PSE Circular for Brokers No. 2809-99

November 4, 1999 PSE CIRCULAR FOR BROKERS NO. 2809-99 November 3, 1999 Philippine Stock Exchange 4th Floor, Tektite Tower 1 Exchange Road, Ortigas Center Pasig City ATTENTION: Ms . Grace de Guia Assistant Manager Disclosure Department Gentlemen: In compliance with the Securities and Exchange Commission's rules and regulations on disclosure, Seafront Resources Corporation hereby informs the Commission that in its regular meeting on 29 October 1999, the Seafront Resources Corporation Board of Directors executed a Memorandum of Agreement with PetroEnergy Resources Corporation. Under said Agreement, Seafront Resources Corporation assigns, transfers and conveys to PetroEnergy Resources Corporation its entire undivided Participating Interest in the following contract areas ("Contract Areas"): 1. Octon-Barselisa Area Service Contract 6A (SC6A) 5.00% 2. South Sulu Area Service Contract 41 (SC41) 1.19% 3. Ragay Gulf Area Geophysical Survey and Exploration Contract No. 76 (GSEC 76) 2.31% 4. Southwest Palawan Area Geophysical Survey and Exploration Contract No. 91 (GSEC 91) 2.94% 5. West Palawan-Reed Bank Area Geophysical Survey and Exploration Contract No. 94 (GSEC 94) 5.00% Attached herewith is a copy of the Memorandum of Agreement and Deed of Assignment and Assumption. prcd Very truly yours, (SGD.) MILAGROS V. REYES President MEMORANDUM OF AGREEMENT This Memorandum of Agreement entered into this 29th day of October 1999 at Pasig City, Metro Manila, Philippines by and between: SEAFRONT RESOURCES CORPORATION, a corporation organized and existing under the Philippine law with office address at 7th floor, JMT Building, ADB Avenue, Ortigas Avenue, Pasig City, represented in this act by its duly authorized officer and President, Milagros V. Reyes, and hereinafter referred to as "SEAFRONT"; - and - PETROENERGY RESOURCES CORPORATION , a corporation organized and existing under the Philippine law with office address at 7th floor, JMT Building, ADB Avenue, Ortigas Center, Pasig City, represented in this act by its duly authorized officer and Asst. Vice President, Adolfo G. Garcia, and hereinafter referred to as "PETROENERGY"; cdlex WITNESSETH : That - WHEREAS , SEAFRONT is willing to assign and transfer certain petroleum exploration/development assets, including all rights and obligations, risks, benefits and participations in favor of PETROENERGY. WHEREAS , PETROENERGY is willing to assume, accept and undertake the acquisition of petroleum exploration/development assets from SEAFRONT. NOW, THEREFORE, for and in consideration of the premises and the mutual covenants herein contained, the parties hereby agree as follows: ARTICLE 1 ASSIGNMENT OF PARTICIPATING INTEREST THE CONTRACT AREAS Section 1.1 SEAFRONT hereby assigns, transfers and conveys its entire undivided Participating Interest in the following contract areas ("Contract Areas"): Participating Interest 1. Octon-Barselisa Area Service Contract 6A (SC6A) 5.00% 2. South Sulu Area Service Contract 41 (SC 41) 1.19% 3. Ragay Gulf Area Geophysical Survey and Exploration Contract NO. 76 (GSEG'I,76) 2.3 % 4. Southwest Palawan Area Geophysical Survey and Exploration Contract No. 91 (GSEC 91) 2.94% 5. West Palawan-Reed Bank Area Geophysical Survey and Exploration Contract No. 94 (GSEC 94) 5.00% Section 1.2 Upon the terms and subject to the conditions set forth in this Agreement and the terms and conditions set forth in the Deed of Assignment and Assumption as set forth in Annex A hereto (the "DAA"), and made an integral part hereof, SEAFRONT agrees to assign, transfer and convey to PETROENERGY, and PETROENERGY hereby agrees to acquire and accept all of SEAFRONT's rights, interest, benefits and participations, and all obligations, burden, risks and liabilities as are or may be attributable to the Contract Areas. Section 1.3 The parties undertake to enter into and execute the DAA in respect of the undivided participating interest in the Contract Areas as soon as the requisite approvals from different parties have been obtained. ARTICLE 2 REPRESENTATIONS AND WARRANTIES Section 3.1 SEAFRONT represents and warrants to PETROENERGY that: (a) SEAFRONT is a corporation duly organized, validly existing and in good standing under the laws of the Philippines, and has the corporate power and authority to carry on its business. (b) SEAFRONT has full power and authority to make, execute, deliver and perform this Agreement and this Agreement constitutes the valid and legally binding obligation of SEAFRONT enforceable in accordance with its terms (c) SEAFRONT is the lawful owner of the undivided participating interests in the Contract Areas. cdlex Section 3.2 PETROENERGY represents and warrants to SEAFRONT that: (a) PETROENERGY is a corporation duly organized, validly existing and in good standing under the laws of the Philippines, and has the corporate power and authority to carry on its business. (b) PETROENERGY has full power and authority to make, execute, deliver and perform this Agreement and this Agreement constitutes the valid and legally binding obligation of PETROENERGY enforceable in accordance with its terms. (c) The execution, delivery and performance of this Agreement by PETROENERGY do not and will not contravene any provision of its Article of Incorporation or equivalent constitutive documents, do not and will not violate any applicable laws or regulations, and do not conflict with or result in a breach of any contract, agreement or other obligation to which PETROENERGY is a party, or for which it may be bound. prcd ARTICLE 3 GOVERNING LAW Section 3.1 This Agreement shall be governed by and construed in accordance with the laws of the Republic of the Philippines. IN WITNESS WHEREOF, the parties hereto have caused the execution of this Agreement by the signatures of their respective authorized officers on the date and place first written above. SEAFRONT RESOURCES CORPORATION (SGD.) MILAGROS V. REYES President PETROENERGY RESOURCES CORPORATION By: (SGD.) ADOLFO G. GARCIA Asst . Vice President SIGNED IN THE PRESENCE OF : _________________________ _________________________