Dated this 9th day of November, 0000
XXX XXXXXXXX XXXXXXXXX XX XXXXXXXXX
Petroleum (Prospecting and Mining) Act
PALM VALLEY PRODUCTION LEASE (OL3)
MAGELLAN PETROLEUM (N.T.) PTY LTD.
THIS LEASE made the 9th day of November One thousand nine hundred and eighty-two
BETWEEN the NORTHERN TERRITORY OF AUSTRALIA (in this lease called "the
Territory") of the one part and MAGELLAN PETROLEUM (N.T.) PTY LTD a company
incorporated under the Companies Act of the State of Queensland and having its
registered office in the Territory care of Veritatem Nominees (N.T.) Pty Ltd,
5th Floor, City Mutual Building, 00 Xxxxxxxx Xxxxxx, Xxxxxx in the Territory (in
this lease called "the lessee" which expression shall, where the context so
admits, include its successors in title and permitted assigns) of the other part
WHEREAS the lessee is the holder of a permit issued in pursuance of section 21
of the Petroleum (Prospecting and Mining) Act (in this lease called "the Act")
AND WHEREAS the lessee has applied to the Minister for Mines and Energy for the
issue of a lease under section 43 of the Act AND WHEREAS the Territory is
desirous of leasing to the lessee in pursuance of the Act and in consideration
of the rent, royalties and covenants hereinafter reserved and provided and on
the part of the lessee to be paid and observed ALL THAT piece or parcel of land
(in this lease called "the land") containing by admeasurement 615.70 square
kilometres or thereabouts and more particularly described and delineated in the
Schedule to this lease for the purpose of mining for petroleum TOGETHER WITH the
rights, liberties, easements, advantages and appurtenances thereto belonging or
appertaining NOW THEREFORE I, XXX XXXXXXX TUXWORTH, the Minister for Mines and
Energy for and on behalf of the Territory, in pursuance of the Act, hereby grant
to the lessee a lease over the land in accordance with and under the terms of
the Act EXCEPTING and RESERVING out of this lease -
(a) the right of the Territory to grant, upon such terms and
conditions as the Minister thinks fit, for joint or several
use, such rights of way or easements through, upon, over or in
the whole of or any portion of the land to which this lease
applies as are necessary for or appropriate to -
(i) the development or working of the land or of other
land containing petroleum deposits;
(ii) the treatment or transportation of the products from
those petroleum deposits by or under the authority of
the Minister, his permittees or lessees;
(iii) the development or working of agricultural land or
land in respect of which a miner's right, mining
lease or a prospecting authority has been issued or a
reservation has been made under the Mining Act; or
(iv) any other public purpose;
(b) the right to all helium found in association with petroleum
and the right to erect on the land a plant for the extraction
of helium from any gases produced by the lessee, together with
such incidental rights as are necessary for the purpose of
removing the helium;
(c) the right to authorize mining on the land, in respect of which
a lease is in force, under the provisions of the Mining Act;
(d) the right to any substance in or on the land to which the
lease applies which is a prescribed substance within the
meaning of the Atomic Energy Xxx 0000 of the Commonwealth;
(e) the right to enter the land for the purpose of making a
reconnaissance survey, detailed survey or a scientific or
technical investigation; and
(f) the right to grant authority to a person under section 28 of
the Act to enter the land for the purpose of making a
geological investigation and for that purpose to carry out
geological surveys on that land.
