicable after Closing, lodge security of an amount and in cash or in a form required or approved by the Minister or the EP Authority in respect of the Petroleum Tenures, so as to enable the release and replacement of all security or undertaking lodged by or on behalf of the Vendor in relation to the Petroleum Tenures; and

(c) notwithstanding any other provision of this Agreement (including the Purchaser's obligations set forth above and the Security), during the period after Closing in which the Vendor continues to hold legal title (as trustee for the benefit of the Purchaser) to any of the Assets until such assets are legally transferred to the Purchaser and registered in the name of the Purchaser, the Purchaser shall only be required to perform any applicable obligations of the Purchaser set out herein or in the Security to the extent possible while not holding legal title to such Assets.

     (a)  not dispose or agree to dispose of, encumber, take any steps to
          surrender, cancel, transfer or declare itself a trustee of the
          Petroleum and Natural Gas Rights or the Environmental Authorities;

     (b)  not of their own volition, seek to amend the conditions of, or
          terminate, any of the Petroleum Tenures or the Environmental
          Authorities; and

     (c)  promptly give to the Purchaser any notices or correspondence received
          from the Minister, the EP Authority or any other Governmental
          Authority as to any Petroleum Tenure or Environmental Authority.

6.3              PURCHASER TO COMPLY WITH DEVELOPMENT PLANS

     (a)  The Purchaser acknowledges and understands that each of the Petroleum
          Tenures is subject to a Development Plan and failure to comply with
          the Development Plan could result in the Petroleum Tenures being
          cancelled, terminated or revoked.

     (b)  On and from Closing the Purchaser will comply with the requirements of
          the Development Plan for each Petroleum Tenure to the extent possible
          while not holding legal title to such Petroleum Tenure.

                                   ARTICLE 7
                               INTERIM PROVISIONS

7.1              MAINTENANCE OF ASSETS

During the Interim Period, the Vendor shall:

(a) conduct its business in material compliance with Applicable Laws and generally accepted oil and gas industry practices in Queensland;

(b) operate and maintain the Assets:

(i) in a proper and prudent manner consistent with the Vendor's past practices; and

(ii) in material compliance with all Applicable Laws;

(c) except as otherwise provided in this Agreement, pay or cause to be paid all costs and expenses relating to the Assets that become due prior to the Closing Time; and

(d) perform and comply with all of the material provisions of the Petroleum Tenures;

provided that where the Vendor is not the operator of any Asset (or the holder of one hundred percent (100%) of the interests therein), the Vendor shall be obligated to do only that which a prudent non-operator would be expected to do in similar circumstances in accordance with good oil and gas industry practices.

7.2 CONSENT OF PURCHASER

Notwithstanding clause 7.1, during the Interim Period, the Vendor shall not without the prior written consent of the Purchaser, which consent shall not be unreasonably withheld by the Purchaser and which, if provided, shall be provided in a timely manner:

(a) make any commitment or propose, initiate or authorize any capital expenditure with respect to the Assets of which the Vendor's share is in excess of ten thousand Dollars ($10,000.00), except in case of an emergency or in respect of amounts which the Vendor may be committed to expend or be deemed to authorize for expenditure without its consent;

(b) surrender or abandon any of the Assets;

(c) amend or terminate any Petroleum Tenure or any other agreement or document to which the Assets are subject, or enter into any new agreement or commitment relating to the Assets; or

(d) sell, encumber or otherwise dispose of any of the Assets or any part or portion thereof excepting sales of produced Leased Substances or any of the Assets in the normal course of business.

7.3 PRE-CLOSING INTEGRATION OF ASSETS

The Vendor shall make reasonable commercial efforts after the execution of this Agreement, and prior to Closing, to provide the Purchaser, at the Purchaser's expense, with the information that it reasonably requires and requests to aid in the planning for, and the integration of, the Assets into the Purchaser's business. The Vendor shall ensure that the Purchaser has reasonable access during business hours prior to Closing to the Vendor's accounting, land and operational records that pertain to the Assets for the purposes of the planning for, and the integration of, the Assets into the Purchaser's business.

                                   ARTICLE 8
                                 DUE DILIGENCE

8.1              ACCESS

     (a)  Between the date hereof and the Closing Time, the Vendor shall allow
          the Purchaser and its Representatives to have reasonable access,
          during normal business hours of the Vendor, to the field locations at
          which the Wells and the Facilities and other Tangibles are situated
          and to the Lands and any other lands to which the rights and interests
          included in the Miscellaneous Interests relate in order to conduct a
          physical inspection thereof, including reasonable inspections to
          determine and evaluate the environmental condition thereof in order to
          assess the Environmental Liabilities associated with the Assets. The
          Purchaser shall use all reasonable efforts to limit and minimize any
          disruption to operations that may be caused by such inspections and
          will follow all of the Vendor's safety and work permit requirements.
          All such inspections shall be conducted at the Purchaser's sole cost,
          risk and expense and the Purchaser shall indemnify the Vendor and each
          of the Vendor's Related Parties from and against all Losses and
          Liabilities suffered, sustained, paid or incurred by any of them and
          all Claims made against any of them as a consequence of any bodily
          injury or death suffered by any person or any damage to the property
          of any person in connection with such access and inspections.

     (b)  Between the date hereof and the Closing Time, the Vendor shall provide
          to the Purchaser and its Representatives reasonable access to all:

          (i)  title opinions and reports;

          (ii) Petroleum Tenures;

          (iii) agreements and documents to which the Assets are subject;

          (iv) documents relating to Encumbrances affecting the Assets;

          (v)  evidence with respect to the payment of all rentals, royalties
               and other payments due under the Petroleum Tenures and any other
               agreements and documents to which the Assets are subject;

          (vi) evidence with respect to the payment of all taxes, charges and
               assessments pertaining to the Assets;

          (vii) lease records, data sheets, production records, ownership maps
               and surveys;

          (viii) Permits;

          (ix) all documents and information relevant to Environmental
               Liabilities;

(x) accounting records, policies of insurance, consulting agreements, field contracts and other agreements relating to the operation of the Assets; and

(xi) other documentation relating to or comprising the Assets;

that are in the Vendor's possession and control. Such review shall be conducted at the Purchaser's sole cost, risk and expense.

     (a)  no later than ten (10) Business Days after it has first come to the
          Purchaser's attention but no later than five (5) Business Days prior
          to the Closing Time, the Purchaser shall notify the Vendor in writing
          of the Title Defects it becomes aware of during the course of its
          title review; and

     (b)  such notice shall include a description of each Title Defect in
          reasonable detail, the Assets directly and adversely affected thereby
          (hereinafter, the "TITLE DEFECTAFFECTED ASSET"), and, in the case of
          each Material Title Defect, the bona fide value allocated by the
          Purchaser acting reasonably, by which the value of each Title Defect
          Affected Asset has, in the Purchaser's opinion, acting reasonably and
          in good faith, been reduced by such Material Title Defect, taking into
          account the likelihood the Material Title Defect will manifest itself,
          and the Purchaser's reasonable requirements for the remedying thereof.

8.3              RECTIFICATION OF MATERIAL TITLE DEFECTS

     (a)  Prior to the Closing Time, the Vendor shall use reasonable commercial
          efforts to cure or rectify all the Title Defects of which Purchaser
          gives notice pursuant to clause 8.2, or of which the Vendor otherwise
          has knowledge, however, priority shall be given to Material Title
          Defects. The Vendor shall not be required to make any payment to cure
          a Title Defect.

