Table of Contents

Page

SECTION 1 DEFINITIONS

  3

SECTION 2 SALE AND PURCHASE OF TRANSFERRED INTERESTS

20

SECTION 3 EFFECTIVE DATE AND INDEMNITIES

24

SECTION 4 CONSIDERATION

25

SECTION 5 CONDITIONS PRECEDENT

30

SECTION 6 CLOSING

34

SECTION 7 SELLER'S WARRANTIES

38

SECTION 8 PURCHASER'S AND GUARANTOR'S WARRANTIES

46

SECTION 9 COVENANTS

49

SECTION 10 CONSEQUENCES OF A BREACH

51

SECTION 11 GUARANTEE

57

SECTION 12 TERMINATION

58

SECTION 13 TAXATION

62

SECTION 14 MISCELLANEOUS

62

EXHIBIT 1 PSC INTERESTS

EXHIBIT 2 GK UUOA NOVATION AGREEMENT

EXHIBIT 3 SNP UUOA NOVATION AGREEMENT

EXHIBIT 4 SK 309 AND SK 311 GSA NOVATION AGREEMENT

EXHIBIT 5 KIKEH GSA NOVATION AGREEMENT

EXHIBIT 6 KIKEH NOMINATING AND LIFTING AGREEMENT AMENDMENT AGREEMENT

EXHIBIT 7 KIDURONG NOMINATING AND LIFTING AGREEMENT AMENDMENT AGREEMENT

EXHIBIT 8 MATERIAL CONTRACTS

EXHIBIT 9 MATERIAL AGREEMENTS AND DESIGNATED AGREEMENTS

EXHIBIT 10 TEMPLATE DEED OF ASSIGNMENT

EXHIBIT 11 ESTIMATED SETTLEMENT STATEMENT

EXHIBIT 12 INVENTORY AND MATERIALS ADJUSTMENT AMOUNT

EXHIBIT 13 TEMPLATE JOA NOVATION AGREEMENT

EXHIBIT 14 TAXATION

EXHIBIT 15 GK UUOA VOTING AGREEMENT

EXHIBIT 16 SNP UUOA VOTING AGREEMENT

EXHIBIT 17 GK GSA NOVATION AGREEMENT

EXHIBIT 18 SNP GSA NOVATION AGREEMENT

Section 1
Definitions

1.1

In this Agreement, the following capitalized words and terms shall have the meaning ascribed to them below:

"AFE" shall mean an authorisation for expenditure issued under the JOAs or the UUOAs;

"Affiliate" shall mean:

(a)with respect to a specified person other than Purchaser and Guarantor, any other person that directly or indirectly controls or is controlled by, or is under common control with, the person specified; and

(b)with respect to Purchaser or Guarantor, any person that is directly or indirectly controlled by Guarantor;

The term "person" for purposes of this definition shall also include any form of legal entity. The term "control" means the right to exercise directly or indirectly fifty percent (50%) or more of the voting rights attributable to the shares or other equity interest of that person, or with respect to any person, the possession directly or indirectly, of the power to direct or cause the direction of the management or policies of such person;

"Agreed Form" means in relation to any document, the form of that document which has been agreed between Sellers and Purchaser with any alterations that are agreed in writing by or on behalf of such Parties;

"Agreed Interest" shall mean interest calculated on the first (1st) day of each month at a rate of LIBOR plus [*****] accruing daily and compounding monthly, on the basis of there being three hundred and sixty five (365) days in a calendar year;

"Agreement" shall have the meaning ascribed thereto in the introductory sentence after the  Recitals;

"Appointing Authority" shall have the meaning ascribed thereto in Section 12.2(c);

“Basket” shall have the meaning ascribed thereto in Section 10.3(a);

"Biris Gas Field" means the gas field delineated in attachment 1 of the letter issued by PETRONAS dated 7 May 2008 approving the gas holding period for such field;

"Block H Farmout Agreement" means the farmout agreement between Esso Exploration and Production Sabah Limited and Murphy Sabah dated 4 December 2000;

"Block H JOA" means the joint operating agreement with respect to Block H between Esso Production Malaysia Inc. and Carigali dated 19 March 1997 as amended by the supplemental agreement to the joint operating agreement between Esso Exploration and Production Sabah Limited, Carigali and Murphy Sabah dated 4 December 2000;

"Block H PSC" means the production sharing contract with respect to Block H between PETRONAS, Esso Production Malaysia Inc. and Carigali dated 19 March 1997 as amended;

"Block K JOA" means the joint operating agreement with respect to Block K between Murphy Sabah and Carigali dated 27 January 1999;

"Block K PSC" means the production sharing contract with respect to Block K between PETRONAS, Murphy Sabah and Carigali dated 27 January 1999 as amended;

"Block P JOA" means the joint operating agreement with respect to Block P between Murphy Sabah and Carigali dated 23 January 2006;

"Block P PSC" means the production sharing contract with respect to Block P between PETRONAS, Murphy Sabah and Carigali dated 23 January 2006 as amended;

"Block SK 309 JOA" means the joint operating agreement with respect to Block SK 309 between Murphy Sarawak and Carigali dated 27 January 1999;

"Block SK 309 PSC" means the production sharing contract with respect to Block SK 309 between PETRONAS, Murphy Sarawak and Carigali dated 27 January 1999 as amended; 

"Block SK 311 JOA" means the joint operating agreement between Murphy Sarawak and Carigali with respect to Block SK 311 dated 27 January 1999;

"Block SK 311 PSC" means the production sharing contract between PETRONAS, Murphy Sarawak and Carigali with respect to Block SK 311 dated 27 January 1999 as amended;

"Block SK 314A JOA" means the joint operating agreement with respect to Block SK 314A between Murphy Sarawak and Carigali dated 7 May 2013;

"Block SK 314A PSC" means the production sharing contract with respect to Block SK 314A between PETRONAS, Murphy Sarawak and Carigali dated 7 May 2013 as amended;

"Business Day" shall mean any day other than a Saturday, Sunday or any other day on which banks in Jakarta, the Republic of Indonesia, Kuala Lumpur, Malaysia or New York, United States of America, are generally closed for business;

"Carigali" means PETRONAS Carigali Sdn. Bhd.;

"Cash Advances" shall have the meaning ascribed thereto in the UUOAs;

"Cash Call" shall have the meaning ascribed thereto in the accounting procedures under the JOAs;

"Claim" means a claim by Purchaser arising out of a breach of a warranty, covenant, agreement or indemnity of Sellers contained in this Agreement;

"Conditions Precedent" means the Conditions Precedent to First Closing and the Conditions Precedent to Second Closing;

“Conditions Precedent to First Closing” shall have the meaning ascribed thereto in Section 5.1(a);

“Conditions Precedent to Second Closing” shall have the meaning ascribed thereto in Section 5.3(a);

"Confidential Information" shall have the meaning ascribed thereto in Section 14.4(a);  

"Confidential Information Memorandum" means the confidential information memorandum issued by Tudor, Pickering, Holt & Co. on behalf of Sellers dated 13 March 2014;

"Confidentiality Agreement" means the confidentiality agreement between Sellers and Guarantor dated 10 March 2014;

"ConocoPhillips" means ConocoPhillips Sabah Ltd.;

"Contract Area" has the meaning given to it in the PSCs;

"Costs" means all costs (including legal and other professional fees and costs), expenses, penalties or fines in all cases irrespective of when such costs (including legal and other professional fees and costs), expenses, penalties or fines arose;

“Counter-Notice” has the meaning given to it in Section 5.1(e);

"Crude Oil" has the meaning given to it in the PSCs;

"Dangerous Substance" shall mean any natural or artificial substance, emission, chemical, material or thing (whether in a solid, liquid, gas, vapour or other form) that is defined or regulated as or included in the definition of a "hazardous" or "toxic" substance, or as a "waste", "hazardous material", "extremely hazardous substance", "contaminant", "pollution" or words of similar meaning and regulatory effect under any applicable Environmental Law,  or that is capable and/or deemed capable by law or regulation (alone or in combination) of causing harm to man or any other living organism or of damaging the Environment or public health or welfare (including Hydrocarbons and Hydrocarbon products, controlled, clinical, special or hazardous waste, polluting, toxic or harmful substances, radiation, noise, vibration, electricity and heat);

"Data Room" shall have the meaning ascribed thereto in Section 10.2(a)(ii);

"Decommissioning Liabilities" means any and all Liabilities and Costs howsoever arising (whether under Environmental Law, any Environmental Licence, the PSCs, the JOAs, the UUOAs, public, common, civil or international law or otherwise) directly or indirectly from, or in connection with, abandoning, dismantling, decommissioning, removing, disposing, recovering and/or making safe any or all of the Joint Property or any other property previously or currently owned, held, used, leased, operated or controlled under or in connection with the PSCs, the JOAs or the UUOAs (including any platforms, vessels, rigs, pipelines, wells, subsea equipment, drill cuttings, transportation facilities and all other plant, equipment, facilities, waste and other offshore and onshore installations and structures) and all associated equipment, infrastructure or installations and/or any part of the Environment associated with, connected to or impacted by the Joint Property (or any other property previously or currently owned, held, used, leased, operated or controlled under or in connection with the PSCs, the JOAs or the UUOAs) or otherwise impacted by the carrying on of activities at or with the Joint Property and/or pursuant to the PSCs including any liability for anticipated and/or necessary continuing insurance, maintenance and/or monitoring Costs or Liabilities and, in all cases, irrespective of when such Liabilities or Costs arose or were suffered or incurred and/or when the relevant action was taken;

"Deeds of Assignment" means each deed of assignment to be entered into between the respective Sellers and Purchaser in respect of each PSC substantially in the form set out in Exhibit 10;

"Delta Amount" shall have the meaning ascribed thereto in Section 4.4(b);

"Deposit" shall have the meaning ascribed thereto in Section 4.2(a);

“Designated Agreements” shall have the meaning ascribed thereto in Section 7.5(d)(iv);

"Determination" shall have the meaning ascribed thereto in Section 12.2(c);

"Development Plan" has the meaning given to it in the PSCs, other than the Block SK 314A PSC where it has the meaning given to the term “Field Development Plan”;

"Disclosure Letter" means the letter from Sellers to Purchaser executed and delivered on the Signing Date immediately prior to the signing of this Agreement;

"Dispute" shall have the meaning ascribed thereto in Section 14.9(b);

"Dispute Notice" shall have the meaning ascribed thereto in Section 4.4(c);

"Dispute Period" shall have the meaning ascribed thereto in Section 4.4(c);

"East Patricia Field" means the gas field delineated in attachment 1 of the letter issued by PETRONAS dated 25 January 2010 approving the gas holding period for such field;

"Effective Date" means 00:00 hours Malaysia Standard Time on 1 January 2014;

"Encumbrances" means any mortgage, charge, encumbrance, debenture, pledge, lien, option, claim, equitable right or interest, equity, royalty, net profit interest, production payment, earned interest, overriding royalty interest, power of sale, hypothecation, usufruct, retention of title, right of pre-emption, right of first refusal, right to acquire, assignment by way of security, trust arrangement for the purpose of providing security or any other security interest including retention arrangements and any agreement, arrangement or obligation to create any of the foregoing excluding:

(a)those created by the terms of or arising under the Material Contracts and Material Agreements or any contract entered by Sellers in the ordinary course of Petroleum Operations in their capacity as Operators under the Joint Operating Agreements; and

(b)liens or title retentions or any other right or claim having a similar effect arising by operation of applicable law;

"Environment" means all or any of the following media, alone or in combination: air (including the air within buildings or other natural or man-made structures whether above or below ground), water (including water within buildings or other natural or man-made structures above or below ground, surface waters, underground waters, ground waters, inland waters, freshwater, coastal and seawater inside and outside of any territorial limits, international waters and territorial and controlled waters), land (including land beneath waters and the sea bed), flora, fauna and any living organisms supported by those media including man;

“Environmental Condition” means any condition which harms or is capable of harming or permanently altering the Environment or any part thereof, or which gives rise to or is capable of giving rise to a breach of or any liability under any Environmental Laws or Material Contract;

"Environmental Law" means any and all applicable laws, national, federal, provincial, state or local statutes, regulations, by-laws, directives and other secondary subordinate legislation, international treaties and conventions, civil and common law, notices under legislation, judgments, orders, decisions, interpretations of any laws by any regulatory authority and any codes or conventions of law and any guidelines and/or codes of practice for industry on decommissioning onshore and offshore installations and pipelines made under law and decommissioning programmes having effect from time to time in any relevant jurisdiction, and concerning or relating to:

(a)the Environment, human health or welfare, the conditions of the workplace and/or worker or public health and safety;

(b)emissions, discharges, releases or escapes into, or the presence in the Environment of any Dangerous Substance and/or the use, handling, generation, manufacturing, distribution, collection, transportation, storage, treatment and/or disposal of any Dangerous Substance;

(c)the decommissioning, abandonment, removal or making safe of any property, infrastructure, installation or equipment (including but not limited to platforms, rigs, pipelines, wells, drill cuttings, transportation equipment and all other plant, equipment, facilities and offshore and onshore installations and structures);

(d)any matter that is regulated, or could give rise to a liability, under any Environmental Law and/or Environmental Licence; and

(e)any Remedial Action;

"Environmental Liabilities" shall mean any and all Liabilities and Costs howsoever arising (whether under Environmental Law, any Environmental Licence, contract, any PSC, public, common, civil or international law or otherwise) directly or indirectly from, under or in connection with:

(a)any Environmental Law and/or Environmental Licence;

(b)the use, handling, generation, processing, distribution, collection, transportation, disposal, treatment, storage, recovery, deposit, emission, discharge, release, leakage, escape into or presence, of any Dangerous Substance in, on, at, under or from any Joint Property or any other property previously or currently owned, leased, occupied, used or controlled under any PSC, JOA or UUOA including platforms, rigs, pipelines, plant, machinery, wells (including well cuttings), equipment and transportation facilities and all other offshore and onshore installations or structures;

(c)damage to groundwater, surface water (including wetlands), soil quality, air quality, sea and/or marine biota quality, plants or animals, or any other damage to or adverse effect on the Environment resulting from any Dangerous Substances or any other Environmental Condition; and/or

(d)any insurance, maintenance and/or monitoring costs and/or any reinstatement or restoration of any land, foreshore or seabed (wherever situated) and/or Remedial Action,

in each case irrespective of when such Liabilities and Costs arose or were incurred and/or the relevant action was taken;

"Environmental Licence" means any permit, licence, authorisation, permission, accreditation, consent, exemption or other approval required or existing in relation to any Joint Property (and any activities carried on, at or with such Joint Property) and/or any of the Transferred Interests under or in relation to any Environmental Law;

"Environmental Matters" means any matter or thing which relates to: the Environment, the presence, use, handling, manufacturing, generation, distribution, collection, transportation, storage, disposal, remediation, monitoring, clean-up or release of any Dangerous Substances, human health and safety and/or the conditions of the workplace, the protection of, and/or prevention of harm to, or otherwise to the protection of the Environment, the carrying out of any Remedial Action, and/or any matter or thing which is regulated under Environmental Law and/or any Environmental Licence;

"Estimated Settlement Statement" shall have the meaning ascribed thereto in Section 4.3(b);

"Exhibit" means any of the following exhibits to this Agreement:

(a)Exhibit 1 PSC Interests;

(b)Exhibit 2 GK UUOA Novation Agreement;

(c)Exhibit 3 SNP UUOA Novation Agreement;

(d)Exhibit 4 SK 309 and SK 311 GSA Novation Agreement;

(e)Exhibit 5 Kikeh GSA Novation Agreement;

(f)Exhibit 6 Kikeh Nominating and Lifting Agreement Amendment Agreement;

(g)Exhibit 7 Kidurong Nominating and Lifting Agreement Amendment Agreement;

(h)Exhibit 8 Material Contracts;

(i)Exhibit 9 Material Agreements and Designated Agreements;

(j)Exhibit 10 Template Deed of Assignment;

(k)Exhibit 11 Estimated Settlement Statement;

(l)Exhibit 12 Inventory and Materials Adjustment Amount;

(m)Exhibit 13 Template JOA Novation Agreement;

(n)Exhibit 14 Taxation;

(o)Exhibit 15 GK UUOA Voting Agreement;

(p)Exhibit 16  SNP UUOA Voting Agreement;

(q)Exhibit 17 GK GSA Novation Agreement; and

(r)Exhibit 18 SNP GSA Novation Agreement;

"Final Settlement Statement" shall have the meaning ascribed thereto in Section 4.4(a);

“First Closing” shall have the meaning ascribed thereto in Section 6.1(a);

“First Closing Actions” means the actions specified in Section 6.2;

“First Closing Date” shall have the meaning ascribed thereto in Section 6.1(b);

“First Closing Payment” shall have the meaning ascribed thereto in Section 4.3(a);

“First Transferred Interests” means two-thirds (2/3) of each Seller’s Transferred Interests;

“First Transferred Interests Reimbursement Amount” means the sum of:

(a)any Post-Effective Date Receipts attributable to the First Transferred Interests made until and including the First Closing Date;

(b)minus the Post-Effective Date Expenses attributable to the First Transferred Interests made until and including the First Closing Date;

(c)minus the Inventory and Materials Adjustment Amount attributable to the First Transferred Interests together with Agreed Interest from the Effective Date up to and including the Interim Termination Date; and

(d)plus Agreed Interest on the amount equal to the Post-Effective Date Receipts attributable to the First Transferred Interests minus the Post-Effective Date Expenses attributable to the First Transferred Interests from the Effective Date up to and including the Interim Termination Date calculated in accordance with the methodology stipulated in Exhibit 11;

"GAAP" means U.S. generally accepted accounting principles, consistently applied;

"GK GSA" means the agreement in relation to the sale and purchase of associated gas from the Gumusut-Kakap unitised field, East Malaysia between PETRONAS, Carigali, Shell Petroleum, Shell Sabah, ConocoPhillips and Murphy Sabah dated 24 April 2014;

"GK GSA Novation Agreement" means the novation agreement substantially in the form set out in Exhibit 17 with such amendments as may be reasonably required by each of the parties thereto;

