Petroleum Exploration Licence PEL 285

Section 19 af the1 Petroleum (On.sh.ore) Act 199111 ,

I, ANTHONY ROBERTS MP, MINISTER FOR RESOURCES AND ENERGY, pursuant to Section 19 of the Petroleum (Onshore) Act 1991, renew Petroleum Exploration Licence 285 over the land and for the term set out in Schedule 1 subject to the conditions as specified in Schedule 2.

The rights and duties of a Licence Holder are those prescribed by the Petroleum (Onshore) Act 1991, subject to the terms and conditions of this Licence. This Licence does not override any obligation on the Licence Holder to comply with the requirements of other legislation and regulatory instruments which may apply to the Licence Holder.

SIGNE{)/~ 'i/r/,,.,vDATE

The Hon Anthony Roberts MP Minister for Resources and Energy

Sydney

SCHEDULE 1

Licence Holder(s): AGL Upstream Investments Pty Limited (ABN 58 115 063 7 44)

Land: 13 full and partial blocks numbered 3408 within the Armidale map sheet and 23, 24, 95, 96, 97, 167, 168, 239, 240, 311, 312 and 384 within the Sydney map sheet.

Term: 6 years beginning on the date of this instrument

SCHEDULE 2

PETROLEUM EXPLORATION LICENCE CONDITIONS 2014-PEL 285

DEFINITIONS Words used in this exploration licence have the same meaning as defined in the Petroleum (Onshore) Act 1991 except where otherwise defined below:

Act means the Petroleum (Onshore) Act 1991.

Borehole means a hole made by drilling or boring, but excludes:

a) sampling and coring using hand held equipment; and

b) petroleum wells.

Category 1 prospecting operations means petroleum exploration activities of a kind described in clauses 10(1) and 10(2) of State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2009 which are exempt development within the meaning of s 76 of the Environmental Planning and Assessment Act 1979.

Category 2 prospecting operations means:

a) petroleum exploration activities of a kind described in clause 10(2) of State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007, where those activities are carried out on land to which clause 1 O does not apply;

b) construction of an access way such as a track or road;

c) construction and use of boreholes; and

d) seismic surveys.

Category 3 prospecting operations means petroleum exploration activities of the following kind:

a) construction and use of petroleum wells;

b) prospecting operations and water management infrastructure required to be carried out in accordance with an approved Produced Water Management Plan under condition 16;

c) fracture stimulation;

d) installation of gas gathering and pipeline infrastructure;

e) any prospecting operation resulting in a cumulative surface disturbance exceeding a total of five (5) hectares within the exploration licence area; and

f) any other prospecting operations which are not Category 1 or Category 2 prospecting operations.

Controlling body in relation to an exempted area means:

a) in the case of land referred to in paragraph (a) or (c) of the definition of exempted area - the person having the control and management of the land;

b) in the case of land referred to in paragraph (b) of that definition - the holder of the lease referred to in that paragraph; or

c) in the case of land referred to in paragraph (d) of that definition - the person prescribed by the regulations as the controlling body for that land for the purposes of this definition.

Department means the Department of Trade and Investment, Regional Infrastructure and Services.

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Environment has the same meaning as in the Dictionary in the Protection of the Environment Operations Act 1997.

EP&A Act means the Environmental Planning and Assessment Act 1979.

Exempted area has the same meaning as in section 70 of the Act.

Exploration licence area means the land and water which is subject to this exploration licence.

Feasible relates to engineering considerations and what is practical to build or implement.

Flowback water is the return to surface of fracture stimulation fluids before transition to produced water.

Fracture stimulation means the process by which a well is "stimulated" when fluids are forced at high pressure into hydrocarbon-bearing formations to create a conductive flow path into the target formation resulting in enhanced flow of hydrocarbons to the wellhead (also known as "hydraulic fracturing", "fraccing" or "tracking").

Harm to the environment has the same meaning as in the Dictionary in the Protection of the Environment Operations Act 1997.

Landholder for the purposes of these conditions does not include a secondary landholder and includes, in the case of exempted areas, the controlling body for the exempted area.

Material harm to the environment has the same meaning as in section 147 of the Protection of the Environment Operations Act 1997.

Minister means the Minister administering the Act.

Petroleum well means a hole made by drilling or boring in connection with prospecting for petroleum or operations for the recovery of petroleum, but excludes:

(a) sampling and coring using hand held equipment;

{b) a hole constructed and operated for the following purposes where the operation of that hole does not involve fracture stimulation or the recovery of petroleum:

(i) stratigraphic definition;

(ii) seismic (for example shot holes, geophone, tilt meters bores);

(iii) water monitoring; or

(iv) environmental assessment.

Pollution incident has the same meaning as in the Dictionary in the Protection of the Environment Operations Act 1997.

