PETROLEUM AND NATURAL GAS LEASE
-------------------------------

PARCEL    LEGAL DESCRIPTION                                            HA  
-------   -------------------------------------------------------    ------

  67003   TRACT  1                                                      264
          --------
          TWP 085 RGE 16 W6M SEC 2

          INC : PETROLEUM AND NATURAL GAS

          ALL ZONES

          EXC : PETROLEUM AND NATURAL GAS

          IN 33016 MONTNEY (EXCLUDING BASAL LAG)

          33016 MONTNEY (EXCLUDING BASAL LAG) ZONE IDENTIFIED IN 
          THE INTERVAL 1447.4M-1711.9M ON THE PHOTO DENSITY DUAL 
          SPACED NEUTRON LOG OF THE WELL W.A. 19768 15-5-86-16 
          W6M

          THE GRANT OF TENURE DOES NOT GUARANTEE THE ISSUANCE OF 
          A PERMIT TO CONDUCT OIL AND GAS ACTIVITY. SUCCESSFUL 
          BIDDERS MUST APPLY FOR ACTIVITY PERMITS FROM THE BC 
          OIL AND GAS COMMISSION (COMMISSION) UNDER THE OIL AND 
          GAS ACTIVITIES ACT AND/OR FROM OTHER AGENCIES WHERE 
          APPLICABLE. THE COMMISSION MAY DENY PERMIT 
          APPLICATIONS OR MAY IMPOSE CONDITIONS ON ACTIVITY 
          PERMITS.
          PARCEL LOCATED WITHIN TREATY 8 AREA AND WAS REFERRED 
          TO THE FOLLOWING FIRST NATION(S) FOR REVIEW AND 
          COMMENT (NOTE THAT SUBSEQUENT CONSULTATION WITH FIRST 
          NATIONS, NOT NECESSARILY LIMITED TO THOSE LISTED 
          BELOW, MAY BE REQUIRED PRIOR TO ACTIVITIES BEING 
          AUTHORIZED):
          - BLUEBERRY RIVER FIRST NATIONS
          - DOIG RIVER FIRST NATION
          - HORSE LAKE FIRST NATION
          - WEST MOBERLY FIRST NATIONS
          THE FOLLOWING FIRST NATION(S) HAS/HAVE ADVISED THAT 
          THE AREA IS USED FOR PRACTISING THEIR TREATY RIGHTS:
          - DENE THA' FIRST NATION
          - BLUEBERRY RIVER FIRST NATIONS
          THE FOLLOWING FIRST NATION(S) HAS/HAVE REQUESTED EARLY 
          ENGAGEMENT, PRIOR TO SUBMITTING AN APPLICATION TO THE 
          OIL AND GAS COMMISSION, TO PROVIDE THE PROPONENT WITH 
          THE OPPORTUNITY TO DISCUSS FIRST NATION(S) INTERESTS 
          (ASSESSMENTS; MONITORING STUDIES; AND MITIGATION, 
          MANAGEMENT AND/OR RECLAMATION PLANS MAY BE REQUESTED):
          - DOIG RIVER FIRST NATION
          - BLUEBERRY RIVER FIRST NATIONS
          ACCESS, EXPLORATION AND CONSTRUCTION RESTRICTIONS MAY 
          APPLY TO PROTECT ACTIVITIES AND INTERESTS IDENTIFIED 
          IN THE AREA BY ONE OR MORE FIRST NATIONS. THESE 
          INCLUDE BUT ARE NOT LIMITED TO:


                                   PAGE     1
PETROLEUM AND NATURAL GAS LEASE
-------------------------------

PARCEL    LEGAL DESCRIPTION                                            HA  
-------   -------------------------------------------------------    ------

          - HUNTING
          - FISHING
          - HISTORIC AND CURRENT TRANSPORTATION CORRIDORS (LAND 
          AND WATER)
          - UNGULATE WINTER RANGE AND BIRTHING AREAS
          - WILDLIFE AND WILDLIFE HABITAT INCLUDING CONNECTIVITY
          - UNGULATE BIRTHING AND CALVING AREAS
          - TRADITIONAL USE AREAS
          - CULTURAL AND SPIRITUAL VALUES
          - STREAMS, WETLANDS, LAKES
          - SURFACE WATER
          - RIPARIAN HABITATS
          CONCERNS AND ISSUES IN THE AREA IDENTIFIED BY ONE OR 
          MORE FIRST NATIONS INCLUDE:
          - UNCONVENTIONAL OIL AND GAS DEVELOPMENT
          - CUMULATIVE EFFECTS
          - WATER QUALITY AND WATERSHED VALUES
          ACCESS AND CONSTRUCTION RESTRICTIONS MAY APPLY. PRIOR 
          TO ON-THE-GROUND ACTIVITY, CONTACT THE APPROPRIATE 
          PROVINCIAL MINISTRY FOR APPLICABLE MANAGEMENT AND 
          PROTECTION MEASURES TO MINIMIZE DISTURBANCE AND 
          ADDRESS THE FOLLOWING (NOT LIMITED TO):
          PARCEL WITHIN OR PARTIALLY WITHIN THE AGRICULTURAL 
          LAND RESERVE; RESTORATION OF SURFACE SOIL ON DISTURBED 
          AREAS REQUIRED. PRECAUTIONS REQUIRED TO PREVENT THE 
          INTRODUCTION OR SPREAD OF INVASIVE PLANTS AND PLANT 
          DISEASES.
          POTENTIAL FOR ARCHAEOLOGICAL RESOURCES EXISTS; 
          ARCHAEOLOGICAL IMPACT ASSESSMENT MAY BE REQUIRED.

          TERM           :    5  YEARS
          FEES           :     $500.00
          RENT PER HA    :       $7.50

          NO FURTHER TRACTS                      REF.NO. 1905005

---------------------------------------------------------------------------
















                                   PAGE     2



                       Parcels Offered and Hectares Summary


                                   No. Offered         Hectares
                                   -----------         --------

            Permits                          0                0
            Drilling Licences                0                0
            Leases                           1              264

            Grand Total                      1              264














































