EXHIBIT 10.1

Partnership Agreement

THIS PARTNERSHIP AGREEMENT is made as of September 1, 1995

BETWEEN:

GEORGE LISZICASZ

3390 St. George Street
Vancouver, B.C.
V5V 5A6

("Liszicasz")

OF THE FIRST PART

AND:

R. DIRK STINSON of

1956 Bow Drive
Coquitlam B.C.
V3E 1T2

("Stinson")

OF THE SECOND PART

In this Agreement Liszicasz and Stinson are together referred to as the "Partners".

NOW THIS AGREEMENT WITNESSES that in consideration of the premises the parties covenant and agree as follows:

1. The Partners hereby form a Partnership, effective on September 1, 1995, for the purposes set out in paragraph 4.

2. Each of the Partners has an equal interest in the Partnership, and an equal vote on all matters in connection with the Partnership.

3. The respective contributions of the Partners to the Partnership are as follows:

. Liszicasz has agreed to contribute a device owned by him and known as a stress field detector, which Liszicasz has enhanced and refined during the three years preceding the formation of this Partnership, together with Liszicasz's know-how in locating hydrocarbons, water and other mineralization deposits using this enhanced stress field detector. In addition the device, with Liszicasz's know-how, has the ability to forecast earthquakes and volcanic eruptions; (the device,

enhancements, and Liszicasz's know-how are together referred to hereafter as the "SFD Technology"). Until such time as the corporate structures described in the following paragraph have been established, Liszicasz will retain legal title to the SFD Technology, but he hereby acknowledges that any agreements with respect to the SFD Technology will be made on behalf of the Partnership, and Liszicasz will be a trustee for the Partnership of all benefits under such agreements.

. Stinson has agreed to contribute his experience and expertise in bringing products such as the SFD Technology to market.

4. The purpose of the Partnership is to develop the potential of the SFD Technology by means of the establishment of the following structures:

. A US corporate entity, the shares of which will in due course be capable of being publicly traded, to which the hydrocarbon deposit data produced by the SFD Technology will be made available on an exclusive and confidential basis. The Partners intend to take such entity public by listing it on a stock exchange, or over-the-counter on Nasdaq, or NASD Electronic Bulletin Board, or Pink Sheets, or by merger or reorganization with another such publicly held company.

. An offshore corporate entity, the purpose of which is to further develop the SFD Technology, and to produce data for the resource industry, initially in the field of hydrocarbons, but after further development, in other resource fields as well. The Partners have chosen an offshore corporate entity, specifically in the jurisdiction of the Bahamas, for its central location, its secrecy laws, and its resistance to frivolous litigation, in order to maximize the protection of confidentiality. In due course the Partners intend to transfer the SFD Technology to such corporate entity, together with any agreements with respect to the SFD Technology which Liszicasz, on behalf of the Partnership, will have entered into before such transfer.

5. In consideration for transferring the SFD Technology to the Bahamas corporate entity referred to in the previous paragraph, and causing that corporation to make available its hydrocarbon deposit data to the US corporate entity referred to in the previous paragraph, it is intended that the Partners will receive shares in the US corporate entity in the following proportions as between them:

Initially Liszicasz will receive twice as many shares as Stinson. However, upon the US corporate entity becoming a publicly traded company and completing an initial financing of a minimum of US $750,000, the Partners will adjust their proportions as follows:

Liszicasz 60%
Stinson 40%

6. The Partners will commit their full time to the development and carrying out of the Partnership's purpose set out in paragraph 4.

7. Either Partner may call a meeting of the Partners by giving written notice of such a meeting and the general purpose for calling it. Partner meetings will be held at the offices of the Partnership unless otherwise agreed.

8. This Agreement is not assignable, but will enure to the benefit and be binding upon the Partners and their respective heirs, executors, administrators, and personal representatives.

9. This Agreement will be governed by, and construed in accordance with the law of the Province of British Columbia, Canada. Any dispute must be dealt with in the Courts of British Columbia and both of the Partners will, for such purpose, attorn to the jurisdiction of those Courts.

IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date appearing on the top of the first page.

Executed by George Liszicasz   )
in the presence of:            )
                               )
                               )                        /s/ George Liszicasz
------------------------------ )                 ---------------------------
Witness                        )                 George Liszicasz

Executed by R. Dirk Stinson    )
in the presence of:            )
                               )
                               )                         /s/ R. Dirk Stinson

------------------------------ ) --------------------------- Witness ) R. Dirk Stinson

EXHIBIT 10.2

THIS AGREEMENT made as of 1 January 1996

BETWEEN:

("Company")

OF THE FIRST PART

AND:

("Liszicasz")

OF THE SECOND PART

WHEREAS:

A. Liszicasz has a device, referred to herein as the "SFD Device". Among other things, the SFD Device can locate underground geological formations which indicate the presence of Hydrocarbons.

B. Liszicasz has been instrumental in establishing the Company with the intention that the Company will be a vehicle through which the SFD Device's potential to locate promising drilling sites may be exploited.

NOW THIS AGREEMENT WITNESSES that in consideration of the premises the parties covenant and agree as follows:

1. IDENTIFYING & EXPLOITING PROSPECTS

1.1 Identifying Prospects

Using the SFD Device, Liszicasz will identify areas respecting which he determines there is a good likelihood that Hydrocarbons will be found thereunder. From time to time Liszicasz will give the Company evaluation reports setting out particulars of such areas ("Prospects").

1.2 Dealing with Prospects

(1) Within 180 days of Liszicasz identifying a Prospect to the Company, the Company will conduct a three-dimensional seismic survey over the Prospect. Such surveys will be conducted according to Liszicasz's instructions and, generally, in accordance with normal standards in the oil and gas industry.

(2) The Company will acquire a leasehold or similar interest respecting each Prospect unless it is not commercially reasonable to make such an acquisition. The Company will diligently pursue such acquisitions until the Company decides it is not commercially reasonable to complete the acquisition and that the Prospect should be abandoned.

(3) If the Company decides to abandon a Prospect, it will so inform Liszicasz promptly and deliver up to Liszicasz all SFD Data and Secondary Data relating to the abandoned Prospect. Liszicasz will be free thereafter to acquire a leasehold or other interest in the abandoned Prospect or to sell or otherwise deal with such SFD Data and Secondary Data. Prospects abandoned by the Company will not be counted in calculating identified reserves for the purpose of subsection 1.4(1).

(4) At the time the Company acquires a leasehold or other interest in a Prospect, it will transfer, or cause to be transferred, to Liszicasz an overriding royalty interest of one percent (1%) in the leasehold or other interest, will cause such interest to be duly registered in Liszicasz's name and will provide evidence of such registration to Liszicasz.

(5) The Company will not sell, assign, transfer or otherwise dispose of any interest in a Prospect unless:

(a) the purchaser, assignee, transferee or other recipient ("Joint Venture Co-Owner") gives to Liszicasz a deed acknowledging that Liszicasz owns an overriding royalty interest of one percent (1%) in the Prospect, acknowledging that any interest in the Prospect which the Joint Venture Co-Owner acquires is subject to Liszicasz's said royalty interest and agreeing to observe Liszicasz's rights in respect of Liszicasz's said royalty interest and Liszicasz's rights under this agreement; and

(b) as consideration for such sale, assignment, transfer or other disposition, the Joint Venture Co-Owner gives the Company covenants and agreements to the effect that the Prospect will be exploited and the Company will be entitled to a portion of the revenue generated by the Prospect.

1.3 PERFORMANCE CRITERIA

As of the end of any Year, Liszicasz will have satisfied at least one of the following two tests:

(1) Over the term elapsed to that time, Liszicasz will have identified Prospects in respect of which the reserves verified by engineers' reports will be not less than 10 million barrels of oil or Hydrocarbons which have a value equivalent to 10 million barrels of oil in total, per Year of the term then elapsed. For example, this test will have been met at the end of the third Year if the total value of reserves verified at that time exceeds the value of 30 million barrels of oil.

(2) Liszicasz will have devoted 90 full days of work under this agreement per Year of the term then elapsed. For example, this test will have been met at the end of the third Year if Liszicasz has worked 270 full days in providing services hereunder.

1.4 COMPANY'S RIGHT TO EXCLUSIVITY

Liszicasz will not, during the term of this agreement, use the SFD Device for the purpose of locating Hydrocarbons except to provide data generated by the SFD Device to the Company. That is, the Company will, during the term of the agreement, have the exclusive right to data about Hydrocarbons generated by the SFD Device.

1.5 COMPANY'S OBLIGATION AS TO EXCLUSIVITY

Except with the express approval of Liszicasz, the Company will not become involved in any business except acquiring and exploiting Prospects in accordance with this agreement.

1.6 COMPANY HAS NO INTEREST IN THE SFD DEVICE

Liszicasz is not transferring any interest in the SFD Device to the Company. Subject only to his obligations hereunder, Liszicasz will remain free to deal with his property in the SFD Device and with the data produced by the SFD Device without interference from the Company. The Company will at no time claim any interest in the SFD Device. Whenever requested by Liszicasz, the Company will promptly provide to Liszicasz a certificate in writing and in such form as Liszicasz, acting reasonably, will require confirming that the Company makes no claim to any interest in the SFD Device.

1.7 CONFIDENTIALITY

The Company acknowledges that the value of the SFD Device depends upon secrecy. If others learn how it works, its value will be lost or significantly diminished. The Company will not disclose to any person any information about the SFD Device. Whenever the Company uses or releases any SFD Data or Secondary Data, the Company will observe all reasonable requests made by Liszicasz for the purpose of frustrating others' attempts to determine how the SFD Device works.

2. LISZICASZ'S RENUMERATION

2.1 ROYALTY

In consideration for Liszicasz's services hereunder, the Company will ensure that Liszicasz receives an overriding royalty interest of one percent (1%) in all Prospects. It is intended that Liszicasz will receive one percent (1%) of the gross revenue generated by any Prospect.

2.2 ADDITIONAL TO RENUMERATION FOR OTHER SERVICES

It is expected that the Company will engage Liszicasz's services in other capacities from time to time, whether as an officer, a director, an employee, an independent contractor or otherwise. The Company will pay Liszicasz for such other services separately. The royalty to be received by Liszicasz hereunder will be treated as consideration only for the services expressly provided for in this agreement.

3. TERM

3.1 INITIAL TERM

Subject to any extension under section 3.2, the term of this agreement will be five (5) Years commencing 1 January 1996 and ending 31 December 2000.

3.2 EXTENSION

Approximately 90 days before expiry of the term of this agreement (including the expiry of an extension under this section 3.2), the parties will negotiate in good faith for the extension of the term of this agreement. If an agreement to extend the term is reached:

(1) where the extension is for one Year (or, in the case of a second or subsequent extension, a further one Year) and no other term or condition of the agreement is altered, such agreement to renew may be oral or written; but

(2) where the extension is for any period other than one Year or any material term or condition of this agreement is varied, the renewal agreement will be made in writing and signed by both parties.

4. INTERPRETATION/GENERAL

4.1 GOOD FAITH

The Company will exercise the utmost good faith in its dealings with Liszicasz hereunder. Without limitation:

(1) The Company will faithfully observe its obligation to keep all information about the SFD Device confidential.

(2) The Company will faithfully report to Liszicasz, fully and accurately, all information which relates to or which may affect any Prospect or Liszicasz's royalties arising hereunder.

(3) The Company will not, by any means, attempt to circumvent the parties' intentions herein. For example, the Company will not give to any Person any SFD Data or any Secondary Data except with Liszicasz's written consent.

4.2 LIBERAL INTERPRETATION

This agreement will be construed so as to give effect to the parties' intention that Liszicasz should receive one percent (1%) of all revenues which may result, in the widest sense, from the services he provides to the Company under this agreement.

4.3 DEFINITIONS

In this agreement, where the context permits:

(1) "Hydrocarbons" means all petroleum, natural gas and related hydrocarbons and includes any other substances of value, whether gases, fluids or solids and whether hydrocarbons or not, rights to which are customarily included in oil and gas leases.

(2) "Person" includes an individual, partnership, corporation, unincorporated association, society, government or any agency or department thereof, trust, and the successors, assigns, personal representatives or other legal representatives of such person or other entity to which, according to the context, the provision in question should reasonably apply.

(3) "Secondary Data" means any information acquired by the Company about the location of Hydrocarbons where the Company uses SFD Data in acquiring such information including, without limitation, results of seismic surveys and evaluations, geological/geophysical reports, well logs, etc.

(4) "SFD Data" means information which Liszicasz gives to the Company under this Agreement.

(5) "SFD Device" means a device, invented by Liszicasz, known as a `stress field detector'.

(6) "Year" means a calendar year.

4.4 LAW OF B.C.

This agreement will be governed by and construed in accordance with the laws of British Columbia. Any dispute hereunder will be resolved in the Courts of the Province of British Columbia and the parties will, for such purposes, attorn to the jurisdiction of those Courts.

4.5 LAYOUT OF THIS AGREEMENT

The division of this agreement into separate parts, sections, subsections, paragraphs, and schedules, and the insertion of headings are for convenience only and will not affect the interpretation of this agreement.

4.6 SEVERABILITY

If any provision of this agreement or the application to any Person or circumstances to any extent is held to be invalid or unenforceable, the remainder of this agreement or the application of such provision or portion thereof to any other Person or circumstances will not be affected thereby. Each provision of this agreement will be valid and enforceable to the fullest extent permitted by law.

4.7 NO IMPLIED WAIVERS

This agreement may be amended or modified from time to time only by written agreement of the Company and Liszicasz. For greater certainty, because of the close connection between them, the parties may not always insist on strict observance of the terms of this agreement. Either party may, at any time, insist upon the other strictly performing that other party's obligations hereunder notwithstanding any such pattern of relaxation in previous dealings between them.

4.8 Enurement

This Agreement will enure to the benefit of and be binding on the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and assigns.

IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as of the time and date first above written.

The CORPORATE SEAL of         )
PINNACLE OIL INC.             )
hereunto affixed in the       )
presence of:                  )
                              )
                              )                       c/s
[SIGNATURE ILLEGIBLE]         )
---------------------------   )
authorized signatory          )
                              )
___________________________   )
authorized signatory          )



SIGNED, SEALED and DELIVERED  )
by GEORGE LISZICASZ           )
in the presence of:           )
                              )
/s/ K. Williams               )
---------------------------   )
witness                       )

KIM WILLIAMS/OFFICE MANAGER   )               /s/ George Liszicasz
---------------------------   )               -----------------------------
print name/occupation         )               George Liszicasz

2 - 388 W. 10TH AVE           )
---------------------------   )
address                       )

VANCOUVER, BC VSY 153         )
---------------------------   )
address                       )

EXHIBIT 10.3

Momentum Transfer Agreement

THIS TRANSFER AGREEMENT is made as of June 18, 1996

BETWEEN:

GEORGE LISZICASZ and R. DIRK STINSON

1956 Bow Drive
Coquitlam, B.C.
V3E 1T2

("Partners")

OF THE FIRST PART

AND:

MOMENTUM RESOURCES CORPORATION

Ansbacher (Bahamas)Limited
P.O. Box N-7768, Bank Lane
Nassau, Bahamas

("Momentum")

OF THE SECOND PART

WHEREAS:

1. The Partners formed a partnership (the "Partnership") effective on September 1, 1995, evidenced by the Partnership Agreement attached as Schedule A to this Agreement (the "Partnership Agreement")

2. The Partnership is the beneficial owner of certain technology more completely described in the Partnership Agreement, and referred to in this Agreement and the Partnership Agreement as the "SFD Technology". Pursuant to the Partnership Agreement, one of the Partners, George Liszicasz ("Liszicasz"), was to remain the legal owner of the SFD Technology, but for the benefit of the Partnership, until the technology could be transferred to Momentum under this Agreement;

3. Liszicasz, on behalf of, and for the benefit of the Partners, entered into an agreement with Pinnacle Oil Inc. on January 1, 1996, a copy of which is

attached as Schedule B, (the "Pinnacle Technology Agreement") pursuant to which Liszicasz agreed to make available to Pinnacle Oil Inc. the data it generates using the SFD Technology, enabling Pinnacle Oil Inc. to exploit hydrocarbon deposit prospects upon having the data interpreted;

4. In February of 1996, Pinnacle Oil Inc. was reorganized into a public company, Pinnacle Oil International Inc., ("Pinnacle International") and under that reorganization;

5. The Partners have now agreed that Liszicasz will, on behalf of the Partnership, transfer the SFD Technology and the Pinnacle Technology Agreement to Momentum.

NOW THIS AGREEMENT WITNESSES that in consideration of the premises the parties covenant and agree as follows:

1. Liszicasz and the Partners hereby transfer to Momentum, and Momentum hereby accepts from Liszicasz and the Partners, to the legal and beneficial ownership in the SFD Technology and the Pinnacle Technology Agreement.

2. The Partners will cause Momentum immediately enter into restated technology agreement with Pinnacle International to commence making available the data it generates using the SFD Technology, on substantially the same terms as Liszicasz and the Partners have until now been making such data available to Pinnacle Oil Inc. under the Pinnacle Technology Agreement.

3. As consideration for the transfer of the SFD Technology and the Pinnacle Technology Agreement to Momentum, the Partners have received equal shares in Momentum, plus the following shares in Pinnacle International:

Liszicasz : 5,761,782 shares;
Stinson: 3,067,571 shares.

As provided in the Partnership Agreement, the proportion share interest in Pinnacle International will, at the appropriate time, be adjusted to 60% Liszicasz and 40% Stinson by Liszicasz transferring 464,170 shares to Stinson.

4. The Partners acknowledge that the value of the SFD Technology depends upon its continuing secrecy. Accordingly, the Partners agree with Momentum that they will not disclose to any person any information about the SFD Technology, and they will at all times use their best efforts to ensure that when any third party, whether Pinnacle, a joint venturer with Pinnacle, or any other party, enters into any agreement with Momentum involving the use of data produced by the SFD Technology, such third

party will covenant with Momentum to observe all reasonable requests made by Momentum for the purpose of frustrating any attempts to determine how the SFD Technology works.

5. This Agreement will be governed by, and in construed in accordance with, the law of the Bahamas. Any dispute must be dealt with in the Courts of the Bahamas and the parties will, for such purposes, attorn to the jurisdiction of those Courts.

6. If at any time Momentum contemplates assigning, transferring, or otherwise disposing of the SFD Technology it has acquired under this Agreement to any third party, Momentum must first give the Partners (or one Partner if the other is either unwilling or unable to participate) a written right of first refusal to re-acquire the SFD Technology on terms no less favourable than those offered to or by the third party. The Partner or Partners will have 60 days in which to exercise this right, and a further 60 days to close if they do exercise.

7. This Agreement will enure to the benefit of, and be binding on, the parties to this Agreement and their heirs, executors, administrators, personal representatives, successors and assigns.

IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as of the date appearing on the top of the first page.

Executed by the Partners                    )
in the presence of:                         )
                                            )
                                            )
--------------------------------------          ----------------------------
                                                -
Witness                                     )   George Liszicasz
                                            )
                                            )
--------------------------------------          ----------------------------
                                                -
Witness                                     )   R. Dirk Stinson

Executed by Momentum Resources Corporation  )
by its authorized officers:                 )
                                            )
                                            )
--------------------------------------
Goerge Liszicasz                            )
                                            )
                                                )
--------------------------------------
R. Dirk Stinson                             )

                                             American SFD Data Licence Agreement

THIS AGREEMENT made as of April 1, 1997

BETWEEN:

PINNACLE OIL INTERNATIONAL INC.

a Nevada corporation whose principal executive office is located at 380 - 1090 West Georgia Street Vancouver, B.C., Canada, V6E 3V7

(the "Grantor")

OF THE FIRST PART

AND:

PINNACLE OIL INC.

a Nevada corporation whose principal executive office is located at #380 - 1090 West Georgia Street, Vancouver, B.C. V6E 3V7

(the "Grantee")

OF THE SECOND PART

WHEREAS:

1. The Grantor has the worldwide right to the use of certain data known as SFD Data (hereinafter defined) as it relates to the identification and exploitation of Hydrocarbons (as hereinafter defined) pursuant to an agreement dated as of August 1, 1996, and made between (among others) Momentum Resources Corporation ("Momentum") as the owner of the technology which generates the SFD Data, and the Grantor (the "Restated Technology Agreement"), a copy of which is attached to this Agreement as a Schedule;

2. Pursuant to the Restated Technology Agreement, Momentum has agreed with the Grantor that it will use its best efforts to survey, using the Stress Field Detector (as hereinafter defined), certain geographic areas throughout the world which will have been preselected by both Momentum and the Grantor from time to time during the term of the Restated Technology Agreement, and to provide all raw SFD Data resulting from such surveys to the Grantor for its exclusive use for the identification and exploitation of Hydrocarbons in accordance with the terms of the Restated Technology Agreement;

3. The Restated Technology Agreement further provides that the surveys are to be conducted by George Liszicasz (the original inventor of the technology) or, under the general supervision of George Liszicasz, by such personnel of Momentum as have appropriate levels of training to enable them to conduct such surveys. Under the Restated Technology Agreement, Momentum has agreed with the Grantor that it will provide not less than 500 hours per year of trained manpower to generate the SFD Data with respect to the pre-selected geographic areas to be surveyed;

4. The Restated Technology Agreement further provides, (as does the employment agreement dated as of April 1, 1997, and between the Grantor and Liszicasz (the "Liszicasz Employment Agreement") that Liszicasz will be available to provide the required manpower until at least December 31, 2005, unless Liszicasz is unable to render such services by reason of death or disability (as that term is defined in the Liszicasz Employment Agreement);

5. The Restated Technology Agreement also provides that Liszicasz shall initially interpret all raw SFD Data provided to the Grantor by Momentum to ascertain whether there is a reasonable likelihood that there are commercially extractable amounts of Hydrocarbons in any given surveyed area. Further, Liszicasz and the Grantor have agreed that they will both use their best efforts to train mutually acceptable personnel of the Grantor to conduct such interpretation under the general supervision of Liszicasz as soon as is reasonably practical;

6. The Restated Technology Agreement also provides that the Grantor may fulfil its obligation to Momentum to use its best efforts to exploit a commercially viable area by means of a wholly-owned subsidiary, and that the Grantor may license any or all of its rights to a wholly- owned subsidiary;

7. The Grantee is a wholly-owned subsidiary of the Grantor, and the parties wish to enter into this Licence Agreement with respect to both the generation and the interpretation of raw American SFD Data (as hereinafter defined), and to the exploitation of Hydrocarbons identified by such interpretation.

NOW THIS AGREEMENT WITNESSES that in consideration of the premises the parties covenant and agree as follows:

1. DEFINITIONS

In this Agreement:

(a) The terms "Hydrocarbons", "SFD Data", "SFD Technology" and "Stress Field Detector" shall have the meanings ascribed to them in paragraph 1 of the Restated Technology Agreement;

(b) "American SFD Data" means all SFD Data relating to the sovereign territory of the United States of America.

(c) "American Prospect" means an area in the sovereign territory of the United States of America which has been identified, following interpretation of American SFD Data, as one in which there is a reasonable likelihood of commercially extractible amounts of Hydrocarbons.

(d) "Subsidiaries" means any subsidiary of a party (or subsidiary of a subsidiary of a party) regardless of form of entity, such as a corporation, partnership, limited partnership, or limited liability company, with the exception of joint ventures and third party arrangements described in this Agreement.

2. GRANT OF LICENCE FOR AMERICAN SFD DATA

2.1 In consideration of the licence fee set out in paragraph 4, the Grantor hereby grants to the Grantee an exclusive licence, for the periods set out in paragraph 6, to use and exploit the American SFD Data generated by Momentum for the Grantor under the Restated Technology Agreement.

2.2 By way of fulfilling its obligation under this Licence Agreement to supply an amount of American SFD Data sufficient for the Grantee to commercially exploit the Hydrocarbons identified using such data, the Grantor covenants with the Grantee that, when pre-selecting Designated Search Areas together with Momentum under the provisions of paragraph 2 of the Restated Technology Agreement, the Grantor will at all times during the term of this Licence Agreement use its best efforts to select sufficient surveys in American territory to ensure to the Grantee a supply of American SFD Data sufficient to enable the Grantee to carry on a commercially viable business, and to fulfil its obligations under all agreements with third parties respecting the use of American SFD Data.

2.3 The Grantor will also use its best efforts to ensure the availability to the Grantee of the services of Liszicasz to interpret or cause to be interpreted, for the benefit of the Grantee, the American SFD Data supplied under this Licence Agreement. To better secure the availability of Liszicasz or other trained personnel for such purposes, the Grantee may itself enter into appropriate employment contracts with Liszicasz and/or such other trained personnel. In determining the amount of time which Liszicasz and/or other trained personnel must devote to the interpretation of the American SFD Data, as a proportion of world-wide SFD Data, the parties will act reasonably, basing the determination on, among other things:

(a) the obligations of the Grantee under third party agreements, to the extent that the Grantor has been made aware of such obligations; and

(b) an estimate of the value of commercially extractable Hydrocarbons identified in the

United States of America as a proportion of the total value of the commercially extractible Hydrocarbons identified world-wide.

3. COMMERCIAL EXPLOITATION OF AMERICAN SFD DATA

Within 180 days after the Grantee has interpreted, or obtained the interpretation of, the American SFD Data, and has identified an American Prospect, the Grantee will, either directly or indirectly through joint ventures and/or other third parties, use its best efforts to commercially and economically exploit the American Prospect. Such exploitation may occur through one or a combination of the following, as selected by the Grantee in its reasonable discretion:

(i) the direct acquisition by the Grantee and/or a wholly owned Subsidiary of the legal rights for the further exploitation, development and production of Hydrocarbons with respect to the American Prospect;

(ii) the indirect acquisition of such rights through joint ventures or other arrangements with third parties; and/or

(iii) the sale by the Grantee and/or its joint venture partners of such rights.

The Grantee will use its best efforts to commercially exploit the American Prospect through one or more of the foregoing methods, and will diligently pursue such efforts unless it is not, in the opinion of either the Grantee or the Grantor, commercially reasonable to make any such acquisition and/or pursue such exploration development and/or production and/or enter into any such agreement with a joint venture partner and/or other third parties.

4. LICENCE FEE

4.1 AMOUNT OF FEE

In consideration of this grant of the licence with respect to the American SFD Data, the Grantee shall pay to the Grantor a fee (the "Licence Fee") equal to 50% of the "Gross Revenues" (as such term is defined below) actually received by the Grantee and/or its Subsidiaries with respect to the commercial exploitation of the Hydrocarbons identified in each American Prospect.

4.2 GROSS REVENUES DEFINED

The term "Gross Revenues" generally means the aggregate of all gross revenues received by the Grantee and/or its Subsidiaries from the commercial exploitation of Hydrocarbons calculated by way of example and not limitation as follows:

(i) If the Grantee and/or its Subsidiaries indirectly acquire the legal rights for the further exploration, development and production of Hydrocarbons with respect to an American Prospect through joint ventures and/or other arrangements with third parties, then the Gross Revenues will mean the cash flows received by the Grantee and/or its Subsidiaries from such joint venture and/or third party, whether from the sale of Hydrocarbons or the sale by the joint venture and/or third party of its interest in such legal rights.

(ii) If the Grantee and/or its Subsidiaries sell or transfer the legal rights for (or "leads" relating to) an American Prospect, then the Gross Revenues from such American Prospect will be the gross consideration received by the Grantee and/or its Subsidiaries as a result of such sale or transfer.

(iii) If the Grantee and/or its Subsidiaries directly acquire the legal rights for the further exploration, development and productions of Hydrocarbons with respect to an American Prospect, and independently extract and sell Hydrocarbons from such American Prospect, then the Gross Revenues from such an American Prospect will be the gross cash flows received by the Grantee and/or its Subsidiaries from the sale of such Hydrocarbons.

The Grantee and/or its Subsidiaries acknowledge and agree that they shall not be entitled to deduct any expenses, costs, capital or equity investment and/or loans against any calculation of Gross Revenues when determining the Licence Fee owing to the Grantor (such as acquisition, development, extraction, marketing and/or distribution costs which would be incurred should the Grantee and/or its Subsidiaries directly exploit the Prospect without joint venture partners), it being understood that the Grantor has an interest in Gross Revenues generated from the Hydrocarbons identified in an American Prospect without offset or deduction. Notwithstanding the foregoing, the Grantor understands and agrees that Gross Revenues arising from distributions from joint ventures and/or third party arrangements may, based upon the terms and conditions of such arrangements, be made after the joint venture has deducted costs, expenses and reserves, or repaid capital provided by the joint venture and/or other third party, and the Grantor further agrees that it shall have no right to "gross up" the Gross Revenues to reflect the pre-distribution deduction by the joint

venture or other third party of such costs, expenses and reserves and/or repayment of capital.

The parties further acknowledge that the foregoing examples are merely examples, and do not fully reflect many methods by which the Grantee may commercially and economically exploit an American Prospect, with and without the participation of joint venture and/or other third parties. Accordingly, the parties agree that the Licence Fee shall be liberally interpreted to apply to each and every transaction by which the Grantee and/or any of its Subsidiaries exploit the American Prospect to ensure that the Grantor receives such equitable portion of the total return received by the Grantee and/or its Subsidiaries as to enable the Grantor to receive the benefit of its bargain, subject to avoidance of duplicative payments by the Grantee and its Subsidiaries. In order to avoid any disputes or misunderstandings, the parties agree to use their best efforts, while the Grantee is formulating its proposed method to exploit a Prospect, to outline in writing, prior to committing to such method, the economics of the proposed method of exploitation consistent with the terms of this Agreement. Should the parties be unable to agree upon such economics, they agree that such issue shall be resolved by arbitration (an "Arbitration Proceeding") before the American Arbitration Association (the "Arbitration Authority") located in Carson City, Nevada, according to the rules and practices of the Arbitration Authority from time-to-time in force, unless the parties mutually agree upon a different Arbitration Authority and/or different location for such Arbitration Proceeding.

4.3 TERMS OF PAYMENT OF LICENCE FEE

The Licence Fee shall be paid to the Grantor within 15 days of the end of each quarter in which the Grantee and/or any of its Subsidiaries collect Gross Revenues with respect to any American Prospect. The obligation to pay the Licence Fee shall continue following the termination of this Agreement with respect to any American Prospect for which the Licence Fee was provided by the Grantor to the Grantee on or before the effective date of such termination.

4.4 REPORTS

Within 15 days after the end of each quarter, irrespective of whether any Gross Revenues have been collected by the Grantee and/or any of its Subsidiaries or whether any sum is then due to the Grantor, the Grantee shall deliver to the Grantor a complete and accurate written statement setting forth;

(i) total Gross Revenues earned or accrued from each American Prospect in such quarter;

(ii) total Gross Revenues collected from each American Prospect in such quarter;

(iii) the Licence Fee earned from each American Prospect in such quarter;

(iv) the Grantee's calculation of the amount of the Licence Fee then due the Grantor for the period covered by such report; and

(v) such other information reasonably requested by the Grantor with respect to each American Prospect, in specific detail so as to allow an audit of underlying documents.

4.5 BOOKS AND RECORDS

During the period that the Grantee shall be obligated to pay to the Grantor a Licence Fee, the Grantee shall keep or cause to be kept accurate, complete and up-to-date books of accounts separately stating records of all revenues earned, accrued and/or collected with respect to each American Prospect, and all costs, expenses, and investments in such American Prospect.

4.6 INSPECTION

During the period that the Grantee and/or its Subsidiaries shall be obligated to pay to the Grantor the Licence Fee, the Grantor or its authorized representatives shall have the right to inspect all records of the Grantee and/or its Subsidiaries with respect to the American Prospect, and to make copies of said records utilizing the facilities the Grantee and/or its Subsidiaries without charge, and shall have free and full access thereto on reasonable notice during the normal business hours of the Grantee and/or its Subsidiaries. If such inspection or audit reveals an underpayment by the Grantee and/or its Subsidiaries of the Licence Fee and/or any other amounts then due to the Grantor under this Agreement, the Grantee and/or its Subsidiaries shall upon written notice pay to the Grantor the balance of all such amounts found to be due pursuant to such audit inspection, together with interest thereon at the "best commercial customer" rate of the largest bank in terms of assets in the eleventh district of the Federal Reserve, plus 4% per annum from the date such amounts first became due to the Grantor, until all such amounts have been paid in full. If such inspection or audit discloses that, for the annual period reviewed or audited, the Grantee has underpaid or understated its Licence Fee obligation under this Agreement by 5% or more, then the Grantee shall also pay the reasonable professional fees of the independent representatives engaged to conduct or review such inspection or audit.

4.7 SECURITY INTEREST GRANTED TO THE GRANTOR

As security for the Grantee's obligation to pay the Licence Fee to the Grantor, the Grantee agrees to execute a Security Agreement in a form reasonably acceptable to the Grantor with respect to any interest in any American Prospect acquired by the Grantee and/or its Subsidiaries, which will grant to the Grantor a security interest in any Gross Revenues generated by the Grantee and/or its Subsidiaries in such American Prospect. The grant of the security interest shall not exceed the anticipated aggregate Licence Fee payable to the Grantor with respect to such American Prospects.

5. TERM OF LICENCE

The term of the licence granted under this Agreement will correspond in all respects, including provisions for extension and for early termination, with the term of the Restated Technology Agreement.

6. REPRESENTATIONS AND WARRANTIES OF PARTIES

Each of the parties to this Agreement hereby represents and warrants to each of the other parties of this Agreement, each of which is deemed to be a separate representation and warranty, as follows:

(a) ORGANIZATION, POWER AND AUTHORITY

Such party, if an entity, is duly organized, validly existing and in good standing under the laws of its state, territory or province of incorporation or organization, and has all requisite corporate or other power and authority to enter into this Agreement.

(b) AUTHORIZATION AND VALIDITY OF AGREEMENT

The execution and delivery of this Agreement by such party, and the performance by such party of the transactions herein contemplated, have, if such party is an entity, been duly authorized by its governing organizational documents, and are not prohibited by its governing organization documents, and no further corporate or other action on the part of such party is necessary to authorize this Agreement, or the performance of such transactions. This Agreement has been duly executed and delivered by such party and, assuming due authorization, execution and delivery by all of the other parties hereto, is valid and binding upon such party in execution and delivery by all of the other parties hereto, is valid and binding upon such party in accordance with its terms, except as limited by:

(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditor rights generally; and

(ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(c) NO BREACH OR CONFLICT

Neither the execution nor delivery of this Agreement, nor the performance by such party of the transactions contemplated herein:

(i) if such party is an entity, will breach or conflict with any of the provisions of such party's governing organizational documents; nor

(ii) to the best of such party's knowledge and belief, will violate or constitute an event of default under any agreement or other instrument to which such party is a party.

7. INDEMNIFICATION; DEFENSE OF THIRD-PARTY CLAIMS

The provisions of paragraph 12 of the Restated Technology Agreement entitled "Indemnification; Defense of Third-Party Claims" apply to this Agreement.

8. MISCELLANEOUS

(a) COOPERATION

Each party agrees, without further consideration, to cooperate and diligently perform any further acts, deeds and things, and to execute and deliver any documents that may be reasonably necessary or otherwise reasonably required to consummate, evidence, confirm and/or carry out the intent and provisions of this Agreement, all without undue delay or expense.

(b) INTERPRETATION

(i) SURVIVAL

All representations and warranties made by any party in connection with any transaction contemplated by this Agreement shall, irrespective of any investigation made by or on behalf of any other party hereto, survive the execution and delivery of this Agreement, and the performance or consummation of any transaction described in this Agreement.

(ii) ENTIRE AGREEMENT/NO COLLATERAL REPRESENTATIONS

Each party expressly acknowledges and agrees that this Agreement, and the agreements and documents referenced herein;

(i) is the final, complete and exclusive statement of the agreement

of the parties with respect to the subject matter
hereof;

(ii) supersedes any prior or contemporaneous agreements, memorandums, proposals, commitments, guaranties, assurances, communications, discussions, promises, representations, understandings, conduct, acts, courses of dealing, warranties, interpretations or terms of any kind, whether oral or written, and that may such prior agreements are of no force or effect except as expressly set forth herein; and

(iii) may not be varied, supplemented or contradicted by evidence of prior agreements, or by evidence of subsequent oral agreements.

No prior drafts of this Agreement, and no words or phrases from any prior drafts, shall be admissible into evidence in any action or suit involving this Agreement.

(iii) AMENDMENT; WAIVER; FORBEARANCE

Except as expressly provided otherwise herein, neither this Agreement nor any of the terms, provisions, obligations or rights contained herein, may be amended, modified, supplemented, augmented, rescinded, discharged or terminated (other than by performance), except by a written instrument or instruments signed by all of the parties to this Agreement. No waiver of any breach of any term, provision or agreement contained herein, or of the performance of any act or obligation under this Agreement, or of any extension of time for performance of any such act or obligation, or of any right granted under this Agreement, shall be effective and binding unless such waiver shall be in a written instrument or instruments signed by each party claimed to have given or consented to such waiver and each party affected by such waiver. Except to the extent that the party or parties claimed to have given or consented to a waiver may have otherwise agreed in writing, no such waiver shall be deemed a waiver or relinquishment of any other term, provision, agreement, act, obligation or right granted under this Agreement, or any preceding or subsequent breach thereof. No forbearance by a party to seek a remedy for any noncompliance or breach by another party hereto shall be deemed to be a waiver by such forbearing party of its rights and remedies with respect to such noncompliance or breach, unless such waiver shall be in a written instrument or instruments signed by the forbearing party.

(iv) REMEDIES CUMULATIVE

The remedies of each party under this Agreement are cumulative and shall not exclude any other remedies to which such party may be lawfully entitled.

(v) SEVERABILITY

If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be determined to be invalid, illegal or unenforceable under present or future laws, then, and in that event:

(i) The performance of the offending term or provision (but only to the extent its application is invalid, illegal or unenforceable) shall be excused as if it had never been incorporated into this Agreement, and in lieu of such excused provision, there shall be added a provision as similar in terms and amount to such excused provisions as may be possible and be legal, valid and enforceable; and

(ii) The remaining part of this Agreement (including the application of the offending term or provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not be affected thereby, and shall continue in full force and effect to the fullest extent provided by law.

(vi) PARTIES IN INTEREST

Notwithstanding anything else to the contrary herein, nothing in this Agreement shall confer any rights or remedies under or by reason of this Agreement on any persons other than the parties hereto and their respective successors and assigns, if any, as may be permitted hereunder, nor shall anything in this Agreement relieve or discharge the obligation or liability of any third party to any party to this Agreement, nor shall any provision give any third person any right of subrogation or action over or against any party to this Agreement. Notwithstanding the prior sentence, the parties acknowledge that the subsidiaries of the Grantee and the Grantor and their respective successors and assigns are a third party beneficiary of this Agreement.

(c) ENFORCEMENT

(i) APPLICABLE LAW

This Agreement and the rights and remedies of each party arising out of or relating to this Agreement (including, without limitation, equitable remedies) shall (with the exception of the applicable securities laws) be solely governed by, interpreted under, and construed and enforced in accordance with the laws (without regard to the conflicts of law principles) of the State of Nevada, as if this Agreement were made, and as if its obligations are to be performed, wholly with in the State of Nevada.

(ii) CONSENT TO JURISDICTION: SERVICE PROCESS

Any "action or proceeding" (as such term is defined below) arising out of or relating to this Agreement shall be filed in and heard and litigated solely before the state courts of Nevada. Each party generally and unconditionally accepts the exclusive jurisdiction of such courts and venue therein; consents to the service of process in any such action or proceeding by certified or registered mailing of the summons and complaint in accordance with the notice provisions of this Agreement; and waives any defense or right to object to venue in said courts based upon the doctrine of "forum non conveniens" the Term "action or proceeding" is defined as any and all claims, suits, actions, hearings, arbitrations or other similar proceedings, including appeals and petitions therefrom, whether formal or informal, governmental or non- governmental, or civil or criminal.

(iii) WAIVER OF RIGHTS TO JURY TRIAL

Each party hereby waives such party's respective right to a jury trial of any claim or cause of action based upon or arising out of this Agreement. Each party acknowledges that this waiver is a material inducement to each other party hereto to enter into the transaction contemplated hereby; that each other party has already relied upon this waiver in entering into this Agreement; and that each other party will continue to rely on this waiver in their future dealings. Each party warrants and represents that such party has reviewed this waiver with such party's legal counsel, and that such party has knowingly and voluntarily waived its jury trial rights following consultation with such legal counsel.

(d) ASSIGNMENT

Provided in this Agreement the Grantee may not sell, license, transfer or assign (whether direct or indirect, merger, consolidations, conversion, sale of assets, sale or exchange of securities, or by operation of law, or otherwise) any of its rights or interests or delegate its duties or obligations under this Agreement, in whole or

in

part, including to any Subsidiary or any Affiliate, without the prior written consent of the Grantee which consent may be withheld in such other party's sole discretion.

(e) COUNTERPARTS; ELECTRONICALLY TRANSMITTED DOCUMENTS

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument, binding on all parties hereto. Any signature page of its Agreement may be detached from any counterpart of this Agreement and reattached to any other counterpart of this Agreement identical in form hereto by having attached to it one or more additional signature pages. If a copy or counterpart of this Agreement is originally executed and such copy or counterpart is thereafter transmitted electronically by facsimile or similar device, such facsimiled document shall for all purposes be treated as if manually signed by the party whose facsimile signature appears.

WHEREFORE, the parties hereto have, for purposes of this Agreement, executed this Agreement in Vancouver, British Columbia, Canada, as of the date first herinabove set forth.

THE GRANTOR              PINNACLE OIL INTERNATIONAL INC.,
                         a Nevada corporation

                         By:  /s/ R. Dirk Stinson
                              ---------------------------
                              R. Dirk Stinson, President


THE GRANTEE              PINNACLE OIL INC.

                         By:  /s/ R. Dirk Stinson
                              ---------------------------
                              R. Dirk Stinson, President

EXHIBIT 10.4

RESTATED TECHNOLOGY AGREEMENT

This Restated Technology Agreement (the "Agreement"), dated as of August 1, 1996, is entered into by and between PINNACLE OIL, INC., a Nevada corporation ("Pinnacle Oil"), whose principal executive office is located at 380-1090 West Georgia Street, Vancouver, British Columbia, Canada V6E 3V7; PINNACLE OIL INTERNATIONAL, INC., a Nevada corporation ("Pinnacle International"), whose principal executive office is located at 380-1090 West Georgia Street, Vancouver, British Columbia, Canada V6E 3V7; MOMENTUM RESOURCES CORPORATION, a Bahamas corporation ("Momentum"), whose principal executive office is located c/o Ansbacher (Bahamas) Limited, P.O. Box N-7768, Bank Lane, Nassau, Bahamas; GEORGE LISZICASZ ("Liszicasz"), an individual whose principal office is located at 380-1090 West Georgia Street, Vancouver, British Columbia, Canada V6E 3V7; and R. DIRK STINSON ("Stinson"), an individual whose principal office is located at 380-1090 West Georgia Street, Vancouver, British Columbia, Canada V6E 3V7, with reference to the following facts:

WHEREAS, Liszicasz is the inventor, developer and owner of a certain device, defined in this Restated Technology Agreement as the "Stress Field Detector," and is the inventor, developer and owner of certain technology upon which the Stress Field Detector is based, defined in this Restated Technology Agreement as the "SFD Technology," which generate certain data, defined in this Restated Technology Agreement as the "SFD Data," which can, when interpreted, identify underground geological formations which indicate, among other things, the presence of petroleum, natural gas, water deposits and minerals;

WHEREAS, Pinnacle International, through its subsidiaries, including Pinnacle Oil and Pinnacle Oil Canada, Inc., a federal Canadian corporation, is engaged in the business of exploring for and commercially exploiting petroleum and natural gas deposits;

WHEREAS, on September 1, 1995, Liszicasz and Stinson entered into an agreement (the "Liszicasz-Stinson Agreement") relating to the ownership, use and exploitation of the Stress Field Detector and the SFD Technology wherein, among other things, they agreed: (i) that the Stress Field Detector and the SFD Technology would be owned by Liszicasz for a period and, upon the occurrence of certain events, would subsequently be owned and exploited by a corporation to be formed ("Newco 1") which would be owned jointly by Liszicasz and Stinson; and
(ii) that Liszicasz, and eventually Newco 1, would provide raw SFD Data to third parties in return for the payment of a fee, and that such third parties would include a second corporation to be formed ("Newco 2") which would be organized for the specific business purpose of identifying and commercially exploiting petroleum and natural gas deposits, and which would be managed, and owned in part, by Liszicasz and Stinson;

WHEREAS, in satisfaction of the terms of the Liszicasz-Stinson Agreement relating to the formation of Newco 2, Liszicasz and Stinson caused Pinnacle Oil to be organized on October 20, 1995;

WHEREAS, in satisfaction of the terms of the Liszicasz-Stinson Agreement, Liszicasz entered into an agreement with Pinnacle Oil on January 1, 1996 (the "Original Technology Agreement") wherein Liszicasz agreed, that from the date of the Original Technology Agreement through the period ended December 31, 2000, to survey selected properties using the Stress Field Detector and the SFD Technology, and to provide raw SFD Data generated from such activities to Pinnacle Oil for its exclusive use to identify petroleum and natural gas deposits on such properties, and to commercially exploit such prospects;

WHEREAS, in satisfaction of the terms of the Liszicasz-Stinson Agreement relating to the formation of Newco 1, Liszicasz and Stinson caused Momentum to be organized on June 17, 1996;

WHEREAS, in satisfaction of the terms of the Liszicasz-Stinson Agreement, Liszicasz desires to transfer his rights and obligations under the Original Technology Agreement to Momentum as of June 18, 1996, and to obtain the consent of Pinnacle Oil and Pinnacle International to such transfer;

WHEREAS, after entering into the Original Technology Agreement, Pinnacle Oil was acquired in February, 1996, by Pinnacle International (then known as "Auric Mining Corporation"), and Pinnacle Oil now desires to transfer its rights under the Original Technology Agreement to Pinnacle International, and to obtain the consent of Liszicasz, Stinson and Momentum to such transfer;

WHEREAS, the parties also desire to enter into this Restated Technology Agreement to reflect and restate the new relationships amongst the parties, and the new rights and obligations of the parties arising from such new relationships;

WHEREAS, the parties further desire that this Restated Technology Agreement also fully address and/or clarify certain matters not fully addressed or clarified in the Original Technology Agreement, in order to avoid any ambiguities or potential misunderstandings;

WHEREAS, in view of the mutual satisfaction to date of the parties with the results of the Stress Field Detector, the SFD Technology and the SFD Data, and the desire of the parties in view of such satisfaction to extend the term of the Original Technology Agreement beyond December 31, 2000, and in order to provide Pinnacle International with the exclusive worldwide use of the SFD Data as it relates to the identification and exploitation of hydrocarbons for so long as Pinnacle International performs its obligations, the parties further desire to extend the term of the Original Technology Agreement on the terms set forth herein;

WHEREAS, it is the intent of the parties that this Restated Technology Agreement restate and supersede the Original Technology Agreement in its entirety;

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the parties to this Restated Technology Agreement (collectively "parties" and individually a "party") agree as follows:

1. DEFINITIONS

Set forth below are definitions of capitalized terms which are generally used throughout this Restated Technology Agreement, or references to provisions containing such definitions (capitalized terms used only in a specific section of this Restated Technology Agreement are defined in such section):

(A) "AFFILIATE" means any Person controlling, controlled by, or under common control with a party.

(B) "AGREEMENT" shall mean this Restated Technology Agreement, as originally executed and as amended or restated from time to time.

(C) "CHANGE IN CONTROL" shall mean, subject to subparagraphs (iv) and
(v) below, the occurrence of any of the following events:

(i) An acquisition of control by an "Acquiring Person" where, immediately after the subject acquisition, such "Person" holds "Beneficial Ownership" of more than fifty percent (50%) of the "Total Combined Voting Power" of the Company's then outstanding "Voting Securities". The terms in quotations in the immediately preceding sentence shall, for purposes of this Agreement, have the following meanings :

(A) "Acquiring Person" shall mean any "Person" which acquires the defined percentage of securities, with the exception of:
(A) any Employee Benefit Plan (or a trust forming a part thereof)
maintained by the Company, or any corporation or entity in which the Company holds fifty percent (50%) or more of the "Voting Securities" (each, a "Controlled Subsidiary"); (B) the Company or any Controlled Subsidiary; or (C) any "Person" which acquires the threshold percentage of "Voting Securities" through a "Non-Control Transaction" (as defined below).

(B) "Non-Control Transaction" shall mean any transaction in which the stockholders of the Company immediately before such transaction, directly or indirectly own immediately following such transaction at least a majority of the "Total Combined Voting Power" of the outstanding "Voting Securities" of the surviving corporation (or other entity) resulting from such transaction, in substantially the same proportion as such stockholders' ownership of the Company's "Voting Securities" immediately before such transaction.