Produced water means water that is taken in the course of a prospecting operation that is part of or incidental to that prospecting operation, including water that is encountered within and extracted from boreholes, petroleum wells or excavations.

Reasonable relates to the application of judgment in arriving at a decision, taking in to account: mitigation benefits; cost of mitigation versus benefits provided; community views; and the nature and extent of potential improvements.

River has the same meaning as in the Dictionary in the Water Management Act 2000.

Secretary means the Secretary of the Department of Trade and Investment, Regional Infrastructure and Services

Waste has the same meaning as in the Dictionary in the Protection of the Environment Operations Act 1997.

Water land has the same meaning as in section 198A of the Fisheries Management Act 1994.

Wetlands has the same meaning as in section 198A of the Fisheries Management Act 1994.

CONDITIONS

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Conditions 1-44, 45-52, 56-57, 58, 63, 64 and 69 of this exploration licence are identified as conditions relating to environmental management.

Prospecting operations permitted under this exploration licence

1. The licence holder may conduct Category 1 prospecting operations on the exploration licence area subject to the conditions of this licence.

Prospecting operations requiring further approval

2. The licence holder must obtain written approval from the Minister prior to carrying out any of the following prospecting operations on the exploration licence area:

a) Category 2 prospecting operations; and

b) Category 3 prospecting operations.

3. In relation to the application for the Minister's approval under condition 2, the application for approval:

a) must be accompanied by a Surface Disturbance Notice (SON);

b) in respect of Category 2 prospecting operations, must be accompanied by a Review of Environmental Factors (REF) and Agricultural Impact Statement, if required by the Minister (accordingly, the licence holder must seek advice from the Department as to whether these documents are required in respect of the prospecting operations prior to lodging an application for approval for a Category 2 prospecting operation);

c) in respect of all Category 3 prospecting operations, must be accompanied by a REF and Agricultural Impact Statement.

4. The licence holder must comply with the conditions of an approval under condition 2 when carrying out those prospecting operations.

Note - EP&A Act Part 5 obllgatlons and other obligations:

If the impact ofprospecting operations on the environment is determined as likely to signfficantly affect the environment (including critical habitat) or threatened species, populations or ecological communities, or their habitats, the licence holder will be required to submit an Environmental Impact Statement (EIS) and/or a Spec/es Impact Statement in accordance with Part 5 ofthe Environmental Planning and Assessment Act 1979.

Applications may a/so require a Groundwater Monitoring and Modelling Plan (see condition 12) and/or a Produced Water Management Plan (see condition 16).

Exempted Areas

5. The licence holder must obtain the Minister's consent before carrying out any prospecting operations or exercising any other right conferred by this licence in an exempted area. Applications for the Minister's consent under this condition must include a copy of the land access agreement executed by the licence holder and the controlling body for the exempted area.

Note - Exempted area provisions In the Act:

'Exempted Area' is defined in section 70 of the Act. Under that section the licence holder must not commence prospecting operations in an exempted area without the prior written consent of the Minister, which may be subject to conditions.

If relevant, the title holder would also need to comply with provisions ofthe Native Title Act 1993 (Cth) in relation to the exercise ofrights in exempted areas.

Codes of Practice

6. Unless otherwise approved by the Minister, the licence holder must comply with the requirements set out in the following Codes, as amended or replaced from time to time:

a) the NSW Code of Practice for Coal Seam Gas Well Integrity (NSW Trade & Investment, 2012); and

b) the NSW Code of Practice for Coal Seam Gas Fracture Stimulation (NSW Trade & Investment, 2012).

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7. In the event of any inconsistency between the Codes identified in condition 6 and the conditions of this exploration licence, the Codes prevail except where an approval has been given by the Minister under condition 2.

Access to exploration licence and relevant documents

8. Prior to the commencement of prospecting operations authorised under this licence, the licence holder must ensure that a copy of this exploration licence and any relevant documentation relating to the conduct of prospecting operations is:

a) accessible on the site of active prospecting operations authorised by this exploration licence; and

b) made available to all supervisors or other persons concerned in the day to day management of prospecting operations authorised by this licence.

For the purposes of this condition, relevant documentation includes, but is not limited to:

a) access arrangements required under Part 4A of the Act, with the exception of documentation that is subject to confidentiality obligations;

b) exempted area consents required under section 70 of the Act;

c) approvals under condition 2 of this licence, and any document specified as forming part of that approval, such as an REF;

d) the Groundwater Monitoring and Modelling Plan/s approved under condition 12 of this exploration licence;

e) the Produced Water Management Plan/s approved under condition 16 of this exploration licence;

f) the approved Work Program included in Schedule 3 of this exploration licence; and

g) any approval, plan, program or similar document required to comply with the Codes of Practice specified in condition 6 of this exploration licence.