"GK PHOSA" means the agreement for Gumusut-Kakap interim crude evacuation system Kikeh tie-back production handling and operating support between Shell Petroleum and Murphy Sabah dated 23 April 2014;

"GK UUOA" means the Gumusut-Kakap field unitisation and unit operating agreement between Carigali, Murphy Sabah, Shell Petroleum, Shell Sabah and ConocoPhillips dated 3 July 2006;

"GK UUOA Novation Agreement" means the novation agreement substantially in the form set out in Exhibit 2 with such amendments as may be reasonably required by each of the parties thereto;

"GK UUOA Voting Agreement" means the agreement in the form set out in Exhibit 15;

"Government" shall mean the Government of Malaysia;

"Governmental Entity" shall mean any government entities, including any ministry, department, agency, regulator (including PETRONAS), political subdivision or instrumentality thereof, or any court of competent jurisdiction or other governmental authority (excluding, for the avoidance of doubt, Carigali);

“Gross Negligence” means any act or failure to act (whether sole, joint or concurrent) by a Seller which was intended to cause, or which was in reckless disregard of or wanton indifference to, harmful consequences that such Seller knew, or should have known, such act or failure would have had on the safety or property of another person or entity, but shall not include any error of judgement or mistake made by such Seller in the exercise in good faith of any function, authority or discretion conferred on such Seller as Operator under the JOAs or the PSCs;

"GST" means goods and services tax;

"Guaranteed Obligations" shall have the meaning ascribed thereto in Section 11(a);

"Guarantor" shall have the meaning ascribed thereto in the introductory paragraphs to this Agreement;

“Guarantor’s Knowledge”  means the actual knowledge, as of the date on which a warranty is given, of  [†††††];

"Hydrocarbons" shall mean oil, gas, condensate and other gaseous and liquid hydrocarbons or any combination thereof;

"Independent Accountant" shall have the meaning ascribed thereto in Section 4.4(d);  

"Independent Expert" shall have the meaning ascribed thereto in Section 12.2(b);

“Initial Purchase Price” has the meaning given in Section 4.1(a);

"Interim Period Novation Agreement" shall have the meaning ascribed thereto in Section 5.1(a)(xiv);

“Interim Settlement Statement” has the meaning given in Section 4.5(a);

“Interim Termination Date” has the meaning given in Section 4.5(a);

"Inventory and Materials Adjustment Amount" means the amount of the Crude Oil inventory, imbalances and materials attributable to the First Transferred Interests and Second Transferred Interests in each case calculated as of the Effective Date in accordance with the methodology set forth in Exhibit 12;

"JOA Notice" shall have the meaning ascribed thereto in Section 5.1(b);  

"JOA Novation Agreements" means each novation agreement to be entered into between the respective Seller, Purchaser and Carigali in respect of each Joint Operating Agreement substantially in the form set out in Exhibit 13 with such amendments as may be reasonably required by Carigali;

"Joint Account" has the meaning given to it in the JOAs;

"Joint Account Contract" shall mean any contract for the provision of engineering,  procurement, construction or other services or goods entered into by Sellers in their capacity as Operators under the Joint Operating Agreements and for which expenditures thereunder are charged to the Joint Accounts;

"Joint Account Costs" shall mean all costs and expenses charged to the Joint Accounts included in all joint venture statements, joint interest billings and all Cash Calls issued under the JOAs;

"Joint Operating Agreements" or "JOAs" means each of:

(a) the Block K JOA;

(b)the Block H JOA;

(c)the Block P JOA;

(d)the Block SK 314A JOA;

(e)the Block SK 309 JOA; and

(f)the Block SK 311 JOA;

"Joint Property" has the meaning given to it in the JOAs;

"Kidurong Nominating and Lifting Agreement" means the nominating and lifting agreement for Kidurong Marine Terminal between PETRONAS, Carigali and Murphy Sarawak dated 1 April 2004;

"Kidurong Nominating and Lifting Agreement Amendment Agreement" means the amendment agreement substantially in the form set out in Exhibit 7 with such amendments as may be reasonably required by each of the parties thereto;

"Kikeh GSA" means the gas sales agreement in relation to the sale and purchase of associated gas from Kikeh Oil Field between PETRONAS, Carigali and Murphy Sabah dated 23 February 2007 as amended by a side letter between PETRONAS, Carigali and Murphy Sabah dated 22 July 2010;

"Kikeh GSA Novation Agreement" means the novation agreement substantially in the form set out in Exhibit 5 with such amendments as may be reasonably required by each of the parties thereto;

"Kikeh Nominating and Lifting Agreement" means the nominating and lifting agreement for Kikeh Marine Terminal between PETRONAS, Carigali and Murphy Sabah dated 21 August 2007 as amended by:

(a) supplementary agreement no. 1 to the nominating and lifting agreement for Kikeh Marine Terminal between PETRONAS, Carigali and Murphy Sabah dated 24 September 2012; and

(b)supplementary agreement no. 2 to the nominating and lifting agreement for Kikeh Marine Terminal between ConocoPhillips, Shell Petroleum, Shell Sabah, PETRONAS, Carigali and Murphy Sabah dated 15 December 2012;

"Kikeh Nominating and Lifting Agreement Amendment Agreement" means the amendment agreement substantially in the form set out in Exhibit 6 with such amendments as may be reasonably required by each of the parties thereto;

"Liabilities" shall mean any liabilities (including, without limitation, any Taxes), losses, damages, charges, claims, demands, actions, and obligations of whatever nature or description, whether deriving from contract, common law, statute, international treaty, convention or otherwise, whether actual or contingent, ascertained or unascertained or disputed and whether owed or incurred jointly or severally, or as principal or surety;

"LIBOR" means the London interbank offered rate for deposits in United States Dollars for a term of one (1) month which is quoted on the "LIBOR01" page on the Reuters Monitor Money Rates Service (or such other page as may replace such page on such service for the purpose of displaying London interbank offered rates for deposits in United States Dollars) at or about 11.00 a.m. London time on the relevant day, and if the applicable rate is not available for any reason, the rate published on the immediately preceding date on which the rate was published;

"Longstop Date" means the date occurring nine (9) months after the Signing Date (or such later date as Sellers and Purchaser may agree upon in writing);

"Losses" means all liabilities, costs, charges and expenses and other damages, excluding, however, punitive, exemplary, special, aggravated, consequential or indirect damages and losses, lost profits, losses caused by business interruption, loss of revenue, loss of business or other opportunity. Any Loss shall be computed net of any present or future entitlements related to the relevant matter, including avoided losses and Tax benefits received by a Party or its Affiliates;

"MAE Notice" shall have the meaning ascribed thereto in Section 12.2(a);

"Management Committees":

(a)with respect to the JOAs, has the meaning given to it in the JOAs; and

(b)with respect to the Unitisation Agreements, has the meaning given to it in the Unitisation Agreements;

"Material Adverse Effect" means, prior to First Closing, any event or circumstance that results in an adverse effect of greater than [*****] of the Purchase Price on the value of the Transferred Interests; provided, however, in no event shall any of the following be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been a Material Adverse Effect:

(a)changes in global prices of Crude Oil or Natural Gas;

(b)any change affecting the oil and gas industry as a whole in Malaysia, provided that such change does not have a disproportionate adverse effect on the Transferred Interests compared to other similarly situated companies or entities that hold participating interests in production sharing contracts in Malaysia;

(c)any change in the economy or the financial, capital or energy markets generally in Malaysia or globally, including changes in interest and exchange rates and monetary policy, provided that such change does not have a disproportionate adverse effect on the Transferred Interests compared to other similarly situated companies or entities that hold participating interests in production sharing contracts in Malaysia;

(d)any change in applicable laws or in GAAP or interpretations thereof or governmental policy or political conditions, provided that such change does not have a disproportionate adverse effect on the Transferred Interests compared to other similarly situated companies or entities that hold participating interests in production sharing contracts in Malaysia;

(e)any physical damage to, or any mechanical failure of, any of the Joint Property which is utilised for the production of Crude Oil and Natural Gas from an individual event to the extent that it is covered by insurance maintained by the Operator or is the result of normal wear and tear or gradual structural deterioration of materials, equipment, and infrastructure, or reservoir changes;

(f)any change in general regulatory or political conditions, including acts of war, sabotage, armed hostilities or terrorism, embargo, sanctions or interruption of trade;

(g)Sellers’ compliance with the terms of this Agreement or their taking any other action which Purchaser has expressly consented to or approved in writing;

(h)events or circumstances directly arising from actions taken by Purchaser or its Affiliates;

(i)any act or omission of any Governmental Entity;

(j)any reduction, reclassification or decrease in the reserves in the Contract Areas of the PSCs, including as a result of unanticipated depletion or subsurface conditions;

(k)any decline in the performance of the wells, equipment, plants or facilities included or used in connection with the Transferred Interests except to the extent attributable to the Gross Negligence of a Seller in its capacity as an Operator; and

(l)any results of drilling operations.

For the avoidance of doubt, a Material Adverse Effect shall not be measured against any forward-looking statements, financial projections or forecasts applicable to the Transferred Interests;

"Material Agreements" shall have the meaning ascribed thereto in Section 7.5(d)(i);

"Material Contracts" means those agreements listed in Exhibit 8;

"Minimum Financial Commitment" has the meaning given to it in the PSCs;

"Minimum Work Commitments" has the meaning given to it in the PSCs;

"Murphy Sabah" shall have the meaning ascribed thereto in the introductory paragraphs to this Agreement;

"Murphy Sarawak" shall have the meaning ascribed thereto in the introductory paragraphs to this Agreement;

"Natural Gas" has the meaning given to it in the PSCs;

"Novation Agreements" means each of:

(a)the GK UUOA Novation Agreement;

(b)the SNP UUOA Novation Agreement;

(c)the SK 309 and SK 311 GSA Novation Agreement;

(d)the Kikeh GSA Novation Agreement;

(e)the GK GSA Novation Agreement;

(f)the SNP GSA Novation Agreement;

(g)the Kikeh Nominating and Lifting Agreement Amendment Agreement;

(h)the Kidurong Nominating and Lifting Agreement Amendment Agreement;

(i)the JOA Novation Agreements; and

(j)any Interim Period Novation Agreement;

"Official" means (a) any officer or employee of, or any other person acting in an official capacity for or on behalf of, any Governmental Entity or Public International Organization; (b) any political party; or (c) any candidate for political office;

"Operations Committees" means the committees established pursuant to Article 4 of the PSCs;

"Operator" means the entity designated as operator under the JOAs, which, as of the Signing Date, is Murphy Sarawak or Murphy Sabah, as the case requires or as the unit operator under the UUOAs;

"Participating Interest" means as to a PSC and/or contract the undivided legal and beneficial interest of a party in the PSC and/or contract and in the rights and obligations relating to such PSC and/or contract expressed as a percentage of the total interests of all parties to such PSC and/or contract in such rights and obligations;

"Party" or "Parties" shall have the meaning ascribed thereto in the introductory paragraphs to this Agreement;

“[*****]” shall have the meaning ascribed thereto in Section [*****];

"Petroleum Operations" has the meaning given to it in the PSCs;

"PETRONAS" means Petroliam Nasional Berhad;

"PETRONAS Approval" means the approval of PETRONAS to the assignment of the Transferred Interests to Purchaser in accordance with the terms and conditions of the PSCs;

"Post-Effective Date Expenses" shall mean all Joint Account Costs and Unit Account Costs incurred by Sellers (and/or any other member of Sellers’ Group) on or after the Effective Date which relate to expenditures incurred after the Effective Date and Petroleum Income Tax (PITA) payments (both instalment and final payments for YA2014 or YA2015) incurred, in each case, to the extent relating to the  First Transferred Interests or the Second Transferred Interests, as the case requires, and which have not been included in the Inventory and Materials Adjustment Amount;

"Post-Effective Date Receipts" shall mean any income from the sale of Hydrocarbons on and after the Effective Date, receipts, insurance proceeds, reimbursements, cost recovery entitlements (whenever the relevant costs relating to the cost recovery entitlements were or are incurred even if prior to the Effective Date), received by Sellers (and/or any other member of Sellers’ Group) on or after the Effective Date to the extent relating to the First Transferred Interests or Second Transferred Interests, as the case requires, save to the extent that the same have been received by Sellers prior to the Effective Date;

"[*****]" shall have the meaning ascribed thereto in Section [*****];  

"PSC Data" shall mean all data or information relating directly to the PSCs in the possession of Sellers, including geophysical, geological, drilling and engineering data and logs, test reports, and records in which Sellers have an interest pursuant to the JOAs or the PSCs but excluding: (i) internal communications, reports, interpretations and documents created within each Seller or between Sellers and their Affiliates and (ii) any data or information the disclosure or transfer of which is prohibited under an agreement between Sellers and one or more third parties;

"PSCs"  means each of:

(a)the Block K PSC;

(b)the Block H PSC;

(c)the Block P PSC;

(d)the Block SK 314A PSC;

(e)the Block SK 309 PSC; and

(f)the Block SK 311 PSC;

"Public International Organization" shall mean an organization designated as such by executive order under the laws of the United States of America;

"Purchase Price" means the aggregate of the Initial Purchase Price and the Subsequent Purchase Price;

"Purchaser" shall have the meaning ascribed thereto in the introductory paragraphs to this Agreement;

"Purchaser Group" shall mean Purchaser and its Affiliates;

"Purchaser’s Consideration" shall mean the aggregate of the Purchaser’s Initial Consideration and the Purchaser’s Subsequent Consideration;

“Purchaser’s Initial Consideration” shall have the meaning ascribed thereto in Section 4.1(a);

“Purchaser’s Knowledge”  means the actual knowledge, as of the date on which a warranty is given, of [†††††];

"Purchaser’s Representatives" shall mean the directors, officers, employees, agents, consultants, internal and external financial, technical, legal or other advisors and any representatives of Purchaser and of any of Purchaser’s Affiliates;

“Purchaser’s Subsequent Consideration” shall have the meaning ascribed thereto in Section 4.1(d);

“Q&A Log” shall mean the specific written enquiries made by Purchaser, its Affiliates or Purchaser’s Representatives and the specific written responses given by Sellers or Sellers’ Representatives during the due diligence process;

“Recoverable Costs” means all expenditures made in carrying out Petroleum Operations in accordance with the terms of the JOAs, the UUOAs and the PSCs that are eligible for cost recovery under the PSCs;

"Reimbursement Amount" shall have the meaning ascribed thereto in Section 4.1(c);  

“Remaining Deposit” means fifty percent (50%) of the Deposit;

"Remedial Action"  shall mean:

(a)works or actions limiting, mitigating, remediating, preventing, removing, cleaning-up, ameliorating or containing the presence or effect of any Dangerous Substance in or on the Environment; or

(b)any investigation, sampling or monitoring in connection with any such works or action;

"Rotan Gas Field" means the gas field delineated in attachment 1 of the letter issued by PETRONAS dated 21 January 2008 approving the gas holding period for such field;

“Second Closing” has the meaning ascribed thereto in Section 6.3(a);

“Second Closing Actions” means the actions specified in Section 6.4;

“Second Closing Date” has the meaning ascribed thereto in Section 6.3(b);

“Second Transferred Interests” means one-third (1/3) of each Seller’s Transferred Interests;

"Seller" or "Sellers" shall have the meaning ascribed thereto in the introductory paragraphs to this Agreement;

"Sellers’ Group" shall mean each of Sellers and their Affiliates;

"Sellers’ Knowledge" shall have the meaning ascribed thereto in Section 7.2;

"Sellers’ Representatives" shall mean the directors, officers, employees, agents, consultants, internal and external financial, technical, legal or other advisors and any representatives of Sellers and of any of Sellers’ Affiliates;

"Shell Petroleum" means Sabah Shell Petroleum Company Limited;

"Shell Sabah" means Shell Sabah Selatan Sendirian Berhad;

"SIAC" shall have the meaning ascribed thereto in Section 14.9(b);

"Signing Date" shall have the meaning ascribed thereto in the introductory paragraphs to this Agreement;

"SK 309 and SK 311 GSA" means the gas sales agreement between PETRONAS, Carigali and Murphy Sarawak dated 23 February 2007;

"SK 309 and SK 311 GSA Novation Agreement" means the novation agreement substantially in the form set out in Exhibit 4 with such amendments as may be reasonably required by each of the parties thereto;

“SNP GSA” means the upstream gas sales agreement in relation to the sale and purchase of associated gas from the Siakap North – Petai field, offshore Malaysia, Deepwater Block K and Deepwater Block G between PETRONAS, Carigali, Murphy Sabah, Shell Petroleum, Shell Sabah and ConocoPhillips dated 1 February 2014;

“SNP GSA Novation Agreement” means the novation agreement substantially in the form set out in Exhibit 18 with such amendments as may be reasonably required by each of the parties thereto;

"SNP PHOSA" means the agreement for Siakap North-Petai unit production handling and operating support between Murphy Sabah (for and on behalf of the parties to the Block K JOA) and Murphy Sabah (for and on behalf of the parties to the SNP UUOA) dated 7 December 2012;

"SNP UUOA" means the Siakap North-Petai field unitisation and unit operating agreement between Carigali, Murphy Sabah, Shell Petroleum, Shell Sabah and ConocoPhillips dated 21 April 2011;

"SNP UUOA Novation Agreement" means the novation agreement substantially in the form set out in Exhibit 3 with such amendments as may be reasonably required by each of the parties thereto;

"SNP UUOA Voting Agreement" means the agreement in the form set out in Exhibit 16;

"Straddle Period" shall have the meaning ascribed thereto in Exhibit 14;

“Subsequent Purchase Price” has the meaning given in Section 4.1(b);

"Taxes" and "Taxation" means all forms of tax whether direct or indirect and whether levied by reference to income, profits, gains, net wealth, exports, sales, asset values, turnover, added value or other reference and statutory, governmental, state, federal, provincial, municipal or local duty, rate, levy (including social security contributions and any other payroll taxes), charge, excess profits, research cess, contribution, export duties, import duties or other customs duties, deduction or withholding wherever imposed (whether imposed by way of a withholding or deduction for or on account of tax or otherwise) and in respect of any person, together with any interest, penalty, surcharge instalments, charges, costs, additional sums, fines or other amounts otherwise due to any government in connection with any such tax;

