Exposure Draft Model Petroleum JOA – Alternative & Optional Clauses The Resources and Energy Law...

Exposure Draft Model Petroleum JOA – Alternative & Optional Clauses

© AMPLA Model Petroleum JOA, Alternative & Optional Clauses, Exposure Draft, 09.06.2011

The Resources and Energy Law Association

EXPLANATORY NOTE

These Exposure Draft Alternative and Optional Clauses have been prepared on the initiative of the

Board of AMPLA Ltd for use with the Exposure Draft AMPLA Model Petroleum Joint Operating

Agreement (Model Petroleum JOA). They have been prepared by a representative Reference

Group selected from knowledgeable AMPLA members in private practice, oil and gas companies

and contractor organisations.

The Alternative and Optional Clauses are clauses which can be used instead of a Model Petroleum

JOA clause or are clauses which go beyond the basic framework of the Model Petroleum JVA.

They cover specific situations relevant to a typical agreement, such as the production of Coal Seam

Gas, and can be tailored to suit a particular joint venture. Each of the Alternative and Optional

Clauses can be inserted in the Model Petroleum JOA at the places indicated.

As with the Model Petroleum JOA, the Alternative and Optional Clauses endeavour to strike a fair

balance on contentious matters between the parties in a consistent manner.

Note: This Model form document continues to be revised and updated. The AMPLA

website should be checked to ensure that you are using the latest version.

COPYRIGHT

The AMPLA Model Petroleum JOA and the Alternative and Optional Clauses are the property of

AMPLA Ltd which owns the copyright. AMPLA financial members are granted a royalty free

licence to use them for commercial purposes. Non-members may use the Model Petroleum JOA and

the Alternative and Optional Clauses, without being in breach of copyright, only if the applicable

licence fee has been paid to AMPLA Ltd.

DISCLAIMER

AMPLA makes no warranty or guarantee or promise, express or implied, that this Exposure Draft

Alternative and Optional Clauses for use with the Exposure Draft AMPLA Model Petroleum Joint

Operating Agreement (Model Petroleum JOA) is accurate, complete, up to date, or fit for any use

whatsoever. It is made available on the AMPLA website for the information and use of AMPLA

members only and for the use of non-members on payment of the applicable licence fee, on the

condition that AMPLA Ltd is not engaged in rendering professional advice. Readers should

exercise their own skill and judgment in adopting or adapting any part of the Model Petroleum JOA

for their own use and, where necessary, seek advice from a suitable qualified legal practitioner.

AMPLA accepts no responsibility for any loss, cost or expense arising from the use of this Model

Petroleum JOA and shall not be liable in any manner whatsoever for any direct, incidental,

consequential, indirect or punitive damages arising out of the use of the Model Petroleum JOA, or

any errors or omissions in its contents.

IMPROVEMENTS

If you have any questions or suggestions for improvement concerning this document, please contact

the AMPLA office at [email protected] or see www.ampla.org.

mailto:[email protected]

http://www.ampla.org/



TABLE OF CONTENTS

1. Definitions and interpretation – Definitions – Coal Seam Gas – (Optional

definition clause 1.1) _______________________________________________ 7

2. Definitions and interpretation – Definitions – Imposts – (Optional definition

clause 1.1) ________________________________________________________ 8

3. Definitions and interpretation – Definitions - Material Breach – (Optional

definition Clause 1.1) _______________________________________________ 9

4. Definitions and interpretation – Definitions – Net Proceeds of Sale – (Optional

definition Clause 1.1) ______________________________________________ 10

5. Definitions and interpretation – Definitions – Project – (Optional definition

Clause 1.1) _______________________________________________________ 11

6. Definitions and interpretation – Definitions – Wilful Misconduct – (Alternative

definition - clause 1.1) _____________________________________________ 12

7. Definitions and interpretation – Definitions – Wilful Misconduct/ Senior

Management Personnel – (Alternative definition clause 1.1) _____________ 13

8. Definitions and interpretation – Definitions – sundry technical definitions –

(Optional definitions clause 1.1) _____________________________________ 14

9. Definitions and interpretation – Interpretation of “good faith” – (Alternative

clause 1.2) _______________________________________________________ 18

10. Definitions and interpretation – Interpretation – CPI (Optional clause 1.3) _ 19 1.3 Increase by CPI ________________________________________________ 19

11. Joint Venture objectives and relationships – Objects and scope of the Joint

Venture (Optional clause 3.2) _______________________________________ 20

Schedule 8 _______________________________________________________ 20

Operating Standards [Indicative List only] ____________________________ 20

12. Rights, obligations and liabilities of Participants – restriction on liability

(Optional proviso to clause 3.3(e)) ___________________________________ 26

13. Rights, obligations and liabilities of Participants – US tax partnership clause

short form (Optional clause 3.3(g)) __________________________________ 27

14. Rights, obligations and liabilities of Participants – US tax partnership clause

long form (Optional clause 3.3(g)) ___________________________________ 28

15. Establishment of Joint Venture – additional Participant covenants (Optional

clauses 3.4 (h), (i) and (j)) __________________________________________ 30

16. Establishment of Joint Venture – Participant covenants (Alternative clause

3.4) _____________________________________________________________ 31 3.4 Participants covenants and undertakings ____________________________ 31

17. Joint Venture objectives and relationships - Warranties as to no Payments,

Gifts and Loans (Optional clause 3.6) ________________________________ 32



3.6 Warranties as to no Payments, Gifts and Loans _______________________ 32

18. Joint Venture objectives and relationships - Performance guarantee and

indemnity (Optional clause 3.7) _____________________________________ 33 3.7 Performance guarantee and indemnity ______________________________ 33

19. Joint Venture Property – Delivery and sale of Petroleum (Optional clauses

4.3(a)(f), (g) and (h))_______________________________________________ 34

20. Joint Venture Property - Disposition of crude oil (Optional clause 4.4)_____ 35 4.4 Crude Oil Lifting Procedure ______________________________________ 35

21. Joint Venture Property - Disposition of crude oil (Optional clause 4.4)_____ 36 4.4 Offtake Agreement for Crude Oil __________________________________ 36

22. Participant Property - Disposition of Natural Gas (Optional clause 4.5(b) and

(c)) _____________________________________________________________ 38

23. Joint Venture Property - Disposition of Natural Gas (Alternative clause 4.5(b)

and (c)) _________________________________________________________ 39

24. Joint Venture Property - Disposition of Natural Gas (Alternative clause 4.5) 41 4.5 Disposition of Natural Gas _______________________________________ 41

25. Joint Venture Property - Disposition of Natural Gas – additional arrangements

(Alternative clause 4.5(b) to (f) ______________________________________ 43

26. Joint Venture Property - Abandonment of Joint Venture Property - (Optional

clauses 4.10(e) and (f)) _____________________________________________ 44

27. Joint Venture Property - Abandonment of Joint Venture Property -

Abandonment Security - short form (Optional clause 4.10(e) and Schedule 8) 45

Schedule 8 _______________________________________________________ 45

Security for Abandonment Costs ____________________________________ 45

1. Objective ___________________________________________________ 45

2. Application__________________________________________________ 45

3. Abandonment Security ________________________________________ 46

28. Joint Venture Property - Abandonment of Joint Venture Property - Security

for Abandonment costs - long form (Optional clause 4.10(e)) _____________ 47

Schedule 8 _______________________________________________________ 47

Security for Abandonment Costs ____________________________________ 47

1. Objective ___________________________________________________ 47

2. Application__________________________________________________ 47

3. Definitions __________________________________________________ 47

4. Payment in advance of Abandonment Cost _______________________ 48 4.1 Calculation of Abandonment Cost _____________________________ 48 4.2 Notification of Abandonment Cost _____________________________ 48



4.3 Approval of Abandonment Cost _______________________________ 48 4.4 Payment of Abandonment Cost _______________________________ 49 4.5 Shortfall or excess of Abandonment Cost _______________________ 49

5. Provision of security for payment of Abandonment Cost ____________ 49 5.1 Provision of initial security ___________________________________ 49 5.2 Further payment or provision of security ________________________ 50 5.3 Excess payment or provision of security ________________________ 51

6. Default _____________________________________________________ 51 6.1 Effect of default __________________________________________ 51

6.2 Consequence of default ____________________________________ 51

6.3 Remedy of default __________________________________________ 51

7. Review _____________________________________________________ 52

29. Joint Venture Property – Abandonment of wells - Casing Point election

(Optional clause 4.11(c) to (i) _______________________________________ 53

30. Joint Venture Property - Area of Mutual Interest (Optional clause 4.12) ___ 54 4.12 Area of Mutual Interest as Joint Venture Property ____________________ 54

31. Joint Venture Property - Area of Mutual Interest (Alternative clause 4.12) _ 55 4.12 Area of Mutual Interest as Joint Venture Property ____________________ 55

32. Joint Venture Property – Native title (Optional clause 4.13) ______________ 56

33. Operating Committee – Technical Committee (Optional clause 5.9) _______ 57

34. Operator - Appointment of Operator as an independent contractor

(Alternative clause 6.1) ____________________________________________ 58

35. Operator – cross indemnities (Alternative clauses 6.6 and 6.7) ___________ 59

36. Operator – Specific insurance clause (Optional clause 6.9) _______________ 60 6.9 Provision of insurances __________________________________________ 60

37. Operator – Detailed insurance clause (Optional clause 6.9) ______________ 61

38. Functions, powers and duties of Operator – Rights, powers and duties of

operator – Safety Case (Optional clause 7.2(k)) ________________________ 63

39. Functions, powers and duties of Operator – Rights, powers and duties of

operator – short form (Alternative clause 7.2) _________________________ 64

40. Operator - Nomination of Operator for greenhouse emissions reporting, where

the Operator is not a Participant (Alternative clause 7.3) ________________ 65 7.3 Greenhouse emissions reporting __________________________________ 65

41. Operator – Nomination of Operator for greenhouse emissions reporting, where

the Operator is a Participant (Alternative clause 7.3) ___________________ 67 7.3 Greenhouse emissions reporting ___________________________________ 67

42. Functions, powers and duties of Operator – Well and reservoir reports

(Alternative clauses 7.1(f) and 10.2(c)) ________________________________ 69

Schedule 8 _______________________________________________________ 69



Well and Reservoir Reports [Indicative List only] ______________________ 69

43. Functions, powers and duties of Operator – Drilling, testing, logging and

reporting (Optional clause 7.10) _____________________________________ 72

44. Functions, powers and duties of Operator – Safety Case - Health, safety and

environment (Optional clause 7.11) __________________________________ 74 7.11 Health, safety and environment __________________________________ 74

45. Functions, powers and duties of Operator – Employees and secondees

(Optional clause 7.12) _____________________________________________ 75 7.12 Employees and Secondees ______________________________________ 75

46. Functions, powers and duties of Operator – Contracts (Optional clause 7.13) 76 7.13 Contracts ____________________________________________________ 76

47. Functions, powers and duties of Operator – Contracts (Alternative clause 7.13)

________________________________________________________________ 77 7.13 Contracts ____________________________________________________ 77

48. Functions, powers and duties of Operator – Representation (Optional clause

7.14) ____________________________________________________________ 79 7.14 Representation________________________________________________ 79

49. Functions, powers and duties of Operator – Litigation (Optional clause 7.15) 80 7.15 Litigation ____________________________________________________ 80

50. Functions, powers and duties of Operator – Alcohol and drugs (Optional

clause 7.16) ______________________________________________________ 81

51. Functions, powers and duties of Operator – Conflicts of interest (Optional

clause 7.17) ______________________________________________________ 82

52. Programmes, Budgets and Cash Calls – Miscellaneous expenditure (Optional

clause 8.4(c)) _____________________________________________________ 83

53. Programmes, Budgets and Cash Calls – Banking of funds (Optional clause 8.6)

________________________________________________________________ 84

54. Programmes, Budgets and Cash Calls – Feasibility Study and Development

(Optional clauses 8.6 and 8.7) _______________________________________ 85

55. Insurance and litigation (Optional clause 8) ___________________________ 88

8. Insurance and litigation ____________________________________________ 88 8.1 Operator to maintain insurance ____________________________________ 88 8.2 Naming of Participants as co-insured _______________________________ 89 8.3 Advice to Participants of current insurance __________________________ 89 8.4 Contractor’s insurance __________________________________________ 89

8.5 Review of insurance ____________________________________________ 90 8.6 Participant’s right to opt out of insurance or obtain additional insurance ___ 90

8.7 Cost of insurance, charging of losses and crediting of recovery __________ 90 8.8 Deductibles and caps____________________________________________ 91 8.9 Litigation _____________________________________________________ 91



56. Completion, Discovery, appraisal, development and sales - Appraisal and

Discovery (Alternative clause 9.2) ___________________________________ 92

57. Accounts, reports, audit and access - Reports to Participants (Optional clauses

10.2(d) and (e)) ___________________________________________________ 93

58. Non consent (Optional clause 13.8) __________________________________ 94 13.8 Non consent ___________________________________________________ 94

59. Sole Risk – Coal Seam Gas Facility (Alternative clause 13) ______________ 96 13.1 Sole Risk Facilities for Coal Seam Gas ____________________________ 96

60. Withdrawal - Royalty reserved on optional or forced withdrawal (Optional

clause 12.5) ______________________________________________________ 98

12.5 Royalty reserved on optional or forced withdrawal ________________ 98

61. Withdrawal - from Joint Venture with Security for Abandonment costs

(Optional clause 12.2) ____________________________________________ 100

62. Assignment – Change of Control of Participant (Alternative clause 14.6) __ 102

63. Assignment – Change of Control of Participant (Alternative clause 14.6) __ 103

64. Enforcement of Buy-Out Remedy – Participant rights not a penalty

(Alternative clause 16.5) __________________________________________ 105

65. Dispute resolution – Project co-operation and arbitration (Alternative clause

19) ____________________________________________________________ 106

19 Co-operation and Arbitration ______________________________________ 106 19.1 Co-operation ________________________________________________ 106

19.2 Arbitration __________________________________________________ 106 19.3 Appointment of Sole Expert ____________________________________ 107 19.4 Survival ____________________________________________________ 107

66. Default – Compulsory payment on default (Alternative clause 15.5) ______ 108 15.5 Compulsory payment on default _________________________________ 108

67. Confidentiality – Proprietary technology (Optional clause 18.9) _________ 110

68. Expert determination – (Alternative clause 20.1) ______________________ 111 20.1 Expert determination __________________________________________ 111

69. Expert determination – Nomination by APPEA (Alternative clause 20.1(b)) 113

70. Goods and Services Tax – (Optional clause 23.6) ______________________ 114

71. Notices - When Notices are taken to have been given and received –

(Alternative Clause 24.2 ) _________________________________________ 116 24.2 When Notices are taken to have been given and received _____________ 116


(Alternative Clause 24.2(a)) _______________________________________ 117 24.2 When Notices are taken to have been given and received _____________ 117

73. Ancillary provisions – entire agreement – (Alternative clause 25.1) _______ 118



25.1 Entire agreement _____________________________________________ 118

74. Ancillary provisions – severability – (Alternative clause 25.5) ___________ 119 25.5 Severability _________________________________________________ 119

75. Ancillary provisions – waiver – (Alternative clause 25.6) _______________ 120 25.6 Waiver _____________________________________________________ 120

76. Ancillary provisions – counterparts – (Alternative clause 25.9) __________ 121 25.9 Counterparts ________________________________________________ 121

77. Ancillary provisions – counterparts – (Alternative clause 25.9) __________ 122 25.9 Counterparts ________________________________________________ 122

78. Counterparts – compilation of original document (Optional clause 25.9 (b)) 123

79. Schedule 1 – Basic provisions (Operator Fee) _________________________ 124

80. Schedule 1 – Basic provisions (additional Matters requiring a unanimous vote)

_______________________________________________________________ 125

81. Dilution – consequences of dilution on shortfall (Alternative Schedule 4.

paragraph 2) ____________________________________________________ 127



1. Definitions and interpretation – Definitions – Coal Seam Gas –

(Optional definition clause 1.1)

Insert a new definition in Clause 1.1 as follows:

Coal Seam Gas means coal seam gas or coal bed methane gas, consisting mainly of

methane gas.

Coal Seam Gas means gas that is contained with one or more seams of coal

located with the Coal Seam Zone or which was so contained prior to its

production through facilities owned by the Participants.

Coal Seam Zone means the entire coal-bearing stratum below the base of the

[Insert Basin] sequence and above the [Insert geological era] Basement as

depicted on the plan annexed to Schedule 2.

Completion means an operation intended to complete a Well as a producer of Coal

Seam Gas, including the setting of production casing, equipping of the well head,

stimulating the well (where necessary) and completion of production testing.

Paying Quantities means:-

(a) in the case of a well not completed and equipped for production, the anticipated

output from the well of that quantity of Coal Seam Gas which considering the

Completion Costs, Equipping Costs, Operating Costs, kind and quality of

production, the price to be received therefore, and the royalties and other

burdens payable with respect thereto, would in the opinion of the Operating

Committee by Majority Vote warrant incurring the Completion Costs and

Equipping Costs of the well; and

(b) in the case of a well completed and equipped for production, the output from

the well of that quantity of Coal Seam Gas which, considering the same factors

as in the last paragraph, except that Completion Costs and Equipping Costs

would in the opinion of the Operating Committee by a Unanimous Vote

warrant the continued production from the well.

In Clause 1.1, in the definition “Title Area“, delete “whole of the Area within the

Petroleum Titles set out in Schedule 2 and depicted on the plan annexed to Schedule

2 (if any) ,“ and insert “whole of the area of the Coal Seam Zone as defined in

Schedule 1".

Do global change substituting “Coal Seam Gas“ for “Petroleum “.



2. Definitions and interpretation – Definitions – Imposts – (Optional

definition clause 1.1)


Impost means any royalty (whether based on value, profit or otherwise), tax

(including any carbon tax or similar tax or carbon credit, and including GST, but

excluding income tax), duty, excise, levy, rate, cost, loss of benefit or charge,

imposed by any Authority according to Law which is imposed, directly or indirectly,

on or in respect of or in relation to the acquisition, storage, recovery, production,

transportation, processing, supply or sale of Petroleum but does not include any tax,

duty, excise, levy, rate, cost, loss of benefit or charge imposed in respect of:

(c) employees (such as payroll tax) or benefits provided to employees (such as

fringe benefits tax or superannuation levies);

(d) transactions or documents which do not directly relate to the acquisition,

storage, recovery, production, transportation, processing, supply or sale of

Petroleum (such as stamp duty on documents or transactions or insurance

taxes);

(e) any funding or financing arrangements (such as withholding tax);

(f) bank account imposts (such as debits tax or financial institutions duty); and

(g) any GST already recoverable under this agreement.



3. Definitions and interpretation – Definitions - Material Breach –

(Optional definition Clause 1.1)


Material Breach means:

(a) a material breach of the Operator’s obligations under this agreement (Single

Breach); or

(b) a number of non-material breaches of the Operator’s obligations under this

agreement that in aggregate, are a material breach (Repeated Breach).

For the avoidance of doubt, the following matters constitute Material Breach subject

(in the case of paragraphs (c), (f), (g) and (h)) to the materiality test specified in

paragraphs (a) and (b):

(c) if the Operator fails to carry out an Approved Work Program and Budget or a

Development Plan;

(d) the actions or inactions of Operator, which have resulted in breach of

obligations under the Participants’ respective Gas Sales Agreements (GSA),

which breach gives the buyer under a GSA the right to terminate the GSA on

expiry of any applicable remedy period under the GSA (but not including a

right to terminate that arises because of the application of clause [ ] of the

GSA);

(e) actions or inactions of Operator:

(i) which have resulted in breach of obligations under any GSA; and

(ii) any applicable remedy period under the GSA has expired; and

(iii) the breach gives the buyer under the GSA the right to exercise a Step-In

Right (as defined in the GSA), but not including a Step-In Right

exercised because of the application of clause [ ] of the GSA); and

(iv) the buyer under the GSA gives written notice to the Participants that the

Step-In Right will be exercised;

(f) actions or inactions of the Operator, which have resulted in breach of

obligations under any GSA pursuant to which the buyer under the GSA makes a

claim for damages in accordance with any GSA;

(g) failure to comply with a valid direction of the Operating Committee;

(h) the Operator does not comply with the HSEC Standards:

Provided that Material Breach excludes any act or omission by the Operator that is

taken in good faith in order to protect the health or safety of any person or to prevent

or minimise environmental harm or damage to property, where the Operator has used

reasonable efforts to consult with the Participants prior to acting or omitting to act.



4. Definitions and interpretation – Definitions – Net Proceeds of Sale –

(Optional definition Clause 1.1)

Insert new definition in Clause 1.1 [net proceeds of sale payable to a Defaulting Participant after exercise of a Default Remedy] as follows:

Net Proceeds of Sale means that sum calculated by the following formula:

Where

NPS means Net Proceeds of Sale; and

MV means the fair market value of Petroleum attributable to a Non-Defaulting

Participant’s Participating Interest and delivered for its account as a direct result of the

offtake arrangements; and

A means the aggregate Cash Calls paid by a Non-Defaulting Participant on behalf of a

Defaulting Participant and all other costs or expenses incurred or paid by the Non-

Defaulting Participant in producing, disposing of or selling Petroleum; and

B means royalties, GST or other taxes or duties including resources, rent, tax

(excluding taxes on income) payable by a Non-Defaulting Party in respect of such

Petroleum; and

C means other costs, imputed costs, or provision for future costs relative to the

applicable Program and Budget (including costs of discovery, appraisal, development,

production, realisation or abandonment) relative to the Defaulting Participant’s

Participating Interest of the applicable Program and Budget (including any such costs

relative to the Petroleum) which such Non-Defaulting Participant may from time to

time allocate or apportion to the applicable Program and Budget, unless an Auditor

determines at the cost of the Defaulting Participant that such Non-Defaulting

Participant has no reasonable grounds for making such allocation or apportionment;

and

D means any provision for taxation (including resources, rent, taxes but excluding

income tax) as a Non-Defaulting Participant has from time to time made or may from

time to time make, unless an Auditor determines that such Non-Defaulting Participant

has no reasonable grounds for making such provision; and

E means the aggregate of all amounts previously paid to, or on behalf of, the

Defaulting Participant by the Non-Defaulting Participant under the provisions of this

agreement;

O means all operational costs in respect of the relevant production; and

DR means depreciation allowance in respect of the costs of development in relation to

the relevant production.



5. Definitions and interpretation – Definitions – Project – (Optional

definition Clause 1.1)

Insert new definitions in Clause 1.1 as follows:

Project means the exploration operations carried out under the Petroleum Title and

the construction, development, production, de-commissioning and Abandonment

operations carried out under one or more Petroleum Titles according to this

agreement. It includes all facilities, including ancillary facilities and infrastructure,

constructed and developed that are reasonable and necessary for the Project according

to good international Petroleum industry practice. It also includes (but is not limited

to) facilities for concentrating, transporting, shipping and selling Petroleum and

transporting plant and equipment to and from the Petroleum Titles from and to local

or overseas destinations. It also includes a Project Expansion, once approved by the

Authorities.

Project Expansion means an expansion of the Project undertaken to include the

production of further Discoveries not the subject of the initial Development Plan.



