Ampla Mpejoa - Exposure Draft

Model Petroleum Exploration Joint Operating
Agreement - Exposure Draft

EXPLANATORY NOTE
The Board of AMPLA Ltd has prepared this Exposure Draft Model Petroleum Joint Operating
Agreement (Model Exploration JOA) following the recommendations of a representative
Reference Group selected from knowledgeable and experienced AMPLA members working in oil
and gas companies and in private practice.
The Model Exploration JOA is intended for use in non-complex oil and gas exploration projects
principally onshore in Australia and has a traditional risk/reward/loss/indemnity regime with an
Operator as agent for the parties. It can also be used for similar projects offshore, but parties may
wish to consider an alternative risk/reward/loss/indemnity regime with the Operator as an
independent contractor.
This Model Exploration JOA is a basic 3 party joint venture agreement based on oil and gas Joint
Operating Agreements presently in use in Australia. It may be used under the law of any State or
internal Territory of Australia for all phases of oil and gas operations from initial exploration up to
the production and offtake of oil or gas products.
Schedule 1 of the Model Exploration JOA sets out the basic particulars such as the conditions
precedent, relevant petroleum legislation, voting and financial provisions, agreed sole risk events
and limits on the Operators discretionary contracting powers. The list of Petroleum Titles and
their particulars is specified in Schedule 2. Optional dilution provisions are set out in Schedule 3.
The Model Exploration JOA is not intended as a rigid precedent to be adopted without amendment.
Rather it is a guide which includes representative provisions across all matters normally covered in
such an agreement. It endeavours to strike a fair balance on contentious matters between the parties
to such agreement. It is drafted in a manner which allows for easy deletion or substitution of what
may be contentious or undesired clauses, such as dispute resolution.
In any particular matter, a party may have its own preferred clauses or schedules which can be
readily inserted. Reference should also be made to the Model Alternative and Optional clauses
which can be used with, or in substitution for, clauses in this Model Exploration JOA. These can
be inserted in the Model Exploration JOA with minimum amendment.
Note: This Model form document continues to be revised and updated. The AMPLA
website should be checked to ensure that you are using the latest version.
RELATED AMPLA MODEL DOCUMENTS
Petroleum Joint Operating Agreement

Petroleum Joint Operating Agreement Alternative & Optional clauses
For a discussion of the legal principles underlying this Model Exploration JOA and its drafting,
which are largely applicable to a petroleum joint operating agreement, see JG Grace, The
AMPLA Model Mining Joint Venture Agreement, [2009] AMPLA Yearbook 366 396 and
JG Grace, The AMPLA Model Joint Venture Agreements and associated documents, [2007]
AMPLA Yearbook 365-384, and see also The AMPLA Model Petroleum Joint Operating
Agreement presented at the AMPLA Conference, Melbourne, 21 October 2011.
Users are also referred to the Association of International Petroleum Negotiators (AIPN) 2002
Model Form International Operating Agreement and the very useful User Guide for adaption of
that form for use in Commonwealth waters, Offshore Australia, dated 29 August 2008, first
edition.
COPYRIGHT
AMPLA Model Petroleum Exploration JOA, EXPOSURE DRAFT, 01.09.2011
Model Petroleum Exploration Joint Operating

Agreement - Exposure Draft
This Model Exploration JOA is the property of AMPLA Ltd which owns the copyright. AMPLA
financial members are granted a royalty free licence to use this Model Exploration JOA for
commercial purposes on the basis set out below. Non-members may use this Model Exploration
JOA on a similar basis only if the applicable licence fee has been paid.
DISCLAIMER
AMPLA makes no warranty or guarantee or promise, express or implied, that this Exposure Draft
Model Petroleum Joint Operating Agreement (Model Exploration JOA) is accurate, complete, up
to date, or fit for any use whatsoever. It is made available on the AMPLA website for the
information and use of AMPLA members only and for the use of non-members on payment of
the applicable licence fee, on the condition that AMPLA Ltd is not engaged in rendering
professional advice. Readers should exercise their own skill and judgment in adopting or
adapting any part of the Model Exploration JOA for their own use and, where necessary, seek
advice from a suitable qualified legal practitioner.
AMPLA accepts no responsibility for any loss, cost or expense arising from the use of this Model
Exploration JOA and shall not be liable in any manner whatsoever for any direct, incidental,
consequential, indirect or punitive damages arising out of the use of the Model Exploration JOA,
or any errors or omissions in its contents.
IMPROVEMENTS
If you have any questions or suggestions for improvement concerning this Model, please contact
the AMPLA office at federal@ampla.org or see www.ampla.org. The AMPLA Board would
appreciate receiving all and any questions, comments and other feedback you have.
ii
Model Petroleum Exploration JOA - Exposure Draft

TABLE OF CONTENTS
Particulars
[Insert name] Joint Venture
Definitions and interpretation
1.1
1.2
Definitions
Interpretation
1
7
Conditions precedent
2.1
2.2
2.3
2.4
Coming into effect of agreement

Satisfaction of Conditions Precedent
Failure to satisfy Conditions Precedent
Consequence of failure to satisfy Conditions Precedent
7
7
8
8
Joint Venture objectives and relationships
3.1
3.2
3.3
3.4
3.5
Formation of the Joint Venture

Objects and scope of the Joint Venture
Rights, obligations and liabilities of Participants
Participant covenants
Party warranties
8
8
9
9
10
Joint Venture Property
10
4.1
4.2
4.3
4.4
4.5
4.6
4.7
Participating Interests
Use and ownership of Joint Venture Property
JV Intellectual Property
No partition of Joint Venture Property
Perpetuity period
Disposal of Joint Venture Property
Abandonment of Wells
10
10
10
11
11
11
11
Operating Committee
11
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
Establishment of Operating Committee

Functions of Operating Committee
Meetings of the Operating Committee
Quorum
Voting and decision making
Minutes
Sub-committees
Loss of rights of participation and voting
11
12
13
13
14
14
14
14
Operator
14
6.1
6.2
6.3
6.4
6.5
6.6
6.7
Appointment of Operator
Term of appointment of Operator
Remuneration of the Operator
Appointment of new Operator
Liability of Operator
Full indemnity of Operator by Participants
Limited indemnity by Operator of Participants
14
15
15
15
15
16
16

7
Functions, powers and duties of Operator
16
7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8
Functions of the Operator

Rights, powers and duties of Operator
Maintenance of the Joint Account
Limitations on Operators obligations
Operator may delegate
Agreement with an Affiliate or a Related Entity
Litigation
Trades
16
16
19
19
19
19
19
19
Programmes, Budgets and Cash Calls
20
8.1
8.2
8.3
8.4
8.5
Proposed Programmes and Budgets

Approved Programme and Budget
AFEs
Joint Expenditure not covered by Programme and Budget
Payment of Cash Calls
20
20
21
22
22
Completion, discovery and appraisal
22
9.1
9.2
9.3
Well Completion
Discovery and appraisal
Proposals for development
22
23
23
10
Accounts, reports, audit and access
24
10.1
10.2
10.3
10.4
10.5
Joint Venture accounting

Reports to Participants
Joint Account and audit
Individual Participant recording responsibilities
Participant access
24
24
25
25
26
11
Encumbrances
26
11.1
No Encumbrances without consent
26
12
Surrender, Relinquishment, Withdrawal and Dilution
26
12.1
12.2
12.3
12.4
Surrender
Withdrawal
Effect of withdrawal
Dilution
26
26
27
28
13
Sole Risk
28
13.1
13.2
13.3
13.4
13.5
13.6
13.7
Proposal for a Sole Risk Operation

Sole Risk Election Notice and participation
Sole Risk Operation
Failure to commence Sole Risk Operation
Sole Risk Participants indemnity
Sole Risk Operations report and buy-back
Consequences of buy-back
28
28
29
30
30
30
31
14
Assignment
31
14.1
Restriction on Assignment
31

14.2
14.3
14.4
14.5
14.6
14.7
Assignment to an Affiliate or a Related Entity

Permitted right of Assignment with pre-emption
Selling Participant free to Assign
Requirements of Assignee
Assignment on holding less than Minimum Interest
Participant ceasing to be a Participant
32
32
33
33
33
34
15
Default
34
15.1
15.2
15.3
15.4
15.5
15.6
15.7
Breach Default Event to be remedied

Unpaid Monies Default Event to be remedied
Interest and costs
Period of Unpaid Monies Default
Failure to pay money or provide Security
Buy-out Election
Preservation of other rights
34
35
35
36
36
36
36
16
Enforcement of Buy-Out Election
37
16.1
16.2
16.3
16.4
16.5
16.6
Consequence of Buy-Out Election

Determination of fair market value and Completion Date
Release of Defaulting Participant
Acknowledgement
Attorney
37
37
37
38
38
38
17
Term, suspension and termination of Joint Venture
39
17.1
17.2
17.3
17.4
17.5
Term of agreement
Suspension or abandonment of Joint Operations
Winding up of Joint Venture
Certain obligations continue beyond termination
Extension of term
39
39
39
40
40
18
Confidentiality
40
18.1
18.2
18.3
18.4
18.5
18.6
18.7
18.8
Agreement is confidential
No disclosure except as permitted
Permitted disclosure by a Participant
Permitted disclosure by Operator
Confidential Information disclosed only as necessary
Publicity and disclosure
Obligations exist beyond termination
Access to Information
40
40
40
41
41
41
41
41
19
Dispute Resolution
42
19.1
19.2
19.3
19.4
19.5
Limitation on proceedings
Dispute Resolution Process
Mediation
Dispute Resolution Process not to interrupt Joint Operations
Clause does not apply to matters where consent required
42
42
42
43
43
20
Expert Determination
43
20.1
20.2
Expert determination
Qualifications of Expert to determine dispute
43
44

21
Force Majeure
44
21.1
21.2
21.3
21.4
Meaning of Force Majeure

Relief
Labour disputes and Native Title matters
Resumption
44
45
45
45
22
Goods and Services Tax
46
22.1
22.2
22.3
22.4
22.5
Participants registered for GST

Supply of going concern
GST liability
Reimbursement
Definitions
46
46
46
46
47
23
Notices
47
23.1
23.2
Form of Notice
When Notices are taken to have been given and received
47
47
24
Ancillary provisions
47
24.1
24.2
24.3
24.4
24.5
24.6
24.7
24.8
24.9
Entire agreement
No reliance or inducement
Enurement
Amendment
Severability
Waiver
Applicable law
Fees and charges
Counterparts
47
47
48
48
48
48
48
48
48
Schedule 1
49
Basic Particulars
49
Schedule 2
52
List of Petroleum Titles as at the Commencement Date
52
Schedule 3
53
Dilution Provisions Optional and Default Dilution
53
1.
2.
3.
4.
5.
6.
53
53
54
54
55
55
Dilution Notice
Effect of Dilution Notice
Recalculation of Participating Interests
Additional Cash Calls
Re-assessment of Programme and Budget
Withdrawal of Dilution Notice
Signing page
56

Particulars
[Insert name] Joint Venture
Dated as of
Parties
Participant 1 Name
ABN
Address
Email
Fax
Authorised Officer
Participant 2 Name
ABN
Address
Email
Fax
Authorised Officer
Participant 3 Name
ABN
Address
Email
Fax
Authorised Officer
Operator
Name
ABN
Address
Email
Fax
Authorised Officer
Recitals A. The Participants are, or are entitled to be, registered as the holders and
owners of the Petroleum Titles.
B.
The Participants have agreed to enter into this agreement to

explore for and appraise Petroleum in the area of the Petroleum
Titles on the terms and conditions set out in this agreement.
C.
The Operator has agreed to act as the operator for the Participant
in accordance with this agreement.
The parties agree:

in consideration of, among other things, the mutual promises contained in this agreement:
Definitions and interpretation
1.1
Definitions
Unless the context otherwise requires, the following expressions have the respective
meanings in this agreement (including the Recitals):
Act means the legislation described in Schedule 1.
AFE means an authority for the Operator to incur Joint Expenditure under an
Approved Programme and Budget or otherwise in accordance with this agreement.
Affiliate means, with respect to a particular entity, a related body corporate of that
entity as defined in section 50 of the Corporations Act.
Agreed Interest Rate means the rate of interest which is the average bid rate for bills
(as defined in the Bills of Exchange Act 1909 (Cth)) having a tenor of 90 days which is
displayed on the page of the Reuters Monitor System designated BBSY plus [3] per
cent calculated on a daily basis and compounded with monthly rests, or such other
interest rate agreed by the Participants. If the interest rate is contrary to any applicable
usury Law, the rate of interest to be charged is the maximum rate permitted by Law.
Appraisal Well means a well, not being an Exploration Well or a Development Well,
commenced for the purpose of evaluating the extent or the volume of Petroleum
reserves contained in an existing Discovery.
Approved Programme and Budget means a programme and budget relating to Joint
Operations including the Minimum Work Obligations and an itemised budget of the
estimated Joint Expenditure to be incurred for a Year or particular period, which has
been approved or deemed to have been approved by the Operating Committee.
Assignment means the sale, assignment, farm-in, farm-out, transfer, sub-lease or other
dealing with, or creation of, an interest relating to the whole or any part of a
Participating Interest.
ASX means ASX Limited (ACN 008 624 691), or its lawful successor.
Auditor means a registered company auditor under the Corporations Act appointed by
the Operating Committee at the cost of the Joint Venture to conduct an audit each Year
of the accounts of the Joint Venture.
Authorisation is any consent, authorisation, registration, filing, lodgement,
notification, agreement, certificate, commission, lease, licence, permit, approval or
exemption from, by or with an Authority (including the Petroleum Titles).
Authorised Officer means the person nominated by a party in its Particulars, or any
person replacing the nominated person as its authorised officer by notice given in
accordance with this agreement.

Authority is any government department, local government council, government or
statutory authority or any other party under a Law which has a right to impose a
requirement or whose consent is required with respect to Joint Operations.
Breach Default Event is the happening of an Insolvency Event in relation to a
Participant or the Operator, or a Participant or the Operator committing a material
breach of any of its material obligations under this agreement (other than an Unpaid
Monies Default Event), including where an Encumbrance (other than an Encumbrance
approved by the Participants under this agreement) is created over or attached to the
Participating Interest of a Participant.
Cash Call means the Percentage Share of funds required to be paid by a Participant
from time to time in accordance with this agreement to finance Joint Expenditure.
Commencement Date means the date on which the last of the Conditions Precedent
has been satisfied or waived in accordance with this agreement or, if there are no
Conditions Precedent, then the date of this agreement.
Completion means an operation intended to complete a well up to and including a
wing valve of the Christmas tree as a producer of Petroleum in one or more Zones,
including the setting of production casing, perforating, stimulating the well and
production Testing conducted in such operation.
Conditions Precedent means the conditions specified in Schedule 1 which are
required to be satisfied or waived for this agreement to be fully effective.
Corporations Act means the Corporations Act 2001 (Cth).
Deemed Sale Offer means an offer required to be made under this agreement by a
Participant to sell all of its Participating Interest to the other Participants, free from
Encumbrances, at a Transfer Price.
Default Event means a Breach Default Event or an Unpaid Monies Default Event.
Defaulting Participant means a Participant which has committed a breach of this
agreement, whether as an Unpaid Monies Default Event or a Breach Default Event or
to which (or to an Affiliate of which) a Breach Default Event relates.
Discovery means the discovery of an accumulation of Petroleum by drilling whose
existence until that moment was unproven by drilling.
Due Date means the date on which a payment is due under this agreement.
Emergency means a situation involving actual or reasonably apprehended substantial
damage to or loss of Joint Venture Property or Joint Operations or serious injury to
persons or loss of life and includes where a well goes out of control or a fire, blow out,
sabotage or other unplanned and uncontrolled event occurs.
Encumbrance means any security interest, mortgage, private royalty, free carried
interest, assignment of income, production bonus, pledge, lien, charge, [title retention
arrangement, trust or power, or other form of security or interest having effect as a
security for the payment of any monetary obligation or the observance of any other
obligation whether existing or agreed to be granted or created.
Expert means a person independent of the parties who is suitably qualified and capable
of making an expert determination under this agreement.
Exploitation Area means that part of the Title Area under a Petroleum Title delineated
as the exploitation area for a proposed development of a Discovery as a Joint Operation
or as a Sole Risk Operation.
Exploration Well means any well the purpose of which at the time of the
commencement of drilling is to explore for an accumulation of Petroleum, which
accumulation was at that time unproven by drilling.
Good Australian Oilfield Practice means recognised oilfield methods, procedures
and practices, together with the exercise of that degree of skill, diligence, prudence and
foresight that reasonably would be expected from an experienced and competent
contractor in Australia under conditions comparable to those applicable to the relevant
activity in the light of known facts, or facts which should reasonably have been known
at the time, and consistent with applicable Laws and Authorisations and having regard
to the need for:
(a)
suitable and experienced personnel and adequate materials;
(b)
ongoing monitoring and testing of plant and equipment performance, safe

operating procedures and appropriate maintenance procedures;
(c)
the observance of relevant Australian and international standards; and
(d)
in the case of design, engineering and construction, internationally accepted

design, engineering and construction practices that reasonably would be
expected from recognised designers, engineers and constructors of comparable
plant, equipment and facilities in Australia.
GST Act means A New Tax System (Goods and Services Tax) Act 1999 (Cth.) and
associated legislation.
Information means all information, data and records relating to the Title Area, the
Petroleum Titles and Joint Operations including all surveys, maps, aerial photographs,
data, drawings, notes, drill cores, drill cores logs, geophysical, geological or drill maps,
and sampling reports, whether recorded or stored electronically or otherwise.
Insolvency Event means the happening of any of the following events in relation to a
body corporate:
(a)
it is unable to pay all its debts as and when they become due and payable or it
has failed to comply with a statutory demand as provided in section 459F (1) of
the Corporations Act;
(b)
a resolution is validly passed to wind up the body corporate voluntarily or to

appoint an administrator;
(c)
it, or any other person, makes an application to a court for its winding up, being
an application that is not stayed, withdrawn or dismissed within 7 days;
(d)
an order is made for it to be wound up;
(e)
the appointment of a controller as defined in section 9 of the Corporations Act)

of any of its assets;
(f)
it proposes to enter into or enters into any form of arrangement (formal or

informal) with its creditors or any of them, including a deed of company
arrangement; or
(g)
it becomes an insolvent under administration as defined in section 9 of the