"Tax Return" means any return, report, declaration, estimate, information statement, or other document filed or submitted in order to comply with the Tax law, or required to be so filed or submitted with respect to Taxes;

"Teaser" means the teaser issued by Tudor, Pickering, Holt & Co. on behalf of Sellers dated February 2014;

"Third Party Claim" shall have the meaning ascribed thereto in Section 10.5(b);

"Transaction Taxes"  means (without limitation) all sales taxes, VAT, transfer taxes, property transfer taxes, recording taxes, documentary taxes, registration taxes and other similar taxes (including, without limitation, any liability for Malaysian GST, but excluding, for the avoidance of doubt, taxes charged or withholding taxes on actual or deemed income, profit or gain (including capital gains)) arising as a result of the transactions contemplated by this Agreement;

"Transferred Interests" shall mean thirty percent (30%) of each Seller’s Participating Interest and right, title and interest in and to the following as of the Signing Date:

(a)each PSC to which each Seller is a party together with all rights (including rights to property and assets), title, interests, obligations and liabilities with respect thereto;

(b)each Joint Operating Agreement to which each Seller is a party together with all rights (including rights to Joint Property), title, interests, obligations and liabilities with respect thereto, including its participating interest therein;

(c)all contracts, agreements and instruments affecting each Seller’s Participating Interest, including the Material Contracts, the Material Agreements and any other contracts, agreements and instruments relating to the operations conducted in each PSC together with all rights (including rights to property and assets), title, interests, obligations and liabilities with respect thereto; and

(d)the PSC Data but excluding: (i) any Joint Property and any books, records, data, files, maps and accounting records maintained by Sellers in their capacity as Operators; (ii) any computer hardware and software; and (iii) any work product of, or privileged communications with, legal counsel for Sellers, or any Affiliate of Sellers,

but excluding any rights of Sellers as Operators under any such contracts, agreements and instruments;

"Transferred Interests Liabilities and Costs" shall have the meaning ascribed thereto in Section 3.1;

“[*****]” shall have the meaning ascribed thereto in Section [*****];

“[*****]” shall have the meaning ascribed thereto in Section [*****];

"Unit Account" has the meaning given in the UUOAs;

"Unit Account Costs" means all costs and expenses charged to the Unit Accounts under the UUOAs;

"Unit Reservoirs" has the meaning given in the UUOAs;

"United States Dollars" or "US$" means the lawful currency of the United States of America;

"Unitisation Agreements" or "UUOAs" means each of:

(a)the GK UUOA; and

(b)the SNP UUOA;

"VAT" means value added tax or its equivalent in any other jurisdiction; and

"Work Programme and Budget" means, collectively:

(a)the work programmes and budgets approved by the Management Committee under each Joint Operating Agreement;

(b)the work programmes and budgets approved by the Management Committee under the GK UUOA;

(c)the work programmes and budgets approved by the Management Committee under the SNP UUOA; and

(d)the work programmes and budgets approved by PETRONAS under each PSC.

1.2

Terms defined in the singular have a comparable meaning when used in the plural, and vice versa.

Section 2
Sale and Purchase of Transferred Interests

2.1

Sale and Purchase

(a)

Sellers hereby agree to sell the Transferred Interests free from Encumbrances upon and subject to the terms of this Agreement, in consideration for the payment to Sellers by Purchaser of Purchaser’s Consideration.

(b)

Purchaser hereby agrees to purchase the Transferred Interests free from Encumbrances and to assume all liabilities and obligations associated therewith upon and subject to the terms of this Agreement.

2.2

Participating Interests Following First Closing and Second Closing

(a)

Following the First Closing, the Participating Interests in the PSCs shall be as follows:

(i)

Block K PSC

Party

Participating Interest

Murphy Sabah

64%

Purchaser

16%

Carigali

20%

(ii)

Block H PSC

In respect of the Rotan Gas Field and the Biris Gas Field:

Party

Participating Interest

Murphy Sabah

64%

Purchaser

16%

Carigali

20%

In respect of all other fields:

Party

Participating Interest

Murphy Sabah

48%

Purchaser

12%

Carigali

40%

(iii)

Block P PSC

Party

Participating Interest

Murphy Sabah

48%

Purchaser

12%

Carigali

40%

(iv)

Block SK 314A PSC

Party

Participating Interest

Murphy Sarawak

68%

Purchaser

17%

Carigali

15%

(v)

Block SK 311 PSC

Party

Participating Interest

Murphy Sarawak

68%

Purchaser

17%

Carigali

15%

(vi)

Block SK 309 PSC

In respect of the East Patricia Field:

Party

Participating Interest

Murphy Sarawak

48%

Purchaser

12%

Carigali

40%

In respect of all other fields:

Party

Participating Interest

Murphy Sarawak

68%

Purchaser

17%

Carigali

15%

(b)

Following the Second Closing, the Participating Interests in the PSCs shall be as follows:

(i)

Block K PSC

Party

Participating Interest

Murphy Sabah

56%

Purchaser

24%

Carigali

20%

(ii)

Block H PSC

In respect of the Rotan Gas Field and the Biris Gas Field:

Party

Participating Interest

Murphy Sabah

56%

Purchaser

24%

Carigali

20%

In respect of other fields:

Party

Participating Interest

Murphy Sabah

42%

Purchaser

18%

Carigali

40%

(iii)

Block P PSC

Party

Participating Interest

Murphy Sabah

42%

Purchaser

18%

Carigali

40%

(iv)

Block SK 314A PSC

Party

Participating Interest

Murphy Sarawak

59.5%

Purchaser

25.5%

Carigali

15%

(v)

Block SK 311 PSC

Party

Participating Interest

Murphy Sarawak

59.5%

Purchaser

25.5%

Carigali

15%

(vi)

Block SK 309 PSC

In respect of the East Patricia Field:

Party

Participating Interest

Murphy Sarawak

42%

Purchaser

18%

Carigali

40%

In respect of all other fields:

Party

Participating Interest

Murphy Sarawak

59.5%

Purchaser

25.5%

Carigali

15%

Section 3
Effective Date and Indemnities

3.1

Subject to First Closing but with effect from the Effective Date, and subject to Sections 3.3 and [*****], Purchaser shall assume and discharge when due and be liable for and shall indemnify and keep indemnified Sellers and any other member of Sellers’ Group in respect of all Liabilities and Costs arising in respect of the First Transferred Interests (including all Environmental Liabilities, Decommissioning Liabilities and Post-Effective Date Expenses attributable to the First Transferred Interests) regardless of  whether or not such Liabilities or Costs relate to a period prior to, on or after the Effective Date (all collectively "Transferred Interests Liabilities and Costs"). 

3.2

Subject to First Closing, Purchaser shall be entitled to all Post-Effective Date Receipts attributable to the First Transferred Interests.

3.3

Section 3.1 shall not apply to any Transferred Interests Liabilities and Costs attributable to the Transferred Interests to the extent:

(a)

they relate to Taxes, which shall be dealt with pursuant to Exhibit 14; or

(b)

they are taken into account in the Reimbursement Amount.

3.4

[*****].

3.5

Subject to Second Closing, the provisions of Section 3.1 to [*****] shall apply, with the necessary changes, to the Second Transferred Interests as if references in Section 3.1 to [*****] to:

(a)

First Closing are to Second Closing; and

(b)

First Transferred Interests are to Second Transferred Interests.

3.6

Any amount to be paid or reimbursed in accordance with this Section 3 shall be paid or reimbursed (as applicable) within ten (10) Business Days of receipt thereof by the relevant Party, or, in the case of Transferred Interests Liabilities and Costs, within ten (10) Business Days of receipt of demand from Sellers which have incurred such Transferred Interests Liabilities and Costs.

Section 4
Consideration

4.1

Initial Purchase Price, Subsequent Purchase Price and Reimbursement Amount

(a)

Purchaser shall pay to Sellers in accordance with Sections 4.2 and 4.3 as part consideration for the First Transferred Interests an amount equal to US$1,333,000,000 (the "Initial Purchase Price") together with Agreed Interest on the Initial Purchase Price from the Effective Date up to and including the First Closing Date (the "Purchaser’s Initial Consideration").

(b)

Purchaser shall pay to Sellers as part consideration for the Second Transferred Interests an amount equal to US$667,000,000 (the "Subsequent Purchase Price").  Agreed Interest shall be payable on the Subsequent Purchase Price from the Effective Date up to and including the Second Closing Date.    