(C) "Person," "Beneficial Ownership," "Total Combined Voting Power" and "Voting Securities" shall have the meanings ascribed to such terms in Sections 13(d) and 14(d) of the Securities Exchange Act and Rule 13d-3 promulgated thereunder; or

(ii) During any period of three (3) consecutive years after the date of this Agreement, the individuals who constituted the Board at the beginning of such period (the "Incumbent Board") cease to constitute a majority of the Board, for any reason(s) other than (A) the voluntary resignation of one or more Board members; (B) the refusal by one or more Board members to stand for election to the Board; and/or (C) the removal of one or more Board members for good cause; provided, however, (1) that if the nomination or election of any new director of the Company was approved by a vote of at least a majority of the Incumbent Board, such new director shall be deemed a member of the Incumbent Board; and (2) that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Securities Exchange Act of 1934), or as a result of a solicitation of proxies or consents by or on behalf of an Acquiring Person, other than a member of the Board (a "Proxy Contest"), or as a result of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or

(iii) The Board or the stockholders of the Company approve:

(A) A merger or consolidation or reorganization of the Company reorganization with:

(1) any Controlled Subsidiary, and such transaction is not a Non-Control Transaction; or

(2) any other corporation or other entity, and such transaction is not a Non-Control Transaction; or

(B) A complete liquidation or dissolution of the Company, and such transaction is not a Non-Control Transaction; or

(C) An agreement for the sale or other disposition of all or substantially all of the assets of the Company to (1) any Controlled Subsidiary, and such transaction is not a Non-Control Transaction or (2) to any other Person, and such transaction is not a Non-Control Transaction.

(v) Notwithstanding any other provision of this subsection
(c), if either Messrs. Stinson or Liszicasz or an Affiliate of Messrs. Stinson or Liszicasz who is then a stockholder or director of the Company, either: (i) expressly voted in favor of the transaction constituting the Change In Control in such Person's capacity as either a stockholder or as a director of the Company; or (ii) expressly abstained from voting (other than by reason of an "interest" in a matter or transaction, as defined in the Nevada Revised Statutes); and/or (iii) failed or refused to vote, then the transaction shall not constitute a Change in Control.

(E) "HYDROCARBONS" means all petroleum, natural gas and related hydrocarbons and includes any other substances of value, whether gases, fluids or solids and whether hydrocarbons or not, rights to which are customarily included in oil and gas leases.

(G) "PERSON" (other than for purposes of determining a Change in Control) means, in its broadest sense, any individual, entity or fiduciary who has legal standing to enter into this Agreement such as, by way of example and not limitation, individual or natural persons, corporations, partnerships (limited or general), joint-ventures, associations, business trusts, limited liability companies/partnerships, business trusts, trusts (whether revocable or irrevocable), pension or profit sharing plans, individual retirement accounts, or fiduciary or custodial arrangements.

(H) "SFD DATA" shall mean all information generated by the Stress Field Detector and the SFD Technology which, when interpreted, can be used to identify deposits of Hydrocarbons.

(J) "SFD TECHNOLOGY" shall mean the technologies and scientific theories upon which the Stress Field Detector is based.

(K) "STRESS FIELD DETECTOR" shall mean that certain device owned by Momentum, together with all enhancements and know-how relating thereto, which device uses the SFD Technology to identify, among other things, deposits of Hydrocarbons.

3. INTERPRETATION OF SFD DATA; IDENTIFICATION OF PROSPECTS

4. COMMERCIAL EXPLOITATION OF PROSPECTS

Pinnacle International will use its best efforts to commercially exploit the Prospects through one or more of the foregoing methods, and will diligently pursue such efforts, unless it is not, in Pinnacle International's opinion, commercially reasonable to make any such acquisition and/or to pursue such exploration, development and/or production, and/or enter into any such agreement with a joint venture partner and/or other third party. Momentum understands that Pinnacle International's present preference and intent is to commercially exploit the Prospects through joint-venture arrangements wherein the joint venture (or Pinnacle International's joint venture partner(s) in the joint venture) will pursue the acquisition of the legal rights for the further exploration, development and production of Hydrocarbons with respect to the Prospect, and will provide all or part of the financing required to do so, and assume the financial risk attendant to such acquisition or development. Momentum agrees that it will cooperate in collecting raw SFD Data pursuant to the terms of this Agreement in connection with any such joint ventures and/or third party arrangements.

5. PAYMENT OF SFD DATA FEE TO MOMENTUM RESULTING FROM COMMERCIAL EXPLOITATION OF PROSPECTS

(i) If Pinnacle International and/or its Subsidiaries indirectly acquire the legal rights for the further exploration, development and production of Hydrocarbons with respect to a Prospect through joint-ventures and/or other arrangements with third parties, then the Prospect Revenues from such Prospect will be the cash flows received by Pinnacle International and/or its Subsidiaries from such joint venture and/or third party, whether from the sale of Hydrocarbons or the sale by the joint venture and/or third party of its

interest in such Prospect.

(ii) If Pinnacle International and/or its Subsidiaries sell or transfer the legal rights for (or "leads" relating to) a Prospect, then the Prospect Revenues from such Prospect will be the gross consideration received by Pinnacle International and/or its Subsidiaries as a result of such sale or transfer.

(iii) If Pinnacle International and/or its Subsidiaries directly acquire the legal rights for the further exploration, development and production of Hydrocarbons with respect to a Prospect, and independently extract and sell Hydrocarbons from such Prospect, then the Prospect Revenues from such Prospect will be the gross cash flows received by Pinnacle International and/or its Subsidiaries from the sale of such Hydrocarbons.

Pinnacle International and/or its Subsidiaries acknowledge and agree that they shall not be entitled to deduct any expenses, costs, capital or equity investment and/or loans against payments of any Prospect Revenues to Momentum (such as acquisition, development, extraction, marketing and/or distribution costs which would be incurred should Pinnacle International and/or its Subsidiaries directly exploit the Prospect without joint venture partners), it being understood that Momentum has an interest in gross revenues generated by a Prospect without offset or deduction. Notwithstanding the foregoing, Momentum understands and agrees that Prospect Revenues arising from distributions from joint ventures and/or third party arrangements may, based upon the terms and conditions of such joint venture, be made after the joint venture has deducted costs, expenses and reserves, or repaid capital provided by the joint venture and/or other third party, and Momentum further agrees that it shall have no right to "gross up" the Prospect Revenues to reflect the pre-distribution deduction by the joint venture or other third party of such costs, expenses and reserves and/or repayment of capital.

6. SECURITY INTERESTS GRANTED TO MOMENTUM

As security for Pinnacle International's obligation to pay the SFD Data Fee, it agrees that it shall execute a Security Agreement in form reasonably acceptable to Momentum with respect to any interest in any Prospect acquired by Pinnacle International and/or its Subsidiaries, which will grant to Momentum a security interest in any Prospect Revenues generated by Pinnacle International and/or its Subsidiaries in such Prospect. The grant of the security interest shall not exceed the anticipated aggregate SFD Data Fee payable to Momentum with respect to such Prospect

7. PROVISION OF PERFORMANCE OPTIONS TO MOMENTUM

Pinnacle International shall, as soon as possible following each quarter in which the Performance Options are earned, deliver a written stock option certificate to Momentum to evidence the grant of the Performance Option, and containing such reasonable terms as are usual or customary in stock option certificates. Notwithstanding the foregoing, the Performance Options shall not be subject to any vesting conditions.

For purposes of calculation: (i) production of Hydrocarbons with respect to any Prospects not then owned by Pinnacle International and/or its Subsidiaries and/or indirectly owned by Pinnacle International and/or its Subsidiaries through any joint venture and/or third party arrangement shall be disregarded; and (ii) production of Hydrocarbons with respect to any Prospects indirectly owned by Pinnacle International and/or its Subsidiaries through any joint venture and/or third party arrangement shall be multiplied by a fraction, the numerator of which shall be the participation percentage of Pinnacle International and/or its Subsidiaries in such joint venture or third party arrangement, and the denominator of which shall be the participation percentages of all parties to such joint venture or third party arrangement.

(i) If the Common Stock is traded on a stock exchange on the date in question, the Fair Market Value of the Option Shares will be equal to the closing bid price of Common Stock on the principal exchange on which the Common Stock is then trading as reported by such exchange, or if the Common Stock is not traded on such date, on the next preceding trading day during which a sale occurred;

(ii) If the Common Stock is traded over-the-counter on the NASDAQ National Market on the date in question, the Fair Market Value of the Option Shares will be equal to the last sales price of the Common Stock as reported by NASDAQ, or if the Common Stock is not traded on such date, on the next preceding trading day;

(iii) If the Common Stock is traded over-the-counter on the NASDAQ SmallCap Market, or on the NASD Electronic Bulletin Board or Pink Sheets on the date in question, the Fair Market Value of the Option Shares will equal the mean between the closing representative bid and asked price for the Common Stock on such date as reported by NASDAQ or the NASD (as the case may be), or if the Common Stock is not traded on such date, on the next preceding trading day;

(iv) If the Common Stock is not publicly traded on an exchange and is not traded over-the-counter on NASDAQ or the NASD Electronic Bulletin Board or the NASD Pink Sheets, the Fair Market Value of the Option Shares shall be determined by the Board of Directors of Pinnacle International acting in good faith on such basis as it deems appropriate; and

value.

Notwithstanding the foregoing, the Option Price shall not be less than
(i) that allowed under the exemption from registration or qualification under the applicable federal, state or provincial securities laws as selected pursuant to subsection 7(g) below; and (ii) if the Common Stock is traded on a stock exchange or over-the-counter on NASDAQ, the Option Price may not be less than the minimum price permitted by such stock exchange or by NASDAQ.

(i) In immediately available funds, in United States dollars; and/or

(ii) The surrender or relinquishment of options, warrants or other rights to acquire Common Stock held by Momentum and/or its Affiliates, with a Fair Market Value on the date of such surrender or relinquishment equal to the aggregate Option Price of the Option Shares with respect to which the Performance Option or portion is thereby exercised; and/or

(iii) If expressly consented to by Pinnacle International:

(1) The surrender or relinquishment of options, warrants or other rights to acquire Common Stock held Momentum and/or its Affiliates, with a Fair Market Value on the date of such surrender or relinquishment equal to the aggregate Option Price of the Option Shares with respect to which the Performance Option or portion is thereby exercised; or

(2) A full recourse promissory note bearing interest at a rate as shall then preclude the imputation of interest under the Internal Revenue Code of 1986, as amended, and payable upon such terms as may be prescribed by Pinnacle International. Pinnacle International shall prescribe the form of such note and the security to be given for such note. Notwithstanding the foregoing, no Performance Option may be exercised by delivery of a promissory note or by a loan from Pinnacle International if such loan or other extension of credit is prohibited by law at the time of exercise of this Performance Option or does not comply with the provisions of Regulation G promulgated by the Federal Reserve Board with respect to "margin stock" if Pinnacle International and Momentum are then subject to such Regulation.

death of any natural Person holding a Performance Option, such Options may be Transferred to such deceased Person's successors pursuant to will or the laws of descent or distribution by reason of the death of such Person, and may thereafter be exercised by such Person's successors. The term "Transfer" means any transfer or alienation of a Performance Option which would directly or indirectly change the legal or beneficial ownership thereof, whether voluntary or by operation of law, regardless of payment or provision of consideration, including, by way of example and not limitation: (i) the sale, assignment, bequest or gift of the Performance Option; (ii) any transaction that creates or grants an option, warrant, or right to obtain an interest in the Performance Option; (iii) any transaction that creates a form of joint ownership in the Performance Option between Momentum and one or more other Persons; and/or (iv) any Transfer of the Performance Option to a creditor of Momentum, including the hypothecation, encumbrance or pledge of the Performance Option or any interest therein, or the attachment or imposition of a lien by a creditor of Momentum on the Performance Option or any interest therein which is not released within thirty (30) days after the imposition thereof.

8. COMPETITIVE PRACTICES

interpretation so long as: (1) the use and interpretation of such raw SFD Data by such joint-venture partners and/or third parties is limited to purposes other than the identification and/or exploitation of Hydrocarbons; and (2) such joint venture partners and/or third parties do not have access to the Stress Field Detector and the SFD Technology. In order to facilitate the foregoing covenant, Momentum and each of its Subsidiaries and Affiliates will execute a Competitive Practices Agreement in form reasonably satisfactory to Pinnacle International following execution of this Agreement.

9. TERM

(i) Pinnacle International shall fail to make any payment of the SFD Data Fee, or any other amount due hereunder;

(ii) Pinnacle International and its Subsidiaries shall have collectively abandoned or discontinued the conduct of its oil and gas exploration and/or exploitation business;

(iv) Pinnacle International shall make any assignment for the benefit of creditors, or shall file or have filed against it any petition under any federal, state or provincial bankruptcy or statute, which petition under any federal, state or provincial bankruptcy or similar statute is not vacated within ninety

(90) days, or Pinnacle International takes advantage of any insolvency or similar law, or if any receiver is appointed for Pinnacle International's business or property; and/or

(v) Pinnacle International shall fail to perform any other material covenant, agreement or term of this Agreement.

10. PROTECTION OF INTELLECTUAL PROPERTY RIGHTS

11. REPRESENTATIONS AND WARRANTIES OF PARTIES

(ii) No Infringement. The granting of exclusive rights to Pinnacle International for the use of the SFD Data to identify and exploit Hydrocarbons, and the use of the Stress Field Detector and the SFD Technology by Momentum in generating and providing such SFD Data to Pinnacle International, will not infringe upon or violate any intellectual property right of any other Person including, without limitation, any patent, tradename, trademark, copyright or other proprietary right of any other Person.

12. INDEMNIFICATION; DEFENSE OF THIRD-PARTY CLAIMS

whether meritorious or not meritorious, based upon or related to or arising from any of the following (collectively and severally, "Indemnifiable Claim(s)"):

(i) The breach or threatened breach by the Indemnitor of any of the warranties, obligations, covenants or agreements of such party under this Agreement, or the material inaccuracy of the representations of such party under this Agreement.

(ii) Any infringement or violation of any patent, trademark, copyright or common law or statutory rights, or proprietary rights by or on account of the Stress Field Detector, the SFD Technology and/or the SFD Data, in which case Momentum shall be deemed the "Indemnitor."

The Indemnitor shall promptly pay to the Indemnitee his, her or its Losses as such Losses are incurred or, to the extent already paid by the Indemnitor, reimburse such Losses to the Indemnitee promptly upon demand by the Indemnitee.

(1) In the event the Notice specifies that the Indemnitee elects to assume and control the defense of the Third-Party Claim, then the Indemnitor may nevertheless assume and control such defense [subject to an insurer's right to control the defense of any litigation] at his, her or its sole cost, expense and ultimate liability, regardless of outcome, and through counsel of his, her or its choice (which counsel shall be reasonably satisfactory to the Indemnitee); provided, however: (A) the Indemnitor first acknowledges in writing his, her or its obligation to unconditionally indemnify the Indemnitee with respect to all Indemnitee Damages that may arise with respect to all such Third-Party Claims, and (2) the Indemnitor gives prompt written notice of his, her or its intention to assume and control the defense to the Indemnitee.

(3) In the event the Notice specifies that the Indemnitee does not elect to assume and control the defense of the Third-Party Claim, then the Indemnitor may assume and control

(4) Each party who assumes and control the defense of a Third-Party Claim as provided above shall permit the other party to participate in the defense of such Third-Party Claim by counsel of his, her or its own choosing, and at his, her or its own expense.

13. RELATIONSHIP OF PARTIES

Notwithstanding any other provision of this Agreement to the contrary, this Agreement and the transactions contemplated herein do not and will not establish or constitute a partnership, joint venture, association, agency or other relationship between the parties except as that of Momentum and Pinnacle International. Neither party, nor such party's officers, employees, directors, shareholders and/or representatives, shall be deemed an employee or agent of the other party, or have any right or authority to act for and/or bind the other party in any way, or represent that the other party is in any way responsible for acts of the other. Momentum shall in no way be responsible for the exploitation and/or development of any Prospect identified with the SFD Data. Each party shall have exclusive liability for the payment of all taxes imposed on such party or its employees or agents which arise in connection with the performance of this Agreement including, without limitation, the payment and/or withholding, as the case may be, of income taxes, property taxes, sales or use taxes, social security and other payroll taxes, workmen's compensation insurance, disability benefits and the like which are measured by the wages, salaries or other remuneration to the extent applicable to the personnel involved, and neither party shall be liable for any such payments which may be assessed against the other party. No right, express or implied, is granted by this Agreement to either party to use in any manner the name of the other or any other trade name or trademark of the other in connection with the performance of this Agreement.

14. MISCELLANEOUS

persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not be affected thereby, and shall continue in full force and effect to the fullest extent provided by law.

in which case no party shall be entitled to recover its costs and expenses under this subsection).

Notices shall be addressed at the addresses first set forth above, or to such other address as the party shall have specified in a writing delivered to the other parties in accordance with this paragraph. Any notice given to the estate of a party shall be sufficient if addressed to the party as provided in this section.

WHEREFORE, the parties hereto have, for purposes of this Agreement, executed this Agreement in the City of Vancouver, Province of British Columbia, Canada, as of the date first hereinabove set forth.

PINNACLE OIL:                 PINNACLE OIL, INC.,
                              a Nevada corporation

                              By:   /s/ R. Dirk Stinson
                                  -----------------------------
                                    R. Dirk Stinson, President


PINNACLE INTERNATIONAL:       PINNACLE OIL INTERNATIONAL, INC.,
                              a Nevada corporation

                              By:   /s/ R. Dirk Stinson
                                  -----------------------------
                                    R. Dirk Stinson, President


MOMENTUM:                     MOMENTUM RESOURCES
                              CORPORATION,
                              a Bahamas corporation

                              By:   /s/ R. Dirk Stinson
                                  -----------------------------
                                    R. Dirk Stinson, President


LISZICASZ:                    GEORGE LISZICASZ
                              an individual

                              /s/ George Liszicasz
                              ---------------------------------


STINSON:                      R. DIRK STINSON
                              an individual

                              /s/ R. Dirk Stinson
                              ---------------------------------

EXHIBIT 10.5

AMENDMENT TO RESTATED TECHNOLOGY AGREEMENT

This Amendment to Restated Technology Agreement (the "Agreement"), dated as of April 3, 1998, is entered into by and between Pinnacle Oil Inc., a Nevada corporation ("Pinnacle Oil"), whose principal executive office is located at Suite 750 Phoenix Place, 840 7th Avenue, S.W., Calgary, Alberta Canada T2P 3G2; Pinnacle Oil International, Inc., a Nevada corporation ("Pinnacle International"), whose principal executive office is located at Suite 750 Phoenix Place, 840 7th Avenue, S.W., Calgary, Alberta Canada T2P 3G2; Momentum Resources Corporation, a Bahamas corporation ("Momentum"), whose principal executive office is located c/o Ansbacher (Bahamas) Limited, P.O. Box N-7768, Bank Lane, Nassau, Bahamas; George Liszicasz ("Liszicasz"), an individual whose principal office is located at Suite 750 Phoenix Place, 840 7th Avenue, S.W., Calgary, Alberta Canada T2P 3G2; and R. Dirk Stinson ("Stinson"), an individual whose principal office is located at Suite 750 Phoenix Place, 840 7th Avenue, S.W., Calgary, Alberta Canada T2P 3G2; with reference to the following facts:

WHEREAS, the parties previously entered into a Restated Technology Agreement dated as of August 1, 1996 (the "Prior Agreement"), in order to (i) restate the relationships among the parties, and (ii) clarify certain matters not fully addressed or clarified in the prior agreements between the parties relating to the Stress Field Detector, the SFD Technology and the SFD Data (each as defined in the Prior Agreement); and

WHEREAS, the parties wish to amend and supersede section 5(a) of the Prior Agreement with regard to the provisions regarding the SFD Data Fee as set forth below; and

WHEREAS, it is the intent of the parties that this Agreement amend and supersede the Prior Agreement to the extent provided for herein, but that the remainder of the Prior Agreement remain in full force and effect;

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the parties to this Restated Technology Agreement (collectively "parties" and individually a "party") agree as follows:

Except for capitalized terms specifically defined in this Agreement, capitalized terms shall have the meanings ascribed to them in the Prior Agreement.

2. AMENDMENT REGARDING PAYMENT OF SFD DATA FEE TO MOMENTUM

In furtherance of the recitals set forth above, the parties agree that the following provisions shall replace and supersede section 5(a) of the Prior Agreement in its entirety:

The term "Prospect Profits" means "Prospect Revenues" (as such term is defined below), less all project expenses actually paid by Pinnacle International and/or its Subsidiaries with respect to the commercial exploitation of all Prospects ("Prospect Expenses").

The term "Prospect Revenues" means the aggregate of all gross revenues actually received by Pinnacle International and/or its Subsidiaries with respect to the commercial exploitation of all Prospects calculated, by way of example and not limitation, as follows:

(i) If Pinnacle International and/or its Subsidiaries indirectly acquire the legal rights for the further exploration, development and production of Hydrocarbons with respect to a Prospect through joint-ventures and/or other arrangements with third parties, then the Prospect Revenues from such Prospect will be the cash flows received by Pinnacle International and/or its Subsidiaries from such joint venture and/or third party, whether from the sale of Hydrocarbons or the sale by the joint venture and/or third party of its interest in such Prospect.

(ii) If Pinnacle International and/or its Subsidiaries sell or transfer the legal rights for (or "leads" relating to) a Prospect, then the Prospect Revenues from such Prospect will be the gross consideration received by Pinnacle International and/or its Subsidiaries as a result of such sale or transfer.

(iii) If Pinnacle International and/or its Subsidiaries directly acquire the legal rights for the further exploration, development and production of Hydrocarbons with respect to a Prospect, and independently extract and sell Hydrocarbons from such Prospect, then the Prospect Revenues from such Prospect will be the gross cash flows received by Pinnacle International and/or its Subsidiaries from the sale of such Hydrocarbons.

Momentum acknowledges and agrees that the foregoing definition will permit Pinnacle International and/or its Subsidiaries to deduct expenses, costs, capital or equity investment and/or loan costs paid in connection with the generation of Prospect Revenues prior to payments to Momentum (such as acquisition, development, extraction, marketing and/or distribution costs which would be incurred should Pinnacle International and/or its Subsidiaries directly exploit the Prospect without joint venture partners). In addition, Momentum understands and agrees that Prospect Revenues arising from distributions from joint ventures and/or third party arrangements may, based upon the terms and conditions of such joint venture, be made after the joint venture has deducted costs, expenses and reserves, or repaid capital provided by the joint venture and/or other third party, and Momentum further agrees that it shall have no right to "gross up" the Prospect Revenues to reflect the pre- distribution deduction by the joint venture or other third party of such costs, expenses and reserves and/or repayment of capital.

equitable portion of the total Prospect Profits earned by Pinnacle International and/or its Subsidiaries as to enable Momentum to receive the benefit of its bargain, subject to avoidance of duplicative payments by Pinnacle International and its Subsidiaries. In order to avoid any disputes or misunderstandings, Pinnacle International and Momentum agree to use their best efforts, while Pinnacle International is formulating its proposed method to exploit a Prospect, to outline in writing, prior to committing to such method, the economics of the proposed method of exploitation consistent with the terms of this Agreement. Should the parties be unable to agree upon such economics, they agree that such issue shall be resolved by arbitration (an "Arbitration Proceeding") before the American Arbitration Association (the "Arbitration Authority") located in Carson City, Nevada, according to the rules and practices of the Arbitration Authority from time-to-time in force, unless the parties mutually agree upon a different Arbitration Authority and/or different location for such Arbitration Proceeding."

3. MISCELLANEOUS

WHEREFORE, the parties hereto have, for purposes of this Agreement, executed this Agreement in the City of Calgary, Province of Alberta, Canada, as of the date first hereinabove set forth.

PINNACLE OIL:                      PINNACLE OIL INC.,
                                   a Nevada corporation

                                   By:  /s/ R. Dirk Stinson
                                       -----------------------------
                                        R. Dirk Stinson, President


PINNACLE INTERNATIONAL:            PINNACLE OIL INTERNATIONAL, INC.,
                                   a Nevada corporation


                                   By:  /s/ R. Dirk Stinson
                                       -----------------------------
                                        R. Dirk Stinson, President


MOMENTUM:                          MOMENTUM RESOURCES
                                   CORPORATION,
                                   a Bahamas corporation


                                   By:  /s/ R. Dirk Stinson
                                       -----------------------------
                                        R. Dirk Stinson, President


LISZICASZ:                         GEORGE LISZICASZ
                                   an individual

                                        /s/ George Liszicasz
                                   ----------------------------------


STINSON:                           R. DIRK STINSON
                                   an individual


                                        /s/ R. Dirk Stinson
                                   ----------------------------------

EXHIBIT 10.6

[LETTERHEAD OF ENCAL ENERGY LTD. APPEARS HERE]

December 13, 1996

Pinnacle Oil International Inc.
380 - 1090 West Georgia St.
Vancouver, British Columbia
V6E 3V7

Attention: Mr. R. Dirk Stinson

Dear Sir:

Further to our recent meeting on the captioned subject, please accept this letter of understanding as a term sheet from which Encal Energy Ltd. ("Encal") and Pinnacle Oil International Inc. ("Pinnacle Oil") may pursue a joint venture proposal.

The general terms of the joint venture are as follows:

1. OBJECTIVES

. to provide a field test of the Stress Field Detector ("SFD") technology by Pinnacle for Encal which may be further tested through the drilling of oil and gas test wells by Encal.

. to utilize Pinnacle Oil's expertise and proprietary SFD technology within the Acme/Swalwell area, as set forth on the attached Schedule "A", for the purpose of identifying and further enhancing drilling opportunities for Encal and the joint venture as, herein described (such area shall be hereinafter called "the Area").

2. PINNACLE'S WORK COMMITMENT AND TIMING

. Pinnacle will carry out and interpret SFD surveys within the Area and more specifically over Encal's undeveloped lands in the Area prior to January 30, 1997. Encal's undeveloped lands to be evaluated by Pinnacle will be lands in which Encal holds a working interest, or may be entitled to hold an interest, of not less than 50%. Specified

Pinnacle Oil International Inc. Joint Venture Proposal 12/16/96

exclusions from the Schedule "A" Acme/Swalwell Lands will be any lands and rights not owned by Encal and in addition, shall exclude any well spacing units of Encal's Acme/Swalwell Lands which are shown as excluded portions through cross hatching on Schedule "A".

. Upon completion of the survey, Pinnacle will present an interpreted SFD survey to Encal which shall highlight prospects and anomalies that have been identified by Pinnacle in a ranked order from most prospective to least prospective. Undeveloped prospects identified by Pinnacle and presented for acceptance to Encal at this stage will be the prospects in which Pinnacle shall have the right to participate as hereafter referenced.

3. ENCAL'S COMMITMENT

Encal will provide seismic geophysical evaluation on a minimum of the three most prospective anomalies identified by Pinnacle as soon as possible. Pending incorporation of the seismic data, Encal will proceed to test through test well drilling, none, some or all of the identified anomalies. Upon Encal having drilled a test well to test a prospect, Pinnacle will receive a casing point election to participate in such well as to 5% of Encal's interest on each of the first three test wells. In the event Pinnacle elects to participate beyond casing point in a test well, Pinnacle shall thereafter be entitled to a working interest equal to 5% of Encal's interest in the test well and the test well spacing unit, with such interest earned by Pinnacle to be subject to all existing royalties and other burdens on Encal's interest ("Earned Interest"). Costs incurred after the casing election point would be paid at election to Encal by Pinnacle and Pinnacle would participate as to the Earned Interest share in costs (including casing costs) from that point on. Subject to the further terms of this agreement, Pinnacle will have the right to participate with Encal as to 5% of Encal's interest in subsequent option wells and development wells after the third test well on any prospects identified in Clause 2 hereof, during the term of this agreement as set forth in Clause 5.

4. INFORMATION TO BE KEPT CONFIDENTIAL

. All data, interpretation and future rights from the SFD survey will remain the sole property of Pinnacle. All data interpretation and future rights from any seismic geophysical data will remain the sole property of Encal. It is understood that Pinnacle may use SFD surveys conducted and subsequently tested through drilling under this

Pinnacle Oil International Inc. Joint Venture Proposal 12/16/96

agreement as templates to encourage further applications of SFD technology. Notwithstanding the foregoing, it is understood by both parties that any dissemination of SFD survey, drilling or other confidential information for a period of one year from rig release of each well must be with mutual consent. Press releases regarding the status, progress and results of operations involving both Encal and Pinnacle must also be jointly agreed upon.

5. TERM

. Subject to Clause 6 hereof, Pinnacle's right to participate in the drilling of either option or development wells on Encal's Acme/Swalwell Lands as referred to in Clause 3 hereof will terminate on the later of August 31, 1997, or 120 days after notice by Encal to Pinnacle that Encal has no further intent of drilling test wells, or option wells, or development wells under this agreement.

6. PINNACLE RIGHT TO FARMIN

. Until July 8, 1997, the parties shall consult as to the potential to drill further wells on Encal's Acme/Swalwell Lands. In the event that Encal proposes not to drill any further wells on any portion of the Acme/Swalwell Lands prior to the expiration of the term referenced in Clause 5, Pinnacle shall have the right to commit to drill, on a farmin basis, any number of additional wells on the remaining unearned Acme/Swalwell Lands. It is agreed and understood that in the event that Pinnacle commits to drill any additional wells, the parties will negotiate in good faith towards the execution of a formal farmout agreement. Such agreement shall contain the terms and conditions normally untilized by Canadian oil and gas companies for such transactions. The basic terms would provide for Pinnacle to drill to a depth sufficient enough to evaluate the Nisku formation, complete, and equip or abandon each well at its sole cost, risk, and expense each well. Upon Pinnacle having fulfilled its obligations pursuant to the Farmout Agreement, Pinnacle shall have earned from Encal:

a) an undivided 100% of Encal's pre-farmout working interest in each additional well spacing unit in all zones that Encal holds an interest down to the base of the Nisku formation. Such interest earned by Pinnacle would be subject to a convertible sliding scale gross overriding royalty to Encal of 1/150 (5%-15%) of monthly oil production and 15% of natural gas and all other products based

Pinnacle Oil International Inc. Joint Venture Proposal 12/16/96

on Encal's original pre-farmout working interest. This royalty would be convertible at payout to an undivided 50% interest; and

b) in each additional well spacing unit Pinnacle shall have earned an undivided 50% of Encal's pre-farmout working interest in all zones that Encal holds an interest down to the base of the Nisku formation in the balance of a pre-selected one (1) section block.

7. RIGHT-OF-FIRST REFUSAL

. Pinnacle and Encal hereby acknowledge that the opportunity to participate in the enhancement of drilling opportunities utilizing SFD technology will be limited to three joint venture partners.

. Encal, as one of the prospective partners, hereby requests and Pinnacle agrees to provide Encal with a shared right-of-first refusal (to be shared equally and independently between Encal and Pinnacle's other joint venture partners) to participate in further exploration projects utilizing SFD technology in British Columbia, Alberta and Saskatchewan. The term of this right-of-first refusal will commence on the date of this letter and terminate on August 31, 1997, but subject to extension with the mutual agreement of the parties.

8. MISCELLANEOUS

. This Agreement shall not be construed as a partnership.

. Pinnacle warrants to Encal that Pinnacle has full right and authority to utilize SFD technology.

. Pinnacle, by entering into this agreement, does not violate or conflict with any term or provision of or constitute a default under any agreement of whatever nature.

. Each of Pinnacle and Encal shall indemnify the other against all actions, suits, demands, claims, losses, expenses and damages which may be brought against, incurred by or suffered by the other or which may sustain, pay or incur by reason of or in any way attributable to the operations contemplated by this agreement carried out by the other, its agents, servants, employees or contractors.

Pinnacle Oil International Inc. Joint Venture Proposal 12/16/96

If this summarizes your understanding of our discussions and you are prepared to move forward on this basis, please execute and return one copy to the undersigned. We are prepared to sit down and layout the most effective traverses and identify template locations as soon as possible.

Yours very truly

ENCAL ENERGY LTD.

/s/ Peter A. Carwardine
Peter A. Carwardine
V.P Land & Corporate Development

/cdi
Attachment

ACCEPTED AND AGREED TO THIS 14 day of December, 1996

This is Schedule "A" attached to and forming part of an Joint Venture Proposal dated December 13, 1996 between Encal Energy Ltd. and Pinnacle Oil International Inc.

[GRAPH OF JOINT VENTURE PROPOSAL APPEARS HERE]

EXHIBIT 10.7

EXPLORATION JOINT VENTURE AGREEMENT

THIS AGREEMENT made as of the 19th day of February, 1997,

AMONG

ENCAL ENERGY LTD., a corporation incorporated under the laws of the Province of Alberta ("Encal")

THE PARTY OF THE FIRST PART

-and-

PINNACLE OIL INTERNATIONAL INC., a corporation incorporated under the laws of the State of Nevada

("PINNACLE")

THE PARTY OF THE SECOND PART

-and-

THE AFFILIATES, being the individuals or corporations identified in Schedule "A" hereto, having an affiliation to Pinnacle or the SFD Technology (the "AFFILIATES")

THE PARTY OF THE THIRD PART

WHEREAS the parties have agreed to enter into this Exploration Joint Venture Agreement (the "EJV") for the exploration, development and production of oil and gas in Western Canada; and

WHEREAS the Parties have agreed that the EJV shall be carried out pursuant to the provisions of this Agreement;

NOW THEREFORE THIS AGREEMENT WITNESS THAT, in consideration of the premises and the mutual covenants of the Parties herein contained, the Parties hereto agree as follows:

1. Definitions and Schedules

a) In this Agreement, unless the context otherwise requires, the definitions set forth in Clause 101 of the Operating Procedure, shall apply and in addition, the following shall have the following meanings;

i) "Accounting Procedure" means Schedule "D" attached to and made part of this Agreement;

ii) "Assignment Procedure" means the CAPL 1993 Assignment Procedure attached as Schedule "E" hereto which supersedes any conflicting clause in the Operating Procedure;

iii) "Action" means the court proceedings described in an action filed in the British Columbia Supreme Court, Vancouver Registry, in File No. C944272, between George Liszicasz, as plaintiff; and Alexander Shereshevsky, G.D.M Grand Development Corp., Samuel Higgins, also known as Sam Higgins, and Sam J. Higgins, Manon L. Walters and Keith Morey, as defendants, and Pinnacle Oil Inc., Pinnacle Oil International Inc. and Manon L. Walters Inc., as defendants by counterclaim;

iv) "Basis Geophysical Data" means any non-interpreted seismic data, processed record sections, seismic tapes, monitor records and associated data;

v) "Earning Well" means a well drilled, completed or abandoned pursuant to Clauses 12(b) or 13(b) as the context requires and where such well is drilled pursuant to a Farmin Agreement or and Additional Farmin Agreement and where such well earns from a third party an interest in Petroleum and Natural Gas Rights;

vi) "Exploration Area" means any contiguous area covering up to nine
(9) township (or NTS survey equivalent) in size, as identified by Encal pursuant to Clause 6 hereof with the three Initial Exploration Areas identified in Schedule "B" hereto and as identified by Encal pursuant to Clauses 7 and 9;

vii) "Exploratory Prospect" means the geographic area and appropriate spacing units (including entire spacing units in the case of partial spacing units) covering an SFD Anomaly identified utilizing SFD Technology and qualified in accordance with the provisions of this Agreement;

viii) "Facility" means:

a) production facility; or

b) any gas processing plant, gas compressor station, battery, gathering system or production storage facility used in the production of petroleum substances which facility in accordance with industry practice, would be constructed and/or operated pursuant to a separate agreement:

ix) "Joint Lands" means joint lands and lands where the Parties have acquired and interest pursuant to the terms of a Farmin Agreement and/or an Additional Farmin Agreement as set forth in Clause 12(b) or 13(b);

x) "Losses" means, in respect of any matter, all claims, demands, proceedings, losses, damages, liabilities, deficiencies, costs and expenses (including, without limitation, all legal and other professional fees and disbursements, interest, penalties and amounts paid in settlement) arising directly or indirectly as a consequence of such matter;

xi) "New Lands" means joint lands acquired pursuant to this Agreement excepting those lands acquired pursuant to Clauses 12(b) and 13(b);

xii) "Operating Procedure" means the 1990 amended CAPL Operating Procedure attached hereto as Schedule "C" and made part of this Agreement;

xiii) "party' or "Parties" means a party to this Agreement;

xiv) "Petroleum and Natural Gas Rights" means any documents, issued or which may be issued, by virtue of which a Party is entitled to drill for, win, take or remove petroleum substances underlying lands and all renewals or extensions thereof or documents of title issued thereunder;

xv) "Royalty Procedure" means the royalty procedure attached as schedule "F" and made part of this Agreement.

xvi) "Seismic Costs" means, with respect to Basic Geophysical Data, all moneys expended in respect of an Exploratory Prospect for the purchase

of seismic data, the shooting and processing or reprocessing of seismic data and collection of information and any other costs associated therewith;

xvii) "SFD Anomaly, means an anomalous geological or geophysical feature prospective of containing petroleum substances, initially identified by Pinnacle using SFD Technology and SFD Data:

xviii) "SFD Data" means primary signal data derived form SFD Technology;

xix) "SFD Information" means Ground Based SFD Information and Airborne SFD Information collectively or individually as the context requires;

xx) "SFD Technology" means stress field detector technology;

xxi) "Territory" means Alberta, British Columbia and Saskatchewan;

xxii) "Wells" means, collectively, Earning Wells, Test Wells, Additional Wells and Subsequent Wells as hereinafter defined.

b) Appended hereto are the following schedules:

A - Affiliates
B - Initial Exploratory Areas
C - Operating Procedure
D - Accounting Procedure
E - Assignment Procedure
F - Royalty Procedure
G - Confidentiality Agreement

2. Term

a) The term of this Agreement ("Term") shall commence as of February 19, 1997, ("Effective Date") and shall extend for a period of three (3) years therefrom which Term may be subsequently extended by the mutual agreement of the Parties.

b) Provided that this Agreement has not been previously terminated pursuant to Clause 19, the Term of this Agreement shall be restarted and recommence for a three (3) year period following Pinnacle advising Encal that it has the ability to commence and conduct airborne surveys utilizing the SFD Technology unless such date is more than four (4) years from the Effective Date hereof.

3. No Warranty of Title

In the event any Party, subsequent to the date of this Agreement, encumbers any interest it now holds or may obtain under this Agreement, the Party which encumbers its interest shall be solely responsible for that encumbrance, and agrees to indemnify the other Parties to this Agreement form any Losses caused by the encumbrance.

4. Warranty Of Technology

a) Pinnacle and each of the Affiliates, jointly and severally, represent, warrant and covenant to Encal that the beneficial owner of the SFD Technology is Momentum Resources Ltd. ("Momentum") and Momentum has granted Pinnacle an exclusive licence for the use of SFD Technology for the purpose of generating SFD Data for the exploration of petroleum substances.

b) Pinnacle and each of the Affiliates, jointly and severally, hereby represent, warrant and covenant to Encal that, as of the Effective Date and through the Term of this Agreement and any extensions thereof, that Pinnacle is and will be the beneficial owner of the SFD Data, free and clear of any and all claims, suits, proceedings, encumbrances and obligations which may limit or impair its ability to utilize the SFD Technology in the manner contemplated hereunder.

c) Pinnacle and each of the Affiliates, jointly and severally, hereby represent, warrant and covenant with Encal that the conduct of any SFD survey and joint operation contemplated by this Agreement does not infringe upon the industrial or intellectual property rights, domestic or foreign, of any other person and except for the Action, neither Pinnacle nor the Affiliates are aware of any claim of any infringement or breach of any industrial or intellectual property rights of any other person nor have Pinnacle or any the Affiliates, received any notice that the conduct of the SFD survey and joint operations contemplated in this Agreement, including the use of the SFD Technology, infringes upon or breaches any industrial or intellectual property rights of any other person.

d) Except for the Action, Pinnacle and each of the Affiliates, jointly and severally, represent, warrant and covenant with Encal that there are no claims, actions, suits or proceedings (whether or not purported on behalf of Pinnacle or the Affiliates) pending or to the best of the knowledge of Pinnacle or each of the Affiliates, threatened against or affecting Pinnacle, the Affiliates or the SFD

Technology, at law or in equity or before or by any federal, provincial, municipal or other governmental department, court, commission, board, bureau, agency or instrumentally, domestic or foreign, or before or by any arbitrator or arbitration board.

e) Pinnacle and each of the Affiliates, jointly and severally, warrant and covenant with Encal that the entering into, consummation and performance by Pinnacle of this Agreement will not constitute a breach of any agreement, contract or licence by which Pinnacle or any Affiliate is bound or an infringement upon any intellectual property or technology right of any person.

5. USE OF TECHNOLOGY

a) Pinnacle shall provide to Encal a first priority to have Pinnacle generate SFD Data on Encal's behalf during the Term of this Agreement within the Territory, on the condition that Pinnacle may be entitled to enter into up to a maximum of two (2) current joint ventures with other parties within the Territory, to generate SFD Data on their behalf, which joint ventures may utilize data obtained from the SFD Technology in the Territory in areas other than the current Exploration Areas; provided however that, in British Columbia, the SFD Technology shall be utilized by Pinnacle solely and exclusively for generating SFD Data for the benefit of Encal during the Term.

b) Encal's first priority to have Pinnacle generate SFD Data on Encal's behalf as provide in Clause 5(a) shall mean a first dedication by Pinnacle to Encal hereunder of a minimum of 50% of Pinnacle's world wide SFD Data generating capacity to be dedicated to the Territory and of which a minimum of 75% of Pinnacle's SFD Data generating capacity within the Territory is to be first dedicated to Encal. Such first dedication shall apply only at the times that Pinnacle has not generated the Minimum Prospect Inventory, as hereinafter defined.

c) If during the Term of this Agreement, Pinnacle generates SFD Data in the Territory that pertains to lands that are not within a current Exploration Area or over an area permitted under another joint venture, as allowed hereunder, Pinnacle shall present to Encal all SFD Anomalies identified by Pinnacle from such data within thirty (30) days and the terms and conditions of Clauses 6 or 7

shall apply and Exploration Prospects resulting therefrom shall form part of the Minimum Prospect Inventory referenced in Clause 9 (b). Provided, however, Pinnacle shall not be required to present such SFD Anomalies or features on any lands that would qualify as Excluded Lands pursuant to Clause 8. This Clause 4(b) shall be in effect until October 31, 1998.

6. SFD SURVEY PROGRAM - GROUND SURVEYS

a) Encal shall initially select three (3) Exploration Areas within the Territory upon which ground based survey work will be conducted by Pinnacle, utilizing the SFD Technology ("Ground Based Survey,). Pinnacle shall perform the Ground Based Survey on each of these Exploration Areas selected by Encal, in the order determined by Encal, Pinnacle shall, within thirty (30) days, advise Encal of:

i) any safety concerns; or,

ii) conflicts with an area forming part of another joint venture as provided in Clause 5(a) hereof; or to the knowledge of Pinnacle, conflicts with lands held by Pinnacle's partner in such other current joint venture, or,

iii) any concerns Pinnacle has arising in acquiring SFD Information of a technical nature as a result of Excluded Lands or any other bona fide reason,

if any, that pertain to the Exploration Areas that Encal selects for such Ground Based Surveys. In the event that any of the above conflicts or concerns arise, Encal and Pinnacle shall either jointly modify the subject Exploration Area or Encal shall select another Exploration Area as a substitute.

b) On or before September 25, 1997, Pinnacle shall:

i) present to Encal visual SFD Data and written interpretations thereof collected while conducting the Ground Based Survey, provided however, Pinnacle shall not be required to provide to Encal copies, in any form, of the SFD Data;

ii) provide, at no cost to Encal, copies of all maps, information, written reports, interpretations and assessments of Pinnacle identifying, in Pinnacle's opinion, all SFD Anomalies, and possible Exploratory Prospects; and,

iii) provide recommendations in respect to all SFD Anomalies identified, (i, ii, and iii above are collectively referred to as the "Ground Based SFD Information").

(c) Upon presentation of the Ground Based SFD Information provided by Pinnacle, Encal shall have ninety (90) days to review the Ground Based SFD Information and individually accept or reject in writing any or all SFD Anomalies or features ("Evaluation Period"). Pinnacle agrees during the Evaluation Period to assist Encal in assessing, confirming, and the further evaluation of any of the SFD Anomalies.

Any SFD Anomaly accepted by Encal shall be hereinafter called an Exploratory Prospect.

There is no maximum to the number of SFD Anomalies that Pinnacle may provide Ground Based SFD information on and which may be accepted by Encal as Exploratory Prospects.

In the event that such SFD Anomalies are rejected by Encal, or deemed rejected, such SFD Anomalies shall not be subject to this Agreement and Pinnacle shall be free to deal with these rejected SFD Anomalies as it wishes.

Encal and Pinnacle shall attempt to jointly prioritize the Exploratory Prospects. Encal, as Operator and on behalf of the Parties, shall, utilizing conventional oil and gas industry methods use it's best efforts to cause further evaluation work to be done on each Exploratory Prospect, as prioritized above. Such work shall be for the purpose of confirming whether or not a Test Well location should be selected and whether or not the drilling of such Test Well is warranted (which work may include, but not restricted to further qualification and analysis using Basic Geophysical Data available to either Encal or Pinnacle).

Seismic Costs shall be borne jointly, subject to Clause 10(c)(ii), by each party, in accordance with the nature of the Test Well being drilled under Clause 12 of this Agreement.

d) In the event that Encal fails to elect to accept or reject an SFD Anomaly within the prescribed time, it shall be conclusively be deemed to be a rejection of such SFD Anomaly and as such shall not become an Exploratory Prospect.

e) In the event that an Exploratory Prospect is subsequently rejected for technical reasons by Encal upon its review including any Basic Geophysical Data, then the lands with respect to such Exploratory Prospect, excepting any Joint Lands, shall not be subject to the terms and conditions of this Agreement and Pinnacle shall be free to deal with such Exploratory Prospects as it wishes and the Operating Procedure shall continue to apply to any Joint Lands within such Exploratory Prospect.

f) Should Encal, after reasonable effort, be unable to secure, pursuant to Clauses 12(b), 12(c), or 21, the Petroleum and Natural Gas Rights to any portion of an Exploratory Prospect (which portion represents, in Encal's reasonable opinion, the key tracts to drill a Test Well such Petroleum and Natural Gas Rights shall be called "the Key Tracts"), then Encal shall provide written notice to Pinnacle of such event occurring and for the purposes of Clause 9 such Exploratory Prospect shall not be considered in calculating the Minimum Prospect Inventory as defined in Clause 9 hereof.

The Parties may continue to attempt to secure the Key Tracts and the provisions of Clauses 12(b), 12(c), or 21 shall continue for two (2) years from the date of the above mentioned written notice. In addition, the specific term set forth in Clause 21(b) with respect to the specific Exploratory Prospect shall be deemed to be amended to two
(2) years from the date of the notice pertaining to the Key Tracts. In the event that a Party is unable to secure the Key Tracts for such Exploratory Prospect within such two (2) year period, then such Exploratory Prospect shall be deemed a rejected Exploratory Prospect except for any Joint Lands acquired thereon. In the event that such Key Tracts are secured, then

such Exploratory Prospect shall, for the purposes of Clause 9, be considered in calculating the Minimum Prospect Inventory.

g) Should Pinnacle advise Encal, in writing, that it does not wish to pursue an Exploratory Prospect, and provided Encal wishes to drill a Test Well on such Exploratory Prospect, Encal shall pay Pinnacle an amount of twenty thousand ($20,000.00) dollars and the lands in respect to the Exploratory Prospect, excepting any Joint Lands, shall not be subject to the terms and conditions of this Agreement and Encal shall be free to pursue the Exploratory Prospect free and clear of any further obligations to Pinnacle or the Affiliates.

h) In addition to the foregoing, Pinnacle agrees to provide, exclusively to Encal, all leads and/or SFD Anomalies identified by Pinnacle and the Affiliates utilizing SFD Technology in the Province of Alberta as of the date hereof ("Existing Exploratory Prospects"), which Existing Exploratory Prospects shall not be part of the Exploratory Prospects required to be provided under Clause 5(c) hereof.

Encal shall have ninety (90) days from the date upon which this Ground Based SFD Information is presented by Pinnacle to Encal in writing to determine whether to accept or reject each Existing Exploratory Prospect. Each Existing Exploratory Prospect shall, subsequent to Encal's acceptance of same, be governed by the provisions of this Agreement. In the event that Encal fails to elect to accept or reject an SFD Anomaly within the prescribed time, it shall be conclusively be deemed to be a rejection of such SFD Anomaly. Upon rejection, or deemed rejection, by Encal of an Existing Exploratory Prospect free and clear of any further obligations to Encal.

i) All information acquired by the Parties as a result of any operations on the Exploration Areas shall be considered confidential and for their sole and exclusive use and benefit. The Ground Based SFD Information shall not be divulged to any party unless the Parties first agree in writing to the dissemination thereof. Pinnacle shall not, without the written consent of Encal which consent shall not be unreasonably withheld, trade, sell or swap the Ground Based SFD Information acquired under the terms of this Agreement pertaining to an Exploratory Prospect and or an Existing Prospect unless it pertains

to an Existing Exploratory Prospect and or an Exploratory Prospect which has been rejected or deemed to be rejected by Encal.

j) The Parties hereto acknowledge that the SFD Technology and all SFD Data shall continue to be the sole property of Pinnacle and the Affiliates, and shall remain confidential and within the possession of Pinnacle and/or the Affiliates.

k) Encal agrees that Pinnacle may require each employee of Encal and Encal's professional advisors who come into contact with SFD Technology to execute a Confidentiality Agreement in the form as Schedule "G" attached hereto.

l) The Parties hereto acknowledge that any trading rights to Basic Seismic Data acquired hereunder shall be owned in the same interests as to participation in the initial acquisition of such Basic Seismic Data.