Corporations Act.
Joint Account means the accounts denominated in the currency determined by the
Operator on an accrual basis and maintained by the Operator on behalf of the
Participants in accordance with this agreement, containing a record of all charges and
credits that are attributable to the Joint Venture consistent with standard accounting
procedures, expenditure classifications and reporting formats as approved by the
Operating Committee.
Joint Expenditure means all costs reasonably and properly incurred by the Operator
on behalf of the Participants in connection with Joint Operations pursuant to an
Approved Programme and Budget or incurred in an Emergency or as a permitted cost
overrun or as otherwise approved by the Operating Committee, and includes all the
items which may be charged to the Joint Account as permitted by this agreement.
Joint Operations means those operations and activities carried out by Operator
pursuant to this agreement, the costs of which are chargeable to all Participants.
Joint Venture means the unincorporated joint venture established by and under this
agreement to be known by the name specified in the Particulars.
Joint Venture Property means all rights, titles, interest, claims, benefits and all other
property of whatever kind, real or personal, from time to time owned by any
Participant for the purposes of the Joint Venture, and includes the Petroleum Titles, JV
Intellectual Property, and all items listed in the Joint Venture Asset Register, and
includes Petroleum before delivery to a Participant at the Delivery Point.
JV Intellectual Property means Information, and all business names, trademarks,
copyright, patents, patent applications, discoveries, inventions, and similar rights
developed by the Operator and paid for from the Joint Account pursuant to an
Approved Programme and Budget in the course of Joint Operations.
Law means Commonwealth and State legislation including regulations, by-laws, and
other subordinate legislation, the requirements and guidelines of any Authority,
including the Listing Rules, with which a party is legally required to comply, and
common law and equity.
Listing Rules means the ASX Listing Rules or, to the extent that a party or its
Affiliate is bound thereby, the listing rules of another recognised stock exchange.
Majority Vote means a resolution voted in favour by representatives entitled to vote
and be present at the meeting held under this agreement which satisfies the Passmark,
excluding for this purpose the votes held by a Defaulting Participant.
Minimum Interest means the Percentage Share specified in Schedule 1.
Minimum Work Obligations means that work and/or expenditure obligations
specified in the Petroleum Titles or imposed under the Act which the Participants are
required by Law to perform.
Native Title Claims means either:
(a)
any claim, application or proceeding in respect of Native Title Rights which is

accepted by the Native Title Tribunal or the Registrar thereof pursuant to the
Native Title Act 1993 (Cth) or in relation to Native Title Interests; or
(b)
any claim, application or proceeding in respect of Native Title Interests.
Native Title Interests includes those rights, interests and statutory protections of and
relating to aboriginal persons as set out in the relevant legislation of the Nominated
State or the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth).
Native Title Rights has the same meaning as the expressions native title or native
title rights and interests as defined in section 223 (1) of the Native Title Act 1993
(Cth) and includes Native Title Interests.
Nominated State is the State or Territory of Australia specified in Schedule 1.
Non-Defaulting Participant means a Participant which is not a Defaulting Participant
and is not an Affiliate of a Defaulting Participant.
Operating Committee means the committee of representatives of the Participants

established under this agreement to supervise the management of the Joint Venture.
Operator means the person or entity named as Operator in Schedule 1 or such other
person or entity as may be engaged or appointed by the Operating Committee as
Operator from time to time under this agreement.
Operator Charge means the remuneration payable by the Participants to the Operator
to reimburse its costs of carrying out the function of Operator under this agreement as
specified in Schedule 1.
Participant means a party which holds a Participating Interest, but does not include a
party in its capacity as Operator.
Participating Interest means the following rights, benefits, liabilities and obligations
of a Participant determined under this agreement:
(a)
the obligation, subject to the terms of this agreement, to contribute its

Percentage Share of all Joint Expenditure;
(b)
the beneficial ownership as a tenant in common of an undivided Percentage

Share of Joint Venture Property; and
(c)
its Percentage Share of any other right, benefit, liability and obligation accruing
to or incurred by a Participant in or arising out of this agreement.
Particulars means the particulars of a party and the Joint Venture given on page 1 of
this agreement, or any particular amended by the party by notice given in accordance
with this agreement.
Passmark means the requirements needed to be satisfied as specified in Schedule 1 to
pass a resolution of the Operating Committee by a Majority Vote.
Paying Participant means a Participant, not being a Defaulting Participant, which
makes a payment of Unpaid Monies on behalf of Defaulting Participant in order to
remedy an Unpaid Monies Default Event.
Percentage Share means the percentage Participating Interest which a Participant has
in the Joint Venture in accordance with this agreement.
Petroleum has the meaning given to that term in the Act.

Petroleum Title means a title or licence listed in Schedule 2, and includes any other
petroleum prospecting, exploration, retention, production or associated permit, licence,
authority or lease issued or to be issued under the Act or any other Law on the
application or authority of one or more of the Participants for the purposes of the Joint
Venture which confers or may confer a right to prospect, explore for or produce any
Petroleum in the Title Area, or which may facilitate the enjoyment of such right, and
includes any application for, and any extension, renewal, conversion or substitution of,
any of those titles or licences.
Proposed Programme and Budget means a work programme and budget for the
conduct of Joint Operations, including the Minimum Work Obligations and details of
any proposed wells, proposed in accordance with this agreement for a given Year, or
other relevant period, containing sufficient details to enable each Participant to give it
proper consideration.
Related Entity means a related entity as defined in the Corporations Act.
Security means:
(a)
a guarantee or standby letter of credit issued by a first class bank;
(b)
an on-demand bond issued by a surety corporation;
(c)
a corporate or insurance guarantee;
(d)
a financial security required under a Petroleum Title or this agreement; or
(e)
any financial security agreed from time to time by the Participants
provided that the bank, surety or corporation issuing the guarantee, standby letter of
credit, bond or other security (as applicable) has a credit rating indicating it has a
sufficient worth to pay its obligations in all reasonably foreseeable circumstances.
Sole Risk Information means Information, and all business names, trademarks,
copyright, patents, patent applications, discoveries, inventions, and similar rights
developed by the Operator paid for by the relevant Participants in the course of Sole
Risk Operations.
Sole Risk Operation means an operation of a type listed in Schedule 1 which less than
all the Participants may undertake at their sole risk, benefit, cost and liability under this
agreement.
Third Party means a person not a party, or an Affiliate or a Related Entity of a party
or an Affiliate, to this agreement.
Title Area means the whole of the area within the Petroleum Titles listed in Schedule 2
and depicted on the Title Area map annexed to Schedule 2 (if any), including the area
within any other additional Petroleum Titles or areas applied for or acquired for the
purposes of this agreement.
Title Year means a period of 12 months commencing on the date of commencement of
the relevant Petroleum Title.
Transfer Price means a fair market price for a Participating Interest as at the date of a
Deemed Sale Offer on terms and conditions to be negotiated and agreed in good faith
by the Participants or, in default of agreement, as determined by an Expert appointed
under this agreement, less all amounts due by the transferring Participant to the
Operator or the other Participants under this agreement, including interest at the Agreed
Interest Rate, and the amount of all liability of the transferring Participant to meet
existing rehabilitation and abandonment obligations as reasonably determined by the
Operator as at the date of payment.
Ultimate Holding Company means an ultimate holding company as defined in the
Corporations Act.
Unanimous Vote means a resolution in respect of the matters specified in Schedule 1,
or otherwise specified in this agreement, which is voted upon in favour by all
representatives entitled to vote and be present at a meeting held under this agreement,
excluding for this purpose the votes held by a Defaulting Participant.
Unpaid Monies are monies due for payment under this agreement, and include
monetary compensation and damages payable by a Defaulting Participant which are
agreed, awarded or determined following an unremedied Breach Default Event for so
long as it is unpaid, and interest and costs payable or reimbursable in accordance with
this agreement.
Unpaid Monies Default Event is the failure by a Participant to pay Unpaid Monies on
or before the Due Date.
Wilful Misconduct means intentional or reckless conduct or action, or failure to act
(whether sole, joint or concurrent) by any person or entity which was intended to
cause, or which was in reckless disregard of or wanton indifference to, harmful
consequences such person or entity knew, or should have known, such act or failure
would have on the safety or property of another person or entity, but does not include
any error of judgement, omission or mistake made by the person or entity or any of its
directors, employees, agents or contractors in the exercise in good faith of any
function, authority or discretion conferred upon that person or entity.
Year means the year specified in Schedule 1.
1.2
Interpretation
In this agreement, unless the context otherwise requires:

(a)
the singular includes the plural and vice-versa;
(b)
headings do not affect the interpretation of this agreement;
(c)
a reference to a party means a party to this agreement as listed on page 1 of this

agreement and includes that partys executors, administrators, substitutes,
successors and permitted assigns;
(d)
references to a part, clause, Schedule, exhibit and annexure refers to a part,

clause, Schedule, exhibit or annexure of, in or to this agreement;
(e)
a reference to this agreement includes all Schedules, exhibits and annexures to

this agreement;
(f)
a reference to an agreement, deed, instrument or other document includes the

same as amended, novated, supplemented, varied or replaced from time to time;
(g)
a reference to a court is to an Australian court;
(h)
a reference to any legislation or legislative provision includes any statutory

modification or re-enactment of, or legislative provision substituted for, and
any subordinated legislation issued under, that legislation or legislative
provision;
(i)
a reference to a day, month or year is relevantly to a calendar day, calendar

month or calendar year;
(j)
a reference to $, AUD or dollars is to the lawful currency of the

Commonwealth of Australia;
(k)
the expressions including, includes and include have the meaning as if

followed by without limitation;
(l)
where a word or phrase is defined, its other grammatical forms have a

corresponding meaning;
(m)
a party may exercise a right or remedy or give or refuse its consent in its
absolute and unfettered discretion (including by imposing conditions), unless
this agreement expressly states otherwise; and
(n)
no rule of construction is to apply to the disadvantage of a party on the basis

that that party drafted the whole or any part of this agreement.
Conditions precedent
2.1
Coming into effect of agreement
This clause 2 and clauses 1 (definitions), 18 (confidentiality), 24 (notices) and 25

(ancillary) come into effect immediately. The remainder of this agreement comes into
effect on the Commencement Date.
2.2
Satisfaction of Conditions Precedent
(a)
Each party must use all reasonable endeavours (other than waiver) at its cost to
ensure that the Conditions Precedent are satisfied on conditions acceptable to it
within the time specified in Schedule 1 (Approvals Period).
2.3
(b)
Each party must keep each other informed of its progress in obtaining
satisfaction of any Condition Precedent it is required to obtain and any
circumstance that may result in any of those conditions not being satisfied in
accordance with its terms.
(c)
Each party must give the other parties notice within 7 days after receiving
notice of the conditions whether the conditions for the satisfaction of a
Condition Precedent (if any) are acceptable, or unacceptable, to it.
Failure to satisfy Conditions Precedent
If all Conditions Precedent are not satisfied, or otherwise waived, within the Approvals
Period, or if a party gives notice to the other parties within the Approvals Period that
the conditions of satisfaction of a Condition Precedent imposed by a Third Party are
unacceptable to it, any party may terminate this agreement by notice to the others.
2.4
Consequence of failure to satisfy Conditions Precedent
If a party terminates this agreement by notice for failure to obtain satisfaction of a

Condition Precedent for any reason, then each party is released from all further
obligations under this agreement, other than the obligations of confidentiality, and no
party has any claim against another party as a consequence of the termination.
Joint Venture objectives and relationships
3.1
Formation of the Joint Venture
With effect from the Commencement Date the Participants agree to establish the Joint
Venture as an unincorporated joint venture under the terms of this agreement.
3.2
Objects and scope of the Joint Venture
(a)
The objects of the Joint Venture are to undertake Joint Operations associated
with the Title Area and, in particular, to:
(i)
maintain the Petroleum Titles and explore and appraise the Title Area for
reserves of Petroleum;
(ii)
if exploration and appraisal indicates the probable existence of a

commercial reservoirs of Petroleum in any part of the Title Area test the
feasibility of developing, producing and disposing of that Petroleum;
(iii) do all things incidental to any of the objects as resolved by the Operating
Committee; and
(iv) undertake such other activities as the Participants unanimously agree
from time to time,
upon the terms and conditions set out in this agreement.
(b)
The scope of Joint Operations under this agreement do not include:

(i)
development, production, offtake or marketing of Petroleum from the

Title Area or from any Discovery; or
(ii) acquisition of rights to explore for, appraise, develop or produce Petroleum

outside of the Title Area (other than as a consequence of unitisation with
an adjoining area under the terms of the Petroleum Titles); or
(iii) exploration for, or appraisal, development or production of, minerals other
than Petroleum, whether inside or outside of the Title Area.
3.3
3.4
Rights, obligations and liabilities of Participants
(a)
The rights, duties, obligations and liabilities of the Participants arising out of
this agreement are several in proportion to their respective Percentage Shares
and are neither joint nor joint and several.
(b)
Each Participant is severally liable, in proportion to its Percentage Share, for all
obligations and liabilities incurred by or on behalf of the Participants in the
course of carrying out Joint Operations.
(c)
Unless otherwise provided in this agreement, the Participants, in their

Percentage Shares, must pay all liabilities and expenses incurred by the
Operator in connection with Joint Operations or otherwise incurred, whether in
tort, contract or otherwise, as a result of the ownership, occupation or
possession of Joint Venture Property, and are entitled to share in all benefits,
and all credits to the Joint Account.
(d)
Each Participant, to the extent of its Percentage Share, indemnifies each other
Participant from and against all loss, costs and damage arising from a claim by,
or liability directly or indirectly to, a Third Party under or in connection with
this agreement, agreement, except for any loss, costs or damage arising from
the other Participant's fraud or Wilful Misconduct.
(e)
Notwithstanding any other provision of this agreement, and except in cases of

fraud of Wilful Misconduct, a Participant is not liable to, and is released from
any claim by, any other Participant for any consequential loss, loss of profits, or
loss arising from special circumstances that are outside the ordinary course of
things and are not stated in this agreement, arising as a result of a breach by the
Participant of any obligation or duty whatsoever under or in connection with
this agreement.
(f)
Nothing in this agreement is to be construed or interpreted as constituting a

partnership between the parties, or making any Participant the agent or
representative of any other Participant, except when the Operator acts as
Operator for the Participants, and not, if applicable, as a Participant.
Participant covenants
Each Participant covenants and agrees separately with each other Participant:
(a)
to perform every obligation and commitment which it has in relation to the

Title Area and the Petroleum Titles under the Act or other applicable Law;
(b)
to perform its obligations under or relating to the fulfilment of any contract

which relates to the Joint Venture or Joint Operations;
(c)
not to do or cause to be done any act matter or thing whereby the continued
enjoyment of the Petroleum Titles by any Participant might be jeopardised;
(d)
to act co-operatively, honestly and reasonably in all its dealings with each other
and the Operator concerning the Joint Venture provided that, except as
expressly provided by this agreement, no Participant is under any fiduciary
duty to the other Participants or the Operator;
(e)
not to engage either alone or in association with another or others or through an

Affiliate or a Related Entity in any activity over the Title Area except as
provided or authorised by or under this agreement;
(f)
that each Participant has the unrestricted right to engage in and receive the full
benefit of any competing activities outside the Title Area; and
(g)
subject to the confidentiality provisions of this agreement, that each Participant
is entitled to use and apply Information and Sole Risk Information outside the
Title Area, provided that such activities are carried out in a manner which does
not prejudice, impair or impede Joint Operations.
3.5
Party warranties
Each party warrants for the benefit of each other party that:
(a)
(Incorporation) it is validly incorporated, organised and subsisting in

accordance with the laws of its place of incorporation;
(b)
(Power and capacity) it has full power and capacity to enter into and perform
its obligations under this agreement;
(c)
(Corporate authorisations) all necessary authorisations for the execution,

delivery and performance by it of this agreement in accordance with its terms
have been obtained;
(d)
(No legal impediment) its execution, delivery and performance of this

agreement complies with its constitution and does not constitute a breach of any
law or obligation, or cause a default under any agreement by which it is bound;
(e)
(No trust) it enters into and performs this agreement on its own account and not
as trustee for or nominee of any other person; and
(f)
(No encumbrances) as at the date of this agreement, there are no

Encumbrances affecting its Participating Interest.
Joint Venture Property
4.1
Participating Interests
The Participating Interests of the Participants as at the Commencement Date are :

