SHARE SALE AGREEMENT INTERNATIONAL RESOURCE MANAGEMENT CORPORATION LIMITED BLADE ENERGY PTY LIMITED IDFK INTERNATIONAL MANAGEMENT INC MELIOR PTY LIMITED SADAT NADERI TERRI BIRGITTA ZADKO AUSTRAL PACIFIC ENERGY (NZ) LIMITED

Barristers & Solicitors
Auckland & Wellington, New Zealand
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

1.

DEFINITIONS AND INTERPRETATION

1

2.

AGREEMENT TO SELL AND PURCHASE

5

3.

PURCHASE PRICE AND PAYMENT

5

4.

OBLIGATIONS ON OR BEFORE CLOSING

7

5.

CLOSING

9

6.

CONDITIONS

11

7.

WARRANTIES

12

8.

CONFIDENTIALITY AND ANNOUNCEMENTS

14

9.

MISCELLANEOUS

14

SCHEDULE 1 - WARRANTIES

AGREEMENT DATED

2007

PARTIES

1.

BLADE ENERGY PTY LIMITED a duly incorporated company having its registered office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ on behalf of the ▇▇▇▇▇▇▇▇▇ Trust

IDFK INTERNATIONAL MANAGEMENT INC a duly incorporated company having its registered office at ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ Standard Chartered, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ on behalf of the Gryphon Trust

MELIOR PTY LIMITED a duly incorporated company having its registered office at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ on behalf of W F and H Shire Family Trust

▇▇▇▇▇ ▇▇▇▇▇▇ of London, ▇▇▇▇▇▇▇

▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ of Perth, Australia on behalf of the Nighthawk Trust

(together Vendors and each a Vendor)

2.

AUSTRAL PACIFIC ENERGY (NZ) LIMITED a duly incorporated company having its registered office at ▇▇▇▇▇ ▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ or nominee (Purchaser)

BACKGROUND

A.

International Resource Management Corporation Limited (Company) is a company incorporated under the Companies ▇▇▇ ▇▇▇▇ with 150,100 fully paid ordinary shares each ranking equally in all respects.

B.

The Vendors are the owners of all shares in the Company, with each Vendor having the shareholding set out below:

Blade Energy Pty Limited

30,020 ordinary shares

IDFK International Management Inc

30,020 ordinary shares

Melior Pty Limited

30,020 ordinary shares

▇▇▇▇▇ ▇▇▇▇▇▇

30,020 ordinary shares

▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

30,020 ordinary shares

C.

The Vendors wish to sell and the Purchaser wishes to purchase all of the shares in the Company, in accordance with the terms and conditions in this agreement.

THE PARTIES AGREE THAT:

1.

DEFINITIONS AND INTERPRETATION

1.1

Definitions: In this agreement, unless the context indicates otherwise:

Accounts Date means 31 July 2007;

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Act means the Companies ▇▇▇ ▇▇▇▇;

APX Shares means the shares in Austral Pacific Energy Ltd which are to be issued to the Vendors under clause 3.2(a) in partial settlement of the Purchase Price;

Business means the business of the Company from time to time;

Business Day means a day on which registered banks are open for ordinary over-the-counter business in Wellington, New Zealand, excluding Saturdays, Sundays and statutory public holidays in Wellington;

Cardiff JVOA means the Deep Joint Venture Operating Agreement in respect of Petroleum Exploration Permit (PEP) 38738-02 (and now also Petroleum Mining Permit (PMP) 38156), dated 2 July 2004;

Closing means the closing of the sale and purchase of shares contemplated by this agreement which will take place on the Closing Date;

Closing Date means the later of:

(a)

21 September 2007; or

(b)

such later date as the APX Shares are issued to the Vendors under clause 3.2(a) or a cash payment is made in lieu of the issue of the APX Shares in accordance with clause 3.2(a)

(c)

such other date as may be agreed between the Vendors and the Purchaser;

Company means International Resource Management Corporation Limited;

Condition Date means 24 August 2007 or such earlier date as all of the conditions set out in clause 6.1 are satisfied or waived and the Purchaser has so notified the Vendor under clause 6.2;

Default Interest Rate means 10% per annum;

Disclosure Letter means the letter disclosing certain facts and circumstances in relation to the Warranties delivered by the Vendors to the Purchaser prior to the Condition Date as contemplated by clause 7.4;

Environmental Permits means any and all permits, consents, licences, approvals, registrations, certificates and authorisations required under any and all Environmental Requirements;

Environmental Requirements means any law (including the common law), statute, regulation, notice, consent, agreement, plan, bond or other requirement having legal effect, relating to the following:

(a)

environmental protection;

(b)

health and/or safety of people;

(c)

the use of land;

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(d)

the discharge or release into the environment of contaminants, hazardous substances or any other chemicals or toxic substances; and

(e)

the use, manufacture, processing, refining or storage of contaminants, hazardous substances or other chemicals or toxic substances;

GAAP means generally accepted accounting practice in New Zealand, as defined in section 3 of the Financial Reporting ▇▇▇ ▇▇▇▇;

GST means goods and services tax payable under the Goods and Services Tax ▇▇▇ ▇▇▇▇;

Permits means the Company’s interests in:

(a)

Petroleum Exploration Permit (PEP) 38738-02;

(b)

Petroleum Mining Permit (PMP) 38156; and

(c)

the Joint Venture Operating Agreements for the permits referred to in paragraphs (a) to (b) above.

