EXHIBIT 10.15
JOINT VENTURE AGREEMENT
between
XXXXX XXXXXXXX PETROLEUM COMPANY LIMITED
and
LIBERTY TECHNICAL SERVICES LTD.
NIGERIAN OIL PROSPECTING LICENCE (OPL) 309
THIS JOINT VENTURE AGREEMENT is made and entered into as of the 9th day of
March, 1992 by and between:
XXXXX XXXXXXXX PETROLEUM COMPANY LIMITED, of 15th floor, Xxxxx Xxxxx, 00 Xxxxxx,
Xxxxx, Xxxxxxx, (herein called "Owner/Operator")
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LIBERTY TECHNICAL SERVICES LTD., of Suite 980 XxXxxxxxx Tower 000 Xxxxxx Xxxxxx
X.X., Xxxxxxx, Xxxxxxx, Xxxxxx, (herein called "Technical Partner")
WHEREAS
(a) On June 26,1991, the Government approved the allocation of the
Concession to the Owner.
(b) On February 21, 1992, the Owners and the Technical Partner agreed to
enter into a joint venture for the exploration and development of the
Concession.
NOW THEREFORE, in consideration of the mutual promises and covenants hereinafter
set forth, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 The terms defined in the recitals hereof or at other instances herein
shall have the meaning attributed to them thereby. In addition, the following
words and expressions shall, for the purpose of this Joint Venture Agreement,
bear the meanings respectively set opposite them:
"AFFILIATE" means a company, partnership or other legal entity which controls,
or is controlled by, or which is controlled by an entity which controls a Party.
Control means the ownership directly or indirectly of more than fifty percent
(50%) of the shares or voting rights in a company, partnership or legal entity;
"AGREEMENT" means this Joint Venture Agreement together with the Exhibits
attached to this Joint Venture Agreement;
"CONCESSION" means the instrument concluded between The Ministry of Petroleum
Resources, Federal Government of Nigeria and the Owner and any extension,
renewal or amendment thereof agreed to in writing;
"CONCESSION AREA" means the area covered by the Concession as described in
Schedule "A" attached hereto;
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"CONTROL" when used in relation to Affiliate, means holding with the power to
vote more than fifty percent (50%) of the outstanding voting securities or
interest of such Affiliate;
"COMMERCIAL QUANTITIES" means Hydrocarbons in such quantities which, in the
opinion of the Parties and the Government, will permit their being developed;
"COST OIL" means forty percent (40%) of the total production of Hydrocarbons
which is allocated to the Technical Partner for the recovery of Petroleum Costs;
"EFFECTIVE DATE" means the date first written above;
"GOVERNMENT" means the Federal Government of Nigeria as represented by the
Minister of Petroleum Resources;
"HYDROCARBONS" means all substances including liquid and gaseous hydrocarbons
which are subject to and covered by this Joint Venture;
"MINIMUM WORK OBLIGATIONS" means those work and/or expenditure obligations
specified in the Concession Agreement which must be performed in order to
satisfy the obligations as outlined in the concession agreement;
"PARTICIPATING INTEREST" means the undivided percentage interest of each Party
in the costs required to carry out the Work Program on the Concession pursuant
to this Joint Venture Agreement;
"PARTY" means a party to this Agreement and any successors or assigns, in
accordance with the provisions of this Agreement;
"PAYOUT" means that point where accumulated Cost Oil is equal to the total
Petroleum Cost, on the said concession;
"PETROLEUM COSTS" means all costs and expenses incurred by the Parties both
within and without Nigeria in connection with the exploration, development and
operation of the Concession Area;
"PROFIT OIL" means Thirty percent (30%) of the total production of Hydrocarbons,
in excess of Cost Oil and Tax Oil, which is allocated to the Parties as herein
provided;
"RECOVERY OF PETROLEUM COSTS" means that point in time when Petroleum Costs have
been recovered out of Cost Oil as defined in Schedule "C";
"SCHEDULE "C"" means the Operating Agreement attached hereto.
"TAX OIL" means Thirty percent (30%) of the total production of Hydrocarbons
which is allocated to the Federal Government of Nigeria as payment of all
royalties and taxes;
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"WORK PROGRAM" means the work program and budget attached hereto as Schedule "B"
for operations to be carried out on the Concession prepared by the technical
partner and approved by the owners and the Government.
1.2 All other terms specifically defined in the Concession and not defined
herein shall have the meanings assigned to them in the Concession unless the
context clearly requires otherwise. In addition, where the context requires,
the singular shall include the plural and the plural shall include the singular.
ARTICLE II
GOVERNMENT APPROVAL
2.1 Upon execution of this Agreement, the Owner shall obtain the approval of
the Government to the terms of this Agreement.
2.2 The Owner will provide the Technical Partners with evidence that it is
the holder of the Concession and that the Concession is in good standing with
the Government as of the Effective Date. Owner will supply the Technical
Partner with a copy of the Concession Agreement and any amendments and
correspondence relating thereto together with copies of all geological,
geophysical and other technical data which the Owner has in its possession
relating to the Concession Area.
2.3 And Owner shall maintain said Concession in good standing throughout the
term of this agreement.
ARTICLE III
EXPLORATION PERIOD
3.1 The Owner/Operator will have the right to carry out an exploration
program on the Concession Area in accordance with the Work Program which will be
sufficient to meet the Minimum Work Obligations under the Concession Agreement.
3.2 All costs incurred in carrying out the Work Program shall be borne by
the Technical Partners.
ARTICLE IV
DEVELOPMENT PERIOD
4.1 In the event Hydrocarbons are discovered in Commercial Quantities on the
Concession Area, the owners on behalf of the Parties shall apply to the
Government for an Oil Mining Lease in accordance with the applicable Government
regulations.
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ARTICLE V
PARTICIPATING INTERESTS
5.1 All costs incurred in operating and developing the concession before
Payout shall be as follows:
Owners 0%
Technical partner 100%
5.2 All costs incurred in operating and developing the concession after
payout, shall be as follows:
Owners 60%
Technical partner 40%
5.3 In the event the Government elects to exercise its right to participate
in the development of the Concession Area, the Participating Interests will be
amended accordingly.
ARTICLE VI
ALLOCATION OF PRODUCTION
6.1 All Hydrocarbons produced from the Concession Area shall be allocated as
follows:
(a) Prior to Payout:
COST OIL TAX OIL PROFIT OIL
--------- -------- -----------
Technical Partner 40% 0% 15%
--------- -------- -----------
Owner 0% 0% 15%
--------- -------- -----------
Government 0% 30% 0%
--------- -------- -----------
(b) After Payout:
COST OIL TAX OIL PROFIT OIL
--------- -------- -----------
Technical Partner 0% 0% 28%
--------- -------- -----------
Owner 0% 0% 42%
--------- -------- -----------
Government 0% 30% 0%
--------- -------- -----------
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ARTICLE VII
ASSIGNMENT
7.1 This Agreement and all the provisions hereof shall be binding upon and
enure to the benefit of the respective parties hereto and their respective
successors and assigns but neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Concession shall be assigned by
any Party without the prior written consent of the other Party, and the Nigerian
Government if necessary, but may be assigned to Affiliates without such consent
subject to the provisions of this Agreement.
ARTICLE VIII
OPERATING AGREEMENT
8.1 All operations on the Concession Area shall be carried out in accordance
with the provisions of a Model Form International Operating Agreement 1990, a
copy of which is attached hereto as Schedule "C".
8.2 All working interest parties to the said concession will be subject to
said Operating Agreement.
ARTICLE IX
APPLICABLE LAW AND DISPUTE RESOLUTION
9.1 This Agreement shall be governed by, construed, interpreted and applied
in accordance with the laws of the United Kingdom.
9.2 Any dispute arising out of and relating to this Agreement and which the
Parties have not settled by themselves, shall finally be decided, to the
exclusion of the courts, by arbitration in accordance with the arbitration rules
of the International Chamber of Commerce. Three arbitrators shall be appointed,
each Party appointing one arbitrator, and the two arbitrators thus appointed
choosing the presiding arbitrator. In reaching a decision, the arbitrators
shall act ex aequo et xxxx and shall be guided primarily by the terms of this
Agreement and International practice in similar agreements.