6. Definitions and interpretation – Definitions – Wilful Misconduct –

(Alternative definition - clause 1.1)


Wilful Misconduct means such wanton or reckless act or omission not justified by any

special circumstances as amounts to a wilful or utter disregard for the harmful and

avoidable consequences thereof, but does not include any error of judgment, mistake,

act or omission, whether negligent or not made in good faith by the Operator or any

director, officer, employee, agent or contractor of the Operator in the exercise of any

function, authority or discretion either expressly or impliedly conferred hereunder upon

the Operator.



7. Definitions and interpretation – Definitions – Wilful Misconduct/

Senior Management Personnel – (Alternative definition clause 1.1)


Senior Managerial Personnel means, in relation to any party, any person employed

by the party or any of its Affiliates or Related Entities as a director or other corporate

officer of the party, or any member of the executive committee of the party or any

person employed by the party or its Affiliates or Related Entities who directly reports

to any such member of the executive committee.

Wilful Misconduct means an intentional or reckless disregard by Senior Managerial

Personnel of Good Australian Oilfield Practice in utter disregard of avoidable and

harmful consequences, but excludes any act, omission, error of judgment or mistake

made in the exercise in good faith of any function, authority or discretion vested in or

exercisable by such Senior Managerial Personnel and which in the exercise of such

good faith is justifiable by special circumstances, including safeguarding of life,

property or the environment and other emergencies.



8. Definitions and interpretation – Definitions – sundry technical

definitions – (Optional definitions clause 1.1)

Insert one or more of the following definitions in Clause 1.1:

Appraisal Well means a well drilled after an Exploration Well made a Discovery, in

order to intersect that Discovery for the purpose of obtaining more information about it,

being information relevant to a decision as to either or both of:

(a) whether to set about commercial production from such Discovery; and

(b) the manner in which development in order to achieve or continue commercial

production from such Discovery should proceed,

including information concerning any or all of the following:

(c) the extent and boundaries of the Discovery;

(d) the quantity or qualities of Petroleum in the Discovery; and

(e) such qualities of the Discovery or the Petroleum as may affect the rate at which

Petroleum may be produced from it or the total quantity of Petroleum which

may be produced from it,

and includes a well deemed to be an Appraisal Well pursuant to the definition of an

Exploration Well.

Appraisal Well means and includes all such additional well or wells drilled to the

same stratigraphic unit or objective horizon of a structural trap or stratigraphic trap,

or a combination thereof, in which a preceding Exploration Well has found

Petroleum, for the purpose of confirming the discovery or evaluating the quantities of

Petroleum available from the reservoir involved.

Barrel means a quantity consisting of 42 United States gallons, corrected to a

temperature of 60 degrees Fahrenheit under 1 atmosphere of pressure.

Block means the whole or part of a graticular or other section of the Earth into which

the Title Area is divided under the Act.

Complete means such of the following as are done with respect to a well at any time:

(a) to acquire, install and perforate production casing;

(b) to run tubing;

(c) to install equipment in the well up to and including a wing valve of the

Christmas tree;

(d) to conduct such tests as are necessary to demonstrate that the well is capable of

production;

(e) to swab the well; and

(f) to install such artificial lift equipment including sub surface pumps, pump rods,

power cables and surface pump equipment as is necessary to initiate or promote

the production of Petroleum to the surface,

Completion Costs means, with respect to a well, the costs of acquiring and

installing the casing left in the hole (exclusive of surface casing left in the hole



and exclusive of surface casing and casing which is run for the purpose of

protecting the hole during drilling operations and equipping the well up to and

including the wellhead with tubing installed and the running of adequate back

pressure tests.

Consequential Loss means indirect or consequential loss, damage, loss of

production, loss of revenue, loss of use, loss of contract, loss of goodwill or loss

of profit, including any such loss or damage suffered by a Participant or the

Operator as a result of a claim by any other person against a Participant or the

Operator.

Consequential Loss means any loss, damages, costs, expenses or liabilities caused

(directly or indirectly) by any of the following arising out of, relating to, or connected

with this agreement or the operations carried out under this agreement: (i) reservoir or

formation damage; (ii) inability to produce, use or dispose of Petroleum; (iii) loss or

deferment of income; (iv) punitive damages; or (v) other indirect damages or losses

whether or not similar to the foregoing.

Crude Oil means Petroleum produced by the Joint Venture under this agreement

which is in a liquid state at atmospheric pressure and temperature at the outlet of the

gas/oil separator and storage facilities, but excludes condensate, and natural gas liquids

unless blended with heavier hydrocarbons.

Drill means to drill a well pursuant to this agreement and includes where the context

permits, to deepen, Rework, plug back, well-shoot, carry out testing on, Recomplete or

side-track a well, and Drilling and other derivatives have corresponding meanings.

Drilling Costs means all costs and expenses directly incurred in the relevant Sole Risk

Operation in Drilling, deepening, Reworking, plugging back, Recompleting or side-

tracking a well, including conducting tests, obtaining core and other samples, running

logs and conducting a well-shoot.

Drilling Costs means all costs and expenses incurred in any manner in connection with

the drilling, deepening (but subject to a Participant’s right not to participate in

deepening) and testing of a well, includes any costs of rig mobilization and

demobilization, and, in the case of a well which is abandoned without completing, for

production, including the costs of abandoning the well in accordance with the Law and

all other winding up operations on or in the well or at the well site.

Entitlement means a quantity of Hydrocarbons of which a Participant has the right and

obligation to take delivery pursuant to this agreement or, if applicable, an offtake

agreement, after adjustment for overlifts and underlifts.

Equip (with respect to a well which has been Completed) means to acquire and install

all such equipment downstream of the wing valve of the Christmas Tree, and do all such

things, as are necessary to place the well in production, and to handle, treat and bring

Petroleum from such well to:

(a) the Delivery Point; or

(b) (if applicable) the point where such Petroleum is handled by facilities which are

used in common with Petroleum not associated with such well, including flow

lines, treatment and separation facilities and stock tanks,



and Equipping and other derivatives have corresponding meanings.

Equipping Costs means, in the case of a well which is being completed for the

taking of production therefrom, all costs, other than Drilling Costs and Completion

Costs, which are incurred to place the well on production, and to handle, treat and

bring production from such well to the point where such production is handled by

facilities which are used in common with production not associated with such well or

to the Delivery Point, and includes but is not limited to the flow lines and storage

tanks required for handling production from such well.

Established Trapping Unit means a Trapping Unit which:

(a) on the basis of work previously completed in respect of the Trapping Unit, the

Operating Committee has reserved for additional work; or

(b) is the subject of a development feasibility study; or

(c) is the subject of a Development Plan; or

(d) is in production.

Field means an area consisting of a single Petroleum reservoir or multiple Petroleum

reservoirs all grouped on or related to the same individual geological structural feature

or stratigraphical condition or both.

G & G Data means geological, geophysical and geochemical data and other similar

information that is not obtained through a well bore.

Gas means Petroleum produced in a vaporous or gaseous form but excluding

condensate or gas liquids which by normal field methods of petroleum gas processing

are separated and recovered as a liquid.

Joint Trapping Unit means:

(a) a Trapping Unit into which the Operating Committee has approved the drilling

of a well which has not been completed or abandoned unless, in the case of an

Exploration Well drilled as a Sole Risk Operation, Abandonment is imminent;

or

(b) an Established Trapping Unit.

Maximum Efficient Rate means the maximum daily rate at which Petroleum can be

produced from a productive Reservoir in accordance with Good Australian Oilfield

Practice.

Net Wellhead Value means the actual proceeds from the sale of Petroleum

concerned (determined on the basis of the weighted average price paid by purchasers

not affiliated with the seller, or if there are no such sales, the weighted average price

which an arm's length purchaser would have had to pay a competitive supplier at the

time of sale for the same quantity of Petroleum at the point of sale) less taxes (other

than royalties, taxes or excises levied on individual Participants), levies and royalties

payable to the Government and all costs incurred in transportation from the Wellhead

to point of sale, and all costs of separation and treatment;

Producing Well means a well from which Petroleum has been produced and sold.

Recomplete means:



(a) to re-perforate a Reservoir; or

(b) to isolate or shut off a Reservoir previously opened to production and to

Complete on another Reservoir in the same well,

and Recompleting and other derivatives have corresponding meanings.

Reservoir means that part of a geological formation (whether rock or coal) which

contains a single pool or accumulation of Petroleum separate from any other such pool

or accumulation in the same or another geological formation, in a single pressure system

so that production of Petroleum from any part affects the remainder.

Rework means to clean out or otherwise work on a well to increase or restore

production and includes stimulation of a well by fracturing or acidising or other means;

and Reworking and other derivatives have corresponding meanings.

Trapping Unit means the smallest volume which includes the known, or reasonably

projected, limits of a potential producing area within the interpreted closure.

Wellhead means the first outlet of a well from which Petroleum can be taken;

Zone means a stratum of earth containing or thought to contain an accumulation of

Petroleum separately producible from any other accumulation of Petroleum.



9. Definitions and interpretation – Interpretation of “good faith” –

(Alternative clause 1.2)

Insert a new sub-clause (o) in Clause 1.2 as follows:

(o) a reference to “good faith” in this agreement means that:

(i) the applicable Operator, Participant or Participants must not act

unconscionably, use misleading or deceptive conduct nor any element

of duress (including economic duress or unreasonable threat of

enforcing legal rights);

(ii) the Operator and Participants must act honestly towards each other,

providing where relevant honest appraisals of any facts or

circumstances;

(iii) an Operator or a Participant must act considerately and genuinely

towards the other Participant, meeting with and openly discussing issues

where relevant; and

(iv) an Operator or a Participant must give due and proper consideration to

the views and needs of the other Participant as against their own views

and needs, all in a professional and responsible manner,

but does not require a Participant to act against its own commercial interests.



10. Definitions and interpretation – Interpretation – CPI (Optional clause

1.3)

Insert a new Clause 1.3 as follows:

1.3 Increase by CPI

For the purposes of this agreement:

(a) CPI means the Consumer Price Index (weighted average eight capital cities, all

groups index) published from time to time by the Australian Bureau of

Statistics, and if that index is discontinued, or if its basis of assessment is

changed so that it no longer accurately reflects changes in the prevailing levels

of prices substantially in the same manner as it did prior to the change in basis,

then such other index in substitution for that index:

(i) as may be provided by the Australian Bureau of Statistics; or

(ii) if no index is provided by the Australian Bureau of Statistics, as may be

agreed by the parties; or

(iii) if no index is provided by the Australian Bureau of Statistics and the

parties are unable to agree, as may be provided, at the request of the

Operator, by the President for the time being of the Institute of

Actuaries of Australia, or by that person's nominee, which will provide

a basis for comparison equivalent to the Consumer Price Index

(weighted average eight capital cities, all groups index);

(b) CPIn means the CPI for the quarter ending [ ] for the year

immediately preceding the date from which a variation of the amount is to be

made; and

(c) CPIB means the CPI for the quarter ending [ ].

(d) All amounts set out in clauses [ ] and Accounting Procedure

clauses [ ] must be escalated by the following formula in respect

of each Year commencing on the first Year following the date of execution of

this agreement, unless the parties unanimously agree otherwise:

escalated amount = base amount x }]



11. Joint Venture objectives and relationships – Objects and scope

of the Joint Venture (Optional clause 3.2)

Insert at the end of Clauses 3.2(a)(iii) the following:

(iv) in accordance with a Development Plan prepared and designed in accordance

with the Operating Standards set out in Schedule 8;

Insert a new Schedule 8 as follows:

Schedule 8

Operating Standards [Indicative List only]

A Development Plan supersedes any previously documented Bankable Feasibility Study

and incorporates the initial overall view of how the Project will be developed, having a

goal of zero harm.

Development Plans will demand preparation of a Proposed Work Program and Budget,

which will be in concert with the Development Plan.

In designing the Development Plan the Operator must observe Good Australian Oilfield

Practice.

Regulatory Approvals & Licences

Provide full listing of statutory approvals and licences required for project/operations.

Develop a Statutory Requirements and Approvals Register.

Outline strategies for obtaining approvals and licences in accordance with project

schedule requirements.

Identify applicable legislation and detail outstanding legislative issues and plans to

achieve resolution.

Resources/Reserves: Security of Title

Identify the key milestones or dates in the title, licence or contract that are relevant for

all tollgate phases of the project.

Identify any issues in relation to partners, governments, etc., which may affect

operatorship, title or production continuity.

Resources/Reserves: Recoverable Volumes & Sub-Surface Development

Describe the likely range of characteristics or composition of the expected product(s),

detailing any specific or time dependent issues that will affect the market price of the

product(s).

Discuss scenarios that would result in up-side or down-side contingent resource

estimates and the implications of these scenarios.

Discuss why the contingent resources are considered to meet reserves booking

guidelines.



Discuss what alternative actions can be taken if perception of the resource changes

during development.

Discuss any implications for surface processing, marketing, etc. which may be relevant

for different gas characteristics, recovery volumes or production profiles.

Design Basis Definition & Scope of Work

Develop a firm Design Basis including sub-surface, facilities, marketing, environment,

geological, etc.

Design Basis reviewed and accepted by Operations.

Develop a Scope of Work for the Execution phase (to first gas) activities.

Engineering & Construction: Engineering Definition

Develop a firm Basis of Design.

Completion of all PFDs and process data sheets for all major equipment items.

Quotations obtained for all major equipment items.

Preparation of basic designs, layouts and piping studies.

Completion of a reliability, availability and maintainability analysis.

Completion of preliminary HAZOP review.

Preparation of a preliminary Safety Case (or equivalent).

Preparation of a preliminary Environmental impact assessment and management plan.

Completion of appropriate internal peer reviews.

Preparation of a project risk register.

Discussion of percentage of completed engineering as a percentage of total

engineering (front end loading).

Describe major outstanding engineering tasks.

Detail vendor experience with the technology and the level of support required.

Create or enhance value of project by utilising, where appropriate, an extended range

of relevant Value Improvement practices including:

- Design to Capacity

- Process Simplification

- Process Reliability Modelling

- Predictive Maintenance

- Value Engineering

- Constructability.

Project Contracting Strategy & Plan



Prepare project contracting plan consistent with project objectives and priorities.

Develop mitigation plans if the project concept restricts the number of available

contractors.

Prepare Engineering & Construction & Commissioning Strategy.

Preliminary commissioning and start-up plan developed and reviewed by Operations.

Detail the ongoing support requirements after hand-over.

Describe the user requirement specification to be used in the hand-over.

Project Organisation Structure

Outline the organisation structure corresponding to the project implementation

strategy.

Outline the key management positions in the organisation.

Outline the experience of the individuals appointed to the project team.

Engineering & Construction: Production Ramp Up Plan

Describe the assumptions and major risks in the ramp up schedule.

Provide benchmarks for the plant during the production ramp up period up to

sustainable production.

Engineering & Construction: Financial Sensitivity & Commerciality.

Outline the major impacts on financial sensitivity in terms of production schedule and

ramp up (including impact on the cash flow).

Operations: Operating Strategy.

Define operating requirements, objectives and priorities.

Project Execution Plan & Schedule

Develop a level 1 overall project schedule including major milestones/decisions/

commitments and dependencies between activities.

Develop detailed (4th level) integrated master project schedule including construction,

fabrication, installation, drilling, GSA requirements, regulatory compliance, training,

pre-commissioning and start-up activities.

Perform a schedule risk analysis and explain major assumptions in the schedule.

Compare schedule to similar completed projects.

Define resources required to achieve the overall schedule.

Capital Cost Estimate

Preliminary Design Basis document and cost estimate basis developed.

Quotations obtained for major equipment items.



Develop the most likely capital cost estimate to +/-10% accuracy within 80%

confidence limits.

Perform a review of capital cost by parties external to the project team.

Establish a Work Breakdown Structure consistent with the contracting plan and project

execution plan.

Explain any estimates and provisions for working capital.

Outline provision for escalation and foreign exchange exposure.

Detail the total amount and basis of the contingency and any other provisions.

Outline capital efficiency ratios and compare to industry standards.

Describe any Value Improving Practices used to minimise capital costs.

Describe the methodology for determining any sustaining capital requirements.

Operations Management

Describe the overall operating philosophy for operating and maintaining the assets

(plant, property and equipment) covering all aspects of the operation including but not

limited to, management practices, use of contractors, etc.

Describe the structure of the operations management team (pre and post first gas) to

show responsibilities and authority over key operational aspects. Identify any

externally contracted service providers.

Describe the organisational development program to cover recruitment, induction and

training.

Describe the manning schedule for the operation with each position identified and

ensure consideration for planned and unplanned leave, any expected lost time

provisions, training time etc.

Describe the shift and leave cycles and demonstrate the impact of the cycles on

productivity, ability to attract workforce, costs etc.

Describe the workforce accommodation policy

Describe the maintenance philosophy and provisions for both planned and unplanned

maintenance.

Describe the site administration functions for the operation of the business and

provision of any off-site services or overheads e.g. payroll etc.

Describe the IT plans (hardware and software) for the operation of the business.

Operations: Operating Costs

Prepare forecast of operating costs over useful life of project including life cycle costs

for major equipment. Obtain approval from Operations.

Compare operating costs to benchmarks.

Outline major components of operating costs.



Health, Safety, Environment & Community: Health & Safety Management

Describe the major risk assessment processes used (e.g. preliminary Safety Case,

Formal HAZOP, Qualitative Risk Assessment, Human Factor Analysis).

Describe design modifications to reduce the risks of the major hazards identified.

Identify control and mitigation strategies, incorporating previous industry experience.

Demonstrate that the risks are As Low As Reasonably Practicable (ALARP).

Develop an H&S Risk Register for the project.

Describe the Safety Management System and its relevance to identified critical risks.

Demonstrate conformance with HSEC Standards.

HSEC: Environmental & Community Risk Assessment

Describe the environmental risk identification processes used.

Describe the significant risks identified and mitigation measures implemented or

planned.

Describe the Environmental Management System and its relevance to identified

critical risks.

Identify environmental and community impacts and issues.

Identify control and mitigation strategies, incorporating previous industry experience.

Demonstrate that the proposed development plan will minimise environmental and

community risks.

Develop an E&C Risk Register for the project.

Establish a Stakeholder Commitments Register.

HSEC: Management, monitoring & closure plan

Develop a HSEC Management and Monitoring Plan.

Develop a decommissioning, closure and rehabilitation plan for the project.

Human Resources: Critical Skills

Describe recruitment strategy to address skill gaps.

Describe workforce training programs.

Address any international assignee issues.

Describe recruitment process and identify local HR resource as required.

Human Resources: Statutory Obligations

Describe significant statutory laws and obligations applying to the project (e.g. equal

employment opportunity, privacy, termination).



Discuss implications for Lease to operate if breach of any obligations.

Human Resources: Performance/Reward Strategy

Detail proposed performance management systems.

Describe the proposed compensation and benefits strategy.

Describe the compensation structures and current/future industry practice and their

impact.

Human Resources: Employee Relations Strategy

Describe the employee relations environment and the strategy to achieve best practice

employee relations.

Discuss the likely impact of unions.

Human Resources: Communications

Explain the process to be adopted for public communications (media / analysts).

Explain what data will or won't be released to interest groups.

Explain the strategy for employee communications.

Risk Management

How risks will be managed, recorded and reported on an ongoing basis (during both

the execution and operation phases) is to be documented in accordance with AS4360.

The Risk Register is to be reviewed on at least a quarterly basis and kept up to date.



12. Rights, obligations and liabilities of Participants – restriction

on liability (Optional proviso to clause 3.3(e))

Add the following proviso to clause 3.3(e):

provided that a Participant’s liability to any other Participant under this sub-clause

must not exceed the amount recoverable by the Participant under any insurance

policy.



13. Rights, obligations and liabilities of Participants – US tax

partnership clause short form (Optional clause 3.3(g))

Add a new clause 3.3(g) as follows:

(g) If, for United States federal income tax purposes, this agreement and the

operations under this agreement are regarded as a partnership, each Participant

elects to be excluded from the application of all of the provisions of

Subchapter K, Chapter 1. Subtitle A of the United States Internal Revenue

Code of 1986, as amended (Code), as permitted and authorised by Section

761(a) of the Code and the regulations promulgated under the Code. Each

Participant which is subject to the Code is authorised and directed to execute

and file, or cause to be executed and filed, any such evidence of this election

as may be required by the Internal Revenue Service and provide a copy

thereof to each Participant.



14. Rights, obligations and liabilities of Participants – US tax

partnership clause long form (Optional clause 3.3(g))

Add a new clause 3.3(g) as follows:

(g) If, for United States federal income tax purposes, this agreement and the

operations under this agreement are regarded as a partnership (and if the

Participants have not agreed to form a tax partnership), then:

(i) for the purposes of this clause, "U.S. Party" means any Participant which

is subject to the income tax law of the United States in respect of

operations under this agreement;

(ii) each U.S. Party elects to be excluded from the application of all the

provisions of Subchapter "K", Chapter 1, Subtitle "A" of the United

States Internal Revenue Code of 1986, as amended (Code), as permitted

and authorized by Section 761(a) of the Code and the regulations

promulgated under the Code;

(iii) the Operator, if a U.S. Party, is authorized and directed to execute and

file for each U.S. Party such evidence of this election as may be required

by the Internal Revenue Service, including specifically, but not by way of

limitation, all of the returns, statements, and the data required by United

States Treasury Regulations Sections 1.761-2 and 1.603 l-l (d) (2), and

must provide a copy thereof to each U.S. Participant;

(iv) if the Operator is not a US Party, the Participant who is the greatest

Percentage Share among the US Parties must fulfill the obligations of the

Operator under this clause.

(v) if there is any requirement that any U.S. Party give further evidence of

this election, each U.S. Party must execute such documents and furnish

such other evidence as may be required by the Internal Revenue Service

or as may be necessary to evidence this election;

(vi) each U.S Party making an election under this clause (and if more than

one, each jointly and severally in proportion to their respective

Percentage Shares) must indemnify and keep indemnified Participant

which is not a US Party from, against and in respect of any liability to

pay any tax, duty or other impost under any law of the United States of

America or the Commonwealth of Australia (or under the laws of any

state of either of them) which the indemnified party would not otherwise

have been liable to pay if that election had not been made;

(vii) if any income tax laws of any state or other political subdivision of the

United States or any future income tax laws of the United States or any

such political subdivision contain provisions similar to those in

Subchapter "K", Chapter 1, Subtitle "A" of the Code, under which an

election similar to that provided by Section 761(a) of the Code is

permitted, each U.S. Party must make such election as may be permitted

or required by such laws, including stating that the income derived by it

from operations under this agreement can be adequately determined

without the computation of partnership taxable income;



(viii) no Participant may give any notice or take any other action inconsistent

with the election made above;

(ix) no activity may be conducted under this agreement that would cause any

Participant that is not a U.S. Party to be deemed to be engaged in a trade

or business within the United States under applicable tax laws and

regulations; and

(x) a Participant which is not a U.S. Party is not required to do any act or

execute any instrument which might subject it to the taxation jurisdiction

of the United States.



15. Establishment of Joint Venture – additional Participant covenants

(Optional clauses 3.4 (h), (i) and (j))

Insert new Clauses 3.4 (h), (i) and (j) as follows:

(h) that it is in breach of this agreement if either it or its Affiliates or Related

Entity conducts exploration or production in a Title Area, either on its own

account or jointly with or on behalf of others, at any time prior to the

termination of the Joint Venture, other than as provided in or authorised by

this agreement or with the prior written consent of the other Participants;

(i) that each Participant has unrestricted right to engage in and receive the full

benefit of any activities in which it is involved outside the Title Area (whether

or not in competition with the Joint Venture), without consulting with, or being

obliged to offer to the opportunity to participate to, each other Participant,

provided however that such activities are carried out in a manner which does

not prejudice, impair or impede Joint Operations; and

(j) subject to the confidentiality provisions of this agreement, each Participant is

entitled to use and apply outside the Title Area Information obtained in the

course, or as a result, of Joint Operations.

