JOINT EVALUATION AND
LICENCE APPLICATION AGREEMENT
FALKLAND ISLANDS
DATED 29TH DECEMBER 1995
AMERADA XXXX (FALKLAND ISLANDS) LIMITED
EL DORADO EXPLORATION, X.X.
XXXX RESEARCH S.A.
ARGOS EVERGREEN LIMITED
JOINT EVALUATION AND LICENCE APPLICATION AGREEMENT
FALKLAND ISLANDS
INDEX
CLAUSE
TITLE PAGE
1. DEFINITIONS 2
2. SCOPE OF AGREEMENT 6
3. PERCENTAGE INTERESTS 7
4. OPERATOR 8
5. MANAGEMENT COMMITTEE 10
6. LICENCE APPLICATION PROCEDURE 12
7. PROGRAMME AND BUDGET 16
8. COSTS AND ACCOUNTING 18
9. DEFAULT 20
10. DATA AND CONFIDENTIALITY 23
11. ASSIGNMENT AND ENCUMBRANCE 26
12. RELATIONSHIP OF PARTIES 27
13. FURTHER AGREEMENT AND PRINCIPLES OF
JOINT OPERATING AGREEMENT 28
14. FORCE MAJEURE 31
15. DURATION 32
16. NOTICES 34
17. VARIATION 35
18. GOVERNING LAW 36
EXHIBIT A EVALUATION AREA 37
EXHIBIT B WORK PROGRAMME AND BUDGET 38
EXHIBIT C ALLOCATION OF EXPENDITURES
REGARDING SEISMIC 39
THIS AGREEMENT is made the 29th day of December 1995
BETWEEN
(1) AMERADA XXXX (FALKLAND ISLANDS) LIMITED ("Amerada") having its
registered office at 00 Xxxxxxxxx Xxxxx, Xxxxxx, XX0X 0XX;
(2) EL DORADO EXPLORATION, S.A. ("Xxxxxx") having its principal office at 000
Xxxxx Xxxxxx, Xx Xxxxxx, Xxxxxxxx, 00000, XXX;
(3) FINA RESEARCH S.A., ("Fina") a corporation having its registered office at
Zone Industrielle C, B-7181 Seneffe (Feluy), Belgium; and
(4) ARGOS EVERGREEN LIMITED ("Argos") having its registered office at 00 Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx Xxxxxxx.
WHEREAS
(A) the Parties believe acreage in the Evaluation Area is, or may become,
available for application; and
(B) the Parties desire to conduct certain joint studies and evaluations for the
purpose of making applications for Licences that may be offered and awarded
by the Falkland Islands Government in the First Licensing Round for the
purposes of exploring for petroleum in certain areas of controlled waters
offshore of the Falkland Islands; and
(C) the Parties wish to define their respective rights, interests, obligations
and liabilities with regard to the said applications, evaluations and
operations to be conducted in respect thereof or pursuant thereto;
NOW IT IS HEREBY AGREED AS FOLLOWS
1. DEFINITIONS
1.1 In this Agreement:-
"ACCRUAL BASIS" means that basis of accounting under which costs and
benefits are regarded as applicable to the period in which the
liability for the cost is incurred or the right to the benefit arises
regardless of when invoiced, paid or received;
"ADVANCE" means any payment of cash required to be made pursuant to a
Cash Call;
"AFFILIATE" means in relation to each Party:-
(a) a company of which the equity share capital conferring a
majority of votes at shareholders' meetings of such company is
owned directly or indirectly by such Party;
(b) a company which owns directly or indirectly equity share capital
conferring a majority of votes at shareholders' meetings of such
Party; or
(c) a company of which the equity share capital conferring a majority
of votes at shareholders' meetings of such company is owned
directly or indirectly by a company which also owns equity share
capital conferring a majority of votes at shareholders' meetings
of such Party;
"APPLICATION" means an application for a Licence in the Evaluation
Area during the First Licensing Round;
"CASH CALL" means any request for payment of cash made under clause
8.4 hereof by the Operator to the Parties in connection with Joint
Operations;
"CLOSING DATE" means the closing date for submission of Applications
as notified by the Governor in the Gazette notice;
"DEFAULTING PARTY" has the meaning ascribed to that term in clause 9.1
hereof;
"FIRST LICENSING ROUND" means and extends throughout the period from
the first official publication by or on behalf of the Governor of the
invitation to submit applications for licences in the first round of
licensing in respect of Tranches within the Evaluation Area up to and
including the Closing Date;
"EVALUATION AREA" means the area outlined in red on the map contained
in Exhibit "A" attached hereto and made a part hereof;
"FORCE MAJEURE" means any circumstances which are beyond the
reasonable control of a Party and which could not have been avoided by
reasonable diligence on its part provided always that a lack of funds
shall not constitute Force Majeure;
"GAZETTE NOTICE" shall have the meaning ascribed to that term in the
Regulations;
"GOVERNOR" shall mean the Governor of the Falkland Islands or any
successor in office or any other person being responsible for the
carrying out of the function at present being carried out by him in
relation to the First Licensing Round or any Licence;
"GROSS NEGLIGENCE" means an intentional and conscious or reckless
disregard of any provision of this Agreement but shall not include any
error of judgement or mistake made by any managerial or supervisory
personnel of a Party or of the Operator in the exercise in good faith
of any function, authority or discretion conferred upon such Party or
the Operator;
"JOA" means a joint operating agreement to be agreed by the Licensees
following the award of a Licence pursuant to an Application to
regulate the relationship between such Licensees in relation to all of
the activities to be undertaken under such Licence;
"JOINT ACCOUNT" means the accounts established and maintained by the
Operator to record all Advances, expenditures and receipts in the
conduct of Joint Operations;
"JOINT DATA" has the meaning ascribed to that term in clause 10.3
hereof;
"JOINT OPERATIONS" means all studies, evaluations and operations
conducted by the Operator, or as the Parties may otherwise agree, for
and on behalf of the Parties pursuant to the terms of this Agreement;
"JOINT PROPERTY" means all property held, owned or acquired by the
Parties for the purposes of the Joint Operations, including any cash
held in any bank accounts maintained pursuant to the provisions of
this Agreement;
"LICENCE" means a petroleum production licence granted by the Governor
to search and bore for and get petroleum;
"LICENSEES" means in relation to any Licence granted pursuant to an
Application the Parties to whom such Licence is granted and their
respective successors and assigns;
"MANAGEMENT COMMITTEE" means the committee established pursuant to
clause 5.1 hereof;
"MONTH" means a calendar month;
"NON-DEFAULTING PARTY" has the meaning ascribed to that term in clause
9.1(ii) hereof;
"NON-OPERATOR" means a Party other than the Operator;
"OPERATOR" means Amerada Xxxx (Falkland Islands) Limited or, in the
event that another Party is selected to act as Operator under
clause 6.8 hereof, such other Party acting in its capacity as Operator
hereunder and not as the holder of a Percentage Interest;
"PARTY" means a Party to this Agreement and its permitted successors
and assigns;
"PERCENTAGE INTEREST" means in relation to each Party the undivided