     (b)  If any Material Title Defect described in the Purchaser's notice is
          not cured or removed to the Purchaser's reasonable satisfaction within
          three (3) Business Days prior to the Closing Time, the following shall
          apply:

          (i)  where the aggregate amount by which the value of all of the Title
               Defect Affected Assets has been reduced by such Material Title
               Defects is, in the Purchaser's opinion, acting reasonably and in
               good faith, two hundred and fifty thousand Dollars ($250,000.00)
               or less, the Purchaser shall be deemed to waive permanently such
               uncured Material Title Defects and shall complete the Transaction
               without an adjustment to the Consideration on account of such
               Material Title Defects and the Purchaser shall be deemed to have
               waived all Title Defects; or

(ii) where the aggregate amount by which the value of all of the Title Defect Affected Assets has been reduced by such Material Title Defects is, in the Purchaser's opinion, acting reasonably and in good faith, equal to or more than two hundred and fifty thousand Dollars ($250,000.00), either Party may elect, subject to clause 8.4, by notice in writing delivered to the other Party prior to the Closing Time, to terminate this Agreement, in which case the Parties shall thereupon be discharged from further obligations hereunder, except for those arising under Article 10. If no Party elects to terminate this Agreement in accordance with this clause prior to the Closing Time then, subject to clause 8.4, the Parties will proceed to Closing with the Consideration adjusted accordingly and the Purchaser shall be deemed to have waived all Title Defects.

8.4 VALUE DISPUTES FOR UNCURED MATERIAL TITLE DEFECTS

In determining any reduction in value of the Title Defect Affected Assets due to uncured Material Title Defects, it is the intent of the Parties to include, when reasonably possible, only those Assets directly and adversely affected by the uncured Material Title Defect. If the Vendor disagrees with (i) the value allocated by the Purchaser to any of the Title Defect Affected Assets, (ii) the Purchaser's statement of the value by which a Title Defect Affected Asset has been reduced by a Material Title Defect, or (iii) the validity of a Material Title Defect; or in the instance that the amount by which the value of the Title Defect Affected Assets has been reduced, as allocated by the Purchaser, is equal to or greater than one of the adjustment or termination thresholds provided in clause 8.3 if the Vendor believes such amount, (if any) by which the value has been reduced is less than such adjustment or termination threshold, the Parties shall promptly meet to discuss in good faith the issue and the following shall apply:

(a) if after such a meeting, the issue has not been resolved or if a Party does not forthwith meet to discuss the issue, the issue shall be referred to an Independent Expert pursuant to the provisions of Article 12, in which case Closing shall be delayed until after the decision of the Independent Expert has been rendered, subject to the remainder of this clause 8.4;

(b) if, based on the Independent Expert's decision, the cumulative amount by which the value of all the Title Defect Affected Assets has been reduced is equal to or less than the adjustment threshold provided in clause 8.3(b)(i), the Parties shall proceed to close the Transaction on the third (3rd) Business Day after the decision of the Independent Expert has been rendered and given to both Parties, without an adjustment to the Consideration on account of such Material Title Defects; or

     (c)  if, based on the Independent Expert's decision, the cumulative amount
          by which the value of all the Title Defect Affected Assets has been
          reduced is greater than the termination threshold described in clause
          8.3(b)(ii), either Party may elect termination as provided by this
          Agreement upon written notice to the other Party delivered within
          three (3) Business Days after the decision of the Independent Expert
          has been rendered and given to both Parties, in which case the Parties
          shall thereupon be discharged from all further obligations hereunder,
          except for those arising under Article 10, provided, however, that
          failure by the Purchaser to elect in writing to terminate this
          Agreement within the time period set out in this subclause (3) above
          shall be deemed to be an election by the Purchaser to complete the
          Transaction in accordance with the reduction in price mechanism
          prescribed in subclause 8.3(b)(ii), such that the Parties shall
          proceed to Closing on the fifth (5th) Business Day after the decision
          of the Independent Expert has been rendered and given to both Parties,
          with the Consideration being adjusted by taking into account the
          findings of the Independent Expert.

8.5              NOTICE OF ENVIRONMENTAL DEFECTS

If  the  Purchaser becomes aware of any Environmental Defects as a result of its
inspection of the Assets, then the following shall apply:

     (a)  no later than ten (10) Business Days after it has first come to the
          Purchaser's attention but no later than five (5) Business Days prior
          to the Closing Time, the Purchaser shall notify the Vendor in writing
          of the Environmental Defects; and

     (b)  such notice shall include a description of each Environmental Defect
          in reasonable detail, the Assets directly and adversely affected
          thereby (the "ENVIRONMENTAL DEFECT AFFECTED ASSET"), and, in the case
          of each Material Environmental Defect, the bona fide value allocated
          by the Purchaser acting reasonably, by which the value of each
          Environmental Defect Affected Asset has, in the Purchaser's opinion,
          acting reasonably and in good faith, been reduced by such Material
          Environmental Defect, taking into account only the reasonable
          requirements for the remedying thereof.

8.6              RECTIFICATION OF MATERIAL ENVIRONMENTAL DEFECTS

     (a)  Prior to the Closing Time, the Vendor shall use reasonable commercial
          efforts to cure or rectify all the Environmental Defects of which the
          Purchaser gives notice pursuant to clause 8.5,or of which Vendor
          otherwise has knowledge, however, priority shall be given to Material
          Environmental Defects.

     (b)  If any Material Environmental Defect described in the Purchaser's
          notice is not cured or removed to the Purchaser's reasonable
          satisfaction within three (3) Business Days prior to the Closing Time,
          the following shall apply:

          (i)  if the aggregate amount by which the value of all of the
               Environmental Defect Affected Assets has been reduced by such
               Material Environmental Defects is, in the Purchaser's opinion,
               acting reasonably and in good faith, two hundred and fifty
               thousand Dollars ($250,000.00) or less, the Purchaser shall be
               deemed to waive permanently such uncured Material Environmental
               Defects and shall complete the Transaction without an adjustment
               to the Consideration on account of such Material Environmental
               Defects and the Purchaser shall be deemed to have accepted and
               waived all Environmental Defects for the purpose of this clause
               8.6 and clause 9.2; or

(ii) if the aggregate amount by which the value of all of the Environmental Defect Affected Assets has been reduced by such Material Environmental Defects is, in the Purchaser's opinion, acting reasonably and in good faith, more than two hundred and fifty thousand Dollars ($250,000.00), either Party may elect, subject to clause 8.7, by notice in writing delivered to the other Party prior to the Closing Time, to terminate this Agreement, in which case the Parties shall thereupon be discharged from further obligations hereunder, except for those arising under Article 10. If no Party elects to terminate this Agreement in accordance with this clause prior to the Closing Time then, subject to clause 8.7, the Parties will proceed to Closing with the Consideration adjusted accordingly and the Purchaser shall be deemed to have waived all Environmental Defects.

