Article 2 Purpose of the Agreement 第二条 本协议目标
The purpose of the Parties in entering into this Agreement shall be to: 双方签订本协议的目标是：
a) carry out the Joint Assessment; 实施联合评价工作；
 b) exchange and analyse data arising from the Joint Assessment; 就联合评价工作产生的数据进行交换和分析；
c) assess the Shale Gas potential associated with the Project Area so as to permit the Parties to enter into a PSC, subject to the terms of this Agreement.
评估项目区域向关的页岩气潜力，一遍双方根据本协议条款签订产品分成合同；
d) grant kkk exclusive rights to participate in the Project Area and the exclusive right to negotiate for and enter into a PSC as more particularly set out in Article 5 (including by way of matching PSC terms offered to a third party as set out in Article 5.2). For the avoidance of doubt, references to “kkkk’s exclusive rights” shall mean that subject only to Article 5.2, XXXXX shall not, during such exclusive rights or exclusive option period , make any offer or enter into negotiations with a third party, concerning participation in the Project Area, including participation through a PSC.
给予yyyyyy参与项目区域的排他权，和按照第5条的规定协商、签订产品分成合同的排他权（包括按照第5.2条的规定提供与第三方相同的产品分成合同条款的方式签订分成合同的情况）。为避免歧义，“yyyyyy的排他权”指仅根据第5.2条的规定，xxxxx不得在排他权和排他选择权存在的旗下内，就参与项目区域，包括通过签订产品分成合同参与项目区域的事项向第三方提出要约或进行协商。

Article 3 Project Area and Outline Work Program 第三条 项目区域和工作计划

3.1 Project Area 3.1 项目区域

The Project Area means the ggggggg Bei Block located in the Sichuan Basin, having the geographic coordinates and boundary turning points set out in Annex 1 of this Agreement. The Annexes shall be an integral part of the Agreement.  Currently it is expected that the Parties will study the geologic formations to the bottom of the Sinnian strata, with primary focus on the Silurian, and secondary focus on the Cambrian.
本协议的项目区域指位于四川盆地的ggggggg北区块，其地理边界折点坐标见本协议附件一，附件一应作为本协议的一部分。现在计划双方将研究到震旦纪地层的底部，主要着重志留系地层，其次着重寒武系地层。

3.2 Outline Work Program 3.2 工作计划

3.2.1 The Joint Assessment is envisaged to last approximately two years (assuming xxxxx exercises its option to enter into Phase II), commencing from the Approval  Date, unless otherwise mutually agreed by the Parties. 3.2.1 除非双方另有约定，自批准日开始，联合评价工作预计将持续大约十二个月（假定yyyyyy选择进入第二期）。

3.2.2 In Phase I, xxxxx will study the Data Package and will drill (at least to the base of the Silurian shale), core and test two deep vertical wells. The purpose of these wells will be to understand the rock quality and rock physics of the shales and plan subsequent horizontal wells.
3.2.2 在第一期，yyyyyy将研究资料清单，并就两口垂直深井进行钻探、取心和测试。这些井的目的在于了解岩石质量和页岩的岩石物理性质，并为之后的垂直井做安排。

3.2.3 In Phase II, xxxxx will drill and test (fracture stimulate) two horizontal wells (either inas a sidetrack from the vertical wells or in as new locationswells) to establish the flow characteristics of the shales, and their capability to produce at commercial viable rates.
3.2.3 在第二期，yyyyyy将钻探、测试（压裂增产改造）两口水平井（在垂直井中或者选择其他新地点）以确定页岩的流动特性和其以商业速率开采的容量。
3.2.4 The Work Program goals outlined in this Article 3 above shall be deemed satisfied without regard to depth if xxxxx has used reasonable efforts to complete the wells,  but (i) encounters impenetrable substances, basement, commercial quantities of oil or gas at a lesser depth; (ii) is forced to abandon a well because of difficulties insurmountable by employing modern drilling technology in conformity with sound, cost-effective practices generally accepted in the international petroleum industry; or (iii) spends a cumulative amount of U.S.$ ________ for the Work Program described in this Article 3 but as a result of significant technical or commercial obstacles described in this Article is unable to complete the wells.
3.2.4 只要yyyyyy使用了合理努力完成上述井口，则第3条中列明的工作计划目标就视为完成，而不论井口的深度。