TO HOLD the same UNTO THE LESSEE for the term of 21 years commencing on the date
of this lease with the right as provided for in section 50 of the Act to renew
the same for a further period of 21 years and such further renewals or
extensions permitted under the Act for the purpose of mining for petroleum on
the land and for all purposes necessary to carry on the lessee's overall mining
operations under the Act on or in the land including, subject to compliance with
any law with respect to water or timber and subject to such conditions with
respect to payment or otherwise as are prescribed by the Act or the Regulations
made under the Act -
(a) for the drilling and taking of water that is or may be under
the surface of the land and to take and divert water from any
natural spring, lake, pool or watercourse situated on or
flowing through any land (including private land and improved
land) to which the lease applies and use the water for any
purpose for prospecting or mining operations under the lease;
and
(b) for the cutting and using of timber on the land (other than
private land or improved land) to which the lease applies for
building or construction work, firewood or other necessary
purposes but the lessee shall not cut timber on such lands as
are specified by the Minister by notice in the Government
Gazette of the Territory nor on land which is -
(i) within a distance of 3 kilometres from a homestead or
outstation; or
(ii) within a distance of 3 kilometres from a watering
point,
on land held under a pastoral lease, pastoral homestead lease
or grazing licence granted under the Crown Lands Act,
but upon and subject to the Act YIELDING AND PAYING thereto the yearly rent
hereinafter provided AND FURTHER YIELDING AND PAYING therefor royalties at the
rates and in the manner hereinafter provided:
1. THE LESSEE for itself and for its successors and permitted assigns
covenants with the Territory -
(a) to pay, during the period of this lease, the rent and
royalties prescribed by the Act clear of all deductions at the
respective rates and times and in the manner provided in the
Act;
(b) unless authorized to do so by the Minister not to bore or sink
for, pump or raise water, nor to erect any dam or other
facility on existing rivers or water-ways for the purpose of
the supply of water;
(c) to operate in accordance with good oilfield practice and in
accordance with the Technical Report, and to take all steps
necessary to restore and leave the surface of the land in a
condition satisfactory to the Minister so that -
(i) there shall be no abnormal batters or contours;
(ii) the surface soil (if any) existing prior to the
mining operations shall, where possible, be preserved
and subsequently spread to maximum advantage over the
mined area;
(iii) there shall be a minimum interference with the
natural drainage system except where it is found
expedient to use any mined area for the storage of
water;
(iv) there shall not arise any pollution of any drainage
system that is dangerous or injurious to public
health; and
(v) the provisions of sub-paragraph (ii) of this
paragraph shall be carried out progressively within 3
months of the cessation of mining on that mined area
in order to allow for the regeneration of vegetation;
(d) not to use or work the land nor permit it to be used or worked
except for the purposes for which it is leased;
(e) to observe, perform and carry out the provisions of the Act
and the Regulations and of the Mines Safety Control Act and
the Regulations for the time being in force under that Act or
any other Act so far as those provisions affect or have
reference to a lease granted under the Act;
(f) during the whole of the period in which any well is being
drilled in the land and thereafter until the well is plugged
and abandoned at the sole expense or cost of the lessee to
maintain with an insurance company approved by the Minister a
policy of insurance covering the control of well redrilling
and well recompletion expenses seepage, pollution and general
liability in the sum of not less than seven million dollars in
respect of any one loss arising out of any one event
indemnified (or such other form of insurance as is acceptable
to the Minister) naming the Territory as Lessor and upon
request by the Minister to produce evidence of the currency of
such insurance;
(g) to treat the petroleum in accordance with good oilfield
practice and considering the circumstances to make the best
use of the petroleum reserves;
(h) to take competent advice in association with experts nominated
by the Minister as to what steps are reasonably possible to
progressively encourage and promote regeneration and
development of vegetation on mined areas;
(j) to erect such fences or to take such other steps as may be
reasonably necessary for security or safety purposes;
(k) to permit access to any part of the land, not being a part or
parts designated a restricted area under paragraph (j) of this
clause, by the officers, employees and agents of the Minister
or the Territory;
(m) not to interfere with or mine on any public road on the land
unless the lessee has provided an alternative road approved by
the Minister;
(n) not to interfere with or mine in an area constituting a public
airstrip unless and until the lessee has first constructed an
alternative comparable airstrip on other land specified for
that purpose by the Minister and the alternative airstrip is
licensed for the same purpose as the existing public airstrip;
and
(p) to allow free public access to and along any public road and
the airstrip or the alternative airstrip constructed in
accordance with paragraph (n) of this clause.
2. AND THE LESSEE for itself and its successors and permitted assigns
further covenants with the Territory -
(1) For the purpose of calculating the value at the well-head of all
substances upon which a royalty is payable as provided by the Act, the lessee
shall measure the quantity of such substances by a measuring device approved by
the Minister and installed at the well-head, or at such other place as the
Minister approves, by the lessee.
(2) The lessee shall, from time to time, permit any person authorized
by the Minister, at such times as the Minister may require, to test and examine
any measuring device used or to be used by the lessee to measure the quantity of
petroleum recovered from the land.
