ANALYSIS OF THE MOLVANIAN FARMOUT AGREEMENT

Your client, Rockies Oil Co., has asked you to provide advice based on a Farmout Agreement (marked "Appendix A") and the following facts:

Rockies Oil and Palm Oil Co. (collectively "Farmee") entered into a Farmout Agreement with Aussie Oil Co. ("Farmor") on September 28, 2020, relating to an Enhanced Oil Recovery Contract ("EOR Contract") in Molvania.

Farmee paid $1,000,000 (one million US dollars) to Aussie Oil on September 28, 2020.

Farmee has paid all Interim Costs.

Aussie Oil has not been able to complete the test and evaluation of the Soudruh 33 Well because the local people in the immediate area of the Bigg Field have not received any revenue from oil productions and they have threatened to kidnap oil workers.

Because of the United Nations support of the Local People, the Molvanian Government has cut all ties with the United Nations and prohibited its citizens and corporations from relating with the United Nations or any of its affiliate bodies; including the World Bank, the International Chamber of Commerce and the United Nations High Commission for Refugees(UNHCR).

One-third of the seismic program for the Bigger Field has not been completed because on December 29, 2020, the Ministry of Environment declared that portion of the field to be a protected breeding ground for the endangered Molvanian Mallard. Seismic work is not allowed in that area between February 1 and September 1 each year.

Farmor drilled three (3) new test wells in the Bigger Field. The first two (2) wells were not promising. Rockies Oil objected to the drilling of the third new test well and has not paid $400,000 requested by Aussie Oil to cover the cost of the well.

Aussie Oil has told Rockies Oil that it has forfeited its rights under the Farmout Agreement.

Using recently developed technology, the third test well was completed on August 23, 2020, and produced much better results than expected. Based on the new technology and additional geological information, the Parties expect the Bigger Field to produce twice as much oil as initially expected.

The Molvanian State Oil Company ("MSOC") has stated that it is willing to consent to the assignment of Farmout Interests to Palm Oil, but not to Rockies Oil. Rockies Oil recently declined a request by MSOC's Chief Financial Officer to buy a new SUV for him to inspect the Bigg and Bigger Fields.

QUESTIONS

prepare a memorandum to Rockies Oil addressing the following:

1. Is Rockies Oil going to have to forfeit its interest in the Farmout Agreement?

2. Can Rockies Oil share in the production of oil from the third test well or the Bigger Field?

3. How should Rockies Oil deal with MSOC's refusal to consent to the assignment of Farmout Interests to Rockies Oil?

4.If Aussie Oil refuses to transfer the appropriate interest in the EOR Contract to Rockies Oil, what recourse does Rockies Oil have?

5. What laws apply to the questions presented by Rockies Oil?

***I need to answer the questions in full detail, with an analysis of the answer to each question

APPENDIX A

THE FARMOUT AGREEMENT HIS FARMOUT AGREEMENT ("Agreement") is made and entered into this 28th day of September 2020 (the "Effective Date"), by and between Aussie Oil Co. ("Aussie Oil"), an Austrian corporation, Rockies Oil Co. ("Rockies Oil"), a Colorado corporation, and Palm Oil Co. ("Palm Oil"), a United Kingdom corporation.

In this Agreement, Aussie Oil is also referred to as "Farmor," Rockies Oil and Palm Oil are also referred to individually and collectively as "Farmee," and Aussie Oil, Rockies Oil and Palm Oil are also referred to individually as a "Party" and collectively as "Parties."

A.Farmor owns (i) 85% of the Contractor's Participating Interest under that certain Enhanced Oil Recovery Contract related to the Bigg and Bigger Fields in Molvania (the "Fields") between Molvanian State Oil Company ("MSOC") and Molvanian Private Oil Company ("MPOC" or "Contractor") dated September 12, 2017 (the "EOR Contract") (Farmor's 85% interest in the EOR Contract is referred to herein as the "Farmor's Participating Interest"); and (ii) the right to receive all of the revenues attributable to the remaining 15% interest in the Contractor's Participating Interest in the EOR Contract (the "Revenue Interest"). Farmor acquired the Farmor's Participating Interest and the Revenue Interest (collectively "Farmor's Interests") from Flipper Petroleum Molvania, Inc. ("Flipper") pursuant to that certain Purchase and Sale Agreement dated October 12, 2019 (the "Flipper Agreement") and various assignments delivered thereunder.