8.7 VALUE DISPUTES FOR UNCURED MATERIAL ENVIRONMENTAL DEFECTS

In determining any reduction in value of the Environmental Defect Affected Assets due to uncured Material Environmental Defects, it is the intent of the Parties to include, when reasonably possible, only those Assets directly and adversely affected by the uncured Material Environmental Defect. If the Vendor disagrees with (i) the value allocated by the Purchaser to any of the Environmental Defect Affected Assets, (ii) the Purchaser's statement of the value by which an Environmental Defect Affected Asset has been reduced by a Material Environmental Defect, or (iii) the validity of a Material Environmental Defect; or in the instance that the amount by which the value of the Environmental Defect Affected Assets has been reduced, as allocated by the Purchaser, is equal to or greater than one of the adjustment or termination thresholds provided in clause 8.6 if the Vendor believes such amount, (if any) by which the value has been reduced is less than such adjustment or termination threshold, the Parties shall promptly meet to discuss in good faith the issue and the following shall apply:

(a) if after such a meeting, the issue has not been resolved or if a Party does not forthwith meet to discuss the issue, the issue shall be referred to an Independent Expert pursuant to the provisions of Article 12, in which case Closing shall be delayed until after the decision of the Independent Expert has been rendered, subject to the remainder of this clause 8.7;

(b) if, based on the Independent Expert's decision, the cumulative amount by which the value of all the Environmental Defect Affected Assets has been reduced is equal to or less than the adjustment threshold provided in clause 8.6(b)(i), the Parties shall proceed to close the Transaction on the third (3rd) Business Day after the decision of the Independent Expert has been rendered and given to both Parties, without an adjustment to the Consideration on account of such Material Environmental Defects; or

(c) if, based on the Independent Expert's decision, the cumulative amount by which the value of all the Environmental Defect Affected Assets has been reduced is greater than the termination threshold described in clause 8.6(b)(ii), either Party may elect termination as provided by this Agreement upon written notice to the other Party delivered within three (3) Business Days after the decision of the Independent Expert has been rendered and given to both Parties, in which case the Parties shall thereupon be discharged from all further obligations hereunder, except for those arising under Article 10, provided, however, that failure by the Purchaser to elect in writing to terminate this Agreement within the time period set out in this subclause (c) above shall be deemed to be an election by the Purchaser to complete the Transaction in accordance with the reduction in price mechanism prescribed in subclause 8.6(b)(ii), such that the Parties shall proceed to Closing on the fifth (5th) Business Day after the decision of the Independent Expert has been rendered and given to both Parties, with the Consideration being adjusted by taking into account the findings of the Independent Expert.

ARTICLE 9
REPRESENTATIONS AND WARRANTIES

9.1 REPRESENTATIONS AND WARRANTIES OF THE VENDOR REGARDING THE VENDOR

Each Vendor represents and warrants to the Purchaser that as of the date of this Agreement and as at the Closing Time, and subject to the satisfaction of the Conditions Precedent (as applicable), by reference to the facts and circumstances then existing:

(a) it is a corporation duly organized and validly existing under the laws of the Commonwealth of Australia, is authorized to carry on business in the State in which the Lands are located, and now has good right, full power and absolute authority to sell and convey its interest in and to the Assets to the Purchaser according to the true intent and meaning of this Agreement;

(b) the execution, delivery and the performance of this Agreement has been duly and validly authorized by any and all requisite corporate, shareholders' and directors' actions and will not result in any violation of, be in conflict with or constitute a default under any articles, charter, bylaw or other governing document to which the Vendor is bound;

(c) the execution, delivery and performance of this Agreement, will not result in any violation of, be in conflict with or constitute a default under any term or provision of any agreement or document to which it is party or by which it is bound, nor under any Applicable Law;

(d) this Agreement and any other agreements delivered in connection herewith constitute valid and binding obligations of the Vendor enforceable against it in accordance with their terms subject to the availability of equitable remedies and to laws and regulations relating to bankruptcy and creditor's rights;

(e) other than the Approvals, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body exercising jurisdiction over the Assets, or the Vendor is required for the due execution, delivery and performance by it of this Agreement, other than authorizations, approvals or exemptions from requirement therefore, previously obtained and currently in force; and

(f) it has not incurred any obligation or liability, contingent or otherwise, for brokers' or finders' fees in respect of this Agreement, the Transaction or any matter for which the Purchaser shall have any obligation or liability.

9.2 REPRESENTATIONS AND WARRANTIES OF THE VENDOR REGARDING THE ASSETS

Each Vendor represents and warrants to the Purchaser that as of the date of this Agreement and as at the Closing Time, by reference to the facts and circumstances then existing:

(a) each of PL18, PL40 and PL280 has not been amended or modified and is in full force and effect and, to the Vendor's knowledge, no party thereto is in default thereunder;

(b) no Person has made or, to the knowledge of the Vendor, is threatening to make, any Claim challenging the validity or enforceability of its interest in each of PL18, PL40 and PL280;

(c) it has been paid all amounts due to it and borne all material expenses payable by it under each of PL18, PL40 and PL280 in accordance with its terms and in proportion to the Petroleum and Natural Gas Rights;

(d) it has not subjected PL18, PL40 or PL280 to any Encumbrance other than the Permitted Encumbrances and is not obligated to pay a share of any costs arising under each of PL18, PL40 or PL280 that is disproportionate to the Petroleum and Natural Gas Rights;

(e) subject to the Permitted Encumbrances, it has not:

(i) alienated or encumbered the Assets or any part or portion thereof, or

(ii) committed or is aware of there having been committed any act or omission whereby its interest in and to the Assets or any part or portion thereof may be cancelled, reduced or terminated;

(f) subject to the Permitted Encumbrances, the Assets are free and clear of all Encumbrances created by, through or under it or of which it has knowledge;

(g) it has not received notice from any Third Party claiming an interest in and to any of the Assets adverse to the interest of the Vendor and it has no reason to believe that any such claim may be made;

(h) it has not received notice of default and it is not in any default under any obligation, agreement, document, order, writ, injunction or decree of any court or of any commission or administrative agency, which might result in impairment or loss of its interest in and to any of the Assets or any impairment to or restrictions on the use and enjoyment of any of the Assets after Closing;

(i) no Claim has been commenced against it or, to its knowledge, has been threatened against it or any Third Party, which might result in material impairment or loss of its interest in and to any of the Assets or the use and enjoyment thereof or which might otherwise materially and adversely affect any of the Assets (including the value thereof) or any rights to, and rights to enter upon, use or occupy the surface of any Lands; nor is it aware of any fact or circumstance that could reasonably be expected to give rise to such a Claim;

(j) all amounts due and payable to Third Parties or its Affiliates prior to the date hereof and pertaining to any of the Assets have been fully paid, including (i) all royalties, (ii) any and all ad valorem and property taxes, and (iii) any and all production, severance and similar taxes, charges and assessments based upon or measured by the ownership or production of the Leased Substances or any of them or the receipt of proceeds therefore; provided however, in the case of any and all amounts due and payable prior to the time it first acquired an interest in and to any of the Assets to which such amounts pertain, provided that, in respect of any of the Assets that are not operated by it, it makes this representation and warranty only based upon its knowledge;

(k) in respect of any of the Assets, except in connection with the AFEs, it has no financial commitments which are (individually) in excess of ten thousand Dollars ($10,000.00) or in the aggregate in excess of fifty thousand Dollars ($50,000.00) and which are due as of the date hereof or which may become due after the date hereof by virtue of matters occurring or arising prior to the date hereof, other than usual operating expenses incurred in the normal conduct of operations;

(l) in respect of any of the Assets that are operated by it, it holds all valid Permits and similar rights and privileges, and, in respect of any of the Assets that are operated by Third Parties, it has not received written notice, nor is it aware that, such Third Parties do not hold all valid Permits and similar rights and privileges, that are required under Applicable Law to operate any of the Assets as presently operated;

(m) in respect of any of the Assets that are operated by it, any and all of its operations on or in respect of any of the Assets have been, and, in respect of any of the Assets that are operated by Third Parties, it has not received written notice that such operations by Third Parties have not been, conducted in accordance, in all material respects, with good oil and gas industry practices and in material compliance with all Applicable Laws;

(n) the Tangibles operated by it are, and, in respect of the Tangibles operated by Third Parties, to its knowledge are, in good and operable condition, reasonable wear and tear excepted;

(o) it has not received and is not aware of:

(i) any orders or directives from any Governmental Authority having jurisdiction which relate to Environmental Liabilities and which require any work, repairs, construction or capital expenditures with respect to any of the Assets, where such orders or directives have not been complied with in all material respects;

(ii) any demand or notice issued with respect to the breach of any Applicable Law or any other Claim relating to the Environment, Environmental Liabilities, health or safety applicable to any of the Assets, including respecting the use, storage, treatment, transportation or disposition of environmental contaminants or the abandonment or reclamation of any Wells, Facilities or Lands, which demand or notice remains outstanding on the date hereof;