(3) The lessee shall, at all times during the continuance of the lease,
comply with the Act and Regulations and all other laws from time to time in
force so far as they are applicable to or in relation to the land and the use of
the land by the lessee.
(4) The lessee shall comply promptly with the requirements of all
notices relating to the land and the use of the land by the lessee lawfully
given to the lessee in pursuance of any law in force in the Territory.
(5) When and as often as the lessee intends to construct on the land
any permanent building, plant, water-way, road or other improvement or structure
permitted to be constructed by the Act or Regulations, the lessee shall give to
the Minister written notice of the proposed location thereof and shall obtain
the Minister's written consent before commencing any such construction work,
which consent may be given on such terms and conditions as the Minister thinks
fit, and the lessee shall give to the Minister such further information as the
Minister may, from time to time, require in respect of any such construction.
(6) The lessee shall, from time to time when so required in writing by
the Minister during the continuance of the lease, make provision to the
satisfaction of the Minister for the continued conservation and protection of
the natural resources of the land, including fauna and flora, and for minimizing
damage to or pollution or degradation of the natural environment and in
accordance with the Environmental Report.
(7) If the Minister so directs in writing, the lessee shall, within 3
months next following the expiration or earlier determination of the lease,
remove from the land all plant, buildings, equipment and other property of the
lessee reasonably capable of being so removed.
(8) The lessee shall take all reasonable steps to ensure that -
(a) topsoil from all disturbed areas of the land is stockpiled
and, within the 3 months next following the expiration or
earlier determination of the lease, is to the satisfaction of
the Minister respread to maximum advantage for rehabilitation
and revegetation purposes; and
(b) wherever vegetation on the land has been removed, damaged or
interfered with, within 3 months next following the expiration
or earlier determination of the lease, all areas from or on
which vegetation has been so removed, damaged or interfered
with is revegetated in the manner and to the extent required
by the Minister.
(9) The waiver by the Minister of any default by the lessee shall not
prevent the Minister from cancelling the lease pursuant to the Act or the
exercise by the Minister of any other remedy he may have by reason of any other
cause or for the same cause arising at any other time.
(10) The lessee shall inform all employees, agents and contractors of
the lessee from time to time working on the land of the principal obligations of
the lessee under any agreement between the lessee and a Land Council established
by or under the Aboriginal Land Rights (Northern Xxxxxxxxx) Xxx 0000 of the
Commonwealth and shall take all reasonable steps to ensure that such employees,
agents and contractors comply with and observe such obligations.
(11) The lessee shall, at all times, indemnify and keep the Territory
and the Minister, and all servants thereof, indemnified against all actions,
proceedings, costs, charges, claims and demands whatsoever which may be made or
brought against the Territory or the Minister or any such servant by any person
whomsoever in relation to or in connection with the lease or any matter or thing
done or purported to have been done in pursuance thereof.
(12) The lessee shall, from time to time, deliver to the Minister or
his duly authorized representative copies of or extracts from such records of
the lessee relating to the land or the operations of the lessee thereon as the
Minister may, from time to time in writing, require.
(13) The lessee shall, at all times, permit a person duly authorized in
writing by the Minister to inspect any of the records of the lessee relating to
the land or the operations of the lessee thereon and that person may take such
copies of or extracts from such records as he requires.
3. AND IT IS further expressly agreed and declared between the parties
hereto -
(a) that the lessee shall conduct all operations on the land in
accordance with good oilfield practice and in a diligent,
careful and workmanlike manner and in accordance with the law
applicable to such operations and in accordance with the
Technical Report;
(b) that the lessee shall, prior to the signing of this lease,
execute and deliver to the Minister a bond in a form approved
by the Minister;
(c) that in accordance with the Technical Report, the lessee will
attempt to determine the deliverability of the field within
two years from the date of commencement of production and
transmission of gas from the field, and at the end of that
period or such longer period as the Minister allows, will
provide a written assessment of the reserves in the field and
a further Technical Report on the subsequent development of
the field for the Minister's approval; and
(d) that pursuant to section 55(4) of the Act, the Minister
directs that no well be drilled in the lease area, as required
by 55(l)(a)(ii) of the Act, until he has considered the
written assessment of reserves and Technical Report referred
to in 3(c), or until the drilling of the said well or xxxxx
becomes necessary for the proper appraisal of the gas field or
the continued production of gas from such field, whichever is
the earlier, or unless the lessee elects to drill at any
earlier date, consistent with the objectives of the Technical
Report.
4. (1) ANY DISPUTE or difference between the parties arising out of or in
connection with this lease, which the parties have been unable to settle by
negotiation and agreement shall, at the request of either party made to the
other in writing and stating the matter in dispute, be submitted to the
arbitration of 3 arbitrators, one to be appointed by the Minister, one to be
appointed by the lessee and the third to be chosen by the 2 arbitrators so
appointed.
(2) Any such arbitration shall be held in Darwin and shall be conducted
in accordance with the Arbitration Rules of the International Chamber of
Commerce as in force on the first day of June 1955, and it is expressly agreed
that notwithstanding anything to the contrary contained in the aforesaid
Arbitration Rules, adoption by the parties of such rules shall not constitute or
operate as a waiver by either party of its right of appeal from any award on a
point of law nor operate so as to exclude the jurisdiction of any court
competent to decide such point of law.
(3) Each party shall bear its own costs in connection with such
arbitration and the expenses of the arbitrators shall be borne as the
arbitrators may direct. The majority decision of the arbitrators shall prevail
and shall constitute an award. Any award made in respect of a dispute or
difference submitted to arbitration pursuant to this clause shall, except on a
point of law, be final and binding upon the parties.
(4) The making of an award upon any dispute or difference capable of
being submitted to arbitration pursuant to this clause shall be a condition
precedent to any action upon such dispute or difference, it being expressly
agreed that no cause of action shall arise upon such dispute or difference until
the making of an award as aforesaid.
5. (1) IN THIS LEASE, unless the contrary intention appears -
"Environment Report" means the Environment Assessment and Management
Report - Palm Valley Gas Project dated March 8, 1982 and
approved by the Minister on the 25th day of October, 1982;
"Minister" means the Minister for Mines and Energy, or such other
Minister for the Territory as may be charged with the
administration of the Act;
"Technical Report" means the Technical Report - Palm Valley Project and
the Supplemental Testing Programme approved by the Minister on
the 8th day of November 1982 together with such modifications
or amendments that are approved by the Minister from time to
time.
(2) For the purposes of this lease, the expression "good oilfield
practice", wherever occurring in this lease, shall include the requirement that
the land will be developed in accordance with the technology which, from time to
time, is determined in writing by the Minister to be the most appropriate
technology and which causes the least damage to the natural resources of the
land, including the fauna and flora, and the least damage to or pollution or
degradation of the natural environment.
SIGNED by XXX XXXXXXX TUXWORTH, )
)
Minister for Mines and Energy, for )
)
and on behalf of the Northern )
)
Territory of Australia in the )
)
presence of )
/s/ Xxx Xxxxxxx Tuxworth
.................................
/s/ _________________________
THE COMMON SEAL of MAGELLAN )
)
PETROLEUM (N.T.) PTY LTD was )
)
hereunto affixed by authority of )
)
the Directors in the presence of )
/s/ Xxx X. Xxxxxxx
Director .................................
/s/ Xxxxxx Xxxxxx
Secretary .................................
-------------------------------
SCHEDULE
ALL THAT piece or parcel of land in the Northern Territory of Australia
containing an area of 237.72 square miles (615.70 square kilometres) more or
less, the boundary of which is described as follows:
Commencing at the intersection of latitude 23(degree)57' with longitude
132(degree)25' thence proceeding to the intersection of latitude 23(degree)57'
with longitude 132(degree)45' thence proceeding to the intersection of latitude
24(degree)01'35" with longitude 132(degree)55'02" thence proceeding to the
intersection of 24(degree)06' with longitude 132(degree)55'02" thence proceeding
to the intersection of latitude 24(degree)06' with longitude 132(degree)49'57"
thence proceeding to the intersection of latitude 24(degree)03'45" with
longitude 132(degree)45'02" thence proceeding to the intersection of latitude
24(degree)03'45" with longitude 132(degree)25' thence proceeding to the
intersection of latitude 23(degree)57' with longitude 132(degree)25'.