At the end of Clauses 3.4(f) delete “and”.



16. Establishment of Joint Venture – Participant covenants (Alternative

clause 3.4)

Delete Clause 3.4 and insert a new Clause 3.4 as follows:

3.4 Participants covenants and undertakings

Each Participant covenants and undertakes with each other Participant that it will:

(a) observe, perform and comply with the terms and conditions of the Petroleum

Titles, and all applicable Law and do all such acts and things within its control

as may be necessary to keep and maintain the Licence in force and effect;

(b) just and faithful in all activities and dealings with the other Participants;

(c) attend diligently to the conduct of all Joint Operations in which the Participant

is involved;

(d) pay punctually its separate debts and taxes, and to indemnify the other

Participants against the same and all expenses on account thereof;

(e) account forthwith for all moneys, cheques and negotiable instruments received

by it for and on behalf of the other Participants;

(f) afford, when called upon so to do, all reasonable assistance in the conduct of

Joint Operations for the mutual advantage of the other Participants;

(g) not do or omit to do any act, matter or thing which would place the whole or

any part of the Joint Venture Property, the other Participant’s title thereto or

their respective Participating Interests therein, in jeopardy;

(h) observe and perform the obligations, express and implied, of such Participant in

terms of this agreement; and

(i) make full, frank and immediate disclosure and give truthful explanations to the

other Participants of all matters coming to its attention in respect of Joint

Operations.



17. Joint Venture objectives and relationships - Warranties as to no

Payments, Gifts and Loans (Optional clause 3.6)

Insert new Clause 3.6 as follows:

3.6 Warranties as to no Payments, Gifts and Loans

(a) Each of the Participants and the Operator warrant that neither it nor its

Affiliates or Related Entities has made or will make, with respect to the

matters provided for in this agreement:

(i) any offer, payment, promise to pay or authorization of the payment of

any money, or any offer, gift, promise to give or authorization of the

giving of anything of value, directly or indirectly, to or for the use or

benefit of any official or employee of an Authority or to or for the use or

benefit of any political party, official, or candidate unless such offer,

payment, gift, promise or authorization is authorized by the applicable

Law; or

(ii) any offer, payment, gift, promise or authorization to or for the use or

benefit of any other person if the Participant knows, has a firm belief, or

is aware that there is a high probability that the other person would use

such offer, payment, gift, promise or authorization for any of the

purposes described in the preceding paragraph.

(b) The foregoing warranties do not apply to any facilitating or expediting

payment to secure the performance of routine government action which

includes, but is not limited to, government action regarding the terms, award

or continuation of the Petroleum Titles.

(c) Each Participant must respond promptly, and in reasonable detail, to any notice

from any other Participant or its auditors pertaining to the above stated

warranty and representation and shall furnish documentary support for such

response upon request from such other Participant.



18. Joint Venture objectives and relationships - Performance

guarantee and indemnity (Optional clause 3.7)


3.7 Performance guarantee and indemnity

(a) [Z Ltd] (Guarantor) guarantees to Participant 1 and Participant 2 as

Participants the due and punctual performance by Participant 3 as a

Participant of all its duties and obligations under this agreement.

(b) The Guarantor indemnifies Participant 1 and Participant 2 against all losses,

damages, costs, expenses or liabilities of any nature (other than

consequential, economic or indirect losses, including any lost production or

loss of profits) suffered or incurred by Participant 1 and Participant 2

(including any claims made by third Participants) which each of them suffers

or incurs as a result of the happening of a Default Event (as defined in clause

12.1) caused wholly or partly by Participant 3, except where, and to the

extent that, the Default Event is caused by an action or omission not in good

faith, or fraud or Wilful Misconduct, by Participant 1 or Participant 2 or both.

(c) The guarantee and indemnity given in this clause:

(i) is personal to Participant 1 and Participant 2 as Participants;

(ii) does not apply to any successors or assigns of Participant 3, except an

Affiliate or Related Entity of Participant 3 that becomes a Participant

to this agreement; and

(iii) terminates upon the Participants entering into deeds of cross charge

between them as contemplated by this agreement.

Make the Guarantor a Participant to the agreement.



19. Joint Venture Property – Delivery and sale of Petroleum (Optional

clauses 4.3(a)(f), (g) and (h))

Insert the following Clauses 16.2 (f), (g) and (h) as follows:

(i) For the purpose of this clause, the term "fair market value" means the revenue

however described (excluding any discounts or rebates) actually received for

sales of any Petroleum which is;

A. where that Petroleum is sold at an arm's length price at the point at which

it is to be valued for resource rent tax purposes, such revenue obtained on

the sale of that Petroleum at that point; or

B. where that Petroleum is sold at an arm's length price at a point

downstream of the point at which it is to be valued for resource rent tax

purposes, the revenue obtained on the sale of that Petroleum reduced by

an appropriate allowance for costs incurred in respect of that Petroleum

between the point at which that Petroleum is to be valued for Petroleum

resource rent tax purposes and the point of sale of that Petroleum; or

C. where that Petroleum is not sold on an arm's length basis prior to further

processing by the Participant producing the same, or in any case other

than prescribed in this clause, the revenue, as agreed between the relevant

Participants, or failing agreement as may be determined by an

Independent Expert under this agreement, which would have been

obtained on the sale of that Petroleum if it had been sold as a raw

feedstock for processing at an arm's length price at the point at which it is

to be valued for Petroleum resource rent tax purposes.

(ii) If there is a dispute as to the fair market value of any Petroleum, or whether a

particular sale is made at an arm's length price, or whether the appropriate

allowance for costs has been made, the matter may be referred by a Participant

for determination by an Independent Expert pursuant to this agreement.

(iii) In making any determination as provided in this clause, the Independent Expert

must act as an expert and not as an arbitrator and must take all relevant factors

into account which must include but not be limited to:

A. arm's length sales of that type of Petroleum (excluding any sale which is

on terms not competitive with or comparable to arm's length purchases

and sales between commercial buyers and sellers);

B. the amount of any commission or brokerage paid on such other sales,

which amount shall be disregarded;

C. if there are no other such sales, the prices at which comparable types and

quantities of Petroleum have been sold in. Australia (or if there have been

no such sales in Australia, in other comparable markets); and

D. quantity differentials, freight costs, wharfage, insurance and credit terms.



20. Joint Venture Property - Disposition of crude oil (Optional clause 4.4)

Delete Clause 4.4 and insert the following:

4.4 Crude Oil Lifting Procedure

If Crude Oil is to be produced from an Exploitation Area:

(a) the Participants must in good faith, and not less than 3 months prior to the

anticipated first delivery of Crude Oil, as promptly notified by the Operator,

negotiate and conclude the terms of a lifting agreement to cover the off take

of Crude Oil produced from the applicable Petroleum Titles;

(b) the lifting procedure must, subject to the terms of the applicable Petroleum

Title, be based on the [AIPN Model Form Lifting Procedure] and contain all

terms negotiated and agreed by the Participants and the Operator, and be

consistent with the approved Development Plan.

(c) if a lifting agreement has not been entered into by the date of first delivery of

Crude Oil, the Participants must take and separately dispose of such Crude

Oil on the terms of the [AIPN Model Form Lifting Procedure] until a lifting

agreement with the Operator is executed by the Participants.



21. Joint Venture Property - Disposition of crude oil (Optional clause 4.4)

Delete Clause 4.4 and insert the following:

4.4 Offtake Agreement for Crude Oil

If Crude Oil is to be produced from an Exploitation Area, the Participants must shall in

good faith, and not less than 3 months prior to first delivery of Crude Oil, negotiate and

conclude the terms of an agreement to cover the offtake of Crude Oil produced under

the Petroleum Titles. The offtake agreement must, to the extent consistent with the

Petroleum Titles and this agreement, make provision for;

(a) The Delivery Point, at which title and risk of loss of Participating Interest

shares of Crude Oil, or as the Participants may otherwise agree, passes to the

Participants;

(b) The Operator's regular periodic advice to the Participants of estimates of total

available production for succeeding periods, quantities of each grade of Crude

Oil and each Participant’s share for as far ahead as is necessary for Operator

and the Participants to plan offtake arrangements. Such advice must also cover

for each grade of Crude Oil total available production and deliveries for the

preceding period, inventory and overlifts and underlifts;

(c) The nomination by the Participants to the Operator of acceptance of their

shares of total available production for the succeeding period. Such

nominations must in any one period be for each Participant’s entire share of

available production during that period subject to operational tolerances and

agreed minimum economic cargo sizes, or as the Participants may otherwise

agree;

(d) Adjustment of overlifts and underlifts;

(e) If offshore loading or a shore terminal for vessel loading is involved, risks

regarding acceptability of tankers, demurrage and (if applicable) availability of

berths;

(f) Distribution to the Participants of available grades, gravities and qualities of

Petroleum to ensure, to the extent Participants take delivery of their

Entitlements as they accrue, that each Participants receives in each period

Entitlements of grades, gravities and qualities of Petroleum from each

Exploitation Area in which it participates similar to the grades, gravities and

qualities of Petroleum received by each other Participant from that Exploitation

Area in that period;

(g) To the extent that distribution of Entitlements on such basis is impracticable

due to availability of facilities and minimum cargo sizes, a method of making

periodic adjustments;

(h) The option and the right of the other Participants to sell an Entitlement which a

Participant fails to nominate for acceptance or which a Participant fails to take

delivery, in accordance with applicable agreed procedures, provided that such

failure constitutes a breach of the obligations of the Operator or a Participant

under the terms of the Petroleum Titles, or is likely to result in the curtailment

or shut-in of production; and



(i) Sales of another Participant’s Entitlement must be made only to the limited

extent necessary to avoid disruption in Joint Operations. The Operator must

give to all Participants as much notice as is practicable of such situation and

that a sale option has arisen. Any sale must be only of the unnominated or

undelivered Entitlement, as the case may be, and for reasonable periods of time

as are consistent with the minimum needs of the industry and in no event to

exceed 12 months. The right of sale is revocable at will subject to any prior

contractual commitments. Payment terms for production sold under this option

must be established in the offtake agreement.



22. Participant Property - Disposition of Natural Gas (Optional clause

4.5(b) and (c))

In Clause 1.1, insert a definition “Underlifted Participant“ as follows:

Underlifted Participant means a Participant, not being a Defaulting Participant,

which has not taken up its full entitlement of Natural Gas.

Renumber Clause 4.5 as clause 4.5(a).

Insert new Clauses 4.5 (b) and (c) as follows:

(c) The Participants recognize that, if there is individual disposition of Natural Gas

produced from an Exploitation Area, imbalances may arise with the result being

that a Participant may temporarily have received more than its Entitlement of

Natural Gas (Overlifter) and each other Participant may temporarily have

received less than its Entitlement of Natural Gas (Underlifter).

(d) Accordingly, if Natural Gas is to be produced from an Exploitation Area, the

Participants and the Operator must, in good faith and no later than the date on

which the approved Development Plan for Natural Gas production is approved

by the Operating Committee, negotiate and conclude the principles of a gas

lifting and balancing agreement to cover the disposition of Natural Gas

produced from the relevant Exploitation Area, regardless of whether all of the

Participants have entered into a sales arrangement or sales contract for their

respective Entitlement of Natural Gas.

(e) If the Participants fail to agree upon the terms of a gas lifting and balancing

agreement within 30 days of the commencement of production from the

Exploitation Area, any Participant may refer the terms of that agreement for the

determination by an Expert appointed in accordance with in this agreement,

having regard to relevant operational matters pertaining to the Joint Operations

and any other matters considered relevant by the Expert.

(f) Notwithstanding the provisions of any gas balancing agreement, if the Operator

anticipates that an imbalance in Entitlements of Natural Gas being taken and

disposed of is likely to be for a period of 3 months or less in duration and for a

volume of less than [ TJ], then the Operator must record the

imbalance and the imbalance must be repaid in kind by the Overlifter to the

Underlifter and if more than one Underlifter, pro rata in proportion to their

respective Percentage Shares, within 6 months of the creation of the imbalance.



23. Joint Venture Property - Disposition of Natural Gas (Alternative clause

4.5(b) and (c))

In Clause 1.1, insert a definition “Underlifted Participant“ as follows:

Underlifted Participant means a Participant, not being a Defaulting Participant,

which has not taken up its full entitlement of Natural Gas.

Renumber Clause 4.5 as clause 4.5(a).

Insert new Clauses 4.5 (b) and (c) as follows:

(b) The Natural Gas balancing agreement must, subject to the terms of the Petroleum

Titles, make provision for:

(i) the right of a Participant not in default to take delivery of Natural Gas (and to

thereby use all relevant facilities) in excess of its Participating Interest share

of production, subject to the right of an Underlifted Participant to take later

delivery of make-up Natural Gas (Make-up Gas); provided that:

A. Make-up Gas must in no month exceed 50% of total Natural Gas

production produced monthly from the Exploitation Area; and

B. the such Underlifted Participant loses its right to Make-up Gas if it has

not taken delivery of the Make-up Gas within 2 years after the excess

Natural Gas was originally taken; and

C. if any Participant takes delivery of Natural Gas in excess of its

Percentage Share of production, such overproduction shall in no month

exceed 50% of such Participant’s Percentage Share of production;

(ii) balancing of overproduction and underproduction on a gross calorific value

basis, determined by comparison of the Natural Gas actually taken by a

Participant with that Participant’s Percentage Share of production for the

period of time;

(iii) Natural Gas being taken and owned by a Participant exclusively for its own

account, regardless of whether such Natural Gas is:

A. attributable to such Participant’s Percentage Share of production; or

B. taken as overproduction; or

C. taken as Make-up Gas for past under production;

(iv) unless otherwise agreed, no agency relationship or other relationship of trust

and confidence being created between the Participants in regard to disposition

of Natural Gas;

(v) unless otherwise agreed, the Delivery Point (at which title and risk of loss of

entitlements of Natural Gas passes to the Participant taking delivery of such

Natural Gas) being the point where fiscal calculations are made consistent

with the relevant Petroleum Title;

(vi) each Participant providing the Operator with such information concerning its

arrangements for the disposition of its entitlement of Natural Gas production

as the Operator may reasonably require in order to conduct Joint Operations;



(vii) each Participant making regular periodic nominations to the Operator of the

amount of such Participant’s entitlement of total available Natural Gas

production which it wishes to accept during a defined future period, along

with the Operator’s regular periodic advice to the Participants of estimates of

total Natural Gas production (as reasonably in advance as practicable in order

to assist the Participants to plan Natural Gas disposition arrangements);

provided that the Participants recognize that the Operator’s estimates may

vary from the actual Natural Gas volumes produced and that Participant relies

on any such information at its own risk; and

(viii) if such balancing agreement has not been entered into by the date of first

delivery of Natural Gas, the Participants and the Operator are nonetheless be

bound by the principles set forth in this clause until a Natural Gas balancing

agreement is entered into between the Participants in accordance with this

agreement.

(c) Unless prohibited by Law, the Participants may unanimously agree to dispose of

Natural Gas produced under the Petroleum Titles on a multi-Participant basis to a

common purchaser or purchasers, which multi-Participant Natural Gas disposition

agreement must, subject to the Petroleum Titles, provide for:

(i) the scope and duration of the multi-Participant disposal venture;

(ii) the relationship among the Participants being contractual only and not

creating a partnership or other recognized association.

(iii) the Participants’ rights and obligations with respect to the disposition of

Natural Gas on a multi-Participant basis, including the extent to which the

Operator is designated as the authorized representative of the Participants for

the purpose of conducting marketing studies, designing and constructing

necessary facilities, investigating financing opportunities, and negotiating

sales agreements;

(iv) the terms of sale or disposition of Natural Gas on a multi-Participant basis;

(v) the managerial structure for making decisions governing the multi-Participant

disposal venture;

(vi) the extent, if any, to which the costs of the multi-Participant disposal venture

are chargeable to the Joint Account;

(vii) the obligation of the Participants to participate in developing all Natural Gas

infrastructure necessary for such multi-Participant Natural Gas disposal, and

the multi-Participant disposition venture governing only such Natural Gas

infrastructure as is necessary to deliver Natural Gas to the point where fiscal

calculations are made for the purposes of the Petroleum Title;

(viii) the extent to which a Participant has, or is permitted to hold itself out as

having, the authority to create any obligation on behalf of the multi-

Participant disposal venture; and

(ix) no person not being a Participant to this agreement having any rights in the

multi-Participant disposal venture.



24. Joint Venture Property - Disposition of Natural Gas (Alternative clause

4.5)


4.5 Disposition of Natural Gas

Natural Gas produced from the Title Area must be taken and disposed of in accordance

with the following rules and procedures. The Participants recognise that imbalances

may arise with the result being that a Participant may temporarily have received more

than its Entitlement to Natural Gas (Overlifter). Accordingly the Participants must, in

good faith, negotiate and conclude the terms of a balancing agreement to cover the

disposition of Natural Gas produced under the Petroleum Title, regardless of whether

all of the Participants have entered into gas sales agreements for their respective

Entitlements of Natural Gas. The gas balancing agreement must include, subject to the

terms of the Petroleum Title:

(a) the right of a Non-Defaulting Participant to take delivery of Natural Gas (and

to thereby use all relevant spare capacity in facilities) in excess of its

Entitlement to Natural Gas on an ‘as available’ basis is subject to the right of

each other Participant which has temporarily received less than its

Entitlement of Natural Gas (Underlifter) to take later delivery of make-up

Gas; provided that:

(i) such make-up Gas must not in any month exceed a reasonable

percentage of total Natural Gas produced monthly from the Title Area,

as determined by the Operator; and

(ii) if any Participant takes delivery of Natural Gas in excess of its

Entitlement, such quantity shall in no month exceed [10]% of its

Entitlement to Natural Gas;

(b) the percentage of make-up Gas to be agreed in writing by the Participants or

failing agreement within 30 days after a request for agreement shall be

determined by an Expert as provided in this agreement, having regard to

relevant operational matters pertaining to the Joint Operations and any other

relevant matters. An Underlifter shall lose its right to such make-up Gas if it

has not taken delivery of the make-up Gas within 36 months after the excess

Natural Gas was originally taken;

(c) the balancing of overproduction and underproduction on a gross calorific

value basis, determined by comparison of the Natural Gas taken by a

Participant with that Participant’s Participating Interest share of production

for the period of time;

(d) Natural Gas taken by a Participant being regarded as Natural Gas taken and

owned exclusively for its own account with title thereto being in such

Participant, regardless of whether such Natural Gas is:

(i) attributable to such Participant’s Entitlement;

(ii) taken as overproduction of Natural Gas; or

(iii) taken as make-up for past underproduction of Natural Gas;



(e) no agency relationship or other relationship of trust and confidence being

created between the Participants in regard to disposition of Gas;

(f) unless otherwise agreed, the Delivery Point to be the point where fiscal

calculations are made consistent with the Petroleum Title and the Act;

(g) each Participant’s provision to Operator of such information respecting such

Participant’s arrangements for the disposition of its Entitlement of Natural

Gas production as the Operator may reasonably require in order to conduct

Joint Operations under this agreement;

(h) each Participant’s regular periodic nominations to the Operator of the amount

of such Participant’s Entitlement of total available Natural Gas production

which it wishes to accept during a defined future period, along with the

Operator’s regular periodic advice to the Participants of estimates of total Gas

production (as reasonably in advance as practicable in order to assist the

Participants to plan Natural Gas disposition arrangements). The Participants

recognise that the Operator’s estimates may vary from the actual Natural Gas

volumes produced and that, provided the Operator makes estimates under this

paragraph in good faith, the Participants rely upon any such advice and

estimates at their own risk; and

(i) if such balancing agreement has not been entered into by the date of first

delivery of Natural Gas, the Participants are nonetheless bound by the

principles set forth in this clause until a Natural Gas balancing agreement has

been entered into between the Participants in accordance with this agreement.



25. Joint Venture Property - Disposition of Natural Gas – additional

arrangements (Alternative clause 4.5(b) to (f)

Renumber Clause 4.5 as Clause 4.5(a).

Insert new sub-clauses 4.5 (b) to (f) as follows:

(b) Once the sum contributed by Participant 2 to the Joint Account equals or

exceeds $[XX ] million, Participant 2 has the exclusive right to purchase from

each of the other Participants that Participant’s Participating Interest share of the

next [ ] billion cubic feet of Natural Gas produced from the

Petroleum Titles at a price calculated in accordance with this clause.

(c) The price payable by Participant 2 for any Natural Gas purchased from a

Participant in accordance with this clause is equal to $[ ] per gigajoule

of Natural Gas adjusted as provided herein (or such higher price as Participant 2

has negotiated with a Third Party for the supply of the Natural Gas to that Third

Party) minus:

(i) any royalty payable to an Authority, and excise and other levies which

are calculated specifically in relation to the relevant Natural Gas as may

be applied from time to time;

(ii) operating costs (determined in accordance with the Accounting

Procedure) payable by Participant 2 in respect of that Natural Gas; and

(iii) all direct costs incurred in marketing the relevant Natural Gas and in

transporting it from the Delivery Point to [ ]. The

Participants agree that Participant 2 is not entitled to deduct any fee for

its marketing services under this clause. The Participants also agree

that if the point of sale is some place other than [ ], the

price payable by Participant 2 under this clause for the Natural Gas must

be adjusted to reflect the costs of delivery of the Natural Gas to that

other point of sale.

(d) The minimum price referred to in the previous sub-clause must be adjusted:

(i) annually on [ ] of each year (commencing on [ ]) by [80]% of

the annual change in the CPI (All Groups) in the 12 months to the

previous June; and

(ii) by the net amount of any additional taxes imposed on the Natural Gas or

the Joint Operations after [date].

(e) Title risk and responsibility for any Natural Gas purchased by Participant 2

from the Participants under this clause will pass to Participant 2 at the

Delivery Point.

(f) If Participant 2 exercises its right to purchase Natural Gas under this clause,

the Participants must negotiate a detailed gas sales agreement as soon as

practicable for the sale and purchase of Natural Gas on the terms set out in

this clause.



26. Joint Venture Property - Abandonment of Joint Venture Property - (Optional clauses 4.10(e) and (f))

Insert new Clause 4.10 (e) and (f) as follows:

(e) If under a Petroleum Title or the Law, the Participants must pay or contribute

to the cost of ceasing or abandoning operations then, during preparation of a

Development Plan, the Participants must negotiate a security agreement,

which must be completed and executed by all Participants participating in

such Development Plan prior to application for an Exploitation Area. The

security agreement must incorporate the following principles:

(i) a Security shall be provided by each Participant for each Year

commencing with the Year in which the Discounted Net Value equals

100% of the Discounted Net Cost; and

(ii) the amount of the Security required to be provided by each Participant

in any Year (including any security previously provided which is still

be current throughout such Year) must be equal to the amount by which

the Discounted Net Cost exceeds the Discounted Net Value.

(f) For the purposes of this clause:

Discounted Net Cost means that portion of each Participant’s anticipated

before tax cost of ceasing operations in accordance with Law which remains

after deduction of salvage value calculated at the anticipated time of ceasing

operations and discounted at the Discount Rate at the end of Year in question.

