08/09/2007

Stream Oil & Gas Limited

Gorisht-Kocul Field Stream Oil & Gas shall be solely responsible for petroleum operations conducted at the project area. The project area includes; - that portion of the contract area which during the evaluation period is designated from time to time as the evaluation area; - that portion of the contract area during the development and production period, which is designated from time to time as development and production area; - if Stream Oil & Gas undertakes a new evaluation program, that portion of the contract area which is designated from time to time as the new evaluation area. Albpetrol shall be solely responsible for petroleum operations conducted in means the portion of Annex A which is outside of the project area which is described above.

Gorisht-Kocul Field

-Petroleum -Associated gas (means natural gas found in association with crude oil if such crude oil can by itself be commercially produced).

Albpetrol Sh.A.

The development plan shall commence on the date that the development and production program is approved and shall continue until the expiration of 25 years from the date of approval of such program.

Petroleum Agreement

Stream Oil & Gas shall endeavour to achieve the efficient use and safe development for and production of petroleum and optimise the ultimate economic recovery of petroleum from the project area. It shall also carry out petroleum operations in compliance with petroleum law, the legal provisions in effect on environment protection and in compliance with the regulations made hereunder and in accordance with good practices of oil Industry. Stream Oil & Gas shall conduct petroleum operations in a safe and proper manner in accordance with generally accepted international petroleum industry practice and shall cause as little damage as reasonably practicable to the general environment, including, among other things, the surface, air, lakes, rivers, sea, animal life, plant life, crops, other natural resources and property. If there is a blow-out, accident or other emergency, Stream Oil & Gas shall take all immediate steps to bring the emergency situation under control and protect against loss of life and loss of or damage to property and prevent harm to natural resources and the general environment. If the government reasonably determines that any work or installations erected by Stream Oil & Gas (but not those works or installations which were in place prior to the effective date or are transferred to Stream Oil & Gas after the date the contract is approved) endanger or may endanger persons or third party property or cause pollution or harm the environment to an unacceptable degree, Albpetrol may require Stream Oil & Gas to take remedial measures within a reasonable period and to repair any damage to the environment. In the event that Stream Oil & Gas fails to take the remedial measures required by Albpetrol within the time period established therefore, Albpetrol may carry out such remedial measures for Stream Oil & Gas' account. Any remedial measures required to be undertaken by environmental authorities of the Government of Albania in respect of those works or installations in the contract area which were in place prior to the effective date or were transferred to contractor after the date the contract is approved shall be for Albpetrol's account.

Albpetrol shall have 12 months from receipt of each cost account statement pursuant to the accounting procedure in which to audit and raise objections as to any that cost account statement, provided that Albpetrol shall not be entitled to conduct more than two audits of Stream oil & Gas books, records and accounts in any fiscal year. Albpetrol and Stream Oil & Gas shall agree on any required adjustments. Supporting documents and accounts will be available to the Albpetrol during that 12 months. If within the time limit of the 3 months following the lapse of the above 12 months Albpetrol has not advised Stream Oil & Gas of its exception to such statement, that statement shall be considered as approved.

Stream Oil & Gas will spend a minimum of US$ 20,000 per each contractual year for Albpetrol employees in respect of the annual training bonus starting from the date the contract is approved. Stream Oil & Gas shall within 30 days after the date the contract is approved pay Albpetrol as a signature bonus the amount of US$ 50,000.00. The signature bonus shall not be cost recoverable.

Employees of Stream Oil & Gas will not be subject to taxes and duties on any income or profit realized by them, directly or indirectly, from their work in the petroleum operations, nor on the import or re-export of their personal or household belongings, which items may be freely imported and subsequently exported.

Stream Oil & Gas shall be liable to tax on profit in conformity with Law No.7811, date 12.04.1994 “On approval of decree No.782, date 22.2.1994 “On the fiscal system in the hydrocarbons sector (Exploration-Production)”, and amended by Law No.8297, date 04.03.1998, and in conformity with the License Agreement.

