Common use of Program Area of Mutual Interest Agreement Clause in Contracts

Program Area of Mutual Interest Agreement. At the time a Prospect is identified by McMoRan pursuant to Paragraph 8.1 hereof, there shall be created an Area of Mutual Interest among McMoRan, Participant and the other members of the McMoRan Group. The lands within such Area of Mutual Interest shall include the involved Prospect and shall be fixed and determined in the following manner: (a) McMoRan shall submit to Participant and the other members of the McMoRan Group a plat delineating the area which it determines on a sound geological basis should be considered as the area which, even though outside the boundaries of the Prospect, should be considered an area of mutual interest in connection with the Prospect. (b) In the event that Participant does not accept the proposed area of mutual interest, consultation shall be had between McMoRan and Participant and the other members of the McMoRan Group in an effort to fix and determine the area to constitute the area of mutual interest. (c) If McMoRan and the other members of the McMoRan Group are able to agree on such area, the area agreed upon shall constitute the Area of Mutual Interest, or if agreement cannot be reached, the area of the Leasehold Interests as to a Prospect all of which is under Federal leasing jurisdiction, or as to any other Prospect the area within one-half (1/2) mile surrounding the outer perimeter of the Prospect, shall constitute the Area of Mutual Interest; provided however, any such AMI shall not include any portion of an Excluded Area. The AMI shall be effective so long as any Leasehold Interests in such AMI is owned by any of the parties or is subject to this Agreement, but in no event longer than the earlier of (i) December 31, 2006 or (ii) one (1) year after the plugging and abandoning of an Exploratory Well thereon unless another Exploratory Well has been commenced thereon or McMoRan and/or another member(s) of the McMoRan Group have agreed to install a drilling and production platform on such Prospect within such one (1) year period. Any acquisition of Leasehold Interests within such AMI after the establishment thereof by McMoRan or Participant or any other member of the McMoRan Group shall be made available to be shared by McMoRan, Participant and the other members of the McMoRan Group. Subject to the rights of any third party under third party AMI agreements as described in Paragraph 13.1, each party shall have the option to participate in any such acquisition in the proportion as such party's then interest in such Prospect as compared to the total interest of the McMoRan Group, which option is to be exercised in the following manner: the acquiring party shall notify each of the other parties of such acquisition, furnish a copy thereof and such title information as the acquiring party has, stating the cost of such acquisition and/or obligations that must be assumed in connection therewith. Each of the other parties shall have a period of fifteen (15) days with respect to the interests not related to a drilling well, and forty-eight (48) hours (or such lesser period as required by the circumstances and stated in the notice) with respect to interests related to a drilling well, after receipt of such notice within which to elect and notify the acquiring party whether or not such party desires to participate in such acquisition. Failure to respond shall be deemed an election on the part of such party not to participate in such acquisition. Upon election and payment to the acquiring party of such other party's share of the cost of such acquisition and assumption of its share of such obligations, such other party shall be entitled to an assignment of its pro rata share of such party's interest in such acquisition. The foregoing provision of this paragraph shall not apply nor shall they alter Participant's obligation to purchase its proportionate part of any Leasehold Interests acquired by McMoRan hereunder in those cases where the costs of acquiring such interests are Exploration Expenditures. In the event any party does not elect to participate in an interest tendered to it under this Paragraph 13.2 the participating parties may, within twenty-four (24) hours after notice thereof, elect to take their proportionate shares of the non-participating party's interest. Time periods expressed in this Paragraph 13.2 are inclusive of Saturdays, Sundays and legal holidays. The provisions of this Paragraph 13.2 shall not be applicable to acquisitions by any party hereto of an interest acquired from any other member of the McMoRan Group or through merger, corporate reorganization or consolidation with or purchase of all or substantially all of the assets of a corporation, an individual or a partnership; provided, however, that the primary purpose of such merger, corporate reorganization, consolidation or purchase is not to acquire Leasehold Interests in a specific Prospect which otherwise would be subject to this Agreement. McMoRan agrees to furnish Participant with a list of names, addresses, persons designated to receive notices and the proportional interest of each of the other members of the McMoRan Group who have a right to participate in acquisitions made by Participant within an AMI. Additionally, McMoRan agrees to secure reciprocal obligations in favor of Participant from each of the other members of the McMoRan Group.

