March 19, 2001
Production Specialties Co. ("Production") has obtained from Greka Energy ("Greka") and Nahama Oil and Gas
Inc. ("Nahama") a 100% working interest and 100% net revenue interest less applicable landowner royalties
covering the prospect referred to as the Coalinga Nose Prospect ("Coalinga") located in Fresno County,
Production has agreed to farm out to Brothers Oil and Gas Inc. ("Brothers") and Olympic Resources (Arizona)
Ltd. ("Olympic") 100% of Production's interest on the following basis.
a) Production retains a 2% overriding royalty interest on all revenue earned by the working interest held by
Brothers and Olympic
b) Brothers agrees to assume 50% of Production's interest less the 2% overriding royalty
c) Olympic agrees to assume 50% of Production's interest less the 2% overriding royalty
d) Brothers and Olympic agree that they will retain a further 3% overriding royalty to be held equally by Brothers
e) It is contemplated that Brothers and/or Olympic will farm out their interests and agree that any farm out by
Brothers or Olympic which retains interests over and above the Production 2%, the Brothers 1.5%, and
Olympic's 1.5% will be retained by the farmor exclusively.
f) In Consideration of Production locating and introducing the prospect, Brothers and Olympic agree to pay
Production $US 16,666 each prior to spudding of the initial test well.
g) Brothers agrees to hold Production harmless from claims originating from farm outs entered into by Brothers or
by actions caused by Brothers
h) Olympic agrees to hold Production harmless from claims originating from farm outs entered into by Olympic or
by actions caused by Olympic
i) Brothers and Olympic agree to be bound by the Joint Operating Agreement entered into by Production and
Greka and Nahama
j) Brothers and Olympic acknowledge receipt of all information required to enter into this agreement.
Brothers Oil and Gas Inc. Olympic Resources (Arizona) Ltd.