CARBON DIOXIDE SALE AND PURCHASE AGREEMENT

(a)

“Affiliate” with respect to a Party means any entity that directly or indirectly (through one or more entities) controls, is controlled by, or is under common control with such Party. For the purposes of this definition, the term “control” means the right to cast more than 50% of the votes exercisable at an annual general meeting (or its equivalent) of the entity concerned or, if there are no such rights, ownership of more than 50% of the equity share capital of or other ownership interests in such entity, or the right to direct the policies or operations of such entity.

(b)

“Annual Contract Quantity” or “ACQ” means the total sum of all DCQ for a Contract Year.

(c)

“BCF” means one billion Standard Cubic Feet.

(d)

“Contract Year” means each successive twelve (12) month period during the Term, commencing on the effective date of this Agreement

(e)

“Cortez Pipeline” means the existing pipeline constructed for the transportation of Carbon Dioxide and extending from McElmo Dome to the Delivery Point.

(f)

“Carbon Dioxide” means a substance primarily composed of molecules containing one atom of carbon and two atoms of oxygen and secondarily of the other substances identified in the definition of Quality Specifications.

(g)

“Daily Contract Quantity” or “DCQ” means the volume of Carbon Dioxide specified for each Day during the Term, and shall be 10,000 MCF per day July 1, 2006 through December 31, 2006, and shall be 20,000 MCF per day thereafter.

(h)

“Day” means a period beginning at 7:00 a.m. (Central Standard Time) on a calendar day and ending at 7:00 a.m. (Central Standard Time) on the next succeeding calendar day.

(i)

“Delivered Price” means the amount per MCF payable by Buyer to Seller for Carbon Dioxide sold under this Agreement as set forth in Article 4, which price is exclusive of any royalty or tax reimbursement, if any, paid by Buyer pursuant to Article 7 and 8.

(j)

“Delivery Point(s)” means the flange connection located at the interconnect between the Hovenweep Compression Facility at the McElmo Dome Unit in Delores and Montezuma Counties Colorado, and the McElmo Creek CO2 Pipeline and/or Cortez Pipeline.

(k)

“Effective Date” means the date upon which this Agreement came into force, which is the date specified as such in the preamble of this Agreement.

(l)

“Excess Volume” means volume in excess of Buyer’s nominated volume, as described in Article 3.1.

(m)

“Interest Rate” means the Prime Rate as published in the “Money Rates” column of the Wall Street Journal.

(n)

“MCF” means one thousand Standard Cubic Feet.

(o)

“Measurement Point” means Seller’s Delivery Point(s) located at the flange connection at the interconnect between the Hovenweep Compression Facility at the McElmo Dome Unit in Delores and Montezuma Counties Colorado, and the McElmo Creek CO2 Pipeline and/or Cortez Pipeline.

(p)

“MMCF” means one million Standard Cubic Feet.

(q)

“Month” means a period beginning at 7:00 A.M. (Central Standard Time) on the first day of a calendar month and ending at 7:00 A.M. (Central Standard Time) on the first day of the next succeeding calendar month.

(r)

“Monthly Contract Quantity” or “MCQ” means the total sum of all DCQ for each Month, and shall be the basis for calculating Buyer’s Take or Pay obligation as described in Article 2.2(c).

(s)

“Parties” means the entities described in the preamble to this Agreement, collectively, and “Party” means any of them, individually (and in each case their successors and permitted assigns).

(t)

“Performance Assurance Provider” means a person or entity providing performance assurance in respect of a Party’s obligations under this Agreement in favor of the requiring Party

(u)

“Project” has the meaning ascribed to it in the first “Whereas” clause, above.

(v)

“Psia” means pounds per square inch absolute.

(w)

“Psig” means pounds per square inch gauge.

(x)

“Quality Specifications” means the following specifications for the Carbon Dioxide delivered hereunder:

(y)

“Standard Cubic Foot” means the amount of Carbon Dioxide which would occupy one cubic foot of space at a base pressure of 14.73 psia and at a base temperature of 60° Fahrenheit.

(z)

“Term” means the term of this Agreement, as described in Article 6.1.