(c)

The Subsequent Purchase Price shall be increased or reduced (as the case may be) by an amount equal to the sum of:

(i)

the Post-Effective Date Expenses attributable to the First Transferred Interests made until and including the First Closing Date;

(ii)

minus any Post-Effective Date Receipts attributable to the First Transferred Interests received until and including the First Closing Date;

(iii)

plus the Post-Effective Date Expenses attributable to the Second Transferred Interests made until and including the Second Closing Date;

(iv)

minus any Post-Effective Date Receipts attributable to the Second Transferred Interests received until and including the Second Closing Date;

(v)

plus the Inventory and Materials Adjustment Amount attributable to the First Transferred Interests together with Agreed Interest from the Effective Date up to and including the Second Closing Date;  

(vi)

plus the Inventory and Materials Adjustment Amount attributable to the Second Transferred Interests together with Agreed Interest from the Effective Date up to and including the Second Closing Date;

(vii)

minus Agreed Interest on the amount equal to the Post-Effective Date Receipts attributable to the First Transferred Interests minus the Post-Effective Date Expenses attributable to the First Transferred Interests from the Effective Date up to and including the Second Closing Date calculated in accordance with the methodology stipulated in Exhibit 11; and

(viii)

minus Agreed Interest on the amount equal to the Post-Effective Date Receipts attributable to the Second Transferred Interests minus the Post-Effective Date Expenses attributable to the Second Transferred Interests from the Effective Date up to and including the Second Closing Date calculated in accordance with the methodology stipulated in Exhibit 11,  

(d)

The Subsequent Purchase Price (including the Agreed Interest payable thereon) as adjusted by the Reimbursement Amount in accordance with Section 4.1(c) shall be referred to as "Purchaser’s Subsequent Consideration". Purchaser’s Subsequent Consideration shall become due and payable in accordance with Sections 4.2 and 4.3 and shall be subject to adjustment and settlement pursuant to Section 4.4 below.

4.2

Deposit on the Signing Date

(a)

Upon the Signing Date, Purchaser shall pay to the bank account of Sellers specified in Section 4.6(a) the sum of US$[*****], being [*****] of the Purchase Price, as a performance deposit ("Deposit").  Agreed Interest shall accrue on the Deposit from the Signing Date. Subject to Section 12.3(c), the Deposit is solely to assure the performance of Purchaser’s obligations hereunder in accordance with the terms and conditions of this Agreement and shall be retained by Sellers’ following their termination of the Agreement pursuant to Section 12.1(a)(iv) or (v).

(b)

If First Closing does not occur because of the failure of Purchaser to perform any of its obligations under Section 6.2(b) on or before the deferred First Closing Date pursuant to Section 6.2(c), Sellers may terminate this Agreement and retain the Deposit, and following such termination shall have no obligation to refund the Deposit to Purchaser and, for the avoidance of doubt, the non-refund of the Deposit by Sellers shall be Sellers’ sole and exclusive remedy with respect thereto. The Parties agree that the non-refund of the Deposit by Sellers represents a genuine pre-estimate of the losses which may be sustained by Sellers in the event that First Closing does not occur in the circumstances set out in this Section 4.2(b) and is not a penalty. 

(c)

If First Closing occurs but Second Closing does not occur because of the failure of Purchaser to perform any of its obligations under Section 6.4(b) on or before the deferred Second Closing Date pursuant to Section 6.4(c), Sellers may terminate this Agreement in relation to the Second Transferred Interests in accordance with Section 12.3(a)(ii) and retain the Remaining Deposit, and following such termination shall have no obligation to refund the Remaining Deposit to Purchaser and, for the avoidance of doubt, the non-refund of the Remaining Deposit by Sellers shall be Sellers’ sole and

exclusive remedy with respect thereto. The Parties agree that the non-refund of the Remaining Deposit by Sellers represents a genuine pre-estimate of the losses which may be sustained by Sellers in the event that Second Closing does not occur in the circumstances set out in this Section 4.2(c) and is not a penalty.

4.3

Payments on the First Closing Date and the Second Closing Date 

(a)

No later than five (5) Business Days following the satisfaction or waiver of the Conditions Precedent to First Closing (other than the Condition Precedent set forth in Section 5.1(a)(iv)), Sellers shall deliver to Purchaser a statement providing Sellers’ estimate of Purchaser’s Initial Consideration less fifty percent (50%) of the Deposit and Agreed Interest on fifty percent (50%) of the Deposit calculated from the Signing Date up to but excluding the First Closing Date (the “First Closing Payment”). At First Closing, Purchaser shall pay such estimated First Closing Payment to Sellers’ bank account specified in Section 4.6(a). As soon as practicable following the First Closing Date, Sellers shall deliver to Purchaser a statement providing the actual First Closing Payment amount. If the actual First Closing Payment is higher than the estimated First Closing Payment, Purchaser shall pay to Sellers an amount equal to the excess amount; if it is lower, Sellers shall pay to Purchaser the shortfall amount, in either case within ten (10) Business Days of delivery of the second such statement.

(b)

Not less than ten (10) Business Days prior to the scheduled Second Closing Date, Sellers shall deliver to Purchaser a statement in the form set out in Exhibit 11 providing Sellers’ estimate of Purchaser’s Subsequent Consideration calculated pursuant to Section 4.1(d) (the "Estimated Settlement Statement") setting out the Subsequent Purchase Price, together with the Agreed Interest payable thereon, and the estimate for the Reimbursement Amount,  less the Remaining Deposit and Agreed Interest on the Remaining Deposit calculated from the Signing Date up to but excluding the Second Closing Date. At Second Closing, Purchaser shall pay the amount set out in the Estimated Settlement Statement to Sellers’ bank account specified in Section 4.6(a). 

4.4

Settlement of Reimbursement Amount and Dispute Settlement

(a)

Within ninety (90) days following the Second Closing Date, Sellers shall submit to Purchaser a statement setting out the actual Purchaser’s Subsequent Consideration identifying the Subsequent Purchase Price, together with the Agreed Interest payable thereon, and the Reimbursement Amount as at the Second Closing less the Remaining Deposit and Agreed Interest on the Remaining Deposit calculated from the Signing Date up to but excluding the Second Closing Date (the "Final Settlement Statement").  

(b)

If the actual Purchaser’s Subsequent Consideration is higher than estimated in the Estimated Settlement Statement, Purchaser shall pay to Sellers an amount equal to the excess amount; if it is lower, Sellers shall pay to Purchaser the shortfall amount (the excess amount or the shortfall amount, as applicable, is referred to as the "Delta Amount") in accordance with Section 4.4(e). 

(c)

Within twenty  (20) Business Days after delivery to Purchaser of the Final Settlement Statement (the "Dispute Period"), Purchaser shall notify Sellers of any item or items included in, or used in the calculation of, the Final Settlement Statement in respect of the Reimbursement Amount that it wishes in good faith to dispute together with:

(i)

the reasons for such dispute; and

(ii)

a list of proposed revisions to the Reimbursement Amount (the "Dispute Notice"). 

(d)

If Sellers receive a Dispute Notice, Sellers and Purchaser shall attempt to agree in writing the item or items disputed by Purchaser. If Sellers and Purchaser are unable to reach agreement within thirty (30) Business Days of the Dispute Notice, the matter(s) in dispute may, at the written election of Sellers or Purchaser, be referred to the decision of Deloitte Touche Tohmatsu Limited who shall be appointed by Sellers and Purchaser for the purposes of this Section 4.4(d), or in the event that such firm refuses to accept such appointment within fourteen (14) days of the Dispute Notice having been received by a Party, an independent internationally recognised firm of chartered accountants (the "Independent Accountant") appointed by the President of the Institute of Chartered Accountants in England and Wales. The Independent Accountant shall act as an expert and not as an arbitrator and the Arbitration Act 1996 shall not apply. The Parties shall instruct the Independent Accountant to decide the dispute and deliver its determination within twenty (20) Business Days after the dispute is referred to it. The Parties agree that the Independent Accountant will have the power to make such enquiries of the Parties as the Independent Accountant deems necessary to resolve the dispute and the Parties will co-operate and make information available promptly as requested by the Independent Accountant. The Independent Accountant’s decision shall (in the absence of fraud or manifest error) be final and binding on the Parties for all purposes of this Agreement. The Final Settlement Statement, as adjusted (if necessary) to reflect the Independent Accountant’s final and binding decision, will be deemed to have been accepted by the Parties as the Final Settlement Statement. The costs of the Independent Accountant shall be apportioned between Sellers on the one hand and Purchaser on the other hand in equal shares and each Party shall be responsible for its own costs of presenting its case to the Independent Accountant and costs and expenses of all advisors, witnesses and employees used by it in relation to the determination.

(e)

The Delta Amount together with Agreed Interest from the Second Closing Date shall be paid as follows:

(i)

if Purchaser notifies Sellers that there are no items it wishes to dispute or, by the expiry of the Dispute Period, no Dispute Notice is received by Sellers, the Delta Amount as set out in the Final Settlement Statement shall be paid to Sellers or refunded to Purchaser (as the case may be) within five (5) Business Days of the earlier of the expiry of the Dispute Period or the date on which Purchaser notifies Sellers that it agrees with the Delta Amount as set out in the Final Settlement Statement;

(ii)

if a Dispute Notice is received by Sellers in the Dispute Period, such part of the Delta Amount which is not in dispute shall be paid to Sellers or refunded to Purchaser (as the case may be) on the earlier of the date Purchaser notifies Sellers that it agrees with certain amounts included in the Delta Amount or five (5) Business Days following expiry of the Dispute Period; and

(iii)

such part of the Delta Amount which is in dispute shall be paid to Sellers or refunded to Purchaser (as the case may be) within five (5) Business Days of agreement by Sellers and Purchaser or determination by the Independent Accountant in accordance with this Section 4.4.