Article 4 Joint Assessment 第四条 联合评价

The Joint Assessment herein shall be carried out in one or two phases in accordance with the following:
本协议项下的联合评价根据下列规定分一期或两期进行:

4.1 Phase I shall begin on the Approval Date of this Agreement and is envisaged to last approximately twelve months. xxxxx shall use its reasonable efforts to carry out the portion of the Outline Work Program stipulated in Article 3.2.2 during Phase I. At the end of Phase I (as notified by xxxxx to XXXXX), xxxxx will exercise its option either to enter into Phase II or to terminate the Agreement. This choice shall be communicated by xxxxx to the Steering Committee in writing. xxxxx will not incur any  penalty, liability, or obligation as a result of its exercise of its option to either enter into Phase II or to terminate this Agreement, other than as expressly set forth herein. If xxxxx elects to enter into Phase II, xxxxx will also submit a Phase II Work Program and Budget to the Steering Committee for approval.  The Steering  Committee shall review and approve such Work Program and Budget within 15 working days.
4.1 第一期自本协议批准日开始，预计持续大概十二个月。在第一期，yyyyyy将使用合理努力完成第3.2.2条规定的工作计划量。在第一期结束时（yyyyyy将通知xxxxx结束日），yyyyyy将行使

其选择权，选择终止本协议或者进入第二期。yyyyyy将以书面形式告知指导委员会其选择。除非本协议中另有规定，yyyyyy不会因其行使选择权终止本协议或者进入第二期而产生任何罚金、责

任或义务。如果yyyyyy选择进入第二期，yyyyyy将把第二期工作计划和预算提交给指导委员会批准。指导委员会须在收到工作计划和预算后十五（15）日内审查和批准上述工作计划和预算。

4.2 Phase II shall begin on the date that the Steering Committee approves the Phase II Work Program and Budget in accordance with Article 4.1 and is envisaged to last approximately twelve months. xxxxx shall use its reasonable efforts to carry out the portion of the Outline Work Program stipulated in Article 3.2.3 during Phase II. xxxxx shall notify XXXXX in writing of the end of Phase II. xxxxx will not incur any penalty, liability, or obligation as a result of its exercise of its option to terminate this Agreement.
4.2 第二期将自指导委员会按照第4.1条的规定批准第二期的工作计划和预算之日起开始，预计将持续十二个月。在第二期，yyyyyy将使用合理努力完成第3.2.3条规定的工作计划量。yyyyyy在

第二期结束时书面通知xxxxx。yyyyyy在行使其选择权终止本协议时不产生任何罚金、责任和义务。

4.3 The Steering Committee may agree to extend Phases I and II.  4.3 指导委员会有权同意延长第一期和第二期的时间。

4.4 At any time after the Effective Date of this Agreement, following written notification given by xxxxx to XXXXX, the Parties will begin to negotiate in good faith and on an exclusive basis for a Production Sharing Contract (PSC) for the future hydrocarbon exploration, appraisal, development, production and commercialisation of the hydrocarbons from the Project Area pursuant to Article 5.
4.4 本协议生效后的任何时间，yyyyyy书面通知xxxxx后，双方将开始根据第5条的规定再拍他的基础上本着善意就产品分成合同进行协商，讨论未来碳氢化合物的开采，项目区域内碳氢化合物的评价、开发和商业化事项。

Article 5 Negotiation of PSC and xxxxx Option 第五条 产品分成合同协商和yyyyyy的选择权

5.1 xxxxx has the exclusive right to negotiate a PSC with XXXXX on the following terms:5.1 yyyyyy有排他权就以下条款与xxxxx协商：

(a)  the period of exclusivity to negotiate a PSC will commence on the Effective Date of this Agreement and will last for 12 months beyond the end of Phase II; （a）就产品分成合同进行协商的排他权自本协议生效之日起开始，并持续到第二期结束后的12个月;