Discounted Net Value means the value of each Participant’s estimated

Entitlement which remains after payment of estimated liabilities and expenses

required to recover, save and transport such production to the Delivery Point

and after deduction of estimated applicable taxes, royalties, imposts and

levies on such production. Such Entitlement shall be calculated using

estimated market prices and including taxes on income, discounted at the

Discount Rate at the end of the Year in question. No account must be taken of

tax allowances expected to be available in respect of the costs of ceasing

operations.

Discount Rate means the rate per annum equal to the 1 month term, London

Interbank Offered Rate (LIBOR rate) for U.S. dollar deposits applicable to

the date falling 30 days prior to the start of a Year as published in London by

the Financial Times or if not published then by The Wall Street Journal.




Abandonment Security - short form (Optional clause 4.10(e) and Schedule 8)

In Clause 1.1, insert new definitions as follows:

Abandonment Security means Security provided by a Participant for Discounted

Net Abandonment Costs.

Discounted Net Abandonment Cost means the anticipated before tax cost of

Abandonment in accordance with all applicable Laws and the Petroleum Title

obligations which remains after deduction of salvage value calculated at the

anticipated time of the Abandonment and discounted at the Discount Rate at the last

day of the Year in question.

Discounted Net Value means the value of the Joint Venture Properrty which remains

after payment of estimated liabilities and expenses required to produce and transport

the final Petroleum products produced and recovered from the Exploitation Area to

the Delivery Point and after deduction of estimated applicable taxes, royalties,

imposts and levies on such products. Such value must be calculated using the actual

(to the extent known) and estimated contract prices and including taxes on income,

discounted at the Discount Rate at the last day of the Year in question. No account

may be taken of tax allowances expected to be available in respect of the costs of

Abandonment.

Discount Rate means the Agreed Interest Rate applicable on the first day to which

the relevant Abandonment Plan applies.

Insert a new Clause 4.10 (e) as follows:

(e) Upon the Operating Committee adopting an Approved Programme and

Budget for Abandonment for whole or any part of Joint Venture Property the

Operator must require each Participant to provide its Percentage Share of any

Abandonment Security provided in accordance with Schedule 8.

Insert new Schedule 8 as follows:

Schedule 8

Security for Abandonment Costs

1. Objective

The objective of this Schedule 8 is to ensure that adequate funds are available to the

Operator to pay and discharge the costs of Abandonment as and when due.

2. Application

This Schedule 8 applies:

(a) severally to each Participant in proportion to its Percentage Share; and

(b) separately in respect of each Approved Programme and Budget for

Abandonment.



3. Abandonment Security

If under the terms of a Petroleum Title or any applicable Laws, the Participants are or

may become obliged to pay or contribute to the cost of Abandonment, then the

following provisions shall apply:

(a) During preparation of a Proposed Programme and Budget for Abandonment,

the Participants must negotiate and agree a security agreement, which shall be

completed and executed by all Participants participating in the Abandonment.

The security agreement must incorporate the following principles:

(i) Abandonment Security must be provided by each Participant to the

extent of its Percentage Share for each Year commencing with the Year

in which the Discounted Net Value is equal to or les than [125]% of the

Discounted Net Abandonment Cost; and

(ii) the amount of Abandonment Security required to be provided by each

such Participant in any Year (including security previously provided

which will still be current throughout such Year) shall be equal to its

Percentage Share of the amount by which [125]% of the Discounted Net

Abandonment Cost exceeds the Discounted Net Value.

(b) Failure to provide Abandonment Security constitutes a default under this

agreement.

(c) For the purposes of this agreement and unless the context otherwise requires,

the following expressions have their respective meanings in this agreement:




Security for Abandonment costs - long form (Optional clause 4.10(e))

Insert a new Clause 4.10 (e) as follows:

(e) Upon the Operating Committee adopting an Approved Programme and Budget

for Abandonment for whole or any part of Joint Venture Property the Operator

must require each Participant to provide its Percentage Share of any

Abandonment Security provided in accordance with Schedule 8.

Insert new Schedule 8 as follows:

Schedule 8

Security for Abandonment Costs

1. Objective

The objective of this Schedule 8 is to ensure that adequate funds are available to the

Operator to pay and discharge the costs of Abandonment as and when due.

2. Application

This Schedule 8 applies:

(a) severally to each Participant in proportion to its Percentage Share; and

(b) separately in respect of each Approved Programme and Budget for

Abandonment.

3. Definitions

Unless the contest otherwise requires, terms used in this Schedule 8 which are defined

elsewhere in this agreement have the same meaning and in addition:

Abandoned JV Property means any platform, pipeline, processing plant or other

substantial item of Joint Venture Property which the Operating Committee has resolved

to abandon under an Approved Programme and Budget for Abandonment.

Abandonment Account means an interest bearing trust account to be opened by the

Operator as trustee for itself and the Participants in their Percentage Shares into which

are deposited the Cash Calls for Abandonment paid by the Participants in respect of an

Approved Programme and Budget for Abandonment under this agreement.

Abandonment Cost means the amount required (or estimated by the Operator to be

required) at any time in money of the day to pay all costs and expenses of any

outstanding Abandonment Obligations in respect of the Abandoned JV Property and to

discharge all or any obligations or liabilities of the Participants with respect to such

Abandonment.

Net Value means the value of Petroleum products produced and sold during the Run-

Down Period after deduction of all costs, expenses, obligations and liabilities

attributable thereto. Such value shall be calculated by the Operator using the Operator's

best estimates of market prices, operating costs, taxes and other government imposts,

charges and levies, tax allowances, any government grants, allowances or other

assistance given or expected to be given in relation to relevant Joint Operation or Joint

Venture Property, selling costs and other relevant factors, all over the Run-Down

Period.



Run-Down Period means the period which commences, in respect of the production of

Petroleum from a Discovery, or the operation of a processing plant, [within 6 months of

the date on which production commences or the processing plant] [from at least 10

Years before the scheduled cessation of production of Petroleum or the scheduled

closure of a processing plant as determined by the Operator], and ends when

Abandonment of the relevant Abandoned JV Property is completed.

Unit means the unit in which a Petroleum product being produced and sold is usually

measured.

4. Payment in advance of Abandonment Cost

4.1 Calculation of Abandonment Cost

The Operator must calculate the Abandonment Cost payable by the Participants by:

(a) allocating the estimated Abandonment Cost for each Year of the Run-Down

Period in proportion to the Net Value estimated to accrue in such Year;

(b) then dividing the Abandonment Cost allocated to each Year by the total number

of Units of Products expected to be produced from the relevant Discovery or to

be processed in that Year, and multiplying the result by the number of Units of

Petroleum product estimated to be attributable to each Participating Interest

during the same Year, and expressing the result as an amount per Unit of

Product (Gross Amount per Unit) and as a total sum (Gross Sum) for that

Year; and

(c) then, deducting from the Gross Sum an allowance for interest estimated by the

Operator to be earned on Cash Calls for Abandonment payable under this

Schedule 8, such interest to be calculated in respect of each Year at a rate

determined by the Operator (but not exceeding the Agreed Interest Rate) net of

any income or other tax or impost payable thereon, and thereafter apportioning

such balance Gross Sum on a per Unit basis to derive a Net Amount per Unit.

4.2 Notification of Abandonment Cost

For each Year during a Run-Down Period, the Operator must notify each Participant, in

a Proposed Programme and Budget for Abandonment for that Year, of:

(a) its estimate of Abandonment Cost, Net Value and the production profile during

the Run-Down Period for the relevant Abandoned JV Property; and

(b) each Percentage Share of Abandonment Cost for the relevant Abandoned JV

Property for the immediately following Year.

4.3 Approval of Abandonment Cost

(a) Not less than 21 days after provision of a Proposed Programme and Budget for

Abandonment, and by no later than 30 June in each Year or such other month as

the Operating Committee may determine, the Operating Committee must meet

and discuss the Proposed Programme and Budget for Abandonment for the next

Year or appropriate period and adopt, with or without amendment, an Approved

Programme and Budget for Abandonment for that Year or period.

(b) If the Operating Committee does not adopt an Approved Programme and

Budget for Abandonment, the Proposed Programme and Budget for



Abandonment must be determined by an Expert appointed under this agreement,

who must make such determination within 30 days of his or her appointment.

4.4 Payment of Abandonment Cost

(a) The Operator must in the Year before the Run-Down Period commences, and in

June of each Year during the Run-Down Period, require the Participants to pay

its Percentage Share of the Net Amount per Unit as calculated for the Year in

question as a Cash Call for Abandonment.

(b) Within 30 days of receiving Notice each Participant must pay its Cash Call for

Abandonment to the Operator, which must pay the Cash Calls into an

Abandonment Account to be opened by the Operator as trustee for itself and the

Participants in their Percentage Shares.

(c) The interest earned on the Cash Calls in the Abandonment Account accrues to

the Participants in their Percentage Shares.

(d) The Abandonment Account including all accretions must be retained and used

solely by the Operator in paying and discharging Abandonment Costs.

Following completion of Abandonment, and discharge of all and any and any

outstanding Abandonment Obligations in respect of the relevant Abandoned JV

Property, the Operator must account to the Participants for any balance of funds

remaining in the Abandonment Account.

4.5 Shortfall or excess of Abandonment Cost

If at any time the Operator determines that the estimates on which previous

Abandonment Cost calculations have been based are no longer accurate, it must notify

each Participant of:

(a) the expected shortfall or excess (if any) at the end of the then current Year of

Cash Calls for in any security in lieu as provided for in this Schedule 8;

(b) the revised Net Amount per Unit for each Participant having regard to the

shortfall or excess; and

(c) the amount of any Cash Call for Abandonment or credit which the Participant

must pay or receive forthwith.

5. Provision of security for payment of Abandonment Cost

5.1 Provision of initial security

(a) A Participant's obligation to pay Cash Calls for Abandonment under this

Schedule 8 may be deferred for and during such time as it provides security to

the Operator and the other Participants sufficient to cover payment of its Share

of the Gross Sum, and any excess calculated by the Operator, for the Year in

question.

(b) The security to be provided by a Participant must be prepared at the sole cost

and expense of the Participant giving the Security, in such form containing such

terms and conditions as the Operator and each other Participant may require.

(c) Each security must be provided within 30 days after commencement of each

Year in which a Cash Call for Abandonment is due or payable in any one or

more of the following ways:



(i) by irrevocable and unconditional guarantee given by the Ultimate Holding

Company of the Participant concerned unless the Operating Committee or

the Operator or a Participant for any reason determines that the financial

standing of such Ultimate Holding Company is unacceptable to support

such guarantee;

(ii) by irrevocable and unconditional guarantee provided by an Australian

trading bank or a prime bank (or by a finance house which the Operating

Committee determines is of equivalent financial standing to an Australian

trading bank or a prime bank) providing security to the value required; or

(iii) by means of a registered legal and equitable fixed and/or floating charge

on some or all of the property, undertakings or assets (other than assets

which are the subject of Abandonment pursuant to the provisions hereof)

of the Participant concerned, or its parent company, providing security to a

value which the Operator and each other Participant for any reason

without limitation determines is acceptable;

(iv) by a Participant establishing a special Australian interest bearing bank

account with itself and the Operator as sole joint signatories (Participant

Abandonment Account) and undertaking to lodge therein an amount per

Unit of its share of all Products sold during the Run-Down Period from

the relevant Abandoned JV Property (reduced as appropriate if other

security is given pursuant to this clause) and lodging in such account any

shortfall required to be contributed. The Participant Abandonment

Account and all accretions:

A. must be set up in such manner as the Operator and each Participant

determines is acceptable;

B. must be secured by and included in the Cross Charge given by the

Participant in favour of each Participant and the Operator; and

C. must be retained and available solely for use by the Operator only at

time of Abandonment in paying and discharging Abandonment Cost

for the relevant Abandoned JV Property.

The balance in such account remaining after all the obligations of the

Participant to pay and discharge of its Percentage Share of Abandonment

Costs has been met, may be released from the Cross Charge and paid to

the Participant;

(v) by means of an irrevocable and unconditional performance bond from a

person acceptable to the Operator and each other Participant and on terms

and conditions which the Operating Committee determines is acceptable;

(vi) by means of an assurance arrangement taken out with a person acceptable

to the Operator and each other Participant on the terms and conditions

which the Operating Committee determines is acceptable; or

(vii) by any other means which the Operator and each other Participant

considers acceptable.

5.2 Further payment or provision of security

If:



(a) the Operating Committee determines that the security provided by a Participant

for its Percentage Share of Abandonment Cost is unacceptable; or

(b) any asset which is subject of a security provided by a Participant under this

Schedule 8 is destroyed, damaged, confiscated or in any way devalued; or

(c) the Operator determines there is a shortfall in relation to a Percentage Share of

Abandonment Cost of a Participant,

the Operator must require the Participant to pay a further Cash Call or provide further

acceptable security within 30 days, as may be appropriate, to ensure that its Percentage

Share of Abandonment Cost is paid on due date.

5.3 Excess payment or provision of security

The Operator must refund any excess Abandonment Cost paid, or release any excess

security provided in lieu of payment and adjust the security accordingly, by the end of

the then current Year.

6. Default

6.1 Effect of default

If:

(a) a Participant fails to pay a Cash Call for Abandonment or fails to provide or

maintain adequate security in lieu thereof by due date; or

(b) the Operating Committee determines by Majority Vote that security given

pursuant to this Schedule 8 is or may become inadequate or unacceptable and

the Participant concerned fails to provide alternative or additional security

acceptable to the Operating Committee within 30 days of notice to that effect

then the Participant in question is in default under this agreement, that event is a Breach

Default Event or an Unpaid Monies Default Event for the purposes of this agreement

and the consequences set out in this agreement apply to that Participant.

6.2 Consequence of default

If a Participant in default of its obligation to pay or provide security for its Percentage

Share of Abandonment Cost fails to remedy the default within 30 days from the date of

default, then the other Participants which are not in default, severally in proportion to

their respective Percentage Shares, must pay or provide security to the Operator to the

extent of each of their Percentage Share of Abandonment Cost in default, in which case

all the rights of the non-Defaulting Participants on default, including all rights arising

under this agreement, or any Cross Charge or other Encumbrance, apply to the greatest

extent possible.

6.3 Remedy of default

(a) A Participant may remedy an Unpaid Monies Default Event which applies to it

save that in lieu of paying the amount in default, including interest at the Agreed

Interest Rate, the Participant may provide adequate security for such amounts in

one of the ways provided in this Schedule 8 to the satisfaction of the Operator

and each other Participant.

(b) When a default is remedied:



(i) any Cash Call paid by a Participant which is not in default must be

returned to that Participant together with the interest at the Agreed Interest

rate; and

(ii) any further security provided by a Participant must be discharged and

returned to that Participant.

7. Review

If at any time, whether before or after the commencement of the Run-Down Period, a

Participant gives notice to the Operator and the other Participants that it considers the

objectives of this Schedule 8 can be met by means more beneficial to the Participants

(taking into consideration, inter alia, tax aspects), each Participant and the Operator

must promptly meet to review this Schedule 8 in good faith and to decide whether, and

if so what changes thereto, should be agreed and put into effect.



29. Joint Venture Property – Abandonment of wells - Casing Point election

(Optional clause 4.11(c) to (i)

Amend heading to clause 4.11 to read as follows:

4.11 Abandonment of wells and Casing Point elections

After sub-clause 4.11(b) insert new sub-clauses 4.11(c) to (i) as follows:

(c) A decision by the Operating Committee to approve, as part of an Approved

Programme and Budget, the drilling, deepening, reworking, side-tracking or

plugging back of a well is not deemed to be an approval for the setting of casing

or the making of a completion attempt for production.

(d) For the purposes of this clause "Casing Point" means the time at which a well

drilled by the Operator has reached its projected depth (or such lesser depth as

the Operating Committee may decide) and all logs and tests necessary to enable

a decision as to whether to plug and abandon the well or case it as a producer

have been made and communicated to the Participants.

(e) As soon as practicable after any well drilled, deepened, reworked, side-tracked

or plugged back has reached Casing Point, the Operator must submit a proposal

to the Participants (Casing Point Election) containing the Operator's

recommendation either:

(i) to plug and abandon the well; or

(ii) to case and suspend the well as a producer in which case the proposal will

include the appropriate procedures if not previously provided and the

estimated cost.

(f) Within 1 month of the submission by the Operator of a Casing Point Election,

the Operating Committee will meet and vote on the proposal. The Participants

acknowledge that the Operator may require a vote on the Casing Point Election

to be conducted as a matter of urgency.

(g) If the Operating Committee approves the casing and suspension of a well, the

Operator is authorised to go ahead and case and suspend the well as if such work

had been approved as part of an Approved Programme and Budget. A vote by

the Operating Committee to approve the casing of a well is also a vote in favour

of an AFE for the estimated cost to case and suspend the well, if the estimated

cost was provided as part of the Casing Point Election by the Operator.

(h) If the Operating Committee decides to plug and abandon the well but less than

all the Participants vote to plug and abandon the well, the Operator will notify

the Participants of the result of the vote and any Participant which voted for the

casing and suspension of the well rather than the plugging and abandonment of

the well, has 24 hours to consider a Sole Risk Operation in respect of that well.

If no Sole Risk Proposal is given in accordance with this agreement within the

24 hour period, the Operator must plug and abandon the well.

(i) In this clause, a reference to plugging and abandoning a well includes, without

limitation, completing a water well.



30. Joint Venture Property - Area of Mutual Interest (Optional clause 4.12)


4.12 Area of Mutual Interest as Joint Venture Property

(a) If a Participant or an Affiliate or Related Entity of a Participant (including the

Operator) proposes to take up or acquire or is offered any Petroleum Title or any

interest relating to Petroleum, direct or indirect, whether under any joint venture

agreement or otherwise, in any Petroleum Title or land which is either wholly or

partially within the area depicted on the annexed map (New Petroleum Interest) the

Participant must bring to the attention of and offer in writing to each other Participant

the opportunity to acquire the New Petroleum Interest as part of Joint Venture

Property on terms not less favourable to the other Participants than terms offered, or

proposed to be offered, to a Third Participant. Each other Participant must within 14

days of receipt of the written offer, notify the Participant whether it requires the New

Petroleum Interest to be acquired as part of Joint Venture Property.

(b) A New Petroleum Interest is not included as part of Joint Venture Property unless all

other Participants so require.

(c) If a New Petroleum Interest is not included as part of Joint Venture Property the

parties must hold the New Petroleum Interest on the same terms and conditions as

this agreement, with any necessary changes.



31. Joint Venture Property - Area of Mutual Interest (Alternative clause

4.12)


4.12 Area of Mutual Interest as Joint Venture Property

(a) If at any time any Participant (which includes a person which was a Participant at any

time during the three years immediately preceding), or any of its Affiliates or Related

Entities either directly or indirectly (Acquiring Participant), has an opportunity

after the Commencement Date to acquire directly or indirectly an interest in a right or

privilege to explore for, develop, produce or take Petroleum from an area containing

any geological structure capable of holding petroleum which forms part of the Title

Area (Area of Mutual Interest), then the Acquiring Participant must promptly

notify the other Participants of the terms of that opportunity PROVIDED

HOWEVER, there is no obligation on the part of the Acquiring Participant to offer

any Participant which has withdrawn from this agreement an opportunity to

participate in such acquisition unless the Acquiring Participant obtained such

opportunity prior to the withdrawal of such Participant.

(b) For a period of 21 days after the notice (Option Period), each other Participant has

the option to participate in the acquisition upon the same terms and conditions by

giving notice to the Acquiring Participant prior to during the Option Period and, if

the opportunity is acquired by an Affiliate or Related Entity, the Participant must

procure such an option for the other Participants from the Affiliate or Related Entity.

(c) If all Participants agree to participate in the opportunity, the opportunity must be

included as part of Joint Venture Property and held under the terms of this

agreement, unless the Participants otherwise agree.

(d) If not all Participants agree to participate in the opportunity, the opportunity must be

held on the same terms and conditions as this agreement, with any necessary

changes, unless the Participants otherwise agree.

(e) The obligations under this clause survive termination of this agreement for a period

of 3 years.

(f) This clause does not apply to any opportunity otherwise offered to Participants under

this agreement,



32. Joint Venture Property – Native title (Optional clause 4.13)


4.13 Native Title Claims and Native Title Rights

(a) A Participant must promptly notify the other Participants and the Operator of

any Native Title Claims or Native Title Rights affecting the Petroleum Titles,

whether made before or after the Commencement Date.

(b) The Operator must refer to all the Participants any notification or

correspondence it receives concerning Native Title Claims or Native Title

Rights which affect the Petroleum Titles.

(c) Except with the prior written approval of all the Participants and the Operator,

a Participant must not conduct, either on its own behalf or on behalf of the

Joint Venture, any material dealings concerning Native Title Claims or Native

Title Rights affecting the Petroleum Titles and, in particular, must not notify

the Registrar of the Native Title Tribunal that it:

(i) consents, in whole or in part, conditionally or unconditionally, to a

grant of native title to an applicant; or

(ii) has reached an agreement with any applicant for native title.

(d) The Participants acknowledge and agree that in response to Native Title

Claims or to protect the Participant's interests it may become necessary for

them:

(i) to participate in site surveys or in procedures established under the Law

in respect of the Petroleum Titles or Joint Operations or both; and

(ii) to negotiate with holders of Native Title Claims or Native Title Rights

(or their representatives) either by themselves, or by the Operator as

their agent, and reach agreements in order to obtain the grant of a new

Petroleum Title or to permit the conduct of Joint Operations.

(e) Any costs or expenses incurred (including, without limitation, any

compensation) in negotiating or executing, or complying with obligations

under, an agreement with a native title claimant or holder is to be treated as

Expenditure, unless otherwise agreed.

For native title references, see:

JVA Clauses 6.2(j), 18.1 (g), 18.3;

JVA (Farmin) Clauses 2.1(b), 6.2(j), 18.1 (g), 18.3;

Farmin Agreement clauses 3.1(f), 3.3, Schedule 1

Farmout Agreement clauses 3.1(f), 3.3, Schedule 1



33. Operating Committee – Technical Committee (Optional clause 5.9)


5.8 Technical Committee

(a) The Operator must organize a Technical Committee to review operations or

proposed operations relating to the Title Area for the Joint Account pursuant to

this agreement. Each of the parties must designate a chief representative to

serve on such Committee. Each party must inform the Operator and the

Participants in writing from time to time of the names and addresses of other

members, and any alternates, designated by it to serve on the Technical

Committee. Any such representative, member or alternate may be changed at

any time by like written notice from the designating party to the other parties.

(b) Meetings of the Technical Committee must be held regularly each calendar

month, unless otherwise mutually agreed. Other meetings of the Technical

Committee may be called by any party hereto upon its own motion. The chief

representative designated by the Operator must chair the meetings of the

Technical Committee. Current matters of interest which are within the scope of

the responsibility of the Operator under the provisions of this agreement may

be placed [by any party] on the agenda for each meeting.

(c) At each meeting of the Technical Committee there must be a review of the

progress of each Approved Programme and Budget, and any Proposed

Programme and Budget and of any other matters suggested by any member

pertaining to the Joint Operations for the Joint Account. The agenda must be

prepared so as to cause adequate information concerning such Programme and

Budget and Joint Operations to be submitted to the members at each such

meeting. The chair is responsible for preparing and distributing the agenda to

each party at least 72 hours prior to each meeting. The members of the

Technical Committee are not authorized to bind the parties but may make such

recommendations to the parties for decision.