percentage interest held by it from time to time under this Agreement;
"PRIME NOMINATION" has the meaning ascribed to that term in
clause 6.5(i) hereof;
"QUARTER" means a period of three months ending on 31st March,
30th June, 30th September or 31st December in any Year;
"REGULATIONS" means the Offshore Petroleum (Licensing) Regulations
1995 as amended from time to time;
"SECONDARY NOMINATION" has the meaning ascribed to that term in clause
6.5(ii) hereof;
"SELECTION MEETING" means the meeting of the Parties convened for the
purposes referred to in clause 6.3 hereof;
"TRANCHE" has the meaning ascribed to that term in the Regulations;
"WORK COMMITMENT MEETING" means the meeting of the Parties convened
for the purposes referred to in clause 6.4 hereof;
"WORK PROGRAMME AND BUDGET" means the work programme and budget
detailed in Exhibit B, as may be amended from time to time according
to this Agreement;
"WORK TENDER" has the meaning ascribed to that term in clause 6.4
hereof;
"WORKING DAY" means a day (other than a Saturday or Sunday or Public
Holiday) on which banks in the City of London are normally open for
business;
"YEAR" means a calendar year according to the Gregorian Calendar.
1.2 Reference to the singular includes a reference to the plural and vice
versa.
1.3 Reference to any gender includes a reference to all other genders.
1.4 Unless the context otherwise requires reference to any clause,
sub-clause or paragraph is to a clause, sub-clause or paragraph of
this Agreement.
1.5 The headings are used for convenience only and shall not affect the
construction or validity of this Agreement.
2. SCOPE OF THE AGREEMENT
2.1 The Parties agree to participate together in the evaluation of
petroleum potential of the Evaluation Area and to set out the basis on
which they may together formulate and submit an Application before the
Falkand Islands Government.
2.2 This Agreement is to define the relationship, respective rights,
interests, obligations and liabilities of the Parties in the
evaluation of the petroleum potential of the Evaluation Area and in
the preparation and submission of any Application.
2.3 Each of the Parties undertakes that it will not during the term of
this Agreement by itself, its Affiliates or otherwise seek to or
acquire an interest in the Evaluation Area or any part thereof without
the prior written consent of the other Parties, except in accordance
with this Agreement.
3. PERCENTAGE INTERESTS
Subject as hereinafter provided all Joint Property and all rights and
obligations arising out of the conduct of Joint Operations shall be owned,
enjoyed and borne by the Parties in proportion to their respective
Percentage Interests which, as at the date hereof, are as follows: -
Amerada 35%
Murphy 30%
Fina 30%
Argos 5%
------
100%
4. OPERATOR
4.1 Amerada is hereby appointed and agrees to act as Operator under and
subject to the terms of this Agreement.
4.2 The Operator has the right and is obliged to conduct Joint Operations
by itself, its agents and its contractors under the overall
supervision and control of the Management Committee.
4.3 The responsibilities of the Operator shall include but not be limited
to:-
(i) appraising the merits of acreage by undertaking appropriate
studies in the Evaluation Area;
(ii) advising the Parties of the results of such appraisal;
(iii) submitting proposals for the acquisition of data for
consideration by the Parties and if such proposals are
approved by the Management Committee acquiring and
appraising such data for the Joint Account;
(iv) representing the Parties in dealings with the Governor in
connection with any Application made pursuant to this
Agreement and advising them of the outcome of all such
representations provided that each Party participating in
the Application shall be consulted in respect of such
dealings and have the right to be represented at any
meetings with the Governor. Except as provided in clause
6.15(i), the Operator shall not commit the participating
Parties in such dealings without their approval, such
approval not to be unreasonably withheld or delayed;
(v) providing reports, data and information in accordance with
the directions of the Management Committee; and
(vi) directing and controlling accounting, technical and advisory
services as may be required for the efficient conduct of
Joint Operations.
4.4 The Operator shall conduct Joint Operations in a proper and
workmanlike manner and with that degree of diligence and prudence
reasonably and ordinarily exercised by experienced operators engaged
in similar activities under similar circumstances.
4.5 The Operator shall consult regularly with the Parties and keep them
fully informed of Joint Operations.
4.6 The Operator shall not be liable to the Patties for any loss or damage
arising out of or resulting from any Joint Operations unless and to
the extent that any such loss or damage results from the Gross
Negligence of the Operator provided always that in no circumstances
whatsoever shall the Operator be liable for any loss of profits, lost
production, pollution clean up costs or other indirect or
consequential losses.
4.7 Subject to the provisions of any approved Work Programme and Budget,
the number, selection, hours of work and remuneration of personnel
employed by the Operator in connection with Joint Operations shall be
determined by the Operator.
4.8 The Operator is authorised to incur such expenditures for the Joint
Account and enter into such commitments as may be authorised by the
Management Committee in accordance with the provisions of this
Agreement.
4.9 The Operator is authorised to take any action and incur such
expenditures as it deems reasonably necessary in the case of an
emergency for the safeguarding of lives or property or the prevention
of pollution. The Operator shall promptly notify the Parties of any
such action or expenditure.
4.10 The Operator shall open and maintain such separately identifiable
accounting records as may be necessary to record in a full and proper
manner all Advances received by the Operator from the Parties and all
expenditure incurred and all receipts obtained by the Operator in
connection with the Joint Operations.
5. MANAGEMENT COMMITTEE
5.1 There is hereby established a Management Committee which shall consist
of one representative appointed by each of the Parties. The Management
Committee shall have overall supervision, direction and control of all
Joint Operations. Each Party shall as soon as possible after the date
hereof give notice of the name of its representative and of an
alternative on the Management Committee. Such representative or
alternative may be replaced by like notice. Such representative may
bring to the Management Committee meetings such advisers as he
considers necessary. The representative or in his absence his
alternative shall be deemed authorised to represent and to bind the
Party which has appointed him.
