Dart & Oliphant Holdings

805 Riverside Drive East

Drumheller, Alberta

T0J 0Y5

ATTENTION: Jeff Paarup

QUOTATION: 0403-371

Dart & Oliphant Holdings

March 25, 2004

805 Riverside Drive East

Calgary, Alberta, T0J 0Y5

Attention: Jeff Paarup

Reference: Quotation # 0403-371

Compass Compression Services Ltd. proposes the following described equipment subject to the attached “Compass Compression” General Terms and Conditions and any other conditions set forth in this quotation document.

Equipment Description and Price

BASE OFFERING

Qty (1) Caterpillar 3304NA/Gardner Denver SSH skid mounted, housed, portable, rotary screw compressor package, operating at 1800 rpm.

Price Per Unit: $110,850.00 Canadian

Prices are quoted “duty excluded all taxes extra”, F.O.B., Compass Compression Southeast Calgary yard, loading by others. Prices are firm for 30 days from the quotation document date and are subject to:

-prior sale

-confirmation of shop space at time of order

-confirmation of delivery date at time of order

Equipment Delivery

3 weeks

Item #8 “Invoicing and Payment” of Compass Compression General Terms and Conditions shall apply.

30% on receipt of order

70% on package completion

Exchange Rate Adjustment

All prices contained in this quotation are firm for 30 days

Backcharges

Compass Compression during equipment warranty period, will not accept backcharges at Customer’s sole discretion. Compass Compression Services must be given proper written notice and a reasonable length of time to address any shortcoming. Warranty work performed by the customer without proper notification to “Warranties” of “Compass Compression” General Terms and Conditions shall apply.

This proposal agreement and the following attachments provide out the total submission for your scrutiny. This document shall govern the scope and intent as herein set forth. Compass Compression

Attachments: 1) General Terms and Conditions

2)  Service Rates

3)  Proposal Technical Sections

Thank you for your time and interest.

Proposal Submitted by: Bob Norton Purchaser Acceptance:

Compass Compression Services Ltd. This proposal is hereby accepted:

QUOTATION EQUIPMENT SUMMARY

DRIVER BASE OFFERING

MAKE / MODEL Caterpillar

RATED HORSEPOWER 95 HP

COOLER HORSEPOWER 7 HP

AMBIENT TEMPERATURE DERATE NIL

ELEVATION DERATE 0

SITE HORSEPOWER (CHP) 88 HP

R.P.M. 1800 RPM

COMPRESSOR

MAKE / MODEL Gardner Denver SSH

NUMBER OF STAGES 1

PACKAGE

“COMPASS COMPRESSION” ENGINEERED CONSTRUCTION AND ASSEMBLY.

COOLER: GHT or equal

PANEL: Spartan/Murphy

DATA BOOKS: THREE (3) DATA BOOKS SUPPLIED WITH UNIT

CATERPILLAR 3304NA ENGINE FEATURES

  1. Inlet air filter (manufacturer’s standard dry)
  1. Muffler: Silex hospital grade
  1. Altronic III ignition system CSA approved
  1. Oil filter system (manufacturer’s standard)
  1. Fuel system regulator c/w block and vent
  1. Governor
  1. TDI low pressure Gas Starter
  1. 15 gallon lube oil day c/w level maintainer
GHT 2300 COOLER FEATURES
  1. Direct drive from front of engine
  1. Manual Louvers
  1. 400 psig maximum gas and oil sections
  1. CRN registered oil and gas oil sections

GARDNER DENVER SSH COMPRESSOR FEATURES

1.  177 mm rotary screw gas compressor

2.  375 psig maximum discharge pressure

3.  50 psig maximum suction pressure

4.  Turn valve capacity controller

5.  Large oversized tapered roller bearings

PACKAGING

SKID

Fabricated steel skid utilizing 8” @ 19# wide flange. 8’6” wide x 17’ long OA. Skid main members filled with concrete. Skid top covered with ¼” checker plate. Waste oil containment tanks are included on outside of skid.

INLET CONTROL VALVE

1 only Kimray 2” 150# inlet control valve

INLET SEPARATOR

1 only 12.75” O.D. x 48” mesh pad inlet separator

-  230 psig design @ 250 degrees F

-  1/16” corrosion allowance, code radiography

-  3” 150# RF process connections

-  1 only Murphy L1200 high level shutdown

-  1 only Jerguson reservoir indicator

-  1 only Fisher automatic drain

-  1 only Taylor pressure relief valve set @ 230 psig

GAS SEPARATOR

1 only 16” O.D. x 53” coalescing gas / oil separator

-  300 psig design @ 250 degrees F

-  1/16” corrosion allowance, code radiography

-  2” npt process connections

-  1” NPT oil connection

-  pleated type separator element

-  Murphy L1200 low level shutdown

-  1 only Taylor pressure relief valve set @ 300 psig

-  1 only Jerguson reservoir indicator

PROCESS PIPING

-  3” 150# inlet piping from skid edge to compressor inlet, 1/16” corrosion allowance, 10% radiography

-  2” npt discharge piping from compressor discharge through to unit discharge 1/16” corrosion allowance

-  2” relief valve vent header, tying the process relief to a common header and 1” 3000# union skid edge connection

-  1” valve for manual start up bypass

OIL SYSTEM

Compressor lube system includes:

-  400 psig oil section

-  FPE thermostatic valve for oil temperature control

-  One Wika differential gauge

-  Dual element 10 micron oil filters

MINIMUM PRESSURE VALVE

1 only Kimray 2” npt minimum pressure valve

BYPASS VALVE

1 only Kimray 1” npt automatic low pressure bypass valve

START SYSTEM

1” 3000# starter system

-  quick opening manual start gas valve

-  1” start gas regulator

-  alternate supply piping to skid edge

-  TDI turbine type starter

-  exhaust tubing to eave height

FUEL SYSTEM

1” 3000# NPT fuel gas line complete with:

-  Fisher 1” high pressure fuel gas regulator

-  Murphy fuel gas block and vent valve

-  Safety relief valve

-  alternate supply piping to skid edge

-  Fisher low pressure regulator

-  1” NPT fuel gas manual shut off

-  fuel gas scrubber with coalescing element

ENGINE UTILITIES

Jacket water system comprises an engine mounted radiator c/w a pusher fan.

COOLER DRIVE SYSTEM

Cooler is direct driven from the front of the engine. The engine and cooler drives covered by a removable guard.

PAINT

All bare steel painted with one coat primer and one coat enamel paint.

ALIGNMENT

Direct drive is included and will be fully shop aligned. Alignment to be checked in field before start up.

CONTROL PANEL

Control panel is provided and is equipped to operate on sweet instrument gas. Panel board supplied as follows:

One Spartan/Murphy Control System

Panel Type Murphy

Approved for Class 1, Div. 2, Group C/D

Item #1: ONE ONLY MURPHY SERIES “TTDJ” ELECTRONIC PROTECTION AND CONTROL SYSTEM

(Division 2 application)

Panel Type Murphy

Ignition power supply

20 intrinsically safe channels

Class A, B and C shutdowns

Tachometer Murphy DTHO-1200 tachometer, hour meter and overspeed shutdown

Enclosure 24” x 24” front access panel

Paint ASA61 Grey

Process Gauges Two Murphy OPLFC-A-xxxx switch gauges for indication and shutdown of:

-High/Low Suction Pressure

-High/Low Discharge pressure

Utility Gauges Two Murphy A25P-100 switch gauges for Eng. and Comp oil pressure.

Two Murphy A25T-250 switch gauges Comp Oil and Eng JW temperature.

NOTE: The panel will be built to Canadian Electrical Code Standard for a Class I Group D Division 2 hazardous area. The panel will be provided with CSA approval. Gas detection is not included and is extra.

ELECTRICAL

Hook up of all I/S wiring from end devices to control panel.

All other electrical by others. Gas detection is not included and is extra.

HEATERS

Dual 12000 BTU/hr CCI catadyne heaters c/w thermostats and regulators.

BUILDING

8’6”’ wide x 14’ self framing type building complete with:

-  pre painted exterior, colours to be advised

-  two (2) double doors c/w closer, panic hardware and windows

-  two wall louvers 24” x 24”

-  R12 insulation

-  Summer/winter recirculation system

-  40” x 40” dual pane sliding window

-  white interior building liner

LUBRICANTS AND COOLANTS

All compressor and engine coolants are not included and are extra.

OPTIONS

Additional cost to supply engine and compressor coolants and lubricants.

ADD………………………………………..$1,240.00

Additional cost to supply and install Net safety gas detection c/w 24VDC generator

ADD……………………………………….$7,400.00

Additional cost to supply and install Murphy Millennium PLC panel (requires 24VDC power) in lieu of Murphy TTDJ annunciator panel

ADD………………………………………..$14,365.00

WARRANTY STATEMENT

Compass Compression warrants the above-mentioned unit for a period of one year from the original start-up date. The warranty covers parts and labour to repair any problem arising from defects in workmanship, to be determined by Compass Compression Services representative, but does not include any third party liability or subsequent lost production costs. Warranty is FOB Compass Compression Calgary facility.

The preceding schedule shall not apply and Compass Compression assumes no liability whatsoever for breach of warranty when there is evidence that the failure arose as a result of abuse of equipment, negligence in the operation of the unit, failure to maintain the unit properly, overloading or overspeeding, or the use of maintenance personal or repair parts not approved by Compass Compression.

SERVICE RATES

Compass Compression mechanic for start-up assistance, subsistence and travel time is not included in unit price: No start-up allowance is included.