7. SFD SURVEY PROGRAM - AIRBORNE SURVEYS

a) Upon Pinnacle advising Encal that Pinnacle is capable of conducting airborne surveys utilizing SFD Technology, Encal may initially select two (2) additional Exploration Areas within the Territory upon which airborne survey work will be conducted by Pinnacle, utilizing SFD Technology ("Airborne Survey"). Pinnacle shall perform such survey work on each of these additional Exploration Areas selected by Encal, in the order determined by Encal. Pinnacle shall, within thirty (30) days, advise Encal of:

i) any safety concerns; or,

ii) conflicts with an area forming part of another joint venture as provided in Clause 4(a) hereof; or to the knowledge of Pinnacle, conflicts with lands held by Pinnacle's partner in such other current joint venture, or,

iii) any concerns Pinnacle has arising in acquiring SFD Information of a technical nature as a result of Excluded Lands or any other bona fide reason,

if any, that pertain to either of the Exploration Areas that Encal selects for such Airborne Surveys. In the event that any of the above conflicts or concerns arise, Encal and Pinnacle shall either jointly modify the subject Exploration Area or Encal shall select another Exploration Area as a substitute.

(b) On or before the expiration of one hundred and fifty (150) days from the date that Encal has selected the Exploratory Areas for the Airbourne Survey, Pinnacle shall:

i) present to Encal all visual SFD Data and written interpretations thereof collected while conducting the Airbourne Survey, provided however, Pinnacle shall not be required to provide to Encal copies, in any form, of the SFD Data;

ii) provide, at no cost to Encal, copies of all maps, information, written reports, interpretations and assessments of Pinnacle identifying, in Pinnacle's opinion, all SFD Anomalies, and possible Exploratory Prospects; and,

iii) provide recommendations in respect to all SFD Anomalies identified, (i, ii, and iii above are collectively referred to as the "Airbourne SFD Information").

c) Upon presentation of the Airbourne SFD Information provided by Pinnacle, Encal shall have ninety (90) days to review the Airbourne SFD Information and individually accept or reject in writing any or all SFD Anomalies ("Airbourne Evaluation Period"). Pinnacle agrees during the Airbourne Evaluation Period to assist Encal in assessing, confirming, and the further evaluation of any of the SFD Anomalies.

There is no maximum to the number of SFD Anomalies that Pinnacle is required to provide Airbourne SFD Information on and which may be accepted by Encal as Exploratory Prospects.

d) All of the provisions of this Agreement shall apply mutatis mutandis, to such Exploratory Prospects derived from the Airbourne SFD Information and the Airbourne Survey as those provisions which apply to the Exploratory Prospects set forth in Clause 6 of this Agreement.

e) Notwithstanding Clause 7(b) above, Encal and Pinnacle shall share in the cost, on a 50/50 basis, of the daily rate for the airplane used for the survey work performed pursuant to this Clause. The current estimated gross cost of the daily rate is $3,000.00.

8. Excluded Lands

Upon Encal having selected any Exploratory Area, Encal shall advise Pinnacle in advance of Pinnacle conducting any survey utilizing SFD Technology of any lands within the Exploration Area in which Encal holds or is entitled to hold or is negotiating to acquire an interest in Petroleum and Natural Gas Rights ("Excluded Lands"). Unless otherwise agreed, Pinnacle during the Term:

a) shall not be entitled to acquire, farmin, option to farmin, or purchase from Encal, or any third party an interest in the Excluded Lands; and

b) shall not conduct any Ground Based Survey or Airborne SFD Survey upon the Excluded Lands.

9. Additional Exploration Areas

During the Term of this Agreement and as a result of the SFD information and associated Exploratory Prospects, it is a requirement of this Agreement that at any time after January 1, 1998, either:

a) each Exploration Area yield no fewer than three (3) Exploratory Prospects; or

b) all Exploration Area yield a total of twenty-five (25) Exploratory Prospects (provided Pinnacle is capable of generating Airborne SFD information, a minimum of ten (10) of the required twenty five (25) Exploratory Prospects must be as a result of Airborne SFD information)

(such number of Exploratory Prospects, as set forth in Sub-clauses (a) or
(b) above, is hereinafter referred to as "the Minimum Prospect Inventory").

In the event that the sum of the Exploratory Prospects is less than the Minimum Prospect Inventory, Pinnacle shall commence further Ground Based Surveys or Airborne Surveys, as designated by Encal, on an additional Exploration Area(s) under the same terms and conditions outlined in this Agreement until at least the Minimum Prospect Inventory is achieved, with such additional Exploration Areas to be provided on such a "rolling basis" as may be required.

The provisions of Clauses 6 and/or 7, as the context requires, shall apply to the above mentioned additional Exploration Areas created as a result of this Clause.

10. INTERIM TERM PROVISIONS

a) The Parties agree that an interim period (the "Interim Period") shall apply from the date hereof until the earlier of:

i) such time as either:

a) a minimum of three Test Wells have been drilled, completed and producing or capable of producing petroleum substances of at least one hundred (100) barrels of oil (or an equivalent) per day per each Test Well located on Exploratory Prospects; or

b) five (5) Test Well have been drilled on Exploratory Prospectus; or

ii) one (1) year from the Effective Date

b) Subject to any third party Farmin Agreements or Additional Farmin Agreements, the Parties agree that Pinnacle shall be entitled to release to the public through press releases the results of the drilling of Wells on any Exploratory Prospects to comply with securities laws, confirm and validate the SFD Technology and to assist Pinnacle in raising financing. Pinnacle may disclose in such news releases the expected reserves and expected production rates from the Wells provided confirmation thereof has been given by independent engineers, but will not (without the approval of Encal) release the location of such Wells or other matters of a confidential nature which might reasonability be expected to affect Encal's ability to conduct operations competitively. Pinnacle will not disclose Encal's name in any press release without Encal's prior approval.

c) Notwithstanding anything herein contained, during the Interim Period:

i) Encal shall not, in respect of any Exploratory Prospects, propose the drilling of any Test Wells, make any commitments to third parties, post any lands for sale at Crown sales, initiate any freehold mineral leases, or acquire any lands under agreements for purchase and sale, without the agreement of Pinnacle;

ii) Pinnacle shall have the right not to participate in the acquisition of Basic Geophysical Data in respect of an Exploratory Prospect, in which case, Encal shall be entitled to acquire such Basic Geophysical Data and recover Pinnacle's share of Seismic Costs from Pinnacle's share of production from any Wells; and

iii) Pinnacle shall be given the opportunity during a period of ninety (90) days from the end of the Interim Period to initiate and complete a financing ("Financing Period"). Encal shall endeavour not, without the approval of Pinnacle, to initiate any new operations, incur new obligations for capital (including AFE's or issue cash calls), or new commitments after the end of the Interim Period until the end of the Financing Period. In the event Encal for any reason does initiate new operations, incur new obligations for capital (including AFE's or issue cash calls) during the Financing Period then it is agreed that Pinnacle may withhold payment for same until the end of the Financing Period.

iv) Encal shall use its reasonable efforts to negotiate in third party Farmin Agreements, and Additional Farmin Agreements no more onerous confidentiality provisions than those provided in Article XVIII of the Operating Procedure.

11. CONVENTIONAL EVALUATION

Notwithstanding the use of the SFD Information in evaluating the Exploration Areas, the Parties hereto agree and acknowledge that any Exploratory Prospect (including Existing Exploratory Prospects) evaluated under this Agreement shall have been evaluated using such geological, geophysical, engineering, mapping, seismic and technological data or information, including without limitation the Basic Geophysical Data, available to either Encal or Pinnacle in addition to the SFD Information such that any successes or failures in drilling on an Exploratory Prospect shall be attributed to all of the information and data utilized evaluating and determining the Exploratory Prospect.

12. DRILLING OF WELLS

During the Term of this Agreement:

a) Upon Encal having completed the evaluation work as described in Clause
6(c), Encal may select a location for the drilling of a well on an Exploratory Prospect and if such well is the first well to be drilled on an Exploratory Prospect pursuant to this Agreement it shall be referred to as the "Test Well". In the event that Encal wishes to drill a Test Well, Encal shall serve written notice to Pinnacle ("Test Well Notice") including a reasonable estimate of Test Well costs and an

estimate of the timing of the advance of funds. Pinnacle shall then elect by written notice to Encal on or before the expiration of fifteen (15) days from receipt of the Test Well Notice to either:

i) elect to participate in the drilling of the Test Well; or

ii) elect not to participate in the drilling of the Test Well.

Should Pinnacle elect to participate in the drilling of a Test Well, Encal shall commence, or cause to be commenced, the drilling of such Test Well on the Exploratory Prospect as provided herein or pursuant to any agreement entered into with third parties by Encal, on behalf of Encal and Pinnacle.

Should Pinnacle elect not to participate in the drilling of the Test Well the provisions of Clause 6(g) shall come into effect.

During that period of time prior to Pinnacle's election to participate Encal shall assist Pinnacle in the review of the proposed Test Well location.

In the event that Pinnacle fails to elect to participate in the drilling of a Test Well within the prescribed time, it shall be conclusively be deemed to be an election not to participate.

b) In the event that Petroleum and Natural Gas Rights within an Exploratory Prospect are held by third parties to this Agreement ("Third Party Lands") and Encal is required to commit to conduct certain obligations, including but not restricted to seismic programs, purchases of seismic, or the drilling of Earning Wells (such obligations are collectively referred to as "Obligations") which may be required to earn an interest or the right to earn an interest in the Third Party Lands, Encal may negotiate and enter into agreements with third parties ("Farmin Agreements"). In the event that Encal enters into a Farmin Agreement, Encal shall serve written notice to Pinnacle of Encal entering into such Farmin Agreement ("Farmin Notice") including a reasonable estimate of Obligations and an estimate of the timing of the advance of funds. Such notice shall include such

information necessary to evaluate such Obligations. Pinnacle shall then elect by written notice to Encal on or before the expiration of fifteen (15) days from receipt of the Farmin Notice to either:

i) elect to participate in the Obligations; or

ii) elect not to participate in the Obligations.

Should Pinnacle elect to participate in the Obligations, the cost, risk and expense of the Obligations and the interest earned in the Third Party Lands subject to the Farmin Agreements shall be shared by the Parties in the following proportions:

Encal 75%

Pinnacle 25%

Should Pinnacle elect not to participate in the Obligations, the Third Party Lands and the relevant Exploratory Prospect with the exception of any Joint Lands shall not be subject to the terms and conditions of this Agreement. The cost, risk, expense, any Petroleum and Natural Gas Rights earned, or benefit derived therefrom shall be for Encal's own account.

During that period of time prior to Pinnacle's election to participate Encal shall assist Pinnacle in the review of the Obligations.

In the event that Pinnacle fails to elect to participate in Obligations within the prescribed time, it shall be conclusively be deemed to be an election not to participate.

c) Provided Pinnacle elects to participate in a Test Well, the cost risk and expense associated with each Test Well shall be borne by the Parties in accordance with their interest in the Test Well Spacing Unit unless otherwise provided herein. For clarity sake the interests of the Parties shall be generally shared in the following proportions:

ii) if lands acquired pursuant to Clause 21 c(ii) then:

Encal 70% Pinnacle 30%

ii) if lands acquired pursuant to Clauses 12(b) and 13(b) or 21 (c)
(i), then:

Encal 75% Pinnacle 25%

d) For the purposes of Clause 9 inter alia, upon an Exploratory Prospect having been evaluated by the drilling of a Test Well such Exploratory Prospect shall be considered proven ("Proven Prospect") and shall no longer be considered an Exploratory Prospect.

13. DEVELOPMENT OF PROVEN PROSPECTS

a) During the Term of this Agreement and for one (1) year thereafter, where further wells are proposed in order to fully develop the potential of a Proven Prospect which wells are located on Joint Lands earned as a result of a Farmin Agreement ("Additional Well"). Encal shall serve written notice to Pinnacle of the Additional Well ("Additional Well Notice"). Such Additional Well Notice shall include such information necessary to evaluate such Additional Well including a reasonable estimate of Additional Well costs and an estimate of the timing of the advance of funds. At Pinnacle's option and exercisable by written notice to Encal on or before the expiration of fifteen (15) days from the date such Additional Well is proposed, Pinnacle may elect to:

i) participate in the drilling of such Additional Well; or

ii) not to participate in such Additional Well.

In the event that Pinnacle elects to participate in the drilling of such Additional Well, then the operating provisions of the Farmin Agreement or the Operating Procedure, whichever agreement governs the relationship of the Parties hereto, shall apply to such Additional Well.

In the event Pinnacle elects not to participate in such Additional Well, then for the purposes of such Additional Well and as between the Parties hereto, the

provisions of Clauses 1007, 1009, 1013, 1017, and 1020 of the Operating Procedure shall apply to such Additional Well with the percentages set forth in Clause 1007 (iv) of the Operating Procedure to be 150% and with the statement provided in Clause 1013 (a) of the Operating Procedure to be provided annually.

b) Where further wells may be required to earn Third Party Lands comprising a portion of a Proven Prospect pursuant to a Farmin Agreement or should Encal negotiate and enter into new agreements with third parties ("Additional Farmin Agreement") to drill further wells to earn Third Party Lands (such well shall be referred to as the "Additional Earning Well"), Encal shall serve written notice to Pinnacle of the Additional Earning Well ("Earning Well Notice"). Such Earning Well Notice shall include such information necessary to evaluate such Additional Earning Well including a reasonable estimate of Additional Earning Well costs and an estimate of the timing of the advance of funds. Pinnacle shall then elect by written notice to Encal on or before the expiration of fifteen (15) days from receipt of the Earning Well Notice to either:

i) elect to participate in the Additional Earning Well; or

ii) elect not to participate in the Additional Earning Well.

Should Pinnacle elect to participate in the Additional Earning Well, the cost, risk and expense of the Additional Earning Well and the interest earned in the Third Party Lands subject to the Farmin Agreement or the Additional Farmin Agreement shall be shared by the Parties in the following proportions:

Encal 75%
Pinnacle 25%

Should Pinnacle elect not to participate in the Additional Earning Well; such Third Party Lands shall not be subject to the terms and conditions of this Agreement. The cost, risk, expense, any Petroleum and Natural Gas Rights earned, or benefit derived therefrom shall be for Encal's own account.

During that period of time prior to Pinnacle's election to participate Encal shall assist Pinnacle in the review of the Additional Earning Well.

In the event that Pinnacle fails to elect to participate in the Additional Earning Well within the prescribed time, it shall be conclusively be deemed to be an election not to participate in such Additional Earning Well.

c) During the Term of this Agreement and for one (1) year thereafter and where the drilling of a Test Well leads to the drilling of subsequent wells ("Subsequent Wells") on previously acquired New Lands within a Proven Prospect, and Encal wishes to drill a Subsequent Well, Encal shall serve written notice to Pinnacle ("Subsequent Well Notice") including a reasonable estimate of Subsequent Well costs and an estimate of the timing of the advance of funds. Pinnacle shall then elect by written notice to Encal on or before the expiration of fifteen (15) days from receipt of the Subsequent Well Notice to either:

i) elect to participate in the drilling of the Subsequent Well; or

ii) elect not to participate in the drilling of the Subsequent Well.

Should Pinnacle elect to participate in the drilling of a Subsequent Well, all operations pertaining to such Subsequent Well shall be governed pursuant to the provisions of the Operating Procedure.

Should Pinnacle elect not to participate in the drilling of a Subsequent Well, Encal shall pay Pinnacle's share of the drilling costs, completion costs, equipping costs, lessor royalties, encumbrances which would normally be borne by the Joint Account, and operating costs associated with such Subsequent Well.

During that period of time prior to Pinnacle's election to participate Encal shall assist Pinnacle in the review of the proposed Subsequent Well.

In the event that Pinnacle fails to elect to participate in the drilling of a Test Well within the prescribed time, it shall be conclusively be deemed to be an election not to participate.

d) In the event Pinnacle has elected not to participate in a Subsequent Well, the Parties acknowledge that Encal is not entitled to, nor is Pinnacle obligated to

assign, the interest of Pinnacle in that portion of the New Lands comprising such Subsequent Well Spacing Unit. The provisions of this Sub-clause are in lieu of Article X of the Operating Procedure.

Prior to Payout, as hereinafter defined, Encal shall, however, be entitled to all of Pinnacle's share of production from the Subsequent Well or allocated to the Subsequent Well Spacing Unit until that point in time where the Subsequent Well is abandoned or when the gross proceeds of the sale of petroleum substances produced and sold from the Subsequent Well or allocated to the Subsequent Well Spacing Unit equals, without duplication, the sum of:

i) drilling costs;
ii) completion costs;
iii) equipping costs;
iv) operating costs;
v) gathering, processing and marketing fees;
vi) lessor's royalties;
vii) encumbrances which would normally be borne by the joint Account; and
viii) the Overriding Royalty (hereinafter referred to as "Payout).

During the period prior to Payout, Encal agrees to calculate and pay to Pinnacle the Overriding Royalty in accordance with Schedule "F" which schedule shall be deemed separately executed by the Parties. The aforementioned Overriding Royalty shall be calculated and payable on the combined interest of Pinnacle and Encal in the Subsequent Well Spacing Unit.

Encal shall give written notice as soon as reasonably possible to Pinnacle, for each subsequent Well drilled and completed, setting forth the costs set out in items (i) to (viii) inclusive above.

At Payout on a well by well basis, Encal shall serve written notice to Pinnacle that each such Subsequent Well has reached Payout whereupon the Overriding

Royalty shall be terminated. Thereafter such Subsequent Well shall be held for the Joint Account as if Pinnacle participated in such Subsequent Well..

e) Until Payout, Encal shall supply Pinnacle, annually with a statement showing the status of Payout of the appropriate Subsequent Well.

f) The termination of the Overriding Royalty shall be deemed effective as and from the first day of the month following the date of Payout.

g) In the event that Pinnacle elects not to participate in the drilling of any Subsequent Well, Encal agrees to afford to Pinnacle the same rights and privileges reserved to a participating party including the right to take over a Subsequent Well if abandonment is proposed.

14. Operator

a) Encal is hereby appointed Operator of the EJV and agrees that it shall not delegate or assign any of its duties during the Term of this Agreement without the prior consent of Pinnacle, which consent shall not be unreasonably or arbitrarily withheld.

b) Encal, as Operator of the EJV, shall make all decisions relating to the management and control of the EJV subject to the terms of this Agreement and the agreement of Pinnacle where expressly required hereunder with Encal's reasonable discretion, which shall be exercised in good faith in a workmanlike manner in accordance with good oil and gas field practice, and which shall be final and binding on the Parties, except as otherwise provided in this Agreement. Subject to the foregoing, the Operator shall:

i) explore, develop, manage and operate oil and gas properties;

ii) conduct preparatory exploration on behalf of the Parties, which shall include (but not be limited to subsurface mapping, prospect /play purchases, geophysical field surveys, the collection of Basic Geophysical Data together with the necessary interpretations as may from time to time be necessary);

iii) select drill sites and arrange for the drilling of the Wells thereon and produce and sell petroleum substances from the respective accounts of the Parties; it being understood that Encal is not warranting that

petroleum substances will be sold, only that it shall use its best efforts to market such petroleum substances on the same terms and conditions as it markets its own share;

iv) enter into agreements on behalf of the Parties to the EJV for the drilling, participation, development, pooling, farmin, farmout, unitization, joint venture and production of petroleum substances and for the gathering, processing, transportation and sale of same;

v) carry insurance, as specified in Clause 311(B) of the Operating Procedure on behalf of the Parties as a charge to the joint account;

vi) vote as one on behalf of both Encal and Pinnacle in all matters arising from EJV activities;

vii) give receipts, releases and discharges on behalf of the Parties hereto;

viii) prior to commencing the drilling of any Well, to review the title of the appropriate holder of the Title Document in accordance with industry standards; and

ix) charge overhead and such other costs recoveries to the Parties as are provided in the Accounting Procedure attached to the Operating Procedure, without duplication.

15. FACILITIES AND MARKETING

a) Provided a Well is capable of production of petroleum substances in paying quantities, Encal shall use its best efforts to promptly cause each of the Wells that have been drilled, completed and equipped under this Agreement, to be connected to Encal's or third party's Facilities. Encal agrees to produce and market Pinnacle's share of petroleum substances produced from the Wells and, in addition to the provisions of this Clause, the provisions of Article VI of the Operating Procedure shall apply thereto. Encal shall not, except for lack of market, shut-in the Wells or reduce production rates as will result in such Wells producing less than their fair and equitable share of recoverable reserves from any reservoir from which Encal's other wells are producing, to the disadvantage or detriment of Pinnacle.

b) With respect to those Facilities in which Encal does not have any ownership interest, Pinnacle shall be charged the actual cost for storage gathering,

processing, transporting, treating, compressing, absorption or other plant extraction or stabilization of Pinnacle's share of petroleum substances.

c) With respect to those Facilities in which Encal does have an ownership interest and subject to any agreements with third parties, Pinnacle shall be charged a reasonable fee sufficient to cover the costs for the storage, gathering, processing, transporting, treating, compression, absorption or other plant extraction or stabilization of Pinnacle's share of Petroleum substances which fee shall also include a reasonable rate of return on capital investment.

d) Notwithstanding the provisions of Article VI, Clause 601 of the Operating Procedure, Pinnacle hereby agrees to dedicate Pinnacle's share of production of Petroleum Substances from the Lands to Encal who shall undertake to market Pinnacle's share of production on the same terms as Encal markets its own share of production, subject to the provisions of Article VI, Clause 604, election "A".

e) If at any time during the Term of this Agreement a party (in this Clause called "the Proposing Party") wishes to construct new Facilities for the treating, processing, or transportation of petroleum substances from the New Lands and/or any other lands which lands subject to this Agreement, it shall afford to the other party an opportunity to participate in such project on an equitable basis. The Proposing Party shall provide to the other party the background information the Proposing Party deems reasonably necessary for the other parties to evaluate the project and make a decision. The Parties recognize that until a proposal is made it is not possible to determine the terms of such participation, however, each party agrees that it will act in good faith in carrying out the terms of this Clause.

16. Meetings and Reporting

Upon completion of the SFD survey and the acceptance and evaluation of the Exploratory Prospects, Encal shall provide Pinnacle with an outline of the Wells to be drilled and new Facilities to be constructed. It is acknowledged that such outline shall not be binding and may be subject to revision from time to time. At two (2) month intervals thereafter, Encal shall provide outlines for the EJV Wells scheduled to be drilled in each successive calendar quarter during the Term. Beyond the Term, the

Parties shall consult to determine the most efficient and reasonable method of scheduling further operations.

17. INCORPORATION OF THE OPERATING AGREEMENT

a) Provided Pinnacle has elected not to participate in the drilling of a Subsequent Wells pursuant to Clauses 13(a) and 13(c) of this Agreement, then the following clauses of Schedule "C" ("Operating Procedure") shall apply, mutatis mutandis, to this Agreement and to all operations of Encal as between Encal and Pinnacle for such wells drilled thereunder. Where the terms of this Agreement and the Operating Procedure conflict, the terms of this Agreement shall prevail. Where the Operating Procedure makes reference to "Operator" the word "Encal" is substituted and similarly, "Joint Operator" is substituted by "Pinnacle" and "this Operating Procedure" is substituted by "this Agreement".

304 Proper Practices in Operations
305 Books, Records and Accounts
306 Protection from Liens
307 Joint-Operator's Right of Access
308 Surface Rights
309(a)Maintenance of Title Documents
311 Insurance
501 Accounting Procedure
701 Pre-Commencement Information (excluding 701 (a))
702 Drilling Information and Privileges of Joint-Operators
703 Logging and Testing Information to Joint-Operators
704 Completion and Production Information to Joint-Operators
705 Well Information Subsequent to Completion
706 Data Supplied in Accordance with Industry Standards
801 Velocity Surveys and Other Geophysical Tests

ARTICLE 11 Quit Claims

1601 Definition of Force Majeure

1602 Suspension of Obligation Due to Force Majeure 1603 Obligation to Remedy

1604 Exception for Lack of Finances

1801 Information to be Kept Confidential

b) Subject to the terms of this Agreement, the Operating Procedure shall apply to operations conducted in respect of the exploration, development and maintenance of any Joint Lands, between and among the Parties hereto.

c) In the event that the Parties are parties to an existing agreement involving third parties ("Third Party Agreement") and where the Third Party Agreement conflicts with the Operating Procedure, the Third Party Agreement shall prevail.

18. Indemnification

a) The Parties hereto shall, in proportion to their respective participating interests in the EJV, hereby indemnify and hold harmless the Operator from and against any and all actions, suits, claims and demands made by any person or persons whomsoever, other than the Parties hereto, in respect of any loss, injury, damage or obligation to compensate arising out of or in any way connected with the carrying out by the Operator of its duties and obligations in accordance with the provisions of this Agreement, except when the Operator is found to be grossly negligent.

b) Pinnacle indemnifies Encal against any and all Losses which may be incurred or suffered by Encal or which may be sustained, paid or incurred by reason of or in any way attributable to the operations carried on in respect of the SFD survey by Pinnacle, its servants, agents or employees under this Agreement.

c) Pinnacle and each of the Affiliates jointly and severally indemnifies Encal against any and all Losses which may be incurred or suffered by Encal or which may be sustained, paid or incurred by reason of or in any way attributable to the breach of one or more of the representations, warranties or covenants made by Pinnacle and each of the Affiliates under Clause 4 hereof, whether such a breach occurs prior to or during the Term of this Agreement, such an indemnity to continue for a period of five (5) years following the termination of this Agreement.

19. Default and Termination.

a) If either Party fails to perform any obligation required to be performed hereunder, the non-defaulting Party may give the defaulting party notice to remedy the default, and if the defaulting Party does not commence to remedy the default within thirty (30) days after receiving the notice and proceed diligently and continuously to remedy it, the non-defaulting Party may by notice to defaulting Party in writing terminate this Agreement.

b) If, as a result of the Action or any breach of the representations, warranties and covenants contained in Clause 4 hereof, whether such a breach is the result of the actions of Pinnacle or any of the Affiliates, or if Pinnacle or any of the Affiliates is no longer entitled to the SFD Technology and the right to utilize the SFD Technology is granted to any other third party, Encal may terminate this Agreement by providing written notice of same to Pinnacle.

c) In the event that Encal fails to drill twenty-five (25) Wells within the Term, which Wells shall (subject to reasonable extensions for delays due to drill rig availability and surface access or the failure of Pinnacle to agree to operations or acquisitions proposed by Encal during the Interim Period) be drilled as follows:

1st Year       5 Wells
2nd Year       8 Wells
3rd Year      12 Wells

Pinnacle may terminate this Agreement by providing written notice of same to Encal.

d) In the event that this Agreement is terminated as provided in this Clause, any Joint Lands shall continue to be governed by the Operating Procedure or applicable third party agreement.

20. Transfer

Each Party shall not transfer this Agreement or any interest, right or obligation under this Agreement, except in accordance with the provisions of Clause 2401 (B) of the Operating Procedure, provided that for the purpose of Clause 2401 (B) of the Operating Procedure, Affiliates may include a limited partnership where Pinnacle or Pinnacle Oil

Canada Ltd. is the general partner of such partnership. Any assignment of interest shall be in accordance with the Assignment Procedure attached as Schedule "E" hereto.

Notwithstanding any assignment made by Pinnacle to an Affiliate, during the Term of this Agreement, Encal need only look to Pinnacle for performance of the duties and obligations of Pinnacle pursuant to this Agreement.

21. AREA OF MUTUAL INTEREST

a) In this Clause the expression "AMI Lands" means any Petroleum And Natural Gas Rights, or either of them, which are laterally and/or diagonally within one (1) mile of the lands encompassing any Exploratory Prospect, other then lands acquired pursuant to Clauses 12(b) and 13(b).

b) On an Exploratory Prospect by Exploratory Prospect basis, the provisions of this Clause relating to the acquisition of any AMI Lands shall:

i) for AMI Lands not encompassing the Exploratory Prospect, be effective for that period commencing on the date of acceptance, in writing, by Encal of an Exploratory Prospect and terminating one (1) year thereafter, and;

ii) for AMI Lands encompassing the Exploratory Prospect, be effective for the Term of the Agreement or the period in b (i) above whichever is longer.

c) If any AMI Lands become available for acquisition by Crown sale (the "New Crown Lands") and if one of the Parties desires to acquire an interest in the New Crown Lands, the Parties shall consult at least forty-eight (48) hours prior to the final hour at which bids are accepted for the sale of the New Crown Lands for the purpose of attempting to reach an agreeable bid price. If, after consultation between the Parties, agreement is reached, Encal shall submit the bid on behalf of the Parties and if the New Crown lands are acquired, they shall be paid for, owned and held by the acquiring Parties in the following interests ("Participating Interests"):

i) if a Test Well has been drilled or is being drilled pursuant to Clause 12(b), subject to any third party participation:

Encal 75% Pinnacle 25%; or

ii) in all other cases, subject to any third party participation:

Encal 70% Pinnacle 30%

d) Subject to Sub-clause (e), if agreement is not reached as to a bid price, then the New Crown Lands so acquired shall be paid for, owned and held by the party acquiring the New Crown Lands.

e) If, after any consultation at which an agreed bid price is not reached by all Parties, any party acquires the New Crown Lands at a price which differs by more than five percent [5%] from the price it was prepared to agree to for acquisition, or if a party acquires the New Crown lands without consulting with the other party or without disclosing the price it was prepared to pay for the acquisition, the acquiring party shall immediately give notice to the other party setting forth the consideration paid. Any party receiving the notice shall have the right for a period expiring ten (10) days from the receipt of the notice to elect to acquire its Participating Interest in the New Crown Lands acquired by paying to the acquiring party its proportionate share of the acquisition costs. If this right is exercised, the New Crown Lands shall be held and owned by the Parties acquiring and the parties electing to acquire their proportionate interest in the proportion that their respective Participating Interests bear one to the other as set forth in Sub-clause (b)(i) or
(b)(ii), whichever is applicable. The interest acquired shall be held by the acquiring party on behalf of all Parties until the expiry of the ten (10) day period.

f) On acquisition of AMI Lands more than one Party, if the AMI Lands are not already subject to an agreement that provides for their joint operation, an agreement in the form of the Operating Procedure shall be deemed immediately to become effective to govern the relationship among the Parties and to provide for the maintenance and operation of the AMI Lands. Encal shall be the Operator unless Encal does not acquire an interest in the AMI Lands, in which event the Parties who have acquired an interest shall appoint an operator in the

manner provided for the appointment of a new operator in the Operating Procedure.

g) Provided that both Encal and Pinnacle acquire their Participating interests in the AMI Lands, any Wells drilled on the AMI Lands, except any Test Well, shall be deemed Additional Wells under this Agreement and, as such, the provisions of Clause 13(a) shall apply mutandis mutatis to such an Additional Well.

h) A Party submitting a bid under the provisions of this Clause shall comply with all combines and anti-competition laws and shall make known to the person calling for or requesting the bids or tenders at or before their time when any bid or tender is made, the names of all Parties who have agreed to submit a bid or tender.

i) If any Party acquires an interest (or the right to acquire an interest) in any lands other than New Crown Lands as provided in Sub- clause (c) above or Petroleum and Natural Gas Rights as set forth in Clauses 12(b) or 13(b) and fifty percent (50%) or more (by surface area and title document) of the lands so acquired are situated within the Area of Mutual Interest, the acquiring Party shall notify the other Party thereof within fifteen (15) days of the acquisition, detailing the consideration paid or payable therefor and the obligations undertaken by the acquiring party with respect to the said acquisition. The other Party shall have ten (10) days from receipt of the notice of acquisition within which to elect to participate in the said acquisition to the extent of the percentage interest set forth opposite its name in Sub-clause (c)(i) or (c)(ii) above, which ever is applicable, by paying to the acquiring party pursuant to the said acquisition.

22. Exclusions to the EJV

Notwithstanding anything contained herein, the following are specifically excluded from this Agreement:

a) the acquisition of any interest in corporations, partnerships, affiliates or other legal entities as such by the purchase of an equity interest therein or merger therewith and any duties, obligations or acquisitions resulting therefrom where the AMI Lands are not the primary purpose of the acquisition;

b) any interests held by Encal and its joint operators as Excluded lands; or

c) the purchase of any oil and gas reserves (whether proven or probable reserves) unless subsequently deemed included by mutual agreement of the Parties.

23. NOTICES

a) The addresses for service and the fax numbers of the Parties shall be as follows:

Encal -             Encal Energy Ltd.
                    1800, 421 - 7th Avenue S.W.
                    Calgary, Alberta
                    T2P 4K9

                    Attention: Manager, Land
                    ------------------------

                    Fax: (403)266-6648

Pinnacle -          Pinnacle Oil International Inc.
                    1090 West Georgia Street
                    Vancouver, B.C.
                    V6E 3V7

Fax: (604)893-8644

b) All notices, communications and statements required, permitted or contemplated hereunder shall be in writing, and shall be delivered as follows:

i) by personal service on a party at the address of such party set out above, in which case the item so served shall be deemed to have been received by that party when personally served;

ii) by fascimile transmission to a party to the fax number of such party set out above, in which case the item so transmitted shall be deemed to have been received by that party when transmitted with answer back received; or

iii) except in the event of an actual or threatened postal strike or other labour disruption that may affect mail service, by mailing first class registered post, postage prepaid, to a party at the address of such party set out above, in which case the item so mailed shall be deemed to have been received by that party on the fifth (5) business day following the date of mailing.

c) A Party may from time to time change its address for service or its fax number or both by giving written notice of such change to the other Party.

24. Miscellaneous

a) Each Party shall perform the acts and execute and deliver the deeds and documents and give the assurances as shall be reasonably required in order fully to perform and carry out and give effect to the terms of this Agreement.

b) A waiver of any breach of a provision of this Agreement shall not be binding on any Party unless the waiver is in writing and the waiver shall not affect the Party's rights with respect to any other or future breach.

c) All terms and provisions of this Agreement shall run with and be binding on the lands referred to during the Term of this Agreement.

d) Time is of the essence in this Agreement.

e) This Agreement shall enure to the benefit of and be binding on the Parties and their respective heirs, executors, administrators, successors and assigns.

f) The terms of this Agreement express and constitute the entire agreement between the Parties and no implied covenant or liability of any kind is created or shall arise by reason of these presents or anything in this Agreement contained.

g) This Agreement supersedes and replaces all previous agreements, whether written or oral, memoranda or correspondence between the Parties with respect to the subject matter of this Agreement.

h) Wherever in this Agreement the singular number or masculine gender occurs, the same shall be respectively construed as the plural or neutral, and vice versa, as the context or reference may require.

i) All schedules attached to this Agreement are incorporated by reference as though contained in the body of it. Wherever any term or conditions, expressed or implied, of any schedule conflicts or is at a variance with any term or condition of this Agreement, the term or condition of this Agreement shall prevail.

j) The headings of all Clauses in this Agreement are inserted for convenience of reference only and shall not affect the construction of it.

k) The terms of this Agreement shall be governed exclusively by the law in force from time to time in the Province of Alberta and the Parties hereto agree to

submit to the jurisdiction of the Courts of the Province of Alberta in respect of any claims, actions or proceedings resulting from this Agreement.

1) This Agreement may be executed in counterpart and the executed counterparts shall constitute one agreement.

IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first written above.

ENCAL ENERGY LTD.                            PINNACLE OIL INTERNATIONAL INC.

Per: /s/ D.D. Johnson                        Per:_______________________________
     ----------------------------
     D.D JOHNSON, PRESIDENT


Per: /s/ P.A. CARWARDINE                     Per: [SIGNATURE ILLEGIBLE]
     ----------------------------                -------------------------------
         P.A. CARWARDINE
     V.P. LAND & CORPORATE DEVELOPMENT

                                             PINNACLE OIL INC.

                                             Per:_______________________________


                                             Per: [SIGNATURE ILLEGIBLE]
                                                 -------------------------------

                                             /s/ George Liszicasz
_________________________________            -----------------------------------
Witness                                      GEORGE LISZICASZ


                                             /s/ Dirk R. Stinson
_________________________________            -----------------------------------
Witness                                      DIRK R. STINSON


MOMENTUM RESOURCES LTD.                      PINNACLE OIL CANADA LTD.


Per: ____________________________            Per: ______________________________

EXHIBIT 10.8

EXPLORATION JOINT VENTURE AGREEMENT

THIS AGREEMENT made as of the 15th day of September, 1997,

AMONG:

ENCAL ENERGY LTD., a corporation incorporated under the laws of the Province of Alberta ("Encal")

THE PARTY OF THE FIRST PART

- and -

PINNACLE OIL INTERNATIONAL INC., a corporation incorporated under the laws of the State of Nevada ("Pinnacle")

THE PARTY OF THE SECOND PART

- and -

PINNACLE OIL INC., GEORGE LISZICASZ, DIRK R. STINSON, PINNACLE OIL CANADA LTD. and MOMENTUM RESOURCES LTD., being the individuals or corporations having an affiliation to Pinnacle or the SFD Technology

(the "Affiliates")

THE PARTY OF THE THIRD PART

WHEREAS the Parties have entered into an Exploration Joint Venture Agreement dated February 19, 1997 for the exploration, development and production of Petroleum Substances in Western Canada and wish to replace and supersede the subject Agreement with a new Exploration and Joint Venture Agreement; and

WHEREAS the Parties have agreed to enter into this Exploration Joint Venture Agreement (the "EJV" or "Agreement") to supersede the February 19, 1997 Exploration Joint

Venture Agreement, which EJV will govern the exploration, development and production of Petroleum Substances worldwide with a focus on Western Canada as further set out hereunder; and

WHEREAS the Parties have agreed that the EJV shall be carried out pursuant to the provisions of this Agreement;

NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the premises and the mutual covenants of the Parties herein contained, the Parties hereto agree as follows:

(1) In this Agreement including the recitals herein, unless the context otherwise requires or to the extent defined below, the definitions set forth in Clause 101 of the Operating Procedure, shall apply and in addition, the following shall have the following meanings:

pursuant to clause 6 hereof and which area shall initially include a boundary of additional lands surrounding such area equal to one township (or NTS equivalent) in width and length throughout (the "Buffer Zone");

similar documents, granting, reserving or otherwise conferring rights to explore for, drill for, produce and take Petroleum Substances, and share in the production of Petroleum Substances, and any rights to acquire any of the rights described herein;

A    -    Operating Procedure
B    -    Accounting Procedure
C    -    Assignment Procedure
D    -    Royalty Procedure

          E    -    Confidentiality Agreement
          F    -    Existing Exploration Areas

2.   Term
     ----

The term of this Agreement ("Term") shall commence as of September 15, 1997, ("Effective Date") and shall extend for a period of three (3) years therefrom which Term may be subsequently extended by the mutual agreement of Encal and Pinnacle.

In the event any Party, subsequent to the date of this Agreement, encumbers any interest it now holds or may obtain under this Agreement, the Party which encumbers its interest shall be solely responsible for that encumbrance, and agrees to indemnify the other Parties to this Agreement from any Losses caused by the encumbrance.

Notwithstanding clause 2, Pinnacle and each of the Affiliates provides the representations, covenants and warranties in this Agreement and effective from February 19, 1997 (but only to the extent this Agreement supersedes the February 19, 1997 Exploration Joint Venture Agreement):

(1) Pinnacle and each of the Affiliates, jointly and severally, represent, warrant and covenant to Encal that the beneficial owner of the SFD Technology is Momentum Resources Ltd. ("Momentum") and Momentum has granted Pinnacle an exclusive licence for the use of SFD Technology for the purpose of generating SFD Data for the exploration of Petroleum Substances. Momentum Resources Ltd. agrees that it will not hinder or terminate the exclusive licence for the Term other than as Momentum Resources Ltd. may be permitted under the express terms of the exclusive licence.

(2) Pinnacle and each of the Affiliates, jointly and severally, hereby represent, warrant and covenant to Encal that, as of February 19, 1997 and to the Effective Date, and through the Term of this Agreement and any extensions thereof, that Pinnacle was, is and will be the beneficial owner of the SFD Data, free and clear of any and all claims, suits, proceedings, encumbrances and obligations which may limit or impair its ability to utilize the SFD Data and SFD Technology in the manner contemplated hereunder. Pinnacle agrees to comply with the express terms of the exclusive licence from Momentum Resources Ltd., in order to keep the same in good standing.

(3) Pinnacle and each of the Affiliates, jointly and severally, hereby represent, warrant and covenant with Encal that the conduct of any SFD Survey and joint operation contemplated by this Agreement or any past conduct under the February 19, 1997 Exploration Joint Venture Agreement, does not infringe upon the industrial or intellectual property rights, domestic or foreign, of any other person and except for the Action, neither Pinnacle nor the Affiliates are aware of any claim of any infringement or breach of any industrial or intellectual property rights of any other person relative to the SFD Technology nor have Pinnacle or any the Affiliates, received any notice that the conduct of the SFD Survey and joint operations contemplated in this Agreement, including the use of the SFD Technology, infringes upon or breaches any industrial or intellectual property rights of any other person.

(4) Except for the Action, Pinnacle and each of the Affiliates, jointly and severally, represent, warrant and covenant with Encal that there are no claims, actions, suits or proceedings (either against or by Pinnacle or the Affiliates) pending or to the best of the knowledge of Pinnacle or each of the Affiliates, threatened against or affecting Pinnacle, the Affiliates or the SFD Technology, at law or in equity or before or by any federal, provincial, municipal or other governmental department, court, commission, board, bureau, agency or instrumentally, domestic or foreign, or before or by any arbitrator or arbitration board.

(5) Pinnacle and each of the Affiliates, jointly and severally, warrant and covenant with Encal that the entering into, consummation and performance by Pinnacle of this Agreement will not constitute a breach of any agreement, contract or licence by which Pinnacle or any Affiliate is bound or an infringement upon any intellectual property or technology right of any person relative to the SFD Technology.

(6) Pinnacle agrees to conduct the SFD Survey utilizing SFD Technology in a professional and diligent manner, as set out hereunder, and agrees to conduct the SFD Survey using individuals who have the capability and expertise to conduct the SFD Survey and to provide Encal with the SFD Anomalies set out hereunder according to the intent and meaning of this Agreement. Additionally, Pinnacle agrees that any individuals or persons conducting SFD Survey and presenting SFD Anomalies to Encal will be bound by the same confidentiality provisions as Pinnacle is bound to Encal under the terms of this Agreement. Pinnacle agrees to use its reasonable commercial efforts and act in good faith while in the performance of this Agreement, in the presentation of the SFD Anomalies to Encal and in conducting the SFD Survey.

(7) Encal agrees to conduct and perform any of its work and covenants under this Agreement in a professional and diligent manner, as set out hereunder, and agrees to use individuals who have the capability and expertise to perform its obligations under this Agreement. Encal agrees to use its reasonable commercial efforts and to act in good faith while in the performance of this Agreement.

(1) Pinnacle shall provide to Encal a first priority to have Pinnacle conduct SFD Survey for Encal during the Term and in accordance with the terms and conditions of this Agreement. The Parties confirm that Pinnacle is entitled to enter into a maximum of two (2) joint ventures with two (2) other Third Parties in Canada at any given time (but not in the Exclusive Area), and an unlimited number of such joint ventures

with

an unlimited number of Third Parties outside of Canada to generate, interpret, analyze and present SFD Data, which joint ventures may utilize data obtained from the SFD Technology world-wide but not in the Exclusive Area; provided however that, in the Exclusive Area, Pinnacle shall conduct SFD Survey solely for Encal during the Term.

(2) Encal's first priority to have Pinnacle conduct SFD Survey for Encal as provided in clause 5(a) shall mean a first dedication by Pinnacle to Encal hereunder of a minimum of 50% of Pinnacle's world-wide SFD Survey capacity at any given time. Such first dedication shall apply only at the times that Pinnacle has not generated, the Minimum Prospect Inventory.

(3) If during the Term of this Agreement, Pinnacle generates SFD Data that pertains to lands in Canada that are outside of an Exploration Area selected by Encal or are not over an area selected by a Third Party under a Third Party joint venture, as allowed hereunder, Pinnacle shall present to Encal all SFD Anomalies identified by Pinnacle from such SFD Data within thirty (30 ) days of identifying such SFD Anomalies. The terms and conditions of this Agreement shall apply thereto, and any Exploratory Prospects resulting therefrom shall form part of the Minimum Prospect Inventory. Provided, however, Pinnacle shall not be required to present such SFD Anomalies on any lands that are Excluded Lands. This clause 5(c) shall be in effect until October 31, 1998.

(4) Pinnacle will offer Encal a first opportunity to participate in a transaction utilizing SFD Data to explore for Petroleum Substances outside of Canada where in Pinnacle's sole judgment there is an opportunity for Encal to participate as operator or a participant if such role is available and Pinnacle believes it is appropriate for Encal to perform such role.

(5) At the same time that Encal provides notice to Pinnacle of the location of an Exploration Area pursuant to clause 6(a), it shall also provide to Pinnacle one

additional Exploration Area which shall be an option Exploration Area. Encal will be able to terminate an option Exploration Area prior to any SFD Survey being conducted thereupon and to select an alternate option Exploration Area which shall become the new option Exploration Area. Encal may choose any lands within an Existing Exploration Area as an Exploration Area hereunder but only to the extent SFD Survey has not been completed and provided to Encal on those locations within such an Exploration Area.

(6) Once Pinnacle commences to perform a SFD Survey on an Exploration Area selected by Encal, Encal shall have the right to select a new option Exploration Area. Pinnacle shall advise Encal immediately prior to the time they commence such a SFD Survey.

(7) Pinnacle and the Affiliates covenant and guarantee to Encal that they will not enter into any agreement with any Third Party which will purport to affect the Exploration Areas, option Exploration Area or Existing Exploration Areas or which would allow such Third Party any better rights then Encal has under this Agreement vis a vis the size of an Exploration Area, and the number of Exploration Areas (in each case, in Canada) a Third Party may select at any given time. In addition, no Third Parties will be allowed to select as an Exploration Area and Pinnacle will not conduct any work on any such areas for Third Parties which fall within the Exclusive Area. Nothing in this clause will affect the time commitment of Pinnacle to Encal set out in this clause 5.

(8) In addition to clause 5(g), Pinnacle hereby covenants to ensure it will not make commitments to Third Parties such that, during the Term Encal will be entitled to and will be guaranteed, for the purposes of conducting SFD Survey via selection of Exploration Areas, a minimum of 50% of the total land area falling between the 5th and 6th Meridians (DLS Surveying) in the Province of Alberta, based on the total land area contained therein. Once Encal has selected an Exploration Area and Pinnacle has commenced SFD Survey then that area will automatically be deemed to be an

Exclusive Area hereunder and hence, Pinnacle and the Affiliates hereby covenant and guarantee to Encal that no Third Party will be allowed any rights to the conduct of SFD Survey by Pinnacle or any of them or any rights to SFD Data derived therefrom.

(9) The Parties hereto agree that the Existing Exploration Areas are excluded from the minimum number of Exploration Areas that Encal is entitled to select under the terms of this Agreement and are dealt with in clause 7 hereunder.

(10) The Parties hereto agree that at all times, Encal shall have selected at least one (1) Exploration Area in the Province of British Columbia for each four (4) Exploration Areas selected outside of the Province of British Columbia.

(1) In accordance with the terms of this Agreement, Encal shall from time to time select Exploration Areas upon which SFD Survey will be conducted by Pinnacle. At the time of such selection, Encal shall provide Pinnacle with information pertaining to any Excluded Lands in the Exploration Area. Subject to the qualifications set out below, Pinnacle shall perform the SFD Survey on the Exploration Areas selected by Encal, in the order determined by Encal. Only one Exploration Area will be the current Exploration Area for the SFD Survey at any time, unless otherwise agreed to by Pinnacle. Encal shall reimburse Pinnacle for 50% of all costs of a daily aircraft rental or lease rate, pilot, accommodation and food for SFD Surveys conducted hereunder. Pinnacle shall, within fifteen (15) days of such selection by Encal, advise Encal of:

(1) any safety concerns;

(2) conflicts with an area forming part of a Third Party joint venture or to the knowledge of Pinnacle, conflicts with lands held by Pinnacle's Third Party partner in such other current joint venture;

(3) any concerns Pinnacle has arising in conducting SFD Survey of a technical nature or any other bona fide reason; or

(4) location of Excluded Lands contained in the Exploration Area,

pertaining to the Exploration Area that Encal selects for such SFD Survey. In the event that any of the above conflicts or concerns arise, Encal and Pinnacle shall meet to discuss such concerns and, inter alia, either jointly modify the subject Exploration Area or Encal shall select another Exploration Area as a substitute.

(2) Pinnacle shall have 120 days from being advised of the location of the Exploration Area by Encal in which to:

(1) present for Encal's review the visual SFD Data together with a map of flight lines and locations of any anomalous SFD features whether they comprise SFD Anomalies presented by Pinnacle to Encal or not, provided that in respect of such SFD features that are either presented by Pinnacle as SFD Anomalies of a major nature or Pinnacle is of the good faith opinion that such features warrant further evaluation as potential SFD Anomalies or may be dealt with pursuant to clause 8. Pinnacle shall provide written interpretations and recommendations on those anomalous SFD features which Pinnacle presents to Encal as the major SDF Anomalies on an Exploration Area. Pinnacle shall not be required to provide to Encal copies, in any form, of the SFD Data, however, such SFD Data shall be available for Encal's further review at Pinnacle's offices upon reasonable notice to Pinnacle;

(2) provide, at no cost to Encal, copies of all maps, information, written reports, interpretations and assessments of Pinnacle identifying, in Pinnacle's opinion,

all SFD Anomalies of a major nature, obtained during the conduct of the SFD Survey; and,

(3) provide recommendations in respect to those SFD Anomalies identified which, after consultation between the representatives of Encal and Pinnacle are of a major nature,

(i, ii, and iii above are collectively referred to as the "SFD Information").