5.2 The Operator's representative or alternative shall be chairman of the
Management Committee.
5.3 Management Committee meetings shall be held upon the request of any
Party. The Operator shall call each meeting by giving at least ten
(10) Working Days' notice of the place, time and date of the meeting
together with an agenda therefor. By notice any Party may advise of
any additional matters which such Party desires to be considered at the
meeting and provided such notice is given at least three (3) Working
Days before the date of the meeting those matters shall be included in
the agenda for consideration at the meeting. The periods of notice
referred to in this clause 5.3 may be waived with the consent of all
Parties.
5.4 A Party not represented at a meeting may vote on any matter on the
agenda for such meeting by either appointing a proxy in writing or
giving notice of its vote to the Operator.
5.5 The Operator shall appoint a secretary for each meeting of the
Management Committee who will prepare minutes of each meeting and
provide each Party with a copy thereof within ten (10) Working Days of
the date of the meeting. Each Party shall notify the other Parties of
its approval or disapproval of the minutes within seven (7) Working
Days of receipt thereof. Any disagreement shall if possible be
rectified and failing this any disapproval shall be recorded on such
minutes. A Party which fails to give any notice will be deemed to have
approved the minutes. The approval or disapproval of the minutes as
aforesaid shall not affect the validity of decisions taken by the
Management Committee at such meeting.
5.6 All decisions of the Management Committee shall be made by the
affirmative vote of three (3) or more non-Affiliated Parties having in
aggregate a Percentage Interest of in excess of seventy per cent
(70%).
5.7 The Management Committee may vote on and determine by notice to the
Operator any proposal which is submitted to the Parties by the
Operator by notice. Each Party shall cast its vote within ten (10)
Working Days after its receipt of the proposal except where
circumstances dictate determination in less than ten (10) Working Days
and such fact and lesser period (which shall not be less than
forty-eight (48) hours) are so stated in the notice submitting the
proposal, in which event each of the Parties shall cast its vote
within such lesser period. Failure by a Party to cast its vote within
the relevant period shall be regarded as a vote by that Party against
the proposal. The Operator will give prompt notice of the results of
any such voting.
5.8 The Management Committee may establish such advisory sub-committees as
it considers desirable. Each such advisory sub-committee shall be
subject to such procedures as the Management Committee may determine.
6. LICENCE APPLICATION PROCEDURE
6.1 Not later than forty-five (45) days prior to the Closing Date the
Operator shall give notice to all Parties of:
(i) the Tranches in the Evaluation Area which it proposes the
Parties should consider for inclusion in an Application;
(ii) the date and time of the Selection Meeting which date shall
not be later than thirty (30) days prior to the Closing
Date; and
(iii) the date and time of the Work Commitment Heeling which date
shall not be later than twenty-five (25) days prior to the
Closing Date.
6.2 Any Party may within seven (7) days of the date of the notice given
pursuant to clause 6.1 hereof give notice of any additional Trenches
which it proposes the Parties should also consider for inclusion us an
Application.
6.3 At the Selection Meeting the Parties shall review the technical merits
of each Tranche proposed pursuant to clauses 6 1 (i) and 6.2 hereof
and determine:
(i) Prime Tranches being those proposed Tranches which receive
the affirmative vote of all the Parties; and
(ii) Secondary Tranches being those proposed Tranches which
receive the affirmative vote of two (2) or snore Parties
holding in aggregate Percentage Interests of forty five per
cent (45%) or more.
6.4 At the Work Commitment Meeting the Parties shall determine the
proposed work programme to be offered to the Governor in support of
each Application and a further maximum work programme to which the
Patties would be willing to commit (together referred to as the "Work
Tender") for Prime and Secondary Tranches. The Work Tender for Prime
Tranches shall require the unanimous approval of all the Parties. The
Work Tender for each Secondary Tranche shall require the unanimous
approval of those Parties which voted in favour of the Secondary
Tranche in question at the Selection Meeting. If a Work Tender for any
Prime Tranche cannot be unanimously agreed by the Parties or if a Work
Tender for any Secondary Tranche cannot he unanimously agreed by the
Parties which voted in favour of such Tranche then the most onerous of
the proposed
Work Tenders shall be adopted and such Tranche shall the considered as
a Secondary Nomination hereunder as to the Parties agreeing such Work
Tender.
6.5 Promptly following the Work Commitment Meeting, the Operator shall
give notice to each Party of:
(i) each Prime Tranche and the agreed Work Tender in respect
thereof ("Prime Nomination").
(ii) each Secondary Tranche and the agreed Work Tender in respect
thereof ("Secondary Nomination").
6.6 Within seven (7) days of the date of the notice given by the Operator
pursuant to clause 6.5 hereof each Party shall give notice as to
which, if any, of the Secondary Nominations it elects to participate
in. If all Parties elect to participate in a Secondary Nomination then
it shall become a Prime Nomination. If two (2) or more Parties
holding in aggregate Percentage Interests of forty five per cent (45%)
or more elect to participate Its aforesaid then those Parties which do
elect to participate as aforesaid shall be entitled to make an
Application for the Secondary Block in question subject to and in
accordance with clauses 6.8 to 6.14 inclusive.
6.7 Each Application for a Prime Tranche shall be prepared and submitted
to the Governor by the Operator.
6.8 Each Application for a Secondary Tranche shall be prepared and
submitted to the Governor by the Operator unless the Operator is not a
participant in the Application in question, in which event the
participating Party holding the highest Percentage Interest shall be
elected as Operator, unless otherwise agreed by the participating
Parties, and shall prepare and submit such Application.
6.9 The participating interest of each Party participating in an
Application shall be in the proportion that its Percentage Interest
bears to the sum of the Percentage Interests of the Parties
participating in the Application or in such other proportion as the
Parties participating therein may agree.
6.10 Any Party participating in an Application for a Secondary Tranche may,
at any time after the expiry of seven (7) days after the date of the
notice given by the Operator pursuant to clause 6.5 and subject to the
agreement of all the other
Parties participating in such Application (such agreement not to be
unreasonably withheld), introduce third parties to the Application
provided that:
(i) the sum of the participating interests of such Parties in
the Application in question is not thereby reduced to a
figure which is less than the sum of their Percentage
Interests under this Agreement; and
(ii) any such third party agrees to observe and to be bound by
the terms of this Agreement insofar as such terms relate to
the Application in which such third party is participating.
6.11 No Application for a Secondary Tranche shall be made on terms less
onerous than those provided for in the Secondary Nomination.
6.12 Each Party participating in an Application shall take all such thither
actions and execute all such further documents as may be reasonably
required to complete the Application and keep and maintain the saline
in good standing.
6.13 Costs incurred pursuant to this Agreement by a Party on an Accrual
Basis up to the date of election not to participate in a Secondary
Nomination will not be refunded.
6.14 All costs incurred pursuant to this Agreement in connection with an
Application for a Secondary Tranche shall be borne by the Parties
participating therein in proportion to their respective participating
interests in sully Application pursuant to clause 6.9 hereof or in
such other proportion as they may agree.
6.15 If subsequent to the submission by the Operator to the Governor of an
Application it is indicated by or on behalf of the (governor that more
onerous work obligations are required to improve the possibility of
the award of a Licence ("Revised Programme") then:
(i) if such Revised Programme involves a commitment no greater
than the maximum work programme agreed by the Parties
pursuant to clause 6.4 hereof, the Parties participating in
the Application shall discuss the matter and provided that
at least one Party participating in the Application is
prepared to accept the Revised Programme, the Parties shall
commit to such Revised Programme; and
(ii) if the Revised Programme involves a commitment greater than
the maximum work programme agreed by the Parties pursuant to
clause 6.4 and less than all the Parties are willing to
commit to the Revised Programme, any Party not willing to
commit to the Revised Programme may withdraw from the
Application. If the Governor is prepared to allow the
Application to proceed without the withdrawing Party and the
Parties not so withdrawing agree to increase their
Percentage Interests in the original Application and thereby
absorb the Percentage Interest of the withdrawing Party,
then the Application shall proceed accordingly..
6.16 No Application for a Tranche in the Evaluation Area shall be made by
any Party or the Affiliate of any Party otherwise than in accordance
with the terms of this Agreement.
6.17 Subject to clause 6.15 (ii), no Party may withdraw from an Application
after such Application has been submitted to the Governor. Prior to
submission to the Governor, a Party may withdraw from an Application
only with the prior written consent of all the other Parties
participating therein.
6.18 The Parties to an Application agree to take up and be bound by the
terms of a Licence awarded pursuant to this Agreement.
7. PROGRAMME AND BUDGET
7.1 A Work Programme and Budget for the Joint Operations detailed in
Exhibit "B" has been approved by all of the Parties.
Subject to clause 7.2, such approval shall authorise and oblige the
Operator to carry out such Work Programme and make expenditures
within the limits of such agreed Budget.
7.2 Approval of an AFE by the Management Committee shall be required
before any expenditure is incurred by the Operator except in the case
of Licence fees and support costs. Approval of an AFE shall authorise
and oblige the Operator to carry out the work detailed therein.
7.3 At any time any Party may by notice to the other Parties propose that
the approved work programme and budget or any AFE be amended. To the
extent that an amendment is approved in writing by the Management
Committee the work programme and budget or AFE shall be deemed amended
accordingly provided always that any such amendment shall not
invalidate any authorised commitment for expenditure made by the
Operator prior thereto.
7.4 Promptly following the award of a Licence pursuant to an Application
the Operator shall submit to the Licensees a proposed work programme
and budget on an Accrual, Basis by Quarter, relating to operations
under the Licence for the remainder of the Year then current. In the
period prior to the execution of the JOA, the Operator shall, not later
than 1st September in each Year, submit to the Parties a proposed work
programme and budget for the following Year. The Management Committee
shall promptly review each proposed work programme and budget and make
such revisions thereto as may be agreed as soon as practicable with a
view to approving such work programme and budget within thirty (30)
days of the award of such Licence (in the case of the first work
programme and budget) and within sixty (60) days of its submission by
the Operator (in the case of subsequent work programmes and budgets).
Subject to clause 7.2, such approval shall authorise and oblige the
Operator to carry out such work programme.
7.5 The Operator shall not be required to obtain any further approval from
the Management Committee in respect of over-expenditure not exceeding
10% of the AFE (or budget where no AFE is required) provided that
nothing herein shall entitle the Operator to incur expenditure in
respect of any item or work not
included in any approved work programme (unless incurred under clause
4.9 hereof).
8. COSTS AND ACCOUNTING
8.1 It is the intent of the Parties to establish a method of accounting
which shall truly reflect the Operator's actual cost to the end that
the Operator shall, subject to the provisions of this Agreement,
neither gain nor lose by reason of the fact that it acts as the
Operator. It is the intention of the Parties that there shall be no
duplication of items charged to the Joint Account.
8.2 Accounting records shall be maintained in pounds sterling. Advances
made by the Parties, expenditures and receipts in currencies other
than pounds sterling shall be translated into pounds sterling at rates
in accordance with the Operator's standard accounting procedures.
Expenditures incurred in currencies other than pounds sterling or US
dollars shall be recorded at the cost of purchasing such currency with
pounds sterling.
8.3 The Operator shall open and maintain separate current interest earning
bank accounts in respect of funds in pounds sterling and US dollars to
hold the funds of the Parties and shall restrict funds held to a level
consistent with that required for the conduct of the approved
programme. Interest will be credited to the Joint Account. The
Operator shall not, without the prior approval of the Management
Committee, transfer amounts between bank accounts held for different
currencies.
8.4 The Operator shall be entitled to request each Party to pay cash in
advance for its share of approved expenditure in pounds sterling and
US dollars and in doing so shall specify the currency required, the
bank account into which payment is to be made and the due date on
which payment is required. At least ten (10) days' notice shall be
given prior to a Cash Call and at least five days notice shall be
given of any amendment to a Cash Call.
8.5 The Operator shall send a statement to the Parties within twenty (20)
days following the end of each calendar month showing total Cash
Calls, other cash receipts and payments, balances held by the Operator
in each currency, estimated receivables and liabilities and showing
details of expenditures in pounds sterling summarised by descriptive
headings and by AFE as appropriate, in accordance with the Operator's
standard chart of accounts.
