210101, 09.12.11 AMPLA MPJOA - VERSION 1

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Model Petroleum Joint Operating Agreement

© AMPLA Model Petroleum Joint Operating Agreement, Approved Version 1, 9.12.2011 i

EXPLANATORY NOTE

The Board of AMPLA Ltd has prepared this Model Petroleum Joint Operating Agreement,Approved Version 1 (Model JOA) following the recommendations of a representative ReferenceGroup selected from knowledgeable and experienced AMPLA members working in oil and gascompanies and in private practice.

The Model JOA is intended for use in non-complex oil and gas projects principally onshore inAustralia and has a traditional risk/reward/loss/indemnity regime with an Operator as agent forthe parties. It can also be used for similar projects offshore.

This Model JOA is a basic 3 party joint venture agreement based on oil and gas Joint OperatingAgreements presently in use in Australia. It may be used under the law of any State or internalTerritory 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 JOA sets out the basic particulars such as the conditions precedent,relevant petroleum legislation, voting and financial provisions, agreed sole risk events and limitson the Operator’s discretionary contracting powers. The list of Petroleum Titles and their particulars is specified in Schedule 2. An Accounting Procedure is specified in Schedule 3. OtherOptional matters are set out in Schedules 4 to 7.

The Model JOA is not intended as a rigid precedent to be adopted without amendment. Rather itis a guide which includes representative provisions across all matters normally covered in such anagreement. It endeavours to strike a fair balance on contentious matters between the parties tosuch agreement. It is drafted in a manner which allows for easy deletion or substitution of whatmay 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 bereadily inserted. Reference should also be made to the Model Alternative and Optional clauseswhich can be used with, or in substitution for, clauses in this Model JOA. These can be inserted inthe Model 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.

For a discussion of the development of, and the legal principles underlying, this Model JOA, seeJG Grace, “The AMPLA Model Petroleum Joint Operati ng Agreement,” [2011] AMPLAYearbook , and see also “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. In relation to the introduction of the Personal Property Securities Act 2009 (Cth) (PPSA), theModel JOA has been reviewed in the light of the paper by David Maloney, “Personal Property

Secur ities Act and its impact on the Resour ces Sector ” , [2011] AMPLA Yearbook .

RELATED AMPLA MODEL DOCUMENTS

Petroleum Joint Operating Agreement – Alternative & Optional clauses

Petroleum Exploration Joint Operating Agreement

Cross Security

Financier’s Deed of Covenant (Priority Deed)

Users are also referred to the Association of International Petroleum Negotiators (AIPN) 2002

Model Form International Operating Agreement and associated Accounting Procedure and theuseful User Guide for adaption of that form for use in Commonwealth waters, Offshore Australia,dated 29 August 2008, first edition.



Model Petroleum Joint Operating Agreement

© AMPLA Model Petroleum Joint Operating Agreement, Approved Version 1, 9.12.2011 ii

COPYRIGHT

This Model JOA is the property of AMPLA Ltd which owns the copyright. AMPLA financialmembers are granted a royalty free licence to use this Model JOA for commercial purposes on the basis set out below. Non-members may use this Model JOA on a similar basis only if theapplicable licence fee has been paid.

DISCLAIMER

AMPLA makes no warranty or guarantee or promise, express or implied, that this ModelPetroleum Joint Operating Agreement, Approved Version 1 (Model JOA) is accurate, complete,up to date, or fit for any use whatsoever. It is made available on the AMPLA website for theinformation and use of AMPLA members only and for the use of non-members on payment of theapplicable licence fee, on the condition that AMPLA Ltd is not engaged in rendering professionaladvice. Readers should exercise their own skill and judgment in adopting or adapting any part ofthe Model JOA for their own use and, where necessary, seek advice from a suitable qualifiedlegal practitioner.

AMPLA accepts no responsibility for any loss, cost or expense arising from the use of this ModelJOA 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 JOA, or any errors or omissionsin its contents.

IMPROVEMENTS

If you have any questions or suggestions for improvement concerning this Model, please contactthe AMPLA office at [email protected] or see www.ampla.org. The AMPLA Board wouldappreciate receiving all and any questions, comments and other feedback you have.

mailto:[email protected]


http://www.ampla.org/

http://www.ampla.org/




Petroleum Joint Operating Agreement

© AMPLA Model Petroleum Joint Operating Agreement, Approved Version 1, 9.12.2011 i

TABLE OF CONTENTS

Particulars [Insert name ] Joint Venture 1

1 Definitions and interpretation 1

1.1

Definitions 1

1.2 Interpretation 8

2 Conditions precedent 9

2.1

Coming into effect of agreement 9

2.2 Satisfaction of Conditions Precedent 9

2.3 Failure to satisfy Conditions Precedent 9

2.4

Consequence of failure to satisfy Conditions Precedent 9

3 Joint Venture objectives and relationships 10

3.1 Formation of the Joint Venture 10

3.2

Objects and scope of the Joint Venture 10

3.3 Rights, obligations and liabilities of Participants 10

3.4 Participant covenants 11

3.5 Party warranties 11

3.6 Business conduct 12

4 Joint Venture Property 12

4.1

Participating Interests 12

4.2 Use and ownership of Joint Venture Property 12

4.3 Delivery and sale of Petroleum 13

4.4

Disposition of Crude Oil 13

4.5 Disposition of Natural Gas 13

4.6 JV Intellectual Property 14

4.7 No partition of Joint Venture Property 14

4.8

Perpetuity period 14

4.9 Disposal of Joint Venture Property 14

4.10 Abandonment of Joint Venture Property 14

4.11

Abandonment of Wells 15

5 Operating Committee 15

5.1

Establishment of Operating Committee 15

5.2

Functions of Operating Committee 16

5.3 Meetings of the Operating Committee 16

5.4 Quorum 17

5.5

Voting and decision making 17

5.6 Minutes 17

5.7 Sub-committees 17

5.8 Loss of rights of participation and voting 18

6 Operator 18

6.1 Appointment of Operator 18

6.2

Term of appointment of Operator 18

6.3

Remuneration of the Operator 18

6.4 Appointment of new Operator 18

6.5

Liability of Operator 19 6.6

Full indemnity of Operator by Participants 19

6.7 Limited indemnity by Operator of Participants 19

7

Functions, powers and duties of Operator 19

7.1 Functions of the Operator 19

7.2 Rights, powers and duties of Operator 20

7.3

Greenhouse and energy reporting and carbon liability 22

7.4

Registration of PPSA Security interests 23

7.5 Maintenance of the Joint Account 23

7.6 Limitations on Operator’s obligations 24

7.7

Operator may delegate 24

7.8 Employees and Secondees 24

7.9 Health, safety, environment and community 24

7.10

Agreement with an Affiliate or a Related Entity 25

7.11

Litigation 25




© AMPLA Model Petroleum Joint Operating Agreement, Approved Version 1, 9.12.2011 ii

7.12 Trades 26

8 Programmes, Budgets and Cash Calls 26

8.1

Proposed Programmes and Budgets 26

8.2 Approved Programme and Budget 26

8.3 AFEs 27

8.4

Joint Expenditure not covered by Programme and Budget 28

8.5 Payment of Cash Calls 28

8.6

Banking of funds 28

9

Completion, Discovery, appraisal and development 29

9.1 Well Completion 29

9.2 Discovery and appraisal 29

9.3

Development 29

9.4

Further development 30

9.5 Default Certificate Deed for Petroleum Sales after development 30

10

Accounts, reports, audit and access 30

10.1

Joint Venture accounting 30

10.2 Reports to Participants 31

10.3

Joint Account and audit 31

10.4 Individual Participant recording responsibilities 31

10.5

Participant access 32

11

Cross Security and Deed of Covenant 32

11.1 Cross Security 32

11.2 No Encumbrances without consent 32

12

Surrender, Relinquishment, Withdrawal and Dilution 33

12.1 Surrender 33

12.2 Withdrawal 33

12.3

Effect of withdrawal 34

12.4 Dilution 34

13 Sole Risk 35

13.1

Proposal for a Sole Risk Operation 35

13.2 Sole Risk Election Notice and participation 35

13.3

Sole Risk Operation 36

13.4

Failure to commence Sole Risk Operation 37

13.5 Sole Risk Participants indemnity 37

13.6 Sole Risk Operations report and buy-back 37

13.7 Consequences of buy-back 38

14 Assignment 38

14.1 Restriction on Assignment 38

14.2 Assignment to an Affiliate or a Related Entity 39

14.3

Permitted right of Assignment with pre-emption 39

14.4 Selling Participant free to Assign 40

14.5 Requirements of Assignee 40

14.6

Assignment on Change of Control or less than Minimum Interest 40

14.7 Participant ceasing to be a Participant 41

15

Default 41

15.1

Breach Default Event to be remedied 41

15.2 Unpaid Monies Default Event to be remedied 42

15.3

Interest and costs 42

15.4

Period of Unpaid Monies Default 43

15.5 Failure to pay money or provide Security 43

15.6 Election of Unpaid Monies Default Remedy 43

15.7

Preservation of other rights 45

16 Enforcement of Buy-Out Remedy 45

16.1 Consequence of Unpaid Monies Default Election Notice 45

16.2

Determination of fair market value and Completion Date 45

16.3 Consequence of Buy-Out Election 46

16.4

Release of Defaulting Participant 46 16.5

Acknowledgement 46

16.6

Attorney 47




© AMPLA Model Petroleum Joint Operating Agreement, Approved Version 1, 9.12.2011 iii

17 Term, suspension and termination of Joint Venture 47

17.1 Term of agreement 47

17.2

Suspension of Joint Operations or Abandonment 47

17.3 Winding up of Joint Venture 48

17.4 Certain obligations continue beyond termination 48

17.5

Extension of term 48

18 Confidentiality 48

18.1

Agreement is confidential 48

18.2

No disclosure except as permitted 49

18.3 Permitted disclosure by a Participant 49

18.4 Permitted disclosure by Operator 49

18.5

Confidential Information disclosed only as necessary 49

18.6

Publicity and disclosure 49

18.7 Obligations exist beyond termination 50

18.8 Access to Information 50

19 Dispute Resolution 50

19.1 Limitation on proceedings 50

19.2

Dispute Resolution Process 50

19.3 Mediation 51

19.4

Dispute Resolution Process not to interrupt Joint Operations 51

19.5

Clause does not apply to matters where consent required 51

20 Expert Determination 52

20.1 Expert determination 52

20.2

Qualifications of Expert to determine dispute 52

21 Force Majeure 53

21.1 Meaning of Force Majeure 53

21.2

Relief 53

21.3 Labour disputes and Native Title matters 54

21.4 Resumption 54

22

Royalty and Petroleum Resources Rent Tax 54

22.1 Payment of royalties 54

22.2

Petroleum Resources Rent Tax (PRRT) 54

22.3

Provision of tax and royalty information 54

23 Goods and Services Tax 55

23.1 GST registration 55

23.2

Supply of going concern 55

23.3 GST liability 55

23.4 Reimbursement 55

23.5 Definitions 56

24 Notices 56

24.1 Form of Notice 56

24.2

When Notices are taken to have been given and received 56

25 Ancillary provisions 56

25.1

Entire agreement 56

25.2

No reliance or inducement 56

25.3

Enurement 57

25.4 Amendment 57

25.5

Severability 57

25.6 Waiver 57

25.7 Applicable law 57

25.8

Fees and charges 57

25.9

Counterparts 57

Schedule 1 58

Basic Particulars 58

Schedule 2 62

List of Petroleum Titles as at the Commencement Date 62




© AMPLA Model Petroleum Joint Operating Agreement, Approved Version 1, 9.12.2011 iv

Schedule 3 63

Accounting Procedure 63

1. Introduction 63

2. Definitions 63

3. Joint Account 63

3.1

Maintenance of the Joint Account 63

3.2 Materials and services charged to Joint Account 64

3.3

Authority for Expenditure 64

4. Chargeable credits, costs and Joint Expenditures 64

4.1

Credits 64

4.2

Direct Costs 64

4.3 Indirect Costs – administrative overhead 68

5.

Materials charged to Joint Account 69

5.1

Purchases 69

5.2 Material purchased directly for Joint Operations 69

5.3

Material purchased from a Participant, Affiliate or Related Entity 69

5.4 Material furnished by the Operator or Participant 69

5.5

Premium Prices 70 5.6

Premium Equipment and Facilities Furnished by Operator 70

5.7

Warranty of Material Furnished by Operator 70

6. Fixed Assets 70

6.1

Fixed Assets accounting and records 70

6.2

Fixed Assets losses 71

7. Inventories 71

7.1

Records of Material 71

7.2 Fixed Asset inventories 71

7.3 Periodic Material inventories 71

7.4 Special Inventories 71

7.5

Notice 71

7.6

Failure to be Represented 71

7.7

Reconciliation of Inventory 71

7.8

Adjustment of Inventory 71

7.9 Inventory Expenses 71

8. Disposal of Material 72

8.1

Sale of Joint Venture Property 72

8.2 Operator’s rights of purchase and disposal 72

8.3 Material Purchased by Participants 72

8.4

Division in Kind 72

8.5 Sales to Third Parties 72

8.6 Basis of pricing Material transferred from Joint Venture Property 73

9.

Sole Risk Account 73

9.1 Computation of Sole Risk Costs and Expenses 73

9.2

Sole Risk Costs and Expenses not to be in Joint Account 73

9.3 Cash Advances 73

10. Disputes 73

10.1 Referral to Auditor 73

Schedule 4 74

Dilution Provisions – Optional and Default Dilution 74

1. Dilution Notice 74

2.

Effect of Dilution Notice 74

3. Recalculation of Participating Interests 75

4. Additional Cash Calls 75

5.

Re-assessment of Programme and Budget 76

6.

Withdrawal of Dilution Notice 76




© AMPLA Model Petroleum Joint Operating Agreement, Approved Version 1, 9.12.2011 v

Schedule 5 77

Cross Security 77

Schedule 6 78

Deed of Covenant 78

Schedule 7 79

Default Certificate Deed 79

Particulars 79

1.

Definitions 80

2.

Payment authority 80

3. Payment 80

4. Delivery of Amendment Certificate 80

5.

Amendment or cancellation of Amendment Certificate 80

6. Conclusiveness of Amendment Certificate 80

7. Variation of Sales Contract 81

8.

Assignment 81

9. Buyer acknowledgement 81

10. Seller acknowledgements 81

11.

Indemnity 81

12. GST 81

13. Enurement 81

14.

Amendment 81

15.

Waiver 82

16. Applicable law and jurisdiction 82

17. Counterparts 82

Signing page 83




© AMPLA Model Petroleum Joint Operating Agreement, Approved Version 1, 9.12.2011 1

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 holderand owners of the Petroleum Titles.

B. The Participants have agreed to enter into this agreement to explorfor and, if successful, appraise, develop and produce Petroleum in tharea of the Petroleum Titles on the terms and conditions set out i

this agreement.

C. The Operator has agreed to act as the operator for the Participants iaccordance with this agreement.

The parties agree:

in consideration of, among other things, the mutual promises contained in this agreement:

1 Definitions and interpretation

1.1 Definitions

Unless the context otherwise requires, the following expressions have the respectivemeanings in this agreement (including the Recitals):

Abandonment means action or conduct by the Operator to decommission or abandonall, or a severable part of, the Joint Operations or Joint Venture Property under thisagreement whether by way of removal, placement on permanent care and maintenanceor other basis.

Abandonment Obligations means the obligations of the Participants under the Act, allPetroleum Titles and Authorisations, and all applicable statutory and contractualobligations on and following Abandonment.

Accounting Procedure means the accounting procedure specified in Schedule 3.

Act means the legislation specified in Schedule 1.

AFE means an authority for the Operator to incur Joint Expenditure under an ApprovedProgramme and Budget or otherwise in accordance with this agreement.

Affiliate means, with respect to a particular entity, a related body corporate of that entityas 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 isdisplayed on the page of the Reuters Monitor System designated “BBSY” plus 3 per centcalculated 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 usuryLaw, the rate of interest to be charged is the maximum rate permitted by Law.

Amendment Certificate has the meaning given to that term in the Default CertificateDeed.

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 reservescontained in an existing Discovery.

Approved Programme and Budget means a programme and budget relating to JointOperations including the Minimum Work Obligations and an itemised budget of theestimated 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 aParticipating Interest, and “Assign” has a corresponding meaning.

Auditor means a registered company auditor under the Corporations Act appointed bythe Operating Committee at the cost of the Joint Venture to conduct an audit each Yearof 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 inaccordance with this agreement.

Authority is any government department, local government council, government orstatutory authority or any other person or entity under a Law which has a right to imposea requirement on, or whose consent is required to carry out, 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 breachof any of its material obligations under this agreement (other than an Unpaid MoniesDefault Event), including where an Encumbrance (other than an Encumbrance approved

by the Participants under this agreement) is created over or attached to the ParticipatingInterest of a Participant.

Cash Call means the Percentage Share of funds required to be paid by a Participantfrom 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 ConditionsPrecedent, then the date of this agreement.

Completion means an operation intended to complete a well up to and including a wingvalve of the Christmas tree as a producer of Petroleum in any part of the well, includingthe setting of production casing, perforating, stimulating the well and production testingconducted in such operation.

Conditions Precedent means the conditions specified in Schedule 1 which are requiredto be satisfied or waived for this agreement to be fully effective.

Corporations Act means the Corporations Act 2001 (Cth).

Cross Security means a deed of cross security in substantially the same form as the proforma deed of cross security specified in Schedule 5.

Crude Oil means all crude oil, condensate, and natural gas liquids at atmospheric

pressure and temperature produced by the Joint Venture under this agreement.

Deed of Covenant means a deed of covenant in substantially the same form as the proforma financier’s deed of covenant specified in Schedule 6.

Deemed Sale Offer means an offer required to be made under this agreement by aParticipant to sell all of its Participating Interest to the other Participants, free fromEncumbrances, at a Transfer Price.

Default Certificate Deed means an agreement substantially in the form specified inSchedule 7.

Default Event means a Breach Default Event or an Unpaid Monies Default Event.

Defaulting Participant means a Participant which has committed a breach of thisagreement, 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.

Delivery Point means the place at which the Operator delivers to a Participant itsEntitlement produced from the Petroleum Titles, as determined by the OperatingCommittee from time to time.

Development Plan means a programme and budget for the development of a Discoveryfrom an Exploitation Area, which plan must:

(a) specify the parts of the Title Area required for new development and the locationand delineation of the Petroleum reservoir;

(b) describe in reasonable detail the nature and extent of the proposed developmenttogether with estimates of the capital and likely operating costs required for the

proposed development and subsequent Abandonment; and

(c) estimate the probable period from commencement of planning to commencementof commercial production.

Development Well means any well drilled for the production of Petroleum pursuant to aDevelopment Plan.

Discovery means the discovery of an accumulation of Petroleum by drilling whoseexistence 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 substantialdamage 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 carriedinterest, assignment of income, production bonus, pledge, lien, charge, title retention

arrangement, trust or power, or other form of security or interest having effect as asecurity for the payment of any monetary obligation or the observance of any otherobligation whether existing or agreed to be granted or created.

Entitlement means the Percentage Share of Petroleum (excluding fuel or flare) produced from a Petroleum Title which a Participant is entitled to, and must, takedelivery of pursuant to this agreement.

Expert means a person independent of the parties who is suitably qualified and capableof making an expert determination under this agreement.

Exploitation Area means that part of the Title Area under a Petroleum Title delineatedas the exploitation area for development of a Discovery in a Development Plan approved

as a Joint Operation or as a Sole Risk Operation.Exploration Well means any well the purpose of which at the time of thecommencement of drilling is to explore for an accumulation of Petroleum, whichaccumulation was at that time unproven by drilling.

Excluded Loss means any one or more of:

(a) loss or damage arising out of Petroleum reservoir or formation damage, or any production delay, interruption to or loss of, or any inability to produce, deliver or process, Petroleum;

(b) loss or damage incurred, or liquidated or pre-estimated damages or penalties ofany kind whatsoever borne or payable under or in connection with any contractfor the sale, processing, storage, transportation, or other disposal of Petroleum;




(c) loss, or anticipated loss, of use, profit or revenue, loss of business reputation, business interruption of any nature, loss of opportunity, loss of anticipated savingsor wasted overheads;

(d) exemplary or punitive damages; or

(e) any loss or damage arising from special circumstances that are outside theordinary course of things.

Front End Engineering and Design Study or FEED means the comprehensivedesign and engineering definition of a Petroleum development project, including allancillary operations, necessary to develop and produce a Discovery through processmodelling, design, evaluation and optimisation, equipment selection and integration,constructability analysis, cost estimation and execution planning to the standard andwith the detail required by the Operating Committee which provides the basis for afinal investment decision by the Participants.

Good Australian Oilfield Practice means recognised oilfield methods, procedures and practices, together with the exercise of that degree of skill, diligence, prudence andforesight that reasonably would be expected from an experienced and competent

contractor in Australia under conditions comparable to those applicable to the relevantactivity in the light of known facts, or facts which should reasonably have been known atthe time, and consistent with applicable Laws and Authorisations and having regard tothe need for:

(a) suitable and experienced personnel and adequate materials;

(b) ongoing monitoring and testing of plant and equipment performance, safeoperating 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 expectedfrom 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.) andassociated legislation.

Information means all information, data and records relating to the Title Area, thePetroleum 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 theCorporations Act;

(b) a resolution is validly passed to wind up the body corporate voluntarily or toappoint an administrator;

(c) it, or any other person, makes an application to a court for its winding up, being anapplication 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) ofany of its assets;




(f) it proposes to enter into or enters into any form of arrangement (formal orinformal) with its creditors or any of them, including a deed of companyarrangement; or

(g) it becomes an insolvent under administration as defined in section 9 of theCorporations Act.

Joint Account means the accounts denominated in the currency determined by theOperator on an accrual basis and maintained by the Operator on behalf of theParticipants in accordance with this agreement, including the Accounting Procedure, andcontaining a record of all charges and credits that are attributable to the Joint Ventureconsistent with standard accounting procedures, expenditure classifications andreporting formats as approved by the Operating Committee.

Joint Expenditure means all costs reasonably and properly incurred by the Operator, inaccordance with the Accounting Procedure, on behalf of the Participants in connectionwith Joint Operations pursuant to an Approved Programme and Budget or incurred in anEmergency or as a permitted cost overrun or as otherwise approved by the OperatingCommittee, and includes all the items which may be charged to the Joint Account as set

out in the Accounting Procedure.Joint Operations means those operations and activities carried out by Operator pursuantto this agreement, the costs of which are chargeable to all Participants.

Joint Venture means the unincorporated joint venture established by and under thisagreement to be known by the name specified in the Particulars.

Joint Venture Asset Register means the register of assets owned by the Participants andmaintained by the Operator for the purposes of the Joint Venture.

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 Participantfor 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 rightsdeveloped by the Operator and paid for from the Joint Account pursuant to an ApprovedProgramme and Budget in the course of Joint Operations.

Law means Commonwealth and State legislation including regulations, by-laws, andother subordinate legislation, the requirements and guidelines of any Authority,including the Listing Rules, with which a party is legally required to comply, andcommon law and equity.

Listing Rules means the listing rules of ASX Limited (ACN 008 624 691) or its lawfulsuccessor or, to the extent that a party or its Affiliate is bound thereby, the listing rulesof 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 specifiedin the Petroleum Titles or imposed under the Act which the Participants are required byLaw to perform.

Native Title Claims means either:




(a) any claim, application or proceeding in respect of Native Title Rights which isaccepted 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 andrelating to aboriginal persons as set out in the relevant legislation of the Nominated Stateor 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.

Natural Gas means Petroleum in a gaseous state at atmospheric pressure andtemperature, and includes any liquid or liquefiable hydrocarbons or other impurities

produced in association with that gaseous Petroleum, whether produced from Petroleumreservoirs or coal seams, but excludes crude oil, condensate, and natural gas liquids

blended with heavier hydrocarbons.

Nominated State is the State or Territory of Australia specified in Schedule 1.Non-Defaulting Participant means a Participant which is not a Defaulting Participantand is not an Affiliate of a Defaulting Participant.

Operating Committee means the committee of representatives of the Participantsestablished 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 asOperator from time to time under this agreement.

Operator Overhead means the remuneration payable by the Participants to the Operatorto 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 ofa Participant determined under this agreement:

(a) the obligation, subject to the terms of this agreement, to contribute its PercentageShare of all Joint Expenditure;

(b) the ownership of and the right to receive in kind and to dispose of for its ownaccount its Entitlement produced under this agreement;

(c) the beneficial ownership as a tenant in common of an undivided Percentage Shareof Joint Venture Property; and

(d) its Percentage Share of any other right, benefit, liability and obligation accruing toor 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 ofthis agreement, or any particular amended by the party by notice given in accordancewith 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, whichmakes a payment of Unpaid Monies on behalf of Defaulting Participant in order toremedy an Unpaid Monies Default Event.




Percentage Share means the percentage Participating Interest which a Participant has inthe Joint Venture, or in a Sole Risk Operation, in accordance with this agreement.

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

Petroleum Buyer means a buyer of all or part of the Entitlement of a Participant under aSales Contract.

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 theapplication or authority of one or more of the Participants for the purposes of the JointVenture which confers or may confer a right to prospect, explore for or produce anyPetroleum in the Title Area, or which may facilitate the enjoyment of such right, andincludes any application for, and any extension, renewal, conversion or substitution of,any of those titles or licences.

PPSA means the Personal Property Securities Act 2009 (Cth).

PPSA Security Interest has the meaning given to that term in the PPSA.

Pre-FEED Study means a study assessing the feasibility of an initial project concept oralternative concepts for the development of a Discovery across all engineeringdisciplines having regard to the commercial and execution risks of the project, whichstudy is intended to lead to identifying a single technical concept which can form the

basis for Front End Engineering and Design.

Proposed Programme and Budget means a work programme and budget for theconduct 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 otherrelevant period, containing sufficient details to enable each Participant to give it properconsideration.

Related Entity means a related entity as defined in the Corporations Act.Sales Contract means a contract for the sale by a Participant of all or part of itsEntitlement which is the subject of a Default Certificate Deed.

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; and

(e) any financial security agreed from time to time by the Participants provided that the bank, surety or corporation issuing the guarantee, standby letter ofcredit, bond or other security (as applicable) has a credit rating indicating it has asufficient worth to pay its obligations in all reasonably foreseeable circumstances.

Shutdown Costs means all costs associated with shutting down or suspending JointOperations including the costs associated with satisfaction of AbandonmentObligations, and any redundancy or termination benefits or payments to any consultantor contractor or employee who is engaged by the Operator in the conduct of JointOperations, but only to the extent of the period for which an employee was engaged inJoint Operations.

Sole Risk Information means Information, and all business names, trademarks,copyright, patents, patent applications, discoveries, inventions, and similar rightsdeveloped by the Operator and 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 thanall the Participants may undertake at their sole risk, benefit, cost and liability.

Third Party means a person not a party, or an Affiliate or a Related Entity of a party oran Affiliate, to this agreement.

Title Area means the whole of the area within the Petroleum Titles listed in Schedule 2and depicted on the Title Area map annexed to Schedule 2 (if any), including the areawithin 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 ofthe relevant Petroleum Title.

Transfer Price means a fair market price for a Participating Interest as at the date of aDeemed Sale Offer on terms and conditions to be negotiated and agreed in good faith bythe Participants or, in default of agreement, as determined by an Expert appointed underthis 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 existingAbandonment Obligations as reasonably determined by the Operator as at the date of

payment.

Ultimate Holding Company means an ultimate holding company as defined in theCorporations Act.

Unanimous Vote means a resolution in respect of the matters specified in Schedule 1, orotherwise specified in this agreement, which is voted upon in favour by allrepresentatives 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 includemonetary compensation and damages payable by a Defaulting Participant which areagreed, awarded or determined following an unremedied Breach Default Event for solong as it is unpaid, and interest and costs payable or reimbursable in accordance withthis agreement.

Unpaid Monies Default Event is the failure by a Participant to pay Unpaid Monies onor before the Due Date.

Wilful Misconduct means any act or failure to act which was intended to cause, or wasin reckless disregard or wanton indifference to, the foreseeable consequences of suchaction or failure to act.

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 thisagreement and includes that party’s 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 sameas 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 anysubordinated legislation issued under, that legislation or legislative provision;

(i) a reference to a day, month or year is relevantly to a calendar day, calendar monthor calendar year;

(j) a reference to $, AUD or dollars is to the lawful currency of the Commonwealth ofAustralia;

(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 acorresponding meaning;

(m) a party may exercise a right or remedy or give or refuse its consent in itsabsolute and unfettered discretion (including by imposing conditions), unlessthis agreement expressly states otherwise; and

(n) no rule of construction is to apply to the disadvantage of a party on the basis thatthat party drafted the whole or any part of this agreement.

2 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 intoeffect on the Commencement Date.

2.2 Satisfaction of Conditions Precedent

(a) Each party must use all reasonable endeavours (other than waiver) at its cost toensure that the Conditions Precedent are satisfied on conditions acceptable to itwithin the time specified in Schedule 1 (Approvals Period).

(b) Each party must keep each other informed of its progress in obtaining satisfactionof any Condition Precedent it is required to obtain and any circumstance that mayresult 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 noticeof the conditions whether the conditions for the satisfaction of a ConditionPrecedent (if any) are acceptable, or unacceptable, to it.

2.3 Failure to satisfy Conditions Precedent

If all Conditions Precedent are not satisfied, or otherwise waived, within the ApprovalsPeriod, or if a party gives notice to the other parties within the Approvals Period that theconditions of satisfaction of a Condition Precedent imposed by a Third Party areunacceptable 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 furtherobligations under this agreement, other than the obligations of confidentiality, and no




party has any claim against another party as a consequence of the termination.

3 Joint Venture objectives and relationships

3.1 Formation of the Joint Venture

With effect from the Commencement Date the Participants agree to establish the JointVenture 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 withthe Title Area and, in particular, to:

(i) maintain the Petroleum Titles and explore and evaluate the Title Area forreserves of Petroleum;

(ii) conduct operations for the exploration, appraisal, development, productionand offtake of Petroleum from the Title Area;

(iii) if exploration and appraisal indicates the probable existence of a commercialreservoir of Petroleum in any part of the Title Area and, if the Operating

Committee approves a Development Plan, develop, produce and dispose ofthat Petroleum and, for such purpose, obtain all necessary further PetroleumTitles and other Authorisations;

(iv) do all things incidental to any of the objects as resolved by the OperatingCommittee; and

(v) undertake such other activities as the Participants unanimously agree fromtime to time,

upon the terms and conditions set out in this agreement.

(b) The following activities are outside of the scope of this agreement and are not

included in Joint Operations:(i) construction, operation, ownership, maintenance, repair and removal of

facilities downstream from the Delivery Point;

(ii) transportation of the Entitlements of the Participants downstream from theDelivery Point;

(iii) marketing and sales of Petroleum, except as expressly provided for in thisagreement;

(iv) acquisition of rights to explore for, appraise, develop or produce Petroleumoutside of the Title Area (other than as a consequence of unitisation with anadjoining area under the terms of the Petroleum Titles); and

(v) exploration, appraisal, development or production of minerals other thanPetroleum, whether inside or outside of the Title Area.

3.3 Rights, obligations and liabilities of Participants

(a) The rights, duties, obligations and liabilities of the Participants arising out of thisagreement are several in proportion to their respective Percentage Shares and areneither joint nor joint and several.

(b) Each Participant is severally liable, in proportion to its Percentage Share, for allobligations and liabilities incurred by or on behalf of the Participants in the courseof carrying out Joint Operations.

(c) Unless otherwise provided in this agreement, the Participants, in their PercentageShares, must pay all liabilities and expenses incurred by the Operator in




connection with Joint Operations or otherwise incurred, whether in tort, contractor otherwise, as a result of the ownership, occupation or possession of JointVenture Property, and are entitled to share in all benefits, and all credits to theJoint Account.

(d) Each Participant, to the extent of its Percentage Share, indemnifies each otherParticipant 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 thisagreement, except for any loss, costs or damage arising from the otherParticipant's fraud or Wilful Misconduct.

(e) Notwithstanding any other provision of this agreement, and except in cases offraud or Wilful Misconduct, each Participant releases each other Participant andits Affiliates from, and indemnifies each of them against, any claim by any otherParticipant in respect of any Excluded Loss howsoever caused or arising as aresult of a breach by the Participant or its Affiliates of any obligation or dutywhatsoever 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 orrepresentative of any other Participant, except when the Operator acts as Operatorfor the Participants, and not, if applicable, as a Participant.

3.4 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 TitleArea 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 whichrelates to the Joint Venture or Joint Operations;

(c) not to do or cause to be done any act matter or thing whereby the continuedenjoyment of the Petroleum Titles by any Participant might be jeopardised;

(d) to act co-operatively, honestly and reasonably in all its dealings with each otherand the Operator concerning the Joint Venture provided that, except as expressly

provided by this agreement, no Participant is under any fiduciary duty to the otherParticipants or the Operator;

(e) not to engage either alone or in association with another or others or through anAffiliate or a Related Entity in any activity over the Title Area except as providedor 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 TitleArea, 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 accordancewith the laws of its place of incorporation;

(b) (Power and capacity) it has full power and capacity to enter into and perform itsobligations 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 agreementcomplies with its constitution and does not constitute a breach of any law orobligation, 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 astrustee for or nominee of any other person; and

(f) (No encumbrances) as at the date of this agreement, there are no Encumbrancesaffecting its Participating Interest.

3.6 Business conduct

Each of the Participants and the Operator acknowledge and agree for itself, theirAffiliates and Related Entities and for each of their officers, directors, employees andagents, that:

(a) each of them is subject to the anti-bribery and anti-corruption provisions of the

Law of the Nominated State and, where applicable to them, other legal jurisdictions (collectively the Anticorruption Laws);

(b) they must each conduct their activities relating to this agreement in accordancewith their obligations under the Anticorruption Laws; and

(c) none of them must make, offer, or authorise with respect to the matters thesubject of this agreement, any payment, gift, promise or other advantage to any

private party or public official, whether directly or through any other person orentity, which is in breach of the Anticorruption Laws.

4 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 %

100.00 %

4.2 Use and ownership of Joint Venture Property(a) All Joint Venture Property is owned by the Participants severally as tenants in

common in proportion to their respective Percentage Shares from time to time.

(b) Each Participant must ensure that its Percentage Share of all Joint VentureProperty that it controls is available for the purpose of Joint Operations for theduration of the Joint Venture.

(c) To the extent that ownership of any Joint Venture Property is not registered orrecorded in the names of the individual Participants pro rata in proportion to theirrespective Percentage Shares, then the person registered or recorded as ownerholds the property on trust for all the Participants pro rata in proportion to their

respective Percentage Shares.(d) If, in the course of Joint Operations, the Operator encounters minerals other than




Petroleum which, in its opinion, are prospective for commercial exploitation, theOperator must immediately notify the Participants and take all steps necessary tosecure and acquire the exploitation rights for those minerals which, uponacquisition, become Joint Venture Property subject to the terms of this agreement.

4.3 Delivery and sale of Petroleum

(a) If Petroleum is discovered and produced:

(i) except where the Participant is a Defaulting Participant, the Operator mustdeliver a Participant’s Entitlement to the Participant at the Delivery Point

and, if separately delivered, by use of equipment and techniques which arespecifically designed and intended not to favour any one Participant overanother;

(ii) title to, and the risk of loss of, or damage to, the Petroleum passes to eachParticipant at the Delivery Point;

(iii) each Non-Defaulting Participant has the right and obligation in the ordinarycourse of business to own, take in kind and separately sell and dispose of its

Entitlement free of any Security on delivery to it at the Delivery Point andmust separately enter into its own arrangements for the transportation and processing of its Entitlement downstream of the Delivery Point;

(iv) a Participant must bear and pay for any extra expenditure incurred in theseparate taking and disposition by the Participant of its Entitlement,including all royalties, taxes, costs and expenses; and

(v) if a Participant fails to take its Entitlement within 14 days after receivingnotice from the Operator requiring the Participant to take delivery, thelicence of the Participant to take in kind and separately sell and dispose ofits Percentage Share of Petroleum products in the ordinary course of

business is terminated, and the Operator may sell all or part of that

Entitlement as agent for the Participant at not less than the available arm’slength market value (as determined by the Operator acting reasonably) forthat Petroleum. The Operator must account to the Participant for the

proceeds of any such sale after first deducting its reasonable expenses andadditional storage costs incurred in the sale.

(b) The failure of a Participant to take and dispose of its Entitlement must neither prevent the production of Petroleum from the Title Area nor prevent the otherParticipants from taking and disposing of their respective Entitlements.

(c) Nothing in this agreement provides for any joint or cooperative marketing orselling of Petroleum by the Participants or, except with the prior unanimous

approval of the parties, the processing of Petroleum owned by any Third Party atany processing facility established under this agreement.

(d) Any Participant may produce Petroleum from sources outside the Title Area andmarket that Petroleum in competition with Petroleum produced from within theTitle Area and in competition with any other Participant.

4.4 Disposition of Crude Oil

The Participants must in good faith, and not less than 3 months prior to the anticipatedfirst delivery of Crude Oil to the Delivery Point, as notified by the Operator, negotiateand conclude the terms of a lifting agreement to provide for the offtake of Crude Oilwhich is planned to be produced from an Exploitation Area.

4.5 Disposition of Natural Gas

If there is a discovery of Natural Gas, each party recognises that there may need to be




special arrangements for the offtake and disposal of the Natural Gas. In such event the parties agree to negotiate to amend this agreement and/or make a separate agreement tomake provision for such arrangements.

4.6 JV Intellectual Property

Each Participant and its Affiliates may use, on a non-exclusive world-wide royalty-free basis, JV Intellectual Property, including any modifications and enhancements, outsidethe Title Area in activities other than Joint Operations provided that the intended use ofsuch JV Intellectual Property is first disclosed to each of the other Participants and issubject to the obligations of confidentiality contained in this agreement.

4.7 No partition of Joint Venture Property

(a) Subject to any Law or this agreement, each Participant waives any right it mayhave 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 Participant’s right and obligation to take separatelyits Entitlement or to make an Assignment or disposal as permitted by thisagreement.

4.8 Perpetuity period

If the vesting of any interest of any Participant in any Joint Venture Property would, butfor this clause, be void under the rule against perpetuities at common law or under anystatute imposing perpetuity periods, then that interest terminates within the maximumtime from the Commencement Date permitted by the law of the Nominated State for thatinterest to be valid.

4.9 Disposal of Joint Venture Property

(a) The Operator may, with the approval of the Operating Committee and inaccordance with the Accounting Procedure, 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, theOperator must endeavour to dispose of the Joint Venture Property related to thoseJoint Operations, as economically and reasonably as possible, in accordance withthe Accounting Procedures.

(c) The proceeds of recovery and disposal of Joint Venture Property, net of sellingand disposal costs, must be credited to the Participants pro rata in proportion totheir respective Percentage Shares.

4.10 Abandonment of Joint Venture Property

(a) If the Operating Committee decides by Unanimous Vote to abandon any JointVenture Property, the Operator must formulate and present to the OperatingCommittee for its approval, a Proposed Programme and Budget for Abandonmentdesigned to satisfy the obligations of the Participants in respect of the JointVenture Property proposed to be abandoned.

(b) Unless the Operating Committee otherwise determines, any Approved Programmeand Budget for Abandonment must be carried out by the Operator.

(c) In carrying out an Approved Programme and Budget for Abandonment, theOperator may take whatever action or non-action it considers necessary to complywith all applicable Laws, the Petroleum Titles, the requirements of a competentAuthority and Good Australian Oilfield Practice in relation to such Abandonment.

(d) Each Participant must comply with, and bear its Percentage Share of all costs andexpenses of all obligations and liabilities relating to the Abandonment, including




providing such Security for Abandonment Obligations as the OperatingCommittee may determine, which obligations and liabilities survive termination ofthis agreement.

4.11 Abandonment of Wells

(a) The Operating Committee must approve the plugging and Abandonment of allwells drilled as a Joint Operation which are proposed to be plugged andAbandoned 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 Participantvoting against that decision may give notice to all other Participants and theOperator, 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 Participantdoes not reply within 3 days after receiving notice under this sub-clause it isdeemed to consent to the Abandonment.

5 Operating Committee

5.1 Establishment of Operating Committee

(a) An Operating Committee is established on the Commencement Date. EachParticipant must appoint (and may remove) a representative to the OperatingCommittee in writing.

(b) The role of the Operating Committee is to supervise the Operator in themanagement of the Joint Venture and to make, subject to this agreement, allstrategic decisions relating to the conduct of Joint Operations, includingconsidering and approving any Proposed Programme and Budget and othermanagement plans, and any amendments to any Approved Programme and Budgetand approved management plans.

(c) Unless the Participants otherwise agree by Unanimous Vote, the Participant withthe largest individual Participating Interest must appoint (and may dismiss) itsrepresentative to be chair of the Operating Committee. The Participant appointingthe chair must cause the chair to preside at all meetings of the OperatingCommittee.

(d) The Operator must appoint (and may dismiss) a person, who may be one of itsemployees, to be secretary of the Operating Committee. The Operator must causethe secretary to prepare agendas for meetings, keep proper minutes of all meetingsand coordinate communications among the Participants regarding meetings of theOperating Committee.

(e) For any meeting of the Operating Committee, a Participant may in writing appointa 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 actsolely as representative of the Participant which appointed him or her but arepresentative may also represent the Operator at Operating Committee meetings.

(g) Each representative appointed by a Participant has full power and authority torepresent and bind the Participant which appointed him or her in all mattersdecided 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) that Participant is no longer entitled to have a representative on the




Operating Committee and may not vote individually at meetings of theOperating Committee; and

(ii) its vote may be taken into account only if added to the vote or votes ofanother Participant which holds more than the Minimum Interest and theParticipant appoints the other Participant in writing as its proxy prior to thetime of the vote.

(i) Any decision made by the Operating Committee under this agreement is deemedto be a decision of all the Participants, and each Participant is bound as if thatdecision was an agreement entered into by them.

5.2 Functions of Operating Committee

Except as otherwise provided in this agreement, the Operating Committee may decideall 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 inthe carrying out of Joint Operations.

(ii) acquiring goods or services from persons that will be used in the carryingout of Joint Operations;

(iii) the allocation of contracts, arrangements or understandings to personssupplying goods or services that will be used in the carrying out of JointOperations; and

(iv) the price to be paid, or pricing formula to be applied, for goods and servicesto be used in the carrying out of Joint Operations.

(c) approving cost overruns by the Operator under any Approved Programme and

Budget; and

(d) appointing an Auditor.

5.3 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 ofagreement, at the office of the Operator .

(b) The Operator must ensure that a meeting of the Operating Committee is convenedat 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 alldocumentation required to be considered at the meeting. Meetings may be held onless 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 conferencetelephone call at which all representatives of all Participants have the opportunityto be present. All persons participating in the video meeting or conferencetelephone call must be able to hear each of the others.

(e) If the existing chair of the Operating Committee is not present within 15 minutesafter 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 attendingmeetings of the Operating Committee.

(g) A representative of the Operator must attend every meeting of the OperatingCommittee at the cost of the Participants, unless the Operating Committeeotherwise decides for a particular meeting, or a particular matter at any meeting.

5.4 Quorum

(a) A quorum for any meeting of the Operating Committee is present if therepresentative 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 themeeting, the meeting must be adjourned to the same place, day and time in thenext week.

(c) If a quorum is not present at a reconvened meeting then, provided the reconvenedmeeting 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 aquorum for the purposes of the business before that meeting.

5.5 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, thenumber of votes equal to its Percentage Share.

(b) At meetings of the Operating Committee, the Operator or its representative is notentitled 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 theOperating Committee must be determined by Majority Vote. A decision specifiedin Schedule 1 must be made by Unanimous Vote.

(d) A record of the votes of each Participant shall be made and signed by therepresentatives on behalf of the Participants prior to the end of any meeting.

(e) A resolution in writing (which may consist of one or more documents in the sameterms) 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 ofeach Participant and subsequently confirmed in writing is as valid and effectual asif it had been passed at a duly convened meeting of the Operating Committee.

5.6 Minutes

A copy of the minutes of each Operating Committee meeting must be given to eachParticipant as soon as practicable, but no later than 14 days, after each meeting. Theminutes of a meeting must be submitted for approval at the next meeting held after that14 day period and, if approved, must be signed by the chair of the later meeting andwhen signed are evidence of the proceedings and the decisions of the meeting to whichthey relate. The Operator may act on any matter approved by the Operating Committeenotwithstanding 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 anymeeting of the Operating Committee or any subcommittee formed under this agreementor 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 DefaultEvent has been remedied.

6 Operator

6.1 Appointment of Operator

The Participants severally appoint the Operator to be the operator of the Joint Ventureand agent of the Participants for the purposes of this agreement from the CommencementDate, and the Operator accepts that appointment, on and subject to the provisions of thisagreement.

6.2 Term of appointment of Operator

The appointment of the Operator continues:

(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 theOperating Committee determines if and when a new Operator should beappointed; or

(d) until the Operator commits a Breach Default Event and fails to remedy the defaultwithin 60 days of receipt of a written notice of default served by a Participant.

6.3 Remuneration of the Operator

(a) In consideration of the performance by the Operator of its obligations under thisagreement, each Participant must pay the Operator its Percentage Share of theOperator Overhead payable as part of a Cash Call.

(b) The Operator Overhead may be varied by the Operating Committee by UnanimousVote.

(c) It is intended that the Operator will neither gain nor, except where it hascommitted fraud or Wilful Misconduct, suffer a loss as a result of acting asOperator in the conduct of Joint Operations.

6.4 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 thisagreement is not otherwise terminated.

(b) The Participants must not reappoint an Operator removed for default or followingan Insolvency Event of the Operator.

(c) If a new Operator cannot be appointed and act immediately, the Participantholding the largest Participating Interest must act as interim operator until the newOperator is appointed and commences its duties.

(d) Upon the new or interim Operator commencing its duties, the previous Operatormust immediately deliver to the new or interim Operator all Joint VentureProperty 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 theJoint Venture.

6.5 Liability of Operator

Except as a Participant to the extent of its Percentage Share, the Operator is not liable tothe Participants for any loss sustained or liability incurred in connection with the JointVenture, even if arising from the negligence of the Operator or any person for whom theOperator may be vicariously liable, except where, in a particular case, the Operator (orthat person) has committed fraud or Wilful Misconduct.

6.6 Full indemnity of Operator by Participants

Each Participant severally, to the extent of its Percentage Share, must indemnify andhold harmless the Operator, its Affiliates and their directors, employees and agents(Indemnified Persons) from and against all damage, loss, expense or liability of anynature suffered or incurred by the Indemnified Persons (including any claims made byThird Parties) in connection with Joint Operations, including any personal injury,disease, illness or death, or physical loss of or damage to property, of the IndemnifiedPersons or any Third Party, except, in respect of an Indemnified Person, where thatIndemnified Person has committed fraud or Wilful Misconduct.

6.7 Limited indemnity by Operator of Participants

The Operator must indemnify and hold harmless the Participants, their Affiliates andtheir respective directors, employees and agents (JV Indemnified Persons) from andagainst all damage, loss, expense or liability of any nature suffered or incurred by the JVIndemnified Persons (including any claims made by Third Parties) in connection with itsmanagement 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.

7 Functions, powers and duties of Operator

7.1 Functions of the Operator

The Operator reports to the Operating Committee and must under the overallsupervision and control of the Operating Committee:

(a) by itself or through its employees, agents or contractors manage, direct and controlJoint Operations as agent for and on behalf of the Participants;

(b)

exercise and discharge its powers and duties under this agreement in accordancewith Approved Programmes and Budgets and decisions made by the OperatingCommittee;

(c) conduct Joint Operations in a good, workmanlike and commercially impartial andreasonable manner in accordance with Good Australian Oilfield Practice;

(d) represent the Joint Venture in all dealings with all Authorities in respect of JointOperations and the Petroleum Titles, provided that each Participant may deal withan Authority in matters affecting its own Participating Interest;

(e) report to the Operating Committee at the places and times determined by theOperating Committee;

(f) report to the Participants as soon as reasonably practicable on all Joint Operationsincluding 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.

7.2 Rights, powers and duties of Operator

In the course of managing, supervising and conducting Joint Operations, the Operator isentitled 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 toimplement any Joint Operations and other management plans so as to comply withall applicable Laws and Authorisations, and all amendments and variations to anyApproved Programme and Budget;

(b) (Approved Programmes and Budgets) carry out effectively and efficiently thework required to implement all Approved Programmes and Budgets including forsuch purpose, if required by the Operating Committee, engaging in any conductdescribed 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 andundertake Joint Operations;

(d) (personnel) engage, dismiss, supervise and control all management, technical andlabour personnel necessary for performance of its obligations under this agreementincluding determining the terms and conditions of such engagement andconducting 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 theconduct of Joint Operations and for such purpose open, maintain and operate oneor 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) (foreign currency) by Unanimous Vote, take forward cover for any obligations inforeign currencies or pre-pay or take any other appropriate action to avoidcurrency losses, but in no circumstances is the Operator responsible for or entitledto any currency gains and losses, such losses and gains being borne by or creditedto the Participants pro rata in proportion to their respective Percentage Shares;

(g) (Laws and Authorisations) comply with all Laws and Authorisations applicableto the conduct of Joint Operations, including those relating to health, safety,environmental protection, rehabilitation and Abandonment, and ensure that allAuthorisations required to conduct Joint Operations are applied for, obtained andmaintained;

(h) (Safety Case) adopt and implement a safety case, or an equivalent documentrequired under the applicable occupational health & safety, or petroleum, Law ofthe Nominated State, being a document which:

(i) identifies the hazards and risks;

(ii) describes how the risks are controlled; and

(iii) describes the safety management system in place to ensure the controls areeffectively and consistently applied,




for each phase of field activity carried out by the Operator.

(i) (Petroleum Titles) keep and renew those Petroleum Titles in good standing(including paying all rents, taxes, expenditures and other outgoings by the DueDate), and manage, administer, protect and enforce the rights and obligations ofthe holders under the Petroleum Titles;

(j) (Security Bonds) facilitate the provision by the Participants of any Securityreasonably required for the performance of the Participants' obligations under anyPetroleum Title, lease, contract, service agreement or other agreement authorised

by the Operating Committee;

(k) (statutory reports) prepare, file and lodge all statutory reports as and whenrequired 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 theParticipants in their individual capacities as Participants);

(l) (native title) act as the Participants’ representative in respect of Native Title

Rights and Aboriginal heritage issues, negotiate and enter into agreements withany 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 thatterm is defined in section 253 of the Native Title Act 1993 (Cth)), and the partiesto Native Title Claims and in all other respects deal with issues of this kind as andwhen they arise, provided that the Operator may not recognise any Native TitleRights or agree or settle any Native Title Claims, without the prior approval of theOperating Committee;

(m) (insurances) effect and maintain all insurances appropriate in relation to JointVenture Property and Joint Operations, or as required by Law, and any additionalinsurances which the Operating Committee requires to be effected, provided thatthe Operator must wherever possible procure that all such insurances include a

provision that the insurer has no right of subrogation against any Participant or theOperator and that the Participants and Operator are to be named, to the extent oftheir interests, on each policy of insurance;

(n) (insurance certificates) if requested, provide full details to a Participant of allinsurances effected by the Operator under this agreement, including certificates ofcurrency;

(o) (no Encumbrances) keep the Joint Venture Property free and clear of allEncumbrances, except for those Encumbrances specifically permitted under thisagreement, or approved by the Operating Committee, or existing at the time of, orcreated concurrent with, the acquisition of such Joint Venture Property, or liensarising in the ordinary course of business which the Operator must arrange to be

released or discharged in a diligent manner;

(p) (disposal of surplus equipment) dispose of by Assignment, abandonment orother transfer Joint Venture Property which the Operator classifies as surplus andis no longer needed for Joint Operations and which the Operating Committeeapproves for disposal;

(q) (emergencies) take such action as the Operator may consider necessary oradvisable to prevent or respond to an Emergency;

(r) (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 andmanage, administer and enforce the rights and obligations of the Participants

under such GST joint venture; and




(s) (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 Operationsincluding making such bids, on such terms and paying such prices, as theOperating Committee may direct;

(ii) select the persons from whom goods or services to be used in JointOperations will be acquired, including selecting any person whom theOperating Committee may direct;

(iii) allocate contracts, arrangements or understandings to persons supplyinggoods or services to be used in Joint Operations, including making anyallocation which the Operating Committee may direct; and

(t) (other incidental) do all other acts and things that are reasonably necessary ordesirable to fulfil its functions or are incidental to its powers and duties.

7.3 Greenhouse and energy reporting and carbon liability

(a) The Participants and the Operator acknowledge that the Operator has 'operational

control' (as defined in the National Greenhouse and Energy Reporting Act 2007(Cth) (NGER Act)) of Joint Operations.

(b) If necessary for the purpose of establishing such operational control, theParticipants authorise the Operator to prepare, introduce and implement suchoperating, health and safety, and environmental policies and to take any othersteps necessary for it to have operational control and the Operator agrees toundertake such responsibilities on behalf of the Participants.

(c) The Operator undertakes to report, or procure that an Affiliate of the Operatorreports, greenhouse gas emissions and energy production and consumptionattributable to the Joint Operations as required by the NGER Act.

(d) If a Participant or an Affiliate of a Participant is required to report under the NGER Act on greenhouse gas emissions and energy production and consumption

attributable to the Joint Operations, the Operator must supply that Participant withall the information reasonably required by the Participant or its Affiliate to enableit to comply with its reporting requirements under the NGER Act in relation tothose matters.

(e) The Participants authorise:

(i) the Operator to disclose to its Affiliates; and

(ii) the Operator and its Affiliates to use and disclose,

all information in relation to the greenhouse gas emissions, energy production andenergy consumption attributable to Joint Operations as reasonably required for theOperator and its Affiliates to comply with any obligations imposed on them underthe NGER Act and the Clean Energy Act 2011 (Cth) (CEA).

(f) The Operating Committee may resolve by Unanimous Vote that the Participants jointly apply to the Clean Energy Regulator for the declaration of the JointVenture as a declared designated joint venture under the CEA in relation to theJoint Operations, in which case the Participants and the Operator must do allthings reasonably necessary to have that declaration made. For so long as such adeclaration remains in force, each Participant undertakes to perform theobligations that are imposed on it under the CEA and that arise out of or in

connection with that declaration, including the obligation to make any paymentrelating to a unit shortfall under the CEA.




(g) The Operating Committee may resolve by Unanimous Vote that the Joint Venturecease to be a declared designated joint venture under the CEA in relation to theJoint Operations, in which case the Participants and the Operator must do allthings reasonably necessary to have that declaration revoked.

(h) For so long as the Joint Venture is not a declared designated joint venture underthe CEA in relation to the Joint Operations, the Operator undertakes to perform

the obligations that are imposed on it under the CEA and that arise out of or inconnection with the Joint Operations, including the obligation to make any

payment relating to a unit shortfall under the CEA.

(i) The Participants agree that any actions taken by the Operator, or an Affiliate of the

Operator, under this clause are Joint Operations and that any costs incurred by theOperator or its Affiliates in taking those actions are Joint Expenditure to the extentthat those costs:

(i) are reasonably attributable to the Joint Operations; and

(ii) are incurred in accordance with an Approved Programme and Budget.

Such costs include the costs of acquiring and surrendering carbon units, the costsof entering into, varying, performing and terminating hedging arrangements, andall associated transaction and administration costs.

(j) The Operating Committee may from time to time approve a plan with which theOperator must comply in acquiring carbon units for the purpose of performing itsobligations under this clause. Such a plan may, without limitation:

(i) require the Operator to acquire carbon units from the Participants or theirAffiliates in preference to acquiring carbon units from other sources, to theextent that such carbon units are being offered by the Participants or theirAffiliates at a competitive arms’ length price; and

(ii) entitle a Participant to transfer carbon units to the Operator where theconditions set out in the plan in relation to such transfer are satisfied (inwhich case the Participant’s contribution to Joint Expenditure must be

adjusted by the value of the carbon units it has transferred to the Operator asdetermined in accordance with the plan).

(k) If a Participant or the Operator fails to perform when due an obligation set out inthis clause, or any obligation that arises under the CEA as a result of such afailure, it is a Breach Default Event.

(l) The Participants and the Operator must do all things reasonably necessary tomaximise the number of free carbon units that are available in respect of the JointOperations under the CEA.

7.4 Registration of PPSA Security interests

(a) If it or the Participants have a PPSA Security Interest in Joint Venture Propertyunder this agreement, the Operator may register that PPSA Security Interest on behalf ofitself or the Participants.

(b) If the Operator ceases to be Operator for any reason it must transfer any

such PPSA Security Interest to its successor Operator .

7.5 Maintenance of the Joint Account

(a) The Operator must maintain the Joint Account and the Joint Venture AssetRegister in accordance with the Accounting Procedures on behalf of theParticipants in their Participating Interests.




(b) The Operator must make available to any Participant on request copies of theaccounting procedures, expenditure classifications and reporting formatsunderlying the Joint Account.

(c) The Operator must retain all receipts, vouchers and other documents relating toJoint Expenditure until directed otherwise by the Operating Committee.

7.6 Limitations on Operator’s obligations

(a) Notwithstanding anything to the contrary elsewhere in this agreement, the performance by the Operator of its obligations under this agreement is subject tothe Operator being provided with sufficient funds by the Participants to enable theOperator to perform those obligations.

(b) The rights and obligations of the Operator under this agreement do not extendoutside the scope of the Joint Venture and, in particular, do not apply to or inrelation to Petroleum once it has passed the Delivery Point, unless the Participantsand the Operator otherwise agree.

7.7 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:

(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 orresponsibilities under this agreement;

(c) the Operator informs the Operating Committee at its next meeting of the identityof the delegate and the matter which has been delegated; and

(d) the delegation is at no additional cost to the Participants.

7.8 Employees and Secondees

(a) Subject to the provisions of any approved Programme and Budget, the Operatormay determine the number of employees employed, and persons hired undercontracts for services, by the Operator in connection with Joint Operations, andtheir selection, hours of work and remuneration.

(b) The Operator may request that Participants second to the Operator suitablemanagement and technical personnel for particular Joint Operations, and eachParticipant may propose secondees for particular Joint Operations, on terms andconditions acceptable to the Operator. However neither the Operator nor aParticipant is required to accept or provide any proposed secondee.

7.9 Health, safety, environment and community

(a) Before the beginning of each Year, the Operator must prepare and submit to theOperating Committee for its approval a plan of Health, Safety, Environment andCommunity (HSEC) matters containing the policies which will govern the JointOperations and the objectives and targets for that Year consistent with GoodAustralian Oilfield Practice.

(b) The HSEC plan must:

(i) include an assessment of the health, safety and environmental impact ofJoint Operations;

(ii) include an alcohol and drugs policy and enforcement procedure, which prohibits employees and agents, contractors and invitees in any area in




which Joint Operations are being undertaken from using or distributingunprescribed controlled substances, including alcohol; and

(iii) take into account of any specific policies, objectives and targets adopted by the Operating Committee.

(c) The Operator must conduct Joint Operations and any Sole Risk Operations inaccordance with the HSEC plan.

(d) The Operator must report regularly on the implementation of the HSEC plan and promptly advise the Operating Committee of any adverse matter arising out ofJoint Operations, such as an occurrence which negatively affects theenvironment or could or does cause any serious illness, injury or death.

(e) The Operator must audit, or cause to be audited, the HSEC plan regularly at thecost of the Participants. Each Participant may join in such audit upon reasonablenotice given to the Operator.

7.10 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 conditionswhich are no less favourable to the Participants than an arm’s length commercial

agreement with a Third Party supplier, and the proposed agreement is approved by theOperating Committee.

7.11 Litigation

(a) All matters relating to the enforcement or defence of rights in respect of or arisingout of Joint Operations must be determined by decisions of the OperatingCommittee unless the Operator estimates the value to less than the limit specifiedin Schedule 1 (Litigation Limit). All such matters, regardless of value, must be

brought to the attention of the Operating Committee at its next meeting.(b) Subject to any decision by the Operating Committee, the Operator:

(i) must notify the Participants of any claim, litigation, demand or judgmentrelating to Joint Operations (Claim) which exceeds the Litigation Limit;

(ii) must not except, at the direction of the Operating Committee, prosecute, pursue, defend or settle any Claim which exceeds the Litigation Limit; and

(iii) is authorised to prosecute, pursue, defend or settle any Claim which is equalto or less than the Litigation Limit.

(c) All actions taken by the Operator in conducting litigation and all liabilities

incurred pursuant to this clause are for the Joint Account.(d) A Participant may act separately, at its own expense, in litigation or administrative

proceedings initiated by the Operator on behalf of the Participants. If a Participantelects to participate separately in litigation, that Participant is considered to have adivergent interest to the other Participants, and:

(i) 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 ceaseto act on the basis of a former client conflict of interest.

(e) This clause does not apply to any Claim made, brought or obtained by a

Participant against another Participant.




7.12 Trades

(a) The Operator may, with approval of the Operating Committee, make well tradesand data trades for the benefit of the Participants, with any data so acquired to befurnished 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 anundertaking to the Participants to keep the traded data confidential, on termsapproved by the Operating Committee.

8 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 Yearor such other date as the Operating Committee may agree, the Operator must

provide the Participants with a Proposed Programme and Budget prepared inaccordance with the Accounting Procedure which must include:

(i) details of the programme of Joint Operations proposed for the next Year, orfor 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.

(b) At any time the Operating Committee may require the Operator to prepare and provide to the Participants a Proposed Programme and Budget prepared inaccordance with the Accounting Procedure in relation to any aspect of JointOperations including the appraisal of any Discovery, preparation of a Pre-FEEDStudy, Front End Engineering and Design, a Development Plan, includingengineering, procurement and construction, the development and production of aDiscovery, a Sole Risk Operation, an Emergency, an Abandonment and the like.

(c) Each Proposed Programme and Budget must include expenditure on the PetroleumTitles sufficient to comply with minimum expenditure obligations under the Actand the Petroleum Titles during that period.

(d) Any Joint Operations that cannot be efficiently completed within a single Yearmay be proposed in a multi-year Programme and Budget. Upon approval by theOperating Committee, such multi-year Programme and Budget must be reflectedin each annual Approved Programme and Budget.

8.2 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 OperatingCommittee may determine, the Operating Committee must meet (as many times asnecessary) and discuss the Proposed Programme and Budget for the next Year orappropriate period and adopt, with or without amendment, an ApprovedProgramme and Budget for that Year or period.

(b) Subject to the prior approval by the Operating Committee to the awarding of allcontracts to a value of more than the Contract Limit specified in Schedule 1, oncethe Proposed Programme and Budget is approved by the Operating Committee,the Operator must, subject to receiving an AFE approved by Majority Vote underthis agreement, implement the Approved Programme and Budget, and give a copyto each Participant.

(c) An Approved Programme and Budget may be amended by the Operator with theapproval of the Operating Committee.




(d) If the Operating Committee for any reason fails to approve a Proposed Programmeand Budget, prior to the commencement of the Year to which it relates, theOperating Committee must continue to meet and use all reasonable efforts to reachadopt an Approved Programme and Budget. In the meantime:

(i) the Operator must, subject to any contrary direction of the OperatingCommittee and receipt of necessary funds, continue Joint Venture Activities

at levels comparable with the last Approved Programme and Budget;

(ii) all costs and expenses incurred by the Operator in maintaining thePetroleum Titles and performing and discharging all its existing obligationsis Joint Expenditure; and

(iii) each Participant must pay its Percentage Share of those costs and expensesas a Cash Call when due when an AFE is delivered by the Operator.

8.3 AFEs

(a) On or before the 10th day of each month (or such other date or period as theOperating Committee directs), the Operator must, and may at any other time,

before entering into any commitment or incurring any Joint Expenditure under anApproved Programme and Budget, submit an AFE for approval by the OperatingCommittee by Majority Vote, unless this agreement expressly provides otherwise.

(b) In preparing an AFE for the drilling, testing or logging of a well, the Operatormust compile the AFE:

(i) for the drilling of an Exploration Well on a dry hole basis includingcontingencies; and

(ii) for the drilling of any other well on a case and suspend basis.

(c) 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 Operator’s best estimate of the total funds, including charges and

credits, required to carry out the proposed work and provide a timetable ofexpenditures, if known;

(iv) be accompanied by such other supporting information as is necessary for aninformed decision;

(v) specify the amount due and payable by each Participant; and

(vi) include the amount paid cumulatively by each Participant to date for thecurrent Year.

(d) Each Participant must:

(i) within 24 hours of receipt of an AFE reasonably designated by the Operatorto 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 the AFE or not.

(e) A Participant is deemed to approve an AFE if it does not communicate itsdisapproval to the Operator:

(i) within 24 hours of receipt of the AFE by the Participant in respect of anAFE designated by the Operator as urgent; or




(ii) otherwise within 14 days of receipt of the AFE by the Participant.

(f) If the Operating Committee approves an AFE for proposed Joint Operations:

(i) each Participant must pay its respective Percentage Share of the AFE to theOperator 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 JointOperation within the applicable time period, the operation is deemed rejected.

(h) The Operator must promptly notify the Participant if the proposed Joint Operationhas been rejected, and any Participant may thereafter propose to conduct theoperation as a Sole Risk Operation under this agreement.

8.4 Joint Expenditure not covered by Programme and Budget

(a) The Operator must not undertake any Joint Operations which are not substantiallyin accordance with an Approved Programme and Budget except:

(i) in case of an Emergency, the Operator may make such immediateexpenditure as the Operator deems necessary for the protection of life or

property including the Joint Venture Property, in which case the Operatormust promptly notify the Participants of such expenditure; or

(ii) if the Operator expects there will be a cost overrun in carrying out anApproved Programme which cannot be avoided by Good Australian OilfieldPractice, the Operator may exceed a current Approved Budget by not morethan 10%; or

(iii) if otherwise permitted by this agreement or the Operating Committee.

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

unbudgeted expenditure incurred by the Operator for whatever reason, includingall fines and penalties properly payable to a competent Authority incurred by theOperator in carrying out Joint Operations.

8.5 Payment of Cash Calls

(a) Approval of an AFE constitutes authority for the Operator to issue Cash Calls tothe Participants in respect of that expenditure. A Cash Call must include anestimate of the cash requirement for each of the next ensuing 3 months andinclude a cost break-up of the main expenditure components.

(b) A Participant must pay each Cash Call to the Operator within 7 days of approvalof 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 paymentat 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.

8.6 Banking of funds

(a) All funds received by the Operator under this agreement (other than fundsreceived for the purpose of a Sole Risk Operation) must be lodged by the

Operator in a Joint Venture bank account in Australia maintained by theOperator for the purposes of the Joint Operations. Pending expenditure in




accordance with this agreement, funds advanced by any Participant must be held by the Operator in trust for the respective Participant.

(b) Each Participant is entitled to receive or be credited with any interest earned onits funds while they are held on trust by the Operator.

(c) The Operator is authorised to withdraw funds from the Joint Venture bankaccount as required to pay Joint Expenditure.

9 Completion, Discovery, appraisal and development

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 resultsfurnished to the Participants, the Operator must submit to the Participants anelection to complete such well and plug and abandon it, or case it as a producingwell (Casing Point Election). Such submission must include the Operator’s

recommendation concerning the Casing Point Election and an AFE for theCompletion costs.

(b) If the Operating Committee approves the casing and suspension of a well, theOperator 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 a well but less than allthe Participants vote to plug and abandon the well, the Operator must notify theParticipants of the result of the vote and any Participant which voted for the casingand suspension of the well, rather than the plugging and Abandonment of the well,has 24 hours from receiving the notice to make a Sole Risk Proposal in respect ofthat well. If no Sole Risk Proposal is made within the 24 hour period, the Operatormust plug and abandon the well.

9.2 Discovery and appraisal

(a) If a Discovery is made during the drilling of a well, the Operator must give noticeof the Discovery required under the Act and the Petroleum Title and as soon as

possible submit to the Participants a report containing available details of theDiscovery and its recommendation as to whether the Discovery merits appraisal.

(b) If the Operating Committee determines that the Discovery merits appraisal, theOperator must within 90 days deliver to the Participants a Proposed Programmeand Budget for appraisal of the Discovery. Within 30 days of such delivery, orearlier if necessary to meet any applicable deadline under the Petroleum Title, theOperating 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 andBudget as soon as possible. If an Authority requires changes to an AppraisalProgramme and Budget, the matter must be resubmitted to the OperatingCommittee for further consideration.

(d) Following completion of an Appraisal Programme and Budget and considerationof any consequent report by the Operator, the Operating Committee may authorise

preparation of a Pre-FEED Study or Front End Engineering and Design for theDiscovery to facilitate a decision by the Participants to develop the Discovery.

9.3 Development(a) If the Operating Committee determines that a Discovery may be commercial




whether before or after completing a Pre-FEED Study and approves a Programmeand Budget for undertaking Front End Engineering and Design and thedevelopment of the Discovery, the Operator must, as soon as practicable, completethe Front End Engineering and Design and deliver to the Participants a proposedDevelopment Plan together with a Proposed Programme and Budget for the whole

period of the proposed development which must contain, among other things:

(i) details of the proposed work to be undertaken, personnel required andexpenditures to be incurred, including the timing of same, for each Year;

(ii) a firm estimate of the operating costs of the proposed development;

(iii) an estimated date for the commencement of production;

(iv) a delineation of the proposed Exploitation Area; and

(v) any other information requested by the Operating Committee.

(b) After receipt of the FEED and the proposed Development Plan and prior to anydeadline under the Petroleum Title, the Operating Committee must meet toconsider, modify and either approve or reject the proposed Development Plan and

Proposed Development Programme and Budget submitted by the Operator.

(c) Once the Operating Committee determines that the Discovery is a commercialDiscovery, makes a final investment decision to develop the Discovery andapproves the proposed Development Plan, the Operator must, as soon as possible,apply for the relevant Petroleum Titles pursuant to the Act, comply with therequirements of the Act and take such other steps as may be required under thePetroleum Titles to secure all Authorisations required to implement the approvedDevelopment Plan.

(d) If the Participants by Majority Vote, or an Authority requires changes to theapproved Development Plan, the proposed Development Plan must be resubmitted

to the Operating Committee for further consideration.9.4 Further development

At any time after an initial development has commenced, the Operator or a Participantmay propose to the Operating Committee that a further development be undertaken,which proposal must include a further Development Plan, which plan must take intoaccount all previous Development Plans undertaken by the Participants.

9.5 Default Certificate Deed for Petroleum Sales after development

On each occasion after the Commencement Date on which a Participant enters into aSales Contract, the Participant and the Operator must, as a condition precedent to theexecution of the Sales Contract, enter into a Default Certificate Deed with the buyer of

the Petroleum.

10 Accounts, reports, audit and access

10.1 Joint Venture accounting

(a) The Operator must maintain separate books, accounts and records for the JointVenture of Joint Expenditure in accordance with the Accounting Procedure andgenerally accepted accounting principles adopted from time to time by theInstitute 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 in accordance with

the Accounting Procedure as appropriate to the Joint Venture to satisfy therequirements of the Operating Committee and the Auditor.




10.2 Reports to Participants

The Operator must keep the Participants informed of all Joint Operations by submittingin writing to the Participants:

(a) within one month of the end of each quarter as determined by the OperatingCommittee, quarterly progress reports which include statements of JointExpenditure and comparisons of such expenditures to the Approved Programmeand Budget, including quarterly summaries of data acquired;

(b) within one month of the end of each Year or other relevant period, a detailed finalreport after completion of each Approved Programme and Budget, which mustinclude comparisons between actual and budgeted Joint Expenditure;

(c) whether as part of the other reports required under this clause or otherwise, theOperator must provide the Participants with the Information on Wells, reservoirsand Joint Operations of the type and with the frequency or timing as specified inthe well and reservoir reports by electronic or other means, and in nativeelectronic format, if requested by a Participant;

(d) as soon as possible thereafter, a report on the happening of any event oroccurrence:

(i) which the Operator considers is likely materially to affect the interests of anyof the Participants or the value or worth of any Participant Property or thePetroleum Titles; or

(ii) that would be required to be disclosed to the market by a Participant (or byan Affiliate of a Participant) pursuant to the Listing Rules provided that, inrespect of a foreign stock exchange, the Participant has previously informedthe Operator of the disclosure requirements applying to the stock exchangeon which its, or one of its Affiliates securities are listed;

within one month in each case of its completion, a copy of any material reportconcerning Joint Operations produced by the Operator; and

(e) such other reports as the Operating Committee may direct.

10.3 Joint Account and audit

(a) The Operator must prepare accounts for the Joint Venture reflecting the results foreach Year of all transactions connected with Joint Operations as disclosed by therecords and accounts kept by the Operator and reflecting the Joint VentureProperty in the possession or control of the Operator as at the end of such Year inaccordance 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 particularrequirements before the audit is completed. The Operator must provide the

particular audit requirements to the Auditor forthwith and the additional cost ofconducting any additional audit must be paid by that Participant.

(c) The Operator must rectify any issues or qualifications raised by the Auditorconcerning the Joint Account or Joint Operations as soon as is reasonably

practicable.

10.4 Individual Participant recording responsibilities

(a) Each Participant is responsible, in respect of its Participating Interest, for allfinancial 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 theOperator relating to the Joint Venture in accordance with this agreement, as theParticipant may reasonably require to prepare its financial and accounting records.

10.5 Participant access

A Participant is entitled during working hours at reasonable intervals, and the Operatormust give, on reasonable notice at the Participant's expense and risk, access to, and theright to inspect any Joint Venture Property, including all books and records maintained

by the Operator, provided that the Participant ensures that it access causes nointerference with Joint Operations.

11 Cross Security and Deed of Covenant

11.1 Cross Security

(a) For the purpose of better securing:

(i) the payment of all Cash Calls; and

(ii) payment to each of the Participants of any amount due and payable to it pursuant to this agreement,

each Participant must, prior to the approval by the Operating Committee of aDevelopment Plan, or earlier if it creates an Encumbrance over its ParticipatingInterest, execute and deliver to the other Participants a Cross Security, or uponsubsequently becoming a Participant under this agreement if a Cross Security isalready in place, become a party to that Cross Security.

(b) Each Participant creating a Cross Security must at its cost obtain allAuthorisations in relation to the Cross Security and duly register or lodge the samefor recording in every jurisdiction and registry where registration, lodgement or

recording is required or permitted to perfect the Cross Security.

11.2 No Encumbrances without consent

(a) Except for entry into a Cross Security, a Participant must not at any time create anEncumbrance over its Participating Interest unless:

(i) the Encumbrance is over the whole (but not part) of its ParticipatingInterest;

(ii) the rights of the Encumbrancees and any person claiming through or underany of them (each of whom is a Chargee) must be expressly subject to thisagreement, the Cross Security created by the Participant in accordance withthis agreement, and the Deed of Covenant applicable to the Encumbrance;

(iii) the Encumbrance must be postponed to and rank as a security after the CrossSecurity created by the Participant in accordance with this agreement;

(iv) all funds to be made available by the proposed Chargee to the Participantand secured by the Encumbrance are, and must be applied, solely for eitheror both of the following purposes:

(A) financing a development or other Joint Operations; or

(B) purchasing all or any part of its Participating Interest; and

(v) before creating the Encumbrance the Participant first:

(A) gives to the other Participants at least 14 days’ notice of its intentionto create an Encumbrance giving particulars of its compliance with the




whole of this clause; and

(B) causes all of the proposed Chargees to execute and deliver to the otherParticipants a Deed of Covenant.

(b) On receipt of a Deed of Covenant (in a form and content reasonably satisfactory toall the Participants) duly executed by all the proposed Chargees, the Participantsmust execute and deliver the Deed of Covenant to the Chargees.

(c) The Participant creating the Encumbrance must at its cost obtain all Authorisationsin relation to the Deed of Covenant and duly register or lodge the same forrecording in every jurisdiction and registry where registration, lodgement orrecording is required or permitted to perfect the Deed of Covenant.

12 Surrender, Relinquishment, Withdrawal and Dilution

12.1 Surrender

(a) If the Act or a Petroleum Title requires the Participants to surrender or relinquishany portion of the Title Area, the Operator must advise the Operating Committeeof such requirement at least 120 days prior to the earlier of the date for filingirrevocable notice of such surrender or relinquishment, or the date of suchsurrender 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 therequirements 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 must be adopted.

(d) If no proposal attains the support of a Majority Vote, then the Operator mustchoose the proposal receiving the largest aggregate Percentage Share vote.

(e) The parties must execute any and all documents and take such other actions asmay be necessary to effect the surrender or relinquishment.

(f) Each Participant renounces all claims and causes of action against the Operatorand any other Participants on account of any area surrendered or relinquished inaccordance with the foregoing but against its recommendation whether or notPetroleum is subsequently discovered under the surrendered or relinquished area.

12.2 Withdrawal

(a) A Defaulting Participant may not withdraw from this agreement while a DefaultEvent it has committed has not been remedied in full.

(b) Subject to the conditions of the Petroleum Titles, the provisions of the Act andthis agreement, a Non-Defaulting Participant may withdraw from this agreementin respect of all or any of the Petroleum Titles as from the end of a Title Year bygiving the other Participants and the Operator notice of withdrawal at least 60days before the Title Year end, provided that a Participant may not give a noticeof withdrawal from this agreement in respect of any Petroleum Titles if:

(i) the Minimum Work Obligations for the first such 3 years of the PetroleumTitle or any renewal thereof have not been completed or discharged;

(ii) the Minimum Work Obligations in respect of the current Title Year havenot been completed or discharged; or

(iii) a Development Plan has been approved and the Development Plan has not been undertaken and completed for a period of 6 months from the date offinal practical completion.




(c) Before a withdrawal by a Non-Defaulting Participant becomes effective, thewithdrawing Participant must provide Security acceptable to the remainingParticipants and the Operator in respect of the withdrawing Participant’sPercentage Share of all expected Abandonment Obligations in respect of all JointVenture Property held by the Joint Venture at that time, as determined by theOperator.

(d) In lieu of the withdrawing Participant providing Security covering its futureAbandonment Obligations, the continuing Participants may by Unanimous Votewithin 60 days of receiving notice of withdrawal from this agreement, requirethe withdrawing Participant as from the end of a Title Year to forfeit absolutelyto the remaining Participants (and if more than one, pro-rata in the proportionthat their respective Percentage Shares bear to each other) all its ParticipatingInterest and the withdrawing Participant is, upon such forfeiture becomingeffective, 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 Participantsmay give notice that it wishes to withdraw from this agreement and thePetroleum Titles.

(f) If more than 1 Participant gives such notice of withdrawal within 30 days ofreceipt of the first notice of withdrawal then, within a further 15 days if all theremaining Participants give notice of withdrawal, this agreement will terminateand be wound up according to its terms.

12.3 Effect of withdrawal

(a) Upon a withdrawal from the Joint Venture, unless otherwise provided in thisagreement, the withdrawing Participant:

(i) surrenders absolutely to the other Participants (and if more than one, pro-ratain 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, theAssignment (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 costswhich become payable upon the withdrawing Participant transferring itsParticipating Interest to the remaining Participant; and

(iv) upon approval and registration of the withdrawing Participant’s

Participating Interest to the remaining Participants, the withdrawing

Participant is released from all future obligations relating to the JointVenture, other than its obligations of confidentiality under this agreementand for its Percentage Share of expected Abandonment Obligations at thetime of withdrawal, as determined by the Operator.

(b) Any withdrawal from the Joint Venture is without prejudice to any rights orobligations of the Participants arising prior to the withdrawal, and any surrender ofa Participating Interest is not to be taken as satisfaction, wholly or partly, of theobligations of a withdrawing Participant which have arisen prior to its withdrawal.

12.4 Dilution

The dilution provisions (if any) contained in Schedule 4 form part of this agreement.




13 Sole Risk

13.1 Proposal for a Sole Risk Operation

(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 estimatedcost 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 RiskOperation, which is still to be carried out and completed.

(c) The Operator must hold a meeting of the Operating Committee within 30 daysfrom the date of the notice of the Sole Risk Proposal and at that meeting theOperating Committee may resolve that the Operator proceed with the Sole RiskProposal 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 Committeemust meet following the Sole Risk Proposal must be shortened to 48 hours. Allcosts related to the stand-by of the drilling operations while the Sole Risk Proposalis being considered must be charged to the Sole Risk Proposer, or form part of thecost of the Sole Risk Proposal, if adopted.

(e) If the Sole Risk Proposal relates to development of a Discovery, the 30 day periodwithin which the Operating Committee must meet must be lengthened to 60 days.

(f) If the Operating Committee fails to resolve to proceed with the Sole Risk Proposalas a Joint Operation, it must determine the boundaries of the location in the TitleArea in which the Sole Risk Operation may take place (Sole Risk Area).

(g) If the Operating Committee fails to determine the boundaries of the Sole RiskArea, the Sole Risk Proposer may require the Sole Risk Area to be determined byan Expert as provided for in this agreement.

13.2 Sole Risk Election Notice and participation

(a) Subject to this agreement, where the Operating Committee fails to pass aresolution to proceed with the Sole Risk Proposal as a Joint Operation anyParticipant may, by written notice given within 6 months of the failure of theOperating Committee to agree to proceed with the Sole Risk Proposal as a JointOperation (Sole Risk Election Notice) given to the other Participants and theOperator, elect to undertake the Sole Risk Proposal.

(b) A Participant receiving a Sole Risk Election Notice may, within 30 days ofreceipt, by notice elect to participate in the Sole Risk Proposal and thereby

become, with the Participant giving the notice, a Sole Risk Participant. If otherParticipants elect to participate in the Sole Risk Proposal they are collectivelyreferred to as Sole Risk Participants.

(c) If a Participant does not elect to participate in the Sole Risk Proposal within 30days of receiving a Sole Risk Election Notice, it is deemed to have no furtherinterest in the Sole Risk Proposal.

(d) If no Sole Risk Election Notice is given as required, and the Operating Committeedoes 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 ratain 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 SoleRisk Area (Sole Risk JOA) but unless and until they agree, the provisions of thisagreement 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 thisagreement and the non-Sole Risk Participants must do all things necessary totransfer the Petroleum Title (or part thereof) over the Sole Risk Area to the SoleRisk Participants, or to facilitate the grant of a new Petroleum Title over the SoleRisk 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 allAuthorisations to conduct the Sole Risk Operation are obtained, theParticipants and the Operator of the existing Joint Venture must act inrespect 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 betweenthe parties, as the legal and beneficial property of the Sole Risk Participants.

13.3 Sole Risk Operation

(a) A 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 theOperator, if the Operator is a Sole Risk Participant, or if the Operator is not a SoleRisk Participant, by such person as the Sole Risk Participants may by MajorityVote determine (Sole Risk Operator).

(b) The risk, cost, expense of undertaking a Sole Risk Operation must be borne by theSole Risk Participants pro rata in proportion to their sole risk Percentage Shares.

(c) A Joint Operation has priority over any Sole Risk Operation permitted under thisagreement.

(d) In conducting a Sole Risk Operation, the Sole Risk Participants may:

(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 allwells drilled, during the Sole Risk Operation;

(iv) use any other Joint Venture Property, paying a fair arm’s length price for

that use; and

(v) 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.




(f) The Participants agree that Sole Risk Information is and remains the property of theSole Risk Participants, including any Buy-Back Participant (as subsequentlydefined) once the transfer (and registration, if required) of the Buy-BackParticipating Interest is completed.

(g) If a Sole Risk Operation results in a dry hole, the Sole Risk Operator must plug andabandon the well in accordance with the Law, the Petroleum Title and this

agreement, and the Sole Risk Participants must bear the total costs, risk andexpense of plugging and Abandoning pro rata in the proportions that their SoleRisk Participating Interests bear to each other.

(h) The provisions governing Abandonment of Wells drilled as Joint Operations applywith the necessary changes to the plugging and Abandonment of a well in which aSole Risk Operation has been conducted.

13.4 Failure to commence Sole Risk Operation

Notwithstanding anything contained in this agreement, if the Sole Risk Participants failto commence the Sole Risk Operation within the Sole Risk Area within 12 months fromthe 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 tohave agreed not to proceed with the Sole Risk Operation, whereupon that area will revertto and be included in the Petroleum Titles and the Participants will be entitled to aninterest in such area in accordance with their Percentage Shares as at the date of the SoleRisk Election Notice.

13.5 Sole Risk Participants indemnity

The Sole Risk Participants must indemnify and hold harmless the other Participants andthe 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 ofthat Sole Risk Operation (Sole Risk Operations Report) must be prepared by theSole Risk Operator and delivered to the Operator, the Sole Risk Participants andthe non-Sole Risk Participants.

(b) Except in relation to a Sole Risk Participating Interest in the drilling of aDevelopment Well or in the development of a Discovery, within 60 days of receiptof 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 RiskParticipating Interests, a Sole Risk Participating Interest equal to the Percentage

Share in the Joint Venture which it surrendered to the Sole Risk Participants onformation of the Sole Risk Joint Venture (Buy-Back Participating Interest). Forthe sake of clarity, no buy back by a non-Sole Risk Participant is permitted inrespect of the sole risk drilling of a Development Well or the sole riskdevelopment of a Discovery.

(c) Each non-Sole Risk Participant which gives notice under this clause to purchase aBuy-Back Participating Interest is called a Buy-Back Participant.

(d) The consideration payable by a Buy-Back Participant to the Sole Risk Participantsfor the purchase of the Buy-Back Participating Interest is:

(i) A lump sum in cash equal to the Participant’s Sole Risk Participating

Interest share of all costs and expenses that were incurred by the Sole RiskParticipants 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 Participant’s Percentage Share amount

of the Sole Risk Operation Buy-Back Premium specified in Schedule 1 forthe particular Sole Risk Operation undertaken by the Sole Risk Participantsundertaking the Sole Risk Operation.

(e) Within 60 days of exercising its right to purchase the Buy-Back ParticipatingInterest, the Buy-Back Participant must, in exchange for the Assignment andtransfer of the Buy-Back Participating Interest:

(i) pay the Buy-Back Amount and the Buy-Back Premium to the Sole RiskParticipants and, if more than one, in the same proportion as the Sole RiskParticipants’ 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-BackParticipating 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 Buy-BackParticipating Interest.

13.7 Consequences of buy-back

(a) If all the Non-Sole Risk Participants acquire a Buy-Back Participating Interest, sothat the Participants then hold the same Percentage Share of Participating Interestin the Sole Risk Joint Venture as in the Joint Venture, the parties may agree toterminate the Sole Risk Joint Venture as an independent agreement and merge itinto this Joint Venture agreement.

(b) If less than all the Non-Sole Risk Participants acquire a Buy-Back ParticipatingInterest, and the Sole Risk Joint Venture continues, the Sole Risk Participants mayuse 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 ofagreement as determined by an Expert appointed in accordance with thisagreement.

14 Assignment

14.1 Restriction on Assignment

(a) A Participant may not Assign the whole or any part of its Participating Interestotherwise than:

(i) as permitted by this agreement; or

(ii) with the consent of all the other Participants, which they may give or refusein their absolute discretion.

(b) Except as otherwise provided in this agreement, a Defaulting Participant may notAssign the whole or any part of its Participating Interest.

(c) Any purported dealing by a Participant with its Participating Interest contrary tothis agreement is void.




14.2 Assignment to an Affiliate or a Related Entity

A Participant which is not a Defaulting Participant may at any time without obtainingthe prior consent of the other Participants Assign the whole (but not part) of itsParticipating Interest to an Affiliate or a Related Entity. If a Participant Assigns thewhole of its Participating Interest to an Affiliate or a Related Entity, then thatParticipant:

(a) must, within 14 days following the date of the Assignment, notify all of the otherParticipants 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 itsobligations or discharged from any of its liabilities under this agreement, unless allthe other Participants agree; and

(c) must, by the time that the Affiliate or Related Entity to which the whole of itsParticipating Interest has been Assigned ceases to be an Affiliate of the UltimateHolding Company or a Related Entity of the Participant, ensure that all the rightsAssigned to that Affiliate or Related Entity have been re-Assigned to thatParticipant 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 outin 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 anotherParticipant 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 intendsto make an offer to sell or farm-out, for a consideration involving payment of cashto 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 ParticipatingInterest which it is willing to accept and dispose of or sell or farm-out, theParticipant (Selling Participant) must promptly send written notice to the otherParticipants of the offer to purchase, or farm-in, or sell or farm-out making thesame 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 thatthe Selling Participant has received or intends to make, including theidentity of the proposed acquirer (if then known), to enable an assessment ofthe acquirer’s financial standing including, where applicable, details of the

financial standing of the acquirer’s Ultimate Holding Company and any proposed parent company guarantees; and

(ii) attach a copy of all of the Offer documents.

(d) Each other Participant (Non-Selling Participant) has the right for a period of 45days 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 Offermust give written notice of acceptance to the Selling Participant during the OptionPeriod.

(f) Where more than one Non-Selling Participant accept the Offer from the Selling

Participant the accepting Non-Selling Participants are deemed to have acceptedthe Offer pro rata in proportion to their respective Percentage Shares, unless




otherwise mutually agreed between them.

14.4 Selling Participant free to Assign

If none of the Non-Selling Participants accept the Offer and provided that no Participantwould hold a Participating Interest of less than the Minimum Interest as a consequenceof the Assignment then, following the Option Period, the Selling Participant is freewithin 6 months from the date of the Offer, and subject to subsequent completion anddelivery of the required Assignment documentation specified in this agreement, toAssign 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 SellingParticipant 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 untilthe Assignee:

(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 theobligations of the Assignor under any Cross Security granted to the Assignor bythe other Participants and any Deed of Covenant entered into by any Third Partywith the Assignor, to the extent of the Participating Interest Assigned or upon theParticipating Interest being earned under the terms of the Assignment;

(c) executes and delivers to each of the Participants a Cross Security and Deed ofCovenant, 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 ofCovenant entered into by any Third Party with the Assignor.

14.6 Assignment on Change of Control or less than Minimum Interest

(a) In this clause, Change of Control means, in relation to a Participant, that theParticipant ceases to be a Subsidiary (as defined in the Corporations Act) of itsUltimate Holding Company, except where the shares of that Participant or any ofits holding companies are or become listed by on a recognised stock exchange andsuch Participant ceases to be a Subsidiary of its Ultimate Holding Company byreason of the allotment or transfer of, or any other dealing in, those shares.

(b) If a Change of Control occurs in respect of a Participant (Changed Participant),

any other Participant may, by notice given to all the Participants and the Operator,cause the Changed Participant to make a Deemed Sale Offer as at the date of thenotice to the other Participants.

(c) If the Participating Interest of a Participant reduces to below the MinimumInterest, whether by sale, or other disposition or dilution as permitted under thisagreement, any other Participant may, by notice given to all the Participants andthe Operator, cause that Participant to make a Deemed Sale Offer as at the date ofthe notice to the other Participants.

(d) If, within 30 days after notice of the Deemed Sale Offer is given, the Participantshave not agreed on the Transfer Price an Expert appointed in accordance with inthis agreement must determine the Transfer Price.

(e) On agreement or determination of the Transfer Price, the Deemed Sale Offer isopen 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 isirrevocable for a period of 60 days.

(f) A Deemed Sale Offer by a Changed Participant may be accepted by one or moreof the other Participants. A Deemed Sale Offer of a less than Minimal Interestmust be accepted by all of the other Participants.

(g) Upon a Deemed Sale Offer being accepted:

(i) the transferring Participant must sell, and the accepting Participants must purchase, the whole of its Participant Interest on the terms of the DeemedSale Offer, subject only to obtaining all relevant Authorisations; and

(ii) completion of the transfer of the Participating Interest must occur within 60days after acceptance at which time the transferring Participant mustcomplete and deliver all required Assignment documentation, including adischarge of all Encumbrances, to the accepting Participants and theaccepting Participants must pay the Transfer Price to the transferringParticipant in immediately available funds subject to the relevantAuthorisations being obtained.

(h) If the Deemed Sale Offer made as a result of the Change of Control is notaccepted by any Participant in accordance with this clause, the ChangedParticipant is not liable to transfer its Participant Interest as a result of suchChange of Control.

(i) If the Deemed Sale Offer of a less than Minimal Interest is not accepted by all ofthe other Participants in accordance with this clause, the Participant holding lessthan a Minimal Interest is not liable to transfer its Participating Interest.

14.7 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 aRelated Entity or an Assignment on withdrawal) the Assignor is released fromobligations under this agreement arising after the Assignment to the extent of theParticipating Interest Assigned, other than the obligations of confidentialitycontained in this agreement.

(b) If a party ceases to be a Participant, that person is not relieved of any liabilityunder this agreement which was incurred or arose on or before the date when itceased to be a Participant, unless this agreement otherwise provides.

15 Default

15.1 Breach Default Event to be remedied

(a) The Operator or any Non-Defaulting Participant may at any time after a BreachDefault Event occurs serve a written notice on the Defaulting Participantspecifying 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 defaultwithin 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 capableof being remedied, pay adequate monetary compensation to the Non-Defaulting Participants such payment to be made within 7 days of receipt ofnotification of the amount of compensation payable as determined under this

agreement.

(b) The Participants must agree in writing the amount of adequate monetary




compensation to be paid by the Defaulting Participant under this clause. If theParticipants have not reached agreement within 14 days after the date on whichnotice of default is given, that amount must be determined by an Expert appointedunder this agreement, who must make such determination within 30 days of his orher appointment.

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

under this clause, that amount, and any interest and costs payable or reimbursableunder this agreement, becomes Unpaid Monies due under this agreement after the7 day period referred to in the next clause.

15.2 Unpaid Monies Default Event to be remedied

(a) If an Unpaid Monies Default Event occurs, the Operator must promptly give to theDefaulting Participant a notice to pay all Unpaid Monies within 7 days after theDue Date (Non-payment Notice).

(b) If the Defaulting Participant fails to comply with the Non-payment Notice, theOperator must promptly give notice of such failure to all the Non-DefaultingParticipants 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 hasthe right (but not the obligation) after 7 days from receipt of the notice to pay tothe Operator all or part of Unpaid Monies referred to in the Unpaid MoniesDefault Notice on behalf of the Defaulting Participant. A Non-DefaultingParticipant which makes a payment of Unpaid Monies on behalf of the DefaultingParticipant becomes a Paying Participant.

(d) All monies paid by the Operator or a Paying Participant on behalf of a DefaultingParticipant to remedy an Unpaid Monies Default Event constitute a debt due bythe Defaulting Participant and are included in indebtedness secured under the

Cross Security granted by the Defaulting Participant to the Operator or the PayingParticipant, as applicable.

(e) The rights of the Operator or a Paying Participant against a Defaulting Participantunder 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 orreimbursable in respect of the Default Event, the Defaulting Participant is releasedfrom liability to pay the Cash Call on which it defaulted, but otherwise remainsliable to indemnify each other Participant and the Operator as provided in thisagreement.

15.3 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 thedate 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 UnpaidMonies 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 theOperator, a Paying Participant or a Non-Defaulting Participant which are directlyattributable to pursuing a Default Remedy or remedying a Default Event. All

reasonable costs and expenses so paid become Unpaid Monies due for payment bythe Defaulting Participant to the payer on demand.




(d) If the Operator or one or more Paying Participant pays Unpaid Monies on behalfof the Defaulting Participant, interest at the Agreed Interest Rate must be creditedin the Joint Account to the Operator or the Paying Participants pro rata in

proportion to their respective Percentage Shares, and the Defaulting Participantmust 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:

(a) the Defaulting Participant has paid, or caused to be paid, all Unpaid Monies due tothe Operator, the Paying Participants or the Non-Defaulting Participants (as thecase 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.

15.5 Failure to pay money or provide Security

(a) 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 itsPercentage Share of any Security required to maintain the Petroleum Titles in fullforce and effect or to support and facilitate any development included in anApproved Programme and Budget within the time specified by the Operator, theOperator must give notice to the other Participants (including the DefaultingParticipant) requiring the Non-Defaulting Participants:

(i) to pay the amount of the Defaulting Participant’s Percentage Share of theApproved Programme and Budget which the Defaulting Participant hasfailed to pay when due under this agreement (but excluding any interest andcosts owed in respect of such amount); and

(ii) if applicable, to provide the Defaulting Participant’s Percentage Share of thetype and amount of the Security specified by the Operator to allow theOperator to maintain the Petroleum Titles in full force and effect or tosupport and facilitate any development included in an Approved Programmeand Budget.

(b) Where more than one Non-Defaulting Participant is required to pay money or provide Security on behalf of a Defaulting Participant, the Non-DefaultingParticipants must do so, unless otherwise mutually agreed between them, severallyin proportion to their respective Percentage Shares.

(c) Failure by a Non-Defaulting Participant to pay such money or provide suchSecurity within 14 days of the time required to do so by the Operator constitutes a

Default Event in relation to that Participant.

15.6 Election of Unpaid Monies Default Remedy

(a) If an Unpaid Monies Default Event is not remedied within 14 days from the DueDate, any one or more Non-Defaulting Participants may (but are not obliged to)give notice to the other Participants (including the Defaulting Participant) and theOperator stating which one of the following actions (each a Default Remedy) it orthey intend to pursue (Default Election Notice):

(i) require the Operator to deliver to each Petroleum Buyer under a SalesContract with the Defaulting Participant, with copies to the Non-DefaultingParticipants, an Amendment Certificate requiring the Petroleum Buyer to

pay directly to the Operator all or part of the sums payable by the PetroleumBuyer to the Defaulting Participant under the applicable Sales Contract




(Sales Proceeds Default Remedy); or

(ii) acquisition of the whole (but not part) of the Defaulting Participant’sParticipating Interest by one or more of the Non-Defaulting Participants

pursuant to this agreement (Buy-Out Default Remedy); or

(iii) enforcement of a Cross Security granted under this agreement by one ormore of the Non-Defaulting Participants (Cross Security Default Remedy).

(b) If a Non-Defaulting Participant has given a Default Election Notice electing to pursue the Sales Proceeds Default Remedy in respect of an Unpaid MoniesDefault Event, then:

(i) if the Operator fails to deliver an Amendment Certificate to a PetroleumBuyer within 48 hours of receipt of a request from the Non-DefaultingParticipant to do so, then the rights and obligations of the Operator underthe applicable Default Certificate Deed may be exercised by that Non-Defaulting Participant for and on behalf of all the Non-DefaultingParticipants either in the name of the Operator or in its own name; and

(ii) each of the Participants hereby irrevocably appoints and empowers that Non-Defaulting Participant as its attorney to prepare and deliver anAmendment Certificate to a Petroleum Buyer; and

(iii) all sums received by the Operator from a Petroleum Buyer pursuant to anAmendment Certificate must be retained and applied in the PrescribedOrder specified in the Cross Security and otherwise on the terms andconditions of the Cross Security.

(c) Any Non-Defaulting Participant which has not given a Default Election Notice (ifany) may, within 7 days after receiving the Default Election Notice, give a DefaultElection Notice to the other Participants nominating an alternative DefaultRemedy which it wishes to pursue.

(d) If an alternative Default Election Notice is given, the Non-Defaulting Participantsmust, within 14 days after the giving of the first Default Election Notice, meet andagree upon a Default Remedy they unanimously wish to pursue. In default ofagreement within 14 days, the Default Remedy proposed in the first DefaultElection Notice must be pursued by those Non-Defaulting Participants which electwithin a further 7 days to pursue the Default Remedy in the relevant DefaultElection Notice at their cost severally in proportion to their respective PercentageShares, to the exclusion of any other Default Remedy.

(e) A Non-Defaulting Participant may not pursue a Default Remedy other than inaccordance with this clause (unless an Insolvency Event occurs with respect to the

Defaulting Participant) after the Non-Defaulting Participants have commenced aSales Proceeds Default Remedy or a Buy-Out Default Remedy, in which case anyone or more of the Non-Defaulting Participants may commence and pursue theCross Security Default Remedy in addition to any other Default Remedy.

(f) Notwithstanding this clause, the Operator may enforce a Cross Security granted toit against a Defaulting Participant’s Participating Interest in respect of a default in

paying any Unpaid Monies due to the Operator in its own right which is securedunder the Cross Security. If the Operator does so, such action takes precedenceover the Sales Proceeds Default Remedy and the Buy-Out Default Remedy.

(g) If, after implementation of a Default Remedy, the Non-Defaulting Participants

unanimously agree that the Default Event is unlikely to be fully remedied by theDefault Remedy being pursued, any one or more Non-Defaulting Participants mayat any time thereafter give a further Default Election Notice specifying another




Default Remedy it or they wish to pursue and the procedure to pursue suchDefault Remedy set out in this clause is thereby recommenced.

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.

16 Enforcement of Buy-Out Remedy

16.1 Consequence of Unpaid Monies Default Election Notice

Upon a Buy-Out Default Remedy being chosen to come into effect and be pursued inaccordance with this agreement (Buy-Out Election), the Non-Defaulting Participantswhich 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 forcompletion (Completion Date), acquire the whole (but not part) of the ParticipatingInterest of the Defaulting Participant, provided that if the relevant Unpaid MoniesDefault Event is remedied in full in accordance with this agreement before theCompletion Date, the Buy-Out Election under this sub-clause lapses.

16.2 Determination of fair market value and Completion Date

(a) The Defaulting Participant and the Enforcing Participants must use their bestendeavours to agree on the fair market value of the Defaulting Participant’sParticipating Interest as at the date of the relevant Default Event, and theCompletion Date.

(b) If the parties cannot agree on the fair market value and the Completion Datewithin 14 days of the Buy-Out Election coming into effect, then:

(i) those matters may be determined by an Expert appointed under thisagreement, who must make a determination within 30 days of appointment;

(ii) the Expert may determine that the Participating Interest of the DefaultingParticipant Participating Interest has nil or a negative value; and

(iii) no payment is due if the amount of consideration payable to the DefaultingParticipant is determined to be negative;

(c) Upon the fair market value and the Completion Date being determined by theExpert, each Enforcing Participant must within 7 days of receiving the Expert’s

determination advise the Defaulting Participant whether it accepts or rejects theExpert’s determination and whether or not it agrees to pay the fair market value ofthe Participating Interest of the Defaulting Participant on the Completion Date asdetermined by the Expert.

(d) Where more than one Enforcing Participant agrees to pay the fair market value forthe Participating Interest of the Defaulting Participant on the Completion Date asagreed or determined by the Expert, the Enforcing Participants must do so, unlessotherwise mutually agreed between them, severally in proportion to theirrespective Percentage Shares.

(e) If no Enforcing Participant agrees to pay the fair market value for the Participating

Interest of the Defaulting Participant on the Completion Date as agreed ordetermined by the Expert, any one or more of the Enforcing Participants may




commence and pursue the Sales Proceeds Default Remedy or the Cross SecurityDefault Remedy.

16.3 Consequence of Buy-Out Election

On the agreement, or determination and acceptance, of the fair market value of theParticipating Interest of the Defaulting Participant and the Completion Date, theDefaulting Participant must on or before the Completion Date:

(a) transfer the whole of its Participating Interest to the Enforcing Participants byexecuting and delivering all deeds and documents necessary for, and complete(and register, if required by the law of the Nominated State), the Assignment of itsParticipating Interest to the Enforcing Participant; and

(b) pay all stamp duty and other transfer costs which become payable upon theEnforcing Participant acquiring its Participating Interest,

and in exchange for the Assignment and transfer of the Participating Interest, theEnforcing Participants must severally in proportion to their respective PercentageShares, or in such other proportions they agree:

(c) cure any relevant Default Event of the Defaulting Participant which is capable of being cured;

(d) assume all future obligations and liabilities in respect of the whole of theParticipating Interest of the Defaulting Participant, including any Cross Security;

(e) pay the amount of consideration to the Defaulting Participant being the fair marketvalue agreed, or determined and accepted, for the Participating Interest beingacquired by the Enforcing Participants, less:

(i) all amounts due from the Defaulting Participant to any party or Third Partyunder or pursuant to this agreement;

(ii) all amounts paid by the Non-Defaulting Participants or the Operator to cureany relevant Default Event of the Defaulting Participant, including interestand costs payable under this agreement; and

(iii) the amount of all liability of the Defaulting Participant to meet existingAbandonment Obligations as determined by the Operator as at the date of

payment;

(f) 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

(g) release the Defaulting Participant from all claims the Enforcing Participants have

against the Defaulting Participant in connection with the relevant Default Event.16.4 Release of Defaulting Participant

Upon completion (and registration, if required) of the Assignment of its ParticipatingInterest to the Enforcing Participant, including the payment of all transfer costs, theDefaulting Participant is released from its obligations under this agreement arising aftercompletion of the Assignment, other than the obligations of confidentiality set out in thisagreement.

16.5 Acknowledgement

The Participants acknowledge that the consideration for the acquisition by an EnforcingParticipant of the Participating Interest of a Defaulting Participant (including the

assumption of all future obligations and liabilities):




(a) is agreed following negotiations involving all Participants which accepted that theconsideration does not constitute or give rise to a penalty, forfeiture or unjustenrichment; and

(b) represents a reasonable and good faith assessment of the just and faircompensation for the Defaulting Participant in all the circumstances surroundingthe relevant Default Event.

16.6 Attorney

For so long as it is in default, each Defaulting Participant irrevocably appoints theEnforcing Participants jointly and severally as its lawful attorney to act for it in its nameor 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 theEnforcing Participants (acting reasonably) to be necessary or desirable to complywith the obligations and, to the extent necessary to perform obligations, toexercise 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 forcompletion 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 earliestto 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 Operating Committee determines by Unanimous Vote that all economicallyrecoverable reserves of Petroleum in the Title Area have been recovered;

(c) the Operating Committee determines by Unanimous Vote that Joint Operationsshould cease due to a failure to obtain approval under the Act for any required

proposals for the production of any recoverable reserves of Petroleum within theTitle Area upon terms and conditions acceptable to all the Participants; or

(d) 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 Suspension of Joint Operations or Abandonment

(a) The Operator may, at any time subsequent to 12 months from the CommencementDate, submit to the Operating Committee a Proposed Programme and Budget forthe temporary suspension or permanent Abandonment of all or any part of JointOperations.

(b) The Operator must implement anyApproved Programme and Budget for the suspension of Joint Operations orAbandonment, together with any other directions that the Operating Committeemay 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 anysubsequent time direct that those Joint Operations resume.




17.3 Winding up of Joint Venture

(a) Immediately following the occurrence of a Termination Event, the Operator mustcommence winding up Joint Operations including:

(i) arranging for an evaluation of the Shutdown Costs as at the date of thetermination of the Joint Venture, including the cost of satisfying allAbandonment Obligations;

(ii) taking such steps to dispose of Joint Venture Property as it is directed totake by the Operating Committee;

(iii) satisfying all Abandonment Obligations;

(iv) to the extent reasonably possible, meeting the Shutdown Costs from the proceeds of realization of Joint Venture Property;

(v) after paying the Shutdown Costs distributing any net amount remainingfrom the proceeds of realization of Joint Venture Property among theParticipants pro rata in proportion to their respective Percentage Shares; and

(vi) 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 theShutdown Costs.

(b) 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 respectivePercentage Shares, to contribute any amount unpaid by the Defaulting Participantand the Defaulting Participant is liable to repay all amounts paid by the

Non-Defaulting Participants, together with interest and costs payable under thisagreement. The amount paid by the Non-Defaulting Participants is a debt payable

by the Defaulting Participants to the Non-Defaulting Participants on demand.

17.4 Certain obligations continue beyond termination

Upon termination of this agreement for any reason, all rights and obligations of theParticipants to each other in their capacity as Participants cease, other than:

(a) the obligations of confidentiality set out in this agreement; and

(b) the obligation to pay any actual or contingent liabilities relating to JointOperations, including the cost of all Abandonment Obligations and any severance,sickness and other employee benefit costs incurred or imposed in connection withJoint Operations, or otherwise arising from this agreement, that have not beendischarged as at the date of termination.

17.5 Extension of term

The Participants may at any time consult with each other for the purpose of determiningwhether the term of this agreement should be extended beyond the period it wouldotherwise expire. A failure by any Participant to agree to such extension may not bereferred 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 JointOperations, or in relation to Joint Operations; and




(iii) all information (including Sole Risk Information) flowing to any Participantfrom 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 domainindependently of any breach by a party of this agreement.

(b) To the extent permitted by the PPSA, the parties agree to keep all information ofthe kind mentioned in section 275(1) of the PPSA confidential and not to disclosethat information to any other person, except as permitted by this agreement.

18.2 No disclosure except as permitted

Except as permitted by this agreement, each Participant and the Operator undertakes thatit will keep confidential all Confidential Information received by it and that neither itnor its employees will, without the consent of each of the other Participants, discloseany 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 obligationarises as a consequence of the act of the Participant or otherwise;

(iv) to any stock exchange pursuant to Listing Rules which require disclosure;

(v) where reasonably necessary for the purposes of any arbitration oradministrative 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 Participating Interest of that Participant or forthe provision of finance to that Participant but only if the Third Party and itsadvisers first covenant in writing to the disclosing Participant to preserveconfidentiality of information disclosed in the same terms as this clause.

(b) A Participant making a permitted disclosure under this clause must take allreasonable steps to ensure that the person to whom disclosure is made keepsconfidential all Confidential Information disclosed.

18.4 Permitted disclosure by Operator

The Operator may disclose Information to any person it considers necessary ordesirable in connection with the conduct of the Joint Operations upon such persongiving an undertaking of confidentiality in writing to the Operator and the Participantsto preserve the confidentiality of information disclosed as required by this agreement.

18.5 Confidential Information disclosed only as necessary

(a) Each Participant and the Operator must take all steps reasonably necessary toensure that Confidential Information obtained is disclosed to and known by onlythose 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 notrelated to Joint Operations any geological, geophysical, geochemical,metallurgical or operational concept, model or principle of any kind, even ifderived from the Confidential Information.

18.6 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 publicdisclosure may be made in relation to Joint Operations or Joint Venture Propertyunless the text of the announcement or disclosure has been approved by the otherParticipants.

(b) To the extent that an announcement or other disclosure is required by Law, theParticipants must use all reasonable endeavours to agree, as soon as reasonably

practicable, the wording of such announcement or disclosure before it is made.

18.7 Obligations exist beyond termination

The obligations in relation to Confidential Information imposed by this agreementcontinue until all the Confidential Information ceases to be confidential despite thetermination of this agreement for any reason.

18.8 Access to Information

(a) Each Participant is entitled to full disclosure of all Information available to anyother of them or to the Operator in respect of Joint Operations or any otheroperations carried out by any of them in the Title Area including in relation toSole 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 anyInformation that is charged to the Joint Account the results must be provided toall Participants.

(d) If Information has been provided to a Participant under an intellectual propertylicence which precludes provision to the other Participants the obligation to

provide such information is restricted to the extent provided in the relevantlicence.

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 aDispute (Dispute Resolution Process) under this clause (regardless of the level orlevels 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) if the party seeks urgent interlocutory, injunctive or declaratory relief; or

(c) if the other party has failed to observe the requirements of this clause and the partyseeks to enforce compliance with the Dispute Resolution Process,

in respect of the Dispute.

19.2 Dispute Resolution Process

(a) 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 andsettle the Dispute on the party’s behalf.

(b) Each other party must within 7 days after receipt of a Dispute Notice nominate inwriting to the other parties a representative authorised to negotiate and settle theDispute 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 beimmediately referred to the Chief Executive Officers of the parties.

(d) The Chief Executive Officers must negotiate in good faith with a view to resolvingthe 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 beimmediately referred by any party by notice to mediation or Expert determinationunder this agreement.

19.3 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, asnominated by the President for the time being of the Law Society of the

Nominated State on request by either party;

(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 accordancewith the rules nominated by the person or body agreed or nominated to conductthe 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 partiesotherwise agree; and

(d) if not earlier resolved, be continued for a period expiring on the date being 14 daysafter the nomination of the mediator (or such other period as the parties mayagree) after which any party may at any time after that date seek Expertdetermination in accordance with this agreement or commence litigation

proceedings in respect of the Dispute.

19.4 Dispute Resolution Process not to interrupt Joint Operations

The parties must ensure that neither the commencement nor conduct of any DisputeResolution Process, including mediation or Expert determination, causes any

interruption to Joint Operations or to the performance by the parties of their respectiveobligations under this agreement, nor will it affect any of the time limits fixed in thisagreement unless the performance of Joint Operations or a party under this agreement ismaterially affected by the submission of the matter in dispute to litigation or by theresult 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 ofany party being given then, except where this agreement requires that consent oragreement is not to be unreasonably withheld, the Dispute Resolution Process cannot beused to resolve a dispute between the parties in relation to the reaching of that agreementor 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 Expertor if the parties otherwise agree, any party may refer the matter to the determination ofan Expert and the following provisions apply:

(a) subject to any other determination by the Expert, the costs of obtaining thedetermination must be at the cost and expense of the parties equally (except thateach 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 & MediatorsAustralia; and

(c) in making a determination:

(i) the Expert must act in that capacity and not as an arbitrator;

(ii) the Expert’s finding is final and binding upon the parties in the absence ofmanifest error;

(iii) the Expert must determine which party or parties should bear the costs ofany such determination and in what proportion. In making this decision, theExpert must consider the degree to which he or she considers such party wasunreasonable in failing to agree to the matter; and

(iv) the Expert may employ consultants to assist the Expert to carry out his orher duties.

20.2 Qualifications of Expert to determine dispute

(a) The Expert must be a person reasonably qualified, capable and suitablyexperienced to make an effective, fair and reasonable determination of the relevantdispute 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 GoodAustralian 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 thedispute which is outside his or her subject matter expertise. If such an issue arisesthe expert may obtain advice on the relevant issue from a person suitably qualifiedto 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 employeeor 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 asExpert, 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 orepidemic;

(b) strike, lockout, stoppage, ban or other types of labour difficulty whether at theTitle Area, railway or port or otherwise;

(c) war (whether declared or undeclared), blockade, act of the public enemy, act ofterrorism, revolution, insurrection, riot, civil commotion, sabotage, maliciousdamage, radioactive contamination, toxic or dangerous chemical contamination;

(d) action or inaction by a competent Authority (including heritage related restraintsand, refusal or failure to grant any Authorisation despite timely reasonableendeavours 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

(g) any other cause whether specifically listed above or otherwise which is notreasonably within the control of the party claiming Force Majeure

except where:

(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 orremedied by the exercise by the party affected of care and diligence consistentwith Good Australian Oilfield Practice.

21.2 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):

(a) that Affected Party may give the other Participants and the Operator notice of theForce 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 tothe 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 abatethe effect of the Force Majeure Event as quickly as possible;

(d) if the Force Majeure Event cannot be removed, overcome or abated to an extentthat allows resumption of performance within 6 months (or such other period asthe Participants agree) from the date of the notice, the Participants must considerand determine whether this agreement must be modified or terminated; and

(e) notwithstanding the Force Majeure Event, the Participants must continue to paythe Operator such monies as are necessary to keep the Petroleum Titles in good




standing and maintain the other Joint Venture Property in good condition inaccordance with Good Australian Oilfield Practice.

21.3 Labour disputes and Native Title matters

The obligation to use all reasonable diligence to overcome or remove the effect of theForce 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 NativeTitle Rights,

on terms not acceptable to it solely for the purpose of removing the event of ForceMajeure.

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.

22 Royalty and Petroleum Resources Rent Tax

22.1 Payment of royalties

(a) Unless otherwise approved by the Operating Committee, each Participant must payall royalties payable to any Authority on its Entitlement as required by Law. Noroyalties may be debited to the Joint Account, except by Unanimous Vote.

(b) Any royalties granted by a Participant to a Third Party in connection with thePetroleum Titles, whether in cash or in kind, must be paid or delivered by thatParticipant from its Entitlement and that Participant hereby agrees to indemnify and

hold harmless all other Participants and the Operator from and against all claims,liabilities, costs and expenses arising out of its failure to make such deliveries or

payments.

22.2 Petroleum Resources Rent Tax (PRRT)

(a) Each Participant is responsible for reporting and discharging its own taxmeasured by the profit or income of the Participant, including PRRT.

(b) The Participants intend that all income and all tax benefits (including deductions,depreciation, credits and capitalization) with respect to the expenditures made bythe Participants under this agreement and of PRRT will be allocated by the taxAuthority to the Participant based on the share of each tax item actually received

or borne by each Participant. If such allocation is not accomplished due to theapplication of Law or other tax Authority action, the Participants must attempt toadopt mutually agreeable arrangements that will allow each Participant toachieve the financial results intended.

(c) Each Participant hereby agrees to indemnify each other Participant from andagainst all loss, cost or liability arising from the indemnifying party’s failure to

report and discharge such taxes or satisfy such obligations.

22.3 Provision of tax and royalty information

The Operator must provide each Participant, in a timely manner and at suchParticipant’s sole expense, with such information with respect to Joint Operations as

such Participant may reasonably request for preparation of its tax returns, royalty orPRRT returns or responding to any audit or other tax proceeding.




23 Goods and Services Tax

23.1 GST registration

(a) Each Participant warrants that it is as at the Commencement Date, and will beduring the term of this agreement, registered for GST.

(b) 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.

23.2 Supply of going concern

(a) The Participants agree that the transfer of any Participating Interest under thisagreement is a supply of a going concern within the meaning of subdivision 38-Jof 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 anyParticipating Interest is not the supply of a going concern for GST purposes and isa Taxable Supply, the following provisions of this agreement will apply to thatsupply. 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. Itwill not be a defence to any claim for indemnification pursuant to this clause thatthe transferor failed to mitigate its loss and damage by paying an amount of GSTwhen it fell due under the GST Act.

23.3 GST liability

(a) Except where the consideration for a supply (other than a supply of a goingconcern) is expressed to be GST inclusive, if any Participant (Supplier) (or theRepresentative Member of any GST Group of which that party is a Member) isliable to pay GST on any Supply made to any other Participant (Recipient) underthis 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 byanother party under this agreement, the other party must in addition to any amountit is required to pay by way of indemnity also pay to that party on demand theGST imposed in respect of the indemnity payment.

(c) The additional GST amount is payable at the same time and in the same manner asthe 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 theSupply has issued the Recipient of the Supply with a valid Tax Invoice for theSupply.

(e) If the additional GST amount differs from the amount of GST payable by theSupplier 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 theRecipient, or by the Recipient to the Supplier, as appropriate.

23.4 Reimbursement

An amount required to be reimbursed or contributed to must not include the amount ofany Input Tax Credit where:

(a) a Participant is required to or does pay an amount to another Participant (Payee)(including by way of adjustment or set-off) to reimburse or contribute to anamount payable by the Payee for a Supply to the Payee from a Third Party; and




(b) the Payee or the Representative Member of any GST Group of which the Payee isa Member is entitled to an Input Tax Credit in respect of that Supply.

23.5 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.

24 Notices

24.1 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 anindividual) 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, thenmarked for attention in the last way notified.

24.2 When Notices are taken to have been given and received(a) A Notice is regarded as given and received:

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

(ii) if sent by pre-paid post, on the 3rd day following the date of postage; and

(iii) if given by fax, on production of a transmission report by the machine fromwhich the fax was sent which indicates that the fax was sent in its entirety tothe recipient’s 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 sender’s email system which indicates that the email wassent to the recipient’s email address.

(b) A Notice delivered or received other than on a day on which trading banks areopen for business in the capital city of the Nominated State (Business Day) orafter 5.00pm (recipient’s time) is regarded as received at 9.00am on the following

Business Day. A Notice delivered or received before 9.00am (recipient’s time) is

regarded as received at 9.00am.

25 Ancillary provisions

25.1 Entire agreement

This agreement contains everything the parties have agreed and overrides andsupersedes all earlier agreements in relation to the Joint Venture.

25.2 No reliance or inducement

Each party warrants and agrees that when entering into this agreement it reliedexclusively 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,

and did not rely on any statements, inducements, undertakings, representations or advicegiven 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.




25.3 Enurement

The provisions of this agreement enure for the benefit of and are binding on each partyand their respective successors and permitted Assigns.

25.4 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.25.5 Severability

If any provision of this agreement is void, illegal or unenforceable, it may be severedwithout affecting the enforceability of the other provisions in this agreement.

25.6 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 impliedwaiver of any other right, power or remedy or as an implied waiver of that right, poweror remedy in relation to any other occasion.

25.7 Applicable law

(a) This agreement is governed by and must be construed in accordance with the lawsof the Nominated State.

(b) The parties submit irrevocably to the non-exclusive jurisdiction of the Courtsof the Nominated State and all Courts competent to hear appeals from thoseCourts.

25.8 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 theregistration and performance of this agreement, and of all other documents arisingout of this agreement, are Joint Expenditure.

25.9 Counterparts

This agreement may be executed in any number of counterparts and by different partiesin separate counterparts. Each counterpart when so executed is deemed an original butall of which together constitute one and the same instrument.




Schedule 1

Basic Particulars

Act: [ Insert applicable Petroleum Act(s) or other legislation] (Clause 1.1) [e.g. Petroleum Acts 1923 and 2004 (Qld)]

Approvals Period: [ Insert months] from the date of this agreement, or such(Clause 2.2) longer period as the parties may agree.

Budget Preparation Date: [ Insert date] in respect of an Australian financial Year.(Clause 8.1(a))

Conditions Precedent: [Examples only](Clause 2.3)

1. The obtaining by [each Participant] of all Authorisationsrequired 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 [ specify party] of all Authorisationsrequired under [ specify legislation] by [insert date].

This Condition Precedent 3 is for the benefit of theParticipants and may be waived by each Participant inwhole or in part by giving notice to that effect to the otherParticipants and the Operator.

4. [other - specify Authorisation required, and party requiredto obtain it ] by [insert date]].

This Condition Precedent 4 is for the benefit of theParticipants and the Operator and may only be waived byagreement between the Participants and the Operator.

Contract Limit: $[ Insert amount ].(Clause 8.2(b))

Litigation Limit: the total of the amount in dispute, plus damages and costs,(Clause 7.11) as estimated by the Operator, being $[insert amount ].

Minimum Interest: [ Insert percentage, e.g. 5] % Participating Interest].

(Clause 1.1)

Nominated State: [ Insert relevant State or Territory]. (Clause 1.1)

Operator: [ Insert name, address and contact details of Operator ].(Clause 1.1) [If the Operator is not already a party, it needs to be added

as a party on page 1].

Operator Overhead: $[ Insert amount ] per month being an amount intended to(Clauses 1.1 and 6.3) reimburse, without profit, the Operator for its indirect or

overhead costs which it or its Affiliates incur in providingcorporate, administration and other services for the Joint

Venture and which are not otherwise chargeable as JointExpenditure under the Accounting Procedure clause 4.3.




Passmark: [ Insert percentage] % Percentage Share of Joint(Clause 1.1) Venturers entitled to vote [plus at least 2 Participants

voting in favour].

Matters requiring a Unanimous Vote: [Examples only] (Clauses 1.1 and 5.3)

1. Approval of the terms and conditions of all contracts

between the Operator and an Affiliate or a Related Entityof the Operator or a Participant with a value above $[ Insert

amount, say, 300,000].

2. Creation of any Encumbrance, other than a Cross Security,over the whole or any part of the Participating Interest of aParticipant, unless such Encumbrance arises by operationof Law.

3. Use by an individual Participant of any asset of the JointVenture.

4. Sale or disposition of any item of Joint Venture Property

which exceeds $[ Insert amount, say, 1,000,000] and whichis material to the operation of the Joint Venture.

5. Surrender of the whole or any part of the Title Area exceptas required for minor boundary adjustments, or under theAct.

6. Suspension, closure or termination of all or any material part of Joint Operations for any reason, including extendedForce Majeure.

7. Third Party use or toll processing of Petroleum sourcedoutside the Title Area using Joint Venture Property or

facilities.

8. Variation of the Operator Overhead payable to theOperator.

9. Number, duration, charge and terms of secondees toOperator by Participants which are not the Operator.

10. Suspension of production for 3 months or more, other thanthrough a Force Majeure Event.

11. Any other matter which is specified elsewhere in thisagreement as requiring a Unanimous Vote.

(Clause 7.2(f))

12. Take forward cover for, or hedge, foreign currenciesobligations or pre-pay or take any other appropriate actionto avoid currency losses.

Year: [a period of 12 calendar months commencing on and including(Clause 1.1) the 1st July and ending on and including the following 30th June].

Sole Risk Operations: [Examples only](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 ofPetroleum.

3. The drilling and Completion of any number of Development Wells, thedrilling of which is not required to complete an obligation under a PetroleumTitle, and all activities necessarily incidental to such drilling.

4. The Deepening, Plugging Back, Reworking, Recompletion or Side-tracking of an Exploration Well or Appraisal Well in the course of drilling, orof a previously abandoned well, or the testing of a Zone already penetrated bysuch a well provided that Sole Risk Operations within a radius of 1 kilometreof a Development Well may not proceed unless and until all Participantsconsent to the Deepening, Plugging Back, Reworking, Recompletion or Side-tracking.

5. The development of a Discovery.

6. 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-BackPremium

1. Exploration Well [700] %

2. Appraisal Well [500] %

3. Development Well [400] %

4. Deepening, Reworking or Side-track of Exploration Well [700] %

5. Deepening, Reworking or Side-track of Appraisal Well [500] %

Notes:

1. The Buy-Back Premium payable is the Buy-Back Amount defined in clause13.6(d)(i) above, multiplied by the Buy-Back Premium specified in the above tablefor the Sole Risk Operation listed against the percentage premium.

2. No buy back is permitted following the sole risk drilling of a Development Well orthe sole risk development of a Discovery.

For the purpose of the above Sole Risk Operations, in addition to those terms defined inclause 1.1, the following terms have the following meanings:

Deepening means the drilling of a well to an objective Zone below the deepest Zone inwhich the well was previously drilled, or below the deepest Zone proposed in theassociated AFE (if required), whichever is the deeper.

Plugging Back means a single operation whereby a deeper Zone is abandoned in order toattempt a Completion in a shallower Zone.

Recompletion means an operation whereby a Completion in one Zone is abandoned inorder to attempt a Completion in a different Zone within the existing well.

Reworking means an operation conducted in a well after its Completion to secure,restore, or improve production in a Zone which is currently open to production in the




well. Such operations include well stimulation operations, but exclude any routine repairor maintenance work, or drilling, Sidetracking, Deepening, Completing, Recompleting, orPlugging Back of a well.

Sidetracking means the directional control and intentional deviation of a well fromvertical so as to change the bottom hole location unless done to straighten the hole or todrill around junk in the hole or to overcome other mechanical difficulties.

Testing means an operation intended to evaluate the capacity of a Zone to producePetroleum.

Zone means a stratum of earth containing or thought to contain an accumulation ofPetroleum in the same pressure regime and separately producible from any otheraccumulation of Petroleum.




Schedule 2

List of Petroleum Titles as at the Commencement Date

No. Name Status Reg. Holder Area (km²) Grant date Expiry date

TOTALS: Rent: $ Area: $

Annex to Schedule 2

Title Area Map

[Insert, if required]




Schedule 3

Accounting Procedure

1. Introduction

(a) This Accounting Procedure sets forth the principles and guidelines to be followed

in maintaining proper financial and accounting control required pursuant to thisagreement. They also set forth the charges and credits that are attributable andrecorded to the various operations in order to establish the amounts owing

between the parties pursuant to this agreement.

(b) It is the intent of this Accounting Procedure that, except as otherwise expressly provided by this agreement, no party (including the Operator) will gain or lose byreason of carrying out its duties and responsibilities pursuant to this agreement.

(c) If there is any conflict between the provisions of this Accounting Procedure andthis agreement, the latter prevails.

(d) If at any time any part of this Accounting Procedure proves unfair or inequitable to

the Operator or the Participants, the parties agree to meet and in good faithendeavour to agree on changes necessary to correct any unfairness or inequity.

(e) Nothing in this Accounting Procedure may be interpreted as:

(i) relating to the tax accounting of any party or of any joint venture orundertaking including such parties or any of them; or

(ii) an election by any party with respect to any matter under the tax laws orother laws of the jurisdiction to which a party may be subject or an electionwith respect to any method of accounting for the purpose of reporting togovernment or an election for any other purpose.

2. DefinitionsTerms used in this Accounting Procedure have the same meanings as defined in theagreement to which this Accounting Procedure is annexed and in addition:

Fixed Assets means those assets which by their nature have estimated working lives ofmore than one year.

Major Items of Joint Venture Property means those items of Materials or FixedAssets having an estimated original cost of $[50,000] or more.

Material includes personal property, equipment and supplies acquired or held for usefor the Joint Venture.

3. Joint Account

3.1 Maintenance of the Joint Account

(a) The Operator must maintain the Joint Account on behalf of the Participants inaccordance with their Participating Interests.

(b) The Operator must maintain accounting records for the Joint Account on anaccrual basis in Australian Dollars. Accrual basis as used in this AccountingProcedure means that costs and expenses are regarded as applicable to the periodin which they are incurred regardless of when paid.

(c) The Joint Account must be held in a separate bank account and must be

maintained in Dollars. If payment is made or funds are received in any currencyother than Dollars the sum charged or credited to the Joint Account must be theactual cost in Dollars of the other currency purchased or the actual amount in




Dollars received on the sale of the other currency. Any exchange gain or loss is forthe Joint Account.

(d) The Operator must make available to any Participant on request copies of theaccounting procedures, expenditure classifications and reporting formatsunderlying the Joint Account.

(e) All receipts, vouchers and other documents relating to Joint Expenditure must beretained by the Operator until directed otherwise by the Operating Committee.

3.2 Materials and services charged to Joint Account

So far as it is reasonably practicable and consistent with efficient and economicaloperation, only such Material and services may be purchased or acquired for the JointOperations as is required for immediate use and the accumulation of surplus stocks andservices must be avoided.

3.3 Authority for Expenditure

(a) The Operator must immediately notify all Participants of the actual or deemedapproval of an AFE and must include in that notification copies of the relevantAFE form which must give full details thereof and be clearly marked to the effectthat approval has been deemed to have been given.

(b) The Operator must establish or maintain cost centres and necessary coding formonitoring by the Operator of its internal costs and estimates based on the AFE.

(c) If an approved AFE overruns or is in error by 10% or more, it must be referred back immediately to the Operating Committee for supplementary approval.

(d) Following the receipt of the necessary approvals to commence expenditures, theauthority levels existing within the organisation structure of the Operator mustapply for the approval of actual invoice expenditure. The normal commercial

procedures of the Operator such as the tendering for and letting of major contracts,issue of purchase orders and payment to creditors within agreed credit terms, mustapply for the incurring of any expenditure.

4. Chargeable credits, costs and Joint Expenditures

4.1 Credits

Subject to this agreement, the Operator must credit the Joint Account with all creditsreceived on account of the Joint Venture including, without limitation, the following:

(a) any credits received by the Operator which is referable to Joint Venture Property,including income received from the sale of Joint Venture Property; and

(b) the proceeds of any insurance or claim in connection with Joint Venture Propertyor Joint Operations collected by the Operator; and

(c) any other income received which is to be retained separately by the Operator and paid to each Participant, (pro rata in the proportion to its Participant Interest) at theend of each month.

4.2 Direct Costs

Subject to this agreement, the Operator must charge the Joint Account with all costsreasonably and necessarily incurred in carrying out the Joint Operations and in

performing its obligations as Operator including, without limitation, the following directcosts of:

(a) Rentals, Royalties, Survey Costs and other ownership Expenditures

Rentals, rates, royalties, renewal and extension fees, levied on or in respect of the




Petroleum Titles and Joint Operations, excepting any royalties on production ofPetroleum payable by individual Participant, survey costs and other expendituresnecessary to maintain ownership of the Joint Venture Property when suchexpenditures are paid by the Operator.

(b) Labour

Salaries, wages and on-costs of the Operator’s employees and of its Affiliatesdirectly engaged in or temporarily assigned to Joint Operations according to anestablished daily rate as determined by the Operator including the cost of:

(i) annual leave (including leave loading), sick leave, public holidays, longservice leave and other benefits, assessments and obligations paid byagreement or required to be paid by Law;

(ii) all taxes (including fringe benefits tax and payroll tax), workers’compensation and common law insurance in connection with suchemployees; and

(iii) payments for employee group life insurance, medical/dental

services/hospitalisation, superannuation, pension, training and other benefitsof like nature

all on a pro rata basis while such employees are carrying out Joint Operations;

Payments for provision of the Operator’s senior staff and technical services staff atan appropriate hourly or daily all-inclusive rate;

Payments made to or for contract personnel engaged in Joint Operations;

Reasonable travel and living expenses (except where charged under a separateheading) of the Operator’s em ployees and contract personnel whilst away fromtheir regular place of employment all on a pro rata basis for the time they are

engaged in performing Joint Operations;Reasonable business expenses of those employees whose salaries and wages arechargeable to the Joint Account and for which expenses the employees arereimbursed under the Operator's usual practice.

(c) Compliance with legal requirements

Complying with environmental protection, rehabilitation, Abandonment and otheroperating requirements imposed by an Authority, or by Law or pursuant to theconditions on which the Petroleum Titles are held.

Responding to and settling Native Title Claims, and observing and complyingwith Native Title Rights.

Obtaining, complying with the provisions of and renewing all Authorisationsrequired for Joint Operations.

All occupational health and safety costs, including the provision of first aid andmedical treatment, whether in, near or remote from the Title Area.

(d) Fixed Assets and Materials, including maintenance

The purchase, lease or hire (including depreciation, if appropriate) of Fixed Assetsand Materials used in Joint Operations except for items provided from theOperator’s machinery pool.

The routine maintenance of all buildings, machinery, plant and equipment

(including the Operator’s or a Participant’s machinery pool items) used in JointOperations and repairs, insurance and licensing of all buildings, machinery, plant




and equipment other than the Operator’s or a Participant’s machinery pool items,

in accordance with usual reasonable accounting practices.

The cost of use or hire of exclusively owned equipment and facilities of theOperator or a Participant or any Affiliate of any of them, including depreciation,licensing, insurance and repairs (but not routine maintenance nor fuel, each ofwhich is to be separately charged to the Joint Venture) such cost of use or hire

being no more than the usual commercial rental rate for such items in the area inwhich they are being used, less any trade and/or cash discount normally granted tothird parties. The cost and capability of such equipment and facilities must becompetitive with other available sources of comparable equipment and facilities.

(e) Transportation

Transportation of employees and Material necessary for the conduct of the JointOperations, including all customs duties and handling charges incurred in thattransportation, but subject to the following limitations:

(i) if Material is moved to the Title Area, no charge may be made in respect of

any distance greater than the distance from the nearest reliable supply storeor railway receiving point where like Material is available, except byagreement with the Operating Committee; and

(ii) if surplus Material is moved to the Operator's warehouse or other storage point, no charge may be made to the Joint Account for a distance greaterthan the distance to the nearest reliable supply store or railway receiving

point, except by agreement with the Operating Committee. No charge may be made to the Joint Account for moving Material to other properties belonging to the Operator, except by agreement with the OperatingCommittee.

Transportation costs may include travelling expenses applicable to employees of

the Operator permanently or temporarily assigned and directly engaged in theconduct of Joint Operations and their families and effects at the time ofemployment, separation, vacation, compassionate leave and/or transfer. Such costsinclude transportation of their personal household effects and other relocationcosts in accordance with Operators usual practice.

(f) Services

Outside Services The actual cost of contract services and utilities required for Joint Operations and

procured from any outside sources, including but not limited to fuel, oil, light, power, water, gas, field office supplies and tools.

Geo-scientif ic services The cost of contractors engaged to perform Joint Operations including (but notlimited to) drilling, assaying, surveying, laboratory analysis, drafting geophysicaland geological engineering and reserve studies and related computer services anddata processing and other geo-scientific tasks.

Professional Services The cost of procuring contract, legal, accounting, auditing and other outside

professional services by the Operator for logistic and administrative support ofJoint Operations, including the reasonable costs of the Auditor.

(g) Damages/Losses to Joint Venture Property and Equipment

All costs and expenses necessary for the replacement or repair costs resulting fromdamages or losses incurred to Joint Venture Property by fire, explosion, flood,




storm or any other causes not controllable by the Operator through the exercise ofreasonable diligence, where such costs and expenses are not covered by insurance.The Operator must furnish the Participants with written notice of loss or damagehowsoever caused as soon as practicable the Operator has become aware of theloss or damage.

(h) Legal Costs, Litigation, Judgments and Claims

Except with respect to a successful claim or litigation by a Participant against theOperator or due to proven Wilful Misconduct of the Operator, all legal costs andexpenses including those of litigation, or legal services necessary or expedient forthe protection of the Joint Venture Property, together with all judgments obtainedagainst the Participants or any of them and any agreed settlement insofar as theyrelate to Joint Operations or the subject matter of this agreement and all fines and

penalties properly paid by the Operator to a competent Authority incurred incarrying out Joint Operations.

Actual expenses incurred by any Participant in securing evidence for the purposeof defending or prosecuting any action or claim or negotiating any settlement

relating to the Joint Account or the subject matter of this agreement.

(i) Taxes

All taxes, rates, levies and assessment of every kind and nature levied, assessed orimposed upon or in connection with the Joint Venture Property or any part thereof,or anything operated by or produced from Joint Venture Property, which is for the

benefit of the Participants, excepting any taxes levied upon or measured byincome, and taxes which have been paid by, or for the benefit of a Participant.

The Participants (and not the Operator) are severally responsible for payment ofany taxes levied upon or measured by income, royalty on a Participant'sEntitlement taken and sold by a party and for PRRT.

(j) Insurance

Premiums paid for insurance effected under the direction of the OperatingCommittee or required by Law to be carried for the benefit of the Participantstogether with all expenditures incurred and paid in settlement of any and all losses,claims, damages, judgments and other expenses, including legal services, notrecovered from the insurer, except that a party not participating in such insurancemust not share in the costs and benefits.

Premiums on any additional insurance required by some but not all of theParticipants must be separately charged to the Participants requiring suchadditional insurance.

(k) Field Office Supervision and Camp Expense

The expense of using, operating and maintaining all necessary field operations,field offices, camps, district warehouses, garages, machine shops, water systems,road systems, and housing facilities for employees, consultants and contractors ofthe Operator (including housing facilities for their families) and any warehouses orwork-shops exclusively used in connection with Joint Operations. When otheroperations are served by those facilities, the expense, including depreciation, lessany revenue derived from those facilities, must be pro-rated on an equitable basisdetermined by the Operating Committee against all operations served.

These charges must be allocated to exploration, development and productionoperations relating to the Title Area and other properties served in the sameoperating area (if any), pro rata to the direct charges to each operation. For




example, the Operator may allocate its costs for drilling operations as the numberof well operating days in the Title Area divided by the Operator’s total well

operating days, on a monthly basis. The parties may mutually agree to alter fromtime to time the aforesaid allocation basis.

(l) Rehabilitation and Abandonment Costs

Costs for the future rehabilitation and Abandonment as assessed by the Operatoron an annual basis.

(m) Capital costs

All capital development costs of, and the capital costs of construction of facilitiesfor producing and disposing of Petroleum, unless these capital costs are directlyfunded by the Participants rather than through the Operator,

(n) Other expenditure

Any other expenditures which are not of a capital nature and which are notcovered or dealt with in the foregoing provisions of this Accounting Procedureand which are reasonably incurred by the Operator and its Affiliates for thenecessary and proper conduct of Joint Operations, or the protection of JointVenture Property, or which the parties agree to treat as Joint Expenditure.

PROVIDED THAT where any of the above facilities or services is used not onlyfor Joint Operations but also for unrelated operations of the Operator the costsmust be adjusted on a pro rata basis on the proportion of time such facilities orservices are used for Joint Operations.

4.3 Indirect Costs – administrative overhead

(a) The Operator may charge the Joint Account with that proportion of itsmanagement and administrative overhead costs, including those of its Affiliates as

permitted under this agreement, attributable to Joint Operations based upon actualcost experience to the intent that at all material times the Operator and itsAffiliates must not make any gain nor suffer any loss by virtue of the method ofcharging such costs.

(b) Notwithstanding the provisions hereof, in respect of expenditure pursuant to thisagreement the Operator is entitled to elect to recover its management andadministrative overhead costs by charging the Joint Account with a fee calculatedat the following rates, based on an expenditure incurred in accordance with AFE'sfrom time to time and recorded in the Joint Account:

Total of AFE Operator Overhead

From $1 to $[5,000,000] [5] %

Above $[5,000,000] [4] %

(c) The method of charging the Joint Account for reimbursement of the general andadministrative expenses of the Operator applicable to the Joint Operations may bereviewed annually by the Operating Committee.

(d) If the non-Operator Participants (by simple majority vote of their PercentageShares) consider that the above method of charging is inequitable, they may notifythe Operator of such revised terms for charging as they consider reasonable.

(e) If the Operator disputes the revised basis the matter must be referred to an Expertappointed in accordance with in this agreement for determination.




5. Materials charged to Joint Account

5.1 Purchases

Imported and locally produced Material purchased, and all services procured, for theJoint Venture by or for the Operator (including Materials purchased for warehousestock) must be charged at the price paid, after deduction of all discounts actually

received. The cost of such Materials must include, if appropriate, insurance costs, hand-ling and transportation costs to warehouse; customs fees and duties and like expenseschargeable against the Materials, and external purchasing, shipping and forwardingservice fees.

Current new price, wherever used in this Accounting Procedure is the price f.o.b. orf.o.r. the nearest reputable supply store or railway receiving point, where such Materialis available at current replacement costs of the same kind of Material.

5.2 Material purchased directly for Joint Operations

The cost of Materials purchased directly for Joint Operations which do not pass througha Joint Venture warehouse may include handling, transportation and insurance costs to

the site of installation and use.

5.3 Material purchased from a Participant, Affiliate or Related Entity

Any Material which is produced, processed, manufactured or controlled by a party or anAffiliate or a Related Entity of a party may be purchased from such party or Affiliate orRelated Entity and if so purchased such purchase must be on "arm's length" commercialterms including any trade and/or cash discounts normally granted to Third Party

purchasers and must further be competitive with other sources of supply that may beavailable PROVIDED THAT no such purchase may be made by the Operator from a

party, an Affiliate or a Related Entity for Joint Operations where the consideration payable exceeds [$10,000] without the prior approval of the Operating Committee.

5.4 Material furnished by the Operator or Participant

Material required for Joint Operations must be purchased for direct charge to JointAccount whenever practicable, except that a party or an Affiliate of a party may furnishMaterial to the Joint Venture from its own stocks under the following conditions:

(a) New Material

New Material (Condition A) transferred from the party’s warehouse or other properties to the Operator must be priced on an "arm's length" basis less tradeand/or cash discounts normally granted to Third Party purchasers and must becompetitive with other sources of supply that may be available.

(b) Used Material(i) Used Material which is in sound and serviceable condition and is suitable for

re-use without reconditioning must be classed as Condition B Material and priced at 75% of current new price.

(ii) Used Material which cannot be classified as Condition B but which afterreconditioning will be further serviceable for original function as goodsecond-hand Material is to be classified as Condition B Material.

(iii) Used Material which is serviceable for original function but substantiallynot suitable for reconditioning, must be classified as Condition C Materialand priced at 50% of current new price.

(c) Bad Order Material

Bad order Material (Condition D), being Material not further useable for its




original function but which may be used for possible other service, must be gradedand priced as to condition of the material normally used for such other purpose.

There may also be cases where some items of Material, due to their unusualcondition, may be fairly and equitably priced by the Operator, subject to approvalof all Participants.

(d) Material Furnished by the Operator When Not Readily Available

When Material and/or supplies are not readily available from reputable supplysources due to scarcity, national emergency or governmental regulations, theOperator may furnish such from its stock or properties at its nearest availablesupply and charge the Operator's full cost or replacement costs, as circumstancesmay require, of those Materials or supplies to the Joint Account, including withoutlimitation, purchase price, procurement, warehouse, handling, transportation andall other costs incurred in connection therewith up to the time of delivery to theJoint Venture Property.

5.5 Premium Prices

Whenever Materials are not readily obtainable at the customary supply point and atnormal prices because of national emergencies, strikes or other unusual causes overwhich the Operator has no control, the Participants must be charged for the requiredMaterials on the basis of the direct cost and expense incurred in procuring suchMaterials, in making it suitable for use, and in moving it to the location.

5.6 Premium Equipment and Facilities Furnished by Operator

(a) The Operator must charge the Joint Account for use of Operator's equipment andfacilities at rates approved by the Operating Committee commensurate with theOperator's cost of ownership and operation. Such rates must include cost ofmaintenance, operating repairs, other expenses, insurance, taxes (other than

income taxes) depreciation and interest on estimated current depreciatedreplacement cost at a rate not to exceed 7% per annum, providing such rates donot exceed those current prevailing in the immediate area within which the JointOperations are carried on.

(b) In lieu of rates based on costs of ownership and operation of equipment, theOperator may elect to use commercial rates prevailing in such area less 20%.Rates for laboratory services must not exceed those currently prevailing if

performed by outside laboratories.

(c) The Operator must inform each Participant in advance of the rates the Operator proposes to charge for use of its equipment and facilities.

5.7 Warranty of Material Furnished by OperatorTo the extent permitted by law, the Operator does not give any warranty as to themerchantable quality or fitness for purpose of the Material furnished, but the Participantsare entitled to the benefit of the dealer's or manufacturer's guarantee or warranty. In caseof defective Material, credit must not be passed until an adjustment has been received bythe Operator from the manufacturers or their agents.

6. Fixed Assets

6.1 Fixed Assets accounting and records

(a) The Operator must agree with the Participants the procedures for accounting andcontrol of Fixed Assets, giving due regard to their unit cost. Such procedures mayexclude minor items of little value.




(b) The Operator must maintain detailed records in the Joint Account of all FixedAssets acquired for the Joint Venture, as part of the Joint Venture Asset Register,and advise the Participants of the analysis of those assets into discrete categories.

6.2 Fixed Assets losses

The Operator must promptly notify the Participants of any major Fixed Asset which is

damaged or lost, or disposed of in accordance with this Accounting Procedure, whichnotification must include details of the applicable cost of the disposal to enable theParticipants to make the necessary accounting entries.

7. Inventories

7.1 Records of Material

The Operator must maintain and advise the Participants of appropriately detailed recordsof Material stocks which are Joint Venture Property, as part of the Joint Venture AssetRegister, analysed into discrete categories.

7.2 Fixed Asset inventories

The Operator must conduct a physical inventory of Fixed Assets on an annual basis, orat such periods as will enable adequate control to be exercised, so that all Fixed Assetsmust be inventoried at intervals of not more than 5 Years

7.3 Periodic Material inventories

The Operator must at reasonable intervals during each Year take either a physical countof the Joint Venture warehouse Materials, or a progressive Material stock count inaccordance with a planned schedule to ensure that each item in the inventory is checked

physically against records at least once per Year. Inventory adjustments must be made tothe Joint Account for averages and shortages disclosed by such physical inventories.Details of such averages and shortages must be advised regularly to the Participants.

7.4 Special Inventories

Special inventories may be taken (at the expense of the purchaser) whenever there is anysale or change of Participating Interest. Both the selling Participant and the purchasermay be represented and must be governed by the inventory so taken.

7.5 Notice

Notice of intention to take inventory must be given by the Operator to the Participants atleast 14 days before any inventory is to begin, so that each Participant may berepresented when any such inventory is taken.

7.6 Failure to be Represented

Failure of a Participant to be represented at the physical inventory binds that Participantto accept the inventory taken by the Operator, who must in that event furnish theParticipant with a copy thereof.

7.7 Reconciliation of Inventory

Reconciliation of Inventory with charges to the Participants must be made by theOperator and a list of overages and shortages must be provided to the Participants. TheOperator may be held accountable only for shortages due to lack of reasonable diligence.

7.8 Adjustment of Inventory

The Operator must adjust Inventory for overages and shortages.

7.9 Inventory Expenses

The expense of the Participants' nominee present at the taking of regular inventory may




not be charged to the Joint Account but the expenses incurred by the Operator must beso charged.

8. Disposal of Material

8.1 Sale of Joint Venture Property

(a) The Operator must not offer Major Items of Joint Venture Property for sale toThird Parties without first giving the Participants an opportunity to tender for the purchase of such items.

(b) The Operator may sell Major Items of Joint Venture Property only if it receives aMajority Vote of the Operating Committee. The Operator may sell Fixed Assetsand Materials which are not Major Items of Joint Venture Property withoutreference to the Operating Committee.

(c) Sales of Joint Venture Property may be billed directly by the Operator to the purchaser. The net proceeds from the sale of all Joint Venture Property must be paid by the Operator to the Joint Account for the credit of the Participants.

(d) Any proven and paid claims by the purchaser for defective Materials or othercause must be charged back to the Joint Account.

(e) The Operator must advise the Participants of the applicable cost of Joint VentureProperty sold or disposed of for scrap, for the purpose of eliminating such costsfrom their books.

8.2 Operator’s rights of purchase and disposal

(a) The Operator is under no obligation to purchase the interests of the Participants inany surplus new or second-hand Material.

(b) Major Items of Joint Venture Property must not be removed by the Operator fromthe Joint Venture without the approval of the Participants.

(c) The Operator must not sell major items of Material to a Third Party without givingthe Participants an opportunity to purchase the same at the price offered.

(d) The Operator has the right to dispose of normal accumulations of scrap Materialfrom the Joint Venture Property and any moneys received must be credited to theJoint Account.

8.3 Material Purchased by Participants

Material purchased by any Participant must be invoiced by the Operator and paid forimmediately following receipt of invoice. The Operator must credit the purchase price tothe Participants and include details of the sale in the next periodic statement of

operations.8.4 Division in Kind

Division of Joint Venture Property in kind, if made between the Operator and theParticipants, must be pro rata in proportion to their respective Percentage Shares in suchJoint Venture Property. Each Participant must be charged individually with the value ofJoint Venture Property received or receivable by it, and corresponding credits must bemade by the Operator to the Joint Account.

8.5 Sales to Third Parties

Sales to Third Parties of Material from the Joint Venture Property must be credited bythe Operator to the Participants at the net amount collected from the purchaser. Any

claims by the purchaser for defective Material must be charged back to the Participants,if and when paid by the Operator.




8.6 Basis of pricing Material transferred from Joint Venture Property

Jointly owned Material

Jointly owned Material sold to the Operator, unless otherwise agreed, must be valued onthe same basis of condition and price for Condition A, Condition B, Condition C andCondition D Material defined in this Accounting Procedure.

Other Material in less condition must be assessed and priced as follows:

(a) Scrap

Scrap, being obsolete and unserviceable Material (Condition E), must be priced at prevailing scrap prices in the area.

(b) Other Cases

Items of Material which are in unusual condition must be fairly and equitably priced by the Operator and approved by the Participants.

(c) Temporarily Used Material

When the use of Material is temporary and its service to the Joint Venture does not justify the reduction in price, such Material must be priced on the basis that willhave a net charge to the Joint Account consistent with the value of the servicerendered.

9. Sole Risk Account

9.1 Computation of Sole Risk Costs and Expenses

If under the Operator is conducting a Sole Risk Operation under this agreement, thecomputation of sole risk costs and expenses as incurred by the Sole Risk Participantsmust be made in accordance with this Accounting Procedure. If it is necessary toallocate any kind of cost or expense, including, but not limited to, direct drilling, rig

mobilisation and demobilisation, general and administrative, overhead and depreciationof material and equipment to the Sole Risk Operation and to the Joint Account anequitable procedure previously approved by the parties will be used.

9.2 Sole Risk Costs and Expenses not to be in Joint Account

The costs and expenses of a Sole Risk Operation must not be reflected in the statementand invoices rendered by the Operator for the Joint Account.

9.3 Cash Advances

The Operator is entitled to request and obtain timely cash advances from the Sole RiskParticipants in accordance with the provisions of the Accounting Procedure against costs

and expenses such as will reasonably protect the Operator for the necessity of using itsown or Joint Account funds for such purposes and the Operator is not obliged tocommence the Sole Risk Operation until all such cash advances have been received fromthe Sole Risk Participants.

10. Disputes

10.1 Referral to Auditor

Any disputes between the Operator and any Participant or between Participants as to thevalue of any Joint Venture Property or the correctness of entries in the Joint Accountmust be referred to the Auditor for determination as if the Auditor was the Expert.




Schedule 4

Dilution Provisions – Optional and Default Dilution

Terms used in this Schedule 4 have the same meanings as defined in the agreement towhich this Schedule 4 is scheduled.

1. Dilution Notice

The Participating Interest of a Participant may be reduced and diluted in either of thefollowing circumstances, whereupon the Participant becomes a Diluting

Participant:

(a) If, within 14 days of the adoption by the Operating Committee of an ApprovedProgramme and Budget, but not otherwise, a Participant gives notice to theother Participants and the Operator that it does not wish to contribute to JointOperations pursuant to that Approved Programme and Budget (Optional

Dilution Notice) whereupon it becomes a Diluting Participant for the purposesand duration of that Approved Programme and Budget; or

(b) If a Defaulting Participant fails to remedy a Breach Default Event or an UnpaidMonies Default Event within the period required by this agreement, upon allthe Non-Defaulting Participants giving notice to the Defaulting Participant thatthey require its Participating Interest to be reduced and diluted specifying therelevant Default Event which has not been remedied (Default Dilution Notice)

Provided that:

(c) a Participant may not give an Optional Dilution Notice in respect of anApproved Programme and Budget for Joint Expenditure;

(i) for an Emergency, a development, environmental protection, rehabilitationor Abandonment; or

(ii) which is required to meet obligations lawfully prescribed by an Authorityor by Law including maintenance of the Petroleum Titles in good standing,and to keep other Joint Venture Property in good condition.

2. Effect of Dilution Notice

Upon a Dilution Notice being given, the Diluting Participant is not obliged or entitledto make any further contribution to that Approved Programme and Budget and itsParticipating Interest must be reduced in accordance with the following formula(Dilution Formula) with the Participating Interest of each other Participant which isnot a Diluting Participant (Non-Diluting Participant), increasing pro-rata in the

proportion to that their respective Percentage Shares bear to each other:

100 PI xTE

DE

Where:

PI = the ongoing Participating Interest of the Diluting Participant after theDilution Notice;

DE = the total Joint Expenditure actually incurred by the Diluting Participant up tothe 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 dateof 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 eachParticipant, as applicable:

(a) the following amounts incurred prior to the Commencement Date:

(i) [Party 1] $[ ]

(ii) [Party 2] $[ ]

(iii) [Party 3] $[ ]; and

(b) If a Participant is the Assignee of a Participating Interest, the amount of CashCalls actually paid after the Commencement Date by the Participant’s

predecessors in title to its Assigned Participating Interest.

Note: Alternative Dilution Formula for accelerated [125%] dilution

100 25.1

PI x xTE

DE

3. 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 Budgetthe Operator must recalculate the Participating Interest of each Participant inaccordance with the Dilution Formula and notify the Participants of theirrespective Participating Interest:

(i) when the Participating Interest of the Diluting Participant reduces by eachmultiple of [5] percentage points below its Participating Interestimmediately before the time at which it became a Diluting Participant;

(ii) when the Participating Interest of a Diluting Participant reduces to theMinimum Interest or less;

(iii) immediately before each meeting of the Operating Committee;

(iv) on request in writing by any Participant; and

(v) every 3 months as and from the date that the Non-Diluting Participant paysthe first Cash Call after the Dilution Notice is given.

(b) On request by a Participant, the Diluting Participant must within 30 days ofreceiving the request, at its cost and expense:

(i) transfer to the Non-Diluting Participants sufficient Participating Interest inthe Petroleum Titles to give effect to the Dilution Notice and the DilutionFormula; and

(ii) execute and deliver all documents and pay all stamp duty and othertransfer costs necessary to complete (and register, if required by the law ofthe Nominated State), the Assignment and transfer of the applicableParticipating Interest to the Non-Diluting Participants.

4. Additional Cash Calls

(a) Within 7 days of receiving a Dilution Notice, the Operator must requestadditional Cash Calls from the Participants in proportion to their respectivePercentage Shares (other than the Diluting Participant) to replace thecontributions not being made by the Diluting Participant.

(b) Within 14 days of receiving a request for further Cash Calls, a Participant (otherthan a Diluting Participant) may elect:




(i) to proceed with the Approved Programme and Budget and pay theadditional Cash Calls; or

(ii) not to contribute to the Approved Programme and Budget and give aDilution Notice.

5. Re-assessment of Programme and Budget

If a further Dilution Notice is given by another Participant, the Operator must, within14 days of further Dilution Notice being given, call a meeting of the OperatingCommittee to revise the Approved Programme and Budget. A Diluting Participant isentitled 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 ofthe Operating Committee, a Diluting Participant may within 14 days of that meetinggive 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 inExploration 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 theinclusion 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 PercentageShare; and

3. in rare cases can lead to a Diluting Participant actually increasing its existing PercentageShare.

The above formula, which values the Diluting Participant’s Participating Interest based on its pastcash contributions, may be appropriate at the exploration stage, but is less appropriate at theDevelopment or Production stage. Further, if dilution is artificially accelerated, this may give riseto 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 ParticipatingInterest, they could consider using the following formula:

)1(01

B

A JVI JVI

Where: 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 Participant’s Participating Interest at thetime of the dilution, as agreed by the Participants, or determined by an Expertappointed in accordance with this agreement.

The attention of drafters using the default dilution clause is directed to “Penalties and reliefagainst forfeiture of Joint Venture Interests”, by Michael Lishman, [2008] AMPLA Journal 219.




Schedule 5

Cross Security

[Insert AMPLA Model Cross Security, amended as required]




Schedule 6

Deed of Covenant

[Insert AMPLA Model Financier’s Deed of Covenant, amended as required]




Schedule 7

Default Certificate Deed

Particulars [Insert name ] Joint Venture

Dated as of

Seller Name

ABN

Address

Email

Authorised Officer

Buyer Name

ABN

Address

Email

Authorised Officer

Operator Name

ABN

Address

Email

Authorised Officer

Recitals A. The Sellers are parties to the Joint Operating Agreement dated

20** as amended from time to time (JOA) formed toexplore for, appraise, develop and produce Petroleum in the area

of the Petroleum Titles (Title Area) on the basis that each Sellerhas the right and obligation to take in kind and separatelydispose of its Entitlement of Petroleum.

B. Each Seller is a signatory to a Sales Contract with the Buyer.

C. The Sellers have requested the Buyer to enter into this deed forthe purpose of recording the procedure whereby moneys may

be paid under the Sales Contract if the Seller defaults under the

JOA.




The parties agree:

in consideration of, among other things, the mutual promises contained in this deed:

1. Definitions

Unless set out below or the context otherwise requires, the definition of each definedexpression in this deed (including the Recitals) is the same as is defined in the JOA,and in addition:

Amendment Certificate means a certificate substantially the same as the form inSchedule 2 which is signed by the Operator or by a Non-Defaulting Participantauthorised to do so under the JOA.

JOA means the agreement dated [ ] between [ ]constituting the [ ] Joint Venture in respect of the [ ] Field(s) asamended from time to time.

Non-Defaulting Participant has the meaning set out in the JOA.

Product means Petroleum in any form recovered from the Title Area and produced by

Joint Operations, or Sole Risk Operations, under the JOA

Sales Contract means a contract for the sale and purchase of Product listed inSchedule 1, together with all present and future rights and benefits (including sale

proceeds and accounts receivable) arising under such contract.

Title Area means the area of [ ] and any other production lease orlicence that may be granted to the Sellers in respect of that area.

2. Payment authority

The Seller requests, authorises and directs the Buyer, and the Buyer agrees with theSeller, that, upon receipt by the Buyer of an Amendment Certificate in respect of theSales Contract, the Buyer must pay to the person and to the account specified in theAmendment Certificate all such sums set out in the Amendment Certificate as theBuyer may otherwise thereafter be required to pay to the Seller under the SalesContract.

3. Payment

The Buyer must pay all payments to be made by it pursuant to the AmendmentCertificate into such bank account as is nominated in the Amendment Certificate.

4. Delivery of Amendment Certificate

(a) Any Amendment Certificate required to be delivered to the Buyer under thisdeed must be delivered to the Buyer at its address set out in the Particulars

above.(b) The Buyer may at any time, by Notice in writing delivered to the Seller and the

Operator, amend and substitute the delivery particulars specified in this clause.

5. Amendment or cancellation of Amendment Certificate

Any Amendment Certificate delivered to the Buyer may be amended or cancelled inwhole or in part by a subsequent Amendment Certificate in which event the originalAmendment Certificate is, upon receipt of the subsequent Amendment Certificate bythe Buyer, deemed ineffective and of no force for the purpose of this deed.

6. Conclusiveness of Amendment Certificate

(a) Any Amendment Certificate given by the Operator or by a Non-DefaultingParticipant authorised to do so under the JOA and received by the Buyer in themanner provided under this deed is deemed to be final and conclusive between




the Seller and the Buyer as to any matter appearing in the AmendmentCertificate

(b) Each Seller is bound by the terms of any Amendment Certificate and the Buyeris not concerned to enquire whether any event has occurred to authorise theOperator or the Non-Defaulting Participant to issue any AmendmentCertificate.

7. Variation of Sales Contract

To the extent required to facilitate the payment authority in this deed, the Seller and the

Buyer agree the Sales Contract is varied, and in all other respects the Sales Contract isof full force and effect.

8. Assignment

The Buyer hereby acknowledges and agrees that the Seller may assign the whole orany part of its rights and obligations under this deed to any person who becomes a

party to JOA and to the Sales Contract subject to and in accordance with theassignment provisions set forth in those contracts and subject further to such assigneecovenanting direct with the Buyer to observe and perform this deed and to be bound

by all of the terms thereof.

9. Buyer acknowledgement

The Buyer acknowledges to the Seller that if the Operator fails to issue anAmendment Certificate as required by the JOA, a Non-Defaulting Participant maygive an Amendment Certificate to the Buyer, which Amendment Certificate muststate that the Operator is in default under the JOA.

10. Seller acknowledgements

The Seller acknowledges to the Buyer that:

(a) the Buyer is in no way prejudiced under the Sales Contract or otherwise byacting in reliance upon any Amendment Certificate;

(b) any receipt or other acknowledgement issued by the Operator or a Non-Defaulting Participant in respect of moneys paid by the Buyer pursuant to anysuch Certificate constitutes full and sufficient discharge of the payment of suchmonies under both this deed and the Sales Contract.

11. Indemnity

The Seller indemnifies and must keep indemnified and saved harmless the Buyerfrom and against all costs, claims, suits and demands and all liabilities or damageswhich it may incur or sustain in carrying out or giving effect to any AmendmentCertificate in respect of the Sales Contract given or received pursuant to the terms ofthis deed.

12. GST

The GST provisions in the JOA apply to, and are incorporated into, this deed.

13. Enurement

The provisions of this deed enure for the benefit of and are binding on each party andtheir respective successors and permitted Assigns.

14. Amendment

No modification, variation or amendment of this deed is of any force unless it is in

writing and has been signed by each of the parties.




15. Waiver

A waiver of any right, power or remedy under this deed must be in writing signed bythe party granting it. A waiver is only effective in relation to the particular right, poweror remedy in respect of which it is given. It is not to be taken as an implied waiver ofany other right, power or remedy or as an implied waiver of that right, power or remedyin relation to any other occasion.

16. Applicable law and jurisdiction

(a) This deed is governed by and must be construed in accordance with the laws ofthe Nominated State.

(b) The parties submit irrevocably to the non-exclusive jurisdiction of the Courts ofthe Nominated State and all Courts competent to hear appeals from thoseCourts.

17. Counterparts

This deed may be executed in any number of counterparts and by different parties inseparate counterparts. Each counterpart when so executed is deemed an original but all

of which together constitute one and the same instrument.

Schedule 1

Agreement between the Seller] and the Buyer dated _________for the sale and purchase and sale of oil/natural gas/other products from the Title Area.

Schedule 2

Amendment Certificate

To: [Buyer]

Pursuant to the provisions of the Default Certificate Deed [all sums][Nominated Amounts] as you may from time to time hereafter be required to

pay to [insert name of Seller] under the Sales Contract must henceforth be paid direct to the following person at the Nominated Bank Account:

Name of Person:

Nominated Bank Account:

Nominated Amounts:

Signed on behalf of [Seller]: …………….………………… [Position]

Witness: ……………………………….

Executed as a deed.




Signing page

EXECUTED by [Company][ACN] inaccordance with section 127(1) of theCorporations Act by authority of itsdirectors in the presence of:

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............................................................

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

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Name of witness (block letters)

............................................................

Address of witness

............................................................

Occupation of witness

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By executing this agreement the attornestates that the attorney has received nnotice of revocation of the power oattorney



Dated

Petroleum Joint Operating Agreement[ ] Joint Venture

Between

[ ] (Participant 1)

And

[ ] (Participant 2)

And

[ ] (Participant 3)

And

[ ] (Operator )

210101, 09.12.11 AMPLA MPJOA - VERSION 1

Documents

Transcript of 210101, 09.12.11 AMPLA MPJOA - VERSION 1