After Stream Oil & Gas has recovered all of its petroleum costs from the cost recovery petroleum, the remaining cost recovery petroleum shall be profit petroleum. The profit petroleum will be split between Albpetrol and Stream Oil & Gas as follows: Albpetrol: 1/5 of the corresponding calculated Albetrol % share based on calendar quarter R, as described in Art. 9.2. Stream Oil & Gas 100% minus above profit share of Albpetrol

Available petroleum [the amount of petroleum (less any amount used in petroleum operations, flared or injected, and less any Deemed Production to which Albpetrol is entitled under this contract) produced, saved and metered from the project area at the measurement point] shall be allocated between Albpetrol (the "albpetrol share") and Stream Oil & Gas ("cost recovery petroleum") based on the R factor as defined below, as set forth in the following table: R Factor Albpetrol Share Cost Recovery Petroleum 0.0 < R < 1.0000 2% 98% 1.0000 ≤ R < 1.5000 2.5% 97.5% 1.5000 ≤ R < 2.0000 4% 96% 2.0000 ≤ R 6% 94% The Albpetrol share shall be lifted in oil and delivered in kind and/or cash to Albpetrol in the contract area. The R factor is calculated as follows: RN =Ak/Bk where: RN means the R Factor for calendar quarter N. AK means the sum of Stream Oil & Gas's revenues minus profit petroleum tax accrued in calendar quarter N and all preceding calendar quarters following the date the contract is approved. BK means the sum of petroleum costs in calendar quarter N and all preceding calendar quarters following the date the contract is approved. Any re-adjustment in entitlement for the current calendar quarter will be spread over the remainder of the current fiscal year in a way that the party which is entitled to additional available petroleum for the current calendar quarter will lift the readjustment quantity in equal monthly proportions in addition to its regular entitlements. If the production in any month is insufficient to supply the re-adjustment quantity, then the unsupplied entitlement shall be carried forward and spread equally over the remaining months of the current calendar quarter. The determination of the R factor shall first be done for the first calendar quarter following the date the contract is approved. Stream Oil & Gas shall be entitled to the cost recovery petroleum to recover all petroleum costs borne by it inside or related to the project area.

Stream Oil & Gas will select its management and employees according to its discretion, and shall determine the conditions of employment and the number of employees to be used for petroleum operations. However Stream oil & Gas and its sub-contractors will, to the extent available, employ qualified Albanians to carry out the petroleum operations, giving priority to Albpetrol personnel, if their professional skills, knowledge and expertise fit with operational requirements. Otherwise, Stream Oil & Gas shall be free to employ such expatriate professionals as it deems necessary.

Stream Oil & Gas, its contractors and subcontractors shall give priority to goods and materials produced in Albania if these goods and materials are being offered under equally favourable conditions regarding the quality, price and availability, and in the quantities required. Stream Oil & Gas shall give priority to services performed by Albanian sub-contractors if such services are offered under equally favourable conditions regarding the quality, price and availability they may be offered by foreign sub-contractors For the above purposes, prices for locally manufactured materials, equipment, machinery and consumables and for services of local contractors shall be compared with the prices of goods and services in the international market after transportation and insurance costs have been added.

Stream Oil & Gas shall ensure that all materials, equipment and facilities used in petroleum operations comply with generally accepted engineering norms, are of proper construction and are kept in optimal working order. Stream oil & Gas shall purchase or lease all equipment, materials, services and supplies required to be purchased or leased pursuant to the annual programs. As of the date this contract is approved, Stream Oil & Gas will be entitled to use free of charge and for the performance of the petroleum operations, all other assets, equipment, means and infrastructure (including roads, electricity power lines and water, oil and gas pipelines) existing in the contract area or located at the region around or close to the contract area on the date the contract is approved but (unless otherwise agreed with the supplier) subject to payment, on a non-discriminatory basis, at reasonable cost for electricity, water, oil and gas used. Stream Oil & Gas shall use the above under commercially reasonable terms and conditions, the pipelines that transport the petroleum produced in the contract area to the ports and refineries in Albania and shall have the right to construct, lay and operate pipelines within Albania subject to the requirement to provide access to excess capacity, if available, to third parties on commercial terms. Stream Oil & Gas will be entitled to use the above under commercially reasonable terms and conditions, the pipelines that transport the petroleum produced in the contract area to the ports and refineries in Albania and shall have the right to construct, lay and operate pipelines within Albania subject to the requirement to provide access to excess capacity, if available, to third parties on commercial terms. Albpetrol and National Agency for Natural Resources shall ensure that Stream Oil & Gas has use of the railways, roads, highways, water, land surface, timber, electricity, sanitary structures and other infrastructures in Albania, at commercially reasonable rates and on a non-discriminatory basis, in conformity with Albanian legislation, so as to be able: (a) to perform the petroleum operations in compliance with this contract; and (b) to produce, transport, export and sell petroleum in or from Albania as provided in this contract and the petroleum law.