8.6 Services provided by the Operator and its Affiliates shall be charged
to the Joint Account at the Operator's and its Affiliates' actual
costs for such services. Services for the purposes of this provision
shall mean all work performed by or
on behalf of the Operator to include but not be limited to the
provision of labour, professional services, laboratory analysis,
purchasing services, studies and administration all as necessary for
the proper conduct of the operations authorised under this Agreement.
Services provided by third parties shall be charged to the Joint
Account at cost.
8.7 Each of the Non-Operators shall have the right to audit the accounts
and records of the Joint Account. Notwithstanding the termination of
this Agreement, this right shall extend for a period of twenty-four
(24) months following the end of the Year in which the expenditure was
made. With the exception of unresolved audit findings all records will
be considered correct thereafter. The Non-Operators shall give at
least thirty (30) days notice of their intention to conduct such an
audit and will use reasonable endeavours to conduct such audits
jointly and in a manner which results in the minimum of inconvenience
to the Operator.
9. DEFAULT
9.1 If any Party ("Defaulting Party") fails to pay in full its share of
any Advance by the due date:
(i) the Operator shall as soon as practicable notify by telex or
facsimile all the Parties of such default;
(ii) each other Party ("Non-Defaulting Party") shall contribute as
hereinafter provided a share of the amount in default in the
proportion that its Percentage Interest bears to the total
Percentage Interests of the Non-Defaulting Parties and pending
receipt of such additional contributions the Operator may make
arrangements to meet any commitments falling due by borrowing
the necessary finance from outside sources or by making the
necessary finance available itself and all costs of any such
finance shall be charged to the Non-Defaulting Parties; finance
made available by the Operator shall bear interest calculated on
a day to day basis at a rate equal to two percent (2%) above the
base lending rate of National Westminster Blank PLC from time to
time;
(iii) if such default continues for more than three (3) Working Days
following the notification by the Operator under clause 9.1(i)
above, the Operator shall promptly notify the Parties of the
liability of each of the Non-Defaulting Parties to contribute to
the amount in default and shall make a request for payment
accordingly, to take effect on the expiry of six (6) Working
Days following notification by the Operator under clause 9.1(i)
above;
(iv) each of the Non-Defaulting Parties shall on the Working Day
next following such sixth Working Day pay the amount notified
under clause 9.1(iii) above and thereafter shall continue to
pay, in addition to its share of subsequent Advances, the same
proportion of that part of all such subsequent Advances
attributable to the Defaulting Party until such time as the
Defaulting Party has remedied its default in full or until
forfeiture as hereinafter provided, and failure by any Party
to make such payments shall render that Party in default.
9.2 The Defaulting Party shall have the right to remedy the default at any
time prior to forfeiture as hereinafter provided, by payment in full
to the Operator on behalf of the Non-Defaulting Parties of all amounts
in respect of which the Defaulting Party is in default together with
interest thereon calculated on a day to day basis at the rate of five
per cent (5%) above the base lending rate of the National Westminster
Bank PLC from time to time, from and including the due date for
payment of such amounts until the actual date of payment. The Operator
shall promptly notify the Parties by telex or facsimile as soon as the
Defaulting Party has remedied its default and to the extent that
amounts have been paid by the Non-Defaulting Parties pursuant to
clause 9.1 hereof, the Operator shall reimburse such amounts to such
Non-Defaulting Parties together with the abovementioned interest
thereon.
9.3 During the continuation of any default the Defaulting Party shall not
be entitled to be represented at the Selection Meeting, the Work
Commitment Meeting, meetings of the Management Committee or any
sub-committee thereof nor to vote thereat (so that all voting rights
thereat shall be vested in the Non-Defaulting Parties with the voting
interest of each Non-Defaulting Party being in the proportion which
its Percentage Interest bears to the total Percentage Interests of
such Parties) and shall have no further access to any data and
information relating to the Joint Operations. The Defaulting Party
shall be bound by decisions of the Management Committee made during
the continuation of the default.
9.4 In the event that the default continues for more than ten (10) days in
respect of sums to be expended prior to the award of a Licence or for
more than twenty (20) days in every other case then each of the
Non-Defaulting Parties shall have the right to have forfeited to it
and to acquire, by notice to the other Parties given within ten (10)
days after such period of ten (10) or twenty (20) days, the interest
of the Defaulting Party in and under this Agreement and in any Licence
granted pursuant to an Application or, if more than one Non-Defaulting
Party exercises such right, its proportionate share of the interest of
the Defaulting Party in and under this Agreement and in any such
Licence, such share being the proportion which the Percentage Interest
of the Non-Defaulting Party in question is of the total Percentage
Interests of the Non-Defaulting Parties exercising such right. If none
of the Non-Defaulting Parties elects to exercise such right of
forfeiture as aforesaid then the Parties shall be deemed to have duly
decided to abandon Joint Operations and the Operator shall take such
action as is appropriate to abandon Joint Operations and all costs
incurred by the Operator in connection with such abandonment shall be
charged to the Joint Account and borne by the Parties in accordance
with the terms of this Agreement.
9.5 Any such forfeiture and acquisition of the interest of a Defaulting
Party pursuant to clause 9.4 hereof, shall be:
(i) subject to any necessary consent of the Governor;
(ii) without prejudice to any other rights or remedies of each Non-
Defaulting Party whether accrued at or accruing after the date
of forfeiture;
(iii) so forfeited and acquired by each Non-Defaulting Party as
beneficial owner free of any charges and encumbrances but
subject to all of the obligations under this Agreement; and
(iv) effective as of the date of default;
and the Defaulting Party shall promptly join in such actions as may be
necessary or desirable to obtain any necessary consent of the Governor
and shall execute and deliver any and all documents necessary to
effect any such forfeiture and acquisition.
9.6 Notwithstanding any forfeiture and assignment by a Defaulting Party
pursuant to clause 9.4 hereof, such Defaulting Party:
(i) shall remain liable for its proportionate share of all costs,
expenses, obligations and liabilities, including in respect of
any Licence awarded its share of any obligatory work programme
to which that Party has committed itself in the Application
therefor, incurred prior to the time the said assignment was
effective;
(ii) shall not, and shall ensure that its Affiliates do not, make any
Application in the First Licensing Round for any Tranche in the
Evaluation Area; and
(iii) shall remain bound by clause 10 hereof.
10. DATA AND CONFIDENTIALITY
10.1 All date and information which is proprietary as at the date hereof
shall, subject to clause 10.2, remain proprietary and its ownership
shall remain vested in the proprietor.