Perpetual Provisions means section 8 and 9;

Properties means the properties or premises owned, leased, licensed or otherwise occupied by the Vendors in connection with the Business or by the Company (but excluding any property used in connection with the Permits and which are under the control of the operator under the relevant Joint Venture Operating Agreement);

Purchase Price means NZ$7,000,000.00 plus GST (if any);

Shares means the shares in the capital of the Company referred to in paragraph C of the background and all rights attaching to them;

Taxation includes any and all forms of tax (both domestic and foreign imposed by any level of government or any public body) and in particular (but without limitation):

(a)

income tax, goods and services tax, fringe benefit tax, stamp duty, land tax, gift duty, dividend withholding payments and excess retention tax;

(b)

all other statutory or governmental impositions, dues, duties, levies, tariffs, charges, rates or local taxes;

(c)

all charges, interest, penalties, fines, additional tax, costs and expenses incidental and relating to or arising in connection with the re-assessment of any tax or to the negotiation of any closing of any dispute as to the liability of any person for any tax, or any actual or threatened taxation claim or proceeding taken in connection with any tax; and

(d)

the loss or reduction of any form of relief, exemption, concession, deferral, saving or sparing, including without limitation rebates, credits, deductions, allowances, net losses, loss carry forward or loss offset and in the case of deductions, allowances, net losses, loss carry forward or loss offset multiplied by the appropriate rate of taxation where applicable;

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Tax and Taxes will be construed accordingly;

Warranties means the warranties, representations and undertakings given or made by the Vendors in Schedule 1 and Warranty will be construed accordingly; and

Warranty Claim means a valid and permitted claim by the Purchaser against the Vendors under clause 7.3.

1.2

Interpretation: In this agreement, unless the context indicates otherwise:

(a)

Defined Expressions: expressions defined in the main body of this agreement have the defined meaning throughout this agreement, including the background;

(b)

Headings: section, clause and other headings are for ease of reference only and do not affect this agreement’s interpretation;

(c)

Parties: references to any party include that party’s executors, administrators, successors and permitted assigns;

(d)

Persons: references to a person include an individual, company, corporation, partnership, firm, joint venture, association, trust, unincorporated body of persons, governmental or other regulatory body, authority or entity, in each case whether or not having a separate legal identity;

(e)

Plural and Singular: references to the singular include the plural and vice versa;

(f)

Clauses/Schedules/Attachments: references to clauses, schedules and attachments are to clauses in, and the schedules and attachments to, this agreement. Each such schedule and attachment forms part of this agreement;

(g)

Statutory Provisions: references to any statutory provision are to statutory provisions in force in New Zealand and include any statutory provision which amends or replaces it, and any by-law, regulation, order, statutory instrument, determination or subordinate legislation made under it;

(h)

Negative Obligations: any obligation not to do anything includes an obligation not to suffer, permit or cause that thing to be done;

(i)

Inclusive Expressions: the term includes or including (or any similar expression) is deemed to be followed by the words without limitation;

(j)

Documents: references to any document (however described) are references to that document as modified, novated, supplemented, varied or replaced from time to time and in any form, whether on paper or in an electronic form;

(k)

Joint and Several Obligations: undertakings, warranties, representations, covenants, agreements and other obligations of the Vendors will bind and be deemed to have been given or assumed by each of them severally;

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(l)

Payment: references to, or obligations in this agreement which require, payment of money will be references to, or deemed to be an obligation requiring, payment of money in immediately available cleared funds or in any other form that the Vendors and Purchaser agree in writing;

(m)

$ and Dollars: $ and Dollars refers to New Zealand dollars;

(n)

Monetary Amounts: all monetary amounts are stated exclusive of GST and in New Zealand currency, and all amounts payable by a party under this agreement are to be paid in that currency. GST is payable at the same time and in the same manner as is any other amount payable under this agreement, where that amount is subject to GST under the Goods and Services Tax ▇▇▇ ▇▇▇▇.

2.

AGREEMENT TO SELL AND PURCHASE

2.1

Sale and Purchase: The Vendors agree to sell and transfer to the Purchaser, and the Purchaser agrees to purchase and take a transfer of, the Shares on the terms and conditions in this agreement.

2.2

No Encumbrances: The Shares will be bought and sold free and clear of any encumbrances.

2.3

Rights and Privileges: The Shares will be bought and sold with all benefits, rights, privileges and entitlements which accrue or attach to them as at the date of this agreement including the right to all bonuses, dividends and other distributions made or paid in respect of the Shares on or after 31 July 2007.

2.4

Title, Property and Risk: The title to, property in and risk of the Shares:

(a)

Vendors: until Closing, remains solely with the Vendors; and

(b)

Purchaser: passes to the Purchaser on and from Closing.

3.

PURCHASE PRICE AND PAYMENT

3.1

Purchase Price: The price payable by the Purchaser to the Vendors for the Shares will be the Purchase Price.

3.2

Payment: The Purchase Price will be paid by the Purchaser as follows:

(a)

Share Issue: The payment of NZ$3,000,000 will be satisfied by the issue to the Vendors of ordinary shares in Austral Pacific Energy Ltd. to the value of NZ$3,000,000 (APX Shares). The number of APX Shares to be issued will be calculated as follows:

(i)

The USD sale price for ordinary shares in Austral Pacific Energy Ltd. at close of trade on the AMEX on each of the five trading days prior to the Condition Date will be added together and then divided by 5 to determine the average USD sale price for the five trading days prior to the Condition Date.