The Parties confirm that Encal shall be represented by one designated representative. Encal shall designate one alternate designate and may from time to time upon reasonable notice in writing change the designates as necessary.

(3) Upon presentation of the SFD Information provided by Pinnacle (including the right to review SFD Data at Pinnacle's offices), Encal shall review the SFD Information and individually accept or reject in writing any or all SFD Anomalies presented within ninety (90) days of such SFD Information being presented to Encal ("Evaluation Period"). Pinnacle agrees during the Evaluation Period to assist Encal in assessing and confirming any of the SFD Anomalies. After the expiry of the ninety (90) day period set out herein, the Buffer Zone will no longer form a part of the Exploration Area, except to the extent it contains SFD Anomalies presented by Pinnacle and accepted by Encal, and except to that extent it will no longer be an Exclusive Area.

(4) Any SFD Anomaly accepted by Encal shall be hereinafter called an Exploratory Prospect.

(5) There is no maximum to the number of SFD Anomalies that Pinnacle may provide SFD Information on and which may be accepted by Encal as Exploratory Prospects.

(6) Any SFD Information obtained by Pinnacle in relation to an Exploration Area which does not comprise an SFD Anomaly presented by Pinnacle to Encal and which Encal

has reviewed shall not be disclosed by Encal to any Third Party and Encal agrees to keep it confidential for a period of two (2) years from the expiry of the Term. Encal shall not disclose such SFD Information to a Third Party or use the same in furtherance of oil and gas exploration without the written consent of Pinnacle.

(7) In the event that such SFD Anomalies are rejected by Encal, or deemed rejected, such SFD Anomalies shall be dealt with in accordance with clause 8 of this Agreement. Encal may also reject an Exploratory Prospect for technical and other reasons by written notice to Pinnacle, and such rejected Exploratory Prospect and associated Petroleum and Natural Gas Rights shall also be dealt with in accordance with clause 8 of this Agreement.

(8) Encal and Pinnacle shall attempt to jointly prioritize the Exploratory Prospects. Encal shall, at its sole discretion, utilizing conventional oil and gas industry methods use it's best efforts to cause further evaluation work to be done on each Exploratory Prospect, as prioritized above. Such work shall be for the purpose of confirming whether or not a test well location should be selected and whether or not the drilling of such test well is warranted (which work may include, but not restricted to further qualification and analysis using Basic Geophysical Data available to Encal). Seismic Costs for each Exploratory Prospect shall be borne solely by Encal for the Term.

(9) In the event that Encal fails to elect to accept or reject an SFD Anomaly within the prescribed time, it shall be conclusively be deemed to be a rejection of such SFD Anomaly and as such shall not become an Exploratory Prospect and shall be dealt with in accordance with clause 8 of this Agreement.

(10) Pinnacle, pursuant to clauses 12 or 21, the Petroleum and Natural Gas Rights to any portion of an Exploratory Prospect (which portion represents, in Encal's sole reasonable opinion, the key tracts to drill a test well, such Petroleum and Natural Gas Rights shall be called "the Key Tracts"), then Encal shall provide written notice to

Pinnacle of such event occurring and for the purposes of clause 9 such Exploratory Prospect shall not further be considered as an Exploratory Prospect, shall not be considered in calculating the Minimum Prospect Inventory, and shall be dealt with in accordance with clauseE8 of this Agreement.

The Parties may continue to attempt to secure the Key Tracts and the provisions of clauses 12 or 21 shall continue for two (2) years from the date of the above mentioned written notice. In addition, the specific term set forth in clause 21(b) specific Exploratory Prospect shall be deemed to be amended to two
(2) years from the date of the notice pertaining to the Key Tracts. In the event that a Party is unable to secure the Key Tracts for such Exploratory Prospect within such two (2) year period, then such Exploratory Prospect shall be deemed a rejected Exploratory Prospect except for any joint lands acquired thereon. In the event that such Key Tracts are secured, then such Exploratory Prospect shall, for the purposes of clause 9, be considered in calculating the Minimum Prospect Inventory.

(11) Upon Encal having conducted any conventional oil and gas industry evaluation and analysis as it sees fit on an Exploratory Prospect, Pinnacle and Encal shall meet and consult at least forty-eight (48) hours prior to the final hour at which bids are accepted for the sale of any new Crown lands or 15 days prior to acquiring new freehold leases to discuss the acquisition of any such Crown or Freehold Petroleum and Natural Gas Rights. Prior to the bid date and time Pinnacle shall elect in writing to Encal whether to acquire a working interest in the lands comprising the Exploratory Prospect (as defined in clause 6(q) below), or to elect to receive a gross overriding royalty with respect to the Exploratory Prospect, calculated and payable on the terms of the Royalty Procedure based on Encal's working interest as further set out in the Royalty Procedure. Upon having elected to receive a gross overriding royalty, Pinnacle and Encal shall execute a Royalty Agreement in the same form as the Royalty Procedure attached as Schedule "D" hereto. Should Pinnacle elect to obtain a working interest as set out hereunder, the Parties agree that the terms and conditions of the Operating Procedure will govern their relationship with respect to

the lands and Petroleum and Natural Gas Rights comprising the Exploratory Prospect jointly acquired, however, at all times Encal shall hold any registered and legal interests in trust for Pinnacle subject to a transfer to Pinnacle of such interest at Pinnacle's request and to the extent possible. In addition, Pinnacle shall not be obligated for Seismic Costs or Basic Geophysical Data during such time. Should Pinnacle elect to remain in a gross overriding royalty position and execute the Royalty Agreement as set out hereunder, the Parties hereto agree that the lands and Petroleum and Natural Gas Rights subject to the Exploratory Prospect, and the Exploratory Prospect in general shall be excluded from the terms and conditions of this Agreement and the Exploratory Prospect will solely be governed by the Royalty Agreement executed by Encal and Pinnacle.

With respect to the acquisition of new Crown or freehold lands as set out and indicated in this subclause 6(k) above, Pinnacle agrees that until March 15, 1999 Pinnacle will pay its share acquisition costs of such new Crown or freehold lands until it has expended 45% of a gross $5,000,000.00 land acquisition cost ($2,250,000.00) and in addition, should Encal not have drilled three (3) wells whether exploratory or development in accordance with the terms of this Agreement on Exploratory Prospects located on existing Exploration Areas or new Exploration Areas by March 15, 1999 then Pinnacle will pay 50% of its share of land costs (i.e. 22.5%) until three (3) such wells are drilled on Exploratory Prospects. In addition, the Parties confirm that at the later of March 15, 1999 or the time when Encal shall have drilled the three (3) wells indicated under this subclause, Pinnacle shall be responsible and pay forthwith any amounts equal to the prior reduction in its full share of land acquisition costs under this subclause 6(k) immediately above.

(12) All information including any test well information, SFD Data, SFD Information and any conventional oil and gas industry evaluation and analysis data acquired by the Parties as a result of any operations within the Exploration Areas shall be considered confidential and for their sole and exclusive use and benefit. Such test well information, SFD Information, SFD Data and any conventional oil and gas industry evaluation and analysis data shall not be divulged by Pinnacle or Encal to any Third

Party unless the Parties first agree in writing to the dissemination thereof. The Parties agree that any SFD Data and SFD Information pertaining to any rejected SFD Anomalies and Exploratory Prospects shall remain the property of Pinnacle and in the case of test well information and any conventional oil and gas industry evaluation and analysis data including any Basic Geophysical Data, the property of Encal.

(13) The Parties hereto acknowledge that the SFD Technology, SFD Information and all SFD Data shall, continue to be the sole property of Pinnacle and the Affiliates, and shall remain confidential and within the possession of Pinnacle and the Affiliates.

(14) The Parties hereto acknowledge that any conventional oil and gas industry evaluation and analysis work including Basic Geophysical Data shall continue to be the sole property of Encal, and shall remain confidential and within the possession of Encal.

(15) Encal agrees that Pinnacle may require each employee or consultant of Encal and Encal's professional advisors who come into contact with SFD Technology to execute a Confidentiality Agreement in the form as Schedule "E" attached hereto. Pinnacle agrees that Encal may require each employee or consultant of Pinnacle and Pinnacle's professional advisors who come into contact with Basic Geophysical Data and conventional oil and gas industry evaluation and analysis data to execute a Confidentiality Agreement substantially in the form as Schedule "E" attached hereto as necessarily modified.

(16) The Parties hereto acknowledge that ownership and any trading rights to Basic Seismic Data acquired hereunder shall be solely owned by Encal.

(17) Upon having selected an Exploratory Prospect, Encal shall determine the optimum location of the first test well to be located and drilled on the Exploratory Prospect. The Parties confirm that Petroleum and Natural Gas Rights may have been acquired from the Crown in Right of Alberta or the province or other territory where the

Exploratory Prospect is located, or that the Parties will have to arrange a farmin arrangement, lease or a sublease arrangement from the existing holder of the Petroleum and Natural Gas Rights covering the Exploratory Prospect or any combination of the above. The optimal location of the first test well shall determine the earning entitlement provisions applicable to Pinnacle as set out below and notwithstanding that the remainder of the Exploratory Prospect may have to be acquired by Encal and Pinnacle in some other manner, the percentage participation of Pinnacle in and to the Exploratory Prospect shall be the same throughout the Exploratory Prospect as where the first test well is to be drilled, and the Parties will be governed by the Operating Procedure if Pinnacle elects to remain in a working interest position.

(18) If the test well is to be drilled on lands previously acquired at a Crown sale or via freehold lease by both Encal and Pinnacle, Encal will hold any such registered or legal interest of Pinnacle in trust for Pinnacle with a right in favour of Pinnacle to a transfer of such interest at Pinnacle's request and to the extent possible. When Encal advises Pinnacle that it is ready and prepared to drill a test well on the Petroleum and Natural Gas Rights, Pinnacle shall have fifteen (15) days (however, if a drilling rig is located on the test well site, Pinnacle shall have forty-eight (48) hours) to make an election to either remain in a working interest position relative to the drilling of the test well located on the subject lands, and Petroleum and Natural Gas Rights or to elect to convert to an overriding royalty interest upon the terms set out in the Royalty Procedure. If Pinnacle elects to convert to an overriding royalty, Pinnacle shall immediately convey and transfer its entire beneficial and legal working interest in and to the lands and subject Petroleum and Natural Gas Rights within the Exploratory Prospect to Encal prior to the spudding of the test well for the consideration equal to Pinnacle's share of prior land acquisition costs. In an instance of conversion, the Parties shall execute a Royalty Procedure and Pinnacle shall remain in a royalty position relative to the Exploratory Prospect. If Pinnacle elects to remain in a working interest, Pinnacle shall immediately pay any consideration and money for prior land acquisition costs to the extent Pinnacle has not paid for its full

proportionate working interest share of such land acquisition costs pursuant to clause 6(k) (if applicable).

(1) The Parties hereby confirm and agree that Encal has requested Pinnacle to conduct SFD Surveys on Existing Exploration Areas. The Parties agree that this clause 7 shall govern the terms and conditions of such SFD Surveys.

(2) Encal has requested certain SFD Survey to be conducted on Existing Exploration Areas and the Parties agree that Pinnacle shall conduct the SFD Survey on the locations of any anomalous SFD features identified by Pinnacle as potentially indicative of Petroleum Substances located on the Existing Exploration Areas as time permits and within the scope of the total time commitment Pinnacle has covenanted to Encal in light of the conduct by Pinnacle of SFD Survey on Exploration Areas selected by Encal under the other terms and provisions of this Agreement. Encal may request Pinnacle to conduct SFD Surveys on such specific locations within the Existing Exploration Areas on the basis as set out in this clause herein. The Parties hereby confirm that Encal is not prohibited from including an Existing Exploration Area in an Exploration Area under the other terms and provisions of this Agreement in which case, Pinnacle shall be governed by the terms and provisions in this Agreement pertaining to Exploration Areas. The Parties further agree that any such custom SFD Surveys to be done by Pinnacle in relation to the Existing Exploration Areas shall be governed by and conducted in accordance with the other terms and provisions of this Agreement with respect to the generation and presentation of SFD Anomalies, and the acquisition of lands and Petroleum and Natural Gas Rights and further the elections by Pinnacle in relation to a working interest share on any Exploratory Prospects arising out of such custom Existing Exploration Area or any elections by Pinnacle to be in an overriding royalty position as set out under the other terms and conditions of this Agreement. Pinnacle has the right to reject the conduct

of any SFD Survey on Existing Exploration Areas, on the same basis as set out with respect to SFD Surveys conducted by Pinnacle in relation to Exploration Areas.

(3) Any SFD Data conducted by Pinnacle in relation to the Excluded Lands selected by Encal and accepted by Pinnacle including any SFD Information, and SFD Anomalies, identified by Pinnacle on Excluded Lands shall not be disclosed by Pinnacle to any Third Party whether during the Term or thereafter, and Pinnacle agrees to keep such SFD Data and SFD Information in confidence for a period of two (2) years from the expiry of the Term and shall not disclose such SFD Data and SFD Information to a Third Party or use such SFD Data and SFD Information in furtherance of oil and gas exploration without the written consent of Encal. The immediately preceding clause will also govern any SFD Anomalies rejected by Encal and existing over Excluded Lands.

(1) The Parties agree that with respect to any SFD Anomalies, or any Exploratory Prospects which were rejected under any other clauses of this Agreement including applicable SFD Information (the "Rejected SFD Data"). Such Rejected SFD Data may, at both Parties' mutual election, be conveyed by each of them into a separate entity (whether a corporation or partnership to be decided by the Parties at a later date) and with the intent that the Rejected SFD Data shall be held by each of Pinnacle and Encal equally (i.e. 50/50) through the newly established entity.

(2) The Parties further agree that they may at any time, at both Parties' mutual election, (i.e. convey any further lands and Petroleum and Natural Gas Rights into the subject partnership or corporation, as the case may be, whether such lands and Petroleum and Natural Gas Rights were subject to this Agreement or not. Lastly, the Parties agree that should any of them convey their entire interest in any such lands and Petroleum and Natural Gas Rights to the subject new entity as set out herein, any existing

overriding royalties payable to Pinnacle by Encal or to Encal by Pinnacle (if any) and any AMI clauses arising out of this Agreement will be extinguished such that as among the Parties hereto, only Third Party encumbrances shall remain with respect to those Petroleum and Natural Gas Rights or lands.

(3) The Parties agree that any rejected SFD Anomalies which are not included in the terms and provisions of clause 8(a), are the exclusive property of Pinnacle and may be dealt with by Pinnacle as it decides subject only to subclause 7(c).

During the Term of this Agreement, Pinnacle shall perform its obligations to conduct SFD Surveys until all Exploration Areas or SFD Surveys yield a total of eighteen (18) Exploratory Prospects (such number of Exploratory Prospects is hereinafter referred to as "the Minimum Prospect Inventory").

In the event that the sum of the Exploratory Prospects is less than fifteen
(15), Pinnacle shall commence further SFD Survey, as designated by Encal, on the current Exploration Area or, once it has been completed, on the option Exploration Area until at least the Minimum Prospect Inventory is achieved, with such additional Exploration Areas or SFD Survey to be provided on such a "rolling basis" as may be required. Encal shall have the right to request further SFD Survey even if the Minimum Prospect Inventory has been met and if, in the reasonable opinion of Encal, it deems that eighteen (18) Exploratory Prospects are not sufficient, the Parties may agree to increase such number in order that Encal shall have a sufficient inventory of such Exploratory Prospects.

Once the first test well is spudded on an Exploratory Prospect or an Exploratory Prospect is rejected by Encal, such Exploratory Prospects shall no longer be included in the Minimum Prospect Inventory.

The provisions of clauses 6 and 12, as the context requires, shall apply to the above mentioned additional Exploration Areas created as a result of this clause.

(1) Notwithstanding any clauses relative to Pinnacle paying for its share of any costs to acquire lands and Petroleum and Natural Gas Rights located either in the Exploratory Prospect or comprising AMI Lands, Encal agrees to pay and advance on behalf of Pinnacle any share of Pinnacle's obligations to acquire such Petroleum and Natural Gas Rights until the end of business on February 28, 1998 or the closing of Pinnacle's financing, whichever is earlier. The Parties agree to extend this period for a maximum of 30 days upon written notice by Pinnacle to Encal. This clause shall also apply to any costs and expenses relative to earning and drilling of wells under the terms of this Agreement where Pinnacle has elected to obtain a working interest thereunder. Therefore, any such land acquisition, drilling and associated costs and other operational expenses relative to any wells drilled under this subject Agreement, shall be advanced and paid for (with respect to Pinnacle's portion) by Encal until the end of business on February 28, 1998, or as extended hereunder.

(2) Any monies paid by Encal on behalf of Pinnacle under the terms of this clause, shall be fully repaid with an annual interest rate equal to the prime rate (defined as that rate charged by the Royal Bank of Canada to its best customers as a reference rate for Canadian dollar loans as listed in the main branch, City of Calgary for that particular lending institution) by the end of business on February 28, 1998 or the period of time when Pinnacle has received funds from its financing, whichever is earlier. Any amounts not paid by Pinnacle to Encal under the terms of this clause shall, in addition to any other rights available to it, entitle Encal to any of the rights under the terms of this Agreement including set-off from any existing production sold by Encal for Pinnacle (and any other Third Parties if applicable) or any payments by Encal to

Pinnacle pursuant to the Royalty Procedure and whether such set off rights pertain to this Agreement or any other agreement.

(3) Encal shall have a lien on all production from joint lands pursuant to the terms of the Operating Procedure against the interest of Pinnacle in and thereto in respect of any amounts owing by Pinnacle to Encal pursuant to this clause 10.

Notwithstanding the use of the SFD Information in evaluating the Exploration Areas, the Parties hereto agree and acknowledge that any Exploratory Prospect (including Existing Exploratory Prospects) evaluated under this Agreement shall have been evaluated using such geological, geophysical, engineering, mapping, seismic and technological data or information, including without limitation the Basic Geophysical Data, available to either Encal or Pinnacle in addition to the SFD Information such that any successes or failures in drilling on an Exploratory Prospect shall be attributed to all of the information and data utilized evaluating and determining the Exploratory Prospect.

In the event that Petroleum and Natural Gas Rights within an Exploratory Prospect where a first test well is to be drilled are held by Third Parties to this Agreement ("Third Party Lands") and Encal is required to commit to conduct certain obligations, including but not restricted to the drilling of earning wells on the Exploratory Prospect, but excluding any collection of Basic Geophysical Data, (such obligations are collectively referred to as "Obligations") which may be required to earn an interest or the right to earn an interest in the Third Party Lands, Encal may negotiate and enter into agreements with Third Parties ("Farmin Agreements"). In the event that Encal enters into a Farmin Agreement, Encal shall serve written notice to Pinnacle of Encal entering into such Farmin Agreement ("Farmin Notice") including a reasonable estimate of Obligations and an estimate of the timing of the advance of funds. Such notice shall include such recommendations and assessments as Encal deems in its reasonable opinion to be necessary for Pinnacle to evaluate such Obligations. Pinnacle

acknowledges that Encal provides no representations or warranties relative to such information, recommendations, assessments, interpretations, or estimates and that Pinnacle will make its own reasonable decision based on such information and other factors. Pinnacle shall then elect by written notice to Encal on or before the expiration of fifteen (15) days from receipt of the Farmin Notice to either:

(1) elect to participate in the Obligations; or

(2) elect to acquire a gross overriding royalty as set out below.

Should Pinnacle elect to participate in the Obligations, and if the test well to be drilled upon the Exploratory Prospect is to be drilled on such Third Party Lands, the cost, risk and expense of the Obligations and the benefit and interest earned in the Third Party Lands subject to the Farmin Agreements shall be shared by the Parties in the following proportions:

Encal 60%
Pinnacle 40%

The provisions of clause 19(d) apply mutatis mutandis to the event of non- payment by Pinnacle of the Obligations.

Should Pinnacle elect to acquire a gross overriding royalty and elect not to participate in the Obligations, Pinnacle and Encal agree to enter into the Royalty Procedure. Pinnacle shall convey to Encal any working interest in the entire Exploratory Prospect and Encal shall re-imburse Pinnacle any land acquisition costs previously paid by Pinnacle. The subject gross overriding royalty will be calculated, based and payable on the resultant interest (if no payout account is established) or the after payout interest (if applicable) of Encal in the subject Farmin Agreement from time to time and with respect to any Crown lands outside of the earning well spacing unit on the Third Party Lands, the royalty as set out in the Royalty Procedure shall apply to such lands and production from wells drilled

thereon. For the sake of clarity, a gross overriding royalty will apply to the entire Exploratory Prospect.

During that period of time prior to Pinnacle's election to participate, Encal shall assist Pinnacle in the review of the Obligations.

In the event that Pinnacle fails to elect to participate in Obligations within the prescribed time, it shall be conclusively be deemed to be an election not to participate and to remain in an overriding royalty position on all lands and future wells on the Exploratory Prospect.

(1) Where Pinnacle is in a working interest, and during the Term of this Agreement, where further wells are proposed in order to fully develop the potential of a drilled and proven Exploratory Prospect (a "Proven Prospect") which wells are located on Joint Lands earned as a result of a Farmin Agreement ("Additional Well") and in which Pinnacle has participated for a working interest, Encal shall serve written notice to Pinnacle in accordance with the terms of the governing operating procedure.

(2) If Pinnacle participates for a working interest in the first well on an Exploratory Prospect, where further wells may be required to earn Third Party Lands comprising a portion of a Proven Prospect pursuant to a Farmin Agreement or should Encal negotiate and enter into new agreements with Third Parties ("Additional Farmin Agreement") to drill further wells to earn Third Party Lands (such well shall be referred to as the "Additional Earning Well"), Encal shall serve written notice to Pinnacle of the Additional Earning Well ("Earning Well Notice"). Such Earning Well Notice shall include such recommendations and assessments as Encal deems in its reasonable opinion to be necessary for Pinnacle to evaluate such Additional Earning Well including a reasonable estimate of Additional Earning Well costs and an estimate of the timing of the advance of funds. Pinnacle acknowledges that Encal provides no

representations or warranties relative to such information, recommendations, assessments, interpretations, or estimates and that Pinnacle will make its own reasonable decision based on such information and other factors. Pinnacle shall then elect by written notice to Encal on or before the expiration of fifteen (15) days from receipt of the Earning Well Notice to either:

(1) elect to participate in the Additional Earning Well; or

(2) elect not to participate in the Additional Earning Well.

Should Pinnacle elect to participate in the Additional Earning Well, the cost, risk and expense of the Additional Earning Well and the interest earned in the Third Party Lands subject to the Farmin Agreement or the Additional Farmin Agreement shall be shared by the Parties in the following proportions:

Encal 60%
Pinnacle 40%

Should Pinnacle elect not to participate in the Additional Earning Well, such Third Party Lands being earned by such Additional Earning Well in which Pinnacle is not participating shall not be subject to the terms and conditions of this Agreement and Pinnacle hereby forfeits its entire interest in such Third Party Lands. The cost, risk, expense, any Petroleum and Natural Gas Rights earned, information or benefit derived therefrom shall be for Encal's own account and Pinnacle shall not earn any interest whatsoever whether working interest or overriding royalty in such lands.

During that period of time prior to Pinnacle's election to participate Encal shall assist Pinnacle in the review of the Additional Earning Well.

In the event that Pinnacle fails to elect to participate in the Additional Earning Well within the prescribed time, it shall be conclusively be deemed to be an election not to participate in such Additional Earning Well.

(1) Encal is hereby appointed Operator of the EJV and the attached Operating Procedure and agrees that it shall not delegate or assign any of its duties during the Term of this Agreement without the prior consent of Pinnacle, which consent shall not be unreasonably or arbitrarily withheld.

(2) Encal, as Operator of the EJV (but for sake of clarity, excluding any Excluded Lands), shall make all decisions relating to the management and control of the EJV subject to the terms of this Agreement and the agreement of Pinnacle where expressly required hereunder with Encal's reasonable discretion, which shall be exercised in good faith, in a workmanlike manner, in accordance with good oil and gas field practice, and which shall be final and binding on the Parties, except as otherwise provided in this Agreement. Subject to the foregoing, the Operator shall:

(1) explore, develop, manage and operate oil and gas properties;

(2) subject to the terms and conditions of this Agreement, conduct preparatory exploration, which shall include (but not be limited to subsurface mapping, prospect/play purchases, geophysical field surveys, the collection of Basic Geophysical Data together with the necessary interpretations as may from time to time be necessary);

(3) select drill sites and arrange for the drilling of the wells thereon and produce and sell Petroleum Substances from the respective accounts of the Parties; it being understood that Encal is not warranting that Petroleum Substances will

be sold, only that it shall use its best efforts to market such Petroleum Substances on the same terms and conditions as it markets its own share;

(4) enter into agreements on behalf of the Parties to the EJV for the drilling, participation, development, pooling, farmin, farmout, unitization, joint venture and production of Petroleum Substances and for the gathering, processing, treating, transportation and sale of same;

(5) carry insurance, as specified in Clause 311(B) of the Operating Procedure on behalf of the Parties as a charge to the joint account;

(6) vote as one on behalf of both Encal and Pinnacle in all matters arising from EJV activities;

(7) give receipts, releases and discharges on behalf of the Parties hereto;

(8) prior to commencing the drilling of any well, to review the title of the appropriate holder of the Title Document in accordance with industry standards; and

(9) charge overhead and such other costs recoveries to the Parties as are provided in the Accounting Procedure attached to the Operating Procedure, without duplication.

(3) Notwithstanding any other clauses of this Agreement, should Pinnacle acquire or shoot seismic for its own account, Pinnacle will be solely responsible for any costs and expenses relative thereto.

(1) Provided a well is capable of production of Petroleum Substances in paying quantities having regard to the costs of facilities and marketing as set out below, Encal shall use its best efforts to promptly cause each of the wells that have been drilled, completed and equipped under this Agreement, to be connected to Encal's or Third Party's facilities. Encal agrees to produce and market Pinnacle's share of Petroleum Substances produced from the wells and, in addition to the provisions of this clause, the provisions of Article VI of the Operating Procedure shall apply thereto. Encal shall not, except for lack of market, shut-in the wells or reduce production rates as will result in such wells producing less than their fair and equitable share of recoverable reserves from any reservoir from which Encal's other wells are producing, to the disadvantage or detriment of Pinnacle.

(2) With respect to those facilities in which Encal does not have any ownership interest, Pinnacle shall be charged the actual cost for storage, gathering, processing, transporting, treating, compression, absorption or other plant extraction or stabilization of Pinnacle's share of Petroleum Substances.

(3) With respect to those facilities in which Encal does have an ownership interest and subject to any agreements with Third Parties, Pinnacle shall be charged a reasonable fee sufficient to cover the costs for the storage, gathering, processing, transporting, treating, compression, absorption or other plant extraction or stabilization of Pinnacle's share of Petroleum Substances which fee shall also include a reasonable rate of return on capital investment.

(4) Notwithstanding the provisions of Article VI, Clause 601 of the Operating Procedure, Pinnacle hereby agrees to dedicate Pinnacle's share of production of Petroleum Substances from the joint lands subject to the Operating Procedure to Encal who shall undertake to market Pinnacle's share of production of Petroleum Substances on the same terms as Encal markets its own share of production, subject to the provisions of Article VI, Clause 604, election "A".

(1) If at any time during the Term of this Agreement a Party (in this clause called "the Proposing Party") wishes to construct new facilities for the treating, processing, or transportation of Petroleum Substances from the joint lands subject to the Operating Procedure, it shall afford to the other Party an opportunity to participate in such project on an equitable basis. The Proposing Party shall provide to the other Party the background information the Proposing Party deems reasonably necessary for the other Party to evaluate the project and make a decision. The Parties recognize that until a proposal is made it is not possible to determine the terms of such participation, however, each Party agrees that it will act in good faith in carrying out the terms of this clause.

Upon completion of the SFD Survey set out herein and the acceptance and evaluation of the Exploratory Prospects, Encal shall provide Pinnacle with an outline of the wells to be drilled and new facilities to be constructed. It is acknowledged that such outline shall not be binding and may be subject to revision from time to time. At two (2) month intervals thereafter, Encal shall provide outlines for the wells scheduled to be drilled in each successive calendar quarter during the Term. Beyond the Term, the Parties shall consult to determine the most efficient and reasonable method of scheduling further operations.

(1) Provided Pinnacle has elected not to be in an overriding royalty position, then the following clauses of Schedule "C" ("Operating Procedure") shall apply, mutatis mutandis, to this Agreement and to all operations as between Encal and Pinnacle for such wells drilled thereunder. Where the terms of this Agreement and the Operating Procedure conflict, the terms of this Agreement shall prevail. Where the Operating

Procedure makes reference to "Operator" the word "Encal" is substituted and similarly, "Joint Operator" is substituted by "Pinnacle" and "this Operating Procedure" is substituted by "this Agreement".

304     Proper Practices in Operations
305     Books, Records and Accounts
306     Protection from Liens
307     Joint-Operator's Rights of Access
308     Surface Rights
309(a)  Maintenance of Title Documents
311     Insurance
501     Accounting Procedure
701     Pre-Commencement Information (excluding 701(a))
702     Drilling Information and Privileges of Joint-Operators
703     Logging and Testing Information to Joint-Operators
704     Completion and Production Information to Joint-Operators
705     Well Information Subsequent to Completion
706     Data Supplied in Accordance with Industry Standards
801     Velocity Surveys and Other Geophysical Tests
        ARTICLE 11  Quit Claim
        1601  Definition of Force Majeure
        1602  Suspension of Obligation Due to Force Majeure
        1603  Obligation to Remedy
        1604  Exception for Lack of Finances
        1801  Information to be Kept Confidential

(2) Subject to the terms of this Agreement and to subclause (c) below, the Operating Procedure shall apply to operations conducted in respect of the exploration, development and maintenance of any lands, between and among Pinnacle and Encal hereto.

(3) In the event that Encal and Pinnacle are parties to an existing agreement involving Third Parties ("Third Party Agreement") and to the extent the Third Party Agreement conflicts with the Operating Procedure, the Third Party Agreement terms and conditions shall prevail as between Encal and Pinnacle.

(1) The Parties hereto shall, in proportion to their respective participating interests in the EJV, hereby indemnify and hold harmless the Operator from and against any and all actions, suits, claims and demands made by any person or persons whomsoever, in respect of any loss, injury, damage or obligation to compensate arising out of or in any way connected with the carrying out by the Operator of its duties and obligations in accordance with the provisions of this Agreement, except when the Operator is found to be grossly negligent, and excepting the collection of Basic Geophysical Data.

(2) Pinnacle indemnifies Encal against any and all Losses which may be incurred or suffered by Encal or which may be sustained, paid or incurred by reason of or in any way attributable to the operations carried on in respect of the SFD Survey by Pinnacle, its servants, agents or employees under this Agreement. However, notwithstanding any other clauses of this Agreement, Pinnacle does not represent and warrant the accuracy or reliability of the SFD Data and SFD Information and Encal agrees that it is in part relying on the same based upon its own evaluation of the same.

(3) Encal indemnifies Pinnacle against any and all Losses which may be incurred or suffered by Pinnacle or which may be sustained, paid or incurred by reason of or in any way attributable to the operations carried on in respect of the Basic Geophysical Data by Encal, its servants, agents or employees under this Agreement. However, notwithstanding any other clauses of this Agreement, Encal does not represent or warrant the accuracy or reliability of the conventional oil and gas industry evaluation

any analysis date including the Basic Geophysical Data and Pinnacle agrees that it is in part relying on the same based upon its own evaluation of the same.

(4) Pinnacle and each of the Affiliates jointly and severally indemnifies Encal against any and all Losses which may be incurred or suffered by Encal or which may be sustained, paid or incurred by reason of or in any way attributable to the breach of one or more of the representations, warranties or covenants made by Pinnacle and each of the Affiliates under this Agreement, whether such a breach occurs prior to or during the Term of this Agreement, or as a result of Pinnacle or the Affiliates suffering an adverse loss to their rights in and to the SFD Technology and SFD Data as a result of or arising out of the Action, such an indemnity to continue for a period of five
(5) years following the Term of this Agreement.

(1) If either Party fails to perform any obligation required to be performed hereunder, the non-defaulting Party may give the defaulting Party notice to remedy the default, and if the defaulting Party does not commence to remedy the default within thirty (30) days after receiving the notice and proceed diligently and continuously to remedy it, the non-defaulting Party may by notice to defaulting Party in writing terminate this Agreement.

(2) If, as a result of the Action or any breach of the representations, warranties and covenants contained herein, whether such a breach is the result of the actions of Pinnacle or any of the Affiliates, or if Pinnacle or any of the Affiliates is no longer entitled to the ownership of SFD Technology and the right to utilize the SFD Technology is granted to any other person other than as provided in clause 5(a), Encal may terminate this Agreement by providing written notice of same to Pinnacle.

(3) In the event that this Agreement is terminated as provided in this clause, any lands owned jointly by the Parties hereto shall continue to be governed by the Operating Procedure or applicable Third Party Agreement.

(4) Subject to clause 10 hereof, should Pinnacle fail to pay its proportionate share of any cash calls or authorities for expenditure issued and delivered by Encal to Pinnacle in relation to a test well, or any other operations on an Exploratory Prospect, then, at the option of Encal, Encal may treat the non-payment as a lien on production in favour of Encal pursuant to the applicable operating procedure or may elect to treat the non-paid amount and any applicable interest thereunder as a debt due and owing from Pinnacle to Encal which may be collected by Encal in accordance with any provisions of law or equity and, Encal shall have the right to set-off the subject debt and any interest or penalty amounts owing against any other amounts payable or paid by Pinnacle to Encal including any production on any other lands under the terms of this Agreement or any amounts payable under a Royalty Agreement, or under the terms of the Operating Procedure applicable to any such lands.

(5) Should Encal fail to pay its proportionate share of any cash calls or authorities for expenditure in relation to a test well, or any other operations on any Exploratory Prospect, then, at the option of Pinnacle, Pinnacle may treat the non-payment as a lien on production in favour of Pinnacle pursuant to the applicable operating procedure or may elect to treat the non-paid amount and any applicable interest thereunder as a debt due and owing from Encal to Pinnacle which may be collected by Pinnacle in accordance with any provisions of law or equity and, Pinnacle shall have the right to set-off the subject debt and any interest or penalty amounts owing against any other amounts paid by Encal to Pinnacle including any production on any other lands under the terms of this Agreement or any amounts payable under a Royalty Agreement, or under the terms of the Operating Procedure applicable to any such lands.

Each Party shall not transfer this Agreement or any interest, right or obligation under this Agreement, or any joint lands operated under the Operating Procedure except in accordance with the provisions of Clause 2401 (B) of the Operating Procedure, provided that for the purpose of Clause 2401 (B) of the Operating Procedure, Affiliates may include a limited partnership where Pinnacle or Pinnacle Oil Canada Ltd. or an Affiliate is the general partner of such partnership. Any assignment of interest shall be in accordance with the Assignment Procedure attached as Schedule "C" hereto.

Notwithstanding any assignment made by Pinnacle to an Affiliate, during the Term of this Agreement, Encal need only look to Pinnacle for performance of the duties and obligations of Pinnacle pursuant to this Agreement.

(1) In this clause the expression "AMI Lands" means any Petroleum And Natural Gas Rights, or either of them, which are laterally and/or diagonally within one (1) mile of the lands encompassing any Exploratory Prospect, other than Excluded Lands and lands acquired by Encal alone (i.e. not subject to any obligation to provide an interest to a Third Party) pursuant to clause 13(b).

(2) On an Exploratory Prospect by Exploratory Prospect basis, the provisions of this clause relating to the acquisition of any AMI Lands shall:

(1) for AMI Lands not encompassing the Exploratory Prospect, be effective for that period commencing on the date of acceptance, in writing, by Encal of an Exploratory Prospect and terminating one (1) year thereafter, and;

(2) for AMI Lands encompassing the Exploratory Prospect, be effective for the Term and one (1) year thereafter.

(3) Crown Lands") and if one of the Parties desires to acquire an interest in the New Crown Lands, the Parties shall consult at least forty-eight
(48) hours prior to the final hour at which bids are accepted for the sale of the New Crown Lands for the purpose of attempting to reach an agreeable bid price. If, after consultation between the Parties, agreement is reached, to bid jointly on the New Crown Lands, Encal shall submit the bid on behalf of the Parties and if the New Crown lands are acquired, they shall be paid for, owned and held by the acquiring Parties in the following interests ("Participating Interests"):

(1) if an initial test well has been drilled on an Exploratory Prospect or is being drilled pursuant to clause 12 and Pinnacle participates, subject to any Third Party participation:

Encal 60%
Pinnacle 40%; or

(2) in all other cases where Pinnacle participates, subject to any Third Party participation:

Encal 55%
Pinnacle 45%

(4) Subject to Sub-clause (e), if agreement is not reached as to a bid price, then the New Crown Lands so acquired shall be paid for, owned and held by the Party acquiring the New Crown Lands.

(5) If, after any consultation at which an agreed bid price is not reached by all Parties, any Party acquires the New Crown Lands at a price which differs by more than five percent [5%] from the price it was prepared to agree to for acquisition, or if a Party acquires the New Crown Lands without consulting with the other Party or without

disclosing the price it was prepared to pay for the acquisition, the acquiring Party shall immediately give notice to the other Party setting forth the consideration paid. Any Party receiving the notice shall have the right for a period expiring ten (10) days from the receipt of the notice to elect to acquire its Participating Interest in the New Crown Lands acquired by paying to the acquiring Party its proportionate share of the acquisition costs. If this right is exercised, the New Crown Lands shall be held and owned by the Parties acquiring and the Parties electing to acquire their proportionate interest in the proportion that their respective Participating Interests bear one to the other as set forth in Sub-clause (b)(i) or
(b)(ii), whichever is applicable. The interest acquired shall be held by the acquiring Party on behalf of all Parties until the expiry of the ten (10) day period.

(6) On acquisition of AMI Lands by more than one Party, if the AMI Lands are not already subject to an agreement that provides for their joint operation, an agreement in the form of the Operating Procedure shall be deemed immediately to become effective to govern the relationship among the Parties and to provide for the maintenance and operation of the AMI Lands. Encal shall be the Operator unless Encal does not acquire an interest in the AMI Lands, in which event the Parties who have acquired an interest shall appoint an operator in the manner provided for the appointment of a new operator in the Operating Procedure.

(7) Provided that both Encal and Pinnacle acquire their Participating Interests in the AMI Lands, any wells drilled on the AMI Lands, except any test well, shall be deemed Additional Wells under this Agreement and, as such, the provisions of clause 13(a) shall apply mutandis mutatis to such Additional Well.

(8) A Party submitting a bid under the provisions of this clause shall comply with all combines and anti-competition laws and shall make known to the person calling for or requesting the bids or tenders at or before their time when any bid or tender is made, the names of all Parties who have agreed to submit a bid or tender.

(9) If any Party acquires an interest (or the right to acquire an interest) in any lands other than New Crown Lands as provided in Sub- clause (c) above or Petroleum and Natural Gas Rights as set forth in clauses 12 or 13(b) and fifty percent (50%) or more (by surface area and title document) of the lands so acquired are situated within the Area of Mutual Interest, the acquiring Party shall notify the other Party thereof within fifteen (15) days of the acquisition, detailing the consideration paid or payable therefor and the obligations undertaken by the acquiring Party with respect to the said acquisition. The other Party shall have ten (10) days from receipt of the notice of acquisition within which to elect to participate in the said acquisition to the extent of the percentage interest set forth opposite its name in Sub-clause (c)(i) or (c)(ii) above, which ever is applicable, by paying to the acquiring Party pursuant to the said acquisition.

(1) the acquisition of any interest in lands, Petroleum Substances, corporations, partnerships, affiliates or other legal entities as such by the purchase of an equity interest therein or merger and amalgamation therewith and any duties, obligations or acquisitions resulting therefrom where the AMI Lands are not the primary purpose of the acquisition;

(2) any interests in any lands or Petroleum and Natural Gas Rights presently held by Encal and its joint operators either having reserves which have been proven, probable or capable of any production of Petroleum Substances whatsoever including any lands or possible Petroleum and Natural Gas Rights;

(3) the purchase of any oil and gas reserves (whether proven or probable reserves) unless subsequently deemed included by mutual agreement of the Parties;

(4) any lands and Petroleum and Natural Gas Rights where Encal has conducted technical or analysis work and is pursuing the acquisition of such lands and Petroleum and Natural Gas Rights without reliance upon SFD Data;

(5) any other lands, Petroleum and Natural Gas Rights, tangibles and associated interests in which Encal has an interest or has a right to acquire an interest and which are not made a part of this Agreement in accordance with the terms and conditions hereof.

(1) The addresses for service and the fax numbers of the Parties shall be as follows:

Pinnacle -
Pinnacle Oil International Inc. 54 Patterson Close S.W.
Calgary, Alberta
T3H 3K2

Fax: (403) 686-4199

Dirk R. Stinson
54 Patterson Close S.W.
Calgary, Alberta
T3H 3K2

Pinnacle Oil Canada Ltd.

54 Patterson Close S.W.

Calgary, Alberta
T3H 3K2

Momentum Resources Ltd.

54 Patterson Close S.W.

Calgary, Alberta
T3H 3K2

George Liszicasz
54 Patterson Close S.W.
Calgary, Alberta
T3H 3K2

(1) by personal service on a Party at the address of such Party set out above, in which case the item so served shall be deemed to have been received by that Party when personally served;

(2) by facsimile transmission to a Party to the fax number of such Party set out above, in which case the item so transmitted shall be deemed to have been received by that Party when transmitted with answer back received; or

(3) except in the event of an actual or threatened postal strike or other labour disruption that may affect mail service, by mailing first class registered post, postage prepaid, to a Party at the address of such Party set out above, in which case the item so mailed shall be deemed to have been received by that Party on the fifth (5) business day following the date of mailing.

(3) A Party may from time to time change its address for service or its fax number or both by giving written notice of such change to the other Party.

(1) Each Party shall perform the acts and execute and deliver the deeds and documents and give the assurances as shall be reasonably required in order fully to perform and carry out and give effect to the terms of this Agreement.

(2) A waiver of any breach of a provision of this Agreement shall not be binding on any Party unless the waiver is in writing and the waiver shall not affect the Party's rights with respect to any other or future breach.

(3) All terms and provisions of this Agreement shall run with and be binding on the lands referred to during the Term of this Agreement.

(4) Time is of the essence in this Agreement.

(5) This Agreement shall enure to the benefit of and be binding on the Parties and their respective heirs, executors, administrators, successors and assigns.

(6) The terms of this Agreement express and constitute the entire agreement between the Parties and no implied covenant or liability of any kind is created or shall arise by reason of these presents or anything in this Agreement contained.

(7) This Agreement supersedes and replaces all previous agreements, whether written or oral, memoranda or correspondence between the Parties with respect to the subject matter of this Agreement.

(8) Wherever in this Agreement the singular number or masculine gender occurs, the same shall be respectively construed as the plural or neutral, and vice versa, as the context or reference may require.

(9) All schedules attached to this Agreement are incorporated by reference as though contained in the body of it. Wherever any term or conditions, expressed or implied, of any schedule conflicts or is at a variance with any term or condition of this Agreement, the term or condition of this Agreement shall prevail.

(10) During the Term, Pinnacle and the Affiliates agree not to actively solicit the employment or consulting contracts of Encal's employees or consultants.

(11) The headings of all clauses in this Agreement are inserted for convenience of reference only and shall not affect the construction of it.

(12) The terms of this Agreement shall be governed exclusively by the law in force from time to time in the Province of Alberta and the Parties hereto agree to submit to the

jurisdiction of the Courts of the Province of Alberta in respect of any claims, actions or proceedings resulting from this Agreement.

(13) Notwithstanding anything elsewhere herein contained, the right of a Party to acquire any interest in any lands or Petroleum and Natural Gas Rights from another Party shall not extend beyond twenty one (21) years after the lifetime of the last survivor of the lawful descendants now living of Her Majesty Queen Elizabeth II.

(14) This Agreement may be executed in counterpart and the executed counterparts shall constitute one agreement.

(15) Any confidentiality terms and conditions provided by a Party hereunder shall always be subject to the right of that Party to disclose confidential information to the extent required by law including securities laws applicable to such Party

IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first written above.

Per:   /s/ James D. Reimer              Per:   /s/ R. Dirk Stinson
       -------------------                     -------------------

Per:                                    Per:
----------------------------            -------------------------------

PINNACLE OIL INC. MOMENTUM RESOURCES LTD.

Per:   /s/ R. Dirk Stinson              Per:   /s/ R. Dirk Stinson
       -------------------                     -------------------

Per:                                    Per:
----------------------------            -------------------------------

PINNACLE OIL CANADA LTD. Witness

Per:   /s/ R. Dirk Stinson              GEORGE LISZICASZ
       -------------------

Per:                                    Witness

                                        DIRK R. STINSON      /s/ R. Dirk Stinson
                                        ----------------------------------------

EXHIBIT 10.9

[LETTERHEAD OF RENAISSANCE ENERGY LTD APPEARS HERE]

April 16, 1997

Pinnacle Oil International Inc.
380 - 1090 West Georgia Street
Vancouver, British Columbia
V6E 3V7

Dear Sir:

Further to our recent discussions, this letter sets forth our understanding that Pinnacle Oil International Inc. ("Pinnacle") will undertake to generate for Renaissance Energy Ltd. ("Renaissance"), 3 prospects in each of the Drumheller Area, Alberta and the Dollard Area, Saskatchawan (collectively, the "Prospects") using Pinnacle's SFD Tool in consideration of Renaissance entering into discussions with Pinnacle respecting an ongoing prospect generation arrangement. Renaissance shall have sole use and enjoyment of the Prospects and Pinnacle shall not be entitled to any compensation of any kind in respect of the Prospects whether or not such prospects are acted upon by Renaissance. Pinnacle shall at all times keep confidential all information respecting the Prospects. If the foregoing sets out our understanding please sign both copies of this letter and return one to the undersigned at your earliest convenience. Thank you.

Yours truly,

RENAISSANCE ENERGY LTD.

/s/ Jeff S. Lebbert
Jeff S. Lebbert
Vice President, Land & Contracts

Pinnacle Oil International Inc. hereby accepts and agrees to the foregoing this ________ day of _______________, 1997.

PINNACLE INTERNATIONAL OIL INC.

EXHIBIT 10.10

THIS AGREEMENT made as of the 1st day of November, 1997.

BETWEEN:

PINNACLE OIL INTERNATIONAL, INC., a body corporate, having an office in the City of Vancouver, in the Province of British Columbia (hereinafter referred to as "Pinnacle")

- and -

RENAISSANCE ENERGY LTD., a body corporate, having an office in the City of Calgary, in the Province of Alberta

(hereinafter referred to as "Renaissance")

In this Agreement, unless the context otherwise requires:

Schedule "A", pertaining to the Royalty Agreement, is appended to this Agreement. Wherever any term or condition of Schedule "A" conflicts or is at variance with any term or condition in the body of this Agreement, such term or condition in the body of this Agreement shall prevail.

(a) Pinnacle covenants to:

(i) perform stressfield tool surveys over the Prospect Lands in attempts to locate Exploratory Drilling Prospects during the Program Period; and

(ii) submit to Renaissance as and when identified and before the expiration of the Program Period, one or two Exploratory Drilling Prospects identified during the Program Period.

(b) If Renaissance, acting on the Exploratory Drilling Prospect, determines in its sole discretion to drill and subsequently drills a well at a location identified in an Exploratory Drilling Prospect to a depth deeper than below base Mississippian on or before March 31, 1998, Renaissance agrees, with respect to any wells so drilled on or before March 31, 1998 under an Exploratory Drilling Prospect, up to a maximum of 2 wells, to hereby reserve and grant to Pinnacle a 5% royalty to be calculated and paid in accordance with the terms and conditions set out in the Royalty Agreement (which Royalty Agreement shall be entered into on a well by well basis).

Pinnacle shall be liable to Renaissance for and shall, in addition, indemnify Renaissance from and against, all losses, costs, claims, damages, expenses and liabilities suffered, sustained, paid or incurred by Renaissance which arise out of any matter or thing occurring or arising from and after the date hereof and which arise out of acts or omissions of Pinnacle, provided however that Pinnacle shall not be liable to nor be required to indemnify Renaissance in respect of any losses, costs, claims, damages, expenses and liabilities suffered, sustained, paid or incurred by Renaissance which arise out of acts or omissions of Renaissance.

Each Party shall keep confidential all information obtained from the other Party in connection with this Agreement and shall not release any information concerning this Agreement and the operations herein provided for, without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Nothing contained herein shall prevent a Party at any time from furnishing information to any governmental agency or regulatory authority or to the public if required by applicable

law, provided that the Parties shall advise each other and agree as to content in advance of any public statement which they propose to make.

Renaissance shall reimburse Pinnacle for 50% of all charter airplane costs and expenses actually incurred by Pinnacle hereunder during the Program Period.

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 expresses the entire agreement of the Parties with respect to the subject matter hereof.

This Agreement shall, in all respects, be subject to, interpreted, construed and enforced in accordance with and under the laws of the Province of Alberta and the laws of Canada applicable therein and shall, in every regard, be treated as a contract made in the Province of Alberta. The Parties irrevocably attorn and submit to the jurisdiction of the courts of the Province of Alberta and courts of appeal therefrom in respect of all matters arising out of this Agreement.

This Agreement shall be binding upon and shall enure to the benefit of the Parties and their respective administrators, trustees, receivers, successors and assigns.

Time shall be of the essence in this Agreement.

This Agreement shall terminate on March 31, 1998.

PINNACLE OIL INTERNATIONAL, INC.             RENAISSANCE ENERGY LTD.


Per: [SIGNATURE ILLEGIBLE]                   Per: [SIGNATURE ILLEGIBLE]
     ---------------------------                  ----------------------------

Per: ___________________________             Per: ____________________________

THIS AGREEMENT made as of the . day of ., 199..

BETWEEN:

RENAISSANCE ENERGY LTD., a body corporate, having an office in the City of Calgary, in the Province of Alberta

(hereinafter referred to as "Grantor")

-and-

PINNACLE OIL INTERNATIONAL, INC., a body corporate, having an office in the City of Calgary, in the Province of Alberta

(hereinafter referred to as "Grantee")

WHEREAS:

(A) By virtue of an SFD Survey Agreement dated November 1, 1997 between the parties hereto, Grantor has drilled a well at a location identified in an Exploratory Drilling Prospect (as defined in the SFD Survey Agreement); and

(B) The parties hereto desire to provide that from and after the Effective Time, the Royalty Lands shall be subject to the terms and provisions of this Agreement;

NOW THEREFORE for good and valuable consideration, the parties hereto covenant and agree as follows:

1.1 In this Agreement, including the premises hereto, this article and Schedule "A" hereto, unless the context otherwise requires:

(a) "Condensate" means a mixture mainly of pentanes and heavier hydrocarbons that may be contaminated with sulphur compounds, that is recovered or is recoverable at a well from an underground reservoir and that is gaseous in its virgin reservoir state but is liquid at the conditions under which its volume is measured or estimated;

(b) "Crown" means the Crown in Right of the Province of Alberta;

(c) "Delivery Point" means the place where Petroleum Substances are delivered to the purchase thereof, or as otherwise provided herein;

(d) "Effective Time" means the . day of . 199.;

(e) "Natural Gas" means a mixture containing methane, other paraffinic hydrocarbons, nitrogen, carbon dioxide, hydrogen sulphide, helium and minor impurities, or some of them, which is recovered or is recoverable at a well from an underground reservoir and which is gaseous at the conditions under which its volume is measured or estimated, inclusive of all other products (excluding Petroleum and Condensate) necessarily produced in connection therewith:

(f) ("Overriding Royalty" means the royalty reserved to Grantee pursuant to article 2 hereof:)

(g) "Petroleum" means a mixture mainly of pentanes and heavier hydrocarbons that may be contaminated with sulphur compounds, that is recovered or is recoverable at a well from an underground reservoir and that is liquid at the conditions under which its volume is measured or estimated, but does not include Condensate;

(h) "Petroleum Substances" means Petroleum, Natural Gas, Condensate and every other mineral or substance, or any of them;

(i) "Royalty Lands" means the lands, zones and formations set forth and described in Schedule "A" hereto and so much thereof as from time to time remain subject to this Agreement, but only insofar as rights to the same are granted by the Title Documents;

(j) "Title Documents" means the documents and leases by virtue of which Grantor is entitled to drill for, win, take, or remove Petroleum Substances and underlying all or any part of ., and includes any amendments thereto, renewals or extensions thereof and any documents of title issued therefrom or in substitution therefor.

1.2 Schedule "A" hereto is incorporated herein by reference as though contained in the body hereof. Wherever any term or condition, expressed or implied, in Schedule "A" hereto conflicts or is at variance with any term or condition in the body hereof, such term or condition in the body hereof shall prevail.

1.3 If any term or condition of this Agreement or Schedule "A" hereto, whether express or implied, conflicts with or is at variance with a term or condition in the Title Documents, then such term or condition in the Title Documents shall prevail, and this Agreement shall be deemed to be amended to the extent necessary to give effect to such term or condition in the Title Documents.

2.1 There is hereby reserved to and owned by Grantee, an overriding royalty of five (5%) percent of the wellhead value on that portion of Petroleum Substances attributable to the interest of Grantor in the Royalty Lands (understood by Grantor to be set out in Schedule "A" hereto) produced, saved and marketed from . (the "Well") each month during the term of the Title Documents.

2.2 Grantor shall sell the Overriding Royalty share of Grantee at the same price and on the same terms as Grantor receives for its own share of such Petroleum Substances, which shall not be less than the price at which a reasonably prudent operator would dispose of such Petroleum Substances having regard to current market prices, availability of markets and economic conditions affecting the industry

2.3 Notwithstanding any other provision of this Agreement, Grantor shall be entitled to use, free from the obligation to deliver or pay the Overriding Royalty, such part of the Petroleum Substances as is reasonably required for and used by it in its operations upon ., including treating and preparing Petroleum Substances for market but not including injection thereof in connection with any secondary recovery operations. Any Petroleum Substances used by Grantor other than as permitted in this clause 2.3 shall be deemed to have been marketed by Grantor at the time of use for a price at which a reasonably prudent operator would dispose of such Petroleum Substances having regard to current market prices, availability of markets and economic conditions affecting the industry generally. For greater certainty, any Petroleum Substances that are not marketed or deemed to have been marketed due to shrinkage or loss shall not be subject to the Overriding Royalty.

2.4 Notwithstanding any other provision of this Agreement, if pursuant to any agreement governing operatorship of all or any part of the Royalty Lands, whether such agreement presently exists or is subsequently entered into, Grantor elects or is deemed to have elected not to participate in an operation on or in respect of all or any part of the Royalty Lands, such that Grantor is thereafter permanently or temporarily disentitled to all or any part of Grantor's working interest share of the Petroleum Substances or any of them, then, in each such instance, such Petroleum Substances shall not be subject to the Overriding Royalty during such time of disentitlement.

2.5 Any cash payment required to be paid by Grantor to Grantee in respect of the Overriding Royalty shall be made on the fortieth (40th) day following the month in which the Petroleum Substances to which such amount relates were produced and marketed from the Well, to Grantee at its address for notices as hereinafter provided.

2.6 At the same time as the cash payment pursuant to clause 2.5 herein is due, Grantor shall forward to Grantee a written statement of Grantee's Overriding Royalty share due to it for the production in the month concerned showing production, inventories and sales; and the said statement shall be conclusive of the amount thereof unless Grantee objects thereto by notice in writing specifying the particulars of any error or deficiency therein within six (6) months after the end of the calendar year in which the said statement was received.

2.7 Grantor shall keep and maintain in the Province of Alberta at all times during the term hereof true and accurate books, statements, records, and accounts evidencing the quantity of Petroleum Substances produced from the Well and the disposition thereof. Grantor shall permit Grantee to inspect such records during normal business hours and to make extracts or copies thereof and at all times permit Grantee to ascertain the quantity, kind, and nature of the Petroleum Substances produced or taken from the Well and the costs associated with any such production.

2.8 Grantee may transfer or assign its Overriding Royalty in whole or part, but Grantor shall not be required to make payments to more than one party.

2.9 If Grantor transfers or assigns all or any part of its interest in the Well, it shall continue to be bound by, observe, and perform all of the covenants and terms of this Agreement as if there had been no transfer or assignment until such time as the party acquiring such interest delivers to Grantee notice of such transfer or assignment and a written undertaking to be bound by, observe, and perform all of the covenants and terms of this Agreement then binding on Grantor insofar as they relate to the interest transferred or assigned and until Grantee consents to such transfer or assignment, which consent shall not be unreasonably withheld. Upon the giving of such consent and upon receipt by Grantee of such notice and undertaking, Grantor shall be released and discharged from any and all liability and obligations thereafter accruing under this Agreement, or the Title Documents relating to the Royalty Lands, insofar as they relate to the interest so transferred or assigned.

2.10 Grantor shall be entitled to pool all or a part of the Royalty Lands with any other lands for the purposes of creating a spacing unit for production of the Petroleum Substances or to utilize all or a part of the Royalty Lands with any other lands, if such pooling or unitization becomes necessary or desirable in the opinion of Grantor. The basis and manner of such pooling or unitization, the manner of allocating pooled and unitized lands, and the contents of any agreement pertaining thereto shall be in the sole discretion and determination of Grantor, and when so determined shall be binding upon Grantee. Upon any such pooling and unitization the Overriding Royalty shall be paid on the basis of production deemed to be produced from or allocated to Royalty Lands under the plan of unitization or pooling and not upon the basis of actual production from the Well.

3.1 As of the Effective Time, Grantor shall be responsible for the payment of all rentals, shut-in gas royalties, performance bonds, and other maintenance costs falling due with respect to the Title Documents.

4.1 Each party hereto shall be liable for all taxes and other charges levied or assessed against its interest as set out herein in the Petroleum Substances, which shall be deemed to include freehold mineral tax in respect of any Royalty Lands that are freehold, and in lieu of payment by Grantee of its share thereof Grantor may make such payment and deduct the amount thereof from any money payable by it to Grantee.

4.2 The payment on behalf of Grantee by Grantor of any tax or other charge pursuant to the provisions of clause 4.1 herein shall not in any way relieve Grantee from its obligation and responsibility to reimburse Grantor for its share of such costs.

5.1 Grantor shall not surrender any of its interest in the Royalty Lands or that portion of the Title Documents relating thereto, in whole or in part, at any time that Grantee is receiving, or is entitled to receive, its Overriding Royalty unless Grantee consents thereto in writing, such consent not to be unreasonably withheld, provided that if Grantee does not consent as aforesaid within three (3) days of notice of Grantor's intentions, it shall be bound to accept an assignment of the entire right, title, estate, and interest of Grantor in the Royalty Lands or the portion thereof surrendered, and thereupon Grantee shall be deemed to have assumed all obligations of Grantor with respect to the interest assigned.

6.1 If the interest of Grantor in the Royalty Lands now or hereafter shall become encumbered by any royalty, production payment, or other charge of a similar nature, other than the royalties as set forth under the terms of the Title Documents covering such lands, such royalty, production payment, or other charge shall be charged to and paid entirely by Grantor.

Grantor -           Renaissance Energy Ltd.
                    P.O. Box 1120
                    Station "M"
                    Calgary, Alberta
                    T2P 2K9

                    Attention:  Land Department
                    ---------------------------
                    Fax:  (403) 750-1892


Grantee -           Pinnacle Oil International, Inc.
                    54 Patterson Close S.W.
                    Calgary, Alberta
                    T3H 3K2

                    Attention:  President
                    ---------------------
                    Fax:  (403) 686-8020

All notices, communications and statements required, permitted or contemplated hereunder shall be in writing, and shall be delivered as follows:

(a) by personal service on the other party hereto at the relevant address set out above, in which case the item so served shall be deemed to have been received by that party when personally served;

(b) by facsimile transmission to the other party hereto to the relevant fax number set out above, in which case the item so transmitted shall be deemed to have been received by that party when transmitted; or

(c) except in the event of an actual or threatened postal strike or other labour disruption that may affect mail service, by mailing first class registered post, postage prepaid, to the other party hereto at the relevant address set out above, in which case the item so mailed shall be deemed to have been received by that party on the fifth day following the date of mailing.

Grantor and Grantee may from time to time change their respective addresses for service or their respective fax numbers or both by giving written notice to the other.

8.1 The obligations of the parties hereto shall be suspended; and there shall be no liability for damages during the time and to the extent that any party hereto is prevented from complying with its obligations under this Agreement in part or in whole by strikes, lock-outs, acts of God or the Queen's enemies, war, blockades, riots, laws, orders, or regulations of governmental bodies or agencies, unavoidable accidents, delays in transportation, inability to obtain necessary materials in the open market, or any other cause, except financial, whether similar or dissimilar to those specifically enumerated, beyond the reasonable control of the party hereto affected. The party hereto whose obligations under this Agreement are suspended shall give notice, including reasonably full particulars, of the cause of such suspension, to the other party or parties hereto within a reasonable time after the occurrence thereof. The performance of such obligations shall begin or be resumed within a reasonable time after such cause has been removed. No party hereto shall be required against its will to settle any labour dispute.

9.1 Subject to the terms contained herein, this Agreement shall continue for the life of the Title Documents.

9.2 All terms, covenants, and conditions in this Agreement shall run with and are binding upon the Title Documents, the Royalty Lands, and the estates affected thereby for the duration of this Agreement.

9.3 This Agreement supersedes and replaces all previous agreements, whether written or oral, memoranda, and correspondence among the parties hereto with respect to the subject matter of this Agreement.

9.4 Should any clause, provision, or condition of this Agreement be or become illegal or unenforceable, it shall be considered separate and severable from this Agreement and the remaining provisions and conditions shall continue in full force and be binding upon the parties hereto as though the said clause, provision, or condition had never been included.

9.5 The parties hereto covenant, so long as this Agreement is in force and effect, to comply with any and all regulations and other laws with respect to anything done, or purported to be done, pursuant to this Agreement, and with respect to the operations carried out hereunder.

9.6 No waiver by any party hereto of any term of this Agreement shall take effect or be binding upon that party unless the same be expressed in writing and any waiver so given shall extend only to the particular breach so waived and shall not limit or affect any rights with respect to any other or future breach.

9.7 This Agreement shall be binding upon and shall enure to the benefit of each of the parties hereto and their respective heirs, executors, administrators, trustees, receivers, successors and assigns.

9.8 This is of the essence of this Agreement.

9.9 This Agreement shall, in all respects, be subject to and interpreted, construed and enforced in accordance with and under the laws of the Province of Alberta and shall, in every regard, be treated as a contract made in the Province of Alberta. The parties hereto irrevocably attorn and submit to the jurisdiction of the courts of the Province of Alberta in respect of all matters arising out of this Agreement.

9.10 This Agreement may be executed in counterpart, no one copy of which need be executed by each of the parties hereto. When copies have been executed by each of the parties hereto, all copies together shall constitute one agreement and shall be a valid and binding contract among the parties as of the date first above written.

IN WITNESS WHEREOF THE PARTIES hereto have duly executed this Agreement as of the day and year first above written.

RENAISSANCE ENERGY LTD.                    PINNACLE OIL INTERNATIONAL, INC.


Per: ______________________________        Per: ________________________________


Per: ______________________________        Per: ________________________________

[to be inserted] (below base Mississippian)

[to be inserted]

[to be inserted]

[LETTERHEAD OF RENAISSANCE ENERGY LTD. APPEARS HERE]

January 14, 1998

Pinnacle Oil International, Inc.
54 Patterson Close S.W.
Calgary, Alberta
T3H 3K2

Dear Sir:

This letter shall confirm that no Exploratory Drilling Prospects were identified pursuant to the subject agreement.

Please acknowledge your agreement to the foregoing by signing and returning the enclosed duplicate hereof.

Yours truly,

RENAISSANCE ENERGY LTD.

/s/ Jeff S. Lebbert
Jeff S. Lebbert
Vice President, Land and Contracts

ACKNOWLEDGED AND AGREED TO this 14 day of JANUARY 1998.

PINNACLE OIL INTERNATIONAL, INC.

EXHIBIT 10.11

THIS AGREEMENT made as of the 1st day of February, 1998.

BETWEEN:

PINNACLE OIL CANADA INC., a body corporate, having an office in the City of Calgary, in the Province of Alberta

(hereinafter referred to as "Pinnacle")

-and-

RENAISSANCE ENERGY LTD., a body corporate, having an office in the City of Calgary, in the Province of Alberta

(hereinafter referred to as "Renaissance")

In this Agreement, unless the context otherwise requires:

Schedule "A", pertaining to the Royalty Agreement, is appended to this Agreement. Wherever any term or condition of Schedule "A" conflicts or is at variance with any term or condition in the body of this Agreement, such term or condition in the body of this Agreement shall prevail.

(a) Pinnacle covenants to:

(i) perform surveys over the Prospect Lands using the SFD Technology; and

(ii) submit SFD Anomalies to Renaissance as and when identified and before the expiration of the Program Period.

(b) Renaissance shall promptly after receipt of the SFD Anomalies from Pinnacle and their evaluation by Renaissance, advise Pinnacle of its acceptance or rejection of each of the SFD Anomalies. If Renaissance accepts an SFD Anomaly, Renaissance shall, in its sole discretion and acting reasonably, establish the Exploratory Drilling Prospect in respect of any such accepted SFD Anomaly.

(c) If Renaissance, acting on an accepted SFD Anomaly, determines in its sole discretion to drill a test well at a location on an Exploratory Drilling Prospect to a depth below the base of the Mississippian and such test well is spudded on or before August 31, 1998 and if such well is drilled to a depth below the base of the Mississippian, Renaissance agrees to hereby reserve and grant to Pinnacle a 5% royalty in respect of the Exploratory Drilling Prospect, which royalty is to be calculated and paid in accordance with the terms and conditions set out in the Royalty Agreement and the Parties shall execute a Royalty Agreement in respect of such Exploratory Drilling Prospect.

Pinnacle shall be liable to Renaissance for and shall, in addition, indemnify Renaissance from and against, all losses, costs, claims, damages, expenses and liabilities suffered, sustained, paid or incurred by Renaissance which arise out of any matter or thing occurring or arising from and after the date hereof and which arise out of acts or omissions of Pinnacle in connection with the surveys by Pinnacle over the Prospect Lands using the SFD Technology, provided however that Pinnacle shall not be liable to nor be required to indemnify Renaissance in respect of any losses, costs, claims, damages, expenses and liabilities suffered, sustained, paid or incurred by Renaissance which arise out of acts or omissions of Renaissance.

Each Party shall keep confidential all information obtained from the other Party in connection with this Agreement and shall not release any information concerning this Agreement and the operations herein provided for, without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Nothing contained herein shall prevent a Party at any time from furnishing information to any governmental agency or regulatory authority or to the public if required by applicable law, provided that the Parties shall advise each other and agree as to content in advance of any public statement which they propose to make and provided further that unless required by applicable law or agreed to by Renaissance, in no event shall Renaissance's name be disclosed in any public statement. If Pinnacle is required by applicable law to make a disclosure of Renassance's name it shall first and prior to any such disclosure, inform Renaissance of the requirement and provide, at Pinnacle's sole cost and expense, a reasonable opinion of Bennett Jones Verchere (which may be based on an opinion of U.S. counsel with respect to matters of U.S. law) confirming such requirement. Upon receipt of the referenced opinion and again prior to any disclosure. Renaissance shall have the opportunity and a reasonable period of time to make applications directly or as Pinnacle may reasonably arrange to the applicable regulatory authority or stock exchange to limit such disclosure. Without limiting the foregoing, if Pinnacle is required by applicable law to make a disclosure of Renaissance's name, it shall only be entitled to do so hereunder to the minimum number of times required by applicable law.

Renaissance shall reimburse Pinnacle for 100% of all charter airplane costs and expenses actually incurred by Pinnacle hereunder during the Program Period to a maximum of $25,000.00 (Cdn).

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 expresses the entire agreement of the Parties with respect to the subject matter hereof.

This Agreement shall, in all respects, be subject to, interpreted, construed and enforced in accordance with and under the laws of the Province of Alberta and the laws of Canada applicable therein and shall, in every regard, be treated as a contract made in the Province of Alberta. The Parties irrevocably attorn and submit to the jurisdiction of the courts of the Province of Alberta and courts of appeal therefrom in respect of all matters arising out of this Agreement.

This Agreement shall be binding upon and shall enure to the benefit of the Parties and their respective administrators, trustees, receivers, successors and assigns.

Time shall be of the essence in this Agreement.

This Agreement shall terminate on the later of August 31, 1998 and the day following the completion of drilling of any test well on an Exploratory Drilling Prospect spudded on or before August 31, 1998.

Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or association of any kind or as imposing upon any Party, any partnership duty, obligation or liability to any other Party.

Each Party shall not transfer this Agreement or any interest, right or obligation under this Agreement without the prior written consent of the other Party.

IN WITNESS WHEREOF the Parties have executed and delivered this Agreement as of the date first above written.

PINNACLE OIL CANADA INC.                     RENAISSANCE ENERGY LTD.


Per: /s/ R. Dirk Stinson                     Per: /s/Jeff S. Lebgert
    ------------------------------               -------------------------------
    R. DIRK STINSON, PRESIDENT                       JEFF S. LEBGERT
                                                 Vice President Land & Contracts

Per:______________________________           Per:_______________________________

THIS AGREEMENT made as of the . day of ., 199.

BETWEEN:

RENAISSANCE ENERGY LTD., a body corporate, having an office in the City of Calgary, in the Province of Alberta (hereinafter referred to as "Grantor")

-and-

PINNACLE OIL CANADA INC., a body corporate, having an office in the City of Calgary, in the Province of Alberta (hereinafter referred to as "Grantee")

WHEREAS:

(A) By virtue of an SFD Survey Agreement dated February 1, 1998 between the parties hereto, Grantor has drilled a well at a location identified in an Exploratory Drilling Prospect (as defined in the SFD Survey Agreement); and

(B) The parties hereto desire to provide that from and after the Effective Time, the Royalty Lands shall be subject to the terms and provisions of this Agreement;

NOW THEREFORE for good and valuable consideration, the parties hereto covenant and agree as follows:

1.1 In this Agreement, including the premises hereto, this article and Schedule "A" hereto, unless the context otherwise requires:

(a) "Condensate" means a mixture mainly of pentanes and heavier hydrocarbons that may be contaminated with sulphur compounds, that is recovered or is recoverable at a well from an underground reservoir and that is gaseous in its virgin reservoir state but is liquid at the conditions under which its volume is measured or estimated;

(b) "Crown" means the Crown in Right of the Province of Alberta:

(c) "Delivery Point" means the place where Petroleum Substances are delivered to the purchaser thereof, or as otherwise provided herein:

(d) "Effective Time" means the . day of ., 19.:

(e) "Natural Gas" means a mixture containing methane, other paraffinic hydrocarbons, nitrogen, carbon dioxide, hydrogen sulphide, helium and minor impurities, or some of them, which is recovered or is recoverable at a well from an underground reservoir and which is gaseous at the conditions under which its volume is measured or estimated, inclusive of all other products (excluding Petroleum and Condensate) necessarily produced in connection therewith;

(f) "Overriding Royalty" means the royalty reserved to Grantee pursuant to article 2 hereof;

(g) "Petroleum" means a mixture mainly of pentanes and heavier hydrocarbons that may be contaminated with sulphur compounds, that is recovered or is recoverable at a well from an underground reservoir and that is liquid at the conditions under which its volume is measured or estimated, but does not include Condensate;

(h) "Petroleum Substances" means Petroleum, Natural Gas, Condensate and every other mineral or substance, or any of them;

(i) "Royalty Lands" means the lands, zones and formations set forth and described in Schedule "A" hereto and so much thereof as from time to time remain subject to this Agreement, but only insofar as rights to the same are granted by the Title Documents;

(j) "Title Documents" means the documents and leases by virtue of which Grantor is, now or hereafter, entitled to drill for, win, take, or remove Petroleum Substances underlying all or any part of, and includes any amendments thereto, renewals or extensions thereof and any documents of title issued therefrom or in substitution therefor.

1.2 Schedule "A" hereto is incorporated herein by reference as though contained in the body hereof. Wherever any term or condition, expressed or implied, in Schedule "A" hereto conflicts or is at variance with any term or condition in the body hereof, such term or condition in the body hereof shall prevail.

1.3 If any term or condition of this Agreement or Schedule "A" hereto, whether express or implied, conflicts with or is at variance with a term or condition in the Title Documents, then such term or condition in the Title Documents shall prevail, and this Agreement shall be deemed to be amended to the extent necessary to give effect to such term or condition in the Title Documents.

2.1 There is hereby reserved to and owned by Grantee, an overriding royalty of five (5%) percent of the wellhead value on that portion of Petroleum Substances attributable to the interest of Grantor in the Royalty Lands (understood by Grantor to be as set out in Schedule "A" hereto) produced, saved and marketed from each well producing from the Royalty Lands each month during the term of the Title Documents.

2.2 Grantor shall sell the Overriding Royalty share of Grantee at the same price and on the same terms as Grantor receives for its own share of such Petroleum Substances, which shall not be less than the price at which a reasonably prudent operator would dispose of such Petroleum Substances having

regard to current market prices, availability of markets and economic conditions affecting the industry generally. In calculating the Overriding Royalty, Grantor may deduct before applying the percentages aforesaid all charges and costs incidental or pertaining to gathering, storing, processing, treating and transporting Petroleum Substances to the Delivery Point, in the same manner allowed by the Crown when it is lessor, without regard to any royalty holidays, cash payments, incentives, grants, waivers, exemptions, abatements and benefits of any nature whatsoever received by or available to Grantor provided that:

(a) with respect to Petroleum and Condensate, the deductions do not exceed the actual costs incurred; and

(b) with respect to Natural Gas, the deductions do not exceed 60% of the gross proceeds of sale of the Natural Gas.

2.3 Notwithstanding any other provision of this Agreement, Grantor shall be entitled to use, free from the obligation to deliver or pay the Overriding Royalty, such part of the Petroleum Substances as is reasonably required for and used by it in its operations upon ., including treating and preparing Petroleum Substances for market but not including injection thereof in connection with any secondary recovery operations. Any Petroleum Substances used by Grantor other than as permitted in this clause 2.3 shall be deemed to have been marketed by Grantor at the time of use for a price at which a reasonably prudent operator would dispose of such Petroleum Substances having regard to current market prices, availability of markets and economic conditions affecting the industry generally. For greater certainty, any Petroleum Substances that are not marketed or deemed to have been marketed due to shrinkage or loss shall not be subject to the Overriding Royalty.

2.4 Notwithstanding any other provision of this Agreement, if pursuant to any agreement governing operatorship of all or any part of the Royalty Lands, whether such agreement presently exists or is subsequently entered into, Grantor elects or is deemed to have elected not to participate in an operation on or in respect of all or any part of the Royalty Lands, such that Grantor is thereafter permanently or temporarily disentitled to all or any part of Grantor's working interest share of the Petroleum Substances or any of them, then, in each such instance, such Petroleum Substances shall not be subject to the Overriding Royalty during such time of disentitlement.

2.5 Any cash payment required to be paid by Grantor to Grantee in respect of the Overriding Royalty shall be made on the fortieth (40th) day following the month in which the Petroleum Substances to which such amount relates were produced and marketed from the Royalty Lands, to Grantee at its address for notices as hereinafter provided.

2.6 At the same time as the cash payment pursuant to clause 2.5 herein is due, Grantor shall forward to Grantee a written statement of Grantee's Overriding Royalty share due to it for the production in the month concerned showing production, inventories and sales; and the said statement shall be conclusive of the amount thereof unless Grantee objects thereto by notice in writing specifying the particulars of any error or deficiency therein within six
(6) months after the end of the calendar year in which the said statement was received.

2.7 Grantor shall keep and maintain in the Province of Alberta at all times during the term hereof true and accurate books, statements, records, and accounts evidencing the quantity of Petroleum Substances produced from the Royalty Lands and the disposition thereof. Grantor shall permit Grantee to

inspect such records during normal business hours and to make extracts or copies thereof and at all times permit Grantee to ascertain the quantity, kind, and nature of the Petroleum Substances produced or taken from the Well and the costs associated with any such production.

2.8 Grantee may transfer or assign its Overriding Royalty in whole or part, but Grantor shall not be required to make payments to more than one party.

2.9 If Grantor transfers or assigns all or any part of its interest in the Royalty Lands, it shall continue to be bound by, observe, and perform all of the covenants and terms of this Agreement as if there had been no transfer or assignment until such time as the party acquiring such interest delivers to Grantee notice of such transfer or assignment and a written undertaking to be bound by, observe, and perform all of the covenants and terms of this Agreement then binding on Grantor insofar as they relate to the interest transferred or assigned and until Grantee consents to such transfer or assignment, which consent shall not be unreasonably withheld. Upon the giving of such consent and upon receipt by Grantee of such notice and undertaking, Grantor shall be released and discharged from any and all liability and obligations thereafter accruing under this Agreement or the Title Documents relating to the Royalty Lands, insofar as they relate to the interest so transferred or assigned.

2.10 Grantor shall be entitled to pool all or a part of the Royalty Lands with any other lands for the purposes of creating a spacing unit for production of the Petroleum Substances or to unitize all or a part of the Royalty Lands with any other lands, if such pooling or unitization becomes necessary or desirable in the opinion of Grantor. The basis and manner of such pooling or unitization, the manner of allocating pooled or unitized lands, and the contents of any agreement pertaining thereto shall be in the sole discretion and determination of Grantor, and when so determined shall be binding upon Grantee. Upon any such pooling or unitization the Overriding Royalty shall be paid on the basis of production deemed to be produced from or allocated to Royalty Lands under the plan of unitization or pooling and not upon the basis of actual production from the Royalty Lands.

3.1 As of the Effective Time, Grantor shall be responsible for the payment of all rentals, shut-in gas royalties, performance bonds, and other maintenance costs falling due with respect to the Title Documents.

4.1 Each party hereto shall be liable for all taxes and other charges levied or assessed against its interest as set out herein in the Petroleum Substances, which shall be deemed to include freehold mineral tax in respect of any Royalty Lands that are freehold, and in lieu of payment by Grantee of its share thereof Grantor may make such payment and deduct the amount thereof from any money payable by it to Grantee.

4.2 The payment on behalf of Grantee by Grantor of any tax or other charge pursuant to the provisions of clause 4.1 herein shall not in any way relieve Grantee from its obligation and responsibility to reimburse Grantor for its share of such costs.

5.1 Grantor shall not surrender any of its interest in the Royalty Lands or that portion of the Title Documents relating thereto, in whole or in part, at any time that Grantee is receiving, or is entitled to receive, its Overriding Royalty unless Grantee consents thereto in writing, such consent not to be unreasonably withheld; provided that if Grantee does not consent as aforesaid within three (3) days of notice of Grantor's intentions, it shall be bound to accept an assignment of the entire right, title, estate, and interest of Grantor in the Royalty Lands or the portion thereof surrendered, and thereupon Grantee shall be deemed to have assumed all obligations of Grantor with respect to the interest assigned.

6.1 If the interest of Grantor in the Royalty Lands now or hereafter shall become encumbered by any royalty, production payment, or other charge of a similar nature, other than the royalties as set forth under the terms of the Title Documents covering such lands, such royalty, production payment, or other charge shall be charged to and paid entirely by Grantor.

Grantor -      Renaissance Energy Ltd.
               P.O. Box 1120
               Station "M"
               Calgary, Alberta
               T2P 2K9

               Attention: Land Department
               --------------------------
               Fax: (403) 750-1892


Grantee -      Pinnacle Oil Canada Inc.
               54 Patterson Close S.W.
               Calgary, Alberta
               T3H 3K2

               Attention: President
               --------------------
               Fax: (403) 686-8020

All notices, communications and statements required, permitted or contemplated hereunder shall be in writing, and shall be delivered as follows:

(a) by personal service on the other party hereto at the relevant address set out above, in which case the item so served shall be deemed to have been received by that party when personally served;

(b) by facsimile transmission to the other party hereto to the relevant fax number set out above, in which case the item so transmitted shall be deemed to have been received by that party when transmitted; or

(c) except in the event of an actual or threatened postal strike or other labour disruption that may affect mail service, by mailing first class registered post, postage prepaid, to the other party hereto at the relevant address set out above, in which case the item so mailed shall be deemed to have been received by that party on that fifth day following the date of mailing.

Grantor and Grantee may from time to time change their respective addresses for service or their respective fax numbers or both by giving written notice to the other.

8.1 The obligations of the parties hereto shall be suspended; and there shall be no liability for damages during the time and to the extent that any party hereto is prevented from complying with its obligations under this Agreement in part or in whole by strikes, lock-outs, acts of God or the Queen's enemies, war, blockades, riots, laws, orders, or regulations of governmental bodies or agencies, unavoidable accidents, delays in transportation, inability to obtain necessary materials in the open market, or any other cause, except financial, whether similar or dissimilar to those specifically enumerated, beyond the reasonable control of the party hereto affected. The party hereto whose obligations under this Agreement are suspended shall give notice, including reasonably full particulars, of the cause of such suspension, to the other party or parties hereto within a reasonable time after the occurrence thereof. The performance of such obligations shall begin or be resumed within a reasonable time after such cause has been removed. No party hereto shall be required against its will to settle any labour dispute.

9.1 Subject to the terms contained herein, this Agreement shall continue for the life of the Title Documents.

9.2 All terms, covenants, and conditions in this Agreement shall run with and are binding upon the Title Documents, the Royalty Lands, and the estates affected thereby until the date which is six months after the date upon which the last well drilled for and on behalf of Grantor on the Royalty Lands to a zone or formation below the base of the Mississippian is abandoned. Upon such date and without further act or action required by either Party, this Agreement shall terminate and Grantor shall be released from any and all obligations to Grantee hereunder notwithstanding any further operations which may be conducted by or on behalf of Grantor and in respect of the Royalty Lands from and after the termination date hereof.

9.3 This Agreement supersedes and replaces all previous agreements, whether written or oral, memoranda, and correspondence among the parties hereto with respect to the subject matter of this Agreement.

9.4 Should any clause, provision, or condition of this Agreement be or become illegal or unenforceable, it shall be considered separate and severable from this Agreement and the remaining

provisions and conditions shall continue in full force and be binding upon the parties hereto as though the said clause, provision, or condition had never been included.

9.5 The parties hereto covenant, so long as this Agreement is in force and effect, to comply with any and all regulations and other laws with respect to anything done, or purported to be done, pursuant to this Agreement, and with respect to the operations carried out hereunder.

9.6 No waiver by any party hereto of any term of this Agreement shall take effect or be binding upon that party unless the same be expressed in writing and any waiver so given shall extend only to the particular breach so waived and shall not limit or affect any rights with respect to any other or future breach.

9.7 This Agreement shall be binding upon and shall enure to the benefit of each of the parties hereto and their respective heirs, executors, administrators, trustees, receivers, successors and assigns.

9.8 Time is of the essence of this Agreement.

9.9 This Agreement shall, in all respects, be subject to and interpreted, construed and enforced in accordance with and under the laws of the Province of Alberta and shall, in every regard, be treated as a contract made in the Province of Alberta. The parties hereto irrevocably attorn and submit to the jurisdiction of the courts of the Province of Alberta in respect of all matters arising out of this Agreement.

9.10 This Agreement may be executed in counterpart, no one copy of which need be executed by each of the parties hereto. When copies have been executed by each of the parties hereto, all copies together shall constitute one agreement and shall be a valid and binding contract among the parties as of the date first above written.

IN WITNESS WHEREOF THE PARTIES hereto have duly executed this Agreement as of the day and year first above written.

RENAISSANCE ENERGY LTD.                      PINNACLE OIL CANADA INC.


Per:___________________________              Per:_____________________________


Per:___________________________              Per:_____________________________

[being the Exploratory Drilling Prospect] (below base Mississippian)

[to be inserted]

[to be inserted]

EXHIBIT 10.12

THIS AGREEMENT made as of the 1st day of February, 1998.

BETWEEN:

PINNACLE OIL INTERNATIONAL, INC., a body corporate, having an office in the City of Calgary, in the Province of Alberta

(hereinafter referred to as "Pinnacle")

- and -

RENAISSANCE ENERGY LTD., a body corporate, having an office in the City of Calgary, in the Province of Alberta

(hereinafter referred to as "Renaissance")

In this Agreement, unless the context otherwise requires:

Schedule "A", pertaining to the Royalty Agreement, is appended to this Agreement. Wherever any term or condition of Schedule "A" conflicts or is at variance with any term or condition in the body of this Agreement, such term or condition in the body of this Agreement shall prevail.

(a) Pinnacle covenants to:

(i) perform surveys over the Prospect Lands using the SFD Technology; and

(ii) submit SFD Anomalies to Renaissance as and when identified and before the expiration of the Program Period.

(b) Renaissance shall promptly after receipt of the SFD Anomalies from Pinnacle and their evaluation by Renaissance, advise Pinnacle of its acceptance or rejection of each of the SFD Anomalies. If Renaissance accepts an SFD Anomaly, Renaissance shall, in its sole discretion and acting reasonably, establish the Exploratory Drilling Prospect in respect of any such accepted SFD Anomaly.

(c) If Renaissance, acting on an accepted SFD Anomaly, determines in its sole discretion to drill a test well at a location on an Exploratory Drilling Prospect to a depth below the base of the Mississippian and such test well is spudded on or before August 31, 1998 and if such well is drilled to a depth below the base of the Mississippian, Renaissance agrees to hereby reserve and grant to Pinnacle a 5% royalty in respect of the Exploratory Drilling Prospect, which royalty is to be calculated and paid in accordance with the terms and conditions set out in the Royalty Agreement and the Parties shall execute a Royalty Agreement in respect of such Exploratory Drilling Prospect.

Pinnacle shall be liable to Renaissance for and shall, in addition, indemnify Renaissance from and against, all losses, costs, claims, damages, expenses and liabilities suffered, sustained, paid or incurred by Renaissance which arise out of any matter or thing occurring or arising from and after the date hereof and which arise out of acts or omissions of Pinnacle in connection with the surveys by Pinnacle over the Prospect Lands using the SFD Technology, provided however that Pinnacle shall not be liable to nor be required to indemnify Renaissance in respect of any losses, costs, claims, damages, expenses and liabilities suffered, sustained, paid or incurred by Renaissance which arise out of acts or omissions of Renaissance.

Each Party shall keep confidential all information obtained from the other Party in connection with this Agreement and shall not release any information concerning this Agreement and the operations herein provided for, without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Nothing contained herein shall prevent a Party at any time from furnishing information to any governmental agency or regulatory authority or to the public if required by applicable law, provided that the Parties shall advise each other and agree as to content in advance of any public statement which they propose to make and provided further that unless required by applicable law or agreed to by Renaissance, in no event shall Renaissance's name be disclosed in any public statement. If Pinnacle is required by applicable law to make a disclosure of Renaissance's name it shall first and prior to any such disclosure, inform Renaissance of the requirement and provide, at Pinnacle's sole cost and expense, a reasonable opinion of Bennett Jones Verchere (which may be based on an opinion of U.S. counsel with respect to matters of U.S. law) confirming such requirement. Upon receipt of the referenced opinion and again prior to any disclosure, Renaissance shall have the opportunity and a reasonable period of time to make applications directly or as Pinnacle may reasonably arrange to the applicable regulatory authority or stock exchange to limit such disclosure. Without limiting the foregoing, if Pinnacle is required by applicable law to make a disclosure of Renaissance's name, it shall only be entitled to do so hereunder to the minimum number of times required by applicable law.

Renaissance shall reimburse Pinnacle for 100% of all charter airplane costs and expenses actually incurred by Pinnacle hereunder during the Program Period to a maximum of $25,000.00 (Cdn).

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 expresses the entire agreement of the Parties with respect to the subject matter hereof.

This Agreement shall, in all respects, be subject to, interpreted, construed and enforced in accordance with and under the laws of the Province of Alberta and the laws of Canada applicable therein and shall, in every regard, be treated as a contract made in the Province of Alberta. The Parties irrevocably attorn and submit to the jurisdiction of the courts of the Province of Alberta and courts of appeal therefrom in respect of all matters arising out of this Agreement.

This Agreement shall be binding upon and shall enure to the benefit of the Parties and their respective administrators, trustees, receivers, successors and assigns.

Time shall be of the essence on this Agreement.

This Agreement shall terminate on the later of August 31, 1998 and the day following the completion of drilling of any test well on an Exploratory Drilling Prospect spudded on or before August 31, 1998.

Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or association of any kind or as imposing upon any Party, any partnership duty, obligation or liability to any other party.

Each Party shall not transfer this Agreement or any interest, right or obligation under this Agreement without the prior written consent of the other Party, provided that Pinnacle shall be entitled to transfer its rights and obligations under this Agreement to Pinnacle Oil Canada Ltd., its wholly owned Canadian subsidiary, but notwithstanding such transfer, Renaissance need only look to Pinnacle for performance of the duties and obligations of Pinnacle pursuant to this Agreement.

IN WITNESS WHEREOF the Parties have executed and delivered this Agreement as of the date first above written.

PINNACLE OIL INTERNATIONAL, INC               RENAISSANCE ENERGY LTD.


Per: __________________________               Per: _____________________________


Per: __________________________               Per: _____________________________

THIS AGREEMENT made as of the . day of ., 199..

BETWEEN:

RENAISSANCE ENERGY LTD., a body corporate, having an office in the City of Calgary, in the Province of Alberta (hereinafter referred to as "Grantor")

-and-

PINNACLE OIL INTERNATIONAL, INC., a body corporate, having an office in the City of Calgary, in the Province of Alberta (hereinafter referred to as "Grantee")

WHEREAS:

(A) By virtue of an SFD Survey Agreement dated February 1, 1998 between the parties hereto, Grantor has drilled a well at a location identified in an Exploratory Drilling Prospect (as defined in the SFD Survey Agreement): and

(B) The parties hereto desire to provide that from and after the Effective Time, the Royalty Lands shall be subject to the terms and provisions of this Agreement;

NOW THEREFORE for good and valuable consideration, the parties hereto covenant and agree as follows:

1.1 In this Agreement, including the premises hereto, this article and Schedule "A" hereto, unless the context otherwise requires:

(a) "Condensate" means a mixture mainly of pentanes and heavier hydrocarbons that may be contaminated with sulphur compounds, that is recovered or is recoverable at a well from an underground reservoir and that is gaseous in its virgin reservoir state but is liquid at the conditions under which its volume is measured or estimated;

(b) "Crown" means the Crown in Right of the Province of Alberta;

(c) "Delivery Point" means the place where Petroleum Substances are delivered to the purchaser thereof, or as otherwise provided herein;

(d) "Effective Time" means the . day of ., 199.;

(e) "Natural Gas" means a mixture containing methane, other paraffinic hydrocarbons, nitrogen, carbon dioxide, hydrogen sulphide, helium and minor impurities, or some of them, which is recovered or is recoverable at a well from an underground reservoir and which is gaseous at the conditions under which its volume is measured or estimated, inclusive of all other products (excluding Petroleum and Condensate) necessarily produced in connection therewith;

(f) "Overriding Royalty" means the royalty reserved to Grantee pursuant to article 2 hereof;

(g) "Petroleum" means a mixture mainly of pentanes and heavier hydrocarbons that may be contaminated with sulphur compounds, that is recovered or is recoverable at a well from an underground reservoir and that is liquid at the conditions under which its volume is measured or estimated, but does not include Condensate;

(h) "Petroleum Substances" means Petroleum, Natural Gas, Condensate and every other mineral or substance, or any of them;

(i) "Royalty Lands" means the lands, zones and formations set forth and described in Schedule "A" hereto and so much thereof as from time to time remain subject to this Agreement, but only insofar as rights to the same are granted by the Title Documents;

(j) "Title Documents" means the documents and leases by virtue of which Grantor is, now or hereafter, entitled to drill for, win, take, or remove Petroleum Substances underlying all or any part of ., and includes any amendments thereto, renewals or extensions thereof and any documents of title issued therefrom or in substitution therefor.

1.2 Schedule "A" hereto is incorporated herein by reference as though contained in the body hereof. Wherever any term or condition, expressed or implied, in Schedule "A" hereto conflicts or is at variance with any term or condition in the body hereof, such term or condition in the body hereof shall prevail.

1.3 If any term or condition of this Agreement or Schedule "A" hereto, whether express or implied, conflicts with or is at variance with a term or condition in the Title Documents, then such term or condition in the Title Documents shall prevail, and this Agreement shall be deemed to be amended to the extent necessary to give effect to such term or condition in the Title Documents.

2.1 There is hereby reserved to and owned by Grantee, an overriding royalty of five (5%) percent of the wellhead value on that portion of Petroleum Substances attributable to the interest of Grantor in the Royalty Lands (understood by Grantor to be as set out in Schedule "A" hereto) produced, saved and marketed from each well producing from the Royalty Lands each month during the term of the Title Documents.

2.2 Grantor shall sell the Overriding Royalty share of Grantee at the same price and on the same terms as Grantor receives for its own share of such Petroleum Substances, which shall not be less than the price at which a reasonably prudent operator would dispose of such Petroleum Substances having

regard to current market prices, availability of markets and economic conditions affecting the industry generally. In calculating the Overriding Royalty, Grantor may deduct before applying the percentages aforesaid all charges and costs incidental or pertaining to gathering, storing, processing, treating and transporting Petroleum Substances to the Delivery Point, in the same manner allowed by the Crown when it is lessor, without regard to any royalty holidays, cash payments, incentives, grants, waivers, exemptions, abatements and benefits of any nature whatsoever received by or available to Grantor provided that:

(a) with respect to Petroleum and Condensate, the deductions do not exceed the actual costs incurred; and

(b) with respect to Natural Gas, the deductions do not exceed 60% of the gross proceeds of sale of the Natural Gas.

2.3 Notwithstanding any other provision of this Agreement, Grantor shall be entitled to use, free from the obligation to deliver or pay the Overriding Royalty, such part of the Petroleum Substances as is reasonably required for and used by it in its operations upon ., including treating and preparing Petroleum Substances for market but not including injection thereof in connection with any secondary recovery operations. Any Petroleum Substances used by Grantor other than as permitted in this clause 2.3 shall be deemed to have been marketed by Grantor at the time of use for a price at which a reasonably prudent operator would dispose of such Petroleum Substances having regard to current market prices, availability of markets and economic conditions affecting the industry generally. For greater certainty, any Petroleum Substances that are not marketed or deemed to have been marketed due to shrinkage or loss shall not be subject to the Overriding Royalty.

2.4 Notwithstanding any other provision of this Agreement, if pursuant to any agreement governing operatorship of all or any part of the Royalty Lands, whether such agreement presently exists or is subsequently entered into, Grantor elects or is deemed to have elected not to participate in an operation on or in respect of all or any part of the Royalty Lands, such that Grantor is thereafter permanently or temporarily disentitled to all or any part of Grantor's working interest share of the Petroleum Substances or any of them, then, in each such instance, such Petroleum Substances shall not be subject to the Overriding Royalty during such time of disentitlement.

2.5 Any cash payment required to be paid by Grantor to Grantee in respect of the Overriding Royalty shall be made on the fortieth (40th) day following the month in which the Petroleum Substances to which such amount relates were produced and marketed from the Royalty Lands, to Grantee at its address for notices as hereinafter provided.

2.6 At the same time as the cash payment pursuant to clause 2.5 herein is due, Grantor shall forward to Grantee a written statement of Grantee's Overriding Royalty share due to it for the production in the month concerned showing production, inventories and sales; and the said statement shall be conclusive of the amount thereof unless Grantee objects thereto by notice in writing specifying the particulars of any error or deficiency therein within six
(6) months after the end of the calendar year in which the said statement was received.

2.7 Grantor shall keep and maintain in the Province of Alberta at all times during the term hereof true and accurate books, statements, records, and accounts evidencing the quantity of Petroleum Substances produced from the Royalty Lands and the disposition thereof. Grantor shall permit Grantee to

inspect such records during normal business hours and to make extracts or copies thereof and at all times permit Grantee to ascertain the quantity, kind, and nature of the Petroleum Substances produced or taken from the Well and the costs associated with any such production.

2.8 Grantee may transfer or assign its Overriding Royalty in whole or part, but Grantor shall not be required to make payments to more than one party.

2.9 If Grantor transfers or assigns all or any part of its interest in the Royalty Lands, it shall continue to be bound by, observe, and perform all of the covenants and terms of this Agreement as if there had been no transfer or assignment until such time as the party acquiring such interest delivers to Grantee notice of such transfer or assignment and a written undertaking to be bound by, observe, and perform all of the covenants and terms of this Agreement then binding on Grantor insofar as they relate to the interest transferred or assigned and until Grantee consents to such transfer or assignment, which consent shall not be unreasonably withheld. Upon the giving of such consent and upon receipt by Grantee of such notice and undertaking, Grantor shall be released and discharged from any and all liability and obligations thereafter accruing under this Agreement, or the Title Documents relating to the Royalty Lands, insofar as they relate to the interest so transferred or assigned.

2.10 Grantor shall be entitled to pool all or a part of the Royalty Lands with any other lands for the purposes of creating a spacing unit for production of the Petroleum Substances or to unitize all or a part of the Royalty Lands with any other lands, if such pooling or unitization becomes necessary or desirable in the opinion of Grantor. The basis and manner of such pooling or unitization, the manner of allocating pooled or unitized lands, and the contents of any agreement pertaining thereto shall be in the sole discretion and determination of Grantor, and when so determined shall be binding upon Grantee. Upon any such pooling or unitization the Overriding Royalty shall be paid on the basis of production deemed to be produced from or allocated to Royalty Lands under the plan of unitization or pooling and not upon the basis of actual production from the Royalty Lands.

3.1 As of the Effective Time, Grantor shall be responsible for the payment of all rentals, shut-in gas royalties, performance bonds, and other maintenance costs falling due with respect to the Title Documents.

4.1 Each party hereto shall be liable for all taxes and other charges levied or assessed against its interest as set out herein in the Petroleum Substances, which shall be deemed to include freehold mineral tax in respect of any Royalty Lands that are freehold, and in lieu of payment by Grantee of its share thereof Grantor may make such payment and deduct the amount thereof from any money payable by it to Grantee.