10.2 a) Any Party which has data and information relating to the
Evaluation Area in its possession which in the reasonable
opinion of such Party is relevant to any Application, such
possession being subject to third party restrictions on
disclosure, shall use all reasonable endeavours to make such
data and information available to the other Parties on the best
terms as to price and ownership which it can obtain and which
are acceptable to such other Parties.
b) Any Party which is the sole proprietor of data and information
relating to the Evaluation Area, to which it has access free of
third party restrictions on disclosure, shall make such data and
information available to the other Parties at its offices,
provided that no Party shall be entitled to take copies of such
data and information unless it has paid its Percentage Interest
share of the costs of acquisition and processing and the total
cost of copying such data and information.
c) All proprietary data and information belonging to a Party which
is disclosed to any other Party pursuant to this clause 10.2
shall be kept confidential by such other Party pursuant to the
provisions of clause 10.4 provided that, if such data and
information is subject to third party restrictions on disclosure
which are more restrictive than the provisions of clause 10.4,
such third party restrictions shall bind such other Party.
10.3 All data and information acquired pursuant to Joint Operations ("Joint
Data") shall be jointly owned by the Parties in proportion to their
respective Percentage Interests.
10.4 All data and information disclosed to the Parties pursuant to this
Agreement shall be kept confidential during the term of this Agreement
and thereafter either until the Governor announces the commencement of
the next following licensing round or for a period of three (3) years
whichever period is the shorter, and shall not be divulged during that
period to any person which is not a Party without the prior written
consent of all the Parties except as follows:
a) to an Affiliate of a Party provided that such Party shall be
responsible for its Affiliate's adherence to the provisions of
this clause 10 and any breach of such provisions by its
Affiliate shall be deemed a breach by such Party;
b) to an outside professional consultant of a Party;
c) to any bank or financial institution from which a Party is
seeking or obtaining finance;
d) as required by law, by order of count or the rules of any
recognised stock exchange or the Securities and Exchange
Commission of the United States of America or other similar
body;
e) to the extent that the same has become generally available to
the public otherwise than through breach of this Agreement; and
f) the Operator may disclose Joint Data to such persons as may be
necessary in connection with the conduct of the Joint
Operations, provided that the Operator shall promptly inform the
other Parties of the names of such persons and the Joint Data
disclosed to them; and
provided that any person to whom data asked information is to be
disclosed pursuant to b), c) or f) above shall first execute a written
undertaking to hold the data and information strictly confidential,
except to the extent that, if such person is an outside auditor or
legal advisor, such person is bound by a professional obligation of
confidentiality.
10.5 The Operator may, with the approval of the Management Committee,
exchange any Joint Data for other similar data and information and the
Operator shall promptly provide all the Parties with a conformed copy
of the agreement relating to the exchange and all such other data and
information.
10.6 The Operator shall be responsible for all press releases and public
announcements regarding this Agreement or the Joint Operations
provided always that no such release or announcement shall be made
unless prior thereto the Operator has provided all the Parties with a
copy of the proposed release or announcement and obtained the approval
of the Management Committee thereto. Notwithstanding the foregoing no
Party shall be prohibited from making a public announcement or
statement if it is necessary for it to do so in order to comply with
any applicable
law or the regulations of a recognised stock exchange or the
Securities and Exchange Commission of the United States of America or
other similar body.
10.7 The Parties shall pay for the seismic data and information detailed in
Exhibit "C" hereto in accordance with the respective interest shares
detailed therein.
11. ASSIGNMENT AND ENCUMBRANCE
11.1 No Party shall sell, assign, transfer, mortgage, charge or otherwise
encumber the whole or any part of its rights, duties, liabilities or
obligations arising under this Agreement without having first obtained
the consent in writing of all the other Parties provided always that
each of the Parties shall have the right to assign the whole or any
part of its rights, duties, liabilities or obligations arising under
this Agreement to an Affiliate of such Party which has demonstrated to
the satisfaction of the other Parties its technical and financial
capability to meet its prospective obligations hereunder.
12. RELATIONSHIP OF PARTIES
12.1 The rights, duties, obligations and liabilities of the Parties under
this Agreement shall be several and not joint or collective and each
Party shall be responsible only for its obligations as set out herein,
it being expressly agreed by the Parties that it is not the purpose or
intention of this Agreement or of any subsequent Licence to create any
partnership.
12.2 Each Party subject to the Internal Revenue laws of the United States
of America hereby elects, under section 761(a) of the Internal Revenue
Code of 1986 as amended of the United States of America (the "United
States Code"), for this joint venture to be excluded from the
application of Subchapter K of Chapter 1, Subtitle A of the United
States Code. This election to be excluded from Subchapter K shall
apply only insofar as such Subchapter or any portion or portions
thereof may be applicable to the Parties or to their Affiliates in
respect of the operations covered by this Agreement. Notwithstanding
anything to the contrary contained in this Agreement, a Party not
subject to the income tax laws of the United States of America shall
not be required to do or execute anything that might subject it or its
income or property to any tax of the United States of America, and
nothing contained in this Agreement shall constitute or shall be
construed as constituting a submission by that Party to the taxation
jurisdiction of the United States of America.
12.3 Each Party agrees to save, indemnify and hold harmless each other
Party (including the Operator acting in its capacity as such) to the
extent of such indemnifying Party's Percentage Interest from and
against any claim by or liability (including costs and expenses
reasonably incurred in connection with such claim or liability) to any
person not being a Party hereto, arising from or in connection with
the Joint Operations unless and to the extent that any such claim or
liability results from the Gross Negligence of the Party seeking
indemnification.
13. FURTHER AGREEMENT AND PRINCIPLES OF JOINT OPERATING AGREEMENT
13.1 Within three (3) months following the award of a Licence pursuant to
an Application the Operator shall submit a draft JOA to the Licensees
and the Licensees shall thereafter use their reasonable endeavours to
agree and execute a JOA within six (6) months following the award of
the Licence. Such JOA will incorporate an agreed accounting procedure
and cover the conduct of all activities under such Licence and shall
when executed supersede the terms of this Agreement as they apply to
such Licence.
13.2 The Parties agree that the JOA shall in any event provide inter alia
for the following:
(i) joint operations shall be conducted by the operator under the
overall supervision, direction and control of an operating
committee at the expense of all parties;
(ii) operating committee decisions shall be made by an affirmative
vote of parties holding in aggregate not less than - per cent
(-%) of the percentage interest participation in the Licence to
which such JOA refers, save that development programmes shall be
carried out only by the parties electing to participate in them;
(iii) in the case of any proposed contract for goods or services for
the joint operations where the cost is estimated to be in excess
of two hundred and fifty thousand pounds (L250,000) the operator
shall, except where the circumstances do not permit, obtain
competitive tenders therefor. Any proposed contract for goods or
services for the joint operations where the cost is estimated to
be in excess of five hundred thousand pounds (L500,000) during
the exploration and appraisal phases or - million pounds (-)
during the development phase or - million pounds (-) during the
production phase shall be subject to the approval of the
operating committee;
(iv) appropriate "sole-risk" provisions in respect of the relevant
Licence shall provide for an initial buy-back payment of two (2)
times the amount the non-sole risk party would have paid had
such sole risk operation been conducted as a joint operation and
a payment of five (5)
times the said initial buy-back payment upon the approval by
the Governor of a development resulting from such sole risk
operation;
(v) full protection for the operator's and the non-defaulting
parties' interests in the event of failure by a party to
make due and timely payment of the operator's cash calls. If
within any "Relevant Default Period" the defaulting party
accumulates thirty (30) "Default Days" then, without
prejudice to any other rights which they may have, each of
the non-defaulting parties shall have the right to have
forfeited to it the interest of the defaulting party in,
under and pursuant to the Licence and the JOA. "Relevant
Default Period" shall mean the three hundred and sixty-five
(365) consecutive days including and immediately prior to
the latest "Default Day" and "Default Day" shall mean any
day or any part of which the defaulting party is in default;
(vi) the operator shall not resign and none of the parties shall
withdraw from the Licence until all work obligations
detailed in the Licence have been completed save with the
consent of all the other parties;
(vii) the operator shall be entitled to recover from the other
parties overheads and the cost of operatorship according to
the principle that the operator shall neither gain nor lose
by virtue of being operator and such terms shall be detailed
in the accounting procedure to the J0A;
(viii) AFEs within approved work programmes and budgets shall be
deemed approved unless, within the fifteen (15) Working Day
period allowed for the consideration of such AFEs, parties
holding at least percent (-%) of the percentage interest
participation in the Licence notify the operator that they
disapprove such AFE;
(ix) AFEs shall not be required for expenditure in respect of
licence fees, staff support costs and associated overhead or
operating costs provided that such costs are within a work
programme and budget which has been approved by the
operating committee;
(x) the operator shall not incur any expenditure if it exceeds
an approved work programme and budget or AFE as appropriate
by more than ten percent (10%) unless it is necessary for
the safeguarding of lives or property or the prevention of
pollution;
(xi) prior to the submission of a development programme to the
Governor in respect of any discovery the parties
participating in the development
of such discovery shall use all reasonable endeavours to
agree the terms of an abandonment agreement which shall
inter alia include provisions whereby abandonment
liabilities are shared in proportion to their participating
interests in the development (unless otherwise agreed) and
provisions requiring adequate financial security to be
provided in respect of such liabilities and costs relating
thereto;
(xii) terms and representations substantially the same as those
contained in clause 12 of this Agreement; and
(xiii) The Parties shall agree upon liftings procedures (prior to
the implementation of a development programme approved by
the Governor), such agreed liftings procedures to include
suitable underlift/overlift provisions and the right for
Parties to lift economic sized cargoes.
14. FORCE MAJEURE
The obligations of a Party hereunder, other than the obligations to make
payments of money, shall be suspended during the period and to the extent
that such a Party is prevented from complying therewith by reason of Force
Majeure. In such event such Party shall as soon as reasonably possible give
notice of such suspension together with full particulars including the
likely duration thereof and as soon as reasonably possible shall resume
performance of such obligations and shall so notify the other Parties.
15. DURATION
15.1 If a decision is made that no Application is to be made under this
Agreement then this Agreement shall terminate on the Closing Date.
15.2 In respect of those Tranches in the Evaluation Area in relation
to which no Application is made, this Agreement shall terminate on
the day following the Closing Date.
15.3 In the event that one or more Applications are made under this
Agreement then, in respect of each Tranche which is the subject of
an Application and subject to clause 15.4 hereof, this Agreement
shall terminate:
(i) if a Licence is awarded in respect of such Tranche, upon
execution of the JOA negotiated pursuant to clauses 13.1
and 13.2 hereof relating to such Licence; or
(ii) upon the award of a Licence in respect of that Tranche
to a third party; or
(iii) upon notification by the Governor that the Application
relating to that Tranche has been unsuccessful; or
(iv) on 1st July 1999, whichever shall first occur.
15.4 Where any Party elects not to participate in an Application for a
Secondary Tranche all of that Party's rights and obligations under
or pursuant to this Agreement in respect of such Tranche shall be
deemed to terminate on the day following the Closing Date.
15.5 Notwithstanding the provisions of clauses 15.1, 15.2, 15.3 and
15.4 hereof this Agreement shall continue in full force and effect
after the respective termination dates specified therein for such
further period (if any) as may be required to effect a final
settlement of the Joint Account. The termination of this Agreement
or of any Party's rights and obligations hereunder shall be
without prejudice to continuing rights under clause 8.7 and to
continuing obligations under clause 10 hereof.
15.6 For the avoidance of doubt this Agreement shall apply only to the
First Licensing Round and shall not apply in respect of any
applications invited by the Governor in a further round of
licensing.
16. NOTICES
Any notice required to be given pursuant to this Agreement shall be in
writing and shaft be given by delivering the same by hand or by sending the
same by first class post, telex or facsimile to the relevant address as set
out below or such other address in England as any Party may from time to
time notify the other Parties as its address for service of notice. Any
such notice given as aforesaid shall be deemed to have been given or
received at the time of delivery (if delivered by hand between 0900 and
1700 hours on a Working Day) or the first Working Day next following the
day of sending (if sent by first class post, telex or facsimile):
AMERADA XXXX (FALKLAND ISLANDS) LIMITED
00 Xxxxxxxxx Xxxxx
Xxxxxx XX0X 0XX
FAX: 0000 000 0000
TELEX: 296093
ATTENTION: Exploration Manager, International
EL DORADO EXPLORATION, S.A.
c/x XXXXXX EASTERN OIL COMPANY
Xxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxx, Xxxxxx, X0 0XX
FAX: 0000 000 0000
TELEX: 21970
ATTENTION: Manager, U.K. Exploration
FINA RESEARCH X.X.