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(ii)

The average USD sale price calculated under (i) above will then be converted to a NZD sale price using the average buy and sell exchange rate quoted by ASB at midday in New Zealand on the Condition Date.

(iii)

Subject to (iv) below, the total number of APX Shares to be issued will be NZ$3,000,000 divided by the NZD sale price calculated under (ii) above (rounded up to the nearest whole number).

(iv)

On the date prior to the date on which the APX Shares are to be issued (“Pricing Date”), the USD sale price calculated under (i) above will be will be converted to a CND sale price using the average buy and sell cash rate quoted by RBC Royal Bank at midday in Vancouver on that day, and compared with the CND sale price for ordinary shares in Austral Pacific Energy Ltd. as at the close of trade on the Pricing Date on the TSX-V (Market Price). If the CND sale price as converted is less than the “Discounted Market Price” (as determined under (v) below) then the total number of APX Shares to be issued will be determined on the basis of the “Discounted Market Price” as follows:

(A)

The “Discounted Market Price” will be converted to a NZD sale price using the average buy and sell exchange rate quoted by ASB at midday in New Zealand on the Pricing Date.

(B)

The total number of APX Shares to be issued will be NZ$3,000,000 divided by the NZD sale price calculated under (A) above (rounded up to the nearest whole number).

(v)

For the purposes of this clause the “Discounted Market Price” means the Market Price less a discount calculated on the basis of the following table, subject to a minimum price of CND0.05:

Market Price (CND)

Discount

0 – 0.50

25%

0.51 – 2.00

20%

2.01+

15%

As soon as practicable after the total number of APX Shares has been determined, the Purchaser will advise the Vendors, and the Vendors will advise the number of those shares to be issued to each Vendor and the register (Canadian or New Zealand) applicable for each Vendor. The Purchaser will use its reasonable endeavours to procure the issue of the APX Shares in time for settlement on 21 September 2007 but the Vendors acknowledge that this may not be possible taking into account the regulatory and other processes required for such issue. In the event that, for any reason, any of the APX Shares has not been duly issued by the date that is 120 days after the Condition Date, then (unless agreed otherwise) the issue of such shares shall be cancelled and instead the Purchaser shall satisfy the relevant portion of the Purchase Price by a payment in cash. The amount of the cash payment will be the value of the relevant shares (as calculated by multiplying the number of the

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relevant shares by the NZD sale price calculated under paragraph (ii) above) plus interest at the Default Interest Rate on such amount from 21 September 2007 through to the date of payment in full.

(b)

Cash Payment: The remaining NZ$4,000,000 will be paid on the date that is 120 days after the Condition Date by bank transfer of cleared funds to such bank account as is advised in writing by the Vendors at Closing. The payment shall be apportioned amongst the Vendors in accordance with their agreed percentage entitlements but payment of the amount to such bank account shall be a good discharge to the Purchaser. If the Purchaser obtains funding for the transaction contemplated by this Agreement sooner than the payment date required by this clause, the Purchaser shall use reasonable endeavours to pay the cash balance before the payment date so required.

3.3

Lowest Price: The parties agree that:

(a)

Capitalised Interest: the Purchase Price does not include any capitalised interest;

(b)

Lowest Price: the “lowest price” for the purpose of section EW32 of the Income Tax ▇▇▇ ▇▇▇▇ is equal to the Purchase Price; and

(c)

Tax Returns: they will compute their taxable income for the relevant period on the basis that the Purchase Price includes no capitalised interest and that they will file their tax returns accordingly.

4.

OBLIGATIONS ON OR BEFORE CLOSING

4.1

Vendors’ Obligations: The Vendors will:

(a)

Repayment Obligations: on or before Closing, ensure the repayment of all money (if any) owing to the Company by the Vendors;

(b)

Access: ensure that the Purchaser or its representatives have full access to the premises, books of account, computerised records, financial records, and other documents and records of the Company from the date of this agreement until Closing and that they will be given promptly all information they may reasonably require concerning the Business or affairs of the Company;

(c)

Terminate Employment: immediately before Closing, lawfully terminate the employment of all staff employed by the Company and meet all legal obligations to the staff whose employment has been terminated, including paying all wages and salary, holiday pay, redundancy pay and other compensation; and

(d)

Bank Accounts: not less than two Business Days before the Closing Date, deliver to the Purchaser a statement disclosing details of all accounts or deposits of the Company with banks or other financial institutions and the signatories to those accounts.

4.2

Pre-Closing Undertakings: In the period from 31 July 2007 until Closing, the Vendors undertake that:

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(a)

Business Pending Settlement: the Business will be operated in the normal and ordinary course and, except as specified in clause 4.3, no unusual payments shall be made, no unusual or onerous commitments will be entered into and the assets of the Business will be properly maintained and preserved other than as specifically disclosed to the Purchase prior to the date of this agreement;

(b)

Obligations: the Company will continue to meet all of its outstanding obligations, including in relation to the CardiffJVOA;

(c)

Shares: the Vendors will not deal with the Shares and will ensure that all shareholder advances and other third party indebtedness are repaid at the date of Closing; and

(d)

Permits: without limiting clause 4.2(a), the Company will not transfer or otherwise deal with its interest in the Permits without the prior written approval of the Purchaser.