(f)

The Parties agree that the Final Settlement Statement will not be revised following any audit conducted under the JOAs, the UUOAs or the PSCs, and that no adjustments shall be made to the amounts paid in connection with the Final Settlement Statement, but provided that nothing in this Section 4.4(f) shall purport to exclude any liability for fraud.

4.5

Termination prior to Second Closing

(a)

If this Agreement is terminated pursuant to Section 12.1(b)  (the date of such termination,  the “Interim Termination Date”),  within ninety (90) days of the Interim Termination Date, Sellers shall submit to Purchaser a statement setting out the First Transferred Interests Reimbursement Amount (the “Interim Settlement Statement”). Sections 4.4(c), (d) and (e) shall apply, with the necessary changes, to the Interim Settlement Statement.  

(b)

If Purchaser does not deliver a Dispute Notice within the Dispute Period, Sellers shall pay to Purchaser the First Transferred Interests Reimbursement Amount within ten (10) Business Days following expiry of the Dispute Period. If Purchaser delivers a Dispute Notice within the Dispute Period, (i) such part of the First Transferred Interests Reimbursement Amount which is not in dispute shall be paid to Purchaser within ten (10) Business Days following expiry of the Dispute Period and (ii) Section 4.4(d) shall apply with respect to the part of the First Transferred Interests Reimbursement Amount which is in dispute.   

4.6

Mode of Payment; Default; Set-off 

(a)

Any payments to be made by Purchaser to Sellers under this Agreement shall be made in United States Dollars by irrevocable wire transfer of immediately available funds to the following bank account or such other bank account as may be notified by Sellers to Purchaser:

(b)

Any payments to be made by Sellers to Purchaser under this Agreement shall be made in United States Dollars by irrevocable wire transfer of immediately available funds to the following bank account or such other bank account as may be notified by Purchaser to Sellers:

(c)

If an amount that is to be paid under this Agreement is denominated in a currency other than United States Dollars, it shall be converted into United States Dollars at the exchange rate used by Sellers for the conversion of such amounts in accordance with the Accounting Procedure of the Joint Operating Agreements. 

(d)

Any payment shall be deemed to have been made on confirmation of a bank remittance in the form of a SWIFT MT 103 evidencing the transfer of the amount payable (without deduction of any costs or charges, other than those of the recipient’s bank) to the relevant bank account.

(e)

If any Party fails to fully make any payment on the relevant due date, it shall pay Agreed Interest on the amount not timely paid without prejudice to its right to claim additional damages and/or to enforce other rights for default in accordance with applicable law. 

(f)

Purchaser shall not be entitled to exercise any right of set-off or retention right with respect to any of its payment obligations pursuant to this Agreement.

(g)

All amounts payable under this Agreement shall be paid free and clear of all withholdings and deductions, save only as may be required by applicable law. If a Party is required by applicable law to make a deduction or withholding in respect of any amount payable under this Agreement, it shall, at the same time as the amount which is the subject of the deduction or withholding is payable, make a payment of such additional amount as shall be required to ensure that the net amount received by the relevant Party will equal the full amount which would have been received by it had no such deduction or withholding been required to be made.  

(h)

Each Seller represents that it has registered a branch in Malaysia for Malaysian Tax purposes, and that its portion of the Purchaser’s Consideration will be received by and reflected on the accounting books and records of such branch.

Section 5
Conditions Precedent

5.1

Conditions Precedent to First Closing

(a)

The obligation of Sellers to sell and of Purchaser to purchase the First Transferred Interests on the First Closing Date shall be subject to the satisfaction or waiver, in accordance with the terms of this Agreement, of the following conditions precedent (the "Conditions Precedent to First Closing"): 

(i)

all consents and approvals required under the JOAs for the sale of all of the Transferred Interests from Sellers to Purchaser shall have been obtained and the JOA Novation Agreements shall have been entered into by the parties thereto;

(ii)

all pre-emptive rights granted under the JOAs to Carigali in relation to all of the Transferred Interests shall have been waived or expired without exercise;

(iii)

the PETRONAS Approval shall have been received by Sellers in relation to the transfer of the Transferred Interests pursuant to this Agreement and shall not contain any unduly burdensome conditions; 

(iv)

the execution of the Deeds of Assignment by the respective parties thereto in relation to the First Transferred Interests;

(v)

the parties to the GK UUOA shall have entered into the GK UUOA Novation Agreement;

(vi)

the parties to the SNP UUOA shall have entered into the SNP UUOA Novation Agreement;

(vii)

the parties to the SK 309 and SK 311 GSA shall have entered into the SK 309 and SK 311 GSA Novation Agreement;

(viii)

the parties to the Kikeh GSA shall have entered into the Kikeh GSA Novation Agreement;

(ix)

the parties to the GK GSA shall have entered into the GK GSA Novation Agreement;

(x)

the parties to the SNP GSA shall have entered into the SNP GSA Novation Agreement;

(xi)

the parties to the Kikeh Nominating and Lifting Agreement shall have entered into the Kikeh Nominating and Lifting Agreement Amendment Agreement;

(xii)

the parties to the Kidurong Nominating and Lifting Agreement shall have entered into the Kidurong Nominating and Lifting Agreement Amendment Agreement;

(xiii)

no judgment, injunction, order or other decision enforceable against Sellers or Purchaser by any Governmental Entity in Malaysia prohibiting any of the transactions contemplated by this Agreement has been issued, made or served on Sellers or Purchaser; and

(xiv)

the execution of any assignment or novation agreement in respect of any contract entered into by Sellers in connection with any of the Transferred Interests after the Signing Date which Sellers and Purchaser (acting reasonably) consider necessary to effect the sale of the Transferred Interests to Purchaser and to release Sellers from contractual liability under such contract with respect to the Transferred Interests (each an "Interim Period Novation Agreement").

(b)

Following the Signing Date, each Party shall, and shall procure that each of its Affiliates shall, use its reasonable endeavours to procure the satisfaction of the Conditions Precedent, including the execution and performance of all such other documents, acts and things as may be reasonably required in order to satisfy the Conditions Precedent as soon as practicable and in any event by the Longstop Date. Each Party shall keep the other Parties informed of its progress with regard to the satisfaction of the Conditions Precedent. Sellers and Purchaser shall each notify the other promptly upon becoming aware that any of the Conditions Precedent have been satisfied. Sellers shall, promptly after the Signing Date, issue to Carigali notices required pursuant to the JOAs together with a copy of this Agreement and the Agreed Form of the JOA Novation Agreements (the "JOA Notice"). 

(c)

Each Party shall promptly co-operate with and provide to the other Parties all such information and documentation concerning that Party and its Affiliates as may be

necessary to enable the other Parties to prepare and submit all necessary filings required by the Government and/or PETRONAS for the purposes of obtaining the PETRONAS Approval or otherwise in connection with the transfer of all of the Transferred Interests as required under this Agreement and otherwise to satisfy the Conditions Precedent to First Closing. No later than five (5) Business Days following the Signing Date, Sellers shall submit a letter to PETRONAS seeking its approval to the sale of all of the Transferred Interests to Purchaser in order to obtain the PETRONAS Approval.

(d)

No later than two (2) Business Days following the receipt of the PETRONAS Approval, Sellers shall:

(i)

send each of the JOA Novation Agreements to Carigali;

(ii)

send the GK UUOA Novation Agreement to each of the counterparties thereto;

(iii)

send the SNP UUOA Novation Agreement to each of the counterparties thereto;

(iv)

send the SK 309 and SK 311 GSA Novation Agreement to each of the counterparties thereto;

(v)

send the Kikeh GSA Novation Agreement to each of the counterparties thereto;

(vi)

send the GK GSA Novation Agreement to each of the counterparties thereto;

(vii)

send the SNP GSA Novation Agreement to each of the counterparties thereto;

(viii)

send the Kikeh Nominating and Lifting Agreement Amendment Agreement to each of the counterparties thereto;

(ix)

send the Kidurong Nominating and Lifting Agreement Amendment Agreement to each of the counterparties thereto; and

(x)

send each Interim Period Novation Agreement to each of the counterparties thereto.

(e)

If, following the issuance of the JOA Notice pursuant to Section 5.1(b) and pursuant to the pre-emption process under the JOAs:

(i)

a counter-notification from Carigali is received by Sellers that Carigali accepts the agreed upon terms and conditions contained in the JOA Notice which complies with the provisions of the JOAs (a “Counter-Notice”); or

(ii)

any other correspondence is received by Carigali in relation to the pre-emption process under the JOAs,

5.2

Regulatory Requirements

(a)

In order to obtain all requisite approvals for the transactions contemplated by this Agreement under applicable laws, including the PETRONAS Approval, Purchaser and Sellers shall:

(i)

reasonably cooperate in all respects with each other in the preparation of any filing or notification and in connection with any submission, investigation or inquiry from PETRONAS or any other Governmental Entity;

(ii)

supply to PETRONAS or any other Governmental Entity as promptly as practicable any additional information requested; and

(iii)

take all actions reasonably required in order to obtain any necessary approval.