(d) The chair of the meeting must keep or cause to be kept accurate minutes of

matters reviewed and considered at each meeting. The chair must send a copy

of the minutes of each meeting promptly to each party for review prior to

adoption at the next succeeding meeting.

(e) All meetings of the Technical Committee must be held in the principal office of

the Operator in Australia unless the parties otherwise unanimously agree.

(f) If at any time following the execution of this agreement the Operator may

request a Participant to provide the services of any technical staff it considers

necessary or desirable for Joint Operations. If the Participant agrees, the costs

of such technical staff and services so made available to the Operator must be

paid for by the Joint Account.



34. Operator - Appointment of Operator as an independent contractor

(Alternative clause 6.1)


6.1 Appointment of Operator

(a) The Participants severally appoint the Operator as an independent contractor to

be the operator of the Joint Venture for the purposes of this agreement from the

Commencement Date, and the Operator accepts that appointment, on and

subject to the provisions of this agreement.

(b) The Operator is not subject to the direction and control of the Participants.

(c) The Operator must not hold itself out as the agent of the Participants as to any

obligation or liability assumed or incurred by the Operator to any third

Participant.



35. Operator – cross indemnities (Alternative clauses 6.6 and 6.7)

Delete Clauses 6.6 and 6.7 and insert new Clauses 6.6 and 6.7 as follows:

6.6 Full indemnity of Operator by Participants

Except in the case of Wilful Misconduct (unless such Wilful Misconduct is

committed or omitted at the instruction of, or with the concurrence of, the

Participants), the Participants must (pro rata in proportion to their respective

Percentage Shares) fully indemnify the Operator against all loss, damage and expense

incurred as Operator and against every claim, demand, action or proceeding brought

against the Operator by any Third Party in connection with the performance or

intended performance of the Operator's obligations in accordance with this agreement

PROVIDED HOWEVER such indemnity does not apply:

(a) in any case where the absence of insurance cover which would have

indemnified the Operator in such respects has occurred due to the Operator's

default in not taking out or maintaining insurance cover as required pursuant

to this agreement; and

(b) in respect of any loss damage expense claim demand action or proceeding

covered by insurance unless the relevant insurer shall have failed to satisfy

the relevant claim and such insurer is not entitled to the benefit of such

indemnity. In any case the Participants must advance funds to the Operator in

respect of any particular expenditure pending settlement of the claim.

6.7 Limited indemnity by Operator of Participant

In the case of Wilful Misconduct of the Operator (other than Wilful Misconduct

committed or omitted at the instruction of, or with the concurrence of, the

Participants) the Operator must indemnify and keep indemnified the Participants

against loss damage and expense incurred by the Participants and against every claim

demand action or proceeding brought against the Participants arising from such

Wilful Misconduct PROVIDED HOWEVER such indemnity does not apply:

(a) in respect of any loss damage expense claim demand action or proceeding

covered by insurance unless the relevant insurer has failed to satisfy the

relevant claim and such insurer is not entitled to the benefit of such

indemnity, and

(b) in respect of any loss damage expense claim demand action or proceeding

which is not normal loss arising or incurred in conducting Joint Operations.



36. Operator – Specific insurance clause (Optional clause 6.9)


6.9 Provision of insurances

(a) The Operator must, at all times while conducting Joint Operations, comply

fully with the applicable Laws relating to worker's compensation and

purchase, or provide protection for the Participants comparable to that

provided under standard form insurance policies for the following risk

categories:

(i) comprehensive public liability and Third Participant property damage

with combined limits of not less than $ for bodily injury and

property damage;

(ii) automobile insurance with combined limits of not less than $ ; and

(iii) adequate and reasonable insurance against risk of fire and other risks

ordinarily insured against in similar operations.

(b) If the Operator elects to self-insure, it shall charge to the Joint Venture

Account an amount equal to the premium it would have paid had it secured

and maintained a policy or policies of insurance on a competitive bid basis in

the amount of such coverage.

(c) Each Participant must self-insure or purchase for its own account such

additional insurance as it deems necessary.



37. Operator – Detailed insurance clause (Optional clause 6.9)


(a) The Operator must, at the cost of the Joint Account, at all times comply with its

obligations under the provisions of any relevant workers compensation

legislation and prior to the commencement of Joint Operations effect any

necessary insurance including that for unlimited common law liability.

(b) The Operator must further obtain and maintain in respect of Joint Operations

and Joint Venture Property all insurance required under the Petroleum Titles or

any applicable Law including, as far as possible:

(i) Cost of Well Control/redrilling and recompletion expenses/seepage and

contamination and pollution liability insurance in an amount of at least

$[100,000,000] covering expenses incurred in regaining control of wells

including materials and services necessary to bring the wells under

control, the drilling of relief wells, and costs expended to reinstate the

well to the depth and condition which existed prior to a blowout;

(ii) Comprehensive General Liability including Employers' Liability

insurance in an amount of at least $[25,000,000] covering liability to

Third Parties which may arise in connection with the Joint Operations;

(a) For aircraft owned and operated by the Operator (excluding charters)

used in connection with Joint Operations under this agreement,

passenger liability for bodily injury with a limit of $[200,000] any one

passenger or as required from time to time by the civil aviation Law in

Australia, and property damage with a limit of at least [$5,000,000] per

occurrence;

(iii) For non-owned aircraft liability insurance in an amount of at least

$[5,000,000] covering liability to third parties which may arise as a

result of aircraft owned or used in connection with the Joint Operations;

(iv) Contractors Equipment insurance with a minimum limit of

$[20,000,000] covering equipment of contractors engaged in Joint

Operations where the Participants may be held liable for loss or of

damage to such equipment whether by contract or application of any

relevant Law;

(v) All risk transportation or Marine Cargo insurance covering materials

acquired for the Joint Account, in the course of transit from the place

and time of acquisition or when title to such materials passes to the

Participants, while in transit by any land, sea, water, or air conveyance

including without time limit, all intermediate storage to the final

destination and unlimited storage at the final destination. Valuation

must be based on replacement cost with a limit for any one conveyance

of $[20,000,000].

(vi) Charters' Legal Liability Insurance with respect to liabilities assumed

by the Operator under charter agreements for the use of supply boats,

tugs, or any other vessels and including loss of or damage to the vessel,

machinery, equipment and injury or death to crew, with a combined



single limit of $[50,000,000] for any one occurrence.

(c) The Operator must obtain, if possible, such further insurance, at competitive

rates as the Operating Committee may from time to time determine.

(d) No Participant is bound to participate in any of the insurance required under

this clause, unless such insurance is required to be placed by the Operator

pursuant to any Law, if such Participant produces to the Operating Committee,

a certificate of insurance (or such other evidence of such insurance to the

Operating Committee) for similar coverage arranged for such Participant’s

Participating Interest in respect of the Joint Operations.

(e) All insurances arranged by a Participant must name the Operator and the other

Participants as additional insureds and provide that insurers waive all rights of

recourse by subrogation or otherwise against the Operator and other

Participants.

(f) The Operator must, in respect of all insurance obtained by it pursuant to this

clause:

(i) promptly inform the Participants when it is obtained and upon request

supply them with copies of the relevant policies when they are issued;

(ii) arrange for the Participants, according to their respective Percentage

Shares, to be named as additional insureds on the relevant policies and

provide for waivers of subrogation in favour of the Participants; and

(iii) duly file all claims and take all necessary and proper steps to collect

any proceeds and, if all the Participants are participating therein, credit

any proceeds to the Joint Account or if less than all the Participants are

participating therein, credit any proceeds to the participating

Participants.

(g) The Operator must use its reasonable efforts to require all contractors

performing work in respect of Joint Operations to obtain and maintain any and

all insurance required by Law and shall use its reasonable efforts to require all

such contractors to obtain from their insurer's waivers of all rights or recourse

against the Operator and the Participants.

(h) When required, the Operator or its contractor(s) at the Operator's discretion

must place in force so far as possible, prior to commencement of construction

of Joint Venture Property, “All Risks" Course of Construction Insurance

covering loss or damage to the Joint Venture Property in course of construction,

including all machinery, materials and supplies on the premises of the Property

or in transit thereto and intended to become part of the finished Joint Venture

Property and while there awaiting erection and during erection, testing and

until:

(i) the Joint Venture Property is mechanically complete as a whole;

(ii) the Joint Venture Property is being operated by the Operator, and;

(iii) the Joint Venture Property has processed substances for a period of not

less than 30 days.



38. Functions, powers and duties of Operator – Rights, powers and

duties of operator – Safety Case (Optional clause 7.2(k))

Insert a new Clause 7.2(k) as follows:

(k) (Safety Case) adopt and implement a Safety Case, being a document which:

(i) identifies the hazards and risks;

(ii) describes how the risks are controlled; and

(iii) describes the safety management system in place to ensure the controls

are effectively and consistently applied,

for each phase of field activity carried out in Joint Operations or in a Sole Risk

Operation, or the equivalent document required under the applicable

Occupational Health & Safety Law;

Renumber Clause 7.2(k) as Clause 7.2(l), and renumber all subsequent sub-clauses..



39. Functions, powers and duties of Operator – Rights, powers and

duties of operator – short form (Alternative clause 7.2)


The duties, obligations and responsibilities of the Operator include but are not limited

to:

(a) the preparation of Proposed Programmes, Budgets and AFEs pursuant to this

agreement;

(b) the implementation of Approved Programmes, Budgets and the relevant AFEs

approved by the Operating Committee;

(c) the obtaining and maintenance in respect of Joint Operations and Joint Venture

Property of all insurance required under this agreement or the Petroleum Titles

or any Law;

(d) subject to being provided with sufficient funds by the Participants, the

obligation to keep and maintain the Petroleum Titles in force and effect;

(e) the provision to each Participant of reports, data and information concerning

Joint Operations and Joint Venture Property in accordance with this agreement;

(f) the obtaining of all requisite property, rights, labour, goods and services for

Joint Operations and Joint Venture Property;

(g) the direction and control of the Joint Account and all statistical and accounting

services;

(h) provision of technology, data, information and all technical and advisory

services required for the efficient performance of Joint Operations;

(i) whenever directed by the Operating Committee the obtaining of any necessary

Petroleum Title or other Authorisation required by the Participants in relation to

Joint Operations or Joint Venture Property; and

(j) the preparation, implementation and operation of environmental management

programs and environmental due diligence programs relating to Joint

Operations (or Sole Risk Operations), as directed and approved by the

Operating Committee.



40. Operator - Nomination of Operator for greenhouse emissions reporting,

where the Operator is not a Participant (Alternative clause 7.3)

Note: Under the Model Petroleum JOA, the Operator may or may not be a Participant. However, clause 7.3 of the Model Petroleum JOA assumes, for the purposes of the NGER Act, that the Operator is also a Participant. This clause 7.3 is intended for use as an Alternative where the Operator is not a Participant.


7.3 Greenhouse emissions reporting 1

(a) The Participants may by Unanimous Vote agree to nominate the Participant

who, together with its Related Bodies Corporate, has the greatest Participating

Interest as the responsible entity for the Joint Venture for the purposes of the

NGER Act. If there is such a vote:

(i) the Participants agree to do all things necessary to effect that

nomination as soon as practicable in accordance with the requirements

of the NGER Act; and

(ii) the nominated Participant agrees not to revoke its nomination as the

responsible entity for the Joint Venture unless it provides at least 12

months’ prior written notice to the other Participants.

(b) The Operator agrees to supply:

(i) each Participant; or

(ii) where a single Participant has been nominated as the responsible

entity, the nominated Participant

with all information in relation to the greenhouse gas emissions, energy

production and energy consumption attributable to the activities of the Joint

Venture to the extent and in the manner reasonably required for those

Participants and their Related Bodies Corporate to comply with any

obligations imposed on them under the NGER Act.

(c) The Participants authorise the disclosure and use of information by the

Participants and their Related Bodies Corporate for the purpose of complying

with any obligations imposed on them under the NGER Act.

(d) Where a single Participant has been nominated as the responsible entity, the

Participants agree, on demand and in proportion to their respective Percentage

Shares, to reimburse the nominated Participant for such costs as it and its

Related Bodies Corporate reasonably incur for the purpose of complying with

the NGER Act to the extent that those costs are reasonably attributable to the

activities of the Joint Venture.

Insert in Schedule 1 under the heading “Matters requiring a Unanimous Vote“:

1. Nomination of a Participant as the responsible entity under the NGER Act

(clause 7.3).

1 If the Operator is also a Participant, use the next Alternative Clause 6.2.



NOTES:

This clause is only appropriate for use if the Operator does not, as an objective matter, have ‘operational control’ of the Joint Venture facilities. In many joint ventures, it is likely the Operator will have operational control.

This clause is designed to ensure that a responsible entity nomination is not unilaterally revoked by the nominated entity as this can cause considerable administrative difficulty for the other Participants;

No provisions are included in this or the subsequent Alternative clause regarding:

the installation/operation of infrastructure and systems necessary to enable the estimation/collection/ measurement/reporting of the data in accordance with the requirements of the NGER Act;

the manner in which that would be funded;

liability/indemnity for inaccurate or untimely provision of information (e.g. as where the Operator is providing it to the responsible entity); or

the potential impact of the CPRS legislation (which may enable a controlling corporation to transfer reporting responsibility to a subsidiary if the subsidiary agrees, although the CPRS legislation is likely to undergo some change in this regard).



41. Operator – Nomination of Operator for greenhouse emissions reporting,

where the Operator is a Participant (Alternative clause 7.3)

Note: Under the Model Petroleum JOA, the Operator may or may not be a Participant. However, clause 7.3 of the Model Petroleum JOA assumes, for the purposes of the NGER Act, that the Operator is also a Participant. This clause 7.3 is more specific in terms of its authorisation and nomination of the Operator under the NGER Act.

7.3 Greenhouse emissions reporting

(a) The Participants authorise the Operator to prepare, introduce and implement

such operating, health and safety, and environmental policies and to take

any other steps necessary for it to have 'operational control' (as defined

in the National Greenhouse and Energy Reporting Act 2007 (Cth)

(NGER Act)) over the activities of the Joint Venture and the Operator

agrees to undertake such responsibilities on behalf of the Participants.

(b) The Participants agree to nominate the Operator as the responsible

entity for the Joint Venture for the purposes of the NGER Act and to do

all things necessary to effect that nomination as soon as practicable in

accordance with the requirements of the NGER Act.

(c) The Operator agrees not to revoke its nomination as the responsible entity for

the Joint Venture except with the prior written consent of all the other

Participants.

(d) The Participants authorise:

(i) the Operator to use and disclose; and

(ii) the Operator to disclose to any of its Related Bodies Corporate, and

those Related Bodies Corporate to use and disclose,

all information in relation to the greenhouse gas emissions, energy

production and energy consumption attributable to the activities of the Joint

Venture to the extent and in the manner reasonably required for the Operator

and its Related Bodies Corporate to comply with any obligations imposed

on them under the NGER Act.

(e) The Participants agree, on demand and in proportion to their respective

Percentage Shares, to reimburse the Operator for such costs as it or its

Related Bodies Corporate reasonably incur for the purpose of complying

with the NGER Act to the extent that those costs are reasonably attributable

to the activities of the Joint Venture.

NOTES:

1. The Operator incurs the associated reporting liability not as an agent but as a principal where operational control vests in the Operator.

2. It is necessary to deal with the fact that it is the ultimate Australian holding company of the relevant entity that will actually have the reporting obligation and, possibly, incur these costs.

Note also that this clause is designed to ensure that:



(a) a responsible entity nomination is not unilaterally revoked by the nominated entity as this can cause considerable administrative difficulty for the other Participants;

(b) the use and disclosure of the information is authorised e.g. such information may be reported to the Greenhouse and Energy Data Officer or to related bodies corporate (who in turn report it to the Officer) - the extension to Related Bodies Corporate is necessary because reporting liability sits with the top Australian holding company of the Operator, the Participants or the responsible entity (depending on the circumstances); and

(c) the reimbursement of reporting costs incurred in connection with Joint Operations.



42. Functions, powers and duties of Operator – Well and reservoir

reports (Alternative clauses 7.1(f) and 10.2(c))

In clause 1.1 insert the following definition:

Well and Reservoir Reports means Information in reports produced or compiled

from Joint Operations (to the extent charged to the Joint Account) to be provided by

the Operator to the Participants as set out in Schedule 8.

In Clauses 7.1(f) and 10.2 (c) delete “well and reservoir reports” and insert “Well and Reservoir Reports”.

Insert a new Schedule 8 as follows:

Schedule 8

Well and Reservoir Reports [Indicative List only]

Information on Wells, reservoirs and Joint Operations required to be provided by the

Operator to the Participants in the following report types and frequency or timing:

Well and Reservoir Report Frequency/Timing

1. The date of spudding in of a Well Immediate notice by

facsimile or electronic mail.

2. Digital copies of all 3-D seismic data, and in a mutually

agreed standard format for 2-D seismic data, including

copies of all logs or surveys.

As soon as is reasonably

practicable.

3. Daily drilling, workover and Completion progress reports

(daily reporting) and weekly drilling, workover,

Completion, plugging back or Abandonment and

decommissioning summary reports to include an estimate of

cumulative progress and costs. Mud log data and other

similar data gathered during drilling to be forwarded daily

after validation by the Operator.

Daily.

4. All raw data acquired by Operator concerning any well

(including well logs, well tests, wireline or drill stem tests

and core analyses) and any interpretations or studies carried

out by or for the Operator on well data for the Joint

Account. Field logs, transmitted by facsimile, and one (1)

reproducible copy of any logs as run and any surveys made

in respect of any well and, upon completion of a Well, a

final well recap report, copies of all electric logs and mud

logs and a tape of logs so recorded.

On a live basis where

available, otherwise daily.

5. Daily drilling and geological reports, and copies of all tests

and core data and analysis reports.

Daily.

6. Intermediate and final geotechnical reports, drill stem and As soon as is reasonably



well test reports, and core analysis reports. practicable.

7. An individual set of washed and unwashed well drill

cutting samples, or access to cuttings if insufficient

samples exist.

If requested by a

Participant, as soon as is

reasonably practicable.

8. Allotments of core, formation waters and Petroleum, or

access to samples if insufficient amounts remain after the

Operator's analysis.

If requested by a



9. A listing of the field data and source tapes which must be

made available for inspection and, if requested, reproduced

at the cost of the Participant requesting them.

If requested by a



10. Well proposals, location reports, site survey reports and

programmes for drilling, workover, Completion, plugging,

Abandonment and decommissioning are to be provided

before filing with any Authority.

Within a reasonable time

before filing with an

Authority.

11. Copies of plugging reports and final well recap report. As soon as is reasonably

practicable.

12. Copies of final geological and geophysical maps and reports

(in digital format) including base maps, seismic and

geological sections, montages and display, and shot point

location maps.


practicable.

13. Geoscience and engineering studies, including subsurface

interpretative maps, subsurface digital models, reserve

estimates, reservoir management plans and reports and

supporting material


practicable.

14. Reports on engineering studies, pre-development and

development schedules and progress reports on pre-

development and development projects and subsequent

capital projects, which must at least depict the status of each

such project from inception to date, its cumulative costs to

date and the commitments taken.

Monthly, or at a frequency

as otherwise directed by the


15. Daily field production raw metering data output, and

monthly production reports split by field, by well and by

component; and monthly field and well performance reports,

including reservoir studies and reserve estimates

Within 20 Days after the

end of the production

month.

16. Three year production, operating and capital expenditure

forecasts on a Yearly basis with the budget year on a

monthly basis. Operator must also use reasonable

endeavours to provide high level forecast information on

production, operating and capital expenditures for an

To be submitted with the

annual Work Programme

and Budget.



additional two Years.

17. Copies of all material reports relating to Joint Operations

or the Petroleum Titles furnished by the Operator to all

Authorities and any other material studies and reports

relating to Joint Operations if requested by a Participant

and as practicable, prior to filing with any Authority, and

in any event after filing, all reports and other

documentation (other than routine administrative

documentation) relating to Joint Operations (including

safety and/or environmental performance statistics and

incident reports and/or any reports, records or information

to be provided by the Operator to any Authority;


practicable.

18. Monthly report for all Joint Operations, summarising key

operating performance and capital projects data with a

summary of all Joint Operations and related activities

with updated schedules of events, and including reports

on all scheduled and unscheduled downtime. These will

include such indicators of safety and environmental

performance (including leading and lagging indicators) as

the Operating Committee may designate from time to

time. One such report shall be an annual summary and

must include summary statistics reported on a monthly

basis with a discussion of significant events during the

year including current programmes, current and emerging

issues, status of regulatory compliance, parameters used

to monitor performance, and plans and objectives for the

coming Year

Monthly, with annual

summary.

19. Gas balancing reports and gas balance ledgers, if

produced as part of Joint Operations


practicable.

20. All other reports carried out or commissioned by the

Operator which have been charged to the Joint Account

As instructed by the


21. Such additional information as a Participant may

reasonably request, provided that the requesting

Participant pays the costs of preparation of such

information and that the preparation of such information

does not unduly burden the Operator’s administrative and

technical personnel


practicable.

22. Such other reports as are directed by the Operating

Committee

As directed by the

Operating Committee



43. Functions, powers and duties of Operator – Drilling, testing,

logging and reporting (Optional clause 7.10)


7.10 Drilling, testing, logging and reporting

(a) For each well drilled under this agreement the Operator must provide each

Participant with:

(i) details of all conclusions reached as a result of evaluation of data

concerning the well;

(ii) prompt notice by facsimile or email of the spud date of the well;

(iii) daily drilling and geological reports;

(iv) prompt notice by facsimile or email of any occurrence which the Operator

considers might justify a change from the Approved Programme and

Budget, together with a recommendation from the Operator of the change

that the Operator considers appropriate;

(v) on request, at the expense of and requesting Participant, a complete set of

washed samples of the cuttings of the formations penetrated;

(vi) access to all cores taken; and

(vii) access to the drilling rig site to view the Joint Operations on the terms of

this agreement.

(b) With respect to any well drilled under this agreement, the Operator must:

(i) be available to receive the comments of and discuss with the Participants

any advices given by the Operator pursuant to this clause;

(ii) proceed in all material respects in accordance with the Approved

Programme and Budget, or any amendment thereof, unless or until such

time as the Operating Committee directs otherwise;

(iii) take representative mud samples and drill stem test fluid samples; and

(iv) supply each Participant with copies of the test and service report on each

test run.

(c) During the drilling of a well and upon a well reaching its total depth, the

Operator must run all log surveys as are considered necessary by the Operator or

requested by the Participants participating in the well and must promptly supply

each Participant with a copy of each log so run in digital format.

(d) Upon receipt of a request from a Participant (which request may be made by

email or facsimile) that the Operator test an interval in the well, the Operator

must promptly put such a proposal to the Operating Committee for approval by

it and may request that the Operating Committee vote on that proposal.

(e) The Operator must supply each Participant at the expense of the Joint Account:



(i) copy of all geological and geophysical surveys, sections and reports and

maps and (if requested by a Participant at the cost of that Participant)

copies of the magnetic tapes in digital format;

(ii) the well completion report for each well;

(iii) if a well is dry, a copy of the plugging record showing that such well has

been plugged and abandoned; and

(i) any other major reports prepared in connection with Joint Operations.