4.3

Apportionment of Revenue and Expenses: It is the intention of the parties that:

(a)

Subject to clause 4.3(b) all revenue and expenses relating to the period prior to Closing will be the responsibility of the Vendors and all revenue and expenses relating to the period from Closing will be the responsibility of the Purchaser;

(b)

The Vendor will:

(i)

be responsible for any cash calls made in respect of the Cardiff JVOA which are due for payment prior to 1 January 2007; and

(ii)

have the benefit of the Company’s share of any revenue from the Cardiff JVOA prior to 1 January 2007,

and the Purchaser will:

(iii)

be responsible for any cash calls made in respect of the Cardiff JVOA which are due for payment on or after 1 January 2007; and

(iv)

have the benefit of the Company’s share of any revenue from the Cardiff JVOA on and from 1 January 2007.

In this regard the Vendors and the Purchaser will work together to produce a set of final accounts for the Company as at Closing, and will make any payment to each other as may be required to give effect to the intention expressed above.

4.4

Purchaser’s Obligations: Not less than two Business Days before the Closing Date, the Purchaser will provide the Vendor with:

(a)

Officers: the full names and residential addresses of the Company’s new directors nominated by the Purchaser to take office with effect from Closing;

(b)

Bank Authorisations: subject to the Vendors’ compliance with clause 4.1(d), a list of those authorities to operate bank accounts which

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the Purchaser requires to be revoked and the names of any new signatories to those accounts; and

(c)

Transfer: share transfer forms duly executed by the Purchaser.

5.

CLOSING

5.1

Time and Place: Closing will take place at 2.15 pm or at such other time as the Vendors and the Purchaser agree on the Closing Date at the offices of the Purchaser’s solicitors or at such other place as the Vendors and the Purchaser agree.

5.2

Documents for Delivery by the Vendors at Closing: At Closing the Vendors will deliver to the Purchaser:

(a)

Share Transfers: transfers of the Shares to the Purchaser executed by the respective holders of the Shares and in registrable form;

(b)

Share Certificates: the share certificates (if any) for the Shares or, if none, a statutory declaration by a Company officer stating that no share certificate has been issued for any of the Shares;

(c)

Waivers: any waivers of pre-emptive rights required under the Company’s constitution required to enable the Purchaser to be registered as holder of the Shares;

(d)

Directors’ Resolution: a resolution of the Company’s directors approving the transfers of the Shares and directing that, on presentation of the executed transfer, the Purchaser be entered in the Company’s register of shareholders as the holder of the Shares and the existing share certificates (if any) for the Shares be cancelled;

(e)

Statutory Records:

(i)

the certificate of incorporation and constitution of the Company (or copies certified by the Vendors’ solicitor as true and correct copies of the Company’s certificate of incorporation and constitution);

(ii)

any certificate of incorporation on change of name of the Company;

(iii)

the directors’ and shareholders’ minute book and other records of meetings or resolutions of directors and members;

(iv)

the share register;

(v)

the interests register;

(vi)

the register of directors and secretary;

(vii)

the register of charges; and

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(viii)

all other registers and statutory records required by the Act and all other books, records and documents relating to the Company’s affairs;

(f)

Written Agreements: copies of all written material agreements to which the Company is a party;

(g)

Intellectual Property Rights: certificates of registration and renewals of those trade marks of which the Company is registered as the proprietor and copies of all licences and registered user agreements which have been executed by the Company and pursuant to which the Company is the registered user of any trade ▇▇▇▇;

(h)

Books of Record and Account: all books of record and account (including without limitation, all tax returns, statement of taxation, account and correspondence with the Inland Revenue Department) of the Company and all computerised records of the Company;

(i)

Resignations: resignations in writing as directors of the Company, which resignations will include an acknowledgment in a form acceptable to the Purchaser that no money is owing to them whether as fees, salary, reimbursement for expenditure, compensation or otherwise and that they have no claims of any kind against the Company;

(j)

Appointments: evidence of the passing of an effective resolution by the Company appointing such persons as the Purchaser may nominate as directors; and

(k)

Banking: evidence of the passing by the Company’s board of directors of effective resolutions revoking all existing authorities to bankers concerning the operation of the Company’s bank accounts required by the Purchaser to be revoked under clause 4.1(d) and giving authority to such persons as the Purchaser may have nominated under clause 4.1 (d) to operate these accounts.

5.3

Closing Payment: On compliance with the provisions of clause 5.2, the Purchaser will issue the APX Shares (or make a cash payment in lieu of the issue of the APX Shares) in the manner specified in clause 3.2(a).

5.4

Default by Vendors: If the Vendors default in the performance of any of their obligations under this agreement prior to or on the Closing Date, the Purchaser may (in addition to and without prejudice to any other rights or remedies available to it):

(a)

Limited Closing: effect Closing so far as practicable having regard the defaults which have occurred (in which case the Vendors will be liable to comply as soon as possible with their obligations under this section);

(b)

Specific Performance: ▇▇▇ the Vendors for specific performance; and

(c)

Cancel Agreement: give the Vendors notice in writing of the default and if such default is not remedied to the satisfaction of the Purchaser within 10 Business Days of any notice under this clause 5.4(c), cancel this agreement.

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5.5

Default by Purchaser: If due to the Purchaser’s default any portion of the Purchase Price is not paid on the due date the Purchaser will without prejudice to any of the Vendor’s rights or remedies under this Agreement pay to the Vendor interest at the Default Interest Rate on the unpaid portion of the Purchase Price from the due date until payment in full.

5.6

Post Closing Name Change: As soon as is practicable following Closing the Purchaser will cause the Company to change its name and will not object to the use of such name by the Vendors for any other company owned by the Vendors.

6.