Stream Oil & Gas shall have the right during the term hereof to freely lift, process, transport,dispose of and export its share of petroleum and retain abroad the proceeds obtained there from. Provisions must be made so that the minimum gas supply required for the Ballsh refinery is sustained based on the existing contract between Albpetrol and ARMO. Stream Oil & Gas shall provide all necessary funds and shall bear all costs and expenses required in carrying out petroleum operations under this contract except to the extent as is otherwise provided in this contract. Stream Oil & Gas shall endeavour to achieve the efficient use and safe development for and production of petroleum and optimise the ultimate economic recovery of petroleum from the project area. It shall also carry out petroleum operations in compliance with petroleum law, the legal provisions in effect on the environment protection and in compliance with the regulations made hereunder and in accordance with good practices of oil industry. Stream Oil & Gas shall provide all funds required to conduct petroleum operations under this contract.

Any dispute or claim including any purported termination under Art. 22, arising out of or relating to this contract or the breach, termination or validity of this contract or to the petroleum operations carried out under this contract, shall be finally and conclusively settled by arbitration in accordance with the United Nations Commission on Trade Law Arbitration Rules. In addition, the appointing authority under the rules shall be the President of the Court of International Arbitration of the International Chamber of Commerce in Paris, France. The arbitration shall take place in Zurich, Switzerland. The language to be used in the arbitration proceedings shall be English. Albpetrol and Stream Oil & Gas expressly waive any right to appeal an arbitral award to any court whatsoever, and the arbitral award shall be final and binding upon them. Albpetrol expressly waives any right to claim sovereign immunity in connection will any proceeding instituted pursuant to this Art. 19, any proceeding to compel enforcement of this Art.19, or any proceeding to enforce any award made by arbitration under this Art. 19.

Except as otherwise specified under this contract, all information acquired or received under this contract shall be maintained by Stream Oil & Gas and Albpetrol as strictly confidential and shall not be divulged without the prior written consent of the other party while this contract remains in force. Stream Oil & Gas shall not be bound by these obligations except to the extent required to comply with laws, rules or regulations of any stock exchange to which Stream Oil & Gas may be subject unless such information becomes part of the public domain through sources other than Stream Oil & Gas. Furthermore, Stream Oil & Gas shall be bound by these obligations of confidentiality for a period of 5 years following termination of this contract. Albpetrol and Stream Oil & Gas may disclose any such information to its employees, affiliates, consultants or subcontractors to the extent required for the efficient conduct of petroleum operations. It shall do so provided that in the case of disclosure to employees and affiliates it ensures adequately the protection of the confidential nature of the information concerned. In the case of disclosure to consultants or subcontractors provided, the recipients have first entered into a confidentiality undertaking. For purposes of obtaining new offers on relinquished portions of the contract area or on areas adjacent to the contract area, Albpetrol may show any other entity data on such relinquished portions in uninterpreted and basic form during the term of this agreement. Subject to obtaining confidentiality undertakings as provided in Art. 23.2, either party may disclose such information obtained pursuant to this agreement as required by financing institutions from which the disclosing party is seeking finance for the purposes of carrying out its obligations under this contract. Subject to obtaining a confidentiality agreement, Stream Oil & Gas may show any such information to bona fide potential assignees who have an interest in the petroleum rights granted to Stream Oil & Gas under this contract.

Subject to Art. 18.1(b), the activities of Stream Oil & Gas in performing the petroleum operations under this contract shall be governed by and conducted in accordance with the requirements of the Albanian Law. All questions with respect to the interpretation or enforcement of, or the rights and obligations of the government and Stream Oil & Gas under, this contract and which are the subject of arbitration in accordance with Art. 19 shall be governed by the laws of England.

If, as a result of any change in the laws, rules and regulations of Albania; (i) any right or benefit granted (or which is intended to be granted) to Stream Oil & Gas under this contract or the license agreement (the license agreement dated 08/06/2007 granted by the ministry in charge of petroleum activity in Albania and the National Agency for Natural Resources to Albpetrol governing petroleum operations under this contract, and to which Stream Oil & Gas will become a party upon execution and registration of the instrument of transfer as described in Annex E) is infringed in some way; (ii) a greater obligation or responsibility is been imposed onto Stream Oil & Gas; or (iii) in whatever other way the economic benefits accruing to Stream Oil & Gas from this contract or the license agreement are negatively influenced by any change in the laws, rules and regulations of Albania, and such an event is not provided for under this contract, Albpetrol and Stream Oil & Gas will immediately amend this contract and license agreement, and Albpetrol, National Agency for Natural Resources and the ministry in charge of petroleum activity will immediately undertake other necessary actions to eliminate the negative economic effect on Stream Oil & Gas.