B.Farmor has agreed to grant to Farmee the right to participate in and earn sixty three percent (63%) of the Farmor's right, title and interest in and to the EOR Contract, including without limitation, Farmor's Interests, all subject to and in accordance with the terms and conditions therein set forth.

NOW THEREFORE,for and in consideration of promises and the mutual agreements contained herein, the parties hereby agree as follows:

1. PAYMENTS:

a.On the Effective Date Farmee shall pay to Farmor the sum of US $1,000,000 in cash or other immediately available funds, as follows:

i. Rockies Oil shall pay US $587,300 (58.73%)

ii. Palm Oil shall pay US $412,700 (41.27%).

In addition, Farmee shall reimburse Farmor one hundred percent (100%) of Farmor's share of all costs and expenses ("Interim Costs") incurred by Farmor in connection with the EOR Contract and/or Farmor's Interests for the period commencing April 12, 2020 (the Closing under the Flipper Agreement) and ending on the Effective Date. Rockies Oil and Palm Oil shall pay such Interim Costs based on the following percentages ("Farmout Percentages"):

Rockies Oil 58.73% Palm Oil 41.27%

Reimbursements of Interim Costs shall be made within ten (10) days of the date Farmor furnishes Farmee a written statement of Interim Costs together with copies of relevant invoices. All such payments shall be made to Farmor either (i) to reimburse Farmor for Interim Expenses previously paid or (ii)to be applied by Farmor to pay Interim Expenses that have been incurred but not yet paid.

b. Effective on the Effective Date and until completion of the Farmout Operations or termination of this Agreement under Section 2(c) below, whichever occurs first, Rockies Oil and Palm Oil shall each bear, in accordance with its respective Farmout Percentage, 100% of Farmor's share of the following costs and expenses ("Farmout Costs")

i. All costs and expenses in connection with the Farmout Operations as set forth in Section 2 below.

ii.All other costs and expenses associated with the EOR Contract and/or Farmor's Interests.

Each Farmee shall pay its share of Farmout Costs to Farmor based on its respective Farmout Percentage and in accordance with the terms and conditions of the Operating Agreement attached hereto as Exhibit A and by this reference made a part hereof (the "Farmout Operating Agreement").

2. FARMOUT OPERATIONS

a. Each Farmee shall, at its sole cost, risk, and expense, participate in and pay for the following operations ("Farmout Operations") based on its respective Farmout Percentage:

i. A full test and evaluation program of the Soudruh 33 Well ("Evaluation Program") drafted by Flipper in the Bigg Field under the EOR Contract.

ii. A seismic program over the Bigger Field ("Seismic Program").

iii. The drilling, testing, evaluation, and completion of two new test wells (the "Additional Wells") in the Bigger Field under the EOR Contract.

Details regarding the Seismic Program, Evaluation Program for the Soudruh 33 Well and the drilling, testing, evaluation and completion of the Additional Wells are set forth in the initial work program and budget (the "Initial Work Program"). The Initial Work Program shall be prepared by Farmor and approved by MSOC on or before December 29, 2020. Any changes in the Initial Work Program, including changes required by MSOC, shall be approved by all Parties.

b. The Farmout Operations shall be carried out in accordance with the terms of the EOR Contract, including the Operating Agreement attached thereto as Exhibit "D" (the "EOR Operating Agreement"). Prior to completion of the Farmout Operations and Farmee earning assignments of the Farmout Interests as provided in Section 3 of this Agreement, Farmor shall represent Farmor's Interests under the EOR Contract in all matters, and Farmor shall, as among the Parties and in so representing Farmor's Interests, act as operator of Farmor's Interests under the terms of the Farmout Operating Agreement attached hereto as Exhibit A. As Operator under the Farmout Operating Agreement, Farmor shall consult with and obtain Farmee's consent with respect to any material changes in the Farmout Operations or the Initial Work Program.