(b)

Purchaser shall provide any guarantee, undertaking or other security or information which is reasonably required by PETRONAS, Carigali or the counterparties to the SNP UUOA, the GK UUOA, the Kidurong Nominating and Lifting Agreement, the Kikeh GSA, the SK 309 and SK 311 GSA, the GK GSA, the SNP GSA or the Kikeh Nominating and Lifting Agreement in respect of the obligations or liabilities under such agreements to which Purchaser will become subject in order to satisfy the Conditions Precedent.

5.3

Conditions Precedent to Second Closing

(a)

The obligations of Sellers to sell and of Purchaser to purchase the Second Transferred Interests shall be subject to the satisfaction or waiver, in accordance with the terms of this Agreement, of the following conditions precedent (the "Conditions Precedent to Second Closing"): 

(i)

the First Closing shall have occurred in accordance with the terms of this Agreement;

(ii)

no judgment, injunction, order or other decision enforceable against Sellers or Purchaser by any Governmental Entity in Malaysia prohibiting the sale and purchase of the Second Transferred Interests having been issued, made or served on Sellers or Purchaser;  

(iii)

the execution of the Deeds of Assignment by the respective parties thereto in relation to the Second Transferred Interests; and

(iv)

the execution of any Interim Period Novation Agreement.

(b)

Prior to the Second Closing Date, Sellers shall send each Interim Period Novation Agreement to each of the counterparties thereto.

Section 6
Closing

6.1

First Closing

(a)

Within ten (10) Business Days of the delivery of the First Closing Payment statement in accordance with Section 4.3(a), Purchaser and Sellers shall take the First Closing Actions specified in Section 6.2 ("First Closing").

(b)

First Closing shall take place at the offices of Sellers at Levels 26 - 31, Tower 2, PETRONAS Twin Towers, Kuala Lumpur City Centre, 50088, Kuala Lumpur, Malaysia at 10 a.m. Malaysia Standard Time within ten (10) Business Days of the delivery of the First Closing Payment statement in accordance with Section 4.3(a) or at any other time, place or date as Sellers and Purchaser may mutually agree. The date on which First Closing occurs shall be referred to as the "First Closing Date".

6.2

First Closing Actions

(a)

At or prior to First Closing, upon the terms and subject to the conditions of this Agreement, and subject to the simultaneous performance by Purchaser of its obligations pursuant to Section 6.2(b), Sellers shall deliver (or cause to be delivered) to Purchaser, the following:

(i)

a certified true copy of a secretary’s certificate certifying a consent in lieu of a meeting of the boards of directors approving the terms of this Agreement and all agreements entered into in connection with this Agreement;

(ii)

a counterpart of each Deed of Assignment relating to the First Transferred Interests duly executed by the relevant Seller;

(iii)

a copy of the PETRONAS Approval;

(iv)

a counterpart of each JOA Novation Agreement duly executed by the relevant Seller and Carigali;

(v)

a counterpart of the GK UUOA Novation Agreement duly executed by the parties thereto other than Purchaser;

(vi)

a counterpart of the SNP UUOA Novation Agreement duly executed by the parties thereto other than Purchaser;

(vii)

a counterpart of the SK 309 and SK 311 GSA Novation Agreement duly executed by the parties thereto other than Purchaser;

(viii)

a counterpart of the Kikeh GSA Novation Agreement duly executed by the parties thereto other than Purchaser;

(ix)

a counterpart of the GK GSA Novation Agreement duly executed by the parties thereto other than Purchaser;

(x)

a counterpart of the SNP GSA Novation Agreement duly executed by the parties thereto other than Purchaser;

(xi)

a counterpart of the Kikeh Nominating and Lifting Agreement Amendment Agreement duly executed by the parties thereto other than Purchaser;

(xii)

a counterpart of the Kidurong Nominating and Lifting Agreement Amendment Agreement duly executed by the parties thereto other than Purchaser;

(xiii)

a counterpart of each Interim Period Novation Agreement duly executed by the parties thereto other than Purchaser;

(xiv)

a counterpart of the GK UUOA Voting Agreement duly executed by Murphy Sabah; and

(xv)

a counterpart of the SNP UUOA Voting Agreement duly executed by Murphy Sabah.

(b)

At or prior to First Closing, upon the terms and subject to the conditions of this Agreement, and subject to the simultaneous performance by Sellers of their obligations pursuant to Section 6.2(a), Purchaser shall deliver (or cause to be delivered) to Sellers, the following:

(i)

a  letter from the general counsel or corporate secretary of Guarantor in Agreed Form certifying the approval by the shareholder of Guarantor of the terms of this Agreement and all agreements entered into in connection with this Agreement;

(ii)

evidence (satisfactory to Sellers in accordance with Section 4.6(d)) of payment by Purchaser of the Fist Closing Payment in accordance with Section 4.3(a);

(iii)

a counterpart of each Deed of Assignment relating to the First Transferred Interests duly executed by Purchaser;

(iv)

a counterpart of each JOA Novation Agreement duly executed by Purchaser;

(v)

a counterpart of the GK UUOA Novation Agreement duly executed by Purchaser;

(vi)

a counterpart of the SNP UUOA Novation Agreement duly executed by Purchaser;

(vii)

a counterpart of the SNP GSA Novation Agreement duly executed by Purchaser;

(viii)

a counterpart of the SK 309 and SK 311 GSA Novation Agreement duly executed by Purchaser;

(ix)

a counterpart of the Kikeh GSA Novation Agreement duly executed by Purchaser;

(x)

a counterpart of the GK GSA Novation Agreement duly executed by Purchaser;

(xi)

a counterpart of the Kikeh Nominating and Lifting Agreement Amendment Agreement duly executed by Purchaser;

(xii)

a counterpart of the Kidurong Nominating and Lifting Agreement Amendment Agreement duly executed by Purchaser;

(xiii)

a certified true copy of the resolutions of the board of directors and board of commissioners of each of Purchaser and Guarantor approving the terms of this Agreement and all the agreements entered into in connection with this Agreement; 

(xiv)

a counterpart of each Interim Period Novation Agreement duly executed by Purchaser;

(xv)

a counterpart of the GK UUOA Voting Agreement duly executed by Purchaser; and

(xvi)

a counterpart of the SNP UUOA Voting Agreement duly executed by Purchaser.

(c)

If Sellers have failed to perform their obligations under Section 6.2(a), and/or Purchaser has failed to perform its obligations under Section 6.2(b), then (in addition to and without prejudice to all other rights or remedies available to each Party under or pursuant to this Agreement and the right to claim damages for breach of this Agreement) First Closing shall be deferred once for ten (10) Business Days. If upon the deferred date for First Closing a Party does not comply with any of its obligations under Section 6.2(a) or 6.2(b) (as the case may be), the non-defaulting Party (which shall be Sellers, in the case of a default by Purchaser, and Purchaser, in the case of a default by either Seller) may terminate this Agreement by notice to the defaulting Party or elect to proceed to First Closing to the extent practicable. Any termination of this Agreement or election to proceed to First Closing shall be without prejudice to any accrued rights and liabilities of the Parties and the rights of a Party to claim damages for breach of this Agreement.

(d)

Within five (5) Business Days of the First Closing Date, Sellers shall (i) notify PETRONAS and the respective counterparties to the JOA Novation Agreements, the GK UUOA Novation Agreement, the SNP UUOA Novation Agreement, the SK 309 and SK 311 GSA Novation Agreement, the SNP GSA Novation Agreement, the Kikeh GSA Novation Agreement, the GK GSA Novation Agreement, the Kikeh Nominating and Lifting Agreement Amendment Agreement, the Kidurong Nominating and Lifting Agreement Amendment Agreement and the Interim Period Novation Agreements of the occurrence of the First Closing Date and (ii) send a notice of assignment in relation to the First Transferred Interests accompanied by a certified true copy of each Deed of Assignment to Carigali.

6.3

Second Closing 

(a)

Subject to the Conditions Precedent to Second Closing (other than the Condition Precedent set forth in Section 5.3(a)(iii)) having been satisfied or waived, Purchaser and Sellers shall take the Second Closing Actions specified in Section 6.4 (“Second Closing”). 

(b)

Second Closing shall take place at the offices of Sellers at Levels 26 - 31, Tower 2, PETRONAS Twin Towers, Kuala Lumpur City Centre, 50088, Kuala Lumpur, Malaysia at 10 a.m. Malaysia Standard Time on the later of First Closing Date and

[*****] or at any other time, place or date as Sellers and Purchaser may mutually agree. The date on which Second Closing occurs shall be referred to as the “Second Closing Date”.

6.4

Second Closing Actions

(a)

At or prior to Second Closing, upon the terms and subject to the conditions of this Agreement, and subject to the simultaneous performance by Purchaser of its obligations pursuant to Section 6.4(b), Sellers shall deliver (or cause to be delivered) to Purchaser, the following: 

(i)

a counterpart of each Deed of Assignment relating to the Second Transferred Interests duly executed by the relevant Seller; and