44. Functions, powers and duties of Operator – Safety Case - Health,

safety and environment (Optional clause 7.11)


7.11 Health, safety and environment

(a) Not later than [30th November] in each Year following approval of a

Development Plan, the Operator must prepare and submit to the Operating

Committee for its [approval/review] a plan of Health, Safety and

Environment (“HSE”) matters containing the policies which will govern the

Joint Operations and the objectives and targets for the following Year

consistent with Good Australian Oilfield Practice. Such HSE plan must take

into account any policies, objectives and targets decided by the Operating

Committee and include an assessment of the health, safety and environmental

impact of the Joint Operations.

(b) The Operator must conduct Joint Operations and any Sole Risk operations in

acccordance with the HSE plan.

(c) The Operator must report regularly on the implementation of the HSE plan

referred to above and must promptly advise the Operating Committee of any

matter arising out of or in connection with Joint Operations which may affect

such plan such as an occurrence that could have a negative impact on the

environment or could cause any serious illness, injury or death.

(d) The Operator must prepare and submit to the Operating Committee for its

approval a programme for regular HSE audits to be performed by the

Operator. Each Participant has the right to join such audit upon reasonable

notice given to the Operator. The costs of conducting an HSE audit must be

charged to the Joint Account.



45. Functions, powers and duties of Operator – Employees and

secondees (Optional clause 7.12)


7.12 Employees and Secondees

(g) Subject to the provisions of any approved Programme and Budget, the Operator

may determine the number of employees employed, and persons hired under

contracts for services, by the Operator in connection with the Joint Operations,

and their selection, hours of work and remuneration.

(h) The Operator may request that Participants second to the Operator suitable

management and technical personnel for particular Joint Operations, and each

Participant may propose secondees for particular Joint Operations, on terms and

conditions acceptable to the Operator. However neither the Operator nor a

Participant is required to accept or provide any proposed secondee.



46. Functions, powers and duties of Operator – Contracts (Optional clause 7.13)


7.13 Contracts

The Operator must use all reasonable endeavours to include in all contracts made

as agent on behalf of the Participants pursuant to this agreement provisions in the

following or similar form:

“The Operator enters into this contract for itself and as agent for and on behalf of

the Participants of the [name] Joint Venture, but notwithstanding this:

(a) the Contractor agrees to look only to the Operator for the due performance

of the Contract and nothing contained in the Contract imposes any liability

upon, or entitle the Contractor to commence any proceedings against any

Participant other than the Operator;

(b) the Operator and only the Operator is entitled to enforce the Contract on

behalf of all Participants as well as for itself. For that purpose the Operator

shall commence proceedings in its own name to enforce all obligations and

liabilities of the Contractor and to make any claim which any Participant

may have against the Contractor.

(c) all losses, damages, costs (including legal costs) and expenses recoverable

by the Operator pursuant to the Contract or otherwise shall include the

losses, costs (including legal costs) and expenses of the Participants and

their Affiliates except that such losses, damages, costs (including legal

costs) and expenses shall be subject to the same limitations or exclusions

of liability applicable to the Operator or the Contractor under the Contract.



47. Functions, powers and duties of Operator – Contracts (Alternative

clause 7.13)


7.13 Contracts

(a) The Operator must take all reasonable steps to obtain competitive tenders on

proposed contracts for the Joint Operations where the cost thereof is or is likely

to exceed the Contract Limit as may from time to time be determined by the

Operating Committee, except where in the opinion of the Operator it is

necessary for emergency reasons or not practicable to obtain competitive

tenders, or except as otherwise determined by the Operating Committee.

(b) For any proposed contract for the Joint Operations where the cost proposed will

or is likely to exceed:

(i) in the case of contracts for drilling and construction operations and all

contracts under a Proposed Development Plan and Budget (other than

for technical services or seismic operations) - $[1,000,000]; and

(ii) in the case of contracts for technical services and seismic operations

and all contracts under a Proposed Program and Budget (other than for

drilling and construction operations) - $[500,000],

or, subject to CPI escalation, such other amounts as the Operating Committee

may from time to time determine, the Operator must, unless otherwise agreed

by the Operating Committee:

(iii) provide to the Participants a list of the persons to be invited to tender

(including any sub-contractors) together with the terms of the tender

and any pro forma documents that are part of the tender process, and

seek competitive sealed bids from the persons named in the list so

provided;

(iv) after the expiration of the period allowed for tender, and the bids have

been opened, report to the Participants details of all bids received and

any rebids, amendments to bids and subsequent negotiations; and

(v) make a recommendation to the Participants.

(c) At the same time, the Operator must request the Operating Committee to

approve by Facsimile within 7 days, or any further period approved by the

Operating Committee, the terms of the recommended bid, and failure by a

Participant to cast its vote within the relevant period is deemed a vote by that

Participant for the recommended bid.

(d) The Operator must, at the request of any Participant, provide to any Participant,

copies of any particular contract or contracts related to the Joint Operations in

the Operator's possession.

(e) Where the Operator enters into any contract for the Joint Account it is agreed

and acknowledged that the Operator must;

(i) do so solely as agent for the Participants severally in proportion to their

respective Percentage Interests and not as principal and notwithstanding



that the names of the Participants do not appear on any such contract or

the Operator does not disclose the existence or identity of any

Participant as principal or the role and capacity of the Operator as

agent; and

(ii) use its best endeavours where practicable to disclose the existence and

identity of each Participant as a principal and its Participating Interest.

(f) Subject to the operator observing the terms of this clause, each Participant must

severally indemnify and keep indemnified the Operator from and against all

and any obligations and liabilities it may incur under such contract for or in

respect of Joint Operations or Joint Venture Property.

(g) The Operator must take all reasonable steps to ensure that all contracts entered

into by it for the Joint Account are assignable to the Participants or a successor

Operator.

(h) The Operator must not, without the prior written approval of the Operating

Committee, contract with a Participant or an Affiliate or Related Entity where

the expenditures are estimated by the Operator to exceed $500,000. Failure of

the Operator to fulfil its obligations under this sub-clause does not affect the

liability of the Participants to contribute their Percentage Interest share of all

costs and expenses associated with such contract.



48. Functions, powers and duties of Operator – Representation

(Optional clause 7.14)


7.14 Representation

(i) Pursuant to its right and obligation to represent the Joint Venture in all dealings

with all Authorities and Third Participants, unless otherwise directed by the

Operating Committee, and save for any routine correspondence which the

Operator is obliged by legislation to submit to the Authorities, the Operator

must provide to each Participant in advance a copy of any material

correspondence which it proposes to provide to the Authorities or any Third

Participant in relation to the Joint Operations and shall obtain the consent of

each Participant to the content of any such correspondence which purports to

represent the views of such Participant.

(j) Where the Operator has been informed or has reason to believe that matters of

material importance to the Participants are to be discussed at a meeting, it shall

give as much advance notice as is reasonably practicable to the Participants of

such meeting together, where practicable, with any agenda, briefing papers or

presentation materials and shall consult with the Participants in relation to such

meeting and report promptly thereafter. Any Participant shall be entitled to

attend such meeting.

(k) The Operator must furnish to each Participant a copy of all significant

correspondence to and from any Authority relating to the Joint Venture.



49. Functions, powers and duties of Operator – Litigation (Optional clause 7.15)


7.15 Litigation

(l) All matters relating to the enforcement or defence of rights in respect of or

arising out of Joint Operations must be determined by the Operating Committee.

(m) All actions taken by the Operator, and all liabilities incurred, pursuant to

litigation under this clause is for the Joint Account and the payment of such

liabilities constitutes Joint Expenditure.

(n) The Operator must promptly notify the Participants of any claim, litigation, lien,

demand, or judgment relating to the Joint Operations where the total amount in

dispute and/or the total amount of damages together with any costs are

estimated by the Operator to exceed $[100,000].

(o) The Operator is authorised to prosecute, pursue, defend or settle any claim,

litigation, lien, demand or judgment relating to the Joint Operations where the

total amount in dispute and/or the then total amount of damages together with

any costs are estimated by the Operator to be less than $[100,000].

(p) The Operator must not, except at the direction of the Operating Committee,

prosecute, pursue, defend or settle any claim, litigation, lien, demand or

judgment relating to the Joint Operations where the then estimated total amount

in dispute and/or the total amount of damages together with any costs is

$[100,000] or greater.

(q) Each Participant must promptly notify the other Participants of any claim,

litigation, lien, demand or judgment relating to the Joint Operations and must

not conduct such proceedings in such a way as to prejudice affect or vitiate any

insurance effected pursuant to this agreement.

(r) Notwithstanding the other provisions of this clause, each Participant has the

right to participate in any prosecution, defence or settlement of any proceedings

conducted pursuant to this clause at its sole cost and expense PROVIDED that a

Participant exercising such a right must remain liable for its share of Joint

Venture costs.

(s) Any Participant participating in the prosecution, defence or settlement of any

proceedings must at all times take all reasonable steps to ensure that it does so

in such manner as does not prejudice the rights of any of the other Participants.

(t) The provisions of this clause does not apply to claims, litigation, liens, demands

or judgments made brought or obtained by a Participant against another

Participant.



50. Functions, powers and duties of Operator – Alcohol and drugs



7.16 Alcohol and drugs

The Operator must establish and maintain an alcohol and drugs policy and

enforcement procedure, which prohibits employees and agents, contractors and

subcontractors and invitees in any area in which Joint Operations are being

undertaken from:

(u) performing services while under the influence of alcohol or any controlled

substance;

(v) misusing legitimate drugs or possessing, using, distributing or selling illicit or

unprescribed controlled substances; or

(w) save in limited circumstances under arrangements approved by the Operator’s

senior management, possessing, using, distributing or selling alcoholic

beverages.



51. Functions, powers and duties of Operator – Conflicts of interest



7.17 Conflicts of interest

The Operator must avoid any conflict of interest between its own interests and the

interests of the Participants in dealing with suppliers, customers and all other

organisations or individuals doing or seeking to do business with the Participants in

connection with Joint Operations, provided that the provisions of this clause do not

apply to:

(x) the Operator’s performance which is in accordance with the local preference

laws or policies of an Authority; or

(y) the Operator’s acquisition of products or services from an Affiliate or a

Related Entity, or the sale thereof to an Affiliate or Related Entity, made in

accordance with the terms of this agreement.



52. Programmes, Budgets and Cash Calls – Miscellaneous

expenditure (Optional clause 8.4(c))

Insert new Clause 8.4(c) as follows:

(c) In addition to all expenditures approved or deemed to be approved in any

AFE, the Operator is authorised to expend on Joint Operations at its sole

discretion up to $[200,000] in any one Year. To the extent that any such

expenditure is subsequently approved by an AFE or AFEs, the balance of

Operator’s authority under this clause must be restored.



53. Programmes, Budgets and Cash Calls – Banking of funds



8.6 Banking of funds

(a) All funds received by the Operator under this agreement (other than funds

received for the purpose of a Sole Risk Operation) must be lodged by the

Operator in a Joint Venture bank account in Australia maintained by the

Operator for the purposes of the Joint Operations. Pending expenditure in

accordance with this agreement, funds advanced by any Participant must be

held by the Operator in trust for the respective Participant.

(b) Each Participant is entitled to receive or be credited with any interest earned

on its funds while they are held on trust by the Operator.

(c) The Operator is authorised to withdraw funds from the Joint Venture bank

account as required to pay Joint Expenditure.



54. Programmes, Budgets and Cash Calls – Feasibility Study and

Development (Optional clauses 8.6 and 8.7)

In clause 1.1 insert the following definitions:

Development Programme and Budget means a work programme and budget for the

devlopment of a Discovery containing sufficient details to enable each Participant to

give it proper consideration.

Sole Risk Election Notice has the meaning given in clause 13.2.

Insert new Clauses 8.6 and 8.7 as follows:

8.6 Feasibility study

(a) As soon as practicable (but not later than 21 days) after the Operating

Committee has considered the information obtained from an Appraisal Well in

respect of a Discovery, the Operating Committee must determine whether or

not such Discovery has resulted in the delineation of Petroleum in commercial

quantities sufficient to warrant the preparation of a feasibility study

(Feasibility Study) regarding development of the Discovery (Decision to

Prepare a Feasibility Study), or whether it is appropriate to apply for a

Retention Lease or similar form of Petroleum Title.

(b) If the Operating Committee makes a Decision to Prepare a Feasibility Study, it

must instruct the Operator to prepare and submit an AFE to the Participants for

a Feasibility Study in respect of such Discovery. Approval of this AFE does not

constitute approval of a Development Programme and Budget.

(c) If the Participants do not unanimously agree on a Decision to Prepare a

Feasibility Study or apply for another Petroleum Title, then each of the

Participants which voted in favour of the Decision to Prepare a Feasibility

Study is separately entitled to give a Sole Risk Election Notice with respect to

the Feasibility Study, subject to the rights of the Participants who voted against

the Decision to Prepare a Feasibility Study or who do not elect to proceed with

the Feasibility Study as a Sole Risk Operation to elect to buy back into the

Feasibility Study under the terms of this agreement.

(d) The costs of the Feasibility Study and any other work conducted by the

Operator pursuant to this clause are for the account of all Participants

participating in the Feasibility Study (in proportion to their respective

Percentage Shares), including any Participant which elects to buy back into

such Feasibility Study.

(e) The Feasibility Study must consider, inter alia, all production technique

alternatives and all material economic factors.

(f) If there is more than one Feasibility Study is proposed and prepared in respect

of a Discovery then:

(i) the Feasibility Study which has the support of a Simple Majority Vote,

or, failing such level of support; then

(ii) the Feasibility Study which has the support of Participants who hold the

greatest aggregate Percentage Shares or, if the Feasibility Studies are



equally supported on this basis, then,

(iii) the Feasibility Study which has the support of the greatest number of

Participants,

is the Feasibility Study to be reviewed for the purposes of deciding whether to

develop the Discovery.

8.7 Development Programme and Budget

(a) If, following review of the Feasibility Study by the Participants therein, they

decide to develop the Discovery, as soon as practicable after such decision the

Operator must submit to those Participants a proposed Development

Programme and Budget for the Discovery based on such Feasibility Study

which shall include but not be limited to:

(i) the Operator's recommendation as to the block or blocks in the Title

Area to be included in the nominations under the Law for the purpose

of the making of a declaration as to a location;

(ii) the projects and other work to be undertaken;

(iii) a preliminary estimate of operating costs for the first year of Joint

Operations;

(iv) the manner in which the development is to be managed;

(v) an estimate of the date of commencement of production and the annual

rates of production; and

(vi) a formula to be adopted for the Operator's general overhead costs under

the development and production budgets.

(b) The proposed Development Programme and Budget is subject to consideration,

revision and approval by Majority Vote of the Operating Committee. The

Operating Committee must by Unanimous Vote of those Participants

participating in the development approve or reject the Development

Programme and Budget within 90 days of its submission.

(c) If the Operating Committee does not approve the Development Programme and

Budget by Unanimous Vote of the participating Participants, the Operating

Committee may direct the Operator to prepare a new Development Programme

and Budget for submission to the Operating Committee and until such new

Programme and Budget has been submitted to, considered by, and is either not

approved or is rejected by the Operating Committee, no other Participant is

entitled to prepare a Development Programme and Budget as a Sole Risk

Operation.

(d) If all Participants decide to participate in the development of the Discovery the

Operator is authorised and obliged to proceed in accordance with it as a Joint

Operation.

(e) If a Development Programme and Budget, whether as a Joint operation or a

Sole Risk Operation , the Operator must as and when instructed by the

Operating Committee nominate the block or blocks in the Title Area selected

by the Operating Committee for nomination as a location and must submit an



application to the relevant Authority on behalf of the participating Participants

for a Production Licence in respect of so much of the area of the location

declared by the participating Participants for the development of the Discovery.

(f) The Operator and the Participants must use their best endeavours to ensure

such Production Licence is obtained. The Participants which have not decided

to participate in the development of the Discovery within the time specified in

this agreement are deemed to have withdrawn from the applicable part of the

Title Area.

(g) Each participating Participants has the right to nominate its technical personnel

to work in the office or offices of the Operator while the Operator is preparing

a proposed Development Programme and Budget for a Discovery under this

clause at times and periods acceptable to the Operator. The Operator must keep

such personnel fully informed of its planning for and preparation of the

proposed Development Programme and Budget.

Insert in Schedule 1as follows:

Sole Risk Operation Buy-Back Premium

Item Sole Risk Operation Buy-Back Premium

6. Decision to Prepare a Feasibility Study [500] %

7. Development Programme and Budget [800] %



55. Insurance and litigation (Optional clause 8)

Insert new Clause 8 headed and insert Insurance and litigation, and

renumber subsequent clauses.

. Insert the following new clause 8.

8. Insurance and litigation

8.1 Operator to maintain insurance

(a) The Operator must at all times while conducting Joint Operations purchase and,

subject to a Participant’s right to opt out of the insurances, maintain, for the

Joint Account for the protection and indemnification of the Participants:

(i) all such insurances as are required by terms of the Petroleum Titles;

(ii) personal injury insurance and property damage insurance in respect of

motor vehicles of all kinds engaged in Joint Operations for a minimum

of $5,000,000 or such other amount as the Operating Committee may

from time to time determine;

(iii) worker's compensation (including unlimited common law risk)

employer's liability and other insurance of a similar nature or as may be

required by law;

(iv) public and products liability Insurance for a minimum of $10,000,000 or

such other amount as the Operating Committee may from time to time

determine;

(v) industrial special risks Insurance in respect of all Joint Property for such

amount as the Operating Committee may from time to time determine;

(vi) well control (on Drilling wells), pollution, seepage, clean up and

redrilling insurance (including underground blowout and replacement

redrill) for a minimum of $10,000,000 or such other amount as the

Operating Committee may from time to time determine;

(vii) insurance in respect of stocks of Petroleum held prior to arrival at the

Delivery Points in such amount as the Operating Committee must from

time to time determine;

(viii) where applicable, aircraft charterer's insurance;

(ix) well control (on producing wells) insurance for a minimum of

$5,000,000 or such other amount as the Operating Committee may from

time to time determine; and

(x) such other insurances or indemnities as the Operating Committee may

from time to time determine.

(b) Notwithstanding the above, the Operator is not be required to take out any

insurances described in this clause if any of the following apply to the relevant

insurance:

(i) the premium for such insurance is so high as to be prohibitive in the

reasonable opinion of the Operator;



(ii) if the Operator determines that the insurance is not necessary or

desirable given the stage of the Joint Operations at the Effective Date (in

which case, the Operator is required, subject to the other provisions of

this Clause, to take out the relevant insurance as soon as the Operator

determines it is necessary or desirable);

(iii) subject to a Participant’s right to opt out of the insurances, each of the

Participants does not contribute its share of the premium for such

insurance in advance or in response to cash calls by the Operator; or

(iv) the relevant insurance is not available or not available on commercial

terms as determined by Operator.

8.2 Naming of Participants as co-insured

The Operator and the other Participants and other persons for whose benefit any policy

of insurance is effected under this clause must be named as co-insureds therein. The

Operator must ensure that each such policy of insurance contains:

(a) a waiver of the right of subrogation by the insurer in favour of all of the

Participants; and

(b) a cross liabilities clause to the effect that for the purposes of the policy each

Participant participating therein and other person comprising the insured must

be considered as a separate unit and the policy must apply to each such

Participant or other person in the same manner as if a separate policy had been

issued to each of them in its name alone and the insurer waives all right of

subrogation or action which it may have or acquire against any such Participant

or other person.

8.3 Advice to Participants of current insurance

The Operator must furnish the Participants annually with a list of all current insurances

effected by the Operator pursuant to this Agreement and must advise the Participants

promptly of any additional insurance effected or of any insurances cancelled, altered or

lapsed.

8.4 Contractor’s insurance

(a) The Operator must require all contractors and sub-contractors performing work

for the Joint Venture on the Title Areas to purchase and maintain for the

protection and indemnification of the Participants personal injury and property

damage insurance, worker's compensation, and public and products liability

and insurance required under the Petroleum Titles, the Act or any other

applicable law, as the Operator may from time to time determine and to obtain

from their insurers appropriate waivers of subrogation in favour of the

Participants.

(b) The Operator may dispense with any such insurance in any case in which the

Operator reasonably determines that in all the circumstances it is appropriate to

do so and may determine such lower limit for any such insurance as the

Operator reasonably deems appropriate.



8.5 Review of insurance

The Operator must annually and otherwise when reasonably requested by any

Participant carry out such review of the insurance effected under this clause as the

Operating Committee or such Participant may require.

8.6 Participant’s right to opt out of insurance or obtain additional insurance

(a) Subject to the remaining terms of this sub-clause, no Participant is bound to

participate in any insurance policy required under this clause if it so elects by

notice to the Operator and each Participant and produces to the Operating

Committee a copy of a policy of insurance and evidence of its currency (or

such other evidence of insurance and currency as the Operating Committee

may reasonably require) providing the same cover in substance for the

Participant’s Participating Interest in Joint Operations and Joint Property as

that required to be effected by Operator under this clause.

(b) If a Participant elects to effect its own insurance then, unless otherwise

permitted by the Operating Committee, it must procure that such insurance

policy contains provisions and wording acceptable to the Operator whereby

the insurer thereunder agrees to:

(i) waive all rights of subrogation as against each other Participant and

Operator;

(ii) admit and pay any claim admitted and paid by the insurer under the

Operator effected insurance;

(iii) accept the report of the Operator appointed loss adjustor as conclusive

proof of the adjusted loss for the purposes of accepting and paying a

claim under its policy; and

(iv) provide the Operator with not less than 30 days prior notice of any

expiry or cancellation or termination of the insurance policy or the

insurance cover thereunder.

(c) The Operator must maintain insurance cover under the relevant policy

effected or to be effected by the Operator pursuant to this clause in respect of

the electing Participant’s Participating Interest of the insurance interests (at

that Participant’s cost and expense) unless and until the requirements of the

following sub-clause have been fulfilled to the Operator’s reasonable

satisfaction.

(d) A Participant so electing to effect its own insurance must not directly or

indirectly interfere with or prejudice the Operator’s negotiations for insurance

required to be effected pursuant to this clause.

(e) A Participant may obtain such additional insurance as it deems advisable for

its own account at its own expense.

8.7 Cost of insurance, charging of losses and crediting of recovery

(a) The actual costs of the insurance effected by the Operator must be charged only

to the account of the Participants participating therein and any recoveries from

any such insurance must be credited to such Participants in the same proportion

as such costs are charged.



(b) Any liability loss damage claim or expense relating to Operations, whether in

respect of an event which has been insured or not, must be charged to the Joint

Account and must be borne and paid by the Participants (without prejudice to

any right of indemnity or action which any Participant may have) in proportion

to their Participating Interests at the time of accrual or occurrence of the liability

loss damage claim or expense in question.

8.8 Deductibles and caps

Insurance required hereunder may be subject to such deductibles, caps, exclusions and

retentions as is customary in the Operator’s insurance program.

8.9 Litigation

(a) Subject to the provisions of this sub-clause, all matters relating to the

enforcement or defence of rights in respect of or arising out of Joint Operations

must be determined by decisions of the Operating Committee.

(b) All actions taken by the Operator in conducting litigation and all liabilities

incurred pursuant thereto are for the Joint Account.

(c) The Operator must promptly notify the Participants of any claim, litigation, lien,

demand, or judgment relating to the Joint Operations where the total amount in

dispute and/or the total amount of damages together with any costs are estimated

by the Operator to exceed $100,000.