(a)

except for Carbon Dioxide recycled at the McElmo Creek Field, the Ratherford Field, and the Aneth Field during the Project(s), each Day during the Term Buyer shall purchase and receive all of its daily Carbon Dioxide requirements for the Project, up to the DCQ and any Excess Volumes Seller has agreed to supply, from Seller; and

(b)

each Day during the Term Buyer shall purchase from Seller, and receive at the Delivery Point, the volume nominated by Buyer in accordance with Article 5.1 and any Excess Volumes requested by Buyer and agreed to by Seller in accordance with Article 3.1; and

(c)

during each Month of the Term, if Buyer does not purchase at least (**) percent ((**)%) of the MCQ for such Month ((**)% of the MCQ being the “Take or Pay Quantity”), then Buyer shall pay Seller for the volume difference between the Take or Pay Quantity and the volume actually purchased (such difference is hereinafter referred to as “Make-Up Volume”) at the price applicable for such Month. Subject to the terms and conditions herein, Buyer shall have the right to take delivery of Make-Up Volumes for which it has made payment under this Article 2.2(c), provided that (i) Buyer has purchased and received 100% of the ACQ for the Contract Year in which such Make-Up Volume was incurred and (ii) all such Make-Up Volumes are delivered during the Term and (iii) Seller, in its sole judgment, has sufficient volumes to provide Make-Up Volume to Buyer on the Day(s) on which Buyer requests delivery. Promptly after written request from Buyer to Seller for delivery of Make-Up Volumes, Buyer and Seller shall cooperate and use reasonable commercial efforts to schedule delivery of Make-Up Volumes. Seller shall never be obligated to provide any volume that exceeds the DCQ for a Day. It is recognized that Make-Up Volumes result from Buyer’s Take or Pay obligation under this Agreement, and that upon termination or cancellation of this Agreement for any reason, Seller shall have no obligation to provide any Make-Up Volume to Buyer.

The Take or Pay Quantity for each Month shall be reduced proportionally to the extent that (i) Seller does not deliver amounts nominated by Buyer, up to the DCQ, in such Month for any reason other than suspension due to Buyer’s default as provided in Articles 5.4 and 5.5; (ii) Seller delivers Off-Specification Carbon Dioxide that is refused by Buyer as provided in Article 11.3; (iii) Seller or Buyer has planned maintenance, as described in Article 11.20, that results in a reduction of the DCQ during such Month and; (iv) either Party’s performance is suspended due to an event of Force Majeure.

5.2

Monthly Statements

Seller shall install, operate and maintain, or cause to be installed, operated and maintained, measurement facilities to be used to measure all volumes delivered and purchased hereunder. No later than the fifteenth (15th) business day of the Month following the Month of delivery, Seller shall furnish Buyer a monthly statement specifying the total volume of Carbon Dioxide delivered and purchased hereunder during the preceding Month and the amount due for such volume. Business day is defined as not including Saturdays, Sundays, or holidays.

5.3

Auditing

Each Party shall have the right during reasonable business hours to examine the books, records, and measurement documents of the other Party to the extent necessary to verify the accuracy of any statement, payment, calculation, or determination made pursuant to the provisions of this Agreement for any calendar year within two (2) calendar years following the end of such calendar year. If any such examination shall reveal, or if either Party shall discover any error or inaccuracy in its own or the other Party’s statement, payment, calculation, or determination, then proper adjustment and correction thereof shall be made as promptly as practicable thereafter. Each party further agrees to retain the books, records and measurement documents for the above-stated period of time.

5.4

Payments

On or before (i) the twenty-fifth (25th) day of a Month in which the monthly statement is issued or (ii) ten (10) Days after Buyer’s receipt of such monthly statement, whichever is later, the Buyer shall pay to Seller the amount due under such monthly statement. Payment shall be made by wire transfer to the bank accounts as designated by Seller, without any discount associated with the transfer of moneys and at the expense of the Buyer, except that any expenses charged by the Seller’s bank with respect to such payments shall be borne by the Seller.
Seller’s designation of a bank account shall remain in effect during the Term unless changed by written notice to Buyer signed by a duly authorized representative of Seller.

If the Buyer fails to make payment of any sum due hereunder which is not the subject of a bona fide dispute, interest thereon shall accrue at an annualized rate equivalent to the Interest Rate plus three per cent (3%) (compounded monthly) from the date when such payment was due until payment is made in full.

When any amount included within a monthly statement is the subject of a bona fide dispute, the Buyer shall immediately notify the Seller in writing of the amount in dispute and the reasons therefor. The undisputed portion shall promptly be paid and after settlement of the dispute any amount agreed, adjudged or determined to be due shall be included in the next monthly statement to be rendered hereunder together with interest thereon at an annualized rate equivalent to the Interest Rate plus one per cent (1%) (compounded monthly) from the date when such payment would, in the absence of a dispute, have been payable until payment is made. If the dispute is later determined not to be bona fide, interest shall instead accrue at an

annualized rate equivalent to the Interest Rate plus three per cent (3%) (compounded monthly) from the date when such payment would, in absence of a dispute, have been payable.

If the Buyer fails to pay any sum due hereunder which is not the subject of a bona fide payment dispute, the Seller may, immediately on giving notice to the Buyer of its intention to do so, suspend delivery of Carbon Dioxide hereunder until payment is duly made; provided, however, that a suspension effected by the Seller in accordance with the provisions of this Article 5.4 shall not, in any circumstances, relieve the Buyer of its accrued obligations under this Agreement, or entitle the Buyer to any form of deduction from the Take-or-Pay Quantity as described in Article 2.2.