Xxx xx x'Xxxxxxxxx, 00-X-0000 Xxxxxxxxx, Xxxxxxx
FAX: (000) 000 0000
TELEX: 21556 PFINA B
ATTENTION: Commercial Manager, Fina Exploration & Production
ARGOS EVERGREEN LIMITED
Xxxxxxx Xxxxx, Xxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx XX00 0XX
FAX: 00000 00000
ATTENTION: UK Director
17. VARIATION
This Agreement may only be altered, varied or amended by written
instrument executed by all the Parties.
18. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the
laws of England and each of the Parties hereby submits to the jurisdiction
of the High Court of England and agrees to accept service of any process in
connection with any proceedings relating to this Agreement at its address
for service of notice pursuant to clause 16 hereof.
IN WITNESS whereof the Parties have caused this Agreement to be executed by
their duly authorised representatives the day and year first above written.
SIGNED BY /s/ X. Xxxxxxx )
.............................. ) X. XXXXXXX
for and on behalf of )
AMERADA XXXX (FALKLAND ISLANDS) LIMITED )
SIGNED BY /s/ Xxxxxxx X. Xxxxxxx )
.............................. ) XXXXXXX X. XXXXXXX
for and on behalf of )
EL DORADO EXPLORATION, S.A. )
SIGNED BY /s/ [illegible] )
.............................. ) ILLEGIBLE
for and on behalf of )
FINA RESEARCH S.A. )
SIGNED BY /s/ Xxx X. Xxxxxxx )
.............................. ) XXX X. XXXXXXX
for and on behalf of )
ARGOS EVERGREEN LIMITED )
EXHIBIT "A"
MAP OF THE EVALUATION AREA
OPERATED EVALUATION AREA
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[MAP]
EXHIBIT "B"
WORK PROGRAMME AND BUDGET
AMERADA XXXX
FALKLAND ISLANDS
1995 & 1996 WORK PROGRAMME & BUDGET
(In Thousands of US $)
-----------------------------------------------------------------------------------------------------------------------------------
LINE LINE
---- ----
NO. DESCRIPTION AHL ARGOS XXXX XXXXXX TOTAL NO.
-- ----------- --- ----- ---- ------ ----- --
1995 COSTS:
-----------
1 GEOLOGICAL & GEOPHYSICAL 471.1 261.1 471.1 471.1 1,674.5 1
2 SUPPORT COSTS 50.4 7.2 43.2 43.2 144.0 2
----- ------ ----- ------ -------
3 TOTAL 1995 EXPENDITURE 521.5 268.3 514.3 514.3 1,818.5 3
1996 COSTS:
-----------
4 GEOLOGICAL & GEOPHYSICAL 7.5 7.5 7.5 7.5 30.0 4
5 SUPPORT COSTS 107.1 15.3 91.8 91.8 306.0 5
----- ------ ----- ------ -------
6 TOTAL 1996 EXPENDITURE 114.6 22.8 99.3 99.3 336.0 6
----- ------ ----- ------ -------
7 TOTAL 1995 & 1996 FIRM EXPENDITURE 636.1 291.1 613.6 613.6 2,154.5 7
----- ------ ----- ------ -------
----- ------ ----- ------ -------
8 CONTINGENT EXPENDITURE 131.4 53.9 125.6 125.6 436.4 8
----- ------ ----- ------ -------
9 TOTAL 1995 & 1996 EXPENDITURE 767.5 344.9 739.2 739.2 2,590.9 9
----- ------ ----- ------ -------
----- ------ ----- ------ -------
-----------------------------------------------------------------------------------------------------------------------------------
September 1995 1995 & 1996 Work Programme & Budget
EXHIBIT "C"
ALLOCATION OF EXPENDITURES REGARDING SEISMIC
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
1995 BUDGET $000s ARGOS XXXX XXXXXX AH TOTAL COMMENT
4 COMPANY GROUP 5% 30% 30% 35%
Seismic Data Purchase
-----------------------------------------------------------------------------------------------------------------------------------
2518 km Original Survey @$195/km, 147 278 278 278 982 Argos pay $195*0.3, others pay equal
2.0 Escalation share of 195*1.7
-----------------------------------------------------------------------------------------------------------------------------------
1648.5 km Infill Survey @$180/km,
2.0 Escalation 89 168 168 168 593 Argos pay $180*0.3, others pay equal
share of $180*1.7
-----------------------------------------------------------------------------------------------------------------------------------
Gravity and Magnetic Study 45 45 45 45 178 Four parties pay equal share
-----------------------------------------------------------------------------------------------------------------------------------
Spectrum Credit -00 -00 -00 -00 -000 Negotiated discount spread equally
-----------------------------------------------------------------------------------------------------------------------------------
Sub total 250 460 460 460 1630
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Further G+G Studies 11 11 11 11 45
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
G&A 7 43 43 50 144 Equity share
-----------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------
1995 TOTAL 268 514 514 522 1819
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
1996 BUDGET $000s ARGOS XXXX XXXXXX AH TOTAL COMMENT
4 COMPANY GROUP 5% 30% 30% 35%
FIRM
-----------------------------------------------------------------------------------------------------------------------------------
G+G Studies 8 8 8 8 30 Four parties pay equal share
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
G+A 15 92 92 107 306 Equity share
-----------------------------------------------------------------------------------------------------------------------------------
Total firm 23 99 99 115 336
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
CONTINGENT
-----------------------------------------------------------------------------------------------------------------------------------
Infill Seismic Data Purchase 48 91 91 91 320 Argos pay $180*0.3, others pay equal
share of $180*1.7
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
G&A 6 35 35 41 116 To finalise application documentation.
-----------------------------------------------------------------------------------------------------------------------------------
Total contingent 54 125 125 131 436
-----------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------
1996 TOTAL 77 225 225 246 772
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
PROJECT SUMMARY
1995 AND 1996 FIRM 291 614 614 636 2155
-----------------------------------------------------------------------------------------------------------------------------------
1996 CONTINGENT 54 125 125 131 436
---------------------------------------------------
PROJECT TOTAL 345 739 739 767 2591
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