c. All Farmout Operations shall be completed on or before Tuesday, September 21, 2021 (the "Completion Date"). If Farmout Operations are not so completed by the Completion Date as a result of any failure by Farmee to perform its obligations under this Agreement, then Farmee shall forfeit its rights under this Agreement together with all rights, title and interest in and to the EOR Contract and the Farmor's Interests; provided, however, that each Farmee shall in addition to liabilities under Section 7 below, be liable for its respective Farmout Percentage of all costs of Farmout Operations incurred prior to the Completion Date. Notwithstanding the foregoing, if the Initial Work Program has not been approved by MSOC on or before December 29, 2020, Farmee may elect to terminate this Agreement pursuant to written notice to Farmor, whereupon this Agreement shall terminate as of the date such notice of termination is effective, and Farmee shall only be liable with respect to obligations incurred under this Agreement prior to such termination date.

3. INTERESTS EARNED

a. Provided that Farmee has made the payments required in Section 1 above and participated in the Farmout Operations as required in Section 2 above (and is not otherwise in default in its obligations under this Agreement), Farmee shall have earned the right to receive assignments from Farmor of sixty-three percent (63%) of Farmor's right, title and interest in and to the EOR Contract and Farmor's Interests, and Farmor shall forthwith assign to Farmee such interests (the "Farmout Interests") so that following such assignments the Parties shall own all of Farmor's right, title and interest in the EOR Contract as follows:

Aussie Oil 37%

Rockies Oil 37%

Palm Oil 26%

Assignments of the Farmout Interests ("Farmout Assignments") shall be conveyed to Farmee in the form of the assignment attached hereto as Exhibit B. MSOC shall consent in writing to such assignments. If MSOC's consent cannot be obtained, Farmor shall retain legal ownership of Farmor's Interests and Farmor shall hold beneficial title to the Farmout Interests on behalf of Farmee under a Nominee Agreement in the form attached hereto as Exhibit C.

The foregoing table does not reflect any interest in the EOR Contract that may be owned by MPOC. Pursuant to (i)that certain Purchase and Sale Agreement dated December 08, 2018 (the "MPOC Agreement") between MPOC and Flipper, (ii)the Flipper Agreement, and (iii)various assignments delivered under the said MPOC Agreement and Flipper Agreement, MPOC may have certain rights with respect to fifteen percent (15%) of Contractor's Participating Interest under the EOR Contract. The Parties acknowledge and agree that this Agreement and the Farmout Assignments are subject to any rights MPOC may have under the MPOC Agreement, the Flipper Agreement and the assignments delivered thereunder. Further, the Parties acknowledge and agree that in the absence of a resolution of MPOC's rights that is binding on MPOC and mutually acceptable to the Parties, Farmor shall assign to Farmee sixty-three percent (63%) of Farmor's right, title and interest in and to the Revenue Interest and each Farmee shall assume the obligations under the MPOC Agreement and the Flipper Agreement in proportion to its respective ownership interests in the Farmout Interests as set forth in the above table.

b. As of the Effective Date, Farmor and its predecessors in interest have incurred US $5,200,000 of costs attributable to MSOC's 50% Participating Interest, which amount is recoverable out of MSOC's share of Incremental Oil Production in accordance with Subsections 4.9, 6.4, and 6.5 of the EOR Contract. It is hereby acknowledged and agreed that, as among the Parties, Farmor shall be entitled to recover the first US $2,500,000 of such US $5,200,000 and Rockies Oil and Palm Oil shall be entitled to recover the remaining US $2,700,000 of such US $5,200,000 in proportion to their respective Farmout Percentage.

c. Farmorshall retain 37% of the Contractor's interest under the EOR Contract (the "Retained Interest"). Prior to the Completion Date, Farmor's Retained Interest will be carried by the Farmee as provided herein. Following the Completion Date, Farmor shall participate as a participating party to the extent of its 37% Retained Interest, and except as provided in clause (b) above, the Parties shall be responsible for and shall bear all costs and expenses incurred under the EOR Contract with respect to the Farmor's Interests and shall be entitled to and shall receive the rights and benefits accruing to Farmor's Interests, in accordance with the following:

Before Completion Date After Completion Date

Aussie Oil -- 37%

Rockies Oil 58.73% 37%

Palm Oil 41.27% 26%

4. OPERATIONSAll operations pursuant to this Agreement shall be conducted in accordance with and subject to the terms and provisions of the EOR Contract and the EOR Operating Agreement attached thereto, except that prior to the Completion Date, the rights and obligations of the Farmor and Farmee shall be in accordance with this Agreement and the Farmout Operating Agreement. All terms defined in the EOR Contract and the Joint Operating Agreement shall have the same meaning in this Agreement.