Program Area of Mutual Interest Agreement. At the time a Prospect is identified by McMoRan pursuant to Paragraph 8.1 hereof, there shall be created an Area of Mutual Interest among McMoRan, Participant McMoRan and the other members of the McMoRan GroupParticipant. The lands within such Area of Mutual Interest shall include the involved Prospect and shall be fixed and determined in the following manner: (a) McMoRan shall submit to Participant and the other members of the McMoRan Group a plat delineating the area which it determines on a sound geological basis should be considered as the area which, even though outside the boundaries of the Prospect, should be considered an area of mutual interest in connection with the Prospect. (b) In the event that Participant does not accept the proposed area of mutual interest, consultation shall be had between McMoRan and Participant and the other members of the McMoRan Group in an effort to fix and determine the area to constitute the area of mutual interest. (c) If McMoRan and the other members of the McMoRan Group Participant are able to agree on such area, the area agreed upon shall constitute the Area of Mutual Interest, or if agreement cannot be reached, the area of the Leasehold Interests as to a Prospect all of which is under Federal leasing jurisdiction, or as to any other Prospect the area within one-half (1/2) mile surrounding the outer perimeter of the Prospect, shall constitute the Area of Mutual Interest; provided however, any such AMI shall not include any portion of an Excluded Area. The AMI shall be effective so long as any Leasehold Interests Interest in such AMI is owned by any of the parties or is subject to this Agreement, but in no event longer than the earlier of (i) December 31, 2006 or (ii) one (1) year after the plugging and abandoning of an Exploratory Well thereon unless another Exploratory Well has been commenced thereon or McMoRan and/or another member(s) of the McMoRan Group and Participant have agreed to install a drilling and production platform on such Prospect within such one (1) year period. Any acquisition of Leasehold Interests within such AMI after the establishment thereof by McMoRan or Participant or any other member of the McMoRan Group shall be made available to be shared by McMoRan, Participant McMoRan and the other members of the McMoRan GroupParticipant. Subject to the rights of any third party under third party AMI agreements as described in Paragraph 13.1, each the other party shall have the option to participate in any such acquisition in the same proportion as such party's then interest in such Prospect as compared to the total interest of the McMoRan GroupProspect, which option is to be exercised in the following manner: the acquiring party shall notify each of the other parties of such acquisition, furnish a copy thereof and such title information as the acquiring party has, stating the cost of such acquisition and/or obligations that must be assumed in connection therewith. Each of the The other parties shall have a period of fifteen (15) days with respect to the interests not related to a drilling well, and forty-eight (48) hours (or such lesser period as required by the circumstances and stated in the notice) with respect to interests related to a drilling well, well after receipt of such notice within which to elect and notify the acquiring party whether or not such party desires to participate in such acquisition. Failure to respond shall be deemed an election on the part of such party not to participate in such acquisition. Upon election and payment to the acquiring party of such other party's share of the cost of such acquisition and assumption of its share of such obligations, such other party shall be entitled to an assignment of its pro rata share of such party's interest in such acquisition. The foregoing provision of this paragraph shall not apply nor shall they alter Participant's obligation to purchase its proportionate part of any Leasehold Interests acquired by McMoRan hereunder in those cases where the costs of acquiring such interests are Exploration Expenditures. In the event any party does not elect to participate in an interest tendered to it under this Paragraph 13.2 the participating parties may, within twenty-four (24) hours after notice thereof, elect to take their proportionate shares of the non-participating party's interest. Time periods expressed in this Paragraph 13.2 are inclusive of Saturdays, Sundays and legal holidays. The provisions of this Paragraph 13.2 shall not be applicable to acquisitions by any party hereto of an interest acquired from any other member of the McMoRan Group or through merger, corporate reorganization or consolidation with or purchase of all or substantially all of the assets of a corporation, an individual or a partnership; provided, however, that the primary purpose of such merger, corporate reorganization, consolidation or purchase is not to acquire Leasehold Interests in a specific Prospect which otherwise would be subject to this Agreement. McMoRan agrees to furnish Participant with a list of names, addresses, persons designated to receive notices and the proportional interest of each of the other members of the McMoRan Group who have a right to participate in acquisitions made by Participant within an AMI. Additionally, McMoRan agrees to secure reciprocal obligations in favor of Participant from each of the other members of the McMoRan Group.