ARTICLE X
TERM
10.1 This Agreement shall remain in force and effect until all materials,
equipment and personal property used or obtained hereunder have been disposed of
and final settlement of all payments due under the terms of this Agreement have
been made among the Parties. Thereafter, this Agreement shall terminate upon
the occurrence of the earliest of the events described below:
(a) It is terminated by unanimous written consent of the Parties;
(b) The date on which all interests in production become vested in one
Party;
(c) The expiration or termination of the Concession Agreement, including
any leases granted therefrom and any extensions thereof;
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(d) Fifty years from the date hereof.
ARTICLE XI
MISCELLANEOUS
11.1 In the event any provisions of this agreement conflict with the
provisions of the Concession or the operating agreement referred to in Article
VIII, the Parties shall meet and attempt in good faith to negotiate and document
such changes in this Agreement as may be appropriate to make it conform to such
other documents.
11.2 This Agreement may be amended only by a written instrument executed by
the Parties.
11.3 This Agreement supersedes any and all other agreements, oral or
written, among the Parties in respect of the subject matter of this Agreement.
11.4 Each of the Parties shall execute and deliver such other certificates,
agreements and other documents and take such other actions as may reasonably be
requested by the other Party in order to consummate or implement the
transactions contemplated by this Agreement.
11.5 All notices, requests, demands or other communications hereunder shall
be delivered by hand or sent by mail as appropriate or by facsimile, telex or
telegram to the Parties at the address provided below:
OWNERS: TECHNICAL PARTNERS:
------- --------------------
Xxxxx Xxxxxxxx Petroleum Limited Liberty Technical Services Ltd.
Xxxxx Xxxxx (00xx Xxxxx) Attention: Xxxx X. Xxxxx
00 Xxxxxx Xxxxx 000 XxXxxxxxx Xxxxx
X.X. Xxx 0000 700 Fourth Avenue S.W.
Lagos Calgary, Alberta
Nigeria T2P 3J4
Ph. (000) 000-0000
Fax (000) 000-0000
ARTICLE XII
PAYMENTS
12.1 Upon written approval from the Federal Government of Nigeria, in order
to continue this Agreement, Technical Partner shall make the Owner the following
payments:
(a) within 60 days of said approval or May 31,1992 which ever is the
latter, [confidential] (US);
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(b) and within 90 days of said approval or June 30,1992 which ever is the
latter, to pay an additional [confidential] (US);
(c) [confidential] (US) within 30 days of conversion of this OPL to an Oil
Mining Lease.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized officers and representatives as of the day and year first
written above.
XXXXX XXXXXXXX PETROLEUM COMPANY LIMITED
Per: /s/ Xxxxx Xxxxxxxx
--------------------
Per:
--------------------
LIBERTY TECHNICAL SERVICES LTD.
Per: /s/ Xxxx Xxxxxxxxx
--------------------
Per:
--------------------
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SCHEDULE "A"
CONCESSION MAP
(Insert map)
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SCHEDULE "B"
WORK PROGRAM - OPL 309
WORK DESCRIPTION ESTIMATED TIMING ESTIMATED COSTS
---------------------------------------- --------------------- ----------------
EVALUATION OF EXISTING DATA JUNE - JULY/92 $ 200,000
---------------------------------------- --------------------- ----------------
SHOOT NEW SEISMIC AUGUST - DECEMBER/92 $ 1,800,000
--------------------- ----------------
PROCESS DATA AND RE-MAP JANUARY - FEBRUARY/93 $ 200,000
--------------------- ----------------
PICK TWO LOCATIONS AND WORK UP LOGISTICS MARCH - MAY/93 $ 100,000
--------------------- ----------------
DRILL TWO TEST XXXXX XXXX - DECEMBER/93 $ 12,800,000
--------------------- ----------------
DRILL TWO CONFIRMATION XXXXX JANUARY - DECEMBER/94 $ 12,800,000
--------------------- ----------------
DEVELOP FIELD(S):
- 18 XXXXX 1995 - 1997 $ 100,000,000
- DESIGN AND INSTALL PRODUCTION
FACILITIES 1995 - 1998 $ 24,000,000
--------------------- ----------------
TOTALS 1992 - 1998 $ 151,900,000
--------------------- ----------------
CONTINUE EXPLORATION 1997 -
CYCLE UNTIL BLOCK FULLY
DEVELOPED
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SCHEDULE "B"
INTERNATIONAL JOINT VENTURE OPERATING AGREEMENT
This document is filed as Exhibit 10.16 to the Form 10-KSB dated March 1, 1999.
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