(iii) written notice that there has been any releases, deposits or discharges, in violation of Applicable Law, of any hazardous or toxic substances, contaminants or wastes into the Environment in respect of any of any of the Assets or the operation thereof of that have not been rectified in all material respects;

(iv) any releases, deposits or discharges, in violation of Applicable Law, of any hazardous or toxic substances, contaminants or wastes into the Environment which if known to any Governmental Authority could reasonably be expected to lead to any order, directive, demand or notice described in clause9.2(o)(i), (ii) or (iii) above, that have not been rectified, remedied or abated in all material respects;

(p) it has no Take or Pay Obligations in respect of the Assets;

(q) it has not received nor delivered any written notices, nor is it aware of, any material breach of or material default under or alleged material breach of or material default under of any provisions of any Petroleum Tenure or any of the agreements included in the Miscellaneous Interests;

(r) subject to Permitted Encumbrances and the satisfaction by the Purchaser after Closing of all of the obligations accruing after Closing required to maintain the Petroleum Tenures in good standing, after Closing the Purchaser will have the right to hold and enjoy the Assets for the residue of their respective terms and all renewals or extensions thereof for the Purchaser's own use and benefit, without any lawful interruption of or by the Vendor or any Person claiming or able to claim by, through or under the Vendor;

(s) to its knowledge, (i) the Assets are not bound by or comprised of any contract or other arrangement for the sale, gathering, processing, treating, storage, balancing, compression, transmission, transportation, injection or subsurface disposal, fractionation of, or the provision of any similar services in respect of, any (A) Petroleum Substances, (B) construction, ownership and operating agreements, (C) agreements for the use of wellbores, or (D) agreements for the contract operation of any Wells or Tangibles by a Third Party or any custom usage of the Facilities or other Tangibles by a Third Party; and (ii) it is not a party to any such contract or arrangement for which it is liable; except for, in each case of (i) and (ii) above, any agreements or arrangements identified in a Schedule, including the Assumed Contracts, or contracts or arrangements which are terminable without penalty on 31 days or less notice;

(t) other than as identified in Schedule "B" under the heading "Leased Tangibles", none of the Tangibles are leased or rented;

(u) all material information in its possession and control that pertains to the Assets or the condition or operation thereof, including records, files and documents relating to any of the Assets, Petroleum Tenures, Assumed Contracts, AFEs and all other material agreements, instruments and other documents included in the Miscellaneous Interests or identified in a Schedule has been or will be made available for review by the Purchaser or its Representatives on or prior to Closing;

(v) to the extent that another Person was disposing of its share of production from or allocated to any of the Assets prior to the date hereof, to its knowledge;

(i) it has been receiving its share of the proceeds from the disposition of such production from or allocated to such Assets; and

(ii) no Person other than the Vendor has claimed any entitlement to such proceeds;

(w) to its knowledge each Well for which it was or is the operator has been drilled by the Vendor and, if completed, completed and operated by the Vendor, in all material respects, in accordance with generally accepted oil and gas field practices and the material requirements of the Applicable Laws as they existed at the relevant time;

(x) other than the Wells described in Schedule "A", to its knowledge there are no wells located on the Lands for which the Purchaser will assume any liability by virtue of the completion of this Transaction;

(y) to its knowledge each Well that has been abandoned has been plugged and abandoned by the Vendor, and the wellsite therefore properly restored, in all material respects, in accordance with generally accepted oil and gas field practices and the material requirements of the Applicable Laws as they existed at the relevant time;

(z) to its knowledge the Tangibles have been constructed, installed, maintained and operated, in all material respects, in accordance with generally accepted oil and gas field practices and the material requirements of the Applicable Laws as they existed at the relevant time; and

(aa) as of the date hereof, to the Vendor's knowledge, no royalty or joint venture audits have been demanded or are underway pursuant to the Petroleum Tenures in respect of any of the Assets.

9.3 APPLICATION OF WARRANTIES

Each of the Warranties:

(a) is separate and independent and not limited or restricted by any other Warranty; and

(b) continues in full force after Closing.

9.4 QUALIFICATIONS TO WARRANTIES

The Warranties are qualified by, and the Purchaser and any Affiliate of the Purchaser may not make any Warranty Claim for, anything:

(a) fairly disclosed in this Agreement or the Disclosure Letter; or

(b) the Purchaser has actual knowledge of before entering in this Agreement.

9.5 EXCLUSION OF OTHER REPRESENTATIONS AND WARRANTIES

Except as expressly stated in the Warranties, the Vendor give no representations or warranties whatever about anything including:

(a) future matters, including the future value or performance of the Assets; or

(b) the accuracy or completeness of any information provided to the Purchaser about the Assets.

     (a)  the Warranties are the only representations and warranties the Vendor
          has given;

     (b)  the Warranties are the only representations and warranties the
          Purchaser has relied on in entering into this Agreement;

     (c)  before entering into this Agreement, it did not know of anything that
          was likely to result in a Warranty Claim.

9.7              NOTICE OF WARRANTY CLAIMS

     (a)  The Purchaser must give the Vendor written notice of a Warranty Claim
          or anything the Purchaser becomes aware of that is reasonably likely
          to result in a Warranty Claim (including any Third Party Claim) (a
          "WARRANTY CLAIM NOTICE").

     (b)  A Warranty Claim Notice must include reasonable details of the
          Warranty Claim (to the extent known by the Purchaser) including:

          (i)  the nature of the Warranty Claim;

          (ii) the circumstances resulting in the Warranty Claim;

          (iii) whether the Warranty Claim involves a Third Party Claim; and

          (iv) a bona fide estimate of the likely amount of the Warranty Claim
               and the basis for that estimate.

9.8              MITIGATION

Without limiting the Purchaser's obligations at law or the Vendor's rights under clause 15.14, the Purchaser must take reasonable steps to minimise the Losses and Liabilities incurred by it or any Affiliate of it in connection with anything that is reasonably likely to result in a Warranty Claim.

9.9 TIME LIMITS FOR WARRANTY CLAIM NOTICES AND WARRANTY CLAIMS

The Vendor will not be liable for any Warranty Claim unless they receive a Warranty Claim Notice for the Warranty Claim within twelve (12) months after the Closing Date.

9.10 LOWER LIMITS FOR WARRANTY CLAIMS

The Vendor will not be liable for a Warranty Claim unless:

(a) the amount of the Warranty Claim is more than ten thousand Dollars ($10,000.00); and

(b) the aggregate amount of all Warranty Claims more than ten thousand Dollars ($10,000.00) exceeds fifty thousand Dollars ($50,000.00);

in which case the Vendor will be liable only for the excess amount.

9.11 UPPER LIMIT FOR WARRANTY CLAIMS

The Vendor's maximum, total, aggregate and combined liability for Warranty Claims, and all other Claims under this Agreement, is limited to three million Dollars ($3,000,000.00).

9.12 OTHER LIMITS

The Vendor will not be liable for a Warranty Claim to the extent that:

(a) it results from any voluntary act, omission, arrangement or transaction of the Purchaser or any Related Party of the Purchaser after Closing;

(b) anything causing the Warranty Claim is remediable and is remedied by the Vendor within ninety (90) days after the Vendor receives the Warranty Claim Notice for that Warranty Claim;

(c) anything causing the Warranty Claim entitles the Purchaser or any Affiliate of the Purchaser to any, and the Purchaser or such Affiliate of the Purchaser actually recovers any:

(i) tax allowance, credit, deduction, exemption, rebate, relief or set-off;

(ii) compensation or indemnification under any insurance policy;

(iii) recovery under any Third Party Claim; or

(iv) other credit, recovery or benefit; or

(d) it results from any change (whether applying retrospectively or not) after Closing to any Applicable Law.

9.13 RECOVERY ONCE

The Purchaser and any Related Parties of the Purchaser may not recover from the Vendor more than once for anything causing any Warranty Claim; provided that this clause shall not be construed as a waiver by the Purchaser of a continuing breach by the Vendor.

9.14 REIMBURSEMENT IF SUBSEQUENT RECOVERY FROM THIRD PARTIES

If the Purchaser or any Related Parties of the Purchaser receive any payment from or on behalf of the Vendor for any Warranty Claim ("VENDOR PAYMENT") and the Purchaser or any Related Parties of the Purchaser subsequently recover any amount from any Third Party (including under a Third Party Claim) for anything causing that Warranty Claim ("RECOVERED AMOUNT"), the Purchaser must promptly:

(a) notify the Vendor of the Recovered Amount; and

(b) pay the Vendor an amount equal to the lesser of:

(i) the Recovered Amount less any reasonable costs and expenses incurred by the Purchaser or any Related Parties of the Purchaser (as the case may be) in making that recovery; and

(ii) the Vendor Payment.

9.15 REDUCTION IN CONSIDERATION

Any payment by the Vendor for a Warranty Claim will be treated as a reduction in the Consideration.

9.16 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Vendor that as of the date of this Agreement and as at the Closing Time, by reference to the facts and circumstances then existing:

(a) the Purchaser is a corporation duly organized and validly existing under the laws of Australia,

(b) the Purchaser, is or by the Closing Time will be authorized to carry on business in the State in which the Lands are located, and now has or by the Closing Time will have good right, full power and absolute authority to purchase the Assets according to the true intent and meaning of this Agreement;

(c) the execution, delivery and performance of this Agreement has been duly and validly authorized by any and all requisite corporate, shareholders' and directors' actions and will not result in any violation of, be in conflict with or constitute a default under any articles, charter, bylaw or other governing document to which the Purchaser is bound;

(d) the execution, delivery and performance of this Agreement will not result in any violation of, be in conflict with or constitute a default under any term or provision of any agreement or document to which the Purchaser is party or by which the Purchaser is bound, nor under any Applicable Law;

(e) this Agreement has been duly executed and delivered by the Purchaser;

(f) this Agreement and any other agreements delivered in connection herewith constitute valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance with their terms subject to the availability of equitable remedies and to laws and regulations relating to bankruptcy and creditor's rights;

(g) other than the Approvals, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority exercising jurisdiction over any of the Assets is required for the due execution, delivery and performance by the Purchaser of this Agreement, other than authorizations, approvals or exemptions from requirement therefore, previously obtained and currently in force; and

(h) the Purchaser has not incurred any obligation or liability, contingent or otherwise, for brokers' or finders' fees in respect of this Agreement or the transaction to be effected by it for which the Vendor shall have any obligation or liability.

ARTICLE 10
CONFIDENTIALITY

10.1 CONFIDENTIAL INFORMATION

Until Closing has occurred, the Purchaser shall keep confidential all information respecting the Assets obtained from the Vendor. Such confidential information respecting the Assets shall be used only for the purposes of this acquisition and disclosed only to those of its Representatives with a need to know such information in connection with the Transaction. In addition, any information obtained by the Purchaser as a result of such access which does not relate to the Assets shall continue to be treated as confidential and shall not be used by the Purchaser without the prior written consent of the Vendor, which may be withheld in the Vendor's sole discretion. The foregoing restrictions on disclosure and use of information shall not apply to information, to the extent that the Purchaser can show by documentary evidence that such information is:

(a) publicly available through no act or omission of the Purchaser or its Representatives;

(b) subsequently obtained lawfully from a Third Party who is not bound to the Vendor to restrict the use or disclosure of such information;

(c) already in the Purchaser's possession at the time of disclosure, without any restriction on its disclosure; or

(d) required to be disclosed pursuant to Applicable Law or by the direction of any Governmental Authority having jurisdiction or the rules of any stock exchange.

Specific items of information shall not be considered to be in the public domain merely because more general information respecting the Assets is in the public domain.

10.2 ACCESS BY REPRESENTATIVES

The Purchaser shall be responsible to the Vendor for ensuring that its Representatives comply with the restrictions on the use and disclosure of the information set forth in clause 10.1, and the Purchaser shall be liable to the Vendor for any and all damages, costs and expenses that the Vendor may suffer or incur as a result of any unauthorized use or disclosure of such confidential information by such Representatives of the Purchaser.

10.3 RETURN OF DOCUMENTS

Other than any of the following that are required or desirable to pursue a potential Claim under this Agreement, if Closing does not occur and this Agreement is terminated, the Purchaser shall ensure that all documents, working papers and other written material obtained from the Vendor in connection with this Agreement are returned to the Vendor forthwith. In addition, all copies of such information, whether electronic or hard copies, and all documents prepared by the Purchaser and its Representatives containing such information shall be destroyed and, if requested by the Vendor, an officer of the Purchaser shall provide a certificate, in form and content reasonably satisfactory to the Vendor, confirming that all such documents and copies have been returned to the Vendor or destroyed.

ARTICLE 11
LIABILITIES AND INDEMNITIES

11.1 VENDOR'S INDEMNITIES

Except to the extent any Claim arises out of or relates to events or circumstances which would constitute a breach of a representation, warranty or covenant of the Purchaser under this Agreement for which the Purchaser would be liable to indemnify the Vendor pursuant to clause11.2 and subject to the qualifications and limitations in clauses 9.7 to 9.14 (which are to be read as if a reference to a 'Warranty Claim' were a reference to a Claim by the Purchaser against the Vendor (or either of them) under this clause 11.1), 11.2 and 11.3, from and after Closing, the Vendor shall be liable for and, as an independent covenant, shall indemnify, defend and save harmless the Purchaser and its Related Parties from and against any and all Purchaser's Losses that any of them may suffer, sustain, pay or incur and all Claims made against the Purchaser or any of its Related Parties, in each case, to the extent caused by or arising out of or resulting from (i) breaches of the representations or warranties made by the Vendor in clause 9.1 and 9.2; or (ii) breaches of covenants made by the Vendor in this Agreement.

11.2             PURCHASER'S INDEMNITIES

     (a)  Except to the extent any Claim arises out of or relates to events or
          circumstances which constitute a breach of a representation, warranty
          or covenant of the Vendor under this Agreement for which the Vendor
          would be liable to indemnify the Purchaser pursuant to clause 11.1
          and, subject to clauses 11.1 and 11.3, from and after Closing, the
          Purchaser shall be liable for and, as an independent covenant, shall
          indemnify, defend and save harmless the Vendor and its Related Parties
          from and against any and all Vendor's Losses that any of them may
          suffer, sustain, pay or incur and all Claims made against the Vendor
          or any of its Related Parties, in each case, to the extent:

(i) subject to clause 9.3, caused by or arising out of or resulting from breaches of the representations or warranties made by the Purchaser in clause 9.16, for which written notice of such Losses and Liabilities or Claims with reasonable particulars shall have been provided by the Vendor to the Purchaser within twelve (12) months from the Closing Time;

(ii) caused by or arising out of or resulting from breaches of covenants made by the Purchaser in this Agreement;

(iii) caused by or arising out of the ownership or operation of the Assets by the Purchaser from and after the Closing Time;

(iv) arising out of the Vendor holding title (registered or otherwise) to any of the Assets after Closing in accordance with the terms of this Agreement, which relate to events or circumstances occurring after Closing; and

(v) caused by or arising out of or resulting from all Environmental Liabilities, however and by whomsoever caused, and whether such Environmental Liabilities occur or arise in whole or in part prior to, at or subsequent to the Closing Time. The Purchaser shall not be entitled to exercise and hereby waives any rights or remedies the Purchaser may now or in the future have against the Vendor in respect of such Environmental Liabilities, whether such rights and remedies are pursuant to the common law or statute or otherwise, including the right to name the Vendor as a third party to any action commenced by any Third Party against the Purchaser.

(b) From and after Closing, the Purchaser shall see to the timely performance of all Abandonment and Reclamation Obligations pertaining to the Assets. Subject to clauses 11.1 and 11.3, the Purchaser shall be liable to the Vendor for and shall, in addition, indemnify the Vendor and its Related Parties from and against, all Losses and Liabilities suffered, sustained, paid or incurred by any of them should the Purchaser fail to timely perform such obligations.

11.3 INDEMNIFICATION ACTIONS

For purposes of this clause 11.3, the term "INDEMNIFYING PERSON" when used in connection with particular Losses and Liabilities shall mean the Person having an obligation to indemnify another Person or Persons with respect to such Losses and Liabilities pursuant to clauses 8.1(a), 11.1 and 11.2, and the term "INDEMNIFIED PERSON" when used in connection with particular Losses and Liabilities shall mean a Person having the right to be indemnified with respect to such Losses and Liabilities pursuant to clauses 8.1, 11.1 and 11.2. All claims for indemnification under clauses 8.1(a), 11.1 and 11.2 shall be asserted and resolved as follows:

(a) to make a claim for indemnification under clauses8.1(a), 11.1 and 11.2, an Indemnified Person shall notify the Indemnifying Person of its claim, including specific details of and specific basis under this Agreement for its claim (the "CLAIM NOTICE"). If the claim for indemnification is based upon a claim by a Third Party against the Indemnified Person (a "THIRD PARTY CLAIM"), the Indemnified Person shall provide its Claim Notice promptly after the Indemnified Person has actual knowledge of the Third Party Claim and shall enclose a copy of all papers (if any) served with respect to the Third Party Claim; provided that the failure of any Indemnified Person to give notice of a Third Party Claim as provided in this clause 11.3 shall not relieve the Indemnifying Person of its obligations under clauses8.1(a), 11.1 and 11.2 except to the extent such failure materially prejudices the Indemnifying Person's ability to defend against the Third Party Claim;

(b) in the case of a claim for indemnification based upon a Third Party Claim, the Indemnifying Person shall have thirty (30) days from its receipt of the Claim Notice to notify the Indemnified Person whether it admits or denies its obligation to defend the Indemnified Person against such Claim under this Article. If the Indemnifying Person does not notify the Indemnified Person within such thirty (30) day period regarding whether the Indemnifying Person admits or denies its obligation to defend the Indemnified Person, the Losses and Liabilities for which the Indemnified Person is seeking indemnity shall be conclusively deemed a liability of the Indemnifying Person hereunder. The Indemnified Person is authorized, prior to and during such thirty (30) day period, to file any motion, answer or other pleading that it shall deem necessary or appropriate to protect its interests or those of the Indemnifying Person and that is not prejudicial to the Indemnifying Person;

(c) if the Indemnifying Person admits its obligation to indemnify the Indemnified Person, it shall have the right and obligation to diligently defend, at its sole cost and expense, the Third Party Claim. The Indemnifying Person shall have full control of such defence and proceedings, including any compromise or settlement thereof. If requested by the Indemnifying Person, the Indemnified Person agrees to cooperate in contesting any Third Party Claim which the Indemnifying Person elects to contest (provided, however, that the Indemnified Person shall not be required to bring any counterclaim or cross-complaint against any Person). The Indemnified Person may participate in, but not control, any defence or settlement of any Third Party Claim controlled by the Indemnifying Person pursuant to this subclause (c). An Indemnifying Person shall not, without the written consent of the Indemnified Person, such consent not to be unreasonably withheld, settle any Third Party Claim or consent to the entry of any judgment with respect thereto that (i) does not result in a final resolution of the Indemnified Person's liability with respect to the Third Party Claim (including, in the case of a settlement, an unconditional written release of the Indemnified Person from all liability in respect of such Third Party Claim) or (ii) may materially and adversely affect the Indemnified Person (other than as a result of money damages covered by the indemnity);

(d) if the Indemnifying Person does not admit its obligation to indemnify the Indemnified Person or admits its obligation but fails to diligently defend or settle the Third Party Claim, the Indemnified Person shall have the right to defend against the Third Party Claim (at the sole cost and expense of the Indemnifying Person, if the Indemnified Person is entitled to indemnification hereunder), with counsel of the Indemnified Person's choosing, subject to the right of the Indemnifying Person to admit its obligation to indemnify the Indemnified Person and assume the defence of the Third Party Claim at any time prior to settlement or final determination thereof. If the Indemnifying Person has not yet admitted its obligation to indemnify the Indemnified Person, the Indemnified Person shall send written notice to the Indemnifying Person of any proposed settlement and the Indemnifying Person shall have the option for ten (10) days following receipt of such notice to (i) admit in writing its obligation for indemnification with respect to such Third Party Claim and (ii) if its obligation is so admitted, assume the defence of the Third Party Claim, including the power to reject the proposed settlement. If the Indemnified Person settles any Third Party Claim over the objection of the Indemnifying Person after the Indemnifying Person has timely admitted its obligation for indemnification in writing and assumed the defence of the Third Party Claim, the Indemnified Person shall be deemed to have waived any right to indemnity therefore; and

(e) in the case of a claim for indemnification not based upon a Third Party Claim, the Indemnifying Person shall have thirty (30) days from its receipt of the Claim Notice to (i) cure the Losses and Liabilities complained of, (ii) admit its obligation to indemnify the Indemnified Person for such Losses and Liabilities or (iii) dispute the Indemnified Person's claim for such Losses and Liabilities. If the Indemnifying Person does not notify the Indemnified Person within such thirty (30) day period that it has cured the Losses and Liabilities or that it disputes the claim for such Losses and Liabilities, the amount of such Losses and Liabilities shall conclusively be deemed an obligation of the Indemnifying Person hereunder.

11.4 SUBROGATION

If a Party indemnifies another Party or any of its Related Parties for Losses and Liabilities pursuant to this Agreement, the indemnifying Party shall be subrogated to all rights of the other Party and its Related Parties to recover such Losses and Liabilities from any Third Party.

11.5 STATUTES OF LIMITATIONS

Unless otherwise expressly specified in this Agreement, any Claim may be made and enforceable by a Party pursuant to or based in any way upon a representation, warranty, covenant or indemnity in this Agreement at any time until the expiration of all applicable statutes of limitations with respect to the matters covered thereby.

                                   ARTICLE 12
                       INDEPENDENT EXPERT DETERMINATIONS

12.1             DISPUTE RESOLUTION PROCEDURE

     (a)  Any disputed matter referred to the Independent Expert must be
          resolved in accordance with the procedures set out in this clause.

     (b)  The disputed matters must be referred to the Independent Expert by
          written submission which must include copies of relevant documentation
          relating to the dispute and reference to the relevant provisions of
          this Agreement.

     (c)  The Independent Expert must be instructed to finish his or her
          determination as soon as practicable and in any event no later than 10
          Business Days after his or her appointment (or other period agreed by
          the Vendor and the Purchaser).

     (d)  The Vendor and the Purchaser must promptly supply the Independent
          Expert with any information, assistance and cooperation requested in
          writing by the Independent Expert in connection with his or her
          determination. All correspondence between the Independent Expert and a
          Party must be copied to the other Parties.

     (e)  The Independent Expert will determine the procedures for settlement of
          the disputed matter.

     (f)  The Independent Expert shall act as an independent expert and not an
          arbitrator. The Independent Expert's decision will be conclusive,
          final and binding on the Parties (except in the case of manifest
          error).