Environmental harm

9. The licence holder must implement all feasible and reasonable measures to prevent and/or minimise harm to the environment that may result from the conduct of prospecting operations under this exploration licence.

Erosion and sediment control

10. The licence holder must prevent erosion and pollution of watercourses resulting from the conduct of prospecting operations by implementing all feasible and reasonable erosion and sediment control measures.

11. The planning, design and construction of erosion and sediment control measures must be conducted in accordance with Managing Urban Stormwater: Soils and Construction (DECC), as amended or replaced from time to time.

Groundwater Monitoring and Modelling Plan

12. Prior to conducting prospecting operations involving the construction or use of petroleum wells, the licence holder must obtain the Minister's approval for a Groundwater Monitoring and Modelling Plan prepared in accordance with the requirements set out in conditions 13 and 14.

13. The Groundwater Monitoring and Modelling Plan must be prepared in consultation with the NSW Office of Water.

14. The Groundwater Monitoring and Modelling Plan must address the following matters to a level of detail commensurate with the scale, timing and potential impact of the proposed prospecting operations:

a) description of methods for identifying aquifers, aquifer depths, behaviour, containing layers and connectivity with surrounding aquifers or surface water systems;

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b) description of methods for collection of data relevant to the type, quantity and quality of water contained within aquifer systems likely to be encountered during prospecting operations;

c) a proposal for the future development of a conceptual model of regional groundwater behaviour;

d) a proposal for the future development of a calibrated computer model of regional groundwater behaviour, to enable the impacts of any proposed production operations to be assessed;

e) description of how records of all data collected will be maintained;

f) description of the staging process for implementation of the plan; and

g) includes any additional requirements prescribed by the Secretary.

15. The licence holder must implement and comply with the Groundwater Monitoring and Modelling Plan approved by the Minister under condition 12.

Note - Purpose of Groundwater Monitoring and Model/Ing Plan

The Groundwater Monitoring and Modelling Plan Is required to ensure:

a) there is sufficient groundwater data available to assess future operations against the Aquffer Interference Policy (NSW Office ofWater, 2012), as amended or replaced from time to time; and

b) baseline data is available prior to submitting an application for any future production operations.

Produced Water Management Plan

16. Prior to conducting prospecting operations with the potential to generate more than three (3) megalitres per year of produced water (as a result of cumulative prospecting operations within the exploration licence area), the licence holder must obtain the Minister's approval for a Produced Water Management Plan prepared in accordance with the requirements set out in conditions 17 and 18.

17. The Produced Water Management Plan must be prepared in consultation with the NSW Office of Water.

18. The Produced Water Management Plan must address the following matters:

a) the expected sources and estimated quantity of the produced water;

b) the proposed containment and treatment measures for the produced water;

c) the proposed beneficial reuse or disposal methods for the produced water;

d) the controls to be implemented to prevent and/or minimise pollution;

e) how records of all relevant parameters for the quality, quantity, transport and disposal of all water will be maintained;

f) the staging process for implementation of the plan; and

g) any additional requirements prescribed by the Secretary.

19. Except where approved under condition 2 or under a Produced Water Management Plan approved under condition 16, produced water must not be discharged to land.

20. The licence holder must implement and comply with the Produced Water Management Plan approved by the Minister under condition 16.

Note - Obflgatlons under other leg/slat/on:

(a) Discharge to receiving waters must meet the requirements of the Protection ofthe Environment Operations Act 1997.

{b) A water access licence under the Water Management Act 2000 may be required for petroleum prospecting operations taking more than three (3) megalitres of water from groundwater sources per year. A licence may be required under the Water Act 1912 where that Act applies.

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Use of chemicals and fuel

21 . The licence holder must comply with Policy Tl-0-120 - Ban on use of BTEX compounds in CSG activities policy (NSW Trade & Investment, 2012), as amended or replaced from time to time.

Note - other obligations:

Additional conditions regulating chemical additives maybe imposed on prospecting operations under approvals issued under condition 2 of this exploration licence. The NSW Code of Practice for Coal Seam Gas Fracture Stimulation also contains relevant requirements.

22. The licence holder must ensure that all chemicals, fuels and oils, excluding those contained within plant and equipment and those for personal use, are:

a) stored and handled in accordance with the relevant Material Safety Data Sheet and Australian Standards for the material;

b) stored in appropriate containers that are in good condition and labelled to clearly identify the stored product; and

c) kept in a facility or area which is capable of containing at least 110% of the largest container capacity stored within that area. The licensee is not, however, required to comply with the 110% containment requirement in this subsection if a secondary containment system is also used that is constructed and operated in a manner that achieves the same environmental outcome.

The licence holder must ensure that adequate spill prevention and oil absorbent materials required to manage spills and leaks for all chemicals, fuels and oils on site are readily available at all times where prospecting operations are being carried out. Equipment and/or materials to capture drips and spills must be used during transfer of chemicals, fuels and oils, and when maintaining oil or fuel filled components.

Noise

23. The licence holder must carry out operations in accordance with the requirements of the Interim Construction Noise Guidelines (DECC, 2009) (ICNG), as amended or replaced from time to time.

24. The requirements identified in condition 23 will not apply where the licence holder has negotiated different limits in a written agreement with:

a) the relevant landholder; or

b) in the case of a prospecting operation that may result in an exceedance of the Interim Construction Noise Guidelines (DECC, 2009) at a dwelling or other sensitive receiver, the resident of that dwelling or occupier of the sensitive receiver.

Any written agreement must be submitted to the Minister prior to the commencement of the prospecting operations the subject of that agreement.

Note - Noise limits In other legislation

The licence holder may a/so be subject to noise limits under an environmental protection licence under the Protection of the Environment Operations Act 1997.

Vegetation clearing

25. Vegetation clearing and vegetation disturbance must be limited to the minimum extent necessary to facilitate the conduct of prospecting operations authorised by this exploration licence.

Fire prevention

26. The licence holder must take all feasible and reasonable precautions against causing an outbreak of fire.

27. The licence holder must not burn off any grass, foliage or herbage without the consent of the landholder and the local fire authority.

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Roads and tracks

28. Except where otherwise approved under condition 2, the licence holder must ensure that:

a) existing roads and tracks are used in preference to constructing new roads and tracks;

b) the planning, design, construction and maintenance of unsealed roads and tracks must be conducted in accordance with Managing Urban Stormwater: Soils and Construction, Volume 2C, Unsealed Roads (DECC 2008), as amended or replaced from time to time;

c) all river crossings are constructed in accordance with requirements of the Policy and Guidelines for Fish Habitat Conservation and Management (Update 2013) (NSW Department of Primary Industries 2013), as amended or replaced from time to time; and

d) all crossings of permanent and intermittent water lands and wetlands are constructed in accordance with requirements of the Policy and Guidelines for Fish Habitat Conservation and Management (Update 2013) (NSW Department of Primary Industries 2013), as amended or replaced from time to time.

29. The licence holder must restrict the use of any road or track during wet weather to prevent damage to that road or track unless the road or track has been designed and constructed for use in wet weather, unless the explicit consent to the use of such a road or track in wet weather has been obtained from the land owner.

Topsoil management

30. The licence holder must ensure that all topsoil removed in the course of prospecting operations is stockpiled for later use in rehabilitating those operations.

Drilling

31. The licence holder must:

a) Construct, maintain and decommission all boreholes and petroleum wells in accordance with standards equivalent to or exceeding the Minimum Construction Requirements for Water Bores in Australia (NUDLC 2012), as amended or replaced from time to time. To the extent of any inconsistency between this condition and other conditions of this licence, the other conditions of this licence prevail.

b) Construct, maintain and decommission all boreholes and petroleum wells in accordance with standards provided under Secretary's guidelines related to the drilling, operation and abandonment of boreholes.

c) Ensure that the construction, operation, maintenance and decommissioning of boreholes and petroleum wells does not significantly enhance, or is not a significant cause of:

(i) hydraulic connection between aquifers;

(ii) contamination or cross-contamination of aquifers;

(iii) uncontrolled escape of natural or noxious gases;

(iv) the uncontrolled surface discharge of groundwater;

(v) collapse of the surrounding surface; or

(vi) hazards to persons, stock and wildlife.

d) Implement appropriate controls to manage any risks associated with natural or noxious gases, both during and after drilling;

e) Contain all drill cuttings, fluids and groundwater returned to the surface as part of the drilling process in above-ground tanks or in-ground sumps pending re-circulation or disposal. In-ground sumps must be lined with an impermeable barrier where there is a potential risk of contamination from drill cuttings or fluids;

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f) Survey all boreholes and petroleum wells to a minimum 0.5 metre accuracy at collar, with the survey to be carried out by a surveyor registered with the Board of Surveying and Spatial Information under the Surveying and Spatial Information Act 2002;

g) Remove equipment and logging tools from the borehole or petroleum well prior to plugging and abandonment of the borehole or petroleum well, unless otherwise approved by the Minister; and

h) Once a borehole or petroleum well ceases to be used, the borehole or petroleum well must be completely filled with cement grout during drill rod withdrawal and plugged, unless otherwise approved by the Minister.

Note

The Code of Practice for Coal Seam Gas Well Integrity also includes requirements in relation to CSG Wells which are in addition to the requirements listed in the condition above. To the extent of any inconