Republic of Uganda

Date of Contract Signature- 02/03/2012

Febuary 3rd 2012- the date of contract signature

Location of contract area- the Kanywataba prospect comprises of 171 square kilometers in the Kanywataba area with the following coordinates ; From 01 00' 00''N, 30' 25' 00'' E and thence East to 01 00' 00''N, 30 35' 00'' E and thence South to 00 55' 0'' N, 30 35' 00'' E and thence West to 00 55' 00'' N, 30 25' 00'' E and thence North back to 01 00' 00''N, 30 25' 00'' E

Tullow Uganda Limited

Name of field- Kanywataba contract area

Resources mean petroleum which include crude oil or natural gas

Size of contract area- 171 square kilometers

The Government of the Republic of Uganda acting through the Ministry of Energy and Mineral Development

Type of Contract- Production Sharing Agreement

2012- year of contract signature

2012- the year of contract signature

Tullow Uganda Limited shall cause a consulting firm or individuals or international standing to carry out a environmental impact studies to determine the present situation relating to the environment, human beings, wildlife or marine life in the contract area and neighboring areas. The study will establish the effect of the petroleum operations on the above and will submit contemplated measures and methods to minimize environmental damage.

Tullow Uganda Limited shall ensure that the petroleum operations are carried out in an environmentally acceptable and safe manner consistent with international best industry practice and applicable laws and that such operations are being monitored.

Tullow Uganda Limited shall conduct petroleum operations in a manner that will promote conservation and protect the environment. It should employ techniques which will prevent damage to the environment. It shall implement proposals in the development plan, which will prevent pollution, safeguard natural resources, treat waste etc., |f the works or installations erected by Tullow Uganda Limited or operations cause pollution, or harm wildlife or the environment to a degree unacceptable by the Government or in violation of international environmental standards, the licensee shall take remedial measures and repair the damage caused.

Within 90 days after the expiration of each calendar year, Tullow Uganda Limited shall submit to the Government, accounts audited and certified by an independent chartered accountant or a certified public accountant of international standing acceptable to both parties. The Government has the right to review Tullow Uganda Limited's books and records in relation to the petroleum operations that are the subject of this agreement for a period of 24 months after the closure of any year's accounts. Art.31.2

Tullow Uganda Limited shall pay the Government a signature bonus of US$300,000 upon signing the contract, and a discovery bonus of US$ 2,000,000 if any discovery is made pursuant to the exploration licence. Art. 9

All central, district administrative, municipal and other local administrators’ or other taxes, duties, levies or other lawful impositions applicable to Tullow Uganda shall be paid by Tullow Uganda in accordance with the laws of Uganda in a timely fashion.

Tullow Uganda Limited shall comply with the procedures and formalities required by the laws and regulations to foreign exchange in force from time to time in Uganda. Art. 23

Production sharing is to be as follow; (i) Where production does not exceed 5,000 BOPD- Government share- 46% and Tullow Uganda Limited share- 54% (ii) Where production is higher than 5,000BOPD but does not exceed 10,000 BOPD- Government share- 48.5% and Tullow Uganda Limited share- 51.5% (iii) Where production is higher than 10,000 BOPD but does not exceed 20,000 BOPD- Government share- 53.5% and Tullow Uganda Limited share- 46.5% (iv) Where production is higher than 20,000 BOPD but does not exceed 30,000 BOPD- Government share- 58.5% and Tullow Uganda Limited share- 41.5% (v) Where production is higher than 30,000 BOPD but does not exceed 40,000 BOPD- Government share- 63.5% and Tullow Uganda Limited share- 36.5% (vi) Where production is higher than 40,000 BOPD - Government share- 68.5% and Tullow Uganda Limited share- 31.5% The Government and Tullow Uganda Limited profit oil split is based on incremental production. Government shall have the right to receive its share of Profit Oil in cash in US Dollars or in kind, depending on Government’s preference. Art. 13

When the production does not exceed 2,500 BOPD- 5%; When the production is higher than 2,500, but does not exceed 5,000 BOPD- 7.5%; When the production is higher than 5,000, but does not exceed 7,500 BOPD- 10%; When the production exceeds 7,500 BOPD- 12.5% Royalties for gas will be negotiated upon the discovery of gas. Additional Royalty Tullow Uganda Limited shall pay the Government the following additional royalty of the value of recovered reserves on the basis of gross total daily production in barrels of oil equivalent per day (BOEPD). Where the recovered cumulative Petroleum does not exceed 50- 2.5%. Where the recovered cumulative Petroleum is higher than 50 but does not exceed 100-5%. Where the recovered cumulative Petroleum is higher than 100 but does not exceed 150- 7.5%. Where the recovered cumulative Petroleum is higher than 150 but does not exceed 250-10%. Where the recovered cumulative Petroleum is higher than 250 but does not exceed 350- 12.5%. Where the recovered cumulative Petroleum is higher than 350- 15% Arts. 10.1.1,10.1.5, 10.2