5. REPRESENTATIONS AND WARRANTIES

a. Farmor represents, warrants and covenants to Farmee as follows

i. Farmor is the owner of the Farmor's Participating Interest and the Revenue Interest, free and clear of all liens, encumbrances and adverse claims and subject only to the terms, covenants and conditions of the EOR Contract, the MPOC Agreement and the Flipper Agreement. Farmor is a corporation duly organized, validly existing and in good standing under the laws of Austria. Farmor has full power and authority to execute and perform this Agreement. This Agreement has been duly and validly executed by Farmor and constitutes valid and binding obligations of Farmor, enforceable in accordance with their respective terms.

ii. Subject to obtaining MSOC's consent as provided in Section

(iii) below, none of the execution, delivery or performance of this Agreement does or will constitute a default under, terminate, accelerate, amend or modify, or give any party the right to terminate, accelerate, amend, modify, abandon or refuse to perform or comply with the EOR Contract, the MPOC Agreement, or any other agreement, arrangement, commitment or plan to which Farmor is a party or by which it or any of its assets is or may be bound. Except for MSOC and MPOC, whose rights and interests are fully set forth in the EOR Contract, the MPOC Agreement and the Flipper Agreement, no entity or individual has any right or interest in Farmor's Interests and the transactions contemplated herein by Farmor will not give rise to any valid claim or cause of action against Farmor or Farmee by any entity or individual. iii. No consent, waiver, approval, or authorization of, or declaration, designation, filing, registration, or qualification with, any governmental or regulatory authority, or any third party, is required to be made or obtained by Farmor or Farmee in connection with the execution, delivery and performance of this Agreement, except as follows:

A. The consent of MSOC described in Section 3 hereof.

B. The acknowledgment and consent of MPOC, to the extent required under the MPOC Agreement.

The Parties shall cooperate and shall use their best efforts to obtain the foregoing acknowledgements and consents, provided that if any such acknowledgement or consent cannot be obtained, Farmor shall hold beneficial title to Farmee's Farmout Interests under the terms of a Nominee Agreement as provided in Section 3 above.

b. Each Farmee represents, warrants, and covenants to Farmor as follows: Each Farmee is a corporation duly organized, validly existing and in good standing under the laws of Colorado or England. Each Farmee has full power and authority to execute and perform this Agreement. This Agreement has been duly and validly executed by Farmee and constitutes valid and binding obligations of Farmee, enforceable in accordance with their respective terms.

6. DEFAULT REMEDIESEach Farmee covenants and agrees that so long as this Agreement remains in effect, such Farmee shall perform all its obligations in accordance with the terms, covenants, and conditions of this Agreement. In the event of any default in the foregoing obligations, Farmee shall promptly notify Farmor in writing, and Farmor shall have the right, at its election, to terminate this Agreement as to the Party in default. In the event of such termination by Farmor, the Party in default shall have no further rights under this Agreement. Such right of termination shall not be exclusive of any other right or remedy available to Farmor, whether at law or in equity, including the rights to seek damages and specific performance in a court of law.

7. NO PARTNERSHIPNothing herein contained shall be construed to Create a partnership, joint venture, association, trust, or other entity, or to constitute any party the agent of any other party, except to the extent provided in the Farmout Operating Agreement. The liability of the parties hereto shall be several and not joint or collective and each party shall be responsible only for its own obligations.

8. FORCE MAJEUREIf as a result of Force Majeure any Party is rendered unable, wholly or in part, to carry out its obligations under this Agreement, other than the obligation to pay any amounts due or to furnish Security, then the obligations of the Party giving such notice, so far as and to the extent that the obligations are affected by such Force Majeure, shall be suspended during the continuance of any inability so caused and for such reasonable period thereafter as may be necessary for the Party to put itself in the same position that it occupied prior to the Force Majeure, but for no longer period.