Participant
Participating Interest (Percentage Share)
Party 1
Party 2
Party 3
%
100.0 %
4.2
4.3
Use and ownership of Joint Venture Property
(a)
All Joint Venture Property is owned by the Participants severally as tenants in

common in the proportions of their respective Percentage Shares from time to
time.
(b)
Each Participant must ensure that its Percentage Share of all Joint Venture
Property that it controls is available for the purpose of Joint Operations for the
duration of the Joint Venture.
(c)
To the extent that ownership of any Joint Venture Property is not registered or
recorded in the names of the individual Participants pro rata in proportion to
their respective Percentage Shares, then the person registered or recorded as
owner holds the property on trust for all the Participants pro rata in proportion
to their respective Percentage Shares.
JV Intellectual Property
Each Participant and its Affiliates are entitled to use, on a non-exclusive world-wide
10
royalty-free basis, JV Intellectual Property, including any modifications and

enhancements, outside the Title Area in activities other than Joint Operations provided
that the intended use of such JV Intellectual Property is first disclosed to each of the
other Participants and is subject to the obligations of confidentiality in this agreement.
4.4
No partition of Joint Venture Property
(a)
Subject to any Law or this agreement, each Participant waives any right it may
have to partition or divide the Joint Venture Property, whether by way of
physical partition, judicial sale or otherwise.
(b)
Nothing in this clause affects a Participants right to make an Assignment or

disposal as permitted by this agreement.
4.5
Perpetuity period
4.6
If the vesting of any interest of any Participant in any Joint Venture Property would,
but for this clause, be void under the rule against perpetuities at common law or under
any statute imposing perpetuity periods, then that interest terminates within the
maximum time from the Commencement Date permitted by the law of the Nominated
1
State for that interest to be valid.
Disposal of Joint Venture Property
4.7
(a)
The Operator may, with the approval of the Operating Committee, dispose of
any item of Joint Venture Property it considers is no longer needed or suitable
for Joint Operations.
(b)
If the Participants by Unanimous Vote decide to abandon any Joint Operations,

the Operator must endeavour to dispose of the Joint Venture Property related to
those Joint Operations, as economically and reasonably as possible.
(c)
The proceeds of recovery and disposal of Joint Venture Property, net of selling
and disposal costs, must be credited to the Participants pro rata in proportion to
their respective Percentage Shares.
Abandonment of Wells
(a)
The Operating Committee must approve the plugging and abandonment of all
wells drilled as a Joint Operation which are proposed to be plugged and
abandoned by Majority Vote.
(b)
If the Operating Committee approves the plugging and abandonment of a well,

the Operator must give immediate notice to each Participant. Any Participant
voting against that decision may give notice to all other Participants and the
Operator, within 3 days after receiving notice, that it will take over, at its risk,
cost, expense and benefit, the entire well as a Sole Risk Operation. If a
Participant does not reply within 3 days after receiving notice under this subclause it is deemed to consent to the abandonment.
Operating Committee
5.1
Establishment of Operating Committee
(a)
An Operating Committee is established on the Commencement Date. Each

Participant must appoint (and may remove) a representative to the Operating
Committee in writing.
A perpetuity period of 80 years is applicable for WA, NSW, NT and ACT; for pre-emptive rights in Vic.
and Qld. the period is 21 years; for pre-emptive rights in Tas. the period is 6 years; in SA clause 4.8 can be
deleted: see JD Merralls QC, The Rule Against Perpetuities and How It Applies to Natural Resources
Agreements, [2007] AMPLA Yearbook 214-227.
11
(b)
The role of the Operating Committee is to supervise the Operator in the

management of the Joint Venture and to make, subject to this agreement, all
strategic decisions relating to the conduct of Joint Operations, including
considering and approving any Proposed Programme and Budget and other
management plans, and any amendments to any Approved Programme and
Budget and approved management plans.
(c)
Unless the Participants otherwise agree by Unanimous Vote, the Participant

with the largest individual Participating Interest must appoint (and may
dismiss) its representative to be chair of the Operating Committee. The
Participant appointing the chair must cause the chair to preside at all meetings
of the Operating Committee.
(d)
The Operator must appoint (and may dismiss) a person, who may be one of its
employees, to be secretary of the Operating Committee. The Operator must
cause the secretary to prepare agendas for meetings, keep proper minutes of all
meetings and coordinate communications among the Participants regarding
meetings of the Operating Committee.
(e)
For any meeting of the Operating Committee, a Participant may in writing

appoint a person as an alternate representative for its representative and may
remove any person so appointed.
(f)
At meetings of the Operating Committee each representative present must act

solely as representative of the Participant which appointed him or her but a
representative may also represent the Operator at Operating Committee
meetings.
(g)
Each representative has full power and authority to represent and bind the
Participant which appointed him or her in all matters decided by the Operating
Committee, and the Participant is bound by all votes cast by its representative.
(h)
If the Percentage Share of any Participant falls below the Minimum Interest:
(i)
5.2
(i)
that Participant is no longer entitled to have a representative on the

Operating Committee and may not vote individually at meetings of the
Operating Committee; and
(ii)
its vote may be taken into account only if added to the vote or votes of
another Participant which holds more than the Minimum Interest and the
Participant appoints the other Participant in writing as its proxy prior to
the time of the vote.
Any decision made by the Operating Committee under this agreement is

deemed to be a decision of all the Participants, and each Participant is bound as
if that decision was an agreement entered into by them.
Functions of Operating Committee
Except as otherwise provided in this agreement, the Operating Committee may decide
all matters relating to the conduct of Joint Operations, including:
(a)
establishing policies from time to time covering Joint Operations;
(b)
deciding on matters relating to:

(i)
bids in relation to the acquisition of goods or services that will be used

in the carrying out of Joint Operations.
(ii)
acquiring goods or services from persons that will be used in the

carrying out of Joint Operations;
12
(iii) the allocation of contracts, arrangements or understandings to persons

supplying goods or services that will be used in the carrying out of
Joint Operations; and
(iv) the price to be paid, or pricing formula to be applied, for goods
2
and services to be used in the carrying out of Joint Operations.
5.3
5.4
(c)
approving cost overruns by the Operator under any Approved Programme and
Budget; and
(d)
appointing an Auditor.
Meetings of the Operating Committee
(a)
All meetings of the Operating Committee must be held in the capital city of the
Nominated State, unless otherwise agreed by the Participants and, in default of
agreement, at the office of the Operator.
(b)
The Operator must ensure that a meeting of the Operating Committee is

convened at least once each Year to approve a Proposed Programme and
Budget for the next period and at least 1 additional meeting must be called by
the Operator or a Participant in each Year.
(c)
The Operator must ensure that the secretary calls meetings and gives at least 15
days prior written notice to the Operator and all Participants entitled to be
present specifying the nature of the business to be discussed and including all
documentation required to be considered at the meeting. Meetings may be held
on less than 15 days notice if agreed in writing by all Participants entitled to be
present.
(d)
Meetings may be convened in person, or by video meeting or conference

telephone call at which all representatives of all Participants have the
opportunity to be present. All persons participating in the video meeting or
conference telephone call must be able to hear each of the others.
(e)
If the existing chair of the Operating Committee is not present within 15

minutes after the time appointed for holding the meeting, the representatives
present must elect one of themselves to be chair of the meeting.
(f)
Each Participant must bear all expenses incurred by its representatives in

attending meetings of the Operating Committee.
(g)
A representative of the Operator must attend every meeting of the Operating

Committee at the cost of the Participants, unless the Operating Committee
otherwise decides for a particular meeting or for a particular subject matter at
any meeting.
Quorum
(a)
A quorum for any meeting of the Operating Committee is present if the

representative of each Non-Defaulting Participant is in attendance at such
meeting.
(b)
If a quorum is not present within 30 minutes from the time appointed for the
meeting, the meeting must be adjourned to the same place, day and time in the
next week.
The need for a sub-clause along these lines has been necessitated by the passage of the Trade Practices
Amendment (Cartel Conduct & Other Measures) Act 2009 on 24 July 2009. The scope and effect of these
provisions, especially as they apply to exploration joint ventures, is not yet clear. In any particular case, it
is advisable for the draftsperson to check the current state of the law and practice before drafting.
13
(c)
5.5
5.6
If a quorum is not present at a reconvened meeting then, provided the

reconvened meeting is conducted as a personal meeting (not by video or
telephone meeting) and all Participants were given at least 5 days notice of the
reconvened meeting, the representatives present at the reconvened meeting are
deemed to constitute a quorum for the purposes of the business before that
meeting.
Voting and decision making
(a)
On any resolution or at any meeting of the Operating Committee, a Participant

(other than a Defaulting Participant) may cast, through its representative, the
number of votes equal to its Percentage Share.
(b)
At meetings of the Operating Committee, the Operator or its representative is

not entitled to vote, and the chair does not have a second or casting vote.
(c)
Unless otherwise specified in this agreement or in Schedule 1, all decisions of

the Operating Committee must be determined by Majority Vote. A decision
specified in Schedule 1 must be made by Unanimous Vote.
(d)
A record of the votes of each Participant shall be made and signed by the
representatives on behalf of the Participants prior to the end of any meeting.
(e)
A resolution in writing (which may consist of one or several documents in the

same terms) signed by at least one representative of each of the Participants or
approved by facsimile or by authenticated email transmitted by at least one
representative of each Participant and subsequently confirmed in writing is as
valid and effectual as if it had been passed at a duly convened meeting of the
Minutes
A copy of the minutes of each Operating Committee meeting must be given to each
Participant as soon as practicable, but no later than 14 days, after each meeting. The
minutes of a meeting must be submitted for approval at the next meeting held after that
14 day period and, if approved, must be signed by the chair of the later meeting and
when signed are evidence of the proceedings and the decisions of the meeting to which
they relate. The Operator may act on any matter approved by the Operating Committee
notwithstanding that the minutes have not been approved.
5.7
Sub-committees
The Operating Committee may at any time create sub-committees (comprising such
persons as the Operating Committee thinks fit) to consider and report back to the
Operating Committee on any particular issues relating to Joint Operations.
5.8
Loss of rights of participation and voting
Unless otherwise agreed by all Non-Defaulting Participants, a Defaulting Participant

(through its representative and alternate) is entitled to receive the agenda, meeting
papers and minutes of meetings, but is not entitled to call, attend or to vote at any
meeting of the Operating Committee or any subcommittee formed under this
agreement or join in voting on a resolution, nor will the presence of the representative
of any such Participant be necessary to form a quorum at any meeting, until the
relevant Default Event has been remedied.
Operator
6.1
Appointment of Operator
The Participants severally appoint the Operator to be the operator of the Joint Venture
and agent of the Participants for the purposes of this agreement from the
14
Commencement Date, and the Operator accepts that appointment, on and subject to the
provisions of this agreement.
6.2
Term of appointment of Operator
The appointment of the Operator continues:
6.3
6.4
6.5
(a)
until this agreement is terminated for any reason;
(b)
until the Operator resigns, having given at least 180 days notice to the
Participants of its intention to resign as Operator;
(c)
if the largest Participating Interest is no longer held by the Operator, until the
Operating Committee determines if and when a new Operator should be
appointed; or
(d)
until the Operator commits a Breach Default Event and fails to remedy the
default within 60 days of receipt of a written notice of default served by a
Participant.
Remuneration of the Operator
(a)
In consideration of the performance by the Operator of its obligations under this

agreement, each Participant must pay the Operator its Percentage Share of the
Operator Charge payable as part of a Cash Call.
(b)
The Operator Charge may be varied by the Operating Committee by

Unanimous Vote.
(c)
It is intended that the Operator will neither gain nor suffer a loss as a result of
acting as Operator in the conduct of Joint Operations.
Appointment of new Operator
(a)
Upon the termination of the appointment of the Operator, the Participants must
promptly appoint a new Operator under the terms of this agreement, if this
agreement is not otherwise terminated.
(b)
The Participants must not reappoint a Operator removed for default or

following an Insolvency Event of the Operator.
(c)
If a new Operator cannot be appointed and act immediately, the Participant

holding the largest Participating Interest must act as interim operator until the
new Operator is appointed and commences its duties.
(d)
Upon the new or interim Operator commencing its duties, the previous
Operator must immediately deliver to the new or interim Operator all Joint
Venture Property and all documents, books, records and accounts relating to
the Joint Venture held by it or under its control.
(e)
If title to any Joint Venture Property is held in the name of the previous
Operator, it must promptly transfer such title to the new or interim Operator at
the cost of the Joint Venture.
Liability of Operator
Except as a Participant to the extent of its Percentage Share, the Operator is not liable
to the Participants for any loss sustained or liability incurred in connection with the
Joint Venture, even if arising from the negligence of the Operator or any person for
whom the Operator may be vicariously liable, except where, in the circumstances of the
particular case, the Operator (or that person) has committed fraud or Wilful
Misconduct.
15
6.6
Full indemnity of Operator by Participants
Each Participant severally, to the extent of its Percentage Share, must indemnify and
hold harmless the Operator, its Affiliates and their directors, employees and agents
(Indemnified Persons) from and against all damage, loss, expense or liability of any
nature suffered or incurred by the Indemnified Persons (including any claims made by
Third Parties) in connection with Joint Operations, including any personal injury,
disease, illness or death, or physical loss of or damage to property, of the Indemnified
Persons or any Third Party, except, in respect of an Indemnified Person, where that
Indemnified Person has committed fraud or Wilful Misconduct.
6.7
Limited indemnity by Operator of Participants
The Operator must indemnify and hold harmless the Participants, its Affiliates and their
respective directors, employees and agents (JV Indemnified Persons) from and
against all damage, loss, expense or liability of any nature suffered or incurred by the
JV Indemnified Persons (including any claims made by Third Parties) in connection
with its management of Joint Operations while it is the Operator, including any
personal injury, disease, illness or death, or physical loss of or damage to property, of
the JV Indemnified Persons or any Third Party, caused by the fraud or Wilful
Misconduct of the Operator, its directors, employees and agents.
Functions, powers and duties of Operator
7.1
Functions of the Operator
The Operator reports to the Operating Committee and must under the overall
supervision and control of the Operating Committee:
7.2
(a)
by itself or through its employees, agents or contractors manage, direct and

control Joint Operations as agent for and on behalf of the Participants;
(b)
exercise and discharge its powers and duties under this agreement in
accordance with Approved Programmes and Budgets and decisions made by
the Operating Committee;
(c)
conduct Joint Operations in a good, workmanlike and commercially reasonable

manner in accordance with Good Australian Oilfield Practice;
(d)
represent the Joint Venture in all dealings with all Authorities in respect of Joint
Operations and the Petroleum Titles, provided that each Participant may deal
with an Authority in matters affecting its own Participating Interest;
(e)
report to the Operating Committee at the places and times determined by the
Operating Committee;
(f)
report to the Participants as soon as reasonably practicable on all Joint

Operations including all well and reservoir reports (to the extent charged to the
Joint Account) agreed to be provided by the Operator; and
(g)
act in utmost good faith in all its dealings, as Operator, with each Participant.
Rights, powers and duties of Operator
In the course of managing, supervising and conducting Joint Operations, the Operator
is entitled to have possession and control of all Joint Venture Property and must, either
itself or through such third parties as it may engage:
(a)
(Proposed Programmes and Budgets) prepare and submit to the Operating

Committee for approval all Proposed Programmes and Budgets required to
implement any Joint Operations and other management plans so as to comply with
all applicable Laws and Authorisations, and all amendments and variations
16
to any Approved Programme and Budget;

(b)
(Approved Programmes and Budgets) carry out effectively and efficiently

the work required to implement all Approved Programmes and Budgets
including for such purpose, if required by the Operating Committee, engaging
in any conduct described in the definition of "cartel provision" in section
44ZZRD of the Australian Competition and Consumer Act 2010;
(c)
(tenders and contracts) obtain, evaluate and accept competitive quotes and
tenders (within the limits determined by the Operating Committee), and enter
into, administer and enforce, as agent of the Participants, all contracts required
for the performance of works and services necessary to perform this agreement
and undertake Joint Operations;
(d)
(personnel) engage, dismiss, supervise and control all management, technical

and labour personnel necessary for performance of its obligations under this
agreement including determining the terms and conditions of such engagement
and conducting all industrial relations;
(e)
(payment and bank accounts) pay on behalf of the Participants out of funds
provided by the Participants all costs and expenses incurred by the Operator in the
conduct of Joint Operations and for such purpose open, maintain and operate one
or more separate bank accounts (within which its own funds are not commingled)
on behalf of the Participants for the purposes of the Joint Venture;
(f)
(Laws and Authorisations) comply with all Laws and Authorisations

applicable to the conduct of Joint Operations, including those relating to health,
safety, environmental protection, rehabilitation and abandonment, and ensure
that all Authorisations required to conduct Joint Operations are applied for,
obtained and maintained;
(g)
(Petroleum Titles) keep and renew those Petroleum Titles in good standing
(including paying all rents, taxes, expenditures and other outgoings by the Due
Date), and manage, administer, protect and enforce the rights and obligations of
the holders under the Petroleum Titles;
(h)
(Security Bonds) facilitate the provision by the Participants of any Security

reasonably required for the performance of the Participants' obligations under
any Petroleum Title, lease, contract, service agreement or other agreement
authorised by the Operating Committee;
(i)
(statutory reports) prepare, file and lodge all statutory reports as and when
required under the Act and any other applicable Laws in respect of the Title
Area (other than reports, such as royalty reports, required to be submitted by
the Participants in their individual capacities as Participants);
(j)
(native title) act as the Participants representative in respect of Native Title

Rights and Aboriginal heritage issues, negotiate and enter into agreements with
any native title holder (as that term is defined in section 224 of the Native Title
Act 1993 (Cth)), any representative Aboriginal or Torres Strait Islander body
(as that term is defined in section 253 of the Native Title Act 1993 (Cth)), and
the parties to Native Title Claims and in all other respects deal with issues of
this kind as and when they arise, provided that the Operator may not recognise
any Native Title Rights or agree or settle any Native Title Claims, without the
prior approval of the Operating Committee;
(k)
(insurances) effect and maintain all insurances appropriate in relation to Joint

Venture Property and Joint Operations, or as required by Law, and any
additional insurances which the Operating Committee requires to be effected,
17
provided that the Operator must wherever possible procure that all such
insurances include a provision that the insurer has no right of subrogation
against any Participant or the Operator and that the Participants and Operator
are to be named, to the extent of their interests, on each policy of insurance;
(l)
(insurance certificates) if requested, provide full details to a Participant of all

insurances effected by the Operator under this agreement, including certificates
of currency;
(m)
(no Encumbrances) keep the Joint Venture Property free and clear of all
Encumbrances, except for those Encumbrances specifically permitted under
this agreement, or approved by the Operating Committee, or existing at the
time of, or created concurrent with, the acquisition of such Joint Venture
Property, or liens arising in the ordinary course of business which the Operator
must arrange to be released or discharged in a diligent manner;
(n)
(litigation) institute, defend, compromise or settle any court or arbitration

proceedings or insurance claims commenced or threatened by or against the
Operator or a Participant affecting or relating to Joint Operations or Joint
Venture Property, provided that:
(i)
unless otherwise instructed by a Participant, the Operator may conduct

such proceedings or claims for and on behalf of and in the name of each
Participant;
(ii)
the Operator must regularly report to the Participants the conduct of such
commenced or threatened proceedings and claims, including any
proceedings and claims related to environmental impacts, and keep the
Participants informed of the progress of such proceedings and claims; and
(iii) the Operator may not institute, compromise or settle any court or
arbitration proceedings or insurance claims exceeding an amount
determined by the Operating Committee without the prior approval of the
Operating Committee;
(o)
(emergencies) take such action as the Operator may consider necessary or

advisable to prevent or respond to an Emergency;
(p)
(GST) act as the Participants representative for the purposes of seeking

registration of the Joint Venture as a GST joint venture under the GST Act and
manage, administer and enforce the rights and obligations of the Participants
under such GST joint venture; and
(q)
(cartel exception) in accordance with any direction of the Operating