CONDITIONS

6.1

Conditions: Closing is conditional upon:

(a)

Due Diligence: the completion by the Purchaser of due diligence on the Shares and the Company, satisfactory to the Purchaser in all respects;

(b)

Third Party Regulatory Consents: any third party regulatory consents or approvals and any other consents or approvals requested for the purchase of the Shares including the consent of the Minister of Energy pursuant to section 41 of the Crown Minerals Act 1991 being received on terms satisfactory to the Purchaser;

(c)

Board Approval: Purchaser board approval of the purchase of the Shares;

(d)

Financial Obligations: evidence satisfactory to the Purchaser that the Company has met all of its financial obligations, including under Cardiff JVOA and it has no third party indebtedness;

(e)

Royalty Arrangements: evidence satisfactory to the Purchaser that the Company has not entered into (and is not otherwise subject to) any royalty arrangements.

6.2

Fulfilment of Conditions: The parties will use their best endeavours to procure the fulfilment of the conditions in clause 6.1. The Purchaser agrees to notify the Vendors promptly upon fulfilment or waiver of each condition in clause 6.1.

6.3

Benefit of Conditions: The conditions in clause 6.1 have been inserted solely for the benefit of the Purchaser which may waive them at the Purchaser’s sole discretion.

6.4

Non-Fulfilment of Consent Condition:

(a)

If the Purchaser has not obtained the consent of the Minister of Energy to the transfer of the Shares, pursuant to section 41 of the Crown Minerals ▇▇▇ ▇▇▇▇, by the Condition Date and the Purchaser elects to waive condition in clause 6.1(b), the parties will continue to use best endeavours to obtain such consent. Notwithstanding the preceding sentence, if the Purchaser subsequently determines (acting reasonably) that is not possible to obtain the consent of the Minister of Energy (on terms satisfactory to the Purchaser) then the parties will take such steps as are necessary or desirable (including the re-transfer of the shares and the repayment of the purchase price) to unwind the transaction contemplated by this agreement and to return each of them to the

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position they would have been in if this agreement had not been entered into.

(b)

The Purchaser acknowledges that:

(i)

it is not aware of any reason why Ministerial Consent would not be given to the transaction;

(ii)

it is not aware of any existing or threatened claim by any party that would prevent the Purchaser’s acquisition of the shares in the Company (or cause Ministerial Consent to be withheld;

(iii)

in the event that the Minister indicates an intent to delay or withhold Ministerial Consent, the Purchaser will use all reasonable endeavours to resolve the underlying issue so as to allow Ministerial Consent to be given; and

(iv)

prior to any unwinding of the transaction, the Purchaser will discuss the issue with the Vendors in good faith in an attempt to find an alternative solution which has the same overall effect for all parties as if the transaction had proceeded.

6.5

Non-Fulfilment of Other Conditions: If all the Conditions have not been fulfilled or waived in accordance with this agreement by the Condition Date or such later date as may be agreed in writing by the parties, then either the Vendors or the Purchaser may terminate this agreement by notice in writing to the other of them, in which case this agreement will end (with the exception of the Perpetual Provisions and rights that accrue before this agreement is terminated) and no party will have any claim against any other party arising under or in connections with this agreement.

7.

WARRANTIES

7.1

Warranties: In consideration of the Purchaser entering into this agreement the Vendors give and make the Warranties, with the intent that the Purchaser does, in entering into this agreement, rely on the truth of the statements in the Warranties. Each of the Warranties is given as a separate Warranty and will not limit, nor be limited by, any other Warranty.

7.2

Warranties Repeated: The Warranties given and made under clause 7.1 will also be deemed to be given and made by the Vendors at all times up to and on Closing.

7.3

Warranty Claims: All Warranty Claims made by the Purchaser must be in writing and delivered to the Vendors’ solicitors and all claims so made will be deemed to have been made against the Vendors.

7.4

Exclusions from Warranty Claims: No fact or circumstance will give rise to a Warranty Claim to the extent that fact or circumstance is specifically disclosed in the Disclosure Letter delivered by the Vendors to the Purchaser prior to the Condition Date.

7.5

Non-Taxation Warranty Claim Limitations: The Purchaser will not be entitled to make any claim whatsoever against the Vendors in respect of any Warranty, other than a Warranty in relation to Tax, being unfulfilled or materially untrue, misleading or incorrect nor any other claim under or in respect of this agreement:

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(a)

Threshold: unless the aggregate amount of all individual claims comprising the first claim made in any one year from the date of this agreement exceeds $50,000 but once any claim or claims have reached that aggregate amount no further minimum thresholds will apply to any subsequent claims made in that year;

(b)

Maximum Liability: to the extent that the aggregate amount payable by the Vendors for all such claims would exceed a sum equal to the Purchase Price; and

(c)

Time: unless the claim is made prior to the expiry of 24 months from Closing, provided that this clause will not apply to claims in respect of Taxation.

7.6

Taxation Warranty Claim Limitations: The Purchaser will not be entitled to make any claim whatsoever against the Vendors in respect of any Warranty in relation to Tax being unfulfilled or materially untrue, misleading or incorrect nor any other claim under or in respect of this agreement unless the claim is made prior to the expiry of four years from the date of filing of the income tax return for the year ending 31 July 2007.

7.7

Notification: If, before Closing, the Vendors become aware of any Warranty being unfulfilled or materially untrue, misleading or inaccurate or of any circumstance which will or would reasonably be likely to result in any of the Warranties being unfulfilled or materially untrue, misleading or inaccurate at Closing, or any event will occur which may entitle the Purchaser to exercise its rights of cancellation under clause 7.11, the Vendors must immediately notify the Purchaser in writing of all relevant information, circumstances or events.