4.2 The payment on behalf of Grantee by Grantor of any tax or other charge pursuant to the provisions of clause 4.1 herein shall not in any way relieve Grantee from its obligation and responsibility to reimburse Grantor for its share of such costs.

5.1 Grantor shall not surrender any of its interest in the Royalty Lands or that portion of the Title Documents relating thereto, in whole or in part, at any time that Grantee is receiving, or is entitled to receive, its Overriding Royalty unless Grantee consents thereto in writing, such consent not to be unreasonably withheld; provided that if Grantee does not consent as aforesaid within three (3) days of notice of Grantor's intentions, it shall be bound to accept an assignment of the entire right, title, estate, and interest of Grantor in the Royalty Lands or the portion thereof surrender, and thereupon Grantee shall be deemed to have assumed all obligations of Grantor with respect to the interest assigned.

6.1 If the interest of Grantor in the Royalty Lands now or hereafter shall become encumbered by any royalty, production payment, or other charge of a similar nature, other than the royalties as set forth under the terms of the Title Documents covering such lands, such royalty, production payment, or other charge shall be charged to and paid entirely by Grantor.

Grantor -           Renaissance Energy Ltd.
                    P.O. Box 1120
                    Station "M"
                    Calgary, Alberta
                    T2P 2K9

                    Attention:  Land Department
                    ---------------------------
                    Fax:  (403) 750-1892


Grantee -           Pinnacle Oil International, Inc.
                    54 Patterson Close S.W.
                    Calgary, Alberta
                    T3H 3K2

                    Attention:  President
                    ---------------------
                    Fax:  (403) 686-8020

All notices, communications and statements required, permitted or contemplated hereunder shall be in writing, and shall be delivered as follows:

(a) by personal service on the other party hereto at the relevant address set out above, in which case the item so served shall be deemed to have been received by that party when personally served;

(b) by facsimile transmission to the other party hereto to the relevant fax number set out above, in which case the item so transmitted shall be deemed to have been received by that party when transmitted; or

(c) except in the event of an actual or threatened postal strike or other labor disruption that may affect mail service, by mailing first class registered post, postage prepaid, to the other party hereto at the relevant address set out above, in which case the item so mailed shall be deemed to have been received by that party on the fifth day following the date of mailing.

Grantor and Grantee may from time to time change their respective addresses for service or their respective fax numbers or both by giving written notice to the other.

8.1 The obligations of the parties hereto shall be suspended; and there shall be no liability for damages during the time and to the extent that any party hereto is prevented from complying with its obligations under this Agreement in part or in whole by strikes, lock-outs, acts of God or the Queen's enemies, war, blockades, riots, laws, orders, or regulations of governmental bodies or agencies, unavoidable accidents, delays in transportation, inability to obtain necessary materials in the open market, or any other cause, except financial, whether similar or dissimilar to those specifically enumerated, beyond the reasonable control of the party hereto affected. The party hereto whose obligations under this Agreement are suspended shall give notice, including reasonably full particulars, of the cause of such suspension, to the other party or parties hereto within a reasonable time after the occurrence thereof. The performance of such obligations shall begin or be resumed within a reasonable time after such cause has been removed. No party hereto shall be required against its will to settle any labour dispute.

9.1 Subject to the terms contained herein, this Agreement shall continue for the life of the Title Documents.

9.2 All terms, covenants, and conditions in this Agreement shall run with and are binding upon the Title Documents, the Royalty Lands, and the estates affected thereby until the date which is six months after the date upon which the last well drilled for and on behalf of Grantor on the Royalty Lands to a zone or formation below the base of the Mississippian is abandoned. Upon such date and without further act or action required by either Party, this Agreement shall terminate and Grantor shall be released from any and all obligations to Grantee hereunder notwithstanding any further operations which may be conducted by or on behalf of Grantor and in respect of the Royalty Lands from and after the termination date hereof.

9.3 This Agreement supersedes and replaces all previous agreements, whether written or oral, memoranda, and correspondence among the parties hereto with respect to the subject matter of this Agreement.

9.4 Should any clause, provision, or condition of this Agreement be or become illegal or unenforceable, it shall be considered separate and severable from this Agreement and the remaining

provisions and conditions shall continue in full force and be binding upon the parties hereto as though the said clause, provision, or condition had never been included.

9.5 The parties hereto covenant, so long as this Agreement is in force and effect, to comply with any and all regulations and other laws with respect to anything done, or purported to be done, pursuant to this Agreement, and with respect to the operations carried out hereunder.

9.6 No waiver by any party hereto of any term of this Agreement shall take effect or be binding upon that party unless the same be expressed in writing and any waiver so given shall extend only to the particular breach so waived and shall not limit or affect any rights with respect to any other or future breach.

9.7 This Agreement shall be binding upon and shall enure to the benefit of each of the parties hereto and their respective heirs, executors, administrators, trustees, receivers, successors and assigns.

9.8 Time is of the essence of this Agreement.

9.9 This Agreement shall, in all respects, be subject to and interpreted, construed and enforced in accordance with and under the laws of the Province of Alberta and shall, in every regard, be treated as a contract made in the Province of Alberta. The parties hereto irrevocably attorn and submit to the jurisdiction of the courts of the Province of Alberta in respect of all matters arising out of this Agreement.

9.10 This Agreement may be executed in counterpart, no one copy of which need be executed by each of the parties hereto. When copies have been executed by each of the parties hereto, all copies together shall constitute one agreement and shall be a valid and binding contract among the parties as of the date first above written.

IN WITNESS WHEREOF THE PARTIES hereto have duly executed this Agreement as of the day and year first above written.

RENAISSANCE ENERGY LTD.                        PINNACLE OIL INTERNATIONAL, INC.


Per:_________________________                  Per: /s/ R. Dirk Stinson
                                                     --------------------------
                                                     R. DIRK STINSON, PRESIDENT

Per:_________________________                  Per:_________________________

[being the Exploratory Drilling Prospect] (below base Mississippian)

[to be inserted]

[to be inserted]

EXHIBIT 10.13

JOINT EXPLORATION AND DEVELOPMENT AGREEMENT

THIS JOINT EXPLORATION AND DEVELOPMENT AGREEMENT (the "Agreement") is dated as of April 3, 1998, by and among CamWest Limited Partnership, an Arkansas limited partnership ("CamWest"), Pinnacle Oil International Inc., a Nevada corporation ("POII"), and Pinnacle Oil Inc., a Nevada corporation ("POI"), and Pinnacle Oil Canada Ltd. ("POC"), a corporation formed under the laws of Canada. POII, POI and POC are referred to herein collectively as "Pinnacle." CamWest and Pinnacle are sometimes referred to herein collectively as the "Parties" and each individually as a "Party." Momentum Resources Ltd., a Bahamas corporation ("Momentum") joins this Agreement for the purposes of making certain representations and covenants, as set forth in Section 4.3.

A. Momentum has granted Pinnacle an exclusive license (the "License") to use a certain stress field detector technology for the purpose of generating certain signal data for the exploration of petroleum substances.

B. Pinnacle and CamWest desire to enter into this Agreement, whereby (i) Pinnacle and CamWest will utilize the stress field detector technology on a world-wide basis to explore for Petroleum Substances, and (ii) CamWest will acquire interests in certain lands and will assign to Pinnacle a working or a royalty interest in such lands.

NOW, THEREFORE, in consideration of the mutual covenants exchanged herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

2.1 SELECTION OF EXPLORATION AREAS. CamWest shall from time to time
(i) select Exploration Areas within which an SFD Survey will be conducted by Pinnacle, and (ii) determine the order in which Pinnacle shall survey each selected Exploration Area. CamWest shall provide Pinnacle with information pertaining to any Excluded Lands in the Exploration Area. Pinnacle shall within 15 days after such selection by CamWest, advise

CamWest of any of the following: (i) safety concerns; (ii) conflicts with an area forming part of a Third Party joint venture with Pinnacle or an Affiliate of Pinnacle; (iii) concerns arising in conducting the SFD Survey of a technical nature; or (iv) any other reasonable concern arising in conducting the SFD Survey. In the event that any of the above-mentioned conflicts or concerns arise, Pinnacle and CamWest shall meet to discuss such conflicts or concerns within 15 days after the above-mentioned notice and either (A) jointly modify the Exploration Area, or (B) CamWest shall select another Exploration Area pursuant to this Section 2.1. CamWest may initially select only two Exploration Areas, but may select an additional Exploration Area once Pinnacle has commenced performing a SFD Survey on an Exploration Area, it being the intent that without the mutual consent of the parties there shall be only two unsurveyed Exploration Areas at any one time.

(a) Pinnacle shall contribute 100% of the associated internal costs, including data acquisition, data processing, data interpretation, administrative, research and development, and salaries of its and its Affiliates' employees; and

Upon the reasonable request of CamWest Pinnacle will resurvey any portion of an Exploration Area provided that the parties will bear the costs of such resurvey as set forth in this Section 2.2.

2.3 CONVEYANCE OF DATA. Provided that at no time shall Pinnacle be obligated to spend more than the Applicable Percentage of its worldwide SFD Survey capacity pursuant to this Agreement, Pinnacle agrees that within 120 days after CamWest informs Pinnacle of an Exploration Area pursuant to
Section 2.1 above (or if a joint meeting was called to modify the Exploration Area, then within 120 days of the resolution achieved pursuant to Section 2.1(A), or such longer period as may be required by Pinnacle, provided that Pinnacle is making the Applicable Percentage of its world- wide SFD Survey capacity available pursuant to this Agreement) with respect to such Exploration Area Pinnacle shall at no cost to CamWest (except as set forth in Section 3) allow Camwest to view the visual SFD Profiles and deliver to Camwest a map of flight lines and locations of major anomalous features, whether or not they comprise SFD Anomalies. Pinnacle shall provide written interpretations and recommendations on those anomalous SFD features that Pinnacle presents as the major SFD Anomalies in an Exploration Area. The data and information specified in this Section 2.3 are collectively referred to as the "SFD Information".

2.4 REVIEW OF DATA. Within 90 days after Pinnacle presents CamWest with the SFD Information pursuant to Section 2.3 (the "Evaluation Period"), CamWest shall:

(a) review each Exploration Area to delineate and accept one or more Exploratory Prospects within such Exploration Area. After the end of the Evaluation Period for each Exploration Area, the corresponding Buffer Zone will be a part of such Exploration Area only to the extent that it overlaps with an Exploratory Prospect. Any SFD Anomaly disclosed by the SFD Information but not included within an Exploratory Prospect shall be deemed a "Rejected Anomaly" and be thereafter governed by Section 11;

(b) use all reasonable efforts to perform an economic analysis of each Exploratory Prospect utilizing conventional oil and gas industry evaluation techniques, which analysis shall be conducted in a professional manner using qualified personnel; and

2.5 REVIEW OF EXPLORATORY PROSPECTS. CamWest may utilize conventional oil and gas industry methods to perform further evaluation work with respect to each Exploratory Prospect. CamWest may in its sole discretion decide whether or not the

drilling of a test well on such Exploratory Prospect is warranted. If CamWest provides written notice to Pinnacle of CamWest's election not to drill a test well on an Exploratory Prospect, it shall include an explanation for such election with reasonable particulars and then such Exploratory Prospect shall (A) be deemed a "Rejected Anomaly," and (B) not count toward the Minimum Project Inventory.

2.6 SECURING PETROLEUM AND NATURAL GAS RIGHTS. If after reviewing an Exploratory Prospect pursuant to Section 2.5 CamWest decides in its sole discretion to drill a test well, CamWest shall use prudent and reasonable efforts to secure the Petroleum and Natural Gas Rights to all or any portion of the Exploratory Prospect, such rights to be held pursuant to the terms and conditions of this Agreement and the Operating Agreement. If CamWest, after reasonable efforts, cannot secure satisfactory Petroleum and Natural Gas Rights to an Exploratory Prospect then such Exploratory Prospect shall be deemed a "Key Tract" as evidenced by a written designation delivered by CamWest to Pinnacle. If CamWest cannot secure satisfactory Petroleum and Natural Gas Rights to the Key Tract within two years from the date the Exploratory Prospect is designated a Key Tract, such Exploratory Prospect shall become a Rejected Anomaly, and the rights with respect to such Rejected Anomaly shall be governed by Section 11 of this Agreement. If the Parties secure the Petroleum and Natural Gas Rights to the Key Tract within the two years from the date the Exploratory Prospect is deemed to be a Key Tract, such Key Tract shall be subject to the terms of this Agreement, including the payment provisions contained in
Section 3.

3. PINNACLE'S INTEREST. Pinnacle shall be entitled to the following interest:

3.1 INITIAL INTEREST. Unless and until Pinnacle elects to be a Royalty Interest owner with respect to any Exploratory Prospect, it shall be deemed to be a Working Interest owner and will pay its share of all related costs (except seismic, geophysical and geological costs and other costs described in Section 2.2(b)) pursuant to the invoicing and payment procedures set forth in the Operating Agreement as if such agreement then applied to such Exploratory Prospect.

3.2 ELECTION BY PINNACLE. At any time from the day on which an Exploratory Prospect is accepted by CamWest until the 15th day (or if a drilling rig is located on the test well site, then 48 hours) after the day on which CamWest informs Pinnacle that

CamWest intends to drill a test well within the Exploratory Prospect, then Pinnacle may elect to either (i) participate in the Exploratory Prospect as a Royalty Interest owner as set forth in Section 3.4, (ii) or remain a Working Interest owner as set forth in Section 3.3. If Pinnacle elects to participate as a Royalty Interest owner in the Exploratory Prospect, then (A) Pinnacle shall immediately convey and transfer its entire beneficial and legal Working Interest in the Exploratory Prospect to CamWest prior to the spudding of the test well in exchange for consideration equal to the amount paid by Pinnacle with respect to acquisition costs for Petroleum and Natural Gas Rights with respect to such Exploratory Prospect, and (B) the Parties shall execute an assignment of the Royalty Interest.

3.3 WORKING INTEREST. Pinnacle's cost bearing interest (the "Working Interest"), if any, for each Exploratory Prospect shall be subject to the following terms:

(a) The interest shall be 45% proportionately reduced in the event CamWest's working interest in the Exploratory Prospect (on a property by property basis) is less than 100%, provided that if Pinnacle desires to participate for less than a 45% Working Interest, it may do so if it so notifies CamWest on or before the times set forth in Section 3.2; and

3.4 ROYALTY INTEREST. Pinnacle's royalty interest (the "Royalty Interest"), if any, for each Exploratory Prospect shall be subject to the following terms:

4.1 PINNACLE'S REPRESENTATIONS AND WARRANTIES. POII and POI hereby represent and warrant to CamWest as follows:

(a) Each of POII, POI, and POC is a corporation duly organized, validly existing, and in good standing under the laws of the State or Country of its incorporation and either is or will be qualified to do business in each state, province, or country where the nature of its business requires it to be qualified;

(b) POII, POI, and POC each have the full power and authority to execute and deliver under this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby will not, violate any of the provisions of any contract, lease, agreement, instrument, order, judgment, or decree to which POII, POI, or POC is a party or by which any of them may be bound;

(d) Pinnacle has good and marketable title to, or a valid leasehold interest in, the properties and assets (other than rights licensed to Pinnacle and its Affiliates, including rights licensed under the License) used by them, located on their premises, or shown on their most recent balance sheet, or acquired after the date thereof, free and clear of all security interests, except for properties and assets disposed of in the ordinary course of business since the date of the most recent balance sheet. With respect to rights licensed to Pinnacle and its Affiliates, including rights licensed under the License, Pinnacle and its Affiliates have good and marketable title to such licensed rights (subject to the terms of the applicable license agreement) used by them or shown on their most recent financial statements or acquired after the date thereof.

(e) Pinnacle and its Affiliates own or have the right to use pursuant to license, sublicense, agreement, or permission all intellectual property necessary for the operation of the businesses of Pinnacle and its Affiliates as presently conducted and as presently proposed to be conducted. Each of Pinnacle and its Affiliates has taken all necessary action to maintain and protect each item of intellectual property

that it owns or uses. Notwithstanding the foregoing, CamWest understands that neither Pinnacle and its Affiliates nor Momentum has patent protection with respect to the SFD Technology, and nothing in this representation or this Agreement shall be construed to require Pinnacle and its Affiliates or Momentum to obtain such patent protection.

(f) To the actual knowledge of Pinnacle, with no obligation to investigate, none of Pinnacle or its Affiliates has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any intellectual property rights of third parties, and none of Pinnacle and the directors and officers (and employees with responsibility for intellectual property matters) of Pinnacle or its Affiliates has ever received any charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation or violation (including any claim that any of Pinnacles or its Affiliates must license or refrain from using any intellectual property rights of any third party). Notwithstanding the foregoing, CamWest understands that neither Pinnacle nor its Affiliates or Momentum represent that the SFD Technology does not interfere with, infringe upon, misappropriate or violate the intellectual property rights of third parties (although none of Pinnacle, its Affiliates or Momentum have any actual knowledge of any such infringement), and nothing in this representation or this Agreement shall be construed to mean that Pinnacle or its Affiliates or Momentum have made any such representation.

4.2 CAMWEST'S REPRESENTATIONS AND WARRANTIES. CamWest hereby represents and warrants to Pinnacle as follows:

(a) CamWest is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Arkansas and either is or will be qualified to do business in each state, province, or country where the nature of its business requires it to be qualified;

(b) CamWest has the full power and authority to execute and deliver this Agreement. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any of the provisions of any contract, lease, agreement, instrument, order, judgment, or decree to which CamWest is a party or by which CamWest may be bound;

(c) There are no claims, actions, suits or proceedings pending, or to the best knowledge of CamWest threatened, against CamWest before any court, governmental authority, or arbitrator;and

(d) CamWest Inc, the sole general partner of CamWest, has the full power and authority to execute and deliver this agreement on behalf of CamWest.

4.3 MOMENTUM'S REPRESENTATIONS AND WARRANTIES. Momentum hereby represents and warrants to CamWest as follows:

(a) Momentum is a corporation duly organized, validly existing, and in good standing under the laws of the Bahamas and either is or will be qualified to do business in each state, province, or country where the nature of its business requires it to be qualified;

(b) Momentum has the full power and authority to execute and deliver under this Agreement. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any of the provisions of any contract, lease, agreement, instrument, order, judgment, or decree to which Momentum is a party or by which Momentum may be bound;

(c) There are no claims, actions, suits or proceedings pending, or to the best knowledge of Momentum, threatened, against Momentum or the SFD Technology before any court, governmental authority, or arbitrator except as set forth on Exhibit G;

(d) Momentum has good and marketable title to, or a valid leasehold interest in, the properties and assets used by it, located on its premises, or shown on their most recent balance sheet, or acquired after the date thereof, free and clear of all security interests, except for properties and assets disposed of in the ordinary course of business since the date of the most recent balance sheet.

(a) to the extent that disclosure to a Third Party is required by applicable law or regulation (including regulations of any applicable stock exchange);

(b) to the extent disclosure is necessary or advisable, to its employees, contractors, consultants or advisors, or to its Affiliates or their employees, consultants or advisors, in each case for the purpose of carrying out their duties hereunder;

(c) to banks or other financial institutions or agencies or any independent accountants or legal counsel or investment advisors employed by the Parties to the extent disclosure is necessary or advisable to seek or obtain financing;

(d) to the extent reasonably necessary, disclosure to Third Parties to enforce this Agreement; or

(e) as agreed between the Parties;

8.1 SUBMISSION TO ARBITRATION. The Parties hereby submit all controversies, claims and matters of difference arising under this Agreement (other than those, if any, relating to ownership of the SFD Technology or SFD Data) to arbitration. Without limiting the generality of the foregoing, the following shall be considered controversies for this purpose: (a) all questions relating to the interpretation or breach of this Agreement, (b) all questions relating to any representations, negotiations and other proceedings leading to the execution hereof, and (c) all questions as to whether the right to arbitrate any such question exists.

8.2 INITIATION OF ARBITRATION AND SELECTION OF ARBITRATORS. The Party desiring arbitration shall so notify the other Party, identifying in reasonable detail the matters to be arbitrated and the relief sought. Arbitration hereunder shall be before a three-person panel of neutral arbitrators. The American Arbitration Association (the "AAA") shall submit a list of potential arbitrators and the Parties shall select three arbitrators in the manner established by the AAA. In the event that any Party fails to select arbitrators as required above, the AAA shall select such arbitrators. The arbitrators shall be entitled to a fee commensurate with their fees for professional services requiring similar time and effort. If the arbitrators so desire they shall have the authority to retain the services of a neutral judge or attorney (whose fees shall be treated as an arbitrator's fees) to assist them in administering the arbitration and conducting any hearings and taking evidence at such hearings or otherwise.

8.3 ARBITRATION PROCEDURES. All matters arbitrated hereunder shall be arbitrated in Denver, Colorado, pursuant to Colorado law, and shall be conducted in accordance with the Commercial Arbitration Rules of the AAA, except to the extent such rules conflict with

8.4 ENFORCEMENT. This submission and agreement to arbitrate shall be specifically enforceable. Arbitration may proceed in the absence of any Party if notice of the proceedings has been given to such Party. The Parties agree to abide by all awards rendered in such proceedings. Such awards shall be final and binding on all Parties to the extent and in the manner provided by Colorado law. All awards may be filed with the clerk of one or more courts, state, federal or foreign having jurisdiction over the Party against whom such award is rendered or its property, as a basis of judgment and of the issuance of execution for its collection. No Party shall be considered in default hereunder during the pendency of arbitration proceedings specifically relating to such default.

8.5 FEES AND COSTS. The arbitrators' fees and other costs of the arbitration and the reasonable attorney fees, expert witness fees and costs of the prevailing Party shall be borne by the non-prevailing Party. In its written opinion, the arbitration panel shall, after comparing the respective positions asserted in the arbitration claim and answer thereto, declare as the prevailing Party the Party whose position was closest to the arbitration award (not necessarily the Party in favor of which the award on the arbitration claim is rendered) and declare the other Party to be the non-prevailing Party. The arbitration award shall include an award of the fees and costs provided by this
Section 8.5 against the non-prevailing Party.

sales made by Newco will be on arms length terms. Following the formation of Newco, the Parties shall negotiate in good faith to settle the terms of and execute an operating agreement relating to the governance of Newco. Any Petroleum and Natural Gas rights assigned to or acquired by Newco will be free and clear of any Royalty Interest or other burdens created pursuant to this Agreement.

(a) the acquisition of any interest in lands, Petroleum and Natural Gas Rights, corporations, partnerships, or other entities as such by either (i) the purchase of an equity interest therein or by merger,
(ii) or other business combination therewith when the primary purpose of such acquisition is not to obtain an interest in the Excluded Lands;

(b) any interest in lands or Petroleum and Natural Gas Rights that is held by CamWest or its Affiliates as of the date of this Agreement that either have reserves that have been proven or are capable of producing Petroleum Substances;

(c) the purchase of any oil and gas reserves (whether proven or probable reserves) unless the Parties mutually agree to include such purchase within this Agreement;

(d) any interest in lands or Petroleum or Natural Gas Rights with respect to which CamWest or its Affiliates (i) have conducted technical or analysis work, and (ii) are pursuing the acquisition of such lands or Petroleum and Natural Gas Rights;

(e) any other interest in lands, Petroleum and Natural Gas Rights, tangibles, and associated interests (i) in which CamWest has an interest, has a right to acquire an interest, or acquires an interest, and (ii) that is not made a part of this Agreement in accordance with the terms and conditions hereof.

13.1 NOTICES. All notices and other required communications hereunder shall be in writing, addressed as follows:

Pinnacle Oil International Inc. Suite 750, Phoenix Place
840 - 7th Avenue S.W.

Calgary, Alberta T2P 3G2

Canada

Attention: President
Facsimile: (403) 246-6442

CamWest Limited Partnership 321 N. Central Expressway; Suite 350 McKinney, Texas 75070

Attention: Kim Eubanks
Facsimile: (972) 542-2170

Notices shall be given (a) by personal delivery to the other Party, (b) by facsimile, with confirmation sent by registered or certified mail, return receipt requested, or (c) by registered or certified mail, return receipt requested. All notices shall be effective and deemed delivered (i) if by personal delivery, on the date of delivery if during business hours, otherwise the next business day, (ii) if by facsimile, on the date the facsimile is received if received during business hours, otherwise the next business day and
(iii) if solely by mail, upon receipt by the addressee. A Party may change its address by notice to the other Party.

13.2 COMPLIANCE WITH LAWS. Each Party shall comply in all material respects with all applicable federal, state and local laws, regulations and codes, and shall obtain all permits and licenses when needed in the performance of its obligations under this Agreement.

13.3 DAMAGES. In the event of a default by either Party under this Agreement, the other Party shall have all remedies available to it under this Agreement at law and in equity, provided that in no event shall either party ever be liable for special, punitive, or consequential damages.

13.4 DEFAULT AND TERMINATION.

(a) If any Party fails to perform any obligation required to be performed hereunder, the non-defaulting Party may provide the defaulting Party written notice to remedy the default. If the defaulting Party (i) does not commence actions to remedy the default within 30 days after receiving such notice, and (ii) proceed diligently and continuously to remedy such default, then the non- defaulting Party may terminate this Agreement by providing written notice to the defaulting Party.

(b) CamWest may terminate this Agreement by providing written notice to Pinnacle upon the occurrence of any of the following events:
(i) the breach of any representation, warranty or covenant contained herein by Pinnacle or any of its Affiliates, to the extent that such breach could have a material adverse effect on CamWest or (ii) Pinnacle or any of its Affiliates are not the owners of or have a license to use the SFD Technology.

(c) Pinnacle may terminate this Agreement by providing written notice to CamWest upon the breach of any representation, warranty or covenant contained herein by CamWest or any of its Affiliates, to the extent that such breach could have a material adverse effect on Pinnacle.

13.5. INDEMNIFICATION. Each Party shall indemnify, hold harmless and defend the other and the other's directors, trustees, agents, officers, management, members, managers and employees against all claims, demands, judgments and associated costs and expenses related to property damage, environmental damage, bodily injury or death resulting from any breach of this Agreement (including the representations and warranties herein), negligence or willful misconduct by such Party. In the event such loss or damage is caused by any joint or concurrent act or failure to act of Pinnacle and CamWest, such loss or damage shall be borne by Pinnacle and CamWest in proportion to the degree of negligence attributable to each Party. In addition, Pinnacle shall indemnify, hold harmless, and defend CamWest from any and all liability or costs arising from the action described on Exhibit G.

13.7. AMENDMENTS. This Agreement shall not be amended except in writing executed by all Parties.

13.8. WAIVER. A waiver by either Party of a default hereunder shall not be deemed to be a waiver of any subsequent default, nor shall any delay in asserting a right hereunder be deemed a waiver of such right. The preceding sentence shall not be construed as a waiver of any applicable statute of limitations. The failure of either Party to insist in any one or more instances upon strict performance of any of the provisions of this Agreement or to take advantage of any of its rights hereunder, shall not be construed as a waiver of any provisions or relinquishment of any such rights, but the same shall continue and remain in full force and effect. All remedies afforded under this Agreement shall be taken and construed as cumulative and in addition to every other remedy provided for herein and by law.

13.9. SECTION HEADINGS. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

13.10. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings between the Parties relating to the subject matter hereof.

13.11. SEVERABILITY. If any provision of this Agreement shall be determined by any relevant authority having jurisdiction to be unlawful, unenforceable, invalid, void or voidable, the legality, validity or enforceability of the remainder of this Agreement shall not be affected or impaired thereby and the unlawful, unenforceable, invalid, void or voidable term or terms shall be deemed deleted from this Agreement to the same extent as if never incorporated.

13.12. SURVIVAL. The indemnity and confidentiality provisions of this Agreement shall survive the termination of this Agreement.

13.13. CONSTRUCTION OF AGREEMENT. In construing this Agreement:

(a) no consideration shall be given to the captions of the articles, sections, subsections or clauses, which are inserted for convenience in locating the provisions of this Agreement and not as an aid in its construction;

(b) no consideration shall be given to the fact or presumption that one Party had a greater or lesser hand in drafting this Agreement;

(c) examples shall not be construed to limit, expressly or by implication, the matter they illustrate;

(d) the word "includes" and its derivatives means "includes, but is not limited to" and corresponding derivative expressions;

(e) the plural shall be deemed to include the singular, and vice versa; and

(f) each gender shall be deemed to include the other gender.

13.14. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same instrument.

13.15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO, WITHOUT REFERENCE TO ITS CHOICE OF LAW RULES.

13.16. NO PARTNERSHIP. Neither this Agreement nor any provision herein shall or be construed as constituting a partnership, agency, or joint venture or similar relationship between CamWest and Pinnacle.

13.17. NO HYDROCARBON WARRANTY. Neither party makes any warranty or representation to the other as to the presence or economic viability of any hydrocarbons in any SFD Anomaly or Exploratory Prospect identified or developed pursuant to this agreement.

13.18. FACILITIES. In the event any Petroleum Substances produced from an Exploratory Prospect and owned by Pinnacle are processed by a facility in which Pinnacle owns no interest, CamWest shall use all reasonable efforts to ensure that Pinnacle receives no less

favorable terms for such processing than are received by CamWest.

[signature page to follow]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the year and date first above written.

CAMWEST LIMITED PARTNERSHIP

By: CamWest, Inc., its general partner

By: /s/ Kim L. Eubanks
    -------------------------------
Kim L. Eubanks, President

PINNACLE OIL INTERNATIONAL, INC.

By:  /s/ George Liszicasz
     -------------------------------
George Liszicasz, CEO and Chairman of the Board


By:  /s/ Dirk Stinson
     -------------------------------
Dirk Stinson, President and COO

PINNACLE OIL, INC.

By:  /s/ George Liszicasz
     -------------------------------
George Liszicasz, CEO and Chairman of the Board


By:  /s/ Dirk Stinson
     -------------------------------
Dirk Stinson, President and COO

PINNACLE OIL CANADA LTD.

By:  /s/ George Liszicasz
     -------------------------------
George Liszicasz, CEO and Chairman of the Board

MOMENTUM RESOURCES LTD.

By:  /s/ R. Dirk Stinson
     -------------------------------
Print Name:
             -----------------------
Title:
        ----------------------------

EXHIBIT 10.14

Canadian SFD Data Licence Agreement

THIS AGREEMENT made as of April 1, 1997

BETWEEN:

PINNACLE OIL INTERNATIONAL INC.

a Nevada corporation whose principal executive office is located at 380 - 1090 West Georgia Street Vancouver, B.C., Canada, V6E 3V7

(the "Grantor")

OF THE FIRST PART

AND:

PINNACLE OIL CANADA INC.

a Canadian federal corporation whose principal executive office is located at #380 - 1090 West Georgia Street,Vancouver, B.C. V6E 3V7

(the "Grantee")

OF THE SECOND PART

WHEREAS:

1. The Grantor has the worldwide right to the use of certain data known as SFD Data (hereinafter defined) as it relates to the identification and exploitation of Hydrocarbons (as hereinafter defined) pursuant to an agreement dated as of August 1, 1996, and made between (among others) Momentum Resources Corporation ("Momentum") as the owner of the technology which generates the SFD Data, and the Grantor (the "Restated Technology Agreement"), a copy of which is attached to this Agreement as a Schedule;

2. Pursuant to the Restated Technology Agreement, Momentum has agreed with the Grantor that it will use its best efforts to survey, using the Stress Field Detector (as hereinafter defined), certain geographic areas throughout the world which will have been preselected by both Momentum and the Grantor from time to time during the term of the Restated Technology Agreement, and to provide all raw SFD Data resulting from such surveys to the Grantor for its exclusive use for the identification and exploitation of Hydrocarbons in accordance with the terms of the Restated Technology Agreement;

3. The Restated Technology Agreement further provides that the surveys are to be conducted by George Liszicasz (the original inventor of the technology) or, under the general supervision of George Liszicasz, by such personnel of Momentum as have appropriate levels of training to enable them to conduct such surveys. Under the Restated Technology Agreement, Momentum has agreed with the Grantor that it will provide not less than 500 hours per year of trained manpower to generate the SFD Data with respect to the pre-selected geographic areas to be surveyed;

4. The Restated Technology Agreement further provides, (as does the employment agreement dated as of April 1, 1997, and between the Grantor and Liszicasz (the "Liszicasz Employment Agreement") that Liszicasz will be available to provide the required manpower until at least December 31, 2005, unless Liszicasz is unable to render such services by reason of death or disability (as that term is defined in the Liszicasz Employment Agreement);

5. The Restated Technology Agreement also provides that Liszicasz shall initially interpret all raw SFD Data provided to the Grantor by Momentum to ascertain whether there is a reasonable likelihood that there are commercially extractable amounts of Hydrocarbons in any given surveyed area. Further, Liszicasz and the Grantor have agreed that they will both use their best efforts to train mutually acceptable personnel of the Grantor to conduct such interpretation under the general supervision of Liszicasz as soon as is reasonably practical;

6. The Restated Technology Agreement also provides that the Grantor may fulfil its obligation to Momentum to use its best efforts to exploit a commercially viable area by means of a wholly-owned subsidiary, and that the Grantor may license any or all of its rights to a wholly- owned subsidiary;

7. The Grantee is a wholly-owned subsidiary of the Grantor, and the parties wish to enter into this Licence Agreement with respect to both the generation and the interpretation of raw Canadian SFD Data (as hereinafter defined), and to the exploitation of Hydrocarbons identified by such interpretation.

NOW THIS AGREEMENT WITNESSES that in consideration of the premises the parties covenant and agree as follows:

1. DEFINITIONS

In this Agreement:

(a) The terms "Hydrocarbons", "SFD Data", "SFD Technology" and "Stress Field Detector" shall have the meanings ascribed to them in paragraph 1 of the Restated Technology Agreement;

(b) "Canadian SFD Data" means all SFD Data relating to the sovereign territory of Canada.

(c) "Canadian Prospect" means an area in the sovereign territory of Canada which has been identified, following interpretation of Canadian SFD Data, as one in which there is a reasonable likelihood of commercially extractible amounts of Hydrocarbons.

(d) "Subsidiaries" means any subsidiary of a party (or subsidiary of a subsidiary of a party) regardless of form of entity, such as a corporation, partnership, limited partnership, or limited liability company, with the exception of joint ventures and third party arrangements described in this Agreement.

2. GRANT OF LICENCE FOR CANADIAN SFD DATA

2.1 In consideration of the licence fee set out in paragraph 4, the Grantor hereby grants to the Grantee an exclusive licence, for the periods set out in paragraph 6, to use and exploit the Canadian SFD Data generated by Momentum for the Grantor under the Restated Technology Agreement.

2.2 By way of fulfilling its obligation under this Licence Agreement to supply an amount of Canadian SFD Data sufficient for the Grantee to commercially exploit the Hydrocarbons identified using such data, the Grantor covenants with the Grantee that, when pre-selecting Designated Search Areas together with Momentum under the provisions of paragraph 2 of the Restated Technology Agreement, the Grantor will at all times during the term of this Licence Agreement use its best efforts to select sufficient surveys in Canadian territory to ensure to the Grantee a supply of Canadian SFD Data sufficient to enable the Grantee to carry on a commercially viable business, and to fulfil its obligations under all agreements with third parties respecting the use of Canadian SFD Data.

2.3 The Grantor will also use its best efforts to ensure the availability to the Grantee of the services of Liszicasz to interpret or cause to be interpreted, for the benefit of the Grantee, the Canadian SFD Data supplied under this Licence Agreement. To better secure the availability of Liszicasz or other trained personnel for such purposes, the Grantee may itself enter into appropriate employment contracts with Liszicasz and/or such other trained personnel. In determining the amount of time which Liszicasz and/or other trained personnel must devote to the interpretation of the Canadian SFD Data, as a proportion of world-wide SFD Data, the parties will act reasonably, basing the determination on, among other things:

(a) the obligations of the Grantee under third party agreements, to the extent that the Grantor has been made aware of such obligations; and

(b) an estimate of the value of commercially extractable Hydrocarbons identified in Canada as a proportion of the total value of the commercially extractible

Hydrocarbons identified world-wide.

3. COMMERCIAL EXPLOITATION OF CANADIAN SFD DATA

Within 180 days after the Grantee has interpreted, or obtained the interpretation of, the Canadian SFD Data, and has identified a Canadian Prospect, the Grantee will, either directly or indirectly through joint ventures and/or other third parties, use its best efforts to commercially and economically exploit the Canadian Prospect. Such exploitation may occur through one or a combination of the following, as selected by the Grantee in its reasonable discretion:

(i) the direct acquisition by the Grantee and/or a wholly owned Subsidiary of the legal rights for the further exploitation, development and production of Hydrocarbons with respect to the Canadian Prospect;

(ii) the indirect acquisition of such rights through joint ventures or other arrangements with third parties; and/or

(iii) the sale by the Grantee and/or its joint venture partners of such rights.

The Grantee will use its best efforts to commercially exploit the Canadian Prospect through one or more of the foregoing methods, and will diligently pursue such efforts unless it is not, in the opinion of either the Grantee or the Grantor, commercially reasonable to make any such acquisition and/or pursue such exploration development and/or production and/or enter into any such agreement with a joint venture partner and/or other third parties.

4. LICENCE FEE

4.1 AMOUNT OF FEE

In consideration of this grant of the licence with respect to the Canadian SFD Data, the Grantee shall pay to the Grantor a fee (the "Licence Fee") equal to 50% of the "Gross Revenues" (as such term is defined below) actually received by the Grantee and/or its Subsidiaries with respect to the commercial exploitation of the Hydrocarbons identified in each Canadian Prospect.

4.2 GROSS REVENUES DEFINED

The term "Gross Revenues" generally means the aggregate of all gross revenues received by the Grantee and/or its Subsidiaries from the commercial exploitation of Hydrocarbons calculated by way of example and not limitation as follows:

(i) If the Grantee and/or its Subsidiaries indirectly acquire the legal rights for the further exploration, development and production of Hydrocarbons with respect to a Canadian Prospect through joint ventures and/or other arrangements with third parties, then the Gross Revenues will mean the cash flows received by the Grantee and/or its Subsidiaries from such joint venture and/or third party, whether from the sale of Hydrocarbons or the sale by the joint venture and/or third party of its interest in such legal rights.

(ii) If the Grantee and/or its Subsidiaries sell or transfer the legal rights for (or "leads" relating to) a Canadian Prospect, then the Gross Revenues from such Canadian Prospect will be the gross consideration received by the Grantee and/or its Subsidiaries as a result of such sale or transfer.

(iii) If the Grantee and/or its Subsidiaries directly acquire the legal rights for the further exploration, development and productions of Hydrocarbons with respect to a Canadian Prospect, and independently extract and sell Hydrocarbons from such Canadian Prospect, then the Gross Revenues from such a Canadian Prospect will be the gross cash flows received by the Grantee and/or its Subsidiaries from the sale of such Hydrocarbons.

(iv) In the case of the agreement between Encal Energy Ltd. and the Grantor, Gross Revenues means all payments of any kind to which the Grantor (or through the Grantor, the Grantee) is entitled under that agreement.

The Grantee and/or its Subsidiaries acknowledge and agree that they shall not be entitled to deduct any expenses, costs, capital or equity investment and/or loans against any calculation of Gross Revenues when determining the Licence Fee owing to the Grantor (such as acquisition, development, extraction, marketing and/or distribution costs which would be incurred should the Grantee and/or its Subsidiaries directly exploit the Prospect without joint venture partners), it being understood that the Grantor has an interest in Gross Revenues generated from the Hydrocarbons identified in a Canadian Prospect without offset or deduction. Notwithstanding the foregoing, the Grantor understands and agrees that Gross Revenues arising from distributions from joint ventures and/or third party arrangements may, based upon the

terms and conditions of such arrangements, be made after the joint venture has deducted costs, expenses and reserves, or repaid capital provided by the joint venture and/or other third party, and the Grantor further agrees that it shall have no right to "gross up" the Gross Revenues to reflect the pre-distribution deduction by the joint venture or other third party of such costs, expenses and reserves and/or repayment of capital.

The parties further acknowledge that the foregoing examples are merely examples, and do not fully reflect many methods by which the Grantee may commercially and economically exploit a Canadian Prospect, with and without the participation of joint venture and/or other third parties. Accordingly, the parties agree that the Licence Fee shall be liberally interpreted to apply to each and every transaction by which the Grantee and/or any of its Subsidiaries exploit the Canadian Prospect to ensure that the Grantor receives such equitable portion of the total return received by the Grantee and/or its Subsidiaries as to enable the Grantor to receive the benefit of its bargain, subject to avoidance of duplicative payments by the Grantee and its Subsidiaries. In order to avoid any disputes or misunderstandings, the parties agree to use their best efforts, while the Grantee is formulating its proposed method to exploit a Prospect, to outline in writing, prior to committing to such method, the economics of the proposed method of exploitation consistent with the terms of this Agreement. Should the parties be unable to agree upon such economics, they agree that such issue shall be resolved by arbitration (an "Arbitration Proceeding") before the American Arbitration Association (the "Arbitration Authority") located in Carson City, Nevada, according to the rules and practices of the Arbitration Authority from time-to-time in force, unless the parties mutually agree upon a different Arbitration Authority and/or different location for such Arbitration Proceeding.

4.3 TERMS OF PAYMENT OF LICENCE FEE

The Licence Fee shall be paid to the Grantor within 15 days of the end of each quarter in which the Grantee and/or any of its Subsidiaries collect Gross Revenues with respect to any Canadian Prospect. The obligation to pay the Licence Fee shall continue following the termination of this Agreement with respect to any Canadian Prospect for which the Licence Fee was provided by the Grantor to the Grantee on or before the effective date of such termination.

4.4 REPORTS

Within 15 days after the end of each quarter, irrespective of whether any Gross Revenues have been collected by the Grantee and/or any of its Subsidiaries or whether any sum is then due to the Grantor, the Grantee shall deliver to the Grantor a complete and accurate written statement setting forth;

(i) total Gross Revenues earned or accrued from each Canadian Prospect in such quarter;

(ii) total Gross Revenues collected from each Canadian Prospect in such quarter;

(iii) the Licence Fee earned from each Canadian Prospect in such quarter;

(iv) the Grantee's calculation of the amount of the Licence Fee then due the Grantor for the period covered by such report; and

(v) such other information reasonably requested by the Grantor with respect to each Canadian Prospect, in specific detail so as to allow an audit of underlying documents.

4.5 BOOKS AND RECORDS

During the period that the Grantee shall be obligated to pay to the Grantor a Licence Fee, the Grantee shall keep or cause to be kept accurate, complete and up-to-date books of accounts separately stating records of all revenues earned, accrued and/or collected with respect to each Canadian Prospect, and all costs, expenses, and investments in such Canadian Prospect.

4.6 INSPECTION

During the period that the Grantee and/or its Subsidiaries shall be obligated to pay to the Grantor the Licence Fee, the Grantor or its authorized representatives shall have the right to inspect all records of the Grantee and/or its Subsidiaries with respect to the Canadian Prospect, and to make copies of said records utilizing the facilities the Grantee and/or its Subsidiaries without charge, and shall have free and full access thereto on reasonable notice during the normal business hours of the Grantee and/or its Subsidiaries. If such inspection or audit reveals an underpayment by the Grantee and/or its Subsidiaries of the Licence Fee and/or any other amounts then due to the Grantor under this Agreement, the Grantee and/or its Subsidiaries shall upon written notice pay to the Grantor the balance of all such amounts found to be due pursuant to such audit inspection, together with interest thereon at the "best commercial customer" rate of the largest bank in terms of assets in the eleventh district of the Federal Reserve, plus 4% per annum from the date such amounts first became due to the Grantor, until all such amounts have been paid in full. If such inspection or audit discloses that, for the annual period reviewed or audited, the Grantee has underpaid or understated its Licence Fee obligation under this Agreement by 5% or more, then the Grantee shall also pay the reasonable professional fees of the independent representatives engaged to conduct or review such inspection or audit.

4.7 SECURITY INTEREST GRANTED TO THE GRANTOR

As security for the Grantee's obligation to pay the Licence Fee to the Grantor, the Grantee agrees to execute a Security Agreement in a form reasonably acceptable to the Grantor with respect to any interest in any Canadian Prospect acquired by the Grantee and/or its

Subsidiaries, which will grant to the Grantor a security interest in any Gross Revenues generated by the Grantee and/or its Subsidiaries in such Canadian Prospect. The grant of the security interest shall not exceed the anticipated aggregate Licence Fee payable to the Grantor with respect to such Canadian Prospects.

5. TERM OF LICENCE

The term of the licence granted under this Agreement will correspond in all respects, including provisions for extension and for early termination, with the term of the Restated Technology Agreement.

6. REPRESENTATIONS AND WARRANTIES OF PARTIES

Each of the parties to this Agreement hereby represents and warrants to each of the other parties of this Agreement, each of which is deemed to be a separate representation and warranty, as follows:

(a) ORGANIZATION, POWER AND AUTHORITY

Such party, if an entity, is duly organized, validly existing and in good standing under the laws of its state, territory or province of incorporation or organization, and has all requisite corporate or other power and authority to enter into this Agreement.

(b) AUTHORIZATION AND VALIDITY OF AGREEMENT

The execution and delivery of this Agreement by such party, and the performance by such party of the transactions herein contemplated, have, if such party is an entity, been duly authorized by its governing organizational documents, and are not prohibited by its governing organization documents, and no further corporate or other action on the part of such party is necessary to authorize this Agreement, or the performance of such transactions. This Agreement has been duly executed and delivered by such party and, assuming due authorization, execution and delivery by all of the other parties hereto, is valid and binding upon such party in execution and delivery by all of the other parties hereto, is valid and binding upon such party in accordance with its terms, except as limited by:

(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditor rights generally; and

(ii) general principles of equity (regardless of whether

such

enforcement is considered in a proceeding in equity
or at law).

(c) NO BREACH OR CONFLICT

Neither the execution nor delivery of this Agreement, nor the performance by such party of the transactions contemplated herein:

(i) if such party is an entity, will breach or conflict with any of the provisions of such party's governing organizational documents; nor

(ii) to the best of such party's knowledge and belief, will violate or constitute an event of default under any agreement or other instrument to which such party is a party.

7. INDEMNIFICATION; DEFENSE OF THIRD-PARTY CLAIMS

The provisions of paragraph 12 of the Restated Technology Agreement entitled "Indemnification; Defense of Third-Party Claims" apply to this Agreement.

8. MISCELLANEOUS

(a) COOPERATION

Each party agrees, without further consideration, to cooperate and diligently perform any further acts, deeds and things, and to execute and deliver any documents that may be reasonably necessary or otherwise reasonably required to consummate, evidence, confirm and/or carry out the intent and provisions of this Agreement, all without undue delay or expense.

(b) INTERPRETATION

(i) SURVIVAL

All representations and warranties made by any party in connection with any transaction contemplated by this Agreement shall, irrespective of any investigation made by or on behalf of any other party hereto, survive the execution and delivery of this Agreement, and the performance or consummation of any transaction described in this Agreement.

(ii) ENTIRE AGREEMENT/NO COLLATERAL REPRESENTATIONS

Each party expressly acknowledges and agrees that this Agreement, and the agreements and documents referenced herein;

(i) is the final, complete and exclusive statement of the agreement of the parties with respect to the subject matter hereof;

(ii) supersedes any prior or contemporaneous agreements, memorandums, proposals, commitments, guaranties, assurances, communications, discussions, promises, representations, understandings, conduct, acts, courses of dealing, warranties, interpretations or terms of any kind, whether oral or written, and that may such prior agreements are of no force or effect except as expressly set forth herein; and

(iii) may not be varied, supplemented or contradicted by evidence of prior agreements, or by evidence of subsequent oral agreements.

No prior drafts of this Agreement, and no words or phrases from any prior drafts, shall be admissible into evidence in any action or suit involving this Agreement.

(iii) AMENDMENT; WAIVER; FORBEARANCE

Except as expressly provided otherwise herein, neither this Agreement nor any of the terms, provisions, obligations or rights contained herein, may be amended, modified, supplemented, augmented, rescinded, discharged or terminated (other than by performance), except by a written instrument or instruments signed by all of the parties to this Agreement. No waiver of any breach of any term, provision or agreement contained herein, or of the performance of any act or obligation under this Agreement, or of any extension of time for performance of any such act or obligation, or of any right granted under this Agreement, shall be effective and binding unless such waiver shall be in a written instrument or instruments signed by each party claimed to have given or consented to such waiver and each party affected by such waiver. Except to the extent that the party or parties claimed to have given or consented to a waiver may have otherwise agreed in writing, no such waiver shall be deemed a waiver or relinquishment of any other term, provision, agreement, act, obligation or right granted under this Agreement, or any preceding or subsequent breach thereof. No forbearance by a party to seek a remedy for any noncompliance or breach by another party hereto shall be deemed to be a waiver by such forbearing party of its rights and remedies

with

respect to such noncompliance or breach, unless such waiver shall be in a written instrument or instruments signed by the forbearing party.

(iv) REMEDIES CUMULATIVE

The remedies of each party under this Agreement are cumulative and shall not exclude any other remedies to which such party may be lawfully entitled.