If Buyer fails to pay any sum due hereunder which is not the subject of a bona fide payment dispute within thirty (30) days after the due date thereof, then the Seller shall have the right, at the Seller’s sole election, to cancel this Agreement, and such cancellation shall become effective upon the date specified in such notice. The Seller’s right to cancel this Agreement shall be conditioned upon the Seller having provided the Buyer a minimum fourteen (14) days notice, which notice may be sent at any time after the due date; provided, however, that regardless of the timing of the notice the Seller shall not have the right to cancel this Agreement any sooner than 31 days after the payment due date. Such cancellation shall be without prejudice to any other rights and remedies that accrued to each Party prior to cancellation, including but not limited to the right of a Party to receive payment for all claims which arose or accrued prior to such cancellation.

Payment may be made by Buyer before the Payment Date for either of the following two reasons: (a) Buyer may pay any invoice prior to the due date in order to avoid incurring additional fees under an outstanding letter of credit securing the payment of such invoice, or (b) Buyer may pay any invoice prior to the Payment Date in order to maintain Buyer’s outstanding credit exposure to Seller below pre-approved credit limits set by Seller so that Buyer may avoid exceeding those limits and being obligated to provide a letter of credit to Seller pursuant to its contractual obligations.

As a condition of this Agreement, when Buyer is purchasing CO2 pursuant to this Agreement on secured terms, Buyer shall provide to Seller by noon central time on the Business Day prior to volume flow during the delivery period, a Letter of Credit from a bank acceptable to ExxonMobil Gas and Power Marketing Company of sufficient term and amount to guarantee payment by Buyer for the sale of CO2 to Buyer provided hereinabove, and in a form and amount acceptable to Seller, in Seller’s sole discretion. If, during the Month CO2 prices payable hereunder either increase or decrease from the price estimate upon which the initial Letter of Credit, or any subsequent revision thereof, was based; or the CO2 quantity deliverable hereunder exceeds the quantity estimate upon which the initial Letter of Credit or any subsequent revision thereof, was based; or Buyer’s ability to make payment is otherwise adversely affected, then in addition to the rights and remedies provided to Seller in Article 5.5 Change in Financial Circumstances, Seller shall have the right to demand that upon Seller’s notification to Buyer, Buyer shall provide a revised Letter of Credit acceptable to Seller in Seller’s sole discretion. If Seller does not receive such acceptable revised Letter of Credit within thirty six (36) hours of Seller’s request to Buyer, Seller shall have the right to suspend deliveries of CO2 hereunder until such time as Seller has received a Letter of Credit satisfactory to Seller, and/or immediately terminate this Contract upon written notice to Buyer. The rights and remedies

provided to Seller in the paragraph are not exclusive of, but are in addition to any rights and remedies provided to Seller in Section 5.5 Change of Financial Circumstances in this Agreement.

5.5

Change of Financial Circumstances

If at any time within the Term there is a change in the financial resources of the Buyer or its Performance Assurance Provider which gives Seller reasonable grounds for believing that Buyer has ceased to have the financial resources to meet its obligations contained in this Agreement, the Seller may give Notice to the Buyer stating its grounds for insecurity with respect to the Buyer’s performance, and requesting adequate assurances of performance in a form acceptable to Seller.

In the event the Buyer does not provide adequate assurances of performance within three (3) business days following receipt of Notice, the Seller may suspend or reduce deliveries under this Agreement with immediate effect until such time as the Buyer provides such adequate assurance of performance, including financial assurances if reasonably requested by the Seller. In the event the Buyer is unable or unwilling to provide adequate assurance of performance satisfactory to the Seller within thirty (30) days of receipt of the Seller’s Notice, the Seller shall have the right to cancel this Agreement with immediate effect upon providing notice of such cancellation to Buyer. Such cancellation shall be without prejudice to any other rights and remedies that accrued to each Party prior to cancellation, including but not limited to the right of a Party to receive payment for all claims which arose or accrued prior to such cancellation.

Seller shall have the right to terminate this Agreement immediately, by giving written Notice, in the event Buyer, its Controlling Party, or its Performance Assurance Provider:

6.1

Term

This Agreement shall become effective July 1st, 2006 and, subject to termination or cancellation as otherwise provided herein, shall have a term of 4 years through June 30, 2010, or until the TCQ has been delivered and purchased, whichever is earlier. If at the end of the Term of this agreement, Buyer has an accrued take-or-pay liability for volume not taken but paid for, this agreement shall automatically be extended for another six (6) months. During that period, Buyer shall have the right to nominate a daily volume from Seller equal to the accrued liability volume divided by 180. The volume delivered during the six (6) month extension period will be for the exclusive purpose of taking the accrued liability volume. However, the daily nominated volum