Committee, and as agent for the Participants:
(i)
bid for and acquire goods and services to be used in Joint Operations
including making such bids, on such terms and paying such prices, as the
Operating Committee may direct;
(ii)
select the persons from whom goods or services to be used in Joint

Operations will be acquired, including selecting any person whom the
Operating Committee may direct;
(iii) allocate contracts, arrangements or understandings to persons supplying

goods or services to be used in Joint Operations, including making any
3
allocation which the Operating Committee may direct; and
See footnote 2 above
18
(r)
7.3
7.4
(other incidental) do all other acts and things that are reasonably necessary or
desirable to fulfil its functions or are incidental to its powers and duties.
Maintenance of the Joint Account
(a)
The Operator must maintain the Joint Account and the Joint Venture Property
on behalf of the Participants in their Participating Interests.
(b)
The Operator must make available to any Participant on request copies of the
accounting procedures, expenditure classifications and reporting formats
underlying the Joint Account.
(c)
The Operator must retain all receipts, vouchers and other documents relating to
Joint Expenditure until directed otherwise by the Operating Committee.
Limitations on Operators obligations
Notwithstanding anything to the contrary elsewhere in this agreement, the performance

by the Operator of its obligations under this agreement is subject to the Operator being
provided with sufficient funds by the Participants to enable the Operator to perform
those obligations.
7.5
Operator may delegate
The Operator may delegate to a Third Party, including an Affiliate, any of its rights,
remedies, powers, discretions and obligations, provided that:
7.6
(a)
the Operator may only delegate the whole of its rights, remedies, powers,
discretions and obligations with the approval of the Operating Committee;
(b)
any delegation does not relieve the Operator of any of its obligations or
responsibilities under this agreement;
(c)
the Operator informs the Operating Committee at its next meeting of the
identity of the delegate and the matter which has been delegated; and
(d)
the delegation is at no additional cost to the Participants.
Agreement with an Affiliate or a Related Entity
The Operator may not enter into an agreement with a Participant or an Affiliate or a
Related Entity of a Participant or the Operator for the supply of goods or services or
both under this agreement unless the proposed agreement is on terms and conditions
which are no less favourable to the Participants than an arms length commercial
agreement with a Third Party supplier, and the proposed agreement is approved by the
7.7
Litigation
(a)
A Participant has the right to participate separately, at its own expense, in

litigation or administrative proceedings initiated by the Operator on behalf of
the Participants.
(b)
If a Participant elects to participate separately in litigation, that Participant:

(i)
is considered to have a divergent interest to the other Participants and is

not entitled to continue to receive reports or legally privileged material
prepared or supplied by the Operator in relation to that litigation; and
(ii) is not entitled to require external lawyers appointed by the Operator to

cease to act on the basis of a former client conflict of interest.
7.8
Trades
(a)
The Operator may, with approval of the Operating Committee, make well
19
trades and data trades for the benefit of the Participants, with any data so
acquired to be furnished to all Participants who contributed to the cost of the
traded data.
(b)
The Operator must cause any party with whom such trade is entered into give
an undertaking to the Participants to keep the traded data confidential, on terms
approved by the Operating Committee.
Programmes, Budgets and Cash Calls
8.1
Proposed Programmes and Budgets
(a)
By no later than the Budget Preparation Date specified in Schedule 1 in each

Year or such other date as the Operating Committee may agree, the Operator
must provide the Participants with a Proposed Programme and Budget which
must include:
(i)
details of the programme of Joint Operations proposed for the next Year,
or for the period of any proposed Capital Works;
(ii)
an itemised budget specifying all estimated Joint Expenditure proposed to

be called by the Operator on a monthly basis under this agreement; and
(iii) all available proposed major contracts and supporting documentation.
8.2
(b)
At any time the Operating Committee may require the Operator to prepare and
provide to the Participants a Proposed Programme and Budget in relation to any
aspect of Joint Operations including the appraisal of any Discovery, a Sole Risk
Operation, an Emergency, abandonment and the like.
(c)
Each Proposed Programme and Budget must include expenditure on the

Petroleum Titles sufficient to comply with minimum expenditure obligations
under the Act and the Petroleum Titles during that period.
Approved Programme and Budget
(a)
Not less than 14 days after provision of a Proposed Programme and Budget,
and by no later than the end of June in each Year or such other time as the
Operating Committee may determine, the Operating Committee must meet (as
many times as necessary) and discuss the Proposed Programme and Budget for
the next Year or appropriate period and adopt, with or without amendment, an
Approved Programme and Budget for that Year or period.
(b)
Subject to the prior approval by the Operating Committee to the awarding of all
contracts to a value of more than the Contract Limit specified in Schedule 1,
once the Proposed Programme and Budget is approved by the Operating
Committee, the Operator must, subject to receiving an AFE approved by
Majority Vote under this agreement, implement the Approved Programme and
Budget, and give a copy to each Participant.
(c)
An Approved Programme and Budget may be amended by the Operator with

the approval of the Operating Committee.
(d)
If the Operating Committee for any reason fails to approve a Proposed

Programme and Budget, prior to the commencement of the Year to which it
relates, the Operating Committee must continue to meet and use all reasonable
efforts to reach adopt an Approved Programme and Budget. In the meantime,
the Operator must, subject to any contrary direction of the Operating
Committee and receipt of necessary funds, continue to:
(i)
do (or, as appropriate, refrain from doing) whatever is necessary to

maintain the Petroleum Titles in good standing and other Joint Venture
20
Property in good condition; and

(ii)
perform and discharge all its existing obligations as Operator under this
agreement, the Act, the Petroleum Titles or to Third Parties or otherwise;
and
all costs and expenses incurred by the Operator in maintaining the Petroleum
Titles and performing and discharging all its existing obligations is Joint
Expenditure and each Participant must pay its Percentage Share of those costs
and expenses as a Cash Call when due when an AFE is delivered by the
Operator.
8.3
AFEs
th
(a)
On or before the 10 day of each month (or such other date or period as the
Operating Committee directs), the Operator must, and may at any other time,
before entering into any commitment or incurring any Joint Expenditure under
an Approved Programme and Budget, submit an AFE for approval by the
Operating Committee by Majority Vote, unless this agreement expressly
provides otherwise.
(b)
In preparing an AFE for the drilling, testing or logging of a well, the Operator
must compile the AFE:
(c)
(i)
for the drilling of an Exploration Well on a dry hole basis including

contingencies; and
(ii)
for the drilling of any other well on a case and suspend basis.
Each AFE must:

(i)
describe the work in detail and outline the proposed work programme;
(ii)
identify the operation by specific reference to the applicable line items in

the Approved Programme and Budget;
(iii) contain the Operators best estimate of the total funds, including charges
and credits, required to carry out the proposed work and provide a
timetable of expenditures, if known;
(iv) be accompanied by such other supporting information as is necessary for
an informed decision;
(v)
specify the amount due and payable by each Participant; and
(vi) include the amount paid cumulatively by each Participant to date for the
current Year.
(d)
Each Participant must:

(i)
within 24 hours of receipt of an AFE reasonably designated by the

Operator to require by its nature an urgent response; and
(ii)
within 14 days in the case of receipt all other AFEs,
notify the Operator and the other Participants whether it approves of the AFE
or not.
(e)
A Participant is deemed to approve an AFE if it does not communicate its

disapproval to the Operator:
(i)
within 24 hours of receipt of the AFE by the Participant in respect of an AFE

designated by the Operator as urgent; or
(ii)
otherwise within 14 days of receipt of the AFE by the Participant...
21
(f)
8.4
If the Operating Committee approves an AFE for proposed Joint Operations:

(i)
each Participant must pay its respective Percentage Share of the AFE to
the Operator in accordance with this agreement; and
(ii)
the Operator is authorized to conduct the approved Joint Operation under

the terms of this agreement.
(g)
If the Operating Committee fails to approve an AFE for the proposed Joint
Operation within the applicable time period, the operation is deemed rejected.
(h)
The Operator must promptly notify the Participant if the proposed Joint
Operation has been rejected, and any Participant may thereafter propose to
conduct the operation as a Sole Risk Operation under this agreement.
Joint Expenditure not covered by Programme and Budget
(a)
The Operator must not undertake any Joint Operations which are not
substantially in accordance with an Approved Programme and Budget except:
(i)
in case of an Emergency, the Operator may make such immediate

expenditure as the Operator deems necessary for the protection of life or
property including the Joint Venture Property, in which case the Operator
must promptly notify the Participants of such expenditure; or
(ii)
if the Operator expects there will be a cost overrun in carrying out an

Approved Programme which cannot be avoided by Good Australian
Oilfield Practice, the Operator may exceed a current Approved Budget by
not more than 10%; or
(iii) if otherwise permitted by this agreement or the Operating Committee.

(b)
8.5
The Operator must report to the Participants as soon as reasonably practicable

any unbudgeted expenditure incurred by the Operator for whatever reason.
Payment of Cash Calls
(a)
Approval of an AFE constitutes authority for the Operator to issue Cash Calls
to the Participants in respect of that expenditure. A Cash Call must include an
estimate of the cash requirement for each of the next ensuing 3 months and
include a cost break-up of the main expenditure components.
(b)
A Participant must pay each Cash Call to the Operator within 7 days of
approval of an AFE. If a Participant is late in paying a Cash Call, the
Participant must pay with interest on the late payment calculated from the due
date to date of payment at the Agreed Interest Rate in the next Cash Call
payable by it.
(c)
The payment of any Cash Call or other monies under this agreement is without
prejudice to the right of a Participant to later contest the payment.
(d)
All payments must be in the currency determined by the Operator and made to
a bank account in Australia nominated by the Operator.
Completion, discovery and appraisal
9.1
Well Completion
(a)
When an Exploration Well or an Appraisal Well has reached its authorized

depth, all logs, cores and other approved tests have been conducted and the
results furnished to the Participants, the Operator must submit to the
Participants an election to Complete such well and plug and abandon it, or case
it as a producing well (Casing Point Election). Such submission must include
22
the Operators recommendation concerning the Casing Point Election and an

AFE for the Completion costs.
9.2
9.3
(b)
If the Operating Committee approves the casing and suspension of a well, the
Operator is authorised to case and suspend the well as if such work, and its
proposed cost, had been approved as part of an Approved Programme and
Budget.
(c)
If the Operating Committee decides to plug and abandon the well but less than
all the Participants vote to plug and abandon the well, the Operator must notify
the Participants of the result of the vote and any Participant which voted for the
casing and suspension of the well rather than the plugging and abandonment of
the well, has 24 hours to make Sole Risk Proposal in respect of that well. If no
Sole Risk Proposal is made within the 24 hour period, the Operator must plug
and abandon the well.
Discovery and appraisal
(a)
If a Discovery is made during the drilling of a well, the Operator must give
notice of Discovery required under the Act and the Petroleum Title and as soon
as possible submit to the Participants a report containing available details of the
Discovery and the Operators recommendation as to whether the Discovery
merits appraisal.
(b)
If the Operating Committee determines that the Discovery merits appraisal, the
Operator must within 90 days deliver to the Participants a Proposed Programme
and Budget for appraisal of the Discovery. Within 30 days of such delivery, or
earlier if necessary to meet any applicable deadline under the Petroleum Title,
the Operating Committee must meet to consider, modify and either approve or
reject the Proposed Appraisal Programme and Budget.
(c)
If the Operating Committee approves the Appraisal Programme and Budget,

the Operator must secure all Authorisations required for the Appraisal
Programme and Budget as soon as possible. If an Authority requires changes to
an Appraisal Programme and Budget, the matter must be resubmitted to the
Operating Committee for further consideration.
Proposals for development
(a)
The Operator or any Participant may propose to the Operating Committee that
the Joint Venture undertake development of one or more pools of a Discovery
in a defined area of the Petroleum Titles (Development Proposal).
(b)
If the Operating Committee decides by Majority Vote to accept the

Development Proposal and makes a final investment decision (FID) to
undertake the proposed development, each Participant must participate in an
application for a production lease or licence over the Exploitation Area, and
the Participants which voted to proceed with the Development Proposal
(Proceeding Participants) are deemed forthwith to be parties to a separate
development and production joint venture agreement over the Exploitation
Area on the same terms and conditions as the then current AMPLA Model
Petroleum Joint Operating Agreement, with such modifications as the
Proceeding Participants may agree, including:
(i)
provisions dealing with development, financing the development,

rehabilitation and abandonment;
(ii)
provisions dealing with disposition of the Petroleum produced by the

Joint Venture;
23
(iii) the execution of cross securities in the form of the then current AMPLA
Model Cross Security; and
(iv)
(c)
the Operator Charge to be payable to the Operator during development

and production operations,
If a FID is made by Majority Vote, a Participant which did not vote for the
Development Proposal (Non-Proceeding Participant):
(i)
is deemed to have offered to sell its Participating Interest in the

Exploitation Area to the Proceeding Participants; and
(ii)
within 30 days from the date the Majority Vote was passed the
Proceeding Participants may elect to acquire, and the Non-Proceeding
Participant must sell and transfer, such Participating Interest (and if
more than one, in proportion to their Percentage Shares or in such other
proportions as they may agree in writing);
at a value agreed within the 30 day period or, failing agreement, at its market
value at that date as determined by an Expert appointed under this agreement,
who must make such determination within 30 days of his or her appointment.
If all the Participating Interest of the Non-Proceeding Participant in the
Exploitation Area is not acquired by the Proceeding Participants, no
development may proceed under that Development Proposal.
(d)
Upon completion of the transfer of all the Non-Proceeding Participants

Participating Interests in the Exploitation Area:
(i)
the Exploitation Area is held by the Participants on trust for and at the
expense of the Proceeding Participants as beneficial owners; and
(ii)
the Non-Proceeding Participants cease to have any beneficial rights

with respect to the Development Proposal or the Exploitation Area.
(e)
If no Participant votes for the Development Proposal within the required

period then the Development Proposal will not proceed, but this does not
prevent a further proposal for development and production being later
submitted to the Operating Committee for approval.
(f)
The area of the Petroleum Titles (if any) outside an Exploitation Area
remains subject to this agreement.
10
Accounts, reports, audit and access
10.1
Joint Venture accounting
10.2
(a)
The Operator must maintain separate books, accounts and records for the Joint
Venture of Joint Expenditure in accordance with the Accounting Procedure and
generally accepted accounting principles adopted from time to time by the
Institute of Chartered Accountants in Australia, consistently applied.
(b)
The Operator must develop and provide to the Participants standard accounting
procedures, expenditure classifications and reporting formats as appropriate to
the Joint Venture to satisfy the requirements of the Operating Committee and
the Auditor.
Reports to Participants
The Operator must keep the Participants informed of all Joint Operations by submitting
in writing to the Participants:
(a)
within one month of the end of each quarter as determined by the Operating
Committee, quarterly progress reports which include statements of Joint
24
Expenditure and comparisons of such expenditures to the Approved Programme

and Budget, including quarterly summaries of data acquired;
(b)
within one month of the end of each Year or other relevant period, a detailed
final report after completion of each Approved Programme and Budget, which
must include comparisons between actual and budgeted Joint Expenditure;
(c)
whether as part of the other reports required under this clause or otherwise, the
Operator must provide the Participants with the Information on Wells,
reservoirs and Joint Operations of the type and with the frequency or timing as
specified in the well and reservoir reports by electronic or other means, and in
native electronic format, if requested by a Participant;
(d)
as soon as possible thereafter, a report on the happening of any event or

occurrence:
(i)
which the Operator considers is likely materially to affect the interests of

any of the Participants or the value or worth of any Participant Property
or the Petroleum Titles; or
(ii)
that would be required to be disclosed to the market by a Participant (or

by an Affiliate of a Participant) pursuant to the Listing Rules provided
that, in respect of a foreign stock exchange, the Participant has previously
informed the Operator of the disclosure requirements applying to the
stock exchange on which its, or one of its Affiliates securities are listed;
within one month in each case of its completion, a copy of any material report
concerning Joint Operations produced by the Operator; and
(e)
10.3
10.4
such other reports as the Operating Committee may direct.
Joint Account and audit
(a)
The Operator must prepare accounts for the Joint Venture reflecting the results
for each Year of all transactions connected with Joint Operations as disclosed
by the records and accounts kept by the Operator and reflecting the Joint
Venture Property in the possession or control of the Operator as at the end of
such Year in accordance with this agreement (Annual Accounts) which
Annual Accounts must be completed, audited by the Auditor and provided to
the Participants no later than 3 months after the end of the Year.
(b)
Any Participant which requires any particular audit requirements to be satisfied

by the Auditor may make known to the Operator in writing its additional
particular requirements before the audit is completed. The Operator must
provide the particular audit requirements to the Auditor forthwith and the
additional cost of conducting any additional audit must be paid by that
Participant.
(c)
The Operator must rectify any issues or qualifications raised by the Auditor
concerning the Joint Account or Joint Operations as soon as is reasonably
practicable.
Individual Participant recording responsibilities
(a)
Each Participant is responsible, in respect of its Participating Interest, for all

financial and accounting records required by Law or to support its income tax
returns or any other reports required by any Authority.
(b)
The Operator must provide to each Participant such information prepared by

the Operator relating to the Joint Venture in accordance with this agreement, as
the Participant may reasonably require to prepare its financial and accounting
25
records.
10.5
Participant access
A Participant is entitled during working hours at reasonable intervals, and the Operator
must give, on reasonable notice at the Participant's expense and risk, access to, and the
right to inspect any Joint Venture Property, including all books and records maintained
by the Operator, provided that the Participant ensures that it access causes no
interference with Joint Operations.
11
Encumbrances
11.1
No Encumbrances without consent
A Participant must not at any time create an Encumbrance over its Participating
Interest unless:
(a)
the Encumbrance is over the whole (but not part) of its Participating Interest;
(b)
the rights of the Encumbrancees and any person claiming through or under any
of them (each of whom is a Encumbrancee) must be expressly subordinated to
the rights of the Participants under this agreement; and
(c)
each Encumbrancee agrees to release its security immediately upon the