(g) The costs of the Independent Accountant will be paid as determined by the Independent Expert, having regard to the relative position of the Parties on the disagreement.

13.2             GOING CONCERN AGREEMENT

     (a)  The Vendor and the Purchaser agree that the sale of the Assets under
          this Agreement constitutes the supply of a going concern for the
          purposes of the GST Act.

     (b)  Within 10 Business Days following execution of this Agreement, the
          Purchaser and the Vendor will jointly seek a private ruling from the
          relevant Governmental Authority that the supply of the Assets under
          this Agreement constitutes a supply of a going concern for GST
          purposes. The cost of obtaining such private ruling will be on account
          of the Purchaser.

13.3             VENDOR WILL CARRY ON ENTERPRISE

The Vendor undertakes that it will carry on the enterprise transferred under this Agreement until the day that the supply is made for the purposes of the GST Act.

13.4 PURCHASER REGISTRATION FOR GST

The Purchaser warrants that within a reasonable time following the execution of this Agreement it will register for GST purposes and that it will be registered for GST purposes prior to Closing. The Purchaser will provide written evidence of its GST registration to the Vendor as soon as practicable after such registration is obtained. If the Purchaser does not provide evidence of registration as required, the Vendor may elect to treat the supply of the Assets as a taxable supply and accordingly the Purchaser must pay the GST Amount (calculated under clause 13.5) to the Vendor on the Closing Date.

13.5 GST GROSS UP

If notwithstanding clause 13.2, the applicable Governmental Authority determines that the Vendor is liable to pay GST on a supply made under or in connection with this Agreement:

(a) the Purchaser must pay to the Vendor in addition to the Consideration and any other consideration to be provided by the Purchaser to the Vendor for that supply under this Agreement ('GST exclusive consideration'), an amount equal to the GST exclusive consideration multiplied by the prevailing rate of GST ('GST Amount');

(b) in addition to the GST Amount, the Purchaser must pay to the Vendor an amount equal to any interest, fines, penalties and additional tax payable by the Vendor as a result of the supply of the Property being incorrectly treated as a supply of a going concern or otherwise resulting from the GST payable on the supply being paid late or the GST Amount being paid late;

(c) the GST Amount and any amount payable under clause 13.5(b) must be paid by the Purchaser to the Vendor within two (2) Business Days of the Vendor issuing a tax invoice to the Purchaser for the relevant taxable supply, except where the GST Amount is payable on the Closing Date under clause 13.4; and

(d) it will not be a defence to any claim against the Purchaser pursuant to this clause 13.5 that the Vendor did not pay the GST on the supply when it fell due under the GST

Act.

13.6 REIMBURSEMENTS (NET DOWN)

If a payment to a Party under this clause 13 is a reimbursement or indemnification, calculated by reference to a loss, cost or expense incurred by that Party, then the payment will be reduced by the amount of any input tax credit to which that Party, or the representative member of the GST group of which either of the Vendor is a member, is entitled for that loss, cost or expense.

13.7 RIGHTS

Rights under this clause 13.7 continue after the Closing Date, whether or not other rights continue.

13.8 ADJUSTMENTS

If an adjustment event occurs in relation to a taxable supply made under or in connection with this Agreement then the consideration payable in respect of the supply shall also be adjusted as follows:

(a) if the adjustment event gives rise to an increase in the GST payable by the Vendor in relation to the supply, a payment equal to that increase will be made by the Purchaser to the Vendor; and

(b) if the adjustment event gives rise to a decrease in the GST payable by the Vendor in relation to the supply, a payment equal to that decrease will be made by the Vendor to the Purchaser.

Any payment that is required under this clause 13.8 will be made within five (5) Business Days of the issuing of an adjustment note or an amended tax invoice, as the case may be, by the Vendor. If the adjustment event gives rise to an adjustment, the Vendor must issue an adjustment note to the Purchaser as soon as the Vendor become aware of the adjustment event.

13.9 PETROLEUM RENT RESOURCES TAX

If the Petroleum Tenures transferred to the Purchaser are subject to PRRT and constitute Project Interests, then the Vendor agrees:

(a) at no cost of the Purchaser, that it will provide the Purchaser with all information relating to the four (4) year period prior to the Closing Time; and

(b) at the cost of the Purchaser, that it will use its reasonable endeavours to provide the Purchaser with all information relating to any time prior to the four (4) year period priorto the Closing Time;

in each case reasonably required by the Purchaser to allow it to calculate its Starting Base for the Petroleum Tenures, excluding information which may be subject to confidentiality obligations to a Third Party or the subject of legal professional privilege. Such information may include, but is not limited to, accounts (financial and management), tax returns, invoices, transaction listings, royalty returns and other contractual information relating to the period prior to Closing. The Vendor also agrees, at the cost of the Purchaser, to use its reasonable endeavours to assist the Purchaser to obtain such information that is not in the possession of the Vendor.

ARTICLE 14
STAMP DUTY

14.1 STAMP DUTY

Any stamp duty, duties or other taxes of a similar nature (including fines, penalties and interest and any increase in stamp duty which becomes payable as a result of the sale of the Assets not being a sale of a going concern) in connection with this Agreement or a transaction contemplated by this Agreement, must be paid by the Purchaser. The Purchaser must promptly attend to stamping of this agreement and all related documentation including all forms of transfer.

ARTICLE 15
MISCELLANEOUS

15.1 FURTHER ASSURANCES

At Closing and thereafter as may be necessary or desirable, and without further consideration, the Parties shall execute, acknowledge and deliver such other instruments and shall take such other action as may be reasonably necessary to carry out their respective obligations under this Agreement. Until the Purchaser is novated, with respect to the interest of the Vendor in and to the Assets, into the Petroleum Tenures and any other agreements and documents to which the Assets are subject, the Vendor shall act as the Purchaser's agent as the Purchaser reasonably and lawfully directs. The Purchaser shall be liable to the Vendor and shall, in addition, indemnify the Vendor from and against, all of the Vendor's Losses arising in connection with all acts or omissions of the Vendor in its capacity as agent of the Purchaser to the extent such acts and omissions were expressly or impliedly authorized by the Purchaser.

15.2 ACCESS TO RECORDS

For a period of not less thanseven (7)years after the Closing Time, the Purchaser shall allow the Vendor and its Representatives, to have access to the premises of the Purchaser during normal business hours of the Purchaser in order to inspect and take copies, at the Vendor's sole cost, of such information delivered by the Vendor to the Purchaser in accordance with this Agreement, if reasonably required by the Vendor, in connection with any joint venture audit, any potential or threatened legal or administrative proceeding by or against the Vendor in relation to the Assets, or to enable the Vendor to comply with a law or the requirement of any Governmental Authority. Nothing herein shall prevent the Vendor from making and retaining copies of any such documents at any time, provided that, if during such seven (7) year period the Purchaser intends to destroy any such information, the Purchaser shall provide the Vendor with notice of such intended destruction and shall provide the Vendor a reasonable opportunity (not to be less than ninety (90) days from the date of such notice) to copy, at the Vendor's sole cost, any such information which the Purchaser intends to destroy. The Vendor shall keep all such information and documents confidential.

15.3 JOINT AND SEVERAL LIABILITY

All obligations and liabilities of each Party comprising the "Vendor" (being BPL and DAPL), in respect of all covenants, representations, warranties, liabilities and obligations in this Agreement, shall be joint and several.

15.4 GOVERNING LAW

This Agreement shall be construed in accordance with the laws of the State of Queenslandand the Commonwealth laws of Australia applicable therein, without reference to any provision thereof which would refer the choice of law to the law of another jurisdiction. Subject to clause 12.1, the Parties irrevocably submit to the non-exclusive jurisdiction of the courts of the State of Queensland in respect of all matters under or relating to this Agreement or the Transaction.