(v) SEVERABILITY

If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be determined to be invalid, illegal or unenforceable under present or future laws, then, and in that event:

(i) The performance of the offending term or provision (but only to the extent its application is invalid, illegal or unenforceable) shall be excused as if it had never been incorporated into this Agreement, and in lieu of such excused provision, there shall be added a provision as similar in terms and amount to such excused provisions as may be possible and be legal, valid and enforceable; and

(ii) The remaining part of this Agreement (including the application of the offending term or provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not be affected thereby, and shall continue in full force and effect to the fullest extent provided by law.

(vi) PARTIES IN INTEREST

Notwithstanding anything else to the contrary herein, nothing in this Agreement shall confer any rights or remedies under or by reason of this Agreement on any persons other than the parties hereto and their respective successors and assigns, if any, as may be permitted hereunder, nor shall anything in this Agreement relieve or discharge the obligation or liability of any third party to any party to this Agreement, nor shall any provision give any third person any right of subrogation or action over or against any party to this Agreement. Notwithstanding the prior sentence, the parties acknowledge that the subsidiaries of the Grantee and the Grantor and their respective successors and assigns are a third party beneficiary of this Agreement.

(c) ENFORCEMENT

(i) APPLICABLE LAW

This Agreement and the rights and remedies of each party arising out of or relating to this Agreement (including, without limitation, equitable remedies) shall (with the exception of the applicable securities laws) be solely governed by, interpreted under, and construed and enforced in accordance with the laws (without regard to the conflicts of law principles) of the State of Nevada, as if this Agreement were made, and as if its obligations are to be performed, wholly with in the State of Nevada.

(ii) CONSENT TO JURISDICTION: SERVICE PROCESS

Any "action or proceeding" (as such term is defined below) arising out of or relating to this Agreement shall be filed in and heard and litigated solely before the state courts of Nevada. Each party generally and unconditionally accepts the exclusive jurisdiction of such courts and venue therein; consents to the service of process in any such action or proceeding by certified or registered mailing of the summons and complaint in accordance with the notice provisions of this Agreement; and waives any defense or right to object to venue in said courts based upon the doctrine of "forum non conveniens" the Term "action or proceeding" is defined as any and all claims, suits, actions, hearings, arbitrations or other similar proceedings, including appeals and petitions therefrom, whether formal or informal, governmental or non- governmental, or civil or criminal.

(iii) WAIVER OF RIGHTS TO JURY TRIAL

Each party hereby waives such party's respective right to a jury trial of any claim or cause of action based upon or arising out of this Agreement. Each party acknowledges that this waiver is a material inducement to each other party hereto to enter into the transaction contemplated hereby; that each other party has already relied upon this waiver in entering into this Agreement; and that each other party will continue to rely on this waiver in their future dealings. Each party warrants and represents that such party has reviewed this waiver with such party's legal counsel, and that such party has knowingly and voluntarily waived its jury trial rights following consultation with such legal counsel.

(d) ASSIGNMENT

Provided in this Agreement the Grantee may not sell, license, transfer or assign (whether direct or indirect, merger, consolidations, conversion, sale of assets, sale or exchange of securities, or by operation of law, or otherwise) any of its rights or interests or delegate its duties or obligations under this Agreement, in whole or in part, including to any Subsidiary or any Affiliate, without the prior written consent of the Grantee which consent may be withheld in such other party's sole discretion.

(e) COUNTERPARTS; ELECTRONICALLY TRANSMITTED DOCUMENTS

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument, binding on all parties hereto. Any signature page of its Agreement may be detached from any counterpart of this Agreement and reattached to any other counterpart of this Agreement identical in form hereto by having attached to it one or more additional signature pages. If a copy or counterpart of this Agreement is originally executed and such copy or counterpart is thereafter transmitted electronically by facsimile or similar device, such facsimiled document shall for all purposes be treated as if manually signed by the party whose facsimile signature appears.

WHEREFORE, the parties hereto have, for purposes of this Agreement, executed this Agreement in Vancouver, British Columbia, Canada, as of the date first herinabove set forth.

THE GRANTOR                  PINNACLE OIL INTERNATIONAL INC.,
                             a Nevada corporation

                             By:       /s/ R. Dirk Stinson
                                  --------------------------------
                                  R. Dirk Stinson, President


THE GRANTEE                  PINNACLE OIL CANADA INC.

                             By:       /s/ R. Dirk Stinson
                                  -------------------------------
                                  R. Dirk Stinson, President

EXHIBIT 10.15

American SFD Data Licence Agreement

THIS AGREEMENT made as of April 1, 1997

BETWEEN:

PINNACLE OIL INTERNATIONAL INC.

a Nevada corporation whose principal executive office is located at 380 - 1090 West Georgia Street Vancouver, B.C., Canada, V6E 3V7

(the "Grantor")

OF THE FIRST PART

AND:

PINNACLE OIL INC.

a Nevada corporation whose principal executive office is located at #380 - 1090 West Georgia Street, Vancouver, B.C. V6E 3V7

(the "Grantee")

OF THE SECOND PART

WHEREAS:

1. The Grantor has the worldwide right to the use of certain data known as SFD Data (hereinafter defined) as it relates to the identification and exploitation of Hydrocarbons (as hereinafter defined) pursuant to an agreement dated as of August 1, 1996, and made between (among others) Momentum Resources Corporation ("Momentum") as the owner of the technology which generates the SFD Data, and the Grantor (the "Restated Technology Agreement"), a copy of which is attached to this Agreement as a Schedule;

2. Pursuant to the Restated Technology Agreement, Momentum has agreed with the Grantor that it will use its best efforts to survey, using the Stress Field Detector (as hereinafter defined), certain geographic areas throughout the world which will have been preselected by both Momentum and the Grantor from time to time during the term of the Restated Technology Agreement, and to provide all raw SFD Data resulting from such surveys to the Grantor for its exclusive use for the identification and exploitation of Hydrocarbons in accordance with the terms of the Restated Technology Agreement;

3. The Restated Technology Agreement further provides that the surveys are to be conducted by George Liszicasz (the original inventor of the technology) or, under the general supervision of George Liszicasz, by such personnel of Momentum as have appropriate levels of training to enable them to conduct such surveys. Under the Restated Technology Agreement, Momentum has agreed with the Grantor that it will provide not less than 500 hours per year of trained manpower to generate the SFD Data with respect to the pre-selected geographic areas to be surveyed;

4. The Restated Technology Agreement further provides, (as does the employment agreement dated as of April 1, 1997, and between the Grantor and Liszicasz (the "Liszicasz Employment Agreement") that Liszicasz will be available to provide the required manpower until at least December 31, 2005, unless Liszicasz is unable to render such services by reason of death or disability (as that term is defined in the Liszicasz Employment Agreement);

5. The Restated Technology Agreement also provides that Liszicasz shall initially interpret all raw SFD Data provided to the Grantor by Momentum to ascertain whether there is a reasonable likelihood that there are commercially extractable amounts of Hydrocarbons in any given surveyed area. Further, Liszicasz and the Grantor have agreed that they will both use their best efforts to train mutually acceptable personnel of the Grantor to conduct such interpretation under the general supervision of Liszicasz as soon as is reasonably practical;

6. The Restated Technology Agreement also provides that the Grantor may fulfil its obligation to Momentum to use its best efforts to exploit a commercially viable area by means of a wholly-owned subsidiary, and that the Grantor may license any or all of its rights to a wholly-owned subsidiary;

7. The Grantee is a wholly-owned subsidiary of the Grantor, and the parties wish to enter into this Licence Agreement with respect to both the generation and the interpretation of raw American SFD Data (as hereinafter defined), and to the exploitation of Hydrocarbons identified by such interpretation.

NOW THIS AGREEMENT WITNESSES that in consideration of the premises the parties covenant and agree as follows:

1. DEFINITIONS

In this Agreement:

(a) The terms "Hydrocarbons", "SFD Data", "SFD Technology" and "Stress Field Detector" shall have the meanings ascribed to them in paragraph 1 of the Restated Technology Agreement;

(b) "American SFD Data" means all SFD Data relating to the sovereign territory of the United States of America.

(c) "American Prospect" means an area in the sovereign territory of the United States of America which has been identified, following interpretation of American SFD Data, as one in which there is a reasonable likelihood of commercially extractible amounts of Hydrocarbons.

(d) "Subsidiaries" means any subsidiary of a party (or subsidiary of a subsidiary of a party) regardless of form of entity, such as a corporation, partnership, limited partnership, or limited liability company, with the exception of joint ventures and third party arrangements described in this Agreement.

2. GRANT OF LICENCE FOR American SFD DATA

2.1 In consideration of the licence fee set out in paragraph 4, the Grantor hereby grants to the Grantee an exclusive licence, for the periods set out in paragraph 6, to use and exploit the American SFD Data generated by Momentum for the Grantor under the Restated Technology Agreement.

2.2 By way of fulfilling its obligation under this Licence Agreement to supply an amount of American SFD Data sufficient for the Grantee to commercially exploit the Hydrocarbons identified using such data, the Grantor covenants with the Grantee that, when pre-selecting Designated Search Areas together with Momentum under the provisions of paragraph 2 of the Restated Technology Agreement, the Grantor will at all times during the term of this Licence Agreement use its best efforts to select sufficient surveys in American territory to ensure to the Grantee a supply of American SFD Data sufficient to enable the Grantee to carry on a commercially viable business, and to fulfil its obligations under all agreements with third parties respecting the use of American SFD Data.

2.3 The Grantor will also use its best efforts to ensure the availability to the Grantee of the services of Liszicasz to interpret or cause to be interpreted, for the benefit of the Grantee, the American SFD Data supplied under this Licence Agreement. To better secure the availability of Liszicasz or other trained personnel for such purposes, the Grantee may itself enter into appropriate employment contracts with Liszicasz and/or such other trained personnel. In determining the amount of time which Liszicasz and/or other trained personnel must devote to the interpretation of the American SFD Data, as a proportion of world-wide SFD Data, the parties will act reasonably, basing the determination on, among other things:

(a) the obligations of the Grantee under third party agreements, to the extent that the Grantor has been made aware of such obligations; and

(b) an estimate of the value of commercially extractable Hydrocarbons identified in the

United States of America as a proportion of the total value of the commercially extractible Hydrocarbons identified world-wide.

3. COMMERCIAL EXPLOITATION OF American SFD DATA

Within 180 days after the Grantee has interpreted, or obtained the interpretation of, the American SFD Data, and has identified an American Prospect, the Grantee will, either directly or indirectly through joint ventures and/or other third parties, use its best efforts to commercially and economically exploit the American Prospect. Such exploitation may occur through one or a combination of the following, as selected by the Grantee in its reasonable discretion:

(i) the direct acquisition by the Grantee and/or a wholly owned Subsidiary of the legal rights for the further exploitation, development and production of Hydrocarbons with respect to the American Prospect;

(ii) the indirect acquisition of such rights through joint ventures or other arrangements with third parties; and/or

(iii) the sale by the Grantee and/or its joint venture partners of such rights.

The Grantee will use its best efforts to commercially exploit the American Prospect through one or more of the foregoing methods, and will diligently pursue such efforts unless it is not, in the opinion of either the Grantee or the Grantor, commercially reasonable to make any such acquisition and/or pursue such exploration development and/or production and/or enter into any such agreement with a joint venture partner and/or other third parties.

4. LICENCE FEE

4.1 Amount of Fee

In consideration of this grant of the licence with respect to the American SFD Data, the Grantee shall pay to the Grantor a fee (the "Licence Fee") equal to 50% of the "Gross Revenues" (as such term is defined below) actually received by the Grantee and/or its Subsidiaries with respect to the commercial exploitation of the Hydrocarbons identified in each American Prospect.

4.2 Gross Revenues Defined

The term "Gross Revenues" generally means the aggregate of all gross revenues received by the Grantee and/or its Subsidiaries from the commercial exploitation of Hydrocarbons calculated by way of example and not limitation as follows:

(i) If the Grantee and/or its Subsidiaries indirectly acquire the legal rights for the further exploration, development and production of Hydrocarbons with respect to an American Prospect through joint ventures and/or other arrangements with third parties, then the Gross Revenues will mean the cash flows received by the Grantee and/or its Subsidiaries from such joint venture and/or third party, whether from the sale of Hydrocarbons or the sale by the joint venture and/or third party of its interest in such legal rights.

(ii) If the Grantee and/or its Subsidiaries sell or transfer the legal rights for (or "leads" relating to) an American Prospect, then the Gross Revenues from such American Prospect will be the gross consideration received by the Grantee and/or its Subsidiaries as a result of such sale or transfer.

(iii) If the Grantee and/or its Subsidiaries directly acquire the legal rights for the further exploration, development and productions of Hydrocarbons with respect to an American Prospect, and independently extract and sell Hydrocarbons from such American Prospect, then the Gross Revenues from such an American Prospect will be the gross cash flows received by the Grantee and/or its Subsidiaries from the sale of such Hydrocarbons.

The Grantee and/or its Subsidiaries acknowledge and agree that they shall not be entitled to deduct any expenses, costs, capital or equity investment and/or loans against any calculation of Gross Revenues when determining the Licence Fee owing to the Grantor (such as acquisition, development, extraction, marketing and/or distribution costs which would be incurred should the Grantee and/or its Subsidiaries directly exploit the Prospect without joint venture partners), it being understood that the Grantor has an interest in Gross Revenues generated from the Hydrocarbons identified in an American Prospect without offset or deduction. Notwithstanding the foregoing, the Grantor understands and agrees that Gross Revenues arising from distributions from joint ventures and/or third party arrangements may, based upon the terms and conditions of such arrangements, be made after the joint venture has deducted costs, expenses and reserves, or repaid capital provided by the joint venture and/or other third party, and the Grantor further agrees that it shall have no right to "gross up" the Gross Revenues to reflect the pre-distribution deduction by the joint

venture or other third party of such costs, expenses and reserves and/or repayment of capital.

The parties further acknowledge that the foregoing examples are merely examples, and do not fully reflect many methods by which the Grantee may commercially and economically exploit an American Prospect, with and without the participation of joint venture and/or other third parties. Accordingly, the parties agree that the Licence Fee shall be liberally interpreted to apply to each and every transaction by which the Grantee and/or any of its Subsidiaries exploit the American Prospect to ensure that the Grantor receives such equitable portion of the total return received by the Grantee and/or its Subsidiaries as to enable the Grantor to receive the benefit of its bargain, subject to avoidance of duplicative payments by the Grantee and its Subsidiaries. In order to avoid any disputes or misunderstandings, the parties agree to use their best efforts, while the Grantee is formulating its proposed method to exploit a Prospect, to outline in writing, prior to committing to such method, the economics of the proposed method of exploitation consistent with the terms of this Agreement. Should the parties be unable to agree upon such economics, they agree that such issue shall be resolved by arbitration (an "Arbitration Proceeding") before the American Arbitration Association (the "Arbitration Authority") located in Carson City, Nevada, according to the rules and practices of the Arbitration Authority from time-to-time in force, unless the parties mutually agree upon a different Arbitration Authority and/or different location for such Arbitration Proceeding.

4.3 Terms of Payment of Licence Fee

The Licence Fee shall be paid to the Grantor within 15 days of the end of each quarter in which the Grantee and/or any of its Subsidiaries collect Gross Revenues with respect to any American Prospect. The obligation to pay the Licence Fee shall continue following the termination of this Agreement with respect to any American Prospect for which the Licence Fee was provided by the Grantor to the Grantee on or before the effective date of such termination.

4.4 Reports

Within 15 days after the end of each quarter, irrespective of whether any Gross Revenues have been collected by the Grantee and/or any of its Subsidiaries or whether any sum is then due to the Grantor, the Grantee shall deliver to the Grantor a complete and accurate written statement setting forth;

(i) total Gross Revenues earned or accrued from each American Prospect in such quarter;

(ii) total Gross Revenues collected from each American Prospect in such quarter;

(iii) the Licence Fee earned from each American Prospect in such quarter;

(iv) the Grantee's calculation of the amount of the Licence Fee then due the Grantor for the period covered by such report; and

(v) such other information reasonably requested by the Grantor with respect to each American Prospect, in specific detail so as to allow an audit of underlying documents.

4.5 Books and Records

During the period that the Grantee shall be obligated to pay to the Grantor a Licence Fee, the Grantee shall keep or cause to be kept accurate, complete and up-to-date books of accounts separately stating records of all revenues earned, accrued and/or collected with respect to each American Prospect, and all costs, expenses, and investments in such American Prospect.

4.6 Inspection

During the period that the Grantee and/or its Subsidiaries shall be obligated to pay to the Grantor the Licence Fee, the Grantor or its authorized representatives shall have the right to inspect all records of the Grantee and/or its Subsidiaries with respect to the American Prospect, and to make copies of said records utilizing the facilities the Grantee and/or its Subsidiaries without charge, and shall have free and full access thereto on reasonable notice during the normal business hours of the Grantee and/or its Subsidiaries. If such inspection or audit reveals an underpayment by the Grantee and/or its Subsidiaries of the Licence Fee and/or any other amounts then due to the Grantor under this Agreement, the Grantee and/or its Subsidiaries shall upon written notice pay to the Grantor the balance of all such amounts found to be due pursuant to such audit inspection, together with interest thereon at the "best commercial customer" rate of the largest bank in terms of assets in the eleventh district of the Federal Reserve, plus 4% per annum from the date such amounts first became due to the Grantor, until all such amounts have been paid in full. If such inspection or audit discloses that, for the annual period reviewed or audited, the Grantee has underpaid or understated its Licence Fee obligation under this Agreement by 5% or more, then the Grantee shall also pay the reasonable professional fees of the independent representatives engaged to conduct or review such inspection or audit.

4.7 Security Interest Granted to the Grantor

As security for the Grantee's obligation to pay the Licence Fee to the Grantor, the Grantee agrees to execute a Security Agreement in a form reasonably acceptable to the Grantor with respect to any interest in any American Prospect acquired by the Grantee and/or its Subsidiaries, which will grant to the Grantor a security interest in any Gross Revenues generated by the Grantee and/or its Subsidiaries in such American Prospect. The grant of the security interest shall not exceed the anticipated aggregate Licence Fee payable to the Grantor with respect to such American Prospects.

5. TERM OF LICENCE

The term of the licence granted under this Agreement will correspond in all respects, including provisions for extension and for early termination, with the term of the Restated Technology Agreement.

6. REPRESENTATIONS AND WARRANTIES OF PARTIES

Each of the parties to this Agreement hereby represents and warrants to each of the other parties of this Agreement, each of which is deemed to be a separate representation and warranty, as follows:

(a) Organization, Power and Authority

Such party, if an entity, is duly organized, validly existing and in good standing under the laws of its state, territory or province of incorporation or organization, and has all requisite corporate or other power and authority to enter into this Agreement.

(b) Authorization and Validity of Agreement

The execution and delivery of this Agreement by such party, and the performance by such party of the transactions herein contemplated, have, if such party is an entity, been duly authorized by its governing organizational documents, and are not prohibited by its governing organization documents, and no further corporate or other action on the part of such party is necessary to authorize this Agreement, or the performance of such transactions. This Agreement has been duly executed and delivered by such party and, assuming due authorization, execution and delivery by all of the other parties hereto, is valid and binding upon such party in execution and delivery by all of the other parties hereto, is valid and binding upon such party in accordance with its terms, except as limited by:

(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditor rights generally; and

(ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

(c) No Breach or Conflict

Neither the execution nor delivery of this Agreement, nor the performance by such party of the transactions contemplated herein:

(i) if such party is an entity, will breach or conflict with any of the provisions of such party's governing organizational documents; nor

(ii) to the best of such party's knowledge and belief, will violate or constitute an event of default under any agreement or other instrument to which such party is a party.

7. INDEMNIFICATION; DEFENSE OF THIRD-PARTY CLAIMS

The provisions of paragraph 12 of the Restated Technology Agreement entitled "Indemnification; Defense of Third-Party Claims" apply to this Agreement.

8. MISCELLANEOUS

(a) Cooperation

Each party agrees, without further consideration, to cooperate and diligently perform any further acts, deeds and things, and to execute and deliver any documents that may be reasonably necessary or otherwise reasonably required to consummate, evidence, confirm and/or carry out the intent and provisions of this Agreement, all without undue delay or expense.

(b) Interpretation

(i) Survival

All representations and warranties made by any party in connection with any transaction contemplated by this Agreement shall, irrespective of any investigation made by or on behalf of any other party hereto, survive the execution and delivery of this Agreement, and the performance or consummation of any transaction described in this Agreement.

(ii) Entire Agreement/No Collateral Representations

Each party expressly acknowledges and agrees that this Agreement, and the agreements and documents referenced herein;

(i) is the final, complete and exclusive statement of the agreement

of the parties with respect to the subject matter
hereof;

(ii) supersedes any prior or contemporaneous agreements, memorandums, proposals, commitments, guaranties, assurances, communications, discussions, promises, representations, understandings, conduct, acts, courses of dealing, warranties, interpretations or terms of any kind, whether oral or written, and that may such prior agreements are of no force or effect except as expressly set forth herein; and

(iii) may not be varied, supplemented or contradicted by evidence of prior agreements, or by evidence of subsequent oral agreements.

No prior drafts of this Agreement, and no words or phrases from any prior drafts, shall be admissible into evidence in any action or suit involving this Agreement.

(iii) Amendment; Waiver; Forbearance

Except as expressly provided otherwise herein, neither this Agreement nor any of the terms, provisions, obligations or rights contained herein, may be amended, modified, supplemented, augmented, rescinded, discharged or terminated (other than by performance), except by a written instrument or instruments signed by all of the parties to this Agreement. No waiver of any breach of any term, provision or agreement contained herein, or of the performance of any act or obligation under this Agreement, or of any extension of time for performance of any such act or obligation, or of any right granted under this Agreement, shall be effective and binding unless such waiver shall be in a written instrument or instruments signed by each party claimed to have given or consented to such waiver and each party affected by such waiver. Except to the extent that the party or parties claimed to have given or consented to a waiver may have otherwise agreed in writing, no such waiver shall be deemed a waiver or relinquishment of any other term, provision, agreement, act, obligation or right granted under this Agreement, or any preceding or subsequent breach thereof. No forbearance by a party to seek a remedy for any noncompliance or breach by another party hereto shall be deemed to be a waiver by such forbearing party of its rights and remedies with respect to such noncompliance or breach, unless such waiver shall be in a written instrument or instruments signed by the forbearing party.

(iv) Remedies Cumulative

The remedies of each party under this Agreement are cumulative and shall not exclude any other remedies to which such party may be lawfully entitled.

(v) Severability

If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be determined to be invalid, illegal or unenforceable under present or future laws, then, and in that event:

(i) The performance of the offending term or provision (but only to the extent its application is invalid, illegal or unenforceable) shall be excused as if it had never been incorporated into this Agreement, and in lieu of such excused provision, there shall be added a provision as similar in terms and amount to such excused provisions as may be possible and be legal, valid and enforceable; and

(ii) The remaining part of this Agreement (including the application of the offending term or provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not be affected thereby, and shall continue in full force and effect to the fullest extent provided by law.

(vi) Parties in Interest

Notwithstanding anything else to the contrary herein, nothing in this Agreement shall confer any rights or remedies under or by reason of this Agreement on any persons other than the parties hereto and their respective successors and assigns, if any, as may be permitted hereunder, nor shall anything in this Agreement relieve or discharge the obligation or liability of any third party to any party to this Agreement, nor shall any provision give any third person any right of subrogation or action over or against any party to this Agreement. Notwithstanding the prior sentence, the parties acknowledge that the subsidiaries of the Grantee and the Grantor and their respective successors and assigns are a third party beneficiary of this Agreement.

(c) Enforcement

(i) Applicable Law

This Agreement and the rights and remedies of each party arising out of or relating to this Agreement (including, without limitation, equitable remedies) shall (with the exception of the applicable securities laws) be solely governed by, interpreted under, and construed and enforced in accordance with the laws (without regard to the conflicts of law principles) of the State of Nevada, as if this Agreement were made, and as if its obligations are to be performed, wholly with in the State of Nevada.

(ii) Consent to Jurisdiction: Service Process

Any "action or proceeding" (as such term is defined below) arising out of or relating to this Agreement shall be filed in and heard and litigated solely before the state courts of Nevada. Each party generally and unconditionally accepts the exclusive jurisdiction of such courts and venue therein; consents to the service of process in any such action or proceeding by certified or registered mailing of the summons and complaint in accordance with the notice provisions of this Agreement; and waives any defense or right to object to venue in said courts based upon the doctrine of "forum non conveniens" the Term "action or proceeding" is defined as any and all claims, suits, actions, hearings, arbitrations or other similar proceedings, including appeals and petitions therefrom, whether formal or informal, governmental or non- governmental, or civil or criminal.

(iii) Waiver of Rights to Jury Trial

Each party hereby waives such party's respective right to a jury trial of any claim or cause of action based upon or arising out of this Agreement. Each party acknowledges that this waiver is a material inducement to each other party hereto to enter into the transaction contemplated hereby; that each other party has already relied upon this waiver in entering into this Agreement; and that each other party will continue to rely on this waiver in their future dealings. Each party warrants and represents that such party has reviewed this waiver with such party's legal counsel, and that such party has knowingly and voluntarily waived its jury trial rights following consultation with such legal counsel.

(d) Assignment

Provided in this Agreement the Grantee may not sell, license, transfer or assign (whether direct or indirect, merger, consolidations, conversion, sale of assets, sale or exchange of securities, or by operation of law, or otherwise) any of its rights or interests or delegate its duties or obligations under this Agreement, in whole or in

part, including to any Subsidiary or any Affiliate, without the prior written consent of the Grantee which consent may be withheld in such other party's sole discretion.

(e) Counterparts; Electronically Transmitted Documents

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument, binding on all parties hereto. Any signature page of its Agreement may be detached from any counterpart of this Agreement and reattached to any other counterpart of this Agreement identical in form hereto by having attached to it one or more additional signature pages. If a copy or counterpart of this Agreement is originally executed and such copy or counterpart is thereafter transmitted electronically by facsimile or similar device, such facsimiled document shall for all purposes be treated as if manually signed by the party whose facsimile signature appears.

WHEREFORE, the parties hereto have, for purposes of this Agreement, executed this Agreement in Vancouver, British Columbia, Canada, as of the date first herinabove set forth.

THE GRANTOR                 PINNACLE OIL INTERNATIONAL INC.,
                            a Nevada corporation

                            By:     /s/ R. Dirk Stinson
                                ----------------------------
                                R. Dirk Stinson, President


THE GRANTEE                 PINNACLE OIL INC.

                            By:     /s/ R. Dirk Stinson
                                -----------------------------
                                R. Dirk Stinson, President

EXHIBIT 10.16

Cost Recovery Agreement

THIS AGREEMENT made as of April 1, 1997

BETWEEN:

PINNACLE OIL INTERNATIONAL INC.

a Nevada corporation whose principal executive office is located at 380 - 1090 West Georgia Street Vancouver, B.C., Canada, V6E 3V7

("Pinnacle International")

OF THE FIRST PART

AND:

PINNACLE OIL CANADA INC.
a Canadian federal corporation registered in

British Columbia as an extra-provincial company whose principal executive office is located at #380 - 1090 West Georgia Street, Vancouver, B.C. V6E 3V7

("PinCan")

OF THE SECOND PART

AND:

PINNACLE OIL INC.

a Nevada corporation whose principal executive office is located at 380 - 1090 West Georgia Street Vancouver, B.C., Canada, V6E 3V7

("PinUS")

OF THE THIRD PART

WHEREAS:

A. PinCan and PinUS are both wholly owned subsidiaries of Pinnacle International;

B. Pinnacle International has entered into technology licence agreements (the "Licence Agreements") with each of PinCan and PinUS

(together called the "Licencees"), pursuant to which the Licencees are to use their best efforts to

exploit Hydrocarbons (as defined in the Licence Agreements) in Canada and the United States, using data obtained from Pinnacle International;

C. In order to fulfil their obligations under the Licence Agreements, the Licencees will need to use certain equipment now owned by Pinnacle International, and which Pinnacle International has agreed to make available to the Licencees;

D. At the same time, the parties have agreed that PinCan will supply certain management services to both Pinnacle International and PinUS, using qualified personnel employed by PinCan for this purpose;

E. Both Licence Agreements provide for a licence fee to be paid to Pinnacle International based on a percentage of gross revenue from the commercial exploitation of Hydrocarbons, without any provisions for adjustments to take into account the use of Pinnacle International's equipment by the Licencees, and the supply of management services to Pinnacle International and PinUS by PinCan; and

F. The parties desire to enter into this Agreement to set out the basis for appropriate cost recovery by each party from the others in respect of the leasing of equipment and the supply of management services by PinCan.

NOW THIS AGREEMENT WITNESSES that in consideration of the premises the parties covenant and agree as follows:

1. DEFINITIONS

In this Agreement:

(a) "Data Acquisition Technology", means all technology owned by Pinnacle International which is required by the Licencees to enable them to fulfil their obligations under the Licence Agreements and under all agreements with third parties, including, without limitation, computer hardware and supporting software and communications technology;

(b) "Equipment" means all other equipment owned or leased by Pinnacle International which Pinnacle International has agreed to make available to the Licencees on a cost recovery basis, including motor vehicles, airplanes and other modes of transportation, and ancillary supplies;

(c) "Management Services" means services supplied to Pinnacle International and PinUS by PinCan personnel relating to administration, finance, accounting, securities compliance, public relations and negotiations with third parties on behalf of Pinnacle International and PinUS.

2. AVAILABILITY OF DATA ACQUISITION TECHNOLOGY

During the currency of the Licence Agreement, Pinnacle International will make its Data Acquisition Technology available to the Licencees for sufficient periods to enable them to fulfil their obligations under the technology agreements and their obligations under all third party agreements.

3. EQUIPMENT LEASE PAYMENTS TO PINNACLE INTERNATIONAL

During the currency of the Licence Agreements, Pinnacle International will make its Equipment available to the Licencees for sufficient periods to assist them to fulfil their obligations under the technology agreements and their obligations under all third party agreements, for lease payments to be determined by the parties from time to time, based on the per diem use of the Equipment by the Licencees, with the intent that Pinnacle International will recover all of its own actual cost of the Equipment, plus a reasonable competitive market return on capital.

4. MANAGEMENT FEES TO PINCAN

During the currency of the Licence Agreements, PinCan will supply Management Services to Pinnacle International in connection with the world- wide activities of Pinnacle International and to PinUS in connection with its activities in the United States, for an annual fee equal to the actual employment costs of all personnel engaged by PinCan to supply such Management Services, (including all reasonable expenses incurred by such personnel in the course of their employment) plus an annual fee of U.S. $20,000.

5. PAYMENT

Each of the parties will account to the others, on a quarterly basis, for the amounts due to the others for Equipment lease payments and for fees for Management Services, and adjustment amounts will be paid from one party to the others, annually, so as to result in

the full recovery by all three parties of all the payments and fees contemplated by this Agreement.

6. MISCELLANEOUS

(a) Cooperation

Each party agrees, without further consideration, to cooperate and diligently perform any further acts, deeds and things, and to execute and deliver any documents that may be reasonably necessary or otherwise reasonably required to consummate, evidence, confirm and/or carry out the intent and provisions of this Agreement, all without undue delay or expense.

(b) Interpretation

(i) Survival

All representations and warranties made by any party in connection with any transaction contemplated by this Agreement shall, irrespective of any investigation made by or on behalf of any other party hereto, survive the execution and delivery of this Agreement, and the performance or consummation of any transaction described in this Agreement.

(ii) Entire Agreement/No Collateral Representations

Each party expressly acknowledges and agrees that this Agreement, and the agreements and documents referenced herein;

(i) is the final, complete and exclusive statement of the agreement of the parties with respect to the subject matter hereof;

(ii) supersedes any prior or contemporaneous agreements, memorandums, proposals, commitments, guarantees, assurances, communications, discussions, promises, representations, understandings, conduct, acts, courses of dealing, warranties, interpretations or terms of any kind, whether oral or written, and that may such prior agreements are of no force or effect except as expressly set forth herein; and

(iii) may not be varied, supplemented or contradicted by evidence of prior agreements, or by evidence of subsequent oral agreements.

No prior drafts of this Agreement, and no words or phrases from any prior drafts, shall be admissible into evidence in any action or suit involving this Agreement.

(iii) Amendment; Waiver; Forbearance

Except as expressly provided otherwise herein, neither this Agreement nor any of the terms, provisions, obligations or rights contained herein, may be amended, modified, supplemented, augmented, rescinded, discharged or terminated (other than by performance), except by a written instrument or instruments signed by all of the parties to this Agreement. No waiver of any breach of any term, provision or agreement contained herein, or of the performance of any act or obligation under this Agreement, or of any extension of time for performance of any such act or obligation, or of any right granted under this Agreement, shall be effective and binding unless such waiver shall be in a written instrument or instruments signed by each party claimed to have given or consented to such waiver and each party affected by such waiver. Except to the extent that the party or parties claimed to have given or consented to a waiver may have otherwise agreed in writing, no such waiver shall be deemed a waiver or relinquishment of any other term, provision, agreement, act, obligation or right granted under this Agreement, or any preceding or subsequent breach thereof. No forbearance by a party to seek a remedy for any noncompliance or breach by another party hereto shall be deemed to be a waiver by such forbearing party of its rights and remedies with respect to such noncompliance or breach, unless such waiver shall be in a written instrument or instruments signed by the forbearing party.

(iv) Remedies Cumulative

The remedies of each party under this Agreement are cumulative and shall not exclude any other remedies to which such party may be lawfully entitled.

(v) Severability

If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be determined to be invalid, illegal or unenforceable under present or future laws, then, and in that event:

(i) The performance of the offending term or provision (but only to the extent its application is invalid, illegal or unenforceable) shall be excused as if it had never been incorporated into this Agreement, and in lieu of such excused provision, there shall be added a provision as similar in terms and amount to such excused provisions as may be possible and be legal, valid and enforceable; and

(ii) The remaining part of this Agreement (including the application of the offending term or provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not be affected thereby, and shall continue in full force and effect to the fullest extent provided by law.

(vi) Parties in Interest

Notwithstanding anything else to the contrary herein, nothing in this Agreement shall confer any rights or remedies under or by reason of this Agreement on any persons other than the parties hereto and their respective successors and assigns, if any, as may be permitted hereunder, nor shall anything in this Agreement relieve or discharge the obligation or liability of any third party to any party to this Agreement, nor shall any provision give any third person any right of subrogation or action over or against any party to this Agreement. Notwithstanding the prior sentence, the parties acknowledge that the subsidiaries of the Grantee and the Grantor and their respective successors and assigns are a third party beneficiary of this Agreement.

(c) Enforcement

(i) Applicable Law

This Agreement and the rights and remedies of each party arising out of or relating to this Agreement (including, without limitation, equitable remedies) shall (with the exception of the applicable securities laws) be solely governed by, interpreted under, and construed and enforced in accordance with the laws (without regard to the conflicts of law principles) of the State of Nevada, as if this Agreement were made, and as if its obligations are to be performed, wholly with in the State of Nevada.

(ii) Consent to Jurisdiction: Service Process

Any "action or proceeding" (as such term is defined below) arising out of or relating to this Agreement shall be filed in and heard and litigated solely before the state courts of Nevada. Each party generally and unconditionally accepts the exclusive jurisdiction of such courts and venue therein; consents to the service of process in any such action or proceeding by certified or registered mailing of the summons and complaint in accordance with the notice provisions of this Agreement; and waives any defense or right to object to venue in said courts based upon the doctrine of "forum non conveniens" the Term "action or proceeding" is defined as any and all claims, suits, actions, hearings, arbitrations or other similar proceedings, including appeals and petitions therefrom, whether formal or informal, governmental or non-governmental, or civil or criminal.

(iii) Waiver of Rights to Jury Trial

Each party hereby waives such party's respective right to a jury trial of any claim or cause of action based upon or arising out of this Agreement. Each party acknowledges that this waiver is a material inducement to each other party hereto to enter into the transaction contemplated hereby; that each other party has already relied upon this waiver in entering into this Agreement; and that each other party will continue to rely on this waiver in their future dealings. Each party warrants and represents that such party has reviewed this waiver with such party's legal counsel, and that such party has knowingly and voluntarily waived its jury trial rights following consultation with such legal counsel.

(d) Assignment

Provided in this Agreement the Grantee may not sell, license, transfer or assign (whether direct or indirect, merger, consolidations, conversion, sale of assets, sale or exchange of securities, or by operation of law, or otherwise) any of its rights or interests or delegate its duties or obligations under this Agreement, in whole or in part, including to any Subsidiary or any Affiliate, without the prior written consent of the Grantee which consent may be withheld in such other party's sole discretion.

(e) Counterparts; Electronically Transmitted Documents

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument, binding on all parties hereto. Any signature page of its Agreement may be detached from any counterpart of this Agreement and reattached to any other counterpart of this Agreement identical in form hereto by having attached to it one or more additional signature pages. If a copy or counterpart of this

Agreement is originally executed and such copy or counterpart is thereafter transmitted electronically by facsimile or similar device, such facsimiled document shall for all purposes be treated as if manually signed by the party whose facsimile signature appears.

WHEREFORE, the parties hereto have, for purposes of this Agreement, executed this Agreement in Vancouver, British Columbia, Canada, as of the date first herinabove set forth.

PINNACLE OIL INTERNATIONAL INC.,
a Nevada corporation

By:     /s/ R. Dirk Stinson
   --------------------------
   R. Dirk Stinson, President

PINNACLE OIL CANADA INC.

By:   /s/ R. Dirk Stinson
   --------------------------
   R. Dirk Stinson, President

PINNACLE OIL INC.

By:   /s/ R. Dirk Stinson
   --------------------------
   R. Dirk Stinson, President

EXHIBIT 10.17

ASSIGNMENT AGREEMENT

THIS AGREEMENT made effective as of the 15th day of September, 1997,

BETWEEN:

PINNACLE OIL INTERNATIONAL, INC., (hereinafter referred to as "Assignor")

- and -

PINNACLE OIL CANADA INC., (hereinafter referred to as "Assignee")

WHEREAS the Assignor, Assignee and the third party listed in Schedule "A" (the "Third Party") are parties to the joint venture agreement as described in Schedule "A" (the "Joint Venture Agreement");

AND WHEREAS the Assignor wishes to assign to the Assignee all of the Assignor's right, title, interest and estate in and to the Joint Venture Agreement pertaining to operations in Canada;

NOW THEREFORE in consideration of the mutual covenants and agreements herein set forth, the parties hereto mutually covenant and agree as follows:

1. The Assignor hereby assigns, transfers, sets over and conveys to the Assignee, effective as of the 15th day of September, 1997, (the "Effective Date"), all of its right, title, interest and estate in and to the Joint Venture Agreement pertaining to operations in Canada (the "Assigned Interest"), TO HAVE AND TO HOLD the same unto the Assignee for the Assignee's sole use and benefit absolutely from and after the Effective Date.

2. The Assignee hereby accepts the within assignment and covenants and agrees with the Assignor that it shall be bound by, observe and perform the covenants, duties and obligations contained in the Joint Venture Agreement and to be observed and performed by the Assignor, to the extent that such covenants, duties and obligations relate to the Assigned

Interest and to a period, or arise, as the case may be, on or after the Effective Date, it being the intent and purpose that the Assignee shall to the extent of the Assigned Interest be a party thereto in the place and stead of the Assignor from and after the Effective Date.

3. Notwithstanding the assignment of the Assigned Interest to the Assignee, the Third Party need only look to the Assignor for performance of the duties and obligations of the Assignee pursuant to the Joint Venture Agreement.

4. Nothing herein contained shall be construed as a release of the Assignor from any obligation or liability under the Joint Venture Agreement.

5. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

IN WITNESS WHEREOF the parties hereto have executed and delivered this Agreement as of the day and year first above written.

PINNACLE OIL INTERNATIONAL, INC.

By:      /s/ R. Dirk Stinson
      -----------------------------

Its: _____________________________

PINNACLE OIL CANADA INC.

By:     /s/ R. Dirk Stinson
      ------------------------------

Its: ______________________________

SCHEDULE "A"

THIRD PARTY

Encal Energy Ltd.

JOINT VENTURE AGREEMENT

Exploration Joint Venture Agreement dated September 15, 1997 between Encal Energy Ltd., Pinnacle Oil International Inc., Pinnacle Oil Inc., George Liszicasz, Dirk R. Stinson, Pinnacle Oil Canada Ltd. and Momentum Resources Ltd.

EXHIBIT 10.18

THIS AGREEMENT made effective as of the 1st day of April, 1997,

BETWEEN:

PINNACLE OIL INTERNATIONAL, INC., (hereinafter referred to as "Assignor")

- and -

PINNACLE OIL CANADA INC., (hereinafter referred to as "Assignee")

WHEREAS the Assignor, Assignee and the third party listed in Schedule "A" (the "Third Party") are parties to the joint venture agreement as described in Schedule "A" (the "Joint Venture Agreement");

AND WHEREAS the Assignor wishes to assign to the Assignee all of the Assignor's right, title, interest and estate in and to the Joint Venture Agreement pertaining to operations in Canada;

NOW THEREFORE in consideration of the mutual covenants and agreements herein set forth, the parties hereto mutually covenant and agree as follows:

1. The Assignor hereby assigns, transfers, sets over and conveys to the Assignee, effective as of the 1st day of April, 1997, (the "Effective Date"), all of its right, title, interest and estate in and to the Joint Venture Agreement pertaining to operations in Canada (the "Assigned Interest"), TO HAVE AND TO HOLD the same unto the Assignee for the Assignee's sole use and benefit absolutely from and after the Effective Date.

2. The Assignee hereby accepts the within assignment and covenants and agrees with the Assignor that it shall be bound by, observe and perform the covenants, duties and obligations contained in the Joint Venture Agreement and to be observed and performed by the Assignor, to the extent that such covenants, duties and obligations relate to the Assigned

Interest and to a period, or arise, as the case may be, on or after the Effective Date, it being the intent and purpose that the Assignee shall to the extent of the Assigned Interest be a party thereto in the place and stead of the Assignor from and after the Effective Date.

3. Notwithstanding the assignment of the Assigned Interest to the Assignee, the Third Party need only look to the Assignor for performance of the duties and obligations of the Assignee pursuant to the Joint Venture Agreement.

4. Nothing herein contained shall be construed as a release of the Assignor from any obligation or liability under the Joint Venture Agreement.

5. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

IN WITNESS WHEREOF the parties hereto have executed and delivered this Agreement as of the day and year first above written.

PINNACLE OIL INTERNATIONAL, INC.

By:    /s/ R. Dirk Stinson
      _____________________________

Its:  _____________________________

PINNACLE OIL CANADA INC.

By:    /s/ R. Dirk Stinson
      _____________________________

Its:  _____________________________

SCHEDULE "A"

Encal Energy Ltd.

Exploration Joint Venture Agreement dated February 19, 1997 between Encal Energy Ltd., Pinnacle Oil International Inc., Pinnacle Oil Inc., George Liszicasz, Dirk R. Stinson, Pinnacle Oil Canada Ltd. and Momentum Resources Ltd.

EXHIBIT 10.19

THIS AGREEMENT made effective as of the 1st day of November, 1997,

BETWEEN:

PINNACLE OIL INTERNATIONAL, INC., (hereinafter referred to as "Assignor")

- and -

PINNACLE OIL CANADA INC., (hereinafter referred to as "Assignee")

WHEREAS the Assignor, Assignee and the third party listed in Schedule "A" (the "Third Party") are parties to the joint venture agreement as described in Schedule "A" (the "Joint Venture Agreement");

AND WHEREAS the Assignor wishes to assign to the Assignee all of the Assignor's right, title, interest and estate in and to the Joint Venture Agreement pertaining to operations in Canada;

NOW THEREFORE in consideration of the mutual covenants and agreements herein set forth, the parties hereto mutually covenant and agree as follows:

1. The Assignor hereby assigns, transfers, sets over and conveys to the Assignee, effective as of the 1st day of November, 1997, (the "Effective Date"), all of its right, title, interest and estate in and to the Joint Venture Agreement pertaining to operations in Canada (the "Assigned Interest"), TO HAVE AND TO HOLD the same unto the Assignee for the Assignee's sole use and benefit absolutely from and after the Effective Date.

2. The Assignee hereby accepts the within assignment and covenants and agrees with the Assignor that it shall be bound by, observe and perform the covenants, duties and obligations contained in the Joint Venture Agreement and to be observed and performed by the Assignor, to the extent that such covenants, duties and obligations relate to the Assigned

Interest and to a period, or arise, as the case may be, on or after the Effective Date, it being the intent and purpose that the Assignee shall to the extent of the Assigned Interest be a party thereto in the place and stead of the Assignor from and after the Effective Date.

3. Notwithstanding the assignment of the Assigned Interest to the Assignee, the Third Party need only look to the Assignor for performance of the duties and obligations of the Assignee pursuant to the Joint Venture Agreement.

4. Nothing herein contained shall be construed as a release of the Assignor from any obligation or liability under the Joint Venture Agreement.

5. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

IN WITNESS WHEREOF the parties hereto have executed and delivered this Agreement as of the day and year first above written.

PINNACLE OIL INTERNATIONAL, INC.

By:    /s/ R. Dirk Stinson
      -----------------------------

Its:  _____________________________

PINNACLE OIL CANADA INC.

By:    /s/ R. Dirk Stinson
      -----------------------------

Its:  _____________________________

SCHEDULE "A"

Renaissance Energy Ltd.

SFD Survey Agreement dated November 1, 1997 between Pinnacle Oil International, Inc. and Renaissance Energy Ltd.

EXHIBIT 10.20

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement"), dated as of April 1, 1997, is entered into by and between PINNACLE OIL INTERNATIONAL, INC., a Nevada corporation (the "Company"), whose principal executive office is located at 380- 1090 West Georgia Street, Vancouver, British Columbia, Canada, V6E 3V7; and R. DIRK STINSON (the "Executive"), an individual whose principal office is located at 380-1090 West Georgia Street, Vancouver, British Columbia, Canada, V6E 3V7, with reference to the following facts:

WHEREAS, the Executive is the President of the Company, as well as a director and a stockholder of the Company;

WHEREAS, the Company is the parent of two wholly owned subsidiaries, namely, Pinnacle Oil, Inc., a Nevada corporation and Pinnacle Oil Canada, Inc., a federal Canadian corporation, and the Company (and/or its subsidiaries) participate as a partner(s) in one or more joint ventures;

WHEREAS, the Company desires to continue to employ the Executive as the President of the Company, and as an officer of the Company's subsidiaries, in order to avail itself of the skill, knowledge and experience of the Executive and to assure the successful management of the Company (and its subsidiaries), and the Executive desires to continue his employment as the President of the Company, and as an officer of the Company's subsidiaries;

WHEREAS, the Company (and its subsidiaries) and the Executive desire to enter into a written employment agreement formally documenting their relationship and setting forth the duties and responsibilities the Executive has agreed to undertake as the President of the Company, and as an officer of the Company's subsidiaries;

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the parties to this Agreement (collectively "parties" and individually a "party") agree as follows:

1. DEFINITIONS

Set forth below are definitions of capitalized terms which are generally used throughout this Agreement, or references to sections containing those definitions (capitalized terms used only in a specific section of this Agreement are defined in that section):

(B) "AFFILIATE" means any "Person" (as defined below) controlling, controlled by, or under common control with a party.

(C) "AGREEMENT" means this Agreement, as originally executed and as amended, modified, supplemented and/or restated from time to time.

(F) "BOARD" means the Board of Directors of the Company, as such body may be reconstituted from time to time.

(H) "CHANGE IN CONTROL" shall mean, subject to subparagraphs (iv) and
(v) below, the occurrence of any of the following events:

(i) An acquisition of control by an "Acquiring Person" where, immediately after the subject acquisition, such "Person" holds "Beneficial Ownership" of more than fifty percent (50%) of the "Total Combined Voting Power" of the Company's then outstanding "Voting Securities". The terms in quotations in the immediately preceding sentence shall, for purposes of this Agreement, have the following meanings:

(A) "Acquiring Person" shall mean any "Person" which acquires the defined percentage of securities, with the exception of:
(A) any Employee Benefit Plan (or a trust forming a part thereof)
maintained by the Company, or any corporation or entity in which the Company holds fifty percent (50%) or more of the "Voting Securities" (each, a "Controlled Subsidiary"); (B) the Company or any Controlled Subsidiary; or (C) any "Person" which acquires the threshold percentage of "Voting Securities" through a "Non-Control Transaction" (as defined below).

(B) "Non-Control Transaction" shall mean any transaction in which the stockholders of the Company immediately before such transaction, directly or indirectly own immediately following such transaction at least a majority of the "Total Combined Voting Power" of the outstanding "Voting Securities" of the surviving corporation (or other entity) resulting from such transaction, in substantially the same proportion as such stockholders' ownership of the Company's "Voting Securities" immediately before such transaction.