(d) The Operator has the authority to prosecute, pursue, defend or settle any claim,

litigation, lien, demand or judgment relating to the Joint Operations where the

total amount in dispute and/or the then total amount of damages together with

any costs are estimated by the Operator to be less than $100,000.

(e) The Operator must not except at the direction of the Operating Committee

prosecute, pursue, defend or settle any claim, litigation, lien, demand or

judgment relating to the Joint Operations where the then estimated total amount

in dispute and/or the total amount of damages together with any costs is

$100,000 or greater.

(f) Each Participant must promptly notify the other Participants of any claim,

litigation, lien, demand or judgment relating to the Joint Operations and must

not conduct such proceedings in such a way as to prejudice affect or vitiate any

insurance effected pursuant to this clause.

(g) Notwithstanding the provisions of sub-clause, each Participant has the right to

participate in any prosecution, defence or settlement of any proceedings

conducted in accordance with this sub-clause at its sole cost and expense

PROVIDED HOWEVER that a Participant exercising such a right remains

liable for its share of Joint Venture costs.

(h) Any Participant participating in the prosecution, defence or settlement of any

proceedings must at all times take all reasonable steps to ensure that it does so in

such manner as does not prejudice the rights of any of the other Participants.

(i) The provisions of this sub-clause does not apply to claims, litigation, liens,

demands or judgments made brought or obtained by a Participant against

another Participant.



56. Completion, Discovery, appraisal, development and sales -

Appraisal and Discovery (Alternative clause 9.2)

In clause 1.1, insert a new definition as follows:

Appraisal Operations means the drilling of Appraisal Wells and other activities for

the purpose of evaluating the quantities or qualities of Petroleum in a Discovery.


9.2 Appraisal and Discovery of Petroleum

(a) Within 60 days after establishment of a Discovery Well, the Operating

Committee must decide whether such Discovery Well requires the carrying out

of Appraisal Operations.

(b) If the Operating Committee decides that Appraisal Operations must be carried

out, the Operator must within 60 days after such decision submit to the

Operating Committee a Proposed Programme and Budget for the conduct of

Appraisal Operations (Appraisal Programme and Budget) covering such

period as the Operator deems advisable or as the Operating Committee directs.

Within 30 days of such submission, the Operating Committee shall decide

upon the Appraisal Programme and Budget in accordance with this agreement.

(c) Within 3 months after Appraisal Operations are completed, the Operator must

submit to all the Participants a report giving details as to all Information

derived from such Appraisal Operations. Within 30 days after such

submission the Operating Committee may decide to proceed with a feasibility

study or decide to carry out supplementary Appraisal Operations.

(d) If the Operating Committee decides to proceed with a feasibility study, the

Operator must within 6 months prepare the feasibility study, which shall cover

without limiting the generality of the study:

(i) the delineation of the Discovery reservoirs;

(ii) the facilities required to develop, produce, transport and treat (if any)

the Petroleum from the Discovery;

(iii) an itemised estimate of the capital and operating Costs to be incurred;

and

(iv) a preliminary Development Plan.

(e) Upon completion of any feasibility study, the Operator must forthwith forward

a copy thereof to each Participant, the cost of such copies being chargeable to

the Joint Account. From the date of receiving it the Participants have 60 days

(or such longer period as the Participants may agree) to consider the feasibility

study and to propose to each other alterations, amendments and additions

thereto. Within that period, a meeting of the Operating Committee must be

convened for the purpose of settling the feasibility study and deciding and

planning the development of the Discovery on the basis of the feasibility

study.



57. Accounts, reports, audit and access - Reports to Participants

(Optional clauses 10.2(d) and (e))

Insert new Clause 10.2(d) as follows:

(d) the following periodic reports being:

(i) monthly reports detailing:

A. technical, development and commercial activities for the month;

B. details of expenditures for the month;

C. the balance held in the Joint Account;

D. details of all material Third Party meetings;

E. details of all material contracts awarded and executed;

F. the status of native title and landowner claims;

G. HSEC information; and

H. such other information as is specified by the Operating

Committee from time to time;

(ii) quarterly reports containing details agreed by the Operating Committee

from time to time;

(iii) yearly reports containing details agreed by the Operating Committee

from time to time;

(iv) additional reports reasonably required by the Operating Committee; and

(v) such other reasonable additional reports and information at the

Participant’s cost.

(e) the following data and reports as they are produced or compiled:

(i) copies of all logs or surveys;

(ii) drilling progress reports;

(iii) all test and core analysis reports;

(iv) copies of well decommissioning reports;

(v) all final geological and geophysical maps and reports;

(vi) engineering studies, development schedules and progress reports on

development projects;

(vii) field and well performance reports including reservoir studies and

reserve estimates;

(viii) copies of all reports relating to Joint Operations furnished by Operator

to Government.

Reletter Clause 10.2(d) and (e) as Clause 10.2 (e) and (f).



58. Non consent (Optional clause 13.8)

Amend Clause 13 heading to read Sole Risk and non consent.


13.8 Non consent

(a) Within 14 days after approval of a Proposed Programme and Budget by the

Operating Committee, a Participant which voted against the carrying out of

any work included in the Approved Programme and Budget, other than the

Minimum Work Obligations, may elect not to participate in and contribute to

the cost to be incurred in carrying out that work. A Participant so electing is

referred to as a Non-Consent Participant and the other Participant are

referred to as Consenting Participants. The work in respect of which notice

is given is referred to as the Non-Consent Operation.

(b) Upon the making of an election by one or more Non-Consent Participants

pursuant to this clause, the Consenting Participants must meet within 14 days

of that election to determine whether they will proceed with the Non-Consent

Operation. If the Consenting Participants elect not to proceed with the Non-

Consent Operation, then the Approved Programme and Budget must be

amended by the deleting the Non-Consent Operation.

(c) If the Consenting Participant elect to proceed with the Non-Consent

Operation, then:

(i) the Non-Consent Operation must not be a Joint Operation;

(ii) the Consenting Participants may carry out the Non-Consent Operation

at their Sole Risk Operation and the provisions of this clause relating to

Sole Risk Operation applies to the Non-Consent Operation as if:

A. the Non-Consent Operation constituted a Sole Risk Operation;

B. the Consenting Participants constituted the Sole Risk Participants;

and

(iii) the Non-Consent Participants are not responsible for any costs, risks or

expenses attributable to the Non-Consent Operation.

(d) Any work forming part of the Minimum Work Obligations may not be the

subject of a Non-Consent Operation. Subject to the foregoing, a Non-Consent

Operation may comprise of any of the following (but no other) activities:

(i) drilling an Exploration Well, a Development Well or an Appraisal

Well; or

(ii) deepening, re-working, side-tracking or completion and testing an

Exploration Well or an Appraisal Well.

(e) On any well reaching programmed total depth and after the completion of the

programmed evaluation of the well (Casing Point) the Operating Committee

must meet within 24 hours to consider and determine by Majority Vote

whether to plug and abandon, deepen, re-work, side-track, complete or



production test the well. If a course of action other than plugging and

abandoning the well is determined by Majority Vote, any Participant voting

against the programme adopted by Majority Vote may elect to be a Non-

Consent Participant in accordance with this clause.



59. Sole Risk – Coal Seam Gas Facility (Alternative clause 13)

13.1 Sole Risk Facilities for Coal Seam Gas

Any Participant which votes against an Operating Committee decision to construct

and install a transportation, processing or storage facility (Facility) may elect to

participate in such Facility by notifying the Participants to such effect within 60 days

of the Operating Committee's decision. If such notice is not timely given, each

Participant which voted against the decision and did not thereafter elect to participate

in the Facility ( Excluded Participant ) is not responsible for any costs, risks or

expenses attributable to the construction and installation of the Facility, such costs,

risk and expenses being borne entirely by the Participants which voted in favour of

such operation (Constructing Participants) in the proportion that their respective

Participating Interests bear to the aggregate Participating Interests of all Constructing

Participants.

13.2 Consequence for Non-Participation in Facility Construction

(a) Once a Facility is installed by the Constructing Participants, each Excluded

Participant is deemed to have assigned its entire interest in the Facility and in

all Coal Seam Gas treated, stored or transported in or through such Facility, to

the Constructing Participants in proportion to the latter's respective interest in

such Facility. Each Excluded Participant may acquire an interest in such

Facility proportionate to its Participating Interest at any time up to the

commissioning of the Facility and thereby become a Constructing Participant

with respect to such Facility by paying to the existing Constructing Participants

a sum of money equal to:

(z) [ ]% of the share of the total cost of designing, constructing,

installing, maintaining and operating the Facility up to the date of such

acquisition which would have been chargeable to such Excluded

Participant had it been an original constructing Participant, plus

(aa) a premium equal to [2] % per month of such total costs computed from

the date of payment by the Excluded Participant to the Constructing

Participants.

(b) The money paid in respect of paragraph (i) shall be shared by the recipients in

proportion to their respective interests in the facility, and the money paid in

respect of paragraph (ii) shall be allocated to the periods before and after any

Participant other than the original Constructing Participants acquired an interest

in the Facility and shall be shared by each of the Participants which owned an

interest in the Facility during the applicable period in proportion to their

respective interests therein.

(c) Upon payment of the aforesaid sum of money by an Excluded Participant such

Participant shall be entitled to use any excess capacity, not to exceed its

Participating Interest share of total capacity, which may exist in the Facility

from time to time; provided that the original Constructing Participants are

entitled at all times to treat, store or transport in or through such Facility not

less than their respective Participating Interest shares of the current production

from all wells served by such Facility.



(d) After acquiring an interest in a Facility the former Excluded Participant may,

unless good operating and engineering practices dictate otherwise, increase the

capacity of such Facility at its sole cost, risk and expense and thereby become

entitled to utilise such increased capacity; provided that in no event shall such

former Excluded Participant be entitled to utilise more than its Participating

Interest share of the total capacity of the Facility.

(e) The cost of operating, maintaining and repairing any Facility shall be borne by

the Participants in proportion to their ownership of Coal Seam Gas treated,

stored or transported in or through such Facility during the immediately

preceding Year and the costs or benefits of salvaging any Facility shall be

borne by or accrue to the Participants in proportion to their ownership of Coal

Seam Gas treated, stored or transported in or through such Facility over its life.



60. Withdrawal - Royalty reserved on optional or forced withdrawal (Optional

clause 12.5)


12.5 Royalty reserved on optional or forced withdrawal

(a) In this clause, “Royalty” means a [X] % [Insert applicable

NSR/NPI/Gross/Fixed royalty wording from the AMPLA Model Framework

Petroleum Royalty Deed with the applicable amendments as set out at the end

of the Framework Deed, or in the Alternative and Optional Clauses to the

Model Framework Petroleum Royalty Deed, as agreed by the Participants].

(b) A Participant:

(i) which is a Diluting Participant may elect in its Optional Dilution Notice

to; and

(ii) if its Participating Interest reduces to a Percentage Share of less than

[5]%, must,

withdraw from the Joint Venture and this agreement and surrender and

transfer its Participating Interest to the remaining Participants pro-rata in the

proportion that their respective Percentage Shares bear to each other, in

exchange for a Royalty.

(c) If a Participant withdraws from the Joint Venture and this agreement:

(i) the withdrawing Participant must assign and transfer to the continuing

Participants all its Participating Interest, pro-rata in the proportion that

their respective Percentage Shares bear to each other, and the

withdrawing Participant is released from all future obligations relating

to the Joint Venture;

(ii) the continuing Participants, pro-rata in the proportion that their

respective Percentage Shares bear to each other, must reserve the

Royalty out of its Participating Interest entitlement for the benefit of the

withdrawn former Participant in accordance with this clause;

(iii) the continuing Participants agree to pay the Royalty to the former

Participant, pro-rata in the proportion that their respective Percentage

Shares bear to each other, in accordance with the provisions of the

AMPLA Model Framework Petroleum Royalty Deed with [specify the

applicable amendments as set out at the end of the Framework Deed, or

in the Alternative and Optional Clauses to the Model Framework

Petroleum Royalty Deed, or as otherwise required];

(iv) any withdrawal from the Joint Venture is without prejudice to any rights

or obligations of the Participants arising prior to the withdrawal; and

(v) any forfeiture of a Participating Interest is not to be taken as satisfaction,

wholly or partly, of the obligations of a withdrawing Participant prior to

withdrawal.

(d) Where a Participant elects to receive, or is required to accept, a Royalty on

withdrawal under this clause, the relevant Participants must enter into a deed



of mortgage to secure payment of the Royalty in favour of the former

Participant [in the form of the AMPLA Model Mortgage to secure Royalty with

the following [specified] amendments agreed by the Participants].

(e) The former Participant may register the mortgage to secure the Royalty

against the relevant Petroleum Titles and the Participants must do all things

reasonably necessary to register, or procure the registration of, the mortgage

to secure Royalty as granted pursuant to this agreement, on the Petroleum

Title register.



61. Withdrawal - from Joint Venture with Security for Abandonment costs



12.3 Withdrawal from Joint Venture

(b) Not less than 90 days before the end of any Year, a Participant may give

notice (Withdrawal Transfer Notice) to the other Participants expressing its

wish to:

(i) transfer its Participating Interest to the other Participants; and

(ii) withdraw from the Joint Venture and be released from its ongoing

obligations under this agreement,

(c) If a Participant delivers a Withdrawal Transfer Notice (Withdrawing

Participant), then each remaining Participant has the right, but not the

obligation, within 60 days of receipt of the Withdrawal Transfer Notice, to

also withdraw from the Joint Venture by providing a Withdrawal Transfer

Notice to all the other Participants.

(d) If Participants holding, in aggregate, not less than 85% Percentage Shares

issue Withdrawal Transfer Notices, then all Participants must use reasonable

endeavours to wind-up the Joint Venture as soon as possible.

(e) If the Joint Venture is not wound up, the Withdrawing Participant is deemed

to transfer, and the remaining Participants (Remaining Participants) are

deemed to accept the Participating Interest of the Withdrawing Participant,

pro rata in the proportion that their respective Percentage Shares bear to each

other, subject to the prior satisfaction of the following conditions:

(i) the consideration payable for the relevant Participating Interest is the

assumption of the Withdrawing Participant's obligations under this

agreement, and no cash consideration is payable;

(ii) the Withdrawing Participant provide to the Remaining Participants

warranties of capacity to transfer and clear title to the Participating

Interest free of Encumbrances;

(iii) the Withdrawing Participant must pay the reasonable legal costs and

expenses incurred by the Remaining Participants in acquiring the

Participating Interest of the Withdrawing Participant;

(iv) the Withdrawing Participant remains liable, and must provide

continuing security to the Remaining Participants, for any obligations or

liabilities which arise prior to the transfer of its Participating Interest,

including its Percentage Share of all Shutdown Costs due or payable up

to at the end of the Year in which the Withdrawing Participant

withdraws (WJV Shutdown Costs); and

(v) the continuing security to be provided by a Withdrawing Participant is

such security as is acceptable to the Remaining Participants and, in

default of agreement is a guarantee (Bank Guarantee) that:



A. is issued by a first class bank in favour of the Remaining

Participants for the principal amount of the WJV Shutdown Costs;

B. provides for the Remaining Participants to draw on the Bank

Guarantee to meet WJV Shutdown Costs as they arise;

C. is payable upon demand by the Remaining Participant;

D. is maintained at all times by the Withdrawing Participant at its

cost; and

E. is irrevocable and continues in full force and effect until the

Remaining Participants give notice to the Withdrawing Participant

and the issuing bank that the Withdrawing Participant is no longer

liable for any WJV Shutdown Costs.

(f) For greater certainty, it is hereby acknowledged and agreed that the other

provisions in this agreement relating to restrictions on assignment do not

apply to a Withdrawing Participant.



62. Assignment – Change of Control of Participant (Alternative clause 14.6)

Delete the existing Clause 14.6 and insert a new Clause 14.6 as follows:

14.6 Change of Control of Participant

(a) In this clause:

Change of Control means, in relation to a Participant, that it ceases to be a

Subsidiary (as defined in the Corporations Act) of the body corporate which is

its Parent Company, except where the shares of that Participant or any of its

holding companies are or become listed on the Australian Stock Exchange

Limited or other recognised stock exchange and such Participant ceases to be a

Subsidiary of its Parent Company by reason of the allotment or transfer of, or

any other dealing in, those shares.

Parent Company means:

(i) [corporation name] in the case of [insert Participant]; and

(ii) in the case of any other Participant, it’s Holding Company (as defined in

the Corporations Act) as at the date that such Participant becomes a

Participant.

(b) If a Change of Control occurs in respect of a Participant then, unless the

Participants agree otherwise, such Participant (Changed Participant) is

deemed;

(i) to have offered to sell its Participating Interest to the other Participant at

the time of the Change of Control free from any Encumbrance at a

purchase price (Price) equal to the fair market value of its Participating

Interest as agreed by the Participants or failing agreement within 14 days

after a Participant proposes a value, as determined by an Expert appointed

under this agreement, who must make such determination within 30 days

of his or her appointment;

(ii) the other Participant has 60 days from the date that the market value of

the Participating Interest is agreed or determined to accept the offer;

(iii) if the offer is not accepted within this period then the Changed Participant

may retain the Participating Interest;

(iv) if the offer is accepted, completion of the sale and purchase of the

Changed Participant's Interest must occur within 60 days after acceptance

and, at the time of completion, the Changed Participant must deliver the

title documents and signed transfer documents in respect of the

Participating Interest and a discharge of all Encumbrances to the

accepting Participant; and

(v) at the same time the accepting Participant must pay the Price to the

Changed Participant in immediately available funds.

(c) If there are more than two Participants in the Joint Venture at the time this clause

applies, then the reference to other Participant shall mean the other Participants in

proportion to their respective Percentage Shares or other agreed proportions,

which may include 0%.



63. Assignment – Change of Control of Participant (Alternative clause 14.6)

Delete the existing Clause 14.6 and insert a new Clause 14.6 as follows:

14.6 Change of Control

(a) This clause applies if at any time any of the following powers whether held

directly or indirectly and by whatever means (and whether or not enforceable at

law or in equity) reside in a person other than a person holding that power on

the date of this agreement (Selling Participant), the movement of each such

power being a Change of Control), the powers being the power to:

(i) exercise or control the right to vote attached to not less than 50% of the

issued shares in the Selling Participant; or

(ii) create or exercise a right of Assignment over not less than 50% of the

issued voting shares in the Selling Participant; or

(iii) appoint not less than one half of the number of directors to the board of

the Selling Participant; or

(iv) exercise or control the right to vote attached to not less than 50% of the

votes that may be cast at board meetings of the Selling Participant; or

(v) determine substantially the conduct of the Selling Participant's business

activities.

(b) If the value of a Selling Participant's Participating Interest is equal to 80% or

more of the aggregate value of all assets owned by the Selling Participant, and

the Selling Participant is not listed on the ASX or other recognised stock

exchange, then if a party to this agreement becomes aware that a Change of

Control has occurred, it shall immediately notify each other party of that

occurrence, and unless each Participant other than the Selling Participant

otherwise agrees, upon service of that notice:

(vi) the Selling Participant is deemed to have granted to each other

Participant (other than a Defaulting Participant or a withdrawing

Participant) an option {Purchase Option) to purchase the whole (but

not part) of the Selling Participant's Participating Interest at a price

equal to its Fair Market Value;

(vii) the Operator (or if the Selling Participant is the Operator or an Affiliate

of the Operator, any Participant which is entitled to exercise the

Purchase Option) must obtain a determination of the Fair Market Value

of the Participating Interest of the Selling Participant in accordance

with this clause; and

(viii) the Selling Participant loses its right to vote at meetings of the

Operating Committee, unless each of the other Participants entitled to

be present and vote at those meetings so agrees.

(c) The Purchase Option may only be exercised by a Participant:

(i) during the period of 14 days commencing on the date on which the Fair

Market Value is determined;



(ii) which at the time of grant of the Purchase Option is not a Defaulting

Participant or a withdrawing Participant (each Participant which validly

exercises the Purchase Option being a Purchasing Participant;

(iii) in respect of the whole of the Selling Participant's Participating Interest,

provided that if there is more than one Purchasing Participant the

Purchase Option is deemed to be exercised by each of them in the

proportions that their respective Percentage Shares bear to each other,

or in any other proportions as they may agree; and

(iv) by giving notice in writing to the Selling Participant.

(d) The Fair Market Value of the Participating Interest of the Selling Participant

the subject of a Purchase Option must be the average of two fair market value

valuation of the Participating Interest as between a willing but not anxious

seller and a willing but not anxious buyer at arm's length made by independent

experts (each a Valuer), to be selected by agreement between the Selling

Participant and the Purchasing Participants or, failing agreement between them

within 14 days of commencing to discuss the selection of those Valuers, to be

selected by the President for the time being of the Australian Society of

Certified Practising Accountants at the request of the Purchasing Participants.

(e) Each Valuer is required to make its determination as of the date on which the

notice was served on it and such determination must be delivered within 30

days of the appointment.

(f) The completion of any purchase under this clause must take place at a time

during normal business hours on a date not later than 120 days after the last

date on which the Purchase Option may be exercised and within 14 days after

all necessary government consents have been obtained (whichever is the later)

and at a place in Australia selected by the Purchasing Participant.

(g) At completion of any purchase following the exercise of a Purchase Option, the

Participating Interest of the Selling Participant is transferred to each Purchasing

Participants (if more than one, in the proportions that their respective

Percentage Shares bear to each other) free from all Encumbrances and of the

interests of any other person. The relevant transferees must bear all stamp duty,

registration fees and other like taxes and imposts which become payable as a

result of the exercise of any Purchase Option or the transfer of the Participating

Interest of the Selling Participant.

(h) At completion of any purchase following the exercise of any Purchase Option,

the Selling Participant must sign, execute, deliver and do all deeds, documents,

transfers, instruments, assurances, acts and things as may be necessary or

appropriate to transfer its Participating Interest to each Purchasing Participants

in accordance with this clause.

(i) The Selling Participant irrevocably appoints each Purchasing Participant and its

respective directors, secretaries and managers jointly and each of them

severally to be its attorneys and attorney in its name and on its behalf and

otherwise to sign and do all deeds, documents, transfers, instruments,

assurances, acts and things whatsoever which the appointor ought to sign,

execute and do under the provisions of this clause.



64. Enforcement of Buy-Out Remedy – Participant rights not a penalty (Alternative clause 16.5)

Delete the exisiting Clause 16.5 and insert a new Clause 16.5 as follows:

16.5 Participant rights not a penalty

(a) The Participants agree that the rights conferred by this clause on the Non-

Defaulting Participants do not constitute a penalty or an unfair or inequitable

remedy or expropriation or forfeiture but are agreed upon by the Participants

as being necessary and fair and reasonable to maintain the continuity of Joint

Operations, to ensure the Petroleum Title conditions are met and to

compensate the Non-Defaulting Parties for assuming the entire financial risk

of Joint Operations.

(b) Each Participant agrees with the other of them that it will not challenge in any

court of competent jurisdiction the exercise by the Non-Defaulting Participant

or any of them of their rights conferred by this clause if the same were

exercised as provided in this agreement.