Note:

A unit run test will be conducted at Compass Compressions shop before shipment.

GENERAL TERMS AND CONDITIONS

Unless otherwise provided in this proposal of Compass Compression. (Seller), the following general terms and conditions shall apply hereto and to all orders issued in pursuance hereof by or on behalf of the buyer to whom this proposal is addressed (Buyer).

1. PRICE ADJUSTMENT

Prices are subject to change without prior notice to adjust for changes in published transportation rates and statutory obligations.

2. ACCEPTANCE

Seller’s proposal shall be voidable at Seller’s option if written acceptance thereof by Buyer is not received by Seller within 30 days from date of proposal. Goods stated in the proposal to be in stock are subject to sale prior to Buyer’s acceptance

3. CHANGES

Buyer may, by written supplement to its purchase order, make changes in the specifications of any goods covered therein, which changes shall become effective upon delivery to Seller of such supplement. If the change affects the price or estimated delivery date of any such goods, Seller shall so notify Buyer in writing and shall submit a written notice of adjustment in price and/or estimated delivery date. Unless otherwise specified by Seller in such notice, there shall be no suspension of work by Seller during the process of making any such adjustment.

4. INSPECTION

All fabrications and assemblies may be inspected and tested by Buyer at Seller’s plant site at Buyer’s risk and expense during normal working hours and upon reasonable advance notice to Seller or at Buyer’s job site.

5. TERMINATION

Any order by buyer shall be subject to termination by Buyer upon written notice addressed and delivered to Seller and signed by an authorized representative of Buyer. If any such order is terminated, all work completed by Seller before termination shall be paid by Buyer at the contract price and in respect of work not completed before termination. Seller shall be entitled to reimbursement for the cost to Seller of such uncompleted work including the cost of applicable overhead and to receive in addition an amount representing a fair and reasonable profit in respect of the work done therein; PROVIDED that in no event shall Seller be entitled to reimbursement for any amount which, when taken together with any amounts paid, due, or becoming due to Seller under such order, exceeds the total amount payable to Seller thereunder.

6. SHIPMENTS

6.1  All shipments shall be F.O.B. Seller’s plant.

6.2  A charge will be made for special packing

6.3  If quoted prices are specified F.O.B. Seller’s plant with transportation allowed, transportation costs will be based upon the least expensive rate for the weight(s) involved. Additional transportation costs incurred by alternate methods of shipment (at Buyer’s prior written requests) will be for Buyer’s account.

6.4  All weights specified in Seller’s proposal are estimates only. Shipping costs shall be based upon book weight 10%.

6.5  All or part of the goods covered hereby is subject to partial or complete shipment at Seller’s option, unless otherwise agreed upon in writing.

6.6  Public carriers are liable for goods lost or damaged in transit. In case of such loss or damage Buyer for consignee if other than Buyer shall immediately provide written notice thereof to the public carrier located at or near the point of receipt of such goods.

7. DELIVERY DATES

All delivery dates specified in Seller’s proposal are estimates. Seller will use its best efforts to deliver within the time specified, and will when possible, notify buyer of inability to meet specified delivery dates. Seller shall not be responsible for delays resulting from acts or occurrences beyond its control. In such event an equitable extension of time shall be afforded to Seller.

8. INVOICING AND PAYMENT

8.1  Separate invoices will be furnished for each order even though goods on different orders may be forwarded in one shipment

8.2  Invoices charging Buyer with transportation costs will be accompanied by a transportation receipt.

8.3  Terms of payment are “Due on Receipt”. A finance charge of 2% per month on the unpaid balance will be levied by Seller.

8.4  Seller reserves the right to invoice Buyer for any of all finished goods ready for shipment when held either at Buyer’s request or for other reasons beyond Seller’s control.

8.5  Seller reserves the right to stop work at any time and to withhold deliveries if any payment herein stipulated is not made promptly as agreed or upon proof of Buyer’s inability to pay as agreed and thereupon the selling price of the hours, parts, supplies and goods in process at such date shall be due and payable when Buyer is invoiced thereof, Seller also reserves the right to require from Buyer, at any time, satisfactory security for payment in full of the purchase price before proceeding with the work or shipment.

9. Buyer agrees to pay Seller for goods purchased by Seller for Buyer, when such goods are received at Seller’s plant and Buyer is invoiced thereof.

10. TAXES

Buyer will bear all sales, use, privilege, personal property, and taxes of every other character by whatever name designated that now are or hereafter may be imposed by Federal, State, Provincial, and Local Authorities. Price quoted excludes all such taxes.

11. WARRANTIES

11.1  Seller warrants that, as to its fabrications and assemblies, all goods purchased by it and incorporated in same shall be new, unless otherwise directed, in writing, by Buyer.

11.2  Seller warrants its fabrications and assemblies against, defects in workmanship under proper use, service and maintenance for a period of 18 months after shipment from Seller’s plant.