(C) "Person," "Beneficial Ownership," "Total Combined Voting Power" and "Voting Securities" shall have the meanings ascribed to such terms in Sections 13(d) and 14(d) of the Securities Exchange Act and Rule 13d-3 promulgated thereunder; or

(ii) During any period of three (3) consecutive years after the date of this Agreement, the individuals who constituted the Board at the beginning of such period (the "Incumbent Board") cease to constitute a majority of the Board, for any reason(s) other than (A) the voluntary resignation of one or more Board members; (B) the refusal by one or more Board members to stand for election to the Board; and/or (C) the removal of one or more Board members for good cause; provided, however, (1) that if the nomination or election of any new director of the Company was approved by a vote of at least a majority of the Incumbent Board, such new director shall be deemed a member of the Incumbent Board; and (2) that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Securities Exchange Act of 1934), or as a result of a solicitation of proxies or consents by or on behalf of an Acquiring Person, other than a member of the Board (a "Proxy Contest"), or as a result of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or

(iii) The Board or the stockholders of the Company approve:

(A) A merger or consolidation or reorganization of the Company reorganization with:

(1) any Controlled Subsidiary, and such transaction is not a Non-Control Transaction; or

(2) any other corporation or other entity, and such transaction is not a Non-Control Transaction; or

(B) A complete liquidation or dissolution of the Company, and such transaction is not a Non-Control Transaction; or

(C) An agreement for the sale or other disposition of all or substantially all of the assets of the Company to (1) any Controlled Subsidiary, and such transaction is not a Non-Control Transaction, or (2) to any other Person, and such transaction is not a Non-Control Transaction.

(v) Notwithstanding any other provision of this subsection (h), if the Executive or an Affiliate of the Executive who is then a stockholder or director of the Company, either: (i) expressly voted in favor of the transaction constituting the Change In Control in such Person's capacity as either a stockholder or as a director of the Company; or (ii) expressly abstained from voting (other than by reason of an "interest" in a matter or transaction, as defined in the Nevada Revised Statutes); and/or (iii) failed or refused to vote, then the transaction shall not constitute a Change in Control.

(J) "DISABILITY" (or the related term "Disabled") means any of the following: (i) the receipt of any disability insurance benefits by the Executive; (ii) a declaration by a court of competent jurisdiction that the Executive is legally incompetent; (iii) the Executive's material inability due to medically documented mental or physical illness or disability to fully perform the Executive's regular obligations of his office and as an employee of the Company (and/or its Subsidiaries) (with reasonable accommodations for such disability, if then required by applicable federal or state laws or regulations), for a six (6) month continuous period, or for nine (9) cumulative months within any one (1) year continuous period; or (iv) the reasonable determination by the Board that the Executive will not be able to fully perform the Executive's regular obligations of his office and as an employee of the Company (and/or its Subsidiaries) (with reasonable accommodations if then required by applicable federal or state laws or regulations) for a six (6) month

(N) "MOMENTUM" means Momentum Resources Corporation, a Bahamas corporation, and its successors and assigns including, without limitation, any successor (whether direct or indirect, or by means of merger, consolidation, conversion, purchase of assets, purchase of securities, or otherwise) to all or substantially all of such corporation's business or assets, or both.

(P) "PERSON" (other than for purposes of determining a Change in Control) means an individual or natural person, a corporation, partnership (limited or general), joint-venture, association, business trust, limited liability company/partnership, business trust, trust (whether revocable or irrevocable), pension or profit sharing plan, individual retirement account, or fiduciary or custodial arrangement.

(R) "SUBSIDIARY" shall mean any corporation, partnership (limited or general), joint-venture, association, business trust, limited liability company/partnership, business trust or trust in which the Company holds a controlling interest, including but not limited to Pinnacle Oil, Inc., a Nevada corporation ("Pinnacle Oil"), and Pinnacle Oil Canada, Inc., a British Columbia corporation ("Pinnacle Canada").

(U) "TERMINATION BY COMPANY FOR CAUSE" means a termination of the Executive caused by a determination of two-thirds of the Board, excluding the Executive if then a member of the Board, that one of the following events has occurred:

(i) Any of the Executive's representations or warranties in this Agreement is not materially true, accurate and/or complete;

(ii) The Executive has intentionally and continually breached or wrongfully failed and/or refused to fulfill and/or perform (A) any of the Executive's obligations, promises or covenants under this Agreement, or (B) any of the warranties, obligations, promises or covenants in any agreement (other than this

Agreement) entered into between the Company (and/or its Subsidiaries) and the Executive, without cure, if any, as provided in such agreement;

(iii) The Executive has intentionally failed and/or refused to obey any lawful and proper order or directive of the Board, and/or the Executive has intentionally interfered with the compliance by other employees of the Company (and/or its Subsidiaries) with any such orders or directives;

(iv) The Executive has intentionally breached the Executive's fiduciary duties to the Company (and/or its Subsidiaries);

(v) The Executive has intentionally caused the Company (and/or its Subsidiaries) to be convicted of a crime, or to incur criminal penalties in material amounts;

(vi) The Executive has committed: (A) any act of fraud, misrepresentation, theft, embezzlement or misappropriation, and/or any other dishonest act against the Company (and/or its Subsidiaries) and/or any of its Affiliates, subsidiaries, joint ventures; or (B) any other offense involving moral turpitude, which offense is followed by conviction or by final action of any court of law; or (C) a felony;

(vii) The Executive repeatedly and intemperately used alcohol or drugs, to the extent that such use (A) interfered with or is likely to interfere with the Executive's ability to perform the Executive's duties, and/or (B) endangered or is likely to endanger the life, health, safety, or property of the Executive, the Company (and/or its Subsidiaries), or any other person;

(viii) The Executive has intentionally demonstrated or committed such acts of racism, sexism or other discrimination as would tend to bring the Company (and/or its Subsidiaries) into public scandal or ridicule, or could otherwise result in material and substantial harm to the Company's (and/or its Subsidiaries')'s business, reputation, operations, affairs or financial position; and/or

(ix) The Executive engaged in other conduct constituting legal cause for termination.

(v) "TERMINATION BY EXECUTIVE FOR GOOD REASON" means the Executive's termination of this Agreement based on his reasonable determination that one of the following events has occurred:

(i) Any of the Company's representations or warranties in this Agreement is not materially true, accurate and/or complete;

(ii) The Company intentionally and continually breached or wrongfully failed to fulfill or perform (A) its obligations, promises or covenants under this Agreement; or (B) any warranties, obligations, promises or covenants of the Company (and/or its Subsidiaries) in any agreement (other than this Agreement) entered into between the Company (and/or its Subsidiaries) and the Executive, without cure, if any, as provided in such agreement;

(iii) The Company terminated this Agreement and the Executive's employment hereunder, and such termination does not constitute Termination By Company For Cause;

(iv) Without the consent of the Executive, the Company: (A) substantially altered or materially diminished the position, nature, status, prestige or responsibilities of the Executive from those in effect by mutual agreement of the parties from time-to-time; (B) assigned additional duties or responsibilities to the Executive which were wholly and clearly inconsistent with the position, nature, status, prestige or responsibilities of the Executive then in effect; or (C) removed or failed to reappoint or re-elect the Executive to the Executive's offices under this Agreement (as they may be changed or augmented from time-to-time with the consent of the Executive), or as a director of the Company, except in connection with the Disability of the Executive;

(v) Without the consent of the Executive, the Company relocated the Company's principal operating offices from their present location, and as a result increased the Executive's ordinary commute from the Executive's temporary residence by more than thirty-five (35) miles;

(vi) Without the consent ratification (express or implied) of the Executive, the Executive was removed from the Board without his consent; or the Company failed to nominate or reappoint the Executive to the Board (unless the Executive is deceased or Disabled, or such removal or failure is attributable to an event which would constitute Termination By Company For Cause), or if the Executive was so nominated, the stockholders of the Company failed to re-elect the Executive to the Board;

(vii) The Company (and/or its Subsidiaries) intentionally required the Executive to commit or participate in any felony or other serious crime; and/or

(viii) The Company (and/or its Subsidiaries) engaged in other conduct constituting legal cause for termination.

2. EMPLOYMENT OBLIGATIONS

the Company's (and/or its Subsidiaries') Bylaws, including without limitation:

(i) Managing, conducting and supervising the day-to-day business of the Company (and/or its Subsidiaries) such as, by way of example and not limitation, hiring and firing employees and consultants and establishing compensation levels for such employees and consultants; and negotiating and entering into contracts on behalf of the Company (and/or its Subsidiaries) with respect to the ordinary operations of the business of the Company (and/or its Subsidiaries) such as, by way of example and not limitation, exploration, equipment, purchase and lease contracts;

(ii) On behalf of the Company (and/or its Subsidiaries), negotiating and entering into agreements, contracts and/or joint ventures with third parties relating to the provision of SFD Data;

(iii) Acting as the Company's liaison with its attorneys, certified public accountants, bankers, joint venture partners, market makers for the Company's securities and the investment community; and

(iv) Developing and implementing long-term strategic, business and fiscal planning for the Company (and/or its Subsidiaries) and their businesses, including but not limited to plans or capital requirements for financing, the commercial exploitation of SFD Data, finance, and positioning the Company's securities in the various capital markets.

The Executive shall report only to the Board, and any significant employment decisions and/or agreements, contracts and/or joint ventures negotiated by the Executive shall be subject to the review and approval/ratification of the Board. The Executive's responsibilities with respect to the Company and each of its Subsidiaries may be changed or supplemented by the Board from time-to-time, in their discretion. The Executive shall also hold such offices with the Subsidiaries and/or joint ventures of the Company (and/or its Subsidiaries) as the Board may, in its discretion and with the consent of the Executive, from time-to-time determine. The Board shall determine the amount of the Executive's total remuneration which will be allocated to and paid by the Company and by each of its Subsidiaries. The Executive shall be reasonably available to travel as the needs of the business of the Company (and/or its Subsidiaries) may require.

support staff, facilities, equipment and supplies as are reasonably necessary or suitable for the adequate performance of the Executive's duties and obligations under this Agreement, including technical and secretarial help.

3. TERM

4. COMPENSATION

5. ALLOWANCES

6. BUSINESS EXPENSES

During the Term of this Agreement the Executive is authorized to incur, and the Company (and/or its Subsidiaries) shall directly pay or reimburse the Executive for his or her payment of the Executive's reasonable and necessary business expenses, duly and actually incurred by the Executive in connection with the duties and services to be performed by the Executive under this Agreement, including without limitation entertainment, meals, travel, lodging and other similar out-of-pocket expenses, upon the Executive's submission to the Company (and/or its Subsidiaries) of itemized expense statements setting forth the date, purpose and amount of the expense incurred, together with corresponding receipts showing payment by the Executive in cases where he or she seeks reimbursement, all in conformity with business expense payment and/or reimbursement policies as may be established by the Company (and/or its Subsidiaries) from time to time, all of which shall comply with the substantiation requirements of any applicable taxing authorities, and regulations promulgated by such authorities thereto, pertaining to the deductibility of such expenses. Direct payment and/or reimbursement shall be made by the Company (and/or its Subsidiaries) no later than thirty (30) days of the Executive submission of the foregoing documentation. The Executive shall be entitled to direct payment and/or reimbursement in full for the aforesaid business expenses. The Company (and/or its Subsidiaries) shall have the option to pay directly the persons entitled to payment for such business expenses.

7. TAX WITHHOLDINGS AND EMPLOYEE DEDUCTIONS

The Company (and/or its Subsidiaries) shall be entitled to deduct from any payments to the Executive pursuant to the terms of this Agreement (including any payments arising from the early termination of this Agreement), amounts sufficient to cover any applicable federal, provincial, state, local and/or foreign income tax withholdings and/or deductions as may be required in connection with such payment, including without limitation old-age and survivor's and other social security payments, state disability and other withholdings payment as may be required by the tax laws or regulations of any applicable jurisdiction (collectively, the "Tax Withholdings"), as well as all other elective employee deductions applicable to such

payment such as, for example, deductions relating to any Employee Benefit Plan in which the Executive participates (collectively, the "Employee Deductions").

8. PERSONAL TIME-OFF

The Executive shall be entitled each calendar year during the term of this Agreement to such number of personal time-off days for such purposes, including vacations and time for personal affairs ("Personal Time-Off") as are approved by the Board, but not less than the greater of (i) twenty (20) business days, or (ii) the number of personal time-off days (including vacation and personal days) generally given by the Company (and/or its Subsidiaries) to its employees. Personal Time-Off shall be in addition to regular paid holidays provided to all employees of the Company (and/or its Subsidiaries). The Executive's compensation shall be paid in full with respect to approved Personal Time-Off days. Should the Executive fail to use all Personal Time-Off days in any calendar year, the Executive shall have the option of (i) receiving payment for such days on a pro rata basis, or (ii) "carrying-over" unused Personal Time- Off days to succeeding years. Personal time-off shall be taken during a period or periods mutually satisfactory to both the Company (and/or its Subsidiaries) and the Executive.

9. INSURANCE

If requested by the Company (and/or its Subsidiaries), the Executive shall submit to such physical examinations and otherwise take such actions and execute and deliver such documents as may be reasonably necessary to enable the Company (and/or its Subsidiaries), at its expense and for its own benefit, to obtain disability and/or life insurance on the life of the Executive. The Executive represents and warrants that he has no reason to believe that he is not insurable for disability or life coverage with a reputable insurance company at rates now prevailing in the city of the Company's principal executive offices, for healthy persons of the Executive's own age and gender.

10. ADVANCES

The Company (and/or its Subsidiaries) may from time-to-time, upon written consent from the Chairman of the Board or the Board, and without any obligation to do so, make advances to the Executive against any compensation or other amounts to be paid by the Company (and/or its Subsidiaries) to the Executive (each, an "Advance"). Any amounts due hereunder to the Executive shall, at the election of the Company (and/or its Subsidiaries), be offset by any then outstanding Advances.

In the event of termination of employment of executive, the Executive agrees that the Company (and/or its Subsidiaries) shall have the right to offset the amount of any and all outstanding Advance(s) against any salary or wages due, or any other amounts due to the Executive from the Company (and/or its Subsidiaries), and that any remaining balance of the Advance(s) shall be repaid by the Executive within thirty (30) days after the Executive's termination date. If such Advance(s) are not repaid within said thirty (30) days, simple interest shall accrue on the unpaid balance at the rate of ten percent (10%) per annum. The Executive agrees to pay all costs of collection incurred by the Company (and/or its Subsidiaries) with respect thereto, including reasonable attorneys' fees and legal costs.

The Company's (and/or its Subsidiaries') obligation to make payments to the Executive hereunder shall not, except with respect to Advance(s) as provided above, be affected by any circumstance, including without limitation any set-off, counterclaim, recoupment, defense or other right which the Company (and/or its Subsidiaries) may have against the Executive or others.

11. TERMINATION OF AGREEMENT BEFORE EXPIRATION OF TERM

12. EFFECT OF TERMINATION ATTRIBUTABLE TO DEATH OR DISABILITY; TERMINATION BY COMPANY FOR CAUSE; TERMINATION BY EXECUTIVE WITHOUT GOOD REASON

(a) The Company (and/or its Subsidiaries) shall pay the Executive's accrued but unpaid Monthly Salary and Personal Time-Off days through the effective date of the termination on or before the close of business on such effective date; and the Executive shall not be entitled to Monthly Salary and/or Personal Time-Off days after the effective date of the termination;

(b) The Company (and/or its Subsidiaries) shall pay the Executive's accrued but unpaid Annual Bonus through the last date of the Executive's employment within one hundred and twenty (120) days after the end of the fiscal period to which the Annual Bonus relates. The amount of the Annual Bonus shall be

determined by calculating the Annual Bonus the Executive would ordinarily be entitled to for the entire fiscal year, and then dividing such amount by a fraction wherein the numerator equals the number of days the Executive was employed in such year and the denominator equals the total number of calendar days in such year; the Executive shall not be entitled to earn or accrue any Annual Bonus after the effective date of the termination;

(c) The Company (and/or its Subsidiaries) shall pay any declared but unpaid Performance Bonus;

(d) The Company (and/or its Subsidiaries) shall reimburse the Executive for any Automobile Allowance and Cell Phone Allowance incurred prior to the effective date of the termination;

(e) The Company (and/or its Subsidiaries) shall reimburse the Executive for any business expenses incurred prior to the effective date of the termination, within three (3) business days after the Executive's submission of the Executive's expense report to the Company (and/or its Subsidiaries);

(f) The Executive shall not be entitled to continue to participate in any Employee Benefit Plans except to the extent provided in such plans for terminated participants, or as may be required by applicable law. Notwithstanding the foregoing, amounts which are vested in any Employee Benefit Plans shall be payable in accordance with such plan; and

13. EFFECT OF TERMINATION WHERE TERMINATION ATTRIBUTABLE TO CHANGE IN CONTROL; TERMINATION BY EXECUTIVE FOR GOOD REASON; TERMINATION BY COMPANY WITHOUT CAUSE

(c) The Company (and/or its Subsidiaries) shall pay the Executive's declared but unpaid Performance Bonus;

(d) At the election of the Executive, the Company (and/or its Subsidiaries) shall (i) permit the Executive to continue to participate in any Employee Benefit Plans, except to the extent prohibited in such plans for terminated employees, or as may be required by applicable law; or (ii) provide the Executive with additional compensation, payable on a monthly basis, which would approximate the cost to the Executive to obtain comparable benefits;

(e) The Company (and/or its Subsidiaries) shall continue to pay the Executive's monthly Automobile Allowance (but not gasoline, insurance and repair, maintenance and operating expenses) through the pending Term of this Agreement, on the same basis as previously paid to the Executive;

(f) The Company (and/or its Subsidiaries) shall reimburse the Executive for the Cell Phone Allowance through the effective date of the termination;

(g) The Company (and/or its Subsidiaries) shall reimburse the Executive for the Executive's business expenses incurred through the effective date of the termination, within three (3) business days of the Executive's submission of the Executive's expense report to the Company (and/or its Subsidiaries);

(i) If both (A) the termination is directly or indirectly attributable to a sale of all or substantially all of the assets of the Company (each, a "Sale"); and (B) the prospective Sale is approved by a "disinterested" majority of the Board of Directors (as defined under the Nevada Revised Statutes), then the Company (and/or its Subsidiaries) shall pay to the Executive an amount equal to two percent (2%) of the total consideration (including cash, securities, debt or any other form of property) received by the Company (and/or its Subsidiaries) in connection with such Sale.

14. REPRESENTATIONS AND WARRANTIES OF PARTIES

such party is an entity, been duly authorized by its governing organizational documents, and are not prohibited by its governing organization documents, and no further corporate or other action on the part of such party is necessary to authorize this Agreement, or the performance of such transactions. This Agreement has been duly executed and delivered by such party and, assuming due authorization, execution and delivery by all of the other parties hereto, is valid and binding upon such party in accordance with its terms, except as limited by: (1) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditor rights generally; and (2) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

15. PERFORMANCE ON BUSINESS DAY

In the event the date on which a party is required to take any action under the terms of this Agreement is not a business day, the action shall, unless otherwise provided herein, be deemed to be required to be taken on the next succeeding business day.

16. NON-LIABILITY FOR DEBTS

The Executive's rights and obligations under this Agreement shall not be subject to encumbrance or to the claims of the Executive's creditors (other than the Company, and/or its Subsidiaries), or subject to the debts, contracts or engagements of the Executive or the Executive's heirs, successors and assigns, and any attempt to do any of the foregoing shall be null and void ab initio and without force and effect.

17. MISCELLANEOUS

affected thereby, and shall continue in full force and effect to the fullest legal extent.

party has knowingly and voluntarily waived its jury trial rights following consultation with such legal counsel.

identical in form hereto by having attached to it one or more additional signature pages. If a copy or counterpart of this Agreement is originally executed and such copy or counterpart is thereafter transmitted electronically by facsimile or similar device, such facsimile document shall for all purposes be treated as if manually signed by the party whose facsimile signature appears.

WHEREFORE, the parties hereto have executed this Agreement in the City of Vancouver, Province of British Columbia, Canada, as of the date first set forth above.

COMPANY:                         PINNACLE OIL INTERNATIONAL, INC.,
                                 a Nevada corporation


                                 By:  /s/ George Liszicasz
                                      ----------------------------
                                      George Liszicasz, Chief Executive Officer

EXECUTIVE:                       R. DIRK STINSON,
                                 an individual


                                      /s/ R. Dirk Stinson
                                 ---------------------------------

EXHIBIT 10.21

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement"), dated as of April 1, 1997, is entered into by and between PINNACLE OIL INTERNATIONAL, INC., a Nevada corporation (the "Company"), whose principal executive office is located at 380- 1090 West Georgia Street, Vancouver, British Columbia, Canada, V6E 3V7; and GEORGE LISZICASZ (the "Executive"), an individual whose principal office is located at 380-1090 West Georgia Street, Vancouver, British Columbia, Canada, V6E 3V7, with reference to the following facts:

WHEREAS, the Executive is the Chief Executive Officer of the Company, as well as a director and a stockholder of the Company;

WHEREAS, the Company is the parent of two wholly owned subsidiaries, namely, Pinnacle Oil, Inc., a Nevada corporation and Pinnacle Oil Canada, Inc., a federal Canadian corporation, and the Company (and/or its subsidiaries) participate as a partner(s) in one or more joint ventures;

WHEREAS, the Company desires to continue to employ the Executive as the Chief Executive Officer of the Company, and as an officer of the Company's subsidiaries, in order to avail itself of the skill, knowledge and experience of the Executive and to assure the successful management of the Company (and its subsidiaries), and the Executive desires to continue his employment as the Chief Executive Officer of the Company, and as an officer of the Company's subsidiaries;

WHEREAS, the Company (and its subsidiaries) and the Executive desire to enter into a written employment agreement formally documenting their relationship and setting forth the duties and responsibilities the Executive has agreed to undertake as the Chief Executive Officer of the Company, and as an officer of the Company's subsidiaries;

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the parties to this Agreement (collectively "parties" and individually a "party") agree as follows:

1. DEFINITIONS

Set forth below are definitions of capitalized terms which are generally used throughout this Agreement, or references to sections containing those definitions (capitalized terms used only in a specific section of this Agreement are defined in that section):

(b) "AFFILIATE" means any "Person" (as defined below) controlling, controlled by, or under common control with a party.

(c) "AGREEMENT" means this Agreement, as originally executed and as amended, modified, supplemented and/or restated from time to time.

(d) "ANNUAL BONUS" is defined in section 4(b).

(f) "BOARD" means the Board of Directors of the Company, as such body may be reconstituted from time to time.

(h) "CHANGE IN CONTROL" shall mean, subject to subparagraphs (iv) and (v) below, the occurrence of any of the following events:

(i) An acquisition of control by an "Acquiring Person" where, immediately after the subject acquisition, such "Person" holds "Beneficial Ownership" of more than fifty percent (50%) of the "Total Combined Voting Power" of the Company's then outstanding "Voting Securities". The terms in quotations in the immediately preceding sentence shall, for purposes of this Agreement, have the following meanings:

(A) "Acquiring Person" shall mean any "Person" which acquires the defined percentage of securities, with the exception of:
(A) any Employee Benefit Plan (or a trust forming a part thereof)
maintained by the Company, or any corporation or entity in which the Company holds fifty percent (50%) or more of the "Voting Securities" (each, a "Controlled Subsidiary"); (B) the Company or any Controlled Subsidiary; or (C) any "Person" which acquires the threshold percentage of "Voting Securities" through a "Non-Control Transaction" (as defined below).

(B) "Non-Control Transaction" shall mean any transaction in which the stockholders of the Company immediately before such transaction, directly or indirectly own immediately following such transaction at least a majority of the "Total Combined Voting Power" of the outstanding "Voting Securities" of the surviving corporation (or other entity) resulting from such transaction, in substantially the same proportion as such stockholders' ownership of the Company's "Voting Securities" immediately before such transaction.

(C) "Person," "Beneficial Ownership," "Total Combined Voting Power" and "Voting Securities" shall have the meanings ascribed to such terms in Sections 13(d) and 14(d) of the Securities Exchange Act and Rule 13d-3 promulgated thereunder; or

(ii) During any period of three (3) consecutive years after the date of this Agreement, the individuals who constituted the Board at the beginning of such period (the "Incumbent Board") cease to constitute a majority of the Board, for any reason(s) other than (A) the voluntary resignation of one or more Board members; (B) the refusal by one or more Board members to stand for election to the Board; and/or (C) the removal of one or more Board members for good cause; provided, however, (1) that if the nomination or election of any new director of the Company was approved by a vote of at least a majority of the Incumbent Board, such new director shall be deemed a member of the Incumbent Board; and (2) that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Securities Exchange Act of 1934), or as a result of a solicitation of proxies or consents by or on behalf of an Acquiring Person, other than a member of the Board (a "Proxy Contest"), or as a result of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or

(iii) The Board or the stockholders of the Company approve:

(A) A merger or consolidation or reorganization of the Company reorganization with:

(1) any Controlled Subsidiary, and such transaction is not a Non-Control Transaction; or

(2) any other corporation or other entity, and such transaction is not a Non-Control Transaction; or

(B) A complete liquidation or dissolution of the Company, and such transaction is not a Non-Control Transaction; or

(C) An agreement for the sale or other disposition of all or substantially all of the assets of the Company to (1) any Controlled Subsidiary, and such transaction is not a Non-Control Transaction, or
(2) to any other Person, and such transaction is not a Non-Control Transaction.

(v) Notwithstanding any other provision of this subsection (h), if the Executive or an Affiliate of the Executive who is then a stockholder or director of the Company, either: (i) expressly voted in favor of the transaction constituting the Change In Control in such Person's capacity as either a stockholder or as a director of the Company; or (ii) expressly abstained from voting (other than by reason of an "interest" in a matter or transaction, as defined in the Nevada Revised Statutes); and/or (iii) failed or refused to vote, then the transaction shall not constitute a Change in Control.

(j) "DISABILITY" (or the related term "Disabled") means any of the following: (i) the receipt of any disability insurance benefits by the Executive; (ii) a declaration by a court of competent jurisdiction that the Executive is legally incompetent; (iii) the Executive's material inability due to medically documented mental or physical illness or disability to fully perform the Executive's regular obligations of his office and as an employee of the Company (and/or its Subsidiaries) (with reasonable accommodations for such disability, if then required by applicable federal or state laws or regulations), for a six (6) month continuous period, or for nine (9) cumulative months within any one (1) year continuous period; or (iv) the reasonable determination by the Board that the Executive will not be able to fully perform the Executive's regular obligations of his office and as an employee of the Company (and/or its Subsidiaries) (with reasonable accommodations if then required by applicable federal or state laws or regulations) for a six (6) month

continuous period. If the Board determines that the Executive is Disabled under clause (iv) above, and the Executive disagrees with the conclusion of the Board, then the Company (and/or its Subsidiaries) shall engage a qualified independent physician reasonably acceptable to the Executive to examine the Executive at the Company's (and/or its Subsidiaries') sole expense. The determination of such physician shall be provided in writing to the parties and shall be final and binding upon the parties for all purposes of this Agreement. The Executive hereby consents to examination in the manner set forth above, and waives any physician-patient privilege arising from any such examination as it relates to the determination of the purported disability. If the parties cannot agree upon a physician, a physician shall be appointed by the American Arbitration Association located in Clark County, Nevada, according to the rules and practices of the American Arbitration Association from time-to-time in force.

(n) "MOMENTUM" means Momentum Resources Corporation, a Bahamas corporation, and its successors and assigns including, without limitation, any successor (whether direct or indirect, or by means of merger, consolidation, conversion, purchase of assets, purchase of securities, or otherwise) to all or substantially all of such corporation's business or assets, or both.

(p) "PERSON" (other than for purposes of determining a Change in Control) means an individual or natural person, a corporation, partnership (limited or general), joint-venture, association, business trust, limited liability company/partnership, business trust, trust (whether revocable or irrevocable), pension or profit sharing plan, individual retirement account, or fiduciary or custodial arrangement.

(r) "SUBSIDIARY" shall mean any corporation, partnership (limited or general), joint-venture, association, business trust, limited liability company/partnership, business trust or trust in which the Company holds a controlling interest, including but not limited to Pinnacle Oil, Inc., a Nevada corporation ("Pinnacle Oil"), and Pinnacle Oil Canada, Inc., a British Columbia corporation ("Pinnacle Canada").

(i) Any of the Executive's representations or warranties in this Agreement is not materially true, accurate and/or complete;

(ii) The Executive has intentionally and continually breached or wrongfully failed and/or refused to fulfill and/or perform (A) any of the Executive's obligations, promises or covenants under this Agreement, or (B) any of the warranties, obligations, promises or covenants in any agreement

(other than this Agreement) entered into between the Company (and/or its Subsidiaries) and the Executive, without cure, if any, as provided in such agreement;

(iii) The Executive has intentionally failed and/or refused to obey any lawful and proper order or directive of the Board, and/or the Executive has intentionally interfered with the compliance by other employees of the Company (and/or its Subsidiaries) with any such orders or directives;

(iv) The Executive has intentionally breached the Executive's fiduciary duties to the Company (and/or its Subsidiaries);

(v) The Executive has intentionally caused the Company (and/or its Subsidiaries) to be convicted of a crime, or to incur criminal penalties in material amounts;

(vi) The Executive has committed: (A) any act of fraud, misrepresentation, theft, embezzlement or misappropriation, and/or any other dishonest act against the Company (and/or its Subsidiaries) and/or any of its Affiliates, subsidiaries, joint ventures; or (B) any other offense involving moral turpitude, which offense is followed by conviction or by final action of any court of law; or (C) a felony;

(vii) The Executive repeatedly and intemperately used alcohol or drugs, to the extent that such use (A) interfered with or is likely to interfere with the Executive's ability to perform the Executive's duties, and/or (B) endangered or is likely to endanger the life, health, safety, or property of the Executive, the Company (and/or its Subsidiaries), or any other person;

(viii) The Executive has intentionally demonstrated or committed such acts of racism, sexism or other discrimination as would tend to bring the Company (and/or its Subsidiaries) into public scandal or ridicule, or could otherwise result in material and substantial harm to the Company's (and/or its Subsidiaries')'s business, reputation, operations, affairs or financial position; and/or

(ix) The Executive engaged in other conduct constituting legal cause for termination.

If any event described above in clause (ii) or clause (viii) of this subparagraph occurs, and such event is reasonably susceptible of being cured, then the Executive shall be entitled to a grace period of thirty (30) days following receipt of written notice of such event. If the Company determines, in its sole discretion, that such event is not reasonably susceptible of being cured within a period of thirty (30) days), the Company may grant a longer cure period to the Executive to cure such event to the reasonable satisfaction of the Company, provided the Executive promptly commences and diligently pursues such cure. The noted grace periods shall not apply to any other event described in this subsection.

(v) "TERMINATION BY EXECUTIVE FOR GOOD REASON" means the Executive's termination of this Agreement based on his reasonable determination that one of the following events has occurred:

(i) Any of the Company's representations or warranties in this Agreement is not materially true, accurate and/or complete;

(ii) The Company intentionally and continually breached or wrongfully failed to fulfill or perform (A) its obligations, promises or covenants under this Agreement; or (B) any warranties, obligations, promises or covenants of the Company (and/or its Subsidiaries) in any agreement (other than this Agreement) entered into between the Company (and/or its Subsidiaries) and the Executive, without cure, if any, as provided in such agreement;

(iii) The Company terminated this Agreement and the Executive's employment hereunder, and such termination does not constitute Termination By Company For Cause;

(iv) Without the consent of the Executive, the Company: (A) substantially altered or materially diminished the position, nature, status, prestige or responsibilities of the Executive from those in effect by mutual agreement of the parties from time-to-time; (B) assigned additional duties or responsibilities to the Executive which were wholly and clearly inconsistent with the position, nature, status, prestige or responsibilities of the Executive then in effect; or (C) removed or failed to reappoint or re-elect the Executive to the Executive's offices under this Agreement (as they may be changed or augmented from time-to-time with the consent of the Executive), or as a director of the Company, except in connection with the Disability of the Executive;

(v) Without the consent of the Executive, the Company relocated the Company's principal operating offices from their present location, and as a result increased the Executive's ordinary commute from the Executive's temporary residence by more than thirty-five (35) miles;

(vi) Without the consent ratification (express or implied) of the Executive, the Executive was removed from the Board without his consent; or the Company failed to nominate or reappoint the Executive to the Board (unless the Executive is deceased or Disabled, or such removal or failure is attributable to an event which would constitute Termination By Company For Cause), or if the Executive was so nominated, the stockholders of the Company failed to re-elect the Executive to the Board;

(vii) The Company (and/or its Subsidiaries) intentionally required the Executive to commit or participate in any felony or other serious crime; and/or

(viii) The Company (and/or its Subsidiaries) engaged in other conduct constituting legal cause for termination.

2. EMPLOYMENT OBLIGATIONS

terms and conditions set forth below. As Chief Executive Officer of the Company, and as an officer of the Subsidiaries, the Executive shall do and perform all services, acts, or things necessary or advisable that a Chief Executive Officer of the Company and an executive officer of the Subsidiaries would customarily be empowered and authorized to do, and perform by law and under the Company's (and/or its Subsidiaries') Bylaws, including without limitation:

(i) Managing, conducting and supervising the day-to-day business of the Company (and/or its Subsidiaries) such as, by way of example and not limitation, hiring and firing employees and consultants and establishing compensation levels for such employees and consultants; and negotiating and entering into contracts on behalf of the Company (and/or its Subsidiaries) with respect to the ordinary operations of the business of the Company (and/or its Subsidiaries) such as, by way of example and not limitation, exploration, equipment, purchase and lease contracts;

(ii) On behalf of the Company (and/or its Subsidiaries), negotiating and entering into agreements, contracts and/or joint ventures with third parties relating to the provision of SFD Data;

(iii) Acting as the Company's liaison with its attorneys, certified public accountants, bankers, joint venture partners, market makers for the Company's securities and the investment community; and

(iv) Developing and implementing long-term strategic, business and fiscal planning for the Company (and/or its Subsidiaries) and their businesses, including but not limited to plans or capital requirements for financing, the commercial exploitation of SFD Data, finance, and positioning the Company's securities in the various capital markets.

The Executive shall report only to the Board, and any significant employment decisions and/or agreements, contracts and/or joint ventures negotiated by the Executive shall be subject to the review and approval/ratification of the Board. The Executive's responsibilities with respect to the Company and each of its Subsidiaries may be changed or supplemented by the Board from time-to-time, in their discretion. The Executive shall also hold such offices with the Subsidiaries and/or joint ventures of the Company (and/or its Subsidiaries) as the Board may, in its discretion and with the consent of the Executive, from time-to-time determine. The Board shall determine the amount of the Executive's total remuneration which will be allocated to and paid by the Company and by each of its Subsidiaries. The Executive shall be reasonably available to travel as the needs of the business of the Company (and/or its Subsidiaries) may require.

material harm to the Company's (and/or its Subsidiaries') business or reputation.

3. TERM

4. COMPENSATION

increase.

5. ALLOWANCES

all costs to rent a new residence which is located within thirty-five (35) miles of the location of the Company's new principal executive offices, to be selected by the Executive and which is comparable to the Executive's then current residence including all utilities, maintenance, insurance and other occupancy costs (the "Old Residence"); provided, however, in the event the Executive rents the Old Residence to a third party, the amount of the rental the Company (and/or its Subsidiaries) pay shall be reduced by the amount of rent (net of expenses) received by the Executive with respect to the Old Residence. The Company's (and/or its Subsidiaries') obligation shall terminate upon the earlier of (i) such time as the Executive, without any obligation to do so, sells or disposes of the Old Residence; or (ii) thirty (30) months after the date of the Relocation.

6. BUSINESS EXPENSES

During the Term of this Agreement the Executive is authorized to incur, and the Company (and/or its Subsidiaries) shall directly pay or reimburse the Executive for his or her payment of the Executive's reasonable and necessary business expenses, duly and actually incurred by the Executive in connection with the duties and services to be performed by the Executive under this Agreement, including without limitation entertainment, meals, travel, lodging and other similar out-of-pocket expenses, upon the Executive's submission to the Company (and/or its Subsidiaries) of itemized expense statements setting forth the date, purpose and amount of the expense incurred, together with corresponding receipts showing payment by the Executive in cases where he or she seeks reimbursement, all in conformity with business expense payment and/or reimbursement policies as may be established by the Company (and/or its Subsidiaries) from time to time, all of which shall comply with the substantiation requirements of any applicable taxing authorities, and regulations promulgated by such authorities thereto, pertaining to the deductibility of such expenses. Direct payment and/or reimbursement shall be made by the Company (and/or its Subsidiaries) no later than thirty (30) days of the Executive submission of the foregoing documentation. The Executive shall be entitled to direct payment and/or reimbursement in full for the aforesaid business expenses. The Company (and/or its Subsidiaries) shall have the option to pay directly the persons entitled to payment for such business expenses.

7. TAX WITHHOLDINGS AND EMPLOYEE DEDUCTIONS

The Company (and/or its Subsidiaries) shall be entitled to deduct from any payments to the Executive pursuant to the terms of this Agreement (including any payments arising from the early termination of this Agreement), amounts sufficient to cover any applicable federal, provincial, state, local and/or foreign income tax withholdings and/or deductions as may be required in connection with such payment, including without limitation old-age and survivor's and other social security payments, state disability and other

withholdings payment as may be required by the tax laws or regulations of any applicable jurisdiction (collectively, the "Tax Withholdings"), as well as all other elective employee deductions applicable to such payment such as, for example, deductions relating to any Employee Benefit Plan in which the Executive participates (collectively, the "Employee Deductions").

8. PERSONAL TIME-OFF

The Executive shall be entitled each calendar year during the term of this Agreement to such number of personal time-off days for such purposes, including vacations and time for personal affairs ("Personal Time-Off") as are approved by the Board, but not less than the greater of (i) twenty (20) business days, or (ii) the number of personal time-off days (including vacation and personal days) generally given by the Company (and/or its Subsidiaries) to its employees. Personal Time-Off shall be in addition to regular paid holidays provided to all employees of the Company (and/or its Subsidiaries). The Executive's compensation shall be paid in full with respect to approved Personal Time-Off days. Should the Executive fail to use all Personal Time-Off days in any calendar year, the Executive shall have the option of (i) receiving payment for such days on a pro rata basis, or (ii) "carrying-over" unused Personal Time- Off days to succeeding years. Personal time-off shall be taken during a period or periods mutually satisfactory to both the Company (and/or its Subsidiaries) and the Executive.

9. INSURANCE

If requested by the Company (and/or its Subsidiaries), the Executive shall submit to such physical examinations and otherwise take such actions and execute and deliver such documents as may be reasonably necessary to enable the Company (and/or its Subsidiaries), at its expense and for its own benefit, to obtain disability and/or life insurance on the life of the Executive. The Executive represents and warrants that he has no reason to believe that he is not insurable for disability or life coverage with a reputable insurance company at rates now prevailing in the city of the Company's principal executive offices, for healthy persons of the Executive's own age and gender.

10. ADVANCES

The Company (and/or its Subsidiaries) may from time-to-time, upon written consent from the Chairman of the Board or the Board, and without any obligation to do so, make advances to the Executive against any compensation or other amounts to be paid by the Company (and/or its Subsidiaries) to the Executive (each, an "Advance"). Any amounts due hereunder to the Executive shall, at the election of the Company (and/or its Subsidiaries), be offset by any then outstanding Advances.

In the event of termination of employment of executive, the Executive agrees that the Company (and/or its Subsidiaries) shall have the right to offset the amount of any and all outstanding Advance(s) against any salary or wages due, or any other amounts due to the Executive from the Company (and/or its Subsidiaries), and that any remaining balance of the Advance(s) shall be repaid by the Executive within thirty (30) days after the Executive's termination date. If such Advance(s) are not repaid within said thirty (30) days, simple interest shall accrue on the unpaid balance at the rate of ten percent (10%) per annum. The Executive agrees to pay all costs of collection incurred by the Company (and/or its Subsidiaries) with respect thereto, including reasonable attorneys' fees and legal costs.

The Company's (and/or its Subsidiaries') obligation to make payments to the Executive hereunder shall not, except with respect to Advance(s) as provided above, be affected by any circumstance, including without limitation any set-off, counterclaim, recoupment, defense or other right which the Company (and/or its Subsidiaries) may have against the Executive or others.

11. TERMINATION OF AGREEMENT BEFORE EXPIRATION OF TERM

12. EFFECT OF TERMINATION ATTRIBUTABLE TO DEATH OR DISABILITY; TERMINATION BY COMPANY FOR CAUSE; TERMINATION BY EXECUTIVE WITHOUT GOOD REASON

In the event the Executive's employment hereunder is terminated before the expiration of a Term, and such termination is attributable to (i) an event defined as Death or Disability; (ii) an event defined as Termination By Company For Cause; and/or (iii) termination by the Executive which does not constitute Termination By Executive For Good Reason, then all rights and obligations of the Company and the Executive under section 2 [Employment Obligations], section 4
[Compensation], section 5 [Allowances], section 6 [Business Expenses] and section 8 [ Personal Time-Off] shall terminate as of the effective date of the termination; provided, however:

(a) The Company (and/or its Subsidiaries) shall pay the Executive's accrued but unpaid Monthly Salary and Personal Time-Off days through the effective date of the termination on or before the close of business on such effective date; and the Executive shall not be entitled to Monthly Salary and/or Personal Time-Off days after the effective date of the termination;

(b) The Company (and/or its Subsidiaries) shall pay the Executive's accrued but unpaid Annual Bonus through the last date of the Executive's employment within one hundred and twenty (120) days after the end of the fiscal period to which the Annual Bonus relates. The amount of the Annual Bonus shall be

determined by calculating the Annual Bonus the Executive would ordinarily be entitled to for the entire fiscal year, and then dividing such amount by a fraction wherein the numerator equals the number of days the Executive was employed in such year and the denominator equals the total number of calendar days in such year; the Executive shall not be entitled to earn or accrue any Annual Bonus after the effective date of the termination;

(c) The Company (and/or its Subsidiaries) shall pay any declared but unpaid Performance Bonus;

(d) The Company (and/or its Subsidiaries) shall reimburse the Executive for any Automobile Allowance and Cell Phone Allowance incurred prior to the effective date of the termination;

(e) The Company (and/or its Subsidiaries) shall reimburse the Executive for any business expenses incurred prior to the effective date of the termination, within three (3) business days after the Executive's submission of the Executive's expense report to the Company (and/or its Subsidiaries);

(f) The Executive shall not be entitled to continue to participate in any Employee Benefit Plans except to the extent provided in such plans for terminated participants, or as may be required by applicable law. Notwithstanding the foregoing, amounts which are vested in any Employee Benefit Plans shall be payable in accordance with such plan; and

13. EFFECT OF TERMINATION WHERE TERMINATION ATTRIBUTABLE TO CHANGE IN CONTROL; TERMINATION BY EXECUTIVE FOR GOOD REASON; TERMINATION BY COMPANY WITHOUT CAUSE

(c) The Company (and/or its Subsidiaries) shall pay the Executive's declared but unpaid Performance Bonus;

(d) At the election of the Executive, the Company (and/or its Subsidiaries) shall (i) permit the Executive to continue to participate in any Employee Benefit Plans, except to the extent prohibited in such plans for terminated employees, or as may be required by applicable law; or (ii) provide the Executive with additional compensation, payable on a monthly basis, which would approximate the cost to the Executive to obtain comparable benefits;

(e) The Company (and/or its Subsidiaries) shall continue to pay the Executive's monthly Automobile Allowance (but not gasoline, insurance and repair, maintenance and operating expenses) through the pending Term of this Agreement, on the same basis as previously paid to the Executive;

(f) The Company (and/or its Subsidiaries) shall reimburse the Executive for the Cell Phone Allowance through the effective date of the termination;

(g) The Company (and/or its Subsidiaries) shall reimburse the Executive for the Executive's business expenses incurred through the effective date of the termination, within three (3) business days of the Executive's submission of the Executive's expense report to the Company (and/or its Subsidiaries);

(i) If both (A) the termination is directly or indirectly attributable to a sale of all or substantially all of the assets of the Company (each, a "Sale"); and (B) the prospective Sale is approved by a "disinterested" majority of the Board of Directors (as defined under the Nevada Revised Statutes), then the Company (and/or its Subsidiaries) shall pay to the Executive an amount equal to two percent (2%) of the total consideration (including cash, securities, debt or any other form of property) received by the Company (and/or its Subsidiaries) in connection with such Sale.

14. REPRESENTATIONS AND WARRANTIES OF PARTIES

Agreement by such party, and the performance by such party of the transactions herein contemplated, have, if such party is an entity, been duly authorized by its governing organizational documents, and are not prohibited by its governing organization documents, and no further corporate or other action on the part of such party is necessary to authorize this Agreement, or the performance of such transactions. This Agreement has been duly executed and delivered by such party and, assuming due authorization, execution and delivery by all of the other parties hereto, is valid and binding upon such party in accordance with its terms, except as limited by: (1) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditor rights generally; and (2) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

15. PERFORMANCE ON BUSINESS DAY

In the event the date on which a party is required to take any action under the terms of this Agreement is not a business day, the action shall, unless otherwise provided herein, be deemed to be required to be taken on the next succeeding business day.

16. NON-LIABILITY FOR DEBTS

The Executive's rights and obligations under this Agreement shall not be subject to encumbrance or to the claims of the Executive's creditors (other than the Company, and/or its Subsidiaries), or subject to the debts, contracts or engagements of the Executive or the Executive's heirs, successors and assigns, and any attempt to do any of the foregoing shall be null and void ab initio and without force and effect.

17. MISCELLANEOUS

drafting this Agreement.

persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not be affected thereby, and shall continue in full force and effect to the fullest legal extent.

warrants and represents that such party has reviewed this waiver with such party's legal counsel, and that such party has knowingly and voluntarily waived its jury trial rights following consultation with such legal counsel.

Any purported assignment or transfer in violation of the terms of this subsection shall be null and void ab initio and of no force and effect, and shall vest no rights or interests in the purported assignee or transferee.

identical in form hereto by having attached to it one or more additional signature pages. If a copy or counterpart of this Agreement is originally executed and such copy or counterpart is thereafter transmitted electronically by facsimile or similar device, such facsimile document shall for all purposes be treated as if manually signed by the party whose facsimile signature appears.

WHEREFORE, the parties hereto have executed this Agreement in the City of Vancouver, Province of British Columbia, Canada, as of the date first set forth above.

COMPANY: PINNACLE OIL INTERNATIONAL, INC.,

a Nevada corporation

                              By:   /s/ R Dirk Stinson
                                 ------------------------------
                                 R. Dirk Stinson, President



EXECUTIVE:                    GEORGE LISZICASZ,
                              an individual


                                    /s/ George Liszicasz
                              ---------------------------------

EXHIBIT 10.22

$ 500,000 JANUARY 31, 1997

LOS ANGELES,CALIFORNIA

Subject to the provisions of this Section and Section 7, of this note, interest on the Principal Amount from time-to-time remaining unpaid shall accrue at the rate of twelve percent (12%) per annum. Interest shall be computed on the basis of a three hundred sixty (360) day year and a thirty (30) day month.

Notwithstanding the foregoing, in the event the Maker and/or any surety, guarantor or endorser of this note is in default under this note, the described interest rate shall, subject to the terms of Section 7 of this note, accrue from the date of such default until the balance of the Principal Amount, accrued and unpaid interest, late charges and all other indebtedness under this note is fully repaid, at a rate equal to the lesser of (i) the maximum legal rate permitted at law; or (ii) the rate of fourteen percent (14%) per annum.

Subject to prior prepayment, acceleration or conversion in accordance with the terms of this note, the Principal Amount, accrued and unpaid interest on the Principal Amount and all other indebtedness under this note shall be due and payable one year after the date hereof (the "Maturity Date").

Notwithstanding the foregoing, the Maker shall have the right to prepay any portion of the Principal Amount in whole or in part (together with any accrued and unpaid interest through the date of prepayment, plus any other amounts due under this note), or to convert this note pursuant to Section 6, without prepayment penalty or premium.

Whenever any payment required under the terms of this note shall be stated to be due on a day other than a business day, such payment shall be made on the next succeeding business day, and such extension of time shall in such case be included in the computation of payment of interest.

Payments of any amount required hereunder shall be made solely in lawful money of Canada, and shall be credited first against accrued but unpaid late charges, if any, then against accrued but unpaid interest, if any, and then against the unpaid balance of the Principal Amount. If any payments are made by check, such payments must be delivered to the Holder in sufficient time to allow the funds to become same day funds on or before the due date for such payment.

Maturity Date, to convert the then outstanding principal amount of this note or any portion thereof, plus any accrued but unpaid interest on this note, into Common Shares of the Maker, to be issued to the Holder. The number of Common Shares to be issued to Holder shall be calculated by dividing the total indebtedness as of such date (including any unpaid interest, late charges, costs or expenses) by a price equal to $2.72 per Common Share.

(i) Until this note is repaid or converted, the Maker shall not, without the consent of the Holder, declare or make any dividend or other distributions to shareholders of Maker.

(ii) The Maker will at all times keep true and complete books or record and accounts in accordance with generally accepted accounting principles and practices.

(iii) The Maker will at all times cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights and franchises; provided, however, that nothing in this Section shall require the Company to maintain, preserve or renew any right or franchise which in the opinion of the Board of Directors of the Company is not necessary or desirable in the conduct of the business of the Company, in the exercise of their reasonable business judgment.

At the option of the Holder, all or any part of the indebtedness of the Maker shall immediately become due and payable, irrespective of any agreed maturity, upon the happening of

(b) If any of the following events occurs, it shall constitute an Event of Default under this note:

(i) If the Maker shall breach any non-monetary condition or obligation imposed on the Maker pursuant to the terms of this note;

(ii) If the Maker shall make an assignment for the benefit of creditors;

(iii) If a custodian, trustee, receiver, or agent is appointed or takes possession of substantially all of the property of the Maker;

(iv) If the Maker becomes insolvent as that term is defined in
Section 101(26) of Title 11 of the United States Code;