(b) xxxxx’s participating interest in the PSC shall be at least 49%;     （b） yyyyyy将参与分享产品分成合同至少49%的利益；

(c ) all reasonable and necessary direct and indirect costs associated with the Joint Assessment incurred by xxxxx or its Affiliates under this Agreement shall be cost recoverable under the PSC in accordance with Article 10;
    （c） yyyyyy或者yyyyyy的关联公司产生的与联合评价直接或间接相关的所有合理必要费用根据第十条的规定在产品分成合同中计入可回收费用；

(d) the Parties will use reasonable endeavours to reach agreement on the transportation and sales arrangements for the Shale Gas or other hydrocarbons that may be discovered in the Project Area;
    （d） 双方将使用合理努力就页岩气和其它项目区域内可能发现的其他碳氢化合物的运输和销售事宜达成合意；

(e)  the PSC shall provide that xxxxx shall act as the Operator for the Petroleum Operations within the Contract Area, until such time that XXXXX takes over the Operator ’s rights and obligations in the Contract Area no earlier than upon full recovery of the development costs actually incurred in the contract area, or at such later date to be specified in the PSC; 
    （e） 产品分成合同须规定yyyyyy在合同区域内担任石油作业的运营商，直到合同区域内的开采成本全部收回时xxxxx接管运营商的权利和义务为止，或者直到产品分成合同规定的更晚日期；

(f) the PSC will be based generally on an onshore model form PSC as issued by relevant PRC authorities, a copy of which is attached hereto as Annex 5, and shall include exploration, development, and production phases, with cost recovery available, and the operating costs required for development operations and for production operations shall be paid by the parties to the PSC in proportion to their participating interests therein;
    （f） 产品分成合同将以XXXXX有关部门发布的陆上产品分成合同模型为基础，该合同样本详见本协议附件5，该合同样本将包括开采，开发和生产阶段，并且期间产生的费用可回收。产品分成合同的双方将按照利益分享比例负担开发运营和生产运营的所有费用；

g) XXXXX will use reasonable endeavours to secure from the Government, the same or better benefits for Shale Gas as for Coal Bed Methane or other encouraged sectors including with regard to pricing, subsidies, reduced mining license fees, and favourable fiscal/tax treatment and upon request provide xxxxx written updates regarding such endeavours; and
    （g）xxxxx将使用合理努力从政府获得与煤层气或其他鼓励产业相同或更好的包括定价，补贴，减少采矿许可费等优惠，并且在康辉提出要求时就上述努力进展情况书面告知yyyyyy；

(h) xxxxx will have the right to use any of its Affiliates as signatory to the PSC.    （h） yyyyyy有权授权其任意关联公司作为产品分成合同的签署方。
5.2  If the Parties have not finalised a PSC by the end of the exclusivity period referred to in 5.1(a), then for a period of 12 months after the end of the exclusivity period XXXXX shall, prior to awarding a PSC over all or part of the Project Area to a third party, offer a PSC to xxxxx on the same terms as being offered to the third party. Within thirty (30) days of receipt of those terms xxxxx must reply in writing to accept or reject such terms. If xxxxx does not accept the same or similar terms, XXXXX may enter into a PSC with the third party only on the same or less favorable terms for the Contractor as those that have been offered to xxxxx, and this Agreement will terminate other than in respect of Articles 11, 12, 13, 16, 19 and 20.

5.2 若双反在第5.1（a）条规定的排他权期限内达成产品分成合同，则xxxxx在排他权结束后的12个月内，与第三方就项目区域的全部或部分签订产品分成合同之前应当将就给予第三方的相同合同条款向yyyyyy提出要约。yyyyyy在收到上述合同条款三十（30）日内书面答复是否接受该合同条款。如果yyyyyy拒绝接受相同或类似的条款，xxxxx只能以给予yyyyyy的相同条款或对第三方更为不利的条款与第三方签订产品分成合同，并且除去第11、12、13、16、19和20条外，本合同终止。

华译网北京翻译公司翻译页岩气潜力联合评价工作文件, Beijing Chinese Translation Service Company translate the Joint Assessment of the Shale Gas potential.