7.8

Indemnification of Purchaser: The Vendors will indemnify the Purchaser and keep the Purchaser fully and effectively indemnified against, and will hold the Purchaser harmless from, any loss, liability, damage, cost, expense or Taxation which results or arises from, or is attributable or relates to, any of the Warranties given by the Vendors being unfulfilled or materially untrue, misleading or inaccurate.

7.9

Gross Up: If:

(a)

Deduction: the Vendors are required by law to make any deduction or withholding from any sum payable under the indemnity given in this section 7 or under or in respect of any Warranty; or

(b)

Payment: the Purchaser is required by law to make any payment or suffers any Taxation on or in relation to any amount received or receivable by the Purchaser under this agreement;

then the sum payable by the Vendors will be increased to the extent necessary to ensure that after making the deduction, withholding or payment, or suffering the Taxation, the Purchaser receives and retains (free of any liability in respect of any such deduction, withholding or payment, or Taxation) a net sum equal to the sum that the Purchaser would have received and retained had no such deduction, withholding or payment been made, and no such Taxation been suffered.

7.10

Other Rights: The Purchaser’s rights to demand payment under this section 7 are additional to and separate from any rights conferred on it by law as a result of

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any of the Warranties being incorrect or materially untrue, misleading or inaccurate, and no such rights will detract from the provisions of this section 7.

7.11

Cancellation for Breach of Warranty: If on or before Closing the Vendors notify the Purchaser or the Purchaser otherwise reasonably forms the view that any of the Warranties are or will be unfulfilled or materially untrue, misleading or inaccurate and has first advised the Vendors of its view and the reasons for this view the Purchaser will be entitled by notice in writing to the Vendors (detailing the basis on which the Purchaser believes any of the Warranties are or will be unfulfilled or materially untrue, misleading or inaccurate) to cancel this agreement but failure to exercise this right will not constitute a waiver of any other rights of the Purchaser arising out of such Warranties being unfulfilled or materially untrue, misleading or inaccurate.

8.

CONFIDENTIALITY AND ANNOUNCEMENTS

8.1

Disclosure by Parties: Subject to clauses 8.2 and 8.3, the parties will not disclose the provisions of this agreement or any matters relating to this agreement to any person.

8.2

Advisers or Required by Law: A party may make disclosures of provisions of this agreement or matters relating to this agreement:

(a)

To Employees, etc: to those of its employees, officers, professional or financial advisers and bankers as the party reasonably thinks necessary but only on a strictly confidential basis; or

(b)

Required by Law: to the extent required by law or by stock exchange listing requirements.

8.3

Consent: Any public announcement of the transactions contemplated by this agreement (except those required by law or by stock exchange listing requirements) must only be made with the prior written consent of the Vendors and the Purchaser.

9.

MISCELLANEOUS

9.1

Non-Merger: The warranties, undertakings, obligations and indemnities given under this agreement will not merge or be treated as discharged on Closing or on the execution or delivery of any document pursuant to this agreement, but will remain enforceable to the fullest extent, despite any rule of law to the contrary.

9.2

Entire Agreement: This agreement (together with the documents referred to in this agreement) records the entire understanding and agreement of the parties relating to the matters dealt with in this agreement. This agreement supersedes all previous understandings or agreements (whether written, oral or both) between the parties relating to these matters.

9.3

Further Assurances: Each party will do all things and execute all documents reasonably required to give effect to the provisions and intent of this agreement.

9.4

Invalidity: If any provision of this agreement is or becomes invalid or unenforceable, that provision will be deemed deleted from this agreement. The invalidity or unenforceability of that provision will not affect the other provisions of this agreement, all of which will remain in full force and effect to the extent

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permitted by law, subject to any modifications made necessary by the deleting of the invalid or unenforceable provision.

9.5

Notices:

(a)

Form of Notice: All notices or other communications required or permitted under this agreement must be in writing, signed by an authorised person on behalf of the relevant party, addressed to the recipient at the postal address, e-mail address or facsimile number in this clause (as applicable) or to such other postal address, e-mail address or facsimile number as a party may notify to the other parties by like notice. Notices or other communications must be sent to the recipient by hand, prepaid fast post (airmail if outside New Zealand), e-mail or facsimile and signed by a person duly authorised by the sender:

(i)

The Vendors: if to the Vendors, to:

▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇, ▇▇,
▇▇▇▇▇▇▇▇▇

e-mail:               ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇.▇▇

with a copy to:

▇▇▇▇▇ ▇▇▇▇▇▇▇ Willshee
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇,
▇▇▇▇▇▇▇▇▇

e-mail:                ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇

(ii)

The Purchaser: if to the Purchaser, to:

Austral Pacific Energy (NZ) Limited
▇▇▇▇▇ ▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇

For:                   ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇

Facsimile:         ▇▇▇ ▇ ▇▇▇ ▇▇▇▇

e-mail:              ▇▇▇▇▇@▇▇▇▇▇▇▇-▇▇▇▇▇▇▇.▇▇▇

with a copy to:

▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Solicitors
▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
P O Box 2402
Wellington

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For:                  ▇▇▇▇▇▇▇ ▇▇▇▇

Facsimile:        ▇▇▇ ▇ ▇▇▇ ▇▇▇▇

e-mail:             ▇▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

(b)

Time of Receipt: Without limiting any other means by which a party may be able to prove that a notice or other communication has been received by another party, a notice or other communication will be deemed to have been duly received:

(i)

Personal Delivery: if sent by hand, when left with an apparently responsible person at the recipient’s address;

(ii)

Pre-Paid Post: if sent by pre-paid fast post, two Business Days (if posted within New Zealand to an address in New Zealand) or seven Business Days (if posted by airmail from one country to another) after the date of posting;

(iii)

Facsimile: if sent by facsimile, on receipt by the sender of an acknowledgment or transmission report generated by the facsimile machine from which the notice or other communication was sent in its entirety to the recipient’s facsimile number. The sender will retain in safe custody the original of the notice or other communication sent by facsimile together with the acknowledgment of transmission report generated by the facsimile machine from which the notice or other communication was sent. The recipient will be authorised to act on any notice or other communication sent by facsimile without requiring receipt of the original notice or other communication;

(iv)

E-mail: if sent by e-mail, on receipt by the sender of an e-mail message showing that the e-mail has been opened at the recipient’s terminal. The sender will keep in safe custody a printed copy of the notice or other communication sent by e-mail together with a printed copy of the e-mail message showing that the e-mail notice was opened at the recipient’s terminal. The recipient will be authorised to act on any notice or other communication sent by e-mail without needing receipt of any printed copy of the notice or other communication. The recipient will be authorised to act on any notice or other communication sent by e-mail without needing receipt of any printed copy of the notice or other communication;

except that if a notice or other communication is served by hand, or is received by facsimile on a day which is not a Business Day, or after 5.00 pm local time on any Business Day, that notice or other communication will be deemed to have been duly received by the recipient at 9.00 am local time on the first Business Day after that day.

9.6

Governing Law and Jurisdiction

This agreement is governed by the laws of New Zealand and the parties submit to the non-exclusive jurisdiction of the New Zealand courts in respect of all matters relating to this agreement.

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9.7

Counterpart and Facsimile/e-mail Execution

This agreement may be signed:

(a)

In Counterpart: in any number of counterpart copies which, read together, will constitute one and the same document, and any party may enter into this agreement by signing any such counterpart; and

(b)

By Facsimile/e-mail: by any party signing a copy of this agreement or any counterpart and sending by facsimile or e-mail to any other party a copy of the agreement so signed by it, and all parties agree to be bound by their signatures appearing on facsimile and e-mail copies.

This agreement will become binding on all the parties when each party has completed delivery of the executed counterpart to all other parties and it will be dated accordingly.

9.8

Amendments

No amendment to this agreement will be effective unless it is in writing and signed by a duly authorised senior representative of each party.

9.9

Waiver

Any waiver by a party of any of its rights or remedies under this agreement will be effective only if it is recorded in writing and signed by a duly authorised senior representative of that party. If the waiver relates to a breach of any provision of this agreement, this will not (unless stated otherwise) operate as a waiver of any other breach of that provision. No waiver of any breach, or failure to enforce any provision, of this agreement at any time by either party will in any way affect limit or waive that party’s right to subsequently require strict compliance with this agreement.

9.10

Costs

Each party will bear its own costs and expenses incurred in connection with the negotiation, preparation and interpretation of this agreement.

9.11

Remedies Cumulative

The rights, powers and remedies provided in this agreement are cumulative and not exclusive of any rights, powers or remedies provided by law.

9.12

Assignment

(a)

By Purchaser: The Purchaser may assign or otherwise transfer all or part of the Purchaser’s rights or obligations under this agreement without the consent of the other parties provided that the Purchaser will remain responsible for satisfying the Purchaser’s obligations under this agreement. Each assignee or transferee of the Purchaser will have the same rights against the other parties under this agreement as if named in the agreement as Purchaser.

(b)

By Vendors: The Vendors may not assign or otherwise transfer all or part of their rights or obligations under this agreement to any other person without the Purchaser’s prior written consent.

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SIGNATURES

SIGNED by AUSTRAL PACIFIC ENERGY

(NZ) LIMITED as Purchaser by:

Full name of director/authorised signatory

Signature of director/authorised signatory

Full name of director/authorised signatory

Signature of director/authorised signatory

Witness:

(if other than two directors sign)

Signature of witness

Full name of witness

Occupation of witness

Address of witness

SIGNED by BLADE ENERGY LIMITED as

a Vendor by its duly authorised attorney

▇▇▇▇▇ ▇▇▇▇▇▇▇ WILSHEE:

Signature

Witness:

Signature of witness

Full name of witness

Occupation of witness

Address of witness

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SIGNED by IDFK INTERNATIONAL

MANAGEMENT INC as a Vendor by its

duly authorised attorney ▇▇▇▇▇ ▇▇▇▇▇▇▇

WILSHEE:

Signature

Witness:

Signature of witness

Full name of witness

Occupation of witness

Address of witness

SIGNED by MELIOR PTY LIMITED as a

Vendor by its duly authorised attorney,

▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇:

Signature

Witness:

Signature of witness

Full name of witness

Occupation of witness

Address of witness

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SIGNED by ▇▇▇▇▇ ▇▇▇▇▇▇ as a Vendor

by his duly authorised attorney ▇▇▇▇▇

▇▇▇▇▇▇▇ WILSHEE in the presence of:

Witness:

Signature of witness

Full name of witness

Occupation of witness

Address of witness

SIGNED by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as

a Vendor by her duly authorised attorney

▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ in the

presence of:

Witness:

Signature of witness

Full name of witness

Occupation of witness

Address of witness

1.

CORPORATE STRUCTURE

1.1

No Subsidiaries: The Company has not, and will not on Closing have, any subsidiaries (as defined by section 5 of the Act) and the Company is not beneficially entitled to, and will not on Closing hold or be beneficially entitled to, shares in any other company, or be a party to any other arrangement, the effect of which is or will be to render that other company, in substance or effect, a subsidiary of the Company, or vice versa.

1.2

No Equity Interests: Except as otherwise expressly disclosed in writing to the Purchaser, the Company is not, and will not on Closing be, legally or beneficially entitled to any shares or other equity interests, or securities convertible into shares or other equity interests, in any corporation.

1.3

No Joint Ventures: The Company is not, and will not on Closing be, a party to any joint venture, partnership, syndicate, consortium, or other body or association, whether incorporated or not (other than in relation to the Permits).

2.

CORPORATE

2.1

Authority:

(a)

Standing: The Company has full corporate power to carry on its business and has obtained all authorisations required to validly do so.

(b)

No Power of Attorney: The Company has not executed any power of attorney or conferred on any person, other than its directors and employees, any authority to enter into any transaction on behalf of or to bind the Company in any way.

(c)

No Further Authorisation: Except as specified in this agreement, no further authorisation, consent or approval of any person is required as a condition of this agreement’s validity or to give effect to the transactions contemplated by it.

2.2

Vendors’ Authority:

(a)

Power to Enter Into Agreement: The Vendors have the legal right, authority and full power to enter into this agreement and to perform their obligations under it and have taken all necessary corporate, and other action to authorise this agreement’s execution, delivery and performance.

(b)

Binding Obligation: The Vendors acknowledge that this agreement constitutes a valid and binding obligation enforceable against the Vendors in accordance with its terms, (except as such enforceability may be limited by equitable principles or by bankruptcy, moratorium, insolvency, reorganisation, liquidation or other laws relating to or affecting creditors’ rights).

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3.

SHARE CAPITAL

3.1

Shares Fully Paid: All the shares in the Company’s capital are fully paid up and rank equally in all respects, and in the case of shares fully or partly paid up otherwise than in cash, all statutory requirements in respect of these shares were duly complied with.

3.2

No Alteration to Share Capital: The Vendors will not permit the Company’s share capital or any rights attaching to the Shares to be altered prior to Closing.

3.3

No Options: Neither the Company nor the Vendors have entered into any agreement or arrangement providing for a right, entitlement or option for any person to take shares or convertible securities in the Company and will not do so prior to Closing.

3.4

Shares Free of Encumbrances: On Closing the Shares will pass to the Purchaser free of all liens, charges, encumbrances, security interests, rights of pre-emption or other adverse interests of any nature.

3.5

Title, Power and Authority: The Vendors have legal title to the Shares and the full right, power and authority to sell the Shares to the Purchaser under this agreement (without the consent of any third party), free and clear of all encumbrances.

3.6

No Obligation to Dispose of Shares: The Vendors are under no obligation, whether actual or contingent, to sell, encumber or otherwise dispose of or deal with any of the Shares or any interest in the Shares except as set out in section 2.

4.

INFORMATION AND MATERIAL CIRCUMSTANCES

4.1

Information Correct: All information which has been, or will prior to Closing be given in writing by or on behalf of the Vendors or the Company (whether by any director, agent, professional advisor or other person) to the Purchaser or any director, agent, professional advisor or other representative of the Purchaser in respect of the Company (including the information in any Disclosure Letter) was, or will be when given, true, complete and accurate in all material respects.

4.2

No Material Circumstances Omitted: The Vendors are not aware of any material circumstances which have not been disclosed in writing to the Purchaser prior to the date of this agreement and which might reasonably be expected materially and adversely to affect the Company’s financial position, Business, assets or profitability, the value of the Shares or the Company’s ability to continue to achieve the level of profitability disclosed by the Company’s accounts referred to in clause 5.1 of this schedule or which might otherwise be material to a purchaser of the Shares.

5.

ACCOUNTS

5.1

Accounts True and Fair: The accounts (Accounts) of the Company for the five financial periods ended on 31 Jul;y 2007, copies of which have been delivered to the Purchaser, were prepared in accordance with the relevant GAAP requirements (consistently applied for all periods while the Company was incorporated in the relevant jurisdiction) and otherwise comply with the Financial Reporting ▇▇▇ ▇▇▇▇ or the requirements of Malaysian law, as the case may be.

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The Accounts give a true and fair view of the assets and liabilities of the Company as at the close of each relevant financial period and for the trading and cash flows of the Company for that financial period.

5.2

No Off Balance Sheet Financing: The Company has not factored any of its debts or engaged in financing of a type which is not required to be shown or reflected in the Accounts.

5.3

No Material Omission: The Accounts do not omit to state a material fact required to be stated or necessary to ensure they are not misleading.

5.4

Undisclosed Liabilities: The Company was not liable at the Accounts Date (whether contingently or otherwise) to any person or creditor for any money or in any manner whatsoever which is not provided for in the Accounts for the period ended 31 July 2007.

6.

TAXATION

6.1

Taxation Returns: The Company has lodged all Taxation returns, reports, declarations, notices, certificates, reconciliations and other information required to be lodged by them with the appropriate body within the relevant time limits. All such returns, reports, declarations, notices, certificates, reconciliations and other information were accurate, complete and not misleading on lodgement, were made on a proper basis and are not the subject of any dispute. The Company has kept and preserved all records that are required to be kept and preserved for such purposes by law.