The Government or its nominee may enter into a joint venture agreement with Tullow Uganda Limited allowing for state participation of no more than 15%. The Government or its nominee is entitled to participation in the development area. Art. 11.1

Tullow Uganda Limited agrees to employ Ugandan citizens in its petroleum operations. It will gradually replace its expatriate staff with suitably qualified and experienced Ugandan citizens. An annual programme for training and phasing in Ugandan citizens shall be established by Tullow Uganda Limited and shall be submitted for approval to the advisory committee. Art. 21.1

Tullow Uganda Limited shall give preference to goods which are produced or available in Uganda and services which are rendered by Ugandan citizens and companies unless such goods or services are not equal to or better than imported goods and services with regard to quality, price and availability at the time and in quantities required. Tullow Uganda Limited shall establish appropriate tender procedures for such procurement. Goods include equipment, materials and supplies. Art. 20

Tullow Uganda Limited should take all necessary steps to ensure adequate compensation for injury to persons caused by petroleum operations. |f the works or installations or operations by Tullow Uganda Limited endangers persons, then it shall take appropriate remedial measures and repair the damage caused. Art. 25.1

The Government reserves the right to grant licences to other legal persons to prospect for and explore for and mine minerals other than petroleum in the contract area.

Tullow Uganda Limited agrees to train and employ Ugandian citizens in its etroleum operations, to undertake the schooling and training or Ugandan citizens for staff positions including administrative and executive management positions. Art. 21.1

Tullow Uganda Limited shall submit to the advisory committee within 30 days from the effective date, a detailed work programme and budget, which explain the exploration operations and development operations it proposes to carry out during the licence period and the cost thereof. Minimum Work Requirement Tullow Uganda Limited shall carry out a minimum work programme - preliminary geological and geophysical studies and the drilling of 1 well. Tullow Uganda Limited shall expende not less than US $3.50 million as a minimum exploration expenditure:- Preliminary geological and geophysical studies- US $500,000 and drilling- US $3,000,000 Compliance with minimum exploration expenditures does not relieve Tullow Uganda Limited of its obligation to comply with the required minimum work programme and vice versa. Arts. 4.2, 4.4, 6.1

Any dispute under the contract that cannot be settled amicably within 60 days, should be referred to arbitration in accordance with UNCITRAL rules. As per the rules, the arbitration is conducted by 3 arbitrators appointed as per UNCITRAL rules. The arbitration shall take place in London and the arbitration award shall be final and binding on the parties to this contract. Any matter in dispute is to be referred for determination by a sole expert to be appointed by both, the Government and Tullow Uganda Limited. If the Government and Tullow Uganda Limited fail to appoint the expert within 60 days after being notified to do so, either of them may have appoint the expert by the president of the institute of petroleum (London). If the President is disqualified to act by reason of professional, personal or social interest or contract with the parties in dispute, the next highest officer for the time being of said institute of petroleum, who is not disqualified should act instead of the President. No person can be appointed as an expert unless he shall be qualified by education, experience, and training to determine the subject matter in dispute; or if he has or may have some interest or duty which conflicts or may conflict with his function as an expert. Art.26

Tullow Uganda Limited may not assign, in whole or in part any of its rights, privileges, duties, or obligations or change the operatorship without the prior written consent from the Minister, whose consent is not to be unreasonably withheld. In relation to any assignment, Tullow Uganda Limited will remain jointly and severally liable for the performance of all rights, duties, and obligations under the contract and any related licences and is fully liable for the performance of any assignee, unless the parties otherwise agree. If the assignment is to a non-affiliated company, then Tullow Uganda Limited (or other assignor) shall provide to the Government an unconditional undertaking by the assignee to assume all obligations of Tullow Uganda Limited under the contract, and a performance bond or insurance bond substantially in the form set out in Annex D. Tullow Uganda Limited shall be released and discharged from its obligations to the extent they are assumed by the assignee. Any assignment attracts capital gains tax. Art. 24

The contract shall be deemed to have terminated if the exploration or production licence has expired, surrendered by the licensee or lawfully cancelled or terminated. The Government has the right to terminate the contract and any exploration or production licences upon giving 30 days written notice if Tullow Uganda Limited : (i) fails to make any monetary payment as required by law or under this contract within 30 days of such payment becoming due; (ii) has committed a material breach of the terms and conditions of the contract or associated licenses; (iii) fails to comply with the petroleum (exploration and production) act; or (iv) becomes bankrupt or goes into liquidation. Art. 30

If any information marked as “confidential” by a party in possession of it which becomes known to the other party shall not be published or disclosed to third parties without the prior written consent of the party. Art. 36

The contract is governed by the laws of Uganda.

Each party shall be excused from compliance expect for payment of monies due, as long as such compliance is prevented or delayed by force majeure events. If any party is unable to comply with the agreement due to a force majeure, then such a party shall notify the other giving details of the event within 7 days of its occurrence and during that period, the obligations of the parties shall be suspended.