Participant ceasing to be a party to this agreement.
12
Surrender, Relinquishment, Withdrawal and Dilution
12.1
Surrender
12.2
(a)
If the Act or a Petroleum Title requires the Participants to surrender or

relinquish any portion of the Title Area, the Operator must advise the Operating
Committee of such requirement at least 120 days prior to the earlier of the date
for filing irrevocable notice of such surrender or relinquishment, or the date of
such surrender or relinquishment.
(b)
Prior to the end of such period, the Operating Committee must determine the
size, shape and location of the surrendered or relinquished area, consistent with
the requirements of the Act and the Petroleum Title.
(c)
If a Unanimous Vote of the Operating Committee cannot be obtained, then the

proposal supported by a Majority Vote of the Participating Interests must be
adopted.
(d)
If no proposal attains the support of a Majority Vote, then the Operator must
choose the proposal receiving the largest aggregate Percentage Share vote.
(e)
The parties must execute any and all documents and take such other actions as
may be necessary to effect the surrender or relinquishment.
(f)
Each Participant renounces all claims and causes of action against the Operator
and any other Participants on account of any area surrendered or relinquished in
accordance with the foregoing but against its recommendation whether or not
Petroleum is subsequently discovered under the surrendered or relinquished
area.
Withdrawal
(a)
A Defaulting Participant may not withdraw from this agreement while a

Default Event it has committed has not been remedied in full.
(b)
Subject to the conditions of the Petroleum Titles, the provisions of the Act
and this agreement, a Non-Defaulting Participant may withdraw from this
26
agreement in respect of all or any of the Petroleum Titles as from the end of a
Title Year by giving the other Participants and the Operator notice of
withdrawal at least 60 days before the Title Year end, provided that a
Participant may not give a notice of withdrawal from this agreement in
respect of any Petroleum Titles if:
the Minimum Work Obligations for the first such 3 years of the
Petroleum Title or any renewal thereof have not been completed or
discharged;
(ii)
the Minimum Work Obligations in respect of the current Title Year

have not been completed or discharged.
(c)
Before a withdrawal by a Non-Defaulting Participant becomes effective, the

withdrawing Participant must provide Security acceptable to the remaining
Participants and the Operator in respect of the withdrawing Participants
Percentage Share of all expected abandonment obligations in respect of all
Joint Venture Property held by the Joint Venture at that time, as determined
by the Operator.
(d)
In lieu of the withdrawing Participant providing Security covering its future

expected abandonment obligations, the continuing Participants may by
Unanimous Vote within 60 days of receiving notice of withdrawal from this
agreement, require the withdrawing Participant as from the end of a Title Year
to forfeit absolutely to the remaining Participants (and if more than one, prorata in the proportion that their respective Percentage Shares bear to each
other) all its Participating Interest and the withdrawing Participant is, upon
such forfeiture becoming effective, released from all future obligations
relating to the Joint Venture.
(e)
Within 30 days of receipt of a notice of withdrawal, any of the other

Participants may give notice that it wishes to withdraw from this agreement
and the Petroleum Titles.
(f)
12.3
(i)
If more than 1 Participant gives such notice of withdrawal within 30 days of

receipt of the first notice of withdrawal then, within a further 15 days if all the
remaining Participants give notice of withdrawal, this agreement will terminate
and be wound up according to its terms.
Effect of withdrawal
(a)
Upon a withdrawal from the Joint Venture, unless otherwise provided in this
agreement, the withdrawing Participant:
(i)
surrenders absolutely to the other Participants (and if more than one, prorata in the proportion that their respective Percentage Shares bear to each
other) all its Participating Interest;
(ii)
the withdrawing Participant must, within 30 days of withdrawal, execute

and deliver all deeds and documents necessary for, and complete, the
Assignment (and registration, if required by the law of the Nominated
State) of its Participating Interest to the remaining Participants;
(iii) the withdrawing Participant must pay all stamp duty and other transfer
costs which become payable upon the withdrawing Participant
transferring its Participating Interest to the remaining Participant; and
(iv) upon approval and registration of the withdrawing Participants
Participating Interest to the remaining Participants, the withdrawing
Participant is released from all future obligations relating to the Joint
27
Venture, other than its obligations of confidentiality under this agreement

and for its Percentage Share of expected abandonment obligations at the
time of withdrawal, as determined by the Operator.
(b)
Any withdrawal from the Joint Venture is without prejudice to any rights or
obligations of the Participants arising prior to the withdrawal, and any
surrender of a Participating Interest is not to be taken as satisfaction, wholly or
partly, of the obligations of a withdrawing Participant which have arisen prior
to its withdrawal.
12.4 Dilution
The Dilution provisions contained in Schedule 4 form part of this agreement.
13
Sole Risk
13.1
Proposal for a Sole Risk Operation
13.2
(a)
At any time after 12 months from the Commencement Date, a Participant (Sole
Risk Proposer) may, by notice given to the Operator and the other Participants,
propose that it undertake a Sole Risk Operation which proposal must state the
proposed location in the Title Area, and the purpose, programme and estimated
cost of the proposed Sole Risk Operation (Sole Risk Proposal).
(b)
No Sole Risk Operation may be proposed or carried out which conflicts with a
previously approved Joint Operation, or with a previously approved Sole Risk
Operation, which is still to be carried out and completed.
(c)
The Operator must hold a meeting of the Operating Committee within 30 days
from the date of the notice of the Sole Risk Proposal and at that meeting the
Operating Committee may resolve that the Operator proceed with the Sole Risk
Proposal as a Joint Operation.
(d)
If the Sole Risk Proposal relates to a well where a rig is on location at that well,
the 30 day notice period in this clause within which the Operating Committee
must meet following the Sole Risk Proposal must be shortened to 48 hours. All
costs related to the stand-by of the drilling operations while the Sole Risk
Proposal is being considered must be charged to the Sole Risk Proposer, or
form part of the cost of the Sole Risk Proposal, if adopted.
(e)
If the Operating Committee fails to resolve to proceed with the Sole Risk
Proposal as a Joint Operation, it must determine the boundaries of the location
in the Title Area in which the Sole Risk Operation may take place (Sole Risk
Area).
(f)
If the Operating Committee fails to determine the boundaries of the Sole Risk
Area, the Sole Risk Proposer may require the Sole Risk Area to be determined
by an Expert as provided for in this agreement.
Sole Risk Election Notice and participation
(a)
Subject to this agreement, where the Operating Committee fails to pass a

resolution to proceed with the Sole Risk Proposal as a Joint Operation any
Participant may, by written notice given within 6 months of the failure of the
Operating Committee to agree to proceed with the Sole Risk Proposal as a Joint
Operation (Sole Risk Election Notice) given to the other Participants and the
Operator, elect to undertake the Sole Risk Proposal.
(b)
A Participant receiving a Sole Risk Election Notice may, within 30 days of

receipt, by notice elect to participate in the Sole Risk Proposal and thereby
become, with the Participant giving the notice, a Sole Risk Participant. If other
28
Participants elect to participate in the Sole Risk Proposal they are collectively
referred to as Sole Risk Participants.
13.3
(c)
If a Participant does not elect to participate in the Sole Risk Proposal within 30
days of receiving a Sole Risk Election Notice, it is deemed to have no further
interest in the Sole Risk Proposal.
(d)
If no Sole Risk Election Notice is given as required, and the Operating

Committee does not elect to undertake the Sole Risk Proposal as a Joint
Operation, the Sole Risk Proposer may proceed with Sole Risk Proposal on its
own account.
(e)
If a Sole Risk Election Notice is given, the Sole Risk Participants are deemed to
have associated in a new unincorporated joint venture (Sole Risk Joint
Venture) in respect in the Sole Risk Operation in the Sole Risk Area as
Participants pro rata in the proportion that their Percentage Shares (at the date
of the Sole Risk Election Notice) bear to each other, or in such other
proportions which they agree (Sole Risk Participating Interest).
(f)
The Sole Risk Participants must promptly and in good faith negotiate and
execute a new joint venture agreement in relation to the Sole Risk Operation in
the Sole Risk Area (Sole Risk JOA) but unless and until they agree, the
provisions of this agreement apply with necessary modification to the Sole Risk
Joint Venture.
(g)
Upon execution of the Sole Risk JOA, the Sole Risk Area is excised from this
agreement and the non-Sole Risk Participants must do all things necessary to
transfer the Petroleum Title (or part thereof) over the Sole Risk Area to the Sole
Risk Participants, or to facilitate the grant of a new Petroleum Title over the
Sole Risk Area to the Sole Risk Participants.
(h)
Upon formation of a Sole Risk Joint Venture:

(i)
the Petroleum Title for the Sole Risk Area must be held by the holders
thereof on trust for and at the expense of the Sole Risk Participants as
beneficial owners; and
(ii)
until a new Petroleum Title is granted over the Sole Risk

Area, and all Authorisations to conduct the Sole Risk Operation are
obtained, the Participants and the Operator of the existing Joint Venture
must act in respect of the Sole Risk Area as directed by, and at the sole
cost and risk of, the Sole Risk Participants, with the Sole Risk Area being
treated, as between those parties, as the legal and beneficial property of
the Sole Risk Participants.
Sole Risk Operation
(a)
The Sole Risk Operation must be carried out at the standard required by Good
Australian Oilfield Practice and in accordance with the Sole Risk Proposal by
the Operator, if the Operator is a Sole Risk Participant, or if the Operator is not
a Sole Risk Participant, by such person as the Sole Risk Participants may by
Majority Vote determine (Sole Risk Operator).
(b)
The risk, cost, expense of undertaking the Sole Risk Operation must be borne
by the Sole Risk Participants pro rata in proportion to their Sole Risk
Participating Interests.
(c)
A Joint Operation has priority over any Sole Risk Operation permitted under
this agreement.
(d)
In conducting a Sole Risk Operation, the Sole Risk Participants may:
29
(i)
access the Sole Risk Area at all reasonable times through the Title Areas;
(ii)
use any Information which they jointly own with the non-Sole Risk
Participants, subject to the confidentiality provisions of this agreement;
(iii) have exclusive possession of all Sole Risk Information acquired, and all
wells drilled, during the Sole Risk Operation;
(iv) use any other Joint Venture Property, paying a fair arms length price for
that use; and
(v)
13.4
take and own all Petroleum produced from the Sole Risk Area.
(e)
The Sole Risk Operator must keep the non-Sole Risk Participants currently informed
on the progress of any Sole Risk Operation and promptly provide the non-Sole Risk
Participants with the Sole Risk Information. The Participants agree that Sole Risk
Information is and remains the property of the Sole Risk Participants, including any
Buy-Back Participant (as subsequently defined) once the transfer (and registration, if
required) of the Buy-Back Participating Interest is completed.
(f)
If a Sole Risk Operation results in a dry hole, the Sole Risk Operator must plug
and abandon the well in accordance with the Law, the Petroleum Title and this
agreement, and the Sole Risk Participants must bear the total costs, risk and
expense of plugging and Abandoning pro rata in the proportions that their Sole
Risk Participating Interests bear to each other.
(g)
The provisions governing abandonment of Wells drilled as Joint Operations

apply with the necessary changes to the plugging and abandonment of a well in
which a Sole Risk Operation has been conducted.
Failure to commence Sole Risk Operation
Notwithstanding anything contained in this agreement, if the Sole Risk Participants fail
to commence the Sole Risk Operation within the Sole Risk Area within 12 months
from the date of the Sole Risk Election Notice, then notwithstanding any agreement
entered into by the Sole Risk Participants thereafter, the Sole Risk Participants are
deemed to have agreed not to proceed with the Sole Risk Operation, whereupon that
area will revert to and be included in the Petroleum Titles and the Participants will be
entitled to an interest in such area in accordance with their Percentage Shares as at the
date of the Sole Risk Election Notice.
13.5
Sole Risk Participants indemnity
The Sole Risk Participants must indemnify and hold harmless the other Participants
and the Operator and the Sole Risk Operator from all costs, expenses, suits, claims,
liens, liabilities and losses resulting from the carrying out of the Sole Risk Operation.
13.6
Sole Risk Operations report and buy-back
(a)
Upon completion of a Sole Risk Operation, 2 copies of a report of the outcome

of that Sole Risk Operation (Sole Risk Operations Report) must be prepared
by the Sole Risk Operator and delivered to the Operator, the Sole Risk
Participants and the non-Sole Risk Participants.
(b)
Within 60 days of receipt of the Sole Risk Operations Report, each non-Sole
Risk Participant has the right, exercisable by notice given to the Sole Risk
Participants and the Operator, to buy back and purchase from the Sole Risk
Participants, in proportion to their Sole Risk Participating Interests, a Sole Risk
Participating Interest equal to the Percentage Share in the Joint Venture which
it surrendered to the Sole Risk Participants on formation of the Sole Risk Joint
Venture (Buy-Back Participating Interest).
30
(c)
Each non-Sole Risk Participant which gives notice under this clause to
purchase a Buy-Back Participating Interest is called a Buy-Back Participant.
(d)
The consideration payable by a Buy-Back Participant to the Sole Risk

Participants for the purchase of the Buy-Back Participating Interest is:
(i)
A lump sum in cash equal to the Participants Sole Risk Participating

Interest share of all costs and expenses that were incurred by the Sole
Risk Participants in the Sole Risk Joint Venture up to the date of the
exercise of the election by the Buy-Back Participant (Buy-Back
Amount); plus
(ii) A further lump sum in cash equal to Participants Percentage Share

amount of the Sole Risk Operation Buy-Back Premium specified in
Schedule 1 for the particular Sole Risk Operation undertaken by the Sole
Risk Participants undertaking the Sole Risk Operation.
(e)
Within 60 days of exercising its right to purchase the Buy-Back Participating

Interest, the Buy-Back Participant must, in exchange for the Assignment and
transfer of the Buy-Back Participating Interest:
(i)
pay the Buy-Back Amount and the Buy-Back Premium to the Sole Risk
Participants and, if more than one, in the same proportion as the Sole
Risk Participants Percentage Shares in the Sole Risk Sole Risk Joint
Venture bear to each other;
(ii)
assume all future obligations and liabilities in respect of the Buy-Back

Participating Interest;
(iii) pay all stamp duty and other transfer costs in respect of the transfer of the
Buy-Back Participating Interest; and
(iv) release the Sole Risk Participants from all claims the Buy-Back
Participant may have against any of them in connection with the BuyBack Participating Interest.
13.7
Consequences of buy-back
(a)
If all the Non-Sole Risk Participants acquire a Buy-Back Participating Interest,

so that the Participants then hold the same Percentage Share of Participating
Interest in the Sole Risk Joint Venture as in the Joint Venture, the parties may
agree to terminate the Sole Risk Joint Venture as an independent agreement
and merge it into this Joint Venture agreement.
(b)
If less than all the Non-Sole Risk Participants acquire a Buy-Back Participating
Interest, and the Sole Risk Joint Venture continues, the Sole Risk Participants
have the right to use such Joint Venture Assets and other facilities of the Joint
Venture that are not presently being used by the Joint Venture, including any
treatment or processing plant and equipment, on terms and conditions agreed
between the Non-Participating Participants and the Sole Risk Participants, and
in default of agreement as determined by an Expert appointed in accordance
with this agreement.
14
Assignment
14.1
Restriction on Assignment
(a)
A Participant may not Assign the whole or any part of its Participating Interest
otherwise than:
(i)
as permitted by this agreement; or
31
(ii)
14.2
with the consent of all the other Participants, which they may give or
refuse in their absolute discretion.
(b)
Except as otherwise provided in this agreement, a Defaulting Participant may

not Assign the whole or any part of its Participating Interest.
(c)
Any purported dealing by a Participant with its Participating Interest contrary

to this agreement is void.
Assignment to an Affiliate or a Related Entity
A Participant which is not a Defaulting Participant may at any time without obtaining
the prior consent of the other Participants Assign the whole (but not part) of its
Participating Interest to an Affiliate or a Related Entity. If a Participant Assigns the
whole of its Participating Interest to an Affiliate or a Related Entity, then that
Participant:
(a)
must, within 14 days following the date of the Assignment, notify all of the
other Participants of the identity of the Assignee and its relationship to the
Participant;
(b)
continues to be bound by this agreement and is not released from any of its
obligations or discharged from any of its liabilities under this agreement, unless
all the other Participants agree; and
(c)
must, by the time that the Affiliate or Related Entity to which the whole of its
Participating Interest has been Assigned ceases to be an Affiliate of the
Ultimate Holding Company or a Related Entity of the Participant, ensure that
all the rights Assigned to that Affiliate or Related Entity have been re-Assigned
to that Participant or Assigned to another Affiliate or Related Entity of that
Participant.
An Assignment made pursuant to this clause is free of any rights of pre-emption set
out in this agreement.
14.3
Permitted right of Assignment with pre-emption
(a)
A Participant, other than a Defaulting Participant, has the right to Assign all or
part of its Participating Interest only subject to the right of pre-emption by
another Participant and the other terms and conditions set out in this clause.
(b)
Where a Participant receives a bona fide offer to purchase or farm-in to, or

intends to make an offer to sell or farm-out, for a consideration involving
payment of cash to the Joint Venture or a Participant in whatever form and over
any period (including immediate cash, deferred cash, royalty, net profit interest
and the like, and including payment of Joint Expenditure) the whole or part of
its Participating Interest which it is willing to accept and dispose of or sell or
farm-out, the Participant (Selling Participant) must promptly send written
notice to the other Participants of the offer to purchase, or farm-in, or sell or
farm-out making the same offer to the other Participants (Offer).
(c)
The Offer must:

(i)
set out all the details of the offer to purchase, farm-in, sell or farm-out
that the Selling Participant has received or intends to make, including the
identity of the proposed acquirer (if then known), to enable an assessment
of the acquirers financial standing including, where applicable, details of
the financial standing of the acquirers Ultimate Holding Company and
any proposed parent company guarantees; and
(ii)
attach a copy of all of the Offer documents.
32
14.4
(d)
Each other Participant (Non-Selling Participant) has the right for a period of
45 days following receipt of an Offer (Option Period) to accept the Offer in
full.
(e)
To accept the Offer a Non-Selling Participant which wishes to accept the Offer
must give written notice of acceptance to the Selling Participant during the
Option Period.
(f)
Where more than one Non-Selling Participant accept the Offer from the Selling
Participant the accepting Non-Selling Participants are deemed to have accepted
the Offer pro rata in proportion to their respective Percentage Shares, unless
otherwise mutually agreed between them.
Selling Participant free to Assign
If none of the Non-Selling Participants accept the Offer and provided that no
Participant would hold a Participating Interest of less than the Minimum Interest as a
consequence of the Assignment then, following the Option Period, the Selling
Participant is free within 6 months from the date of the Offer, and subject to
subsequent completion and delivery of the required Assignment documentation
specified in this agreement, to Assign its Participating Interest the subject of the Offer
to the prospective acquirer at a price and subject to the terms and conditions which are
no less favourable to the Selling Participant than the price, terms and conditions set out
in the Offer.
14.5
Requirements of Assignee
An Assignment of part or all of a Participating Interest is not effective unless and until
the Assignee:
14.6
(a)
obtains all relevant Authorisations;
(b)
executes and delivers to each Participant a form of assumption deed approved

by the Participants (which approval must not be unreasonably withheld or
delayed) under which the Assignee agrees to assume the obligations of the
Assignor under, and be bound by the terms and conditions of, this agreement,
including the obligations of the Assignor under any Cross Security granted to
the Assignor by the other Participants and any Deed of Covenant entered into
by any Third Party with the Assignor, to the extent of the Participating Interest
Assigned or upon the Participating Interest being earned under the terms of the
Assignment;
(c)
executes and delivers to each of the Participants a Cross Security and Deed of
Covenant, to the extent required under this agreement; and
(d)
receives from the Assignor an executed Assignment of the benefit of any Cross
Security granted to the Assignor by the other Participants and any Deed of
Covenant entered into by any Third Party with the Assignor.
Assignment on holding less than Minimum Interest
(a)
If the Participating Interest of a Participant reduces to below the Minimum

Interest, whether by sale, or other disposition or dilution as permitted under this
agreement, any other Participant may, by notice given to all the Participants
and the Operator, cause that Participant to make a Deemed Sale Offer as at the
date of the notice to the other Participants.
(b)
If, within 30 days after notice of the Deemed Sale Offer is given, the
Participants have not agreed on the Transfer Price an Expert appointed in
accordance with in this agreement must determine the Transfer Price.
(c)
On agreement or determination of the Transfer Price, the Deemed Sale Offer is
33
open for acceptance by all the other Participants pro rata in proportion to their
respective Percentage Shares or such other proportions as they may agree and
is irrevocable for a period of 60 days.
(d)
A Deemed Sale Offer of a less than Minimal Interest must be accepted by all
of the other Participants.
(e)
Upon a Deemed Sale Offer being accepted:
(f)
14.7
(i)
the transferring Participant must sell, and the accepting Participants must
purchase, the whole of its Participant Interest on the terms of the Deemed
Sale Offer, subject only to obtaining all relevant Authorisations; and
(ii)
completion of the transfer of the Participating Interest must occur within

60 days after acceptance at which time the transferring Participant must
complete and deliver all required Assignment documentation, including a
discharge of all Encumbrances, to the accepting Participants and the
accepting Participants must pay the Transfer Price to the transferring
Participant in immediately available funds subject to the relevant
Authorisations being obtained.
If the Deemed Sale Offer of a less than Minimal Interest is not accepted by all
of the other Participants in accordance with this clause, the Participant holding
less than a Minimal Interest is not liable to transfer its Participating Interest.
Participant ceasing to be a Participant
(a)
If an Assignment of the whole or part of a Participating Interest is made in

accordance with this agreement (other than an Assignment to an Affiliate or a
Related Entity or an Assignment on withdrawal) the Assignor is released from
obligations under this agreement arising after the Assignment to the extent of
the Participating Interest Assigned, other than the obligations of confidentiality
contained in this agreement.
(b)
If a party ceases to be a Participant, that person is not relieved of any liability

under this agreement which was incurred or arose on or before the date when it
ceased to be a Participant, unless this agreement otherwise provides.
15
Default
15.1
Breach Default Event to be remedied
(a)
(b)
The Operator or any Non-Defaulting Participant may at any time after a Breach
Default Event occurs serve a written notice on the Defaulting Participant
specifying the nature of the Breach Default Event and requiring it to be
remedied. The Defaulting Participant must then:
(i)
if the Breach Default Event is capable of being remedied, remedy the

default within 14 days of its receipt of the notice of default; or
(ii)
if the Breach Default Event is not remedied within 14 days or is not

capable of being remedied, pay adequate monetary compensation to the
Non-Defaulting Participants such payment to be made within 7 days of
receipt of notification of the amount of compensation payable as
determined under this agreement.
The Participants must agree in writing the amount of adequate monetary

compensation to be paid by the Defaulting Participant under this clause. If the
Participants have not reached agreement within 14 days after the date on which
notice of default is given, that amount must be determined by an Expert
appointed under this agreement, who must make such determination within 30
34
days of his or her appointment.

(c)
15.2
15.3
On agreement or determination of the amount of adequate monetary

compensation under this clause, that amount, and any interest and costs payable
or reimbursable under this agreement, becomes Unpaid Monies due under this
agreement after the 7 day period referred to in the next clause.
Unpaid Monies Default Event to be remedied
(a)
If an Unpaid Monies Default Event occurs, the Operator must promptly give to
the Defaulting Participant a notice to pay all Unpaid Monies within 7 days after
the Due Date (Non-payment Notice).
(b)
If the Defaulting Participant fails to comply with the Non-payment Notice, the
Operator must promptly give notice of such failure to all the Non-Defaulting
Participants together with the amount of Unpaid Monies due but not paid
(Unpaid Monies Default Notice).
(c)
Each Non-Defaulting Participant receiving an Unpaid Monies Default Notice

has the right (but not the obligation) after 7 days from receipt of the notice to
pay to the Operator all or part of Unpaid Monies referred to in the Unpaid
Monies Default Notice on behalf of the Defaulting Participant. A NonDefaulting Participant which makes a payment of Unpaid Monies on behalf of
the Defaulting Participant becomes a Paying Participant.
(d)
All monies paid by the Operator or a Paying Participant on behalf of a

Defaulting Participant to remedy an Unpaid Monies Default Event constitute a
debt due by the Defaulting Participant and are included in indebtedness secured
under the Cross Security granted by the Defaulting Participant to the Operator
or the Paying Participant, as applicable.
(e)
The rights of the Operator or a Paying Participant against a Defaulting

Participant under this clause are in addition to any other rights or remedies
available to them.
(f)
Upon payment of all Unpaid Monies including all interest and costs payable or
reimbursable in respect of the Default Event, the Defaulting Participant is
released from liability to pay the Cash Call on which it defaulted, but otherwise
remains liable to indemnify each other Participant and the Operator as provided
in this agreement.
Interest and costs
(a)
Interest at the Agreed Interest Rate is payable on all Unpaid Monies not paid
on or before the Due Date from, but excluding, the Due Date up to and
including the date upon which the moneys are paid.
(b)
All interest paid on Unpaid Monies by the Operator, a Paying Participant or a

Non-Defaulting Participant directly attributable to a Default Event become
Unpaid Monies due for payment by the Defaulting Participant to the payer on
demand.
(c)
A Defaulting Participant must pay or reimburse all reasonable costs and

expenses (including legal costs and expenses on a full indemnity basis)
incurred by the Operator, a Paying Participant or a Non-Defaulting Participant
which are directly attributable to pursuing a Default Remedy or remedying a
Default Event. All reasonable costs and expenses so paid become Unpaid
Monies due for payment by the Defaulting Participant to the payer on demand.
(d)
If the Operator or one or more Paying Participant pays Unpaid Monies on

behalf of the Defaulting Participant, interest at the Agreed Interest Rate must
35
be credited in the Joint Account to the Operator or the Paying Participants pro
rata in proportion to their respective Percentage Shares, and the Defaulting
Participant must pay to the Operator on demand the aggregate of the sums so
credited.
15.4
Period of Unpaid Monies Default
An Unpaid Monies Default Event must not be treated as having been remedied for the
purposes of this agreement until:
15.5
(a)
the Defaulting Participant has paid, or caused to be paid, all Unpaid Monies
due to the Operator, the Paying Participants or the Non-Defaulting Participants
(as the case may be); or
(b)
the whole of the Participating Interest of the Defaulting Participant is acquired

pursuant to this agreement by a Non-Defaulting Participant or a Third Party.
Failure to pay money or provide Security
(a)
15.6
If an Unpaid Monies Default Event is not remedied within 14 days from the
Due Date, or if the Defaulting Participant has failed to provide or maintain its
Percentage Share of any Security required to maintain the Petroleum Titles in
full force and effect within the time specified by the Operator, the Operator
must give notice to the other Participants (including the Defaulting Participant)
requiring the Non-Defaulting Participants:
(i)
to pay the amount of the Defaulting Participants Percentage Share of the

Approved Programme and Budget which the Defaulting Participant has
failed to pay when due under this agreement (but excluding any interest
and costs owed in respect of such amount); and
(ii)
if applicable, to provide the Defaulting Participants Percentage Share of

the type and amount of the Security specified by the Operator to allow the
Operator to maintain the Petroleum Titles in full force and effect.
(b)
Where more than one Non-Defaulting Participant is required to pay money or

provide Security on behalf of a Defaulting Participant, the Non-Defaulting
Participants must do so, unless otherwise mutually agreed between them,
severally in proportion to their respective Percentage Shares.
(c)
Failure by a Non-Defaulting Participant to pay such money or provide such

Security within 14 days of the time required to do so by the Operator
constitutes a Default Event in relation to that Participant.
Buy-out Election
If an Unpaid Monies Default Event is not remedied within 14 days from the Due Date,
any one or more Non-Defaulting Participants may (but are not obliged to) give notice
to the other Participants (including the Defaulting Participant) and the Operator stating
that they wish to acquire the whole (but not part) of the Defaulting Participants
Participating Interest by one or more of the Non-Defaulting Participants pursuant to
this agreement (Buy-Out Election ) and, if more than one, severally in proportion to
15.7
Preservation of other rights
Nothing in this agreement affects the right of a party to:

(a)
subject to observance of the Dispute resolution provisions of this agreement,

commence litigation in respect of a Default Event; or
(b)
exercise any other rights or remedies available to the party under this agreement
or at law or in equity.
36
16
Enforcement of Buy-Out Election
16.1
Upon a Buy-Out Election being made, the Non-Defaulting Participants which have
agreed or elected to pursue the Buy-Out Election (Enforcing Participants) must,
within 28 days from the Buy-Out Election coming into effect, subject to the agreement
or determination and acceptance of the fair market value and the date for completion
(Completion Date), acquire the whole (but not part) of the Participating Interest of the
Defaulting Participant, provided that if the relevant Unpaid Monies Default Event is
remedied in full in accordance with this agreement before the Completion Date, the
Buy-Out Election under this sub-clause lapses.
16.2
16.3
Determination of fair market value and Completion Date
(a)
The Defaulting Participant and the Enforcing Participants must use their best
endeavours to agree on the fair market value of the Defaulting Participants
Participating Interest as at the date of the relevant Default Event, and the
Completion Date.
(b)
If the parties cannot agree on the fair market value and the Completion Date
within 14 days of the Buy-Out Election coming into effect, then:
(i)
those matters may be determined by an Expert appointed under this

agreement, who must make a determination within 30 days of
appointment;
(ii)
the Expert may determine that the Participating Interest of the Defaulting
Participant Participating Interest has nil or a negative value; and
(iii)
no payment is due if the amount of consideration payable to the

Defaulting Participant is determined to be negative;
(c)
Upon the fair market value and the Completion Date being determined by the
Expert, each Enforcing Participant must within 7 days of receiving the Experts
determination advise the Defaulting Participant whether it accepts or rejects the
Experts determination and whether or not it agrees to pay the fair market value
of the Participating Interest of the Defaulting Participant on the Completion
Date as determined by the Expert.
(d)
Where more than one Enforcing Participant agrees to pay the fair market value
for the Participating Interest of the Defaulting Participant on the Completion
Date as agreed or determined by the Expert, the Enforcing Participants must do
so, unless otherwise mutually agreed between them, severally in proportion to
On the agreement, or determination and acceptance, of the fair market value of the
Participating Interest of the Defaulting Participant and the Completion Date, the
Defaulting Participant must on or before the Completion Date:
(a)
transfer the whole of its Participating Interest to the Enforcing Participants by

executing and delivering all deeds and documents necessary for, and complete
(and register, if required by the law of the Nominated State), the Assignment of
its Participating Interest to the Enforcing Participant; and
(b)
pay all stamp duty and other transfer costs which become payable upon the
Enforcing Participant acquiring its Participating Interest,
and in exchange for the Assignment and transfer of the Participating Interest, the
Enforcing Participants must severally in proportion to their respective Percentage
37
Shares, or in such other proportions they agree:

(a)
cure any relevant Default Event of the Defaulting Participant which is capable
of being cured;
(b)
assume all future obligations and liabilities in respect of the whole of the
Participating Interest of the Defaulting Participant, including any Cross
Security;
(c)
pay the amount of consideration to the Defaulting Participant being the fair
market value agreed, or determined and accepted, for the Participating Interest
being acquired by the Enforcing Participants, less:
(i)
all amounts due from the Defaulting Participant to any party or Third
Party under or pursuant to this agreement;
(ii)
all amounts paid by the Non-Defaulting Participants or the Operator to

cure any relevant Default Event of the Defaulting Participant, including
interest and costs payable under this agreement; and
(iii) the amount of all liability of the Defaulting Participant to meet existing
abandonment obligations as determined by the Operator as at the date of
payment;
16.4
(d)
pay any amounts deducted by them from the fair market value for payment to
any party or Third Party, to that party or Third Party as soon as reasonably
possible; and
(e)
release the Defaulting Participant from all claims the Enforcing Participants
have against the Defaulting Participant in connection with the relevant Default
Event.
Release of Defaulting Participant
Upon completion (and registration, if required) of the Assignment of its Participating

Interest to the Enforcing Participant, including the payment of all transfer costs, the
Defaulting Participant is released from its obligations under this agreement arising
after completion of the Assignment, other than the obligations of confidentiality set out
in this agreement.
16.5
Acknowledgement
The Participants acknowledge that the consideration for the acquisition by an

Enforcing Participant of the Participating Interest of a Defaulting Participant
(including the assumption of all future obligations and liabilities) :
16.6
(a)
is agreed following negotiations involving all Participants which accepted that

the consideration does not constitute or give rise to a penalty, forfeiture or
unjust enrichment; and
(b)
represents a reasonable and good faith assessment of the just and fair
compensation for the Defaulting Participant in all the circumstances
surrounding the relevant Default Event.
Attorney
For so long as it is in default, each Defaulting Participant irrevocably appoints the

Enforcing Participants making the election jointly and severally as its lawful attorney
to act for it in its name or otherwise as the Operator (acting reasonably) deems fit for
the purposes of:
(a)
doing all such acts and executing all such documents as may appear to the
Enforcing Participants (acting reasonably) to be necessary or desirable to
38
comply with the obligations and, to the extent necessary to perform obligations,
to exercise the rights of the Defaulting Participant under this agreement; and
(b)
with the agreement of all other Non-Defaulting Participants (if any),

terminating the Joint Venture and doing all things reasonably necessary or
desirable for completion and winding up of Joint Operations
The Defaulting Participant is bound by all acts of the Enforcing Participants as

attorney pursuant to this clause.
17
Term, suspension and termination of Joint Venture
17.1
Term of agreement
This agreement commences on the date of this agreement and continues until the
earliest to occur of any of the following Termination Events:
(a)
all of the Non-Defaulting Participants (for themselves and as attorney for each
Defaulting Participant) agree in writing to terminate the Joint Venture;
(b)
the Participants cease to hold any interest in any Petroleum Title,
and further until completion of the winding up of all Joint Operations.

17.2
17.3
Suspension or abandonment of Joint Operations
(a)
The Operator may, at any time subsequent to 12 months from the

Commencement Date, submit to the Operating Committee a Proposed
Programme and Budget for the temporary suspension or permanent
abandonment of all or any part of Joint Operations.
(b)
The Operator must implement any

Approved Programme and Budget for the suspension or abandonment of Joint
Operations, together with any other directions that the Operating Committee
may give to the Operator in respect of that Approved Programme and Budget.
(c)
If Joint Operations are suspended under an

Approved Programme and Budget, then the Operating Committee may at any
subsequent time direct that those Joint Operations resume.
Winding up of Joint Venture
(a)
(b)
Immediately following the occurrence of a Termination Event, the Operator

must commence winding up Joint Operations including:
(i)
taking such steps to dispose of Joint Venture Property as it is directed to

take by the Operating Committee;
(ii)
requiring payment of a Cash Call from each Participant to the extent that
the proceeds of realization of Joint Venture Property are insufficient to
meet the costs of rehabilitation, abandonment and shutdown (Shutdown
Costs).
If a Participant fails to pay any Cash Call to meet the Shutdown Costs, the
Non-Defaulting Participants are obliged, severally in proportion to their
respective Percentage Shares, to contribute any amount unpaid by the
Defaulting Participant and the Defaulting Participant is liable to repay all
amounts paid by the Non-Defaulting Participants, together with interest and
costs payable under this agreement. The amount paid by the Non-Defaulting
Participants is a debt payable by the Defaulting Participants to the NonDefaulting Participants on demand.
39
17.4
Certain obligations continue beyond termination
Upon termination of this agreement for any reason, all rights and obligations of the
Participants to each other in their capacity as Participants cease, other than:
17.5
(a)
the obligations of confidentiality set out in this agreement; and
(b)
the obligation to pay any actual or contingent liabilities relating to Joint

Operations, including the cost of all abandonment obligations and any
severance, sickness and other employee benefit costs incurred or imposed in
connection with Joint Operations, or otherwise arising from this agreement,
that have not been discharged as at the date of termination.
Extension of term
The Participants may at any time consult with each other for the purpose of
determining whether the term of this agreement should be extended beyond the period
it would otherwise expire. A failure by any Participant to agree to such extension may
not be referred to any dispute resolution procedure.
18
Confidentiality
18.1
Agreement is confidential
(a)
The parties acknowledge and agree that:

(i)
the terms and conditions of this agreement; and
(ii)
all information (including Information) flowing to any Participant from

Joint Operations, or in relation to Joint Operations; and
(iii) all information (including Sole Risk Information) flowing to any

Participant from Sole Risk Operations, or in relation to Sole Risk
Operations,
are confidential to the parties and commercially sensitive (Confidential
Information) other than information which is already within the public domain
independently of any breach by a party of this agreement.
(b)
18.2
To the extent permitted by section 275 of the Personal Property Securities Act
2009 (Cth) (PPSA), the parties agree to keep all information of the kind
mentioned in section 275(1) of the PPSA confidential and to not disclose that
information to any other person, except as permitted by this agreement.
No disclosure except as permitted
Except as permitted by this agreement, each Participant and the Operator undertakes
that it will keep confidential all Confidential Information received by it and that
neither it nor its employees will, without the consent of each of the other Participants,
disclose any Confidential Information to any Third Party.
18.3
Permitted disclosure by a Participant

(a)
A Participant may disclose Confidential Information:

(i)
to the professional advisers or agents of that Participant;
(ii)
to an Affiliate of that Participant;
(iii)
as required by Law or by any competent Authority, whether the

obligation arises as a consequence of the act of the Participant or
otherwise;
(iv)
to any stock exchange pursuant to Listing Rules which require

disclosure;
40
(b)
18.4
(v)
where reasonably necessary for the purposes of any arbitration or

administrative or legal proceedings involving only the Participants; or
(vi)
to a Third Party, and its advisers, bona fide tendering for or negotiating
the purchase of all or part of the interest of that Participant in the Joint
Venture or for the provision of finance to that Participant but only if
the Third Party and its advisers first covenant in writing to the
disclosing Participant to preserve confidentiality of information
disclosed in the same terms as this clause.
A Participant making a permitted disclosure under this clause must take all
reasonable steps to ensure that the person to whom disclosure is made keeps
confidential all Confidential Information disclosed.
Permitted disclosure by Operator
The Operator may disclose Information to any person it considers necessary or

desirable in connection with the conduct of the Joint Operations upon obtaining from
such person an undertaking of confidentiality in writing to the Operator and the
Participants to preserve the confidentiality of information disclosed as required by
this agreement.
18.5
18.6
18.7
Confidential Information disclosed only as necessary
(a)
Each Participant and the Operator must take all steps reasonably necessary to
ensure that the Confidential Information obtained is disclosed to and known by
only those persons who need to acquire that knowledge in the course of their
duties.
(b)
Each Participant, but not the Operator, may use for its own internal purposes
not related to Joint Operations any geological, geophysical, geochemical,
metallurgical or operational concept, model or principle of any kind, even if
derived from the Confidential Information.
Publicity and disclosure
(a)
Except for an announcement or other disclosure required by Law or permitted

by this agreement, no public announcement naming a Participant or other
public disclosure may be made in relation to Joint Operations or Joint Venture
Property unless the text of the announcement or disclosure has been approved
by the other Participants.
(b)
To the extent that an announcement or other disclosure is required by Law, the

Participants must use all reasonable endeavours to agree, as soon as reasonably
practicable, the wording of such announcement or disclosure before it is made.
Obligations exist beyond termination
The obligations in relation to Confidential Information imposed by this agreement

continue until all the Confidential Information ceases to be confidential despite the
termination of this agreement for any reason.
18.8
Access to Information
(a)
Each Participant is entitled to full disclosure of all Information available to

any other of them or to the Operator in respect of Joint Operations or any
other operations carried out by any of them in the Title Area including in
relation to Sole Risk Participants only, Sole Risk Operations.
(b)
No Participant is required to disclose to any other Participant the modelling,

assessment or development it makes from such Information.
(c)
If the Operator makes use of, models, assesses or develops material from any
41
Information that is charged to the Joint Account the results must be provided
to all Participants.
(d)
If Information has been provided to a Participant under an intellectual

property licence which precludes provision to the other Participant the
obligation to provide such information is restricted to the extent provided in
the relevant licence.
19
Dispute Resolution
19.1
Limitation on proceedings
Subject to any matter specifically referred to Expert determination under this

agreement, the parties agree that it is a condition precedent to the commencement of
any litigation proceedings by a party in respect of a dispute under, or in relation to, this
agreement (Dispute) that the party has complied fully with the agreed process for
resolving a Dispute (Dispute Resolution Process) under this clause (regardless of the
level or levels on which the Dispute has previously been considered) except:
(a)
where the Dispute concerns the non-payment of monies due, the quantum of
which is certain; or
(b)
(c)
if the party seeks urgent interlocutory, injunctive or declaratory relief; or

if the other party has failed to observe the requirements of this clause and the
party seeks to enforce compliance with the Dispute Resolution Process,
in respect of the Dispute.

19.2
Dispute Resolution Process
(a)
19.3
Where a Dispute arises between the parties, a party may give notice to the
other parties initiating a Dispute Resolution Process in respect of the Dispute
(Dispute Notice) which Dispute Notice must:
(i)
state that the notice is given under this subclause;
(ii)
describe the nature of the Dispute; and
(iii)
nominate a representative of the party who is authorised to negotiate

and settle the Dispute on the partys behalf.
(b)
Each other party must within 7 days after receipt of a Dispute Notice nominate
in writing to the other parties a representative authorised to negotiate and settle
the Dispute on its behalf.
(c)
The parties representatives must negotiate in good faith with a view to

resolving the Dispute within 21 days after the receipt of the Dispute Notice, (or
such longer period as those representatives agree), failing which the Dispute
must be immediately referred to the Chief Executive Officers of the parties.
(d)
The Chief Executive Officers must negotiate in good faith with a view to
resolving the Dispute within 14 days of the Dispute being referred to them (or
such longer period as the Chief Executive Officers agree) failing which, the
Dispute may be immediately referred by any party by notice to mediation or
Expert determination under this agreement.
Mediation
Mediation of a Dispute must:

(a)
be conducted in the Nominated State by the person or body agreed to by the

parties or, failing agreement within 35 days after receipt of the Dispute Notice,
as nominated by the President for the time being of the Law Society of the
42
Nominated State on request by either party;
19.4
(b)
be conducted in accordance with such rules as may be agreed by the parties or,
failing agreement within 35 days after receipt of the Dispute Notice, in
accordance with the rules nominated by the person or body agreed or
nominated to conduct the mediation;
(c)
be at the cost and expense of the parties equally (except that each party must
pay its own advisers, consultants and legal fees and expenses) unless the
parties otherwise agree; and
(d)
if not earlier resolved, be continued for a period expiring on the date being 14
days after the nomination of the mediator (or such other period as the parties
may agree) after which any party may at any time after that date seek Expert
determination in accordance with this agreement or commence litigation
proceedings in respect of the Dispute.
Dispute Resolution Process not to interrupt Joint Operations
The parties must ensure that neither the commencement nor conduct of any Dispute
Resolution Process, including mediation or Expert determination, causes any
interruption to Joint Operations or to the performance by the parties of their respective
obligations under this agreement, nor will it affect any of the time limits fixed in this
agreement unless the performance of Joint Operations or a party under this agreement
is materially affected by the submission of the matter in dispute to litigation or by the
result of the litigation.
19.5
Clause does not apply to matters where consent required
If this agreement refers to the parties reaching agreement on a matter or the consent of
any party being given then, except where this agreement requires that consent or
agreement is not to be unreasonably withheld, the Dispute Resolution Process cannot
be used to resolve a dispute between the parties in relation to the reaching of that
agreement or the giving of that consent.
20
Expert Determination
20.1
Expert determination
Where a matter is permitted or required by this agreement to be determined by an

Expert or if the parties otherwise agree, any party may refer the matter to the
determination of an Expert and the following provisions apply:
(a)
subject to any other determination by the Expert, the costs of obtaining the
determination must be at the cost and expense of the parties equally (except
that each party must pay its own advisers, consultants and legal fees and
expenses) unless the parties otherwise agree;
(b)
the Expert determination must be conducted by a person or body agreed to by

the parties or failing agreement within 14 days after a party proposes a person
or body, by the person or body nominated by the Institute of Arbitrators &
Mediators Australia; and
(c)
in making a determination:
(i)
(ii)
the Expert must act in that capacity and not as an arbitrator;

the Experts finding is final and binding upon the parties in the absence of
manifest error;
(iii) the Expert must determine which party or parties should bear the costs of
any such determination and in what proportion. In making this decision,
43
the Expert must consider the degree to which he or she considers such
party was unreasonable in failing to agree to the matter; and
(iv) the Expert may employ consultants to assist the Expert to carry out his or
her duties.
20.2
Qualifications of Expert to determine dispute
(a)
The Expert must be a person reasonably qualified, capable and suitably

experienced to make an effective, fair and reasonable determination of the
relevant dispute taking into account its predominant subject matter.
(b)
The Expert appointed to determine a dispute must be appropriate to the

predominant subject matter of the dispute and if a dispute predominantly
concerns:
(i)
petroleum engineering must have petroleum engineering qualifications;
(ii)
the operation of the facilities of the Joint Venture in accordance with

Good Australian Oilfield Practice must have engineering qualifications;
(iii) an accounting or financial matter must have accounting qualifications; or

(iv) construction of the agreement must have legal qualifications.
(c)
The Expert must not make a determination of a matter in relation to the dispute
which is outside his or her subject matter expertise. If such an issue arises the expert
may obtain advice on the relevant issue from a person suitably qualified to advise on
that issue and cite that advice in the determination.
(d)
The Expert must have no interest or duty which conflicts, or which may conflict,
with his or her function as the Expert. The Expert must not be a current employee or
representative of, or a person who provides consultancy services on a regular basis to
any party and must disclose fully to the parties, before being appointed as Expert, any
interest or duty which may conflict with his or her position.
21
Force Majeure
21.1
Meaning of Force Majeure
In this agreement, Force Majeure means any cause which is not reasonably within
the control of the Participant or the Operator claiming relief by reason of Force
Majeure, which cause may include:
(a)
an act of God, earthquake, lightning, fire, flood, storm, cyclone, explosion or

epidemic;
(b)
strike, lockout, stoppage, ban or other types of labour difficulty whether at the
Title Area, railway or port or otherwise;
(c)
war (whether declared or undeclared), blockade, act of the public enemy, act of
terrorism, revolution, insurrection, riot, civil commotion, sabotage, malicious
damage, radioactive contamination, toxic or dangerous chemical
contamination;
(d)
action or inaction by an Authority (including heritage related restraints and,

refusal or failure to grant any Authorisation despite timely reasonable
endeavours to obtain the same);
(e)
inability to access all or any part of a Title Area because of Native Title Claims
or Native Title Rights or otherwise;
(f)
unavailability or mechanical and electrical breakdown and failure of

equipment, plant, pipelines, transmission lines or transport; or
44
(g)
any other cause whether specifically listed above or otherwise which is not
reasonably within the control of the party claiming Force Majeure
except where:
21.2
(h)
the cause is the inability to obtain, use or pay, moneys for any reason; or
(i)
the consequences of the cause could have been prevented, overcome or

remedied by the exercise by the party affected of care and diligence consistent
with Good Australian Oilfield Practice.
Relief
If, as a direct result of an event or occurrence of Force Majeure (Force Majeure

Event), a Participant or the Operator becomes unable, wholly or in part, to perform an
obligation (other than an obligation to obtain, use or pay money) under this agreement
(Affected Party):
21.3
(a)
that Affected Party may give the other Participants and the Operator notice of
the Force Majeure Event with reasonably full particulars and, insofar as is
known to it, the probable extent to which it will be unable to perform, or be
delayed in performing, that obligation;
(b)
on giving the notice of the Force Majeure, that obligation is suspended, but
only to the extent that and for so long as it is affected by the Force Majeure
Event;
(c)
the Affected Party must use all reasonable diligence to remove, overcome or
abate the effect of the Force Majeure Event as quickly as possible;
(d)
if the Force Majeure Event cannot be removed, overcome or abated to an

extent that allows resumption of performance within 6 months (or such other
period as the Participants agree) from the date of the notice, the Participants
must consider and determine whether this agreement must be modified or
terminated; and
(e)
notwithstanding the Force Majeure Event, the Participants must continue to

pay the Operator such monies as are necessary to keep the Tenements in good
standing and maintain the other Joint Venture Property in good condition in
accordance with Good Australian Oilfield Practice.
Labour disputes and Native Title matters
The obligation to use all reasonable diligence to overcome or remove the effect of the
Force Majeure does not require the affected Participant or Operator to:
(a)
settle any strike, or other labour dispute;
(b)
contest the validity or enforceability of any law, regulation or legally

enforceable order by way of legal proceedings; or
(c)
settle any Native Title Claim or enter into any agreement with respect to Native
Title Rights,
on terms not acceptable to it solely for the purpose of removing the event of Force
Majeure.
21.4
Resumption
The Affected Party must resume performance of its obligations as soon as, and to the
extent that, it is no longer affected by the Force Majeure Event.
45
22
Goods and Services Tax
22.1
Participants registered for GST
Each Participant warrants that it is as at the Commencement Date, and will be during
the term of this agreement, registered for GST. The Participants agree to form a GST
Joint Venture and require the Operator to apply for registration of the Joint Venture as
a GST Joint Venture.
22.2
22.3
22.4
Supply of going concern
(a)
The Participants agree that the transfer of any Participating Interest under this
agreement is a supply of a going concern within the meaning of subdivision 38J of the GST Act, and the parties intend that such a supply will be GST free.
(b)
If, despite the agreement of the parties, the transfer of all or any part of any
Participating Interest is not the supply of a going concern for GST purposes
and is a Taxable Supply, the following provisions of this agreement will apply
to that supply. In addition the transferee will indemnify the transferor for all
interest, fines, penalties, charges and similar amounts payable as a result of the
supply being incorrectly treated in whole or in part as the supply of a going
concern. It will not be a defence to any claim for indemnification pursuant to
this clause that the transferor failed to mitigate its loss and damage by paying
an amount of GST when it fell due under the GST Act.
GST liability
(a)
Except where the consideration for a supply (other than a supply of a going
concern) is expressed to be GST inclusive, if any Participant (Supplier) (or the
Representative Member of any GST Group of which that party is a Member) is
liable to pay GST on any Supply made to any other Participant (Recipient)
under this agreement, then the Recipient agrees to pay the Supplier an
additional amount equal to that GST (additional GST amount).
(b)
Where a party is liable to pay GST in respect of any indemnity payment made
by another party under this agreement, the other party must in addition to any
amount it is required to pay by way of indemnity also pay to that party on
demand the GST imposed in respect of the indemnity payment.
(c)
The additional GST amount is payable at the same time and in the same
manner as the consideration for the Supply to which the additional GST
amount relates.
(d)
The obligation to pay the additional GST amount arises only if the Supplier of
the Supply has issued the Recipient of the Supply with a valid Tax Invoice for
the Supply.
(e)
If the additional GST amount differs from the amount of GST payable by the
Supplier on the Supply:
(i)
the Supplier must promptly issue an Adjustment Note to the Recipient;

and
(ii)
an amount equal to the difference must be paid by the Supplier to the

Recipient, or by the Recipient to the Supplier, as appropriate.
Reimbursement
An amount required to be reimbursed or contributed to must not include the amount of

any Input Tax Credit where:
(a)
a Participant is required to or does pay an amount to another Participant
46
(Payee) (including by way of adjustment or set-off) to reimburse or contribute

to an amount payable by the Payee for a Supply to the Payee from a Third
Party; and
(b)
22.5
the Payee or the Representative Member of any GST Group of which the Payee
is a Member is entitled to an Input Tax Credit in respect of that Supply.
Definitions
In this clause, the following terms have the same meaning as in the GST Act:
Adjustment Note, GST, GST Group, GST Joint Venture, Input Tax Credit,
Member, Representative Member, Supply, Tax Invoice and Taxable Supply.
23
Notices
23.1
Form of Notice
Unless expressly stated otherwise in this agreement, any notice, certificate, consent,
approval, waiver or other communication in connection with this agreement (Notice)
must be in writing or given by electronic transmission, signed by the sender (if an
individual) or an Authorised Officer of the sender and marked for the attention of the
person identified in the Particulars or, if the recipient has notified otherwise, then
marked for attention in the last way notified.
23.2
When Notices are taken to have been given and received
(a)
A Notice is regarded as given and received:

(i)
(ii)
if delivered by hand, when left at the address given in the Particulars;

rd
if sent by pre-paid post, on the 3 day following the date of postage; and
(iii) if given by fax, on production of a transmission report by the machine

from which the fax was sent which indicates that the fax was sent in its
entirety to the recipients fax number, unless the recipient informs the
sender that the Notice is illegible or incomplete within 4 hours of it being
transmitted; and
(iv) if sent by email, at the time shown in the delivery confirmation report
generated by the senders email system which indicates that the email
was sent to the recipients email address.
(b)
A Notice delivered or received other than on a day on which trading banks are
open for business in the capital city of the Nominated State (Business Day) or
after 5.00pm (recipients time) is regarded as received at 9.00am on the
following Business Day. A Notice delivered or received before 9.00am
(recipients time) is regarded as received at 9.00am.
24
Ancillary provisions
24.1
Entire agreement
This agreement contains everything the parties have agreed and overrides and
supersedes all earlier agreements in relation to the Joint Venture.
24.2
No reliance or inducement
Each party warrants and agrees that when entering into this agreement it relied
exclusively on the terms expressly contained in this agreement and:
(a)
its own inspections, investigations, skill and judgement; and
(b)
opinions and advice obtained by it,
47
and did not rely on any statements, inducements, undertakings, representations or

advice given or made, whether orally or in writing, by or on behalf of any other party,
including without limitation by any officer, employee, agent or adviser of any other
party.
24.3
Enurement
The provisions of this agreement enure for the benefit of and are binding on each party
and their respective successors and permitted Assigns.
24.4
Amendment
No modification, variation or amendment of this agreement is of any force unless it is

in writing and has been signed by each of the parties.
24.5
Severability
If any provision of this agreement is void, illegal or unenforceable, it may be severed

without affecting the enforceability of the other provisions in this agreement.
24.6
Waiver
A waiver of any right, power or remedy under this agreement must be in writing
signed by the party granting it. A waiver is only effective in relation to the particular
right, power or remedy in respect of which it is given. It is not to be taken as an
implied waiver of any other right, power or remedy or as an implied waiver of that
right, power or remedy in relation to any other occasion.
24.7
24.8
24.9
Applicable law
(a)
This agreement is governed by and must be construed in accordance with the

laws of the Nominated State.
(b)
The parties submit irrevocably to the non-exclusive jurisdiction of the Courts

of the Nominated State and all Courts competent to hear appeals from those
Courts.
Fees and charges
(a)
Each party must bear its own costs for the preparation, execution, delivery and
performance of this agreement.
(b)
Unless otherwise agreed, all stamp duties and registration fees paid relating to
the registration and performance of this agreement, and of all other documents
arising out of this agreement, are Joint Expenditure.
Counterparts
This agreement may be executed in any number of counterparts and by different

parties in separate counterparts. Each counterpart when so executed is deemed an
original but all of which together constitute one and the same instrument.
48
Schedule 1
Basic Particulars
Act:
(Clause 1.1)
Approvals Period:
(Clause 2.2)
[Insert applicable Petroleum Act(s) or other legislation]

[e.g. Petroleum Acts 1923 and 2004 (Qld)]
[Insert months] from the date of this agreement, or such
longer period as the parties may agree.
th
Budget Preparation Date: [Insert date, e.g. 15 May in respect of an Australian
(Clause 8.1(a))
financial Year].
Conditions Precedent:
[Examples only]
(Clause 2.3)
1.
The obtaining [by each Participant] of
all Authorisations required by it under the Act by [insert date].
This Condition Precedent 1 is not capable of waiver.
2.
The execution and delivery of a Cross
Security and Deed of Covenant by each Participant to each
other Participant by [insert date]..
This Condition Precedent 2 is not capable of waiver.
3.
The obtaining [by Party ?] of all
Authorisations required under [specify other applicable
legislation] by [insert date]..
This Condition Precedent 3 is for the benefit of the Participants
and may be waived by each Participant in whole or in part by
giving notice to that effect to the other Participants and the
Operator.
4.
[other - specify Authorisation required,
and party required to obtain it by [insert date]].
Contract Limit:
(Clause 8.2(b))
This Condition Precedent 4 is for the benefit of the Participants

and the Operator and may only be waived by agreement
between the Participants and the Operator.
$[Insert amount].
Minimum Interest:
(Clause 1.1)
[Insert percentage, e.g. 5] % Participating Interest].
Nominated State:
(Clause 1.1)
[Insert relevant State or Territory].
Operator:
(Clause 1.1)
Operator Charge:
(Clauses 1.1 and 6.3)
Passmark:
(Clause 1.1)
[Insert name, address and contact details of Operator].

[If the Operator is not already a party, it needs to be added as a
party on page 1]
[[$
] per
month being an
amount which is intended to reimburse, without profit, the
Operator for its indirect or overhead costs which it, or its
Affiliates incur in providing corporate, administration and other
services for the Joint Venture and which are not otherwise
chargeable as Joint Expenditure.
[Insert percentage] % Percentage Share of Joint
Venturers entitled to vote [plus at least 2 Participants
49
voting in favour].
Matters requiring a Unanimous Vote:
[Examples only]
(Clause 1.1)
1.
Approval of the terms and conditions of all contracts between

the Operator and an Affiliate or a Related Entity of the Operator
or a Participant with a value above $[300,000].
2.
Creation of any Encumbrance over the whole or any part of the

Participating Interest of a Participant, unless such Encumbrance
arises by operation of Law.
3.
Surrender of the whole or any part of the Title Area except as

required for minor boundary adjustments, or under the Act.
4.
Suspension, closure or termination of all or any material part of

Joint Operations for any reason, including extended Force
Majeure.
5.
Variation of the Operator Charge payable to the Operator.
6.
Any other matter which is specified elsewhere in this

agreement as requiring a Unanimous Vote.
[a period of 12 calendar months commencing on and

st
including the 1 day of July and ending on and including
(Clause 1.1)
th
the following 30 day of June}
Sole Risk Operations:
[Examples only]
Year:
(Clauses 1.1 and 13.3)
Each of the following is permitted as a Sole Risk Operation:

1.
The drilling and/or Testing of an Exploration Well and/or an Appraisal Well, the
drilling of which is not required to complete an obligation under a Petroleum
Title, and all activities necessarily incidental to such drilling.
2.
Completion of Exploration Wells and Appraisal Wells as productive of

Petroleum.
3.
The Deepening, Plugging Back, Recompletion or Side-tracking of an Exploration

Well or Appraisal Well in the course of drilling, or of a previously abandoned
well, or the testing of a Zone already penetrated by such a well.
4.
Any operation specifically authorized to be undertaken as a Sole Risk Operation

under this agreement.
Sole Risk Operation Buy-Back Premium [Examples only]

Item
Sole Risk Operation
Buy-Back
Premium
1.
Exploration Well
[700] %
2.
Appraisal Well
[500] %
3.
Deepening or Side-track of Exploration Well
[700] %
4.
Deepening or Side-track of Appraisal Well
[500] %
Notes:
1. The Buy-Back Premium payable is the Buy-Back Amount defined in clause 13.6(d)(ii)
50
above, multiplied by the Buy-Back Premium specified in the above table for the Sole
Risk Operation listed against the percentage premium.
For the purpose of the above Sole Risk Operations, in addition to those terms defined in
clause 1.1, the following terms have the following meanings:
Deepening means the drilling of a well to an objective Zone below the deepest Zone in which
the well was previously drilled, or below the deepest Zone proposed in the associated AFE (if
required), whichever is the deeper.
Plugging Back means a single operation whereby a deeper Zone is abandoned in order to
attempt a Completion in a shallower Zone.
Recompletion means an operation whereby a Completion in one Zone is abandoned in order
to attempt a Completion in a different Zone within the existing well.
Sidetracking means the directional control and intentional deviation of a well from vertical
so as to change the bottom hole location unless done to straighten the hole or to drill around
junk in the hole or to overcome other mechanical difficulties.
Testing means an operation intended to evaluate the capacity of a Zone to produce
Petroleum.
Zone means a stratum of earth containing or thought to contain an accumulation of Petroleum
in the same pressure regime and separately producible from any other accumulation of
Petroleum.
51
Schedule 2
List of Petroleum Titles as at the Commencement Date
No.
TOTALS:
Name
Status Reg. Holder Area (km) Grant date Expiry date
Rent: $
Area:
Annex to Schedule 2
Title Area Map
[Insert, if required]
52
Schedule 3
Dilution Provisions Optional and Default Dilution
Terms used in this Schedule 4 have the same meanings as defined in the agreement to which
this Schedule 4 is scheduled.
1.
Dilution Notice
The Participating Interest of a Participant may be reduced and diluted in either of the
following circumstances, whereupon the Participant becomes a Diluting
Participant:
(a)
If, within 14 days of the adoption by the Operating Committee of an

Approved Programme and Budget, but not otherwise, a Participant gives
notice to the other Participants and the Operator that it does not wish to
contribute to Joint Operations pursuant to that Approved Programme and
Budget (Optional Dilution Notice) whereupon it becomes a Diluting
Participant for the purposes and duration of that Approved Programme and
Budget; or
(b)
If a Defaulting Participant fails to remedy a Breach Default Event or an

Unpaid Monies Default Event within the period required by this agreement,
upon all the Non-Defaulting Participants giving notice to the Defaulting
Participant that they require its Participating Interest to be reduced and
diluted specifying the relevant Default Event which has not been remedied
(Default Dilution Notice)
Provided that:
(c)
2.
a Participant may not give an Optional Dilution Notice in respect of an

Approved Programme and Budget for Joint Expenditure;
(i)
for an Emergency,
abandonment; or
environmental
protection,
rehabilitation
or
(ii)
which is required to meet obligations lawfully prescribed by an Authority

or by Law including maintenance of the Petroleum Titles in good
standing, and to keep other Joint Venture Property in good condition.
Effect of Dilution Notice
Upon a Dilution Notice being given, the Diluting Participant is not obliged or entitled
to make any further contribution to that Approved Programme and Budget and its
Participating Interest must be reduced in accordance with the following formula
(Dilution Formula) with the Participating Interest of each other Participant which is
not a Diluting Participant (Non-Diluting Participant), increasing pro-rata in the
proportion to that their respective Percentage Shares bear to each other:
PI DE
TE
x 100
Where:
PI =
the ongoing Participating Interest of the Diluting Participant after the

Dilution Notice;
DE =
the total Joint Expenditure actually incurred by the Diluting Participant

up to the date of the Dilution Notice, plus Historical Expenditure deemed
to have been incurred by the Diluting Participant; and
TE =
the total Joint Expenditure actually incurred by all Participants up to the
53
date of the calculation, plus Historical Expenditure deemed to have been

incurred by all Participants.
For the purpose of the calculation of DE and TE, the following amounts are deemed to
be included in DE or TE in the Dilution Formula, as Historical Expenditure for each
Participant, as applicable:
(a)
(b)
the following amounts incurred prior to the Commencement Date:

(i)
[Party 1]
$[
(ii)
[Party 2]
$[
(iii)
[Party 3]
$[
]; and
If a Participant is the Assignee of a Participating Interest, the amount of Cash

Calls actually paid after the Commencement Date by the Participants
predecessors in title to its Assigned Participating Interest.
Note:
Alternative Dilution Formula for accelerated [125%] dilution
DE
3.
PI TEx
1.25 x 100
Recalculation of Participating Interests
(a)
If a Dilution Notice has been received from or given to a Diluting Participant,

then throughout the period of the applicable Approved Programme and Budget
the Operator must recalculate the Participating Interest of each Participant in
accordance with the Dilution Formula and notify the Participants of their
respective Participating Interest:
(i)
when the Participating Interest of the Diluting Participant reduces by

each multiple of [5] percentage points below its Participating Interest
immediately before the time at which it became a Diluting Participant;
(ii)
when the Participating Interest of a Diluting Participant reduces to the

Minimum Interest or less;
(iii) immediately before each meeting of the Operating Committee;

(iv) on request in writing by any Participant; and
(v)
(b)
4.
every 3 months as and from the date that the Non-Diluting Participant
pays the first Cash Call after the Dilution Notice is given.
On request by a Participant, the Diluting Participant must within 30 days of

receiving the request, at its cost and expense:
(i)
transfer to the Non-Diluting Participants sufficient Participating Interest

in the Petroleum Titles to give effect to the Dilution Notice and the
Dilution Formula; and
(ii)
execute and deliver all documents and pay all stamp duty and other
transfer costs necessary to complete (and register, if required by the law
of the Nominated State), the Assignment and transfer of the applicable
Participating Interest to the Non-Diluting Participants.
Additional Cash Calls
(a)
Within 7 days of receiving a Dilution Notice, the Operator must request

additional Cash Calls from the Participants in proportion to their respective
Percentage Shares (other than the Diluting Participant) to replace the
contributions not being made by the Diluting Participant.
54
(b)
5.
Within 14 days of receiving a request for further Cash Calls, a Participant

(other than a Diluting Participant) may elect:
(i)
to proceed with the Approved Programme and Budget and pay the
additional Cash Calls; or
(ii)
not to contribute to the Approved Programme and Budget and give a

Dilution Notice.
Re-assessment of Programme and Budget
If a further Dilution Notice is given by another Participant, the Operator must, within
14 days of further Dilution Notice being given, call a meeting of the Operating
Committee to revise the Approved Programme and Budget. A Diluting Participant is
entitled to vote at such meeting or any adjournment.
6.
Withdrawal of Dilution Notice
Upon an Approved Programme and Budget being revised or confirmed at a meeting of

the Operating Committee, a Diluting Participant may within 14 days of that meeting
give notice to the Operator and the other Participants withdrawing any prior Dilution
Notice and thus electing to pay the further Cash Calls.
NOTE:
The above Dilution Formula includes agreed Historical Expenditure (HE). This is customary in
Exploration JVAs in Australia. Accelerated dilution is also not uncommon.
However users of the clause should be aware that the operation of this Dilution Formula with the
inclusion of HE:
1.
distorts the operation of the formula, and the consequential dilution;
2.
leads to a Diluting Participant being diluted more or less than its existing
Percentage Share; and
3.
in rare cases can lead to a Diluting Participant actually increasing its existing
Percentage Share.
The above formula, which values the Diluting Participants Participating Interest based on its past
cash contributions, may be appropriate at the exploration stage, but is less appropriate at the
Development or Production stage. Further, if dilution is artificially accelerated, this may give rise to
issues of forfeiture and penalties, creating questions about the enforceability of the clause.
If HE is not included in the Dilution Formula, then no issues of disproportionality arise.
If the Participants wish to allow for HE, as reflected in the market value of the Participating Interest,
they could consider using the following formula:
JVI1 JVI 0
Where:
(1 A)
B
JVI1 is the diluted Percentage Share

JVI0 is the original (undiluted) Percentage Share
A is the amount diluted (including any accrued interest) in $
B is the market value in $ of the Diluting Participants Participating Interest at the
time of the dilution, as agreed by the Participants, or determined by an Expert
appointed in accordance with this agreement.
The attention of drafters using the default dilution clause is directed to Penalties and relief against
forfeiture of Joint Venture Interests, by Michael Lishman, [2008] AMPLA Journal 219.
55
Signing page
EXECUTED by [Company][ACN] in )
accordance with section 127(1) of the )
Corporations Act by authority of its
directors in the presence of:
)
............................................................
Signature of director
............................................................
Name of director (block letters)
)
)
............................................................
Signature of director/company secretary*
*delete whichever is not applicable
)
)
............................................................
Name of director/company secretary*

(block letters)
*delete whichever is not applicable
SIGNED, SEALED AND DELIVERED )

by
)
as attorney for
)
............................................................
)
under power of attorney dated [ ] in the )
presence of:
............................................................
Signature of witness
............................................................
Name of witness (block letters)
............................................................
By executing this agreement the attorney

states that the attorney has received no
notice of revocation of the power o
attorney
)
)
)
)
............................................................
Address of witness
)
)
)
............................................................
Occupation of witness
)
)
)
56
Dated
Petroleum Exploration
Joint Operating Agreement
[
Between
[
] Joint Venture
] (Participant 1)
And
[
] (Participant 2)
And
[
] (Participant 3)
And
[
] (Operator)

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Model Petroleum Exploration Joint Operating

Agreement - Exposure Draft

Petroleum Joint Operating Agreement

Model Petroleum Exploration Joint Operating

AMPLA Model Petroleum Exploration JOA, EXPOSURE DRAFT, 01.09.2011

Model Petroleum Exploration JOA - Exposure Draft

[Insert name] Joint Venture

Definitions and interpretation

Coming into effect of agreement

Joint Venture objectives and relationships

Formation of the Joint Venture

Joint Venture Property

Establishment of Operating Committee

AMPLA Model Petroleum Exploration JOA, EXPOSURE DRAFT, 01.09.2011

Model Petroleum Exploration JOA - Exposure Draft

Functions, powers and duties of Operator

Functions of the Operator

Programmes, Budgets and Cash Calls

Proposed Programmes and Budgets

Completion, discovery and appraisal

Accounts, reports, audit and access

Joint Venture accounting

No Encumbrances without consent

Surrender, Relinquishment, Withdrawal and Dilution

Proposal for a Sole Risk Operation

AMPLA Model Petroleum Exploration JOA, EXPOSURE DRAFT, 01.09.2011

Model Petroleum Exploration JOA - Exposure Draft

Assignment to an Affiliate or a Related Entity

Breach Default Event to be remedied

Enforcement of Buy-Out Election

Consequence of Buy-Out Election

Term, suspension and termination of Joint Venture

AMPLA Model Petroleum Exploration JOA, EXPOSURE DRAFT, 01.09.2011

Model Petroleum Exploration JOA - Exposure Draft

Meaning of Force Majeure

Goods and Services Tax

Participants registered for GST

List of Petroleum Titles as at the Commencement Date

Dilution Provisions Optional and Default Dilution

AMPLA Model Petroleum Exploration JOA, EXPOSURE DRAFT, 01.09.2011

Model Petroleum Exploration JOA - Exposure Draft

[Insert name] Joint Venture

AMPLA Model Petroleum Exploration JOA, EXPOSURE DRAFT, 01.09.2011

The Participants have agreed to enter into this agreement to

The parties agree:

Definitions and interpretation

accordance with this agreement.

suitable and experienced personnel and adequate materials;

ongoing monitoring and testing of plant and equipment performance, safe

the observance of relevant Australian and international standards; and

in the case of design, engineering and construction, internationally accepted

a resolution is validly passed to wind up the body corporate voluntarily or to

an order is made for it to be wound up;

the appointment of a controller as defined in section 9 of the Corporations Act)

it proposes to enter into or enters into any form of arrangement (formal or

it becomes an insolvent under administration as defined in section 9 of the

any claim, application or proceeding in respect of Native Title Rights which is

any claim, application or proceeding in respect of Native Title Interests.

Operating Committee means the committee of representatives of the Participants

the obligation, subject to the terms of this agreement, to contribute its

the beneficial ownership as a tenant in common of an undivided Percentage

Petroleum has the meaning given to that term in the Act.

a guarantee or standby letter of credit issued by a first class bank;

an on-demand bond issued by a surety corporation;