65. Dispute resolution – Project co-operation and arbitration (Alternative

clause 19)


Project means the exploration operations carried out under the Petroleum Title and

the construction, development, production, de-commissioning and Abandonment

operations carried out under one or more Petroleum Titles according to this

agreement. It includes all facilities, including ancillary facilities and infrastructure,

constructed and developed that are reasonable and necessary for the Project according

to good international Petroleum industry practice. It also includes (but is not limited

to) facilities for concentrating, transporting, shipping and selling Petroleum and

transporting plant and equipment to and from the Petroleum Titles from and to local

or overseas destinations. It also includes a Project Expansion, once approved by [the

[Government].

Project Expansion means an expansion of the Project undertaken to include the

production of further Discoveries not the subject of the initial Feasibility Study.

Delete the exisiting Clause 19 and insert a new Clause 19 as follows:

19 Co-operation and Arbitration

19.1 Co-operation

(c) The Participants intend to be bound by this agreement and to comply with it

in good faith.

(d) The Participants must regularly inform each other on matters concerning the

Project and must cooperate and meet regularly to facilitate the progress of the

Project and to resolve any disputes, controversy or claim which may arise

between them.

19.2 Arbitration

(a) The Participants must use their best endeavours to settle amicably among

themselves any dispute, controversy or claim arising between them out of or

in connection with this agreement.

(b) If the dispute cannot be resolved by the Participants, the Participants consent

to submit the dispute for settlement by arbitration in accordance with the

ACICA Arbitration Rules. The seat of arbitration shall be [city], Australia.

The language of the arbitration shall be English. The number of arbitrators

shall be [three].

(c) An award in arbitral proceedings pursuant to this agreement is final and

binding on the Participants, and judgement thereon may be entered in any

court having jurisdiction over the award or a Participant or the assets of a

Participant. Application may be made to such court for judicial acceptance of

the award and for an order of enforcement and execution of such award.

(d) Each Participant waives any right or remedy available to it under the law of

the place of the arbitration to appeal against an award on a question of law

arising out of the arbitration.



19.3 Appointment of Sole Expert

Where any dispute or matter is referred to a sole expert for determination under this

agreement, the sole expert must be agreed upon within 30 days of notification of the

dispute or matter and, failing agreement, shall be appointed by the [President of

International Chamber of Commerce in Paris].

19.4 Survival

The right to arbitrate disputes, controversies or claims survives the termination or

cancellation of this agreement.



66. Default – Compulsory payment on default (Alternative clause 15.5)


15.5 Compulsory payment on default

(a) If:

(i) an Unpaid Monies Default Event is not remedied within 14 days

from the Due Date (Unpaid Monies); or

(ii) the Defaulting Participant has failed to provide its Percentage Share

of any security in the form and for the amount required under this

agreement and any applicable contract or law in respect of:

A. security required to maintain the Petroleum Titles in full

force and effect; or

B. to support and facilitate any Capital Works or Development

included in an Approved Programme and Budget,

within the time required under this agreement and any applicable

contract or law (Outstanding Security),

the Operator must give notice to the Non-Defaulting Participants requiring

the Non-Defaulting Participants (as applicable):

(iii) to pay the Unpaid Monies (but excluding any interest and costs

owed in respect of the Unpaid Monies);

(iv) to provide the Outstanding Security.

(b) Where more than one Non-Defaulting Participant is required to pay

Unpaid Monies or provide Outstanding Security, the Non-Defaulting

Participants must do so, unless otherwise mutually agreed between them,

severally in the proportion that each of their Percentage Shares bears to the

aggregate of their Percentage Shares.

(c) Failure by a Non-Defaulting Participant to pay Unpaid Monies or provide

Outstanding Security within 14 days of being required to do so by the

Operator constitutes a Default Event in relation to that Participant.

(d) A Non-Defaulting Participant which pays Unpaid Monies or provides

Outstanding Security is a Paying Participant.

(e) All:

(i) Unpaid Monies paid by a Paying Participant constitute a debt due

by the Defaulting Participant; and

(ii) obligations assumed and costs incurred by a Paying Participant in

respect of the provision of Outstanding Security,

are secured under the Cross Charge granted by the Defaulting Participant.

The rights of a Paying Participant against a Defaulting Participant under



this sub-clause are in addition to any other rights or remedies available to

it.

(f) Upon payment by a Defaulting Participant of Unpaid Monies including all

interest and costs payable or reimbursable in respect of the Default Event,

or provision of any Outstanding Security and payment of the Paying

Participant’s costs, the Defaulting Participant remains liable to indemnify

each other Participant and the Operator as provided in this agreement.



67. Confidentiality – Proprietary technology (Optional clause 18.9)


18.9 Proprietary technology

Nothing in this clause supercedes, amends or revises any obligations between the

Participants under any pre-existing undertaking of confidentiality related to the

technology of any other Participant. Nothing in this agreement requires a Participant to

divulge or use its proprietary technology in Joint Operations. If a Participant elects in

its sole discretion to offer its proprietary technology for use in the Joint Operations, the

following applies:

(a) The Participant offering its proprietary technology (IP Owner) may impose as

conditions of offering the use of its technology such reasonable precautions as

the IP Owner deems necessary or desirable to prevent unauthorised use or

disclosure, including but not limited to agreements with or commitments from

the other Participants and their employees, contractors and agents prohibiting

other uses or disclosure, but a Participant is not obliged to accept such

conditions. If the Participants cannot reach agreement, the IP Owner may

rescind its offer.

(b) The Participants other than the IP Owner must not disclose to Third Parties, nor

use outside the Joint Operations, any aspect of research, methods, apparatus or

technology (Participant IP) of the IP Owner or its Affiliates (other than that

which is otherwise properly available to it or them and if received under

disclosure and/or restriction on use, only to the extent so provided by such

restriction) which is disclosed to the Participants or which is applied in Joint

Operations, without the prior written consent of the IP Owner.

(c) Each Participant will own and each such Participant and its Affiliates have a

non-exclusive right to use in other ventures any Participant IP, including any

innovations, inventions or improvements in the Participant IP, not offered by a

Participant as its proprietary technology and developed in the course of Joint

Operations for which it has contributed the cost in proportion to its Percentage

Share, unless such Participant IP is the subject of a valid patent in favour of

less than all Participants or is developed as an extension or refinement of

previous Participant IP of the IP Owner.



68. Expert determination – (Alternative clause 20.1)


20.1 Expert determination

Where this Agreement expressly provides for a dispute to be resolved in accordance

with this agreement, or the Participants otherwise agree that a dispute is best resolved

by an Expert, the Participants must submit to the following procedure to resolve the

dispute:

(a) the Participants must choose and appoint an Expert qualified to resolve the

dispute;

(b) in the absence of agreement by the Participants as to the independent expert

within 7 days of notice of a dispute, the Expert must be appointed on the

application of any Participant by (unless otherwise agreed) the chairperson or

other senior office bearer for the time being of the Nominated State's Chapter

of the Institute of Arbitrators and Mediators Australia;

(c) the Expert must make a determination or finding on the issues in dispute:

(i) as soon as practicable and in any event within 21 days, or such longer

period as may be agreed between the Participants; and

(ii) in accordance with, and subject to, the Institute of Arbitrators &

Mediators Australia Expert Determination Rules;

(d) the Expert must act as an independent expert and not as an arbitrator and may

adopt such procedures as he or she sees fit so as to provide an expeditious,

cost effective and fair means of determining the dispute, subject to any

provisions to the contrary in this Agreement;

(e) the Expert is not bound by the rules of evidence and may make his or her

determination on the basis of information received or his or her own

expertise;

(f) the Participants in dispute must make available to the Expert all materials in

their possession, custody or control requested by the Expert materially

relevant to the dispute.

(g) each Participant in dispute is entitled to produce to the Expert any materials or

evidence which that Participant believes is relevant to the matter in dispute

and be entitled to appoint a legal practitioner to represent its interest at any

hearing before the Expert.

(h) the Expert must determine the dispute as an expert and not as an arbitrator;

(i) the law as it relates to arbitration is specifically excluded;

(j) in the absence of any manifest error material to the determination, the Expert's

determination is final and binding on the Participants;

(k) where the dispute relates to the amount of money payable to or by a

Participant, the Expert must not award an amount to the Participant seeking

payment either:



(i) greater than the amount which the Participant seeking payment claims it

is entitled to receive; or

(ii) less than the aggregate amount which the Participant or Participants

from whom payment is sought asserts is payable; and

(l) the costs of the Expert must be borne by the Participants equally or as the

Expert may otherwise determine and each Participant must bear its own costs,

including advisers, consultants and legal costs, relating to the Expert's

decision.



69. Expert determination – Nomination by APPEA (Alternative clause

20.1(b))

Delete the exisiting Clause 20.1(b) and insert a new Clause 20.1(b) as follows:

(b) the Expert determination must be conducted by a person or body agreed to by

the parties or failing agreement within 14 days after a party proposes a person

or body, by the person or body nominated by the senior executive officer of the

Australian Petroleum Production Exploration Association Limited, (APPEA)

of Level 10, 60 Marcus Clarke Street, Canberra City ACT 2600, at the request

of the Operator made within 7 days of any failure to agree;



70. Goods and Services Tax – (Optional clause 23.6)

In Clause 23.6 insert the following terms defined in the GST Act:

Net Amount, Tax Period


23.6 GST Joint Venture

(a) On or immediately after the Commencement Date, the Participants agree to

jointly apply to the Commissioner in the approved form for approval as a GST

Joint Venture (GST JV) and will nominate the Operator to be the Joint Venture

Operator (JVO) of the GST JV.

(b) The Participants must indemnify and keep the JVO indemnified from and

against all costs, claims, expenses and liabilities arising in any way out of or

relating in any way to its conduct as the JVO.

(c) Where the Net Amount for the GST JV is less than zero in any Tax Period and

the JVO receives a refund of that amount, then the JVO must apply that refund

to the expenses of the Joint Venture.

(d) The Operator ceases to be the JVO:

(i) when the Operator ceases to be the Operator of the Joint Venture; or

(ii) upon the Operator failing to satisfy the requirements of section 51-10

(c) and (f) of the GST Act.

(e) If the Operator ceases to be the JVO then:

(i) a successor Operator must be appointed JVO by the Participants; and

(ii) the Operator, at the request of the Participants, must immediately apply

to the Commissioner in the approved form for the approval of the

Successor Operator as the JVO.

(f) A Participant ceases to be a participant in the GST JV:

(i) upon ceasing to be a Participant in the Joint Venture; or

(ii) immediately upon the Participant failing to satisfy the participation

requirements of section 51-10 of the GST Act.

(g) The JVO must within 30 days of a Participant ceasing to be a participant in the

GST JV apply to the Commissioner in the approved form to revoke the

approval of the Participant as a participant in the GST JV.

(h) The Participants must immediately notify the JVO of any facts, circumstances

or events which may presently or in the future result in the revocation of the

approval of any Participant as a participant in the GST JV or the revocation of

the approval of the GST JV as a GST Joint Venture.

(i) Upon another entity that satisfies the participation requirements of section 51-

10 of the GST Act becoming a Participant in the Joint Venture, the JVO must

immediately apply to the Commissioner in the approved form for the approval

of that other entity as a participant in the GST JV.



(j) The JVO must, within 30 days of a request by all Participants, apply to the

Commissioner in the approved form to revoke the approval of the GST JV as a

GST Joint Venture.

(k) For the purposes of this clause, each Participant warrants that it is registered for

the purposes of the GST Act and does not account for GST on a cash basis.




(Alternative Clause 24.2 )

Hand delivery signature required

Mail requires confirmation of delivery

No emailed Notices

Delete clause 24.2 and insert:

24.2 When Notices are taken to have been given and received

(a) A Notice is regarded as given and received:

(i) if delivered by hand, when signed by the recipient of the Notice;

(ii) if sent by pre-paid post, by certified or registered mail requiring

confirmation of delivery; and

(iii) if given by fax, on production of a transmission report by the machine

from which the fax was sent which indicates that the fax was sent in

its entirety to the recipient’s fax number, unless the recipient informs

the sender that the Notice is illegible or incomplete within 4 hours of

it being transmitted;

(b) A Notice delivered or received on a day (Business Day) that is not a

Saturday, Sunday or public holiday in the capital city of the Nominated State

or after 5.00pm (recipient’s time) is regarded as received at 9.00am on the

following Business Day. A Notice delivered or received before 9.00am

(recipient’s time) is regarded as received at 9.00am.

(c) Notice may not be given under this agreement by email or similar electronic

means of communication, unless the recipient expressly agrees by Notice to

receive Notice by email.

NOTE: For a discussion of issues relating to Notice clauses, see M Darwin, “Contracts – Boiler

Plate Clauses In Resource Contracts, Notice And Severance Provisions”, [2007]

AMPLA Yearbook 182-195.




(Alternative Clause 24.2(a))

Overseas Participant delivery

Detailed email Notice clause with alternate scenarios

Delete clause 24.2 (a) and insert:

24.2 When Notices are taken to have been given and received

(a) A Notice is regarded as given and received:

(i) if delivered by hand, when delivered;

(ii) if sent by pre-paid post to an address in Australia, 3 days after

posting;

(iii) if sent by pre-paid post to an address outside Australia, 7 days after

posting;

(iv) if given by fax, when the sender’s fax machine issues a successful

transmission report;

(v) if given by email, on the earlier of:

A. the time the sender receives an automated message that the

email was delivered; and

B. 6 hours after being delivered unless:

1. the sender receives an automated message that the email

was undeliverable or that the recipient is out of the office;

or

2. the sender knows or reasonably should know that there is

a network failure and accordingly knows or suspects that

the email was not delivered,

in which case the email is taken not to be delivered and the sender

should resend the notice by hand, post or fax.

NOTE: For a discussion of issues relating to Notice clauses, see M Darwin, “Contracts – Boiler

Plate Clauses In Resource Contracts, Notice And Severance Provisions”, [2007]




73. Ancillary provisions – entire agreement – (Alternative clause 25.1)


25.1 Entire agreement

This agreement constitutes the entire agreement of the Participants about its subject

matter and supersedes all previous agreements, understandings and negotiations on

that subject matter.

NOTE: For a discussion of issues relating to Entire Agreements clauses, see D Edel, “Contracts –

Boiler Plate Clauses In Resource Contracts, Waiver, Variation and Entire Agreement

clauses”, [2007] AMPLA Yearbook 196-213.



74. Ancillary provisions – severability – (Alternative clause 25.5)


25.5 Severability

If any of the provisions of this agreement are invalid or unenforceable:

(a) the invalidity or unenforceability does not affect the operation, construction

or interpretation of any other provision of this agreement;

(b) the Participants must negotiate in good faith and use their best endeavours to

reach agreement on the substitution for any such provisions which will result

in equity between the Participants being restored so that, as nearly as may be

practicable, the Participants must in all respects be in no different position

from that which would have been obtained had there been no such invalidity

or unenforceability (and a failure to reach such agreement may be referred to

the Dispute Resolution Process); and

(c) for all purposes, the invalid or unenforceable provisions are treated as being

severed from this agreement.

NOTE: For a discussion of issues relating to Severance clauses, see M Darwin, “Contracts –

Boiler Plate Clauses In Resource Contracts, Notice And Severance Provisions”, [2007]




75. Ancillary provisions – waiver – (Alternative clause 25.6)


25.6 Waiver

No waiver by a Participant of any default by another Participant in the performance

of this agreement operates or is construed as a waiver of any future default or defaults

by that Participant, whether of a like or of a different character.

NOTE: For a discussion of issues relating to Waiver clauses, see D Edel, “Contracts – Boiler

Plate Clauses In Resource Contracts, Waiver, Variation and Entire Agreement

clauses”, [2007] AMPLA Yearbook 196-213.



76. Ancillary provisions – counterparts – (Alternative clause 25.9)


25.9 Counterparts

(a) This deed may be executed in any number of counterparts each of which is

deemed an original but all of which constitute one and the same instrument.

(b) If a Participant executes this deed in counterpart, that Participant is bound by

this deed from the time when that Participant executes and delivers an

original counterpart to each of the other Participants. Delivery may be

effected initially by facsimile transmission of the whole deed or by email of

the whole deed attached in Portable Document Format (pdf.) or similar

format, followed by physical delivery of an original executed counterpart.

(c) Despite the foregoing, if within 14 days of the execution and delivery by a

Participant of a counterpart to the other Participants, each of the other

Participants has not also executed and delivered a counterpart to the first-

mentioned Participant, that Participant and each other Participant who has

also executed and delivered a counterpart pursuant to this clause must be

taken never to have been bound by this deed, unless otherwise agreed.

NOTE: For a discussion of issues relating to Counterpart clauses, see K Livesley, “Contracts –

Boiler Plate Clauses In Resource Contracts, Counterpart and Governing Law

Clauses”, [2007] AMPLA Yearbook 155-181.



77. Ancillary provisions – counterparts – (Alternative clause 25.9)


25.9 Counterparts

(a) This deed may consist of a number of copies, each signed by one or more

Participants to the deed. If there are a number of signed copies they are treated as

making up the one document and the date on which the last counterpart is

executed is the date of the deed.

(b) This deed may be executed by facsimile and, accordingly, the Participants are

bound by all the terms and conditions in this deed once a counterpart of this deed

has been signed by each Participant and transmitted to each other Participant.

(c) A facsimile transmission of an executed counterpart of this deed is taken to be

sufficient evidence of execution of this deed by each Participant.

(d) Each Participant must subsequently provide an original counterpart of this deed

executed by that Participant to each other Participant.

NOTE: For a discussion of issues relating to Counterpart clauses, see K Livesley, “Contracts –

Boiler Plate Clauses In Resource Contracts, Counterpart and Governing Law

Clauses”, [2007] AMPLA Yearbook 155-181.



78. Counterparts – compilation of original document (Optional clause 25.9

(b))

Insert new Clause 25.9 (b) as follows:

(b) For the purpose of compiling all counterparts into one document, the

Operator is authorised to detach the signature page from a counterpart

executed by a Participant and attach it to an original document with the

signatures of the other Participants.

Renumber Clause 25.9 as Clause 25.9 (a).



79. Schedule 1 – Basic provisions (Operator Fee)

Insert alternative Operator Charge as follows:

During Exploration, a % of Joint Venture Expenditure on Exploration proposed

during the month;

During Development, b % of Joint Venture Expenditure on Development proposed

during the month;

During Production, c % of Joint Venture Expenditure on Joint Operations proposed

during the month;

During Abandonment, d % of Joint Venture Expenditure on Abandonment proposed

during the month.

OR

[x % of the gross proceeds of sale of Product at the Delivery Point by a Participant

during the previous month].

Note: If this alternative is adopted it is necessary to delete clause 6.3(b).



80. Schedule 1 – Basic provisions (additional Matters requiring a unanimous

vote)

Insert additional Matters requiring a unanimous vote as follows:

13. Removal of the Operator and the appointment of another person as Operator;

14. Determination of, or any amendment to, or waiver of any condition or

provision of any of this agreement;

15. Approval of the terms and conditions of all contracts between the Operator

and a an Affiliate or Related Entity of the Operator;

16. Adoption of a Sole Risk Proposal as a Joint Operation;

17. Use by an individual Participant of any asset of the Joint Venture;

18. Creation of any Encumbrance over the whole or any part of the Participating

Interest of a Participant;

19. Determination of the amounts to be paid by Participants into the

Abandonment Fund to meet the Abandonment Obligations;

20. Approval of all Proposed Programmes and Budgets;

21. Material revision of an Approved Programme or of an Approved Budget

22. Any expenditure or commitment to expenditure (whether capital or operating)

by an amount in excess of [10%] of the total expenditure provided for in an

Approved Budget;

23. The incurring of a debt on behalf of the Participants as obligors to any

Participant or a an Affiliate or Related Entity of a Participant in any amount

or to any other person in an amount in excess of [$250,000] outstanding at

any one time (otherwise than under an Approved Budget);

24. The giving by the Participants jointly of any guarantee (whether direct or

indirect) to secure the obligation of any person arising under this agreement

or otherwise in relation to Joint Venture Property;

25. The institution, defence, compromise or settlement of any court or arbitration

proceedings involving the Joint Venture involving an amount in excess of

[$250,000];

26. The compromise or settlement of any insurance claim involving an amount in

excess of [$250,000];

27. Except as expressly provided otherwise in the agreement, any decision to

commence or prepare a Feasibility Study;

28. Any decision to commence preparation of a Development Plan;

29. Any decision to suspend or defer Joint Operations or place any Joint

Operation on a care and maintenance basis or to commence or recommence

operations at a Joint Operation;



30. Entry into or the termination of any contract or subcontract relating to the

Joint Venture involving a commitment to expenditure, whether capital or

operating, in excess of $250,000;

31. Approving all exploration, appraisal, financial and other reports relating to

the Joint Operations;

32. Any decision to abandon or surrender Joint Venture Property;

33. Any decision to abandon or surrender, or any amendment to or waiver in

respect of, any Petroleum Title;

34. Whether or not expressly contemplated in an Approved Programme or

Approved Budget, approval of the sale or disposal of any Joint Venture

Property having a market value in excess of [$250,000];

35. Whether or not expressly contemplated in an Approved Programme or

Approved Budget, approval of any purchase of any item of property (whether

real or personal, tangible or intangible), having a value in excess of

[$250,000];

36. Any decision to terminate, remove, appoint or replace a Operator or to

enforce any of the provisions of the agreement against the Operator;

37. Where the Joint Venture is conducted by a Operator, the appointment and

removal of the senior officers of the Operator including the chief executive

officer, chief financial officer, chief operations officer and any resident or

Operator;

38. The making of a contract between the Operator and an Affiliate or a Related

Entity of a Participant;

39. The appointment of a resident Operator of any Joint Operation conducted by

the Joint Venture; and

40. A change to the Accounting Procedure for the time being of the Joint Venture

including the appointment and removal of auditors.



81. Dilution – consequences of dilution on shortfall (Alternative Schedule 4.

paragraph 2)

Delete Paragraphs 2 and 3 of Schedule 4 and insert a new Paragraph 2 as follows:

2 Shortfall Notice and Shortfall Contribution

(a) If in a Dilution Notice a Participant states that it wishes to contribute only

part of its Percentage Share of an Approved Program and Budget, the

Dilution Notice must clearly specify the amount which it elects not to

contribute (Shortfall).

(b) Within 14 days after service of the Dilution Notice, each non–Diluting

Participant must give notice (Shortfall Notice) to each of the other

Participants and the Operator stating whether or not it is prepared to

contribute the Shortfall and, if so, what proportion of the Shortfall it is

prepared to contribute (for each such non-Diluting Participant called the

Shortfall Contribution).

(c) If a Non–Diluting Participant fails to give a Shortfall Notice, it is deemed to

have elected not to contribute any of the Shortfall. If the total of Shortfall

Contributions is less than the whole of the Shortfall, the Operator must,

within 14 days of the last Shortfall Notice being given, call a meeting of the

Operating Committee to revise the Approved Programme and Budget. A

Diluting Participant is entitled to vote at such meeting or any adjournment to

the extent of its diluted Participant Interest.

(d) If the total of Shortfall Contributions equals or exceeds the whole of the

Shortfall, the Approved Program and Budget stands and the Participants

must pay Cash Calls to the Operator in accordance with their Participating

Interests as re-calculated after giving effect to the Dilution Notices and the

Dilution Formula.

(e) On request by any Participant, the Diluting Participant must transfer to the

non-Diluting Participant such numbers of shares in the Petroleum Titles as is

appropriate so that the registered shareholdings correspond with the

respective Participating Interests of the Participants.

Exposure Draft Model Petroleum JOA – Alternative & Optional Clauses The Resources and Energy Law...

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