15.5 TRANSFER OF OPERATORSHIP

The Vendor shall do all such commercially reasonable things as the Purchaser may request in order to assist the Purchaser to become the operator of those of the Assets which the Purchaser desires to operate and which the Vendor operates as of the Closing Time.

15.6 COSTS AND EXPENSES

Unless otherwise provided for in this Agreement, all fees, costs and expenses incurred in connection with the Transaction shall be paid by the Party incurring such cost or expense.

PURCHASER:                               BPL:
--------------------------------------------------------------------------------
Chelsea Oil Australia Pty Ltd            Brisbane Petroleum Ltd.
c/o Torys LLP
Suite 800                                Brisbane, Queensland
400-3rd  Avenue S.W.                     65 Burswood Road
Calgary, Alberta                         Burswood
T2P 4H2                                  Western Australia
Attention: Janan Paskaran                Attention: Lindsay Colless
Fax: (403) 776-3800                      Fax: 08 9227 8178

DAPL:                                    ACOR:

Delbaere Associates Pty. Limited         Australian-Canadian Oil Royalties Ltd.
23 Wallangra Road                        c/o Torys LLP
Dover Heights                            Suite 800
NSW 2030                                 400-3rd Avenue S.W.
Attention: Mauri Delbaere                Calgary, Alberta
Fax: 612 9388-1323                       T2P 4H2
                                         Attention: Janan Paskaran
                                         Fax: (403) 776-3800
--------------------------------------------------------------------------------

Each Party may from time to time change its address for service herein by giving written notice to the other Parties. Any notice, required or contemplated hereunder, may be given by personal service or by facsimile transmission. Any notice given by personal service or by facsimile transmission to a Party hereto shall be deemed to be given on the date of such delivery; provided that if such delivery occurs on a day that is not a Business Day, delivery will be deemed to have occurred on the next Business Day thereafter.

15.9 ENTIRE AGREEMENT

The provisions contained in any and all documents and agreements collateral hereto shall at all times be read subject to the provisions of this Agreement and, in the event of conflict, the provisions of this Agreement shall prevail. No amendments shall be made to this Agreement unless in writing, executed by the Parties. This Agreement supersedes all other agreements, documents, writings and verbal understandings among the Parties relating to the subject matter hereof and this Agreement expresses the entire agreement of the Parties with respect to the subject matter hereof.

15.10            ASSIGNMENT AND ENUREMENT

     (a)  Subject to subclause (b), this Agreement may not be assigned by a
          Party without the prior written consent of the other Party, which
          consent may be unreasonably and arbitrarily withheld.

     (b)  Notwithstanding subclause (a), after Closing, either Party may assign
          this Agreement to an Affiliate, provided that the assigning Party
          remains bound by this Agreement notwithstanding such assignment.

     (c)  This Agreement shall be binding upon and shall enure to the benefit of
          the Parties and their respective administrators, trustees, receivers,
          successors and permitted assigns.

15.11            ANNOUNCEMENTS

Except as may be required by Applicable Law or the rules of any stock exchange, neither Party will make any press release or other public disclosure of this Agreement or the Transaction without the prior consent of the other Party, not to be unreasonably withheld or delayed. The Parties will consult with each other on public disclosure with a view to joint disclosure where practicable or where required by Applicable Law or stock exchange rules.

15.12 NO MERGER

The covenants, representations, warranties and indemnities contained in this Agreement shall be deemed to be restated in any and all other documents conveying the interests of the Vendor in and to the Assets to the Purchaser, subject to any and all time and other limitations contained in this Agreement. There shall not be any merger of any covenant, representation, warranty or indemnity in such assignments, conveyances, transfers and other documents notwithstanding any rule of law, equity or statute to the contrary and such rules are hereby waived.

15.13 SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable, the invalidity, illegality or unenforceability will not affect any other provision of this Agreement and this Agreement will be construed as if the invalid, illegal or unenforceable provision had never been contained herein unless the deletion of the provision would result in such material change to cause the completion of the Transaction to be unreasonable.

15.14 WAIVER

No failure on the part of either Party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any right or remedy in law or in equity or by statute or otherwise conferred. No waiver of any provision of this Agreement, including this clause, shall be effective otherwise than by an instrument in writing dated subsequent to the date hereof, executed by a duly authorized representative of the Party making such waiver.

15.15 WAIVER OF SOVEREIGN IMMUNITY

Each Party consents generally to the issue of any process in connection with court or arbitration proceedings and to the giving of any type of relief or remedy against it, including the making, enforcement or execution against any of its property or assets (regardless of its or their use or intended use) of any order, judgment or arbitration award. Notwithstanding the foregoing sentence, to the extent that a Party hereto or any of its property or assets is or are entitled in any jurisdiction to any sovereign immunity from service of process or of other documents relating to court or arbitration proceedings, or to any sovereign immunity from jurisdiction, suit, judgment or arbitration award, execution, attachment (whether before judgment or arbitration award, in aid of execution or otherwise) or other legal process, this is irrevocably waived to the fullest extent permitted by the law of that jurisdiction. Each Party hereto also irrevocably agrees not to claim any such immunity for itself or its property or assets.

15.16 AMENDMENT

This Agreement shall not be varied in its terms or amended by oral agreement or by representations or otherwise other than by an instrument in writing dated subsequent to the date hereof, executed by a duly authorized representative of each Party.

15.17 COUNTERPART EXECUTION

This Agreement may be executed in counterpart and all executed counterparts together shall constitute one agreement. Signature pages from separate counterparts may be faxed and delivered by electronic means and may be combined to form a single counterpart. This Agreement shall not be binding upon any Party unless and until executed by all Parties.

IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first above written.

EXECUTED by BRISBANE PETROLEUM
LTD ACN 009 065 043 in accordance with
Section 127 of the Corporations Act 2001

/s/ Kin T. Tshin                            /s/ Mauri Delbaere
-----------------------------------------   ------------------------------------
Signature of director                       Signature of director/company
                                            secretary
                                            (Please delete as applicable)

Kin T. Tshin                                Mauri Delbaere
-----------------------------------------   ------------------------------------
Name of director (print)                    Name of director/company secretary
                                            (print)

EXECUTED by DELBAERE ASSOCIATES PTY. LIMITED ACN 003 197 939 in accordance with Section 127 of the Corporations Act 2001

/s/ Donna Delbaere                          /s/ Mauri Delbaere
-----------------------------------------   ------------------------------------
Signature of director                       Signature of director/company
                                            secretary
                                            (Please delete as applicable)

Donna Delbaere                              Mauri Delbaere
-----------------------------------------   ------------------------------------
Name of director (print)                    Name of director/company secretary
                                            (print)

EXECUTED by CHELSEA OIL AUSTRALIA PTY LTD in accordance with Section 127 of the Corporations Act 2001

/s/ Evan Chadwick                           /s/ Jesse Meidl
-----------------------------------------   ------------------------------------
Signature of director                       Signature of director/company
                                            secretary
                                            (Please delete as applicable)

Evan Chadwick                               Jesse Meidl
-----------------------------------------   ------------------------------------
Name of director (print)                    Name of director/company secretary
                                            (print)


SIGNED for AUSTRALIAN-CANADIAN OIL ROYALTIES
LTD.(for the sole purpose of the issuance of
the Consideration Shares) by an authorised
officer in the presence of                  /s/ Andre Sakhai
                                            ------------------------------------
                                            Signature of officer

/s/ Robert Kamon                            /s/ Andre Sakhai
-----------------------------------------   ------------------------------------
Signature of witness                        Name of officer (print)

Robert Kamon                                President
-----------------------------------------   ------------------------------------
Name of witness (print)                     Office held