The Party claiming Force Majeure shall notify the other Parties of the Force Majeure within a reasonable time after the occurrence of the facts relied on and shall keep all Parties informed of all significant developments. Such notice shall give reasonably full particulars of the Force Majeure and estimate the period of time which the Party will probably require to remedy the Force Majeure. The affected Party shall use all reasonable diligence to remove or overcome the Force Majeure situation as quickly as possible in an economic manner but shall not be obligated to settle any labor dispute except on terms acceptable to it, and all such disputes shall be handled within the sole discretion of the affected Party.

For the purposes of this Agreement, "Force Majeure" shall mean circumstances which were beyond the reasonable control of the Party concerned and shall include civil-wars, pandemics, strikes, lockouts, and other industrial disturbances even if they were not "beyond the reasonable control" of the Party.

9. DISPUTE RESOLUTION

a. Notification:A Party who desires to submit a Dispute for resolution shall commence the dispute resolution process by providing the other parties to the Dispute written notice of the Dispute ("Notice of Dispute"). The Notice of Dispute shall identify the parties to the Dispute and contain a brief statement of the nature of the Dispute and the relief requested. The submission of a Notice of Dispute shall toll any applicable statutes of limitation related to the Dispute, pending the conclusion or abandonment of dispute resolution proceedings.

b. Mediation:The parties to the Dispute shall seek to resolve the Dispute by mediation. Within thirty (30) Days after the date of the receipt by each party to the Dispute of the Notice of Dispute, any party to the Dispute may initiate such mediation in accordance with the practices used by the United Nations Ombudsman and Mediation Services. c. Arbitration: If mediation fails, the parties to the Dispute shall seek to resolve the Dispute by Arbitration before the International Chamber of Commerce. Within thirty (30) Days after the date of the receipt by each party to the Dispute of the Notice of the Failed Mediation, any party to the failed mediation may initiate such arbitration pursuant to the International Chamber of Commerce arbitration rules then in effect, as modified herein, by sending all other parties to the failed mediation a written request that the failed mediation be arbitrated. The Parties receiving such written request will promptly respond to the requesting Party so that all parties to the failed mediation may jointly select a neutral arbitrator and schedule the arbitration session. The arbitrator shall meet with the parties to the failed mediation to arbitrate the Dispute within thirty (30) Days after the date of receipt of the written request for arbitration.

i. Rules: The arbitration shall be conducted by the International Chamber of Commerce in accordance with the Rules of Arbitration of the International Chamber of Commerce (ICC) (as then in effect) (the "Rules").

ii. Number of Arbitrators: The arbitration shall be conducted by three arbitrators, unless all parties to the Dispute agree to a sole arbitrator within thirty (30) Days after the filing of the arbitration.

iii. Method of Appointment of the Arbitrators: If the arbitration is to be conducted by a sole arbitrator, then the arbitrator will be jointly selected by the parties to the Dispute from the list of Arbitrators suggested by the International Chamber of Commerce. If the parties to the Dispute fail to agree on the arbitrator within thirty (30) Days after the filing of the arbitration, then the International Chamber of Commerce shall appoint the arbitrator.

iv. If the arbitration is to be conducted by three arbitrators and there are only two (2) parties to the Dispute, then each party to the Dispute shall appoint one (1) arbitrator within thirty (30) Days of the filing of the arbitration, and the two (2) arbitrators so appointed shall select the presiding arbitrator within thirty (30) Days after the latter of the two arbitrators has been appointed by the parties to the Dispute. If a party to the Dispute fails to appoint its party-appointed arbitrator or if the two party-appointed arbitrators cannot reach an agreement on the presiding arbitrator within the applicable time period, then the International Chamber of Commerce shall appoint the remainder of the three arbitrators not yet appointed.

v.If the arbitration is to be conducted by three arbitrators and there are more than two parties to the Dispute, then within thirty (30) Days of the filing of the arbitration, all claimants shall jointly appoint one arbitrator and all respondents shall jointly appoint one arbitrator, and the two arbitrators so appointed shall select the presiding arbitrator within thirty (30) Days after the latter of the two arbitrators has been appointed by the parties to the Dispute. If either all claimants or all respondents fail to make a joint appointment of an arbitrator or if the party-appointed arbitrators cannot reach an agreement on the presiding arbitrator within the applicable time period, then the International Chamber of Commerce shall appoint all three arbitrators. vi.Place of Arbitration: Unless otherwise agreed by all parties to the Dispute, the place of arbitration shall be Blovgrad, Molvania.

vii. Entry of Judgment: The award of the arbitral tribunal shall be final and binding. Judgment on the award of the arbitral tribunal may be entered and enforced by any court of competent jurisdiction.

10. CONFIDENTIALITY

a. Except as otherwise provided in the Contract and the JOA, each Party agrees that all information disclosed under this Agreement, except information in the public domain or lawfully in possession of a Party prior to the Effective Date, shall be considered confidential and shall not be disclosed to any other person or entity without the prior written consent of the Party which owns such confidential information. This obligation of confidentiality shall remain in force during the term of the Permit and for a period of two (2) years thereafter. Notwithstanding the foregoing, confidential information may be disclosed without consent and without violating the obligations contained in this Article in the following circumstances:

i. to an affiliate provided the affiliate is bound to the provisions of this Agreement and the Party disclosing is responsible for the violation of an affiliate.

ii. to a governmental agency or other entity when required by law.

iii. to the extent such information is required to be furnished in compliance with the applicable laws, or pursuant to any legal proceedings or because of any order of any court binding upon a Party.

iv. to attorneys engaged, or proposed to be engaged, by any Party where disclosure of such information is essential to such attorney's work for such Party and such attorneys are bound by an obligation of confidentiality.

v. to contractors and consultants engaged, or proposed to be engaged, by any Party where disclosure of such information is essential to such contractor's or consultant's work for such Party.

vi. to a bona fide prospective transferee of a Party's interest, or portion thereof, to the extent appropriate in order to allow the assessment of such interest (including an entity with whom a Party and/or its affiliates are conducting bona fide negotiations directed toward a merger, consolidation, or the sale of a majority of its or an affiliate's shares).

vii. to a bank or other financial institution to the extent appropriate to a Party arranging for funding.

viii. to the extent such information must be disclosed pursuant to any rules or requirements of any government or stock exchange having jurisdiction over such Party, or its affiliates.

ix. to its respective employees, subject to each Party taking sufficient precautions to ensure such information is kept confidential.

x. to the extent any information which, through no fault of a Party, becomes a part of the public domain.

b.Disclosure as pursuant to Subsections 10.a(v), (vi) and (vii) shall not be made unless prior to such disclosure the disclosing Party has obtained a written undertaking from the recipient party to keep the information strictly confidential for at least as long as the period set out above and to use the information for the sole purpose described in Subsections 10.a(v), (vi) and (vii), whichever is applicable, with respect to the disclosing Party.

11.MISCELLANEOUS

a. Unless otherwise specifically provided herein, all notices and other information permitted or required under this Agreement shall be in writing and shall be deemed to have been properly given when received by the party to whom such notice is directed. Notices may be delivered in person or sent by telex, telecopy, telegram, or United States mail, with adequate postage prepaid.

b. This Agreement and its terms and conditions shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns, provided that no Party shall assign this Agreement or any interest herein to anyone other than an affiliate without the prior written consent of the other Parties. For purposes hereof, an affiliate of a person shall be any person or entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such person.

c.This Agreement and the Exhibits thereto constitute the entire agreement of the parties with respect to the matters addressed herein and shall not be modified unless agreed to in writing by all parties

d.Each of the parties shall from time to time and always do such further acts and deliver all such further documents and assurances as shall be reasonably necessary fully to perform and carry out this Agreement.

e. No waiver of any of the provisions of this Agreement shall constitute a waiver of any other provision whether similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver.

f.Time shall be of the essence in the performance of this Agreement.

g.Farmee shall pay any and all costs and taxes except income taxes imposed by the Government upon this transaction or the transfer to Farmee of the Farmout Interests required by this Agreement, except that Farmee shall only pay its proportionate share based on its Farmout Interest of the stamp duty, if any, applicable to such transfer.

h.This Agreement may be executed in counterparts.

i.The terms and provisions of this agreement shall be construed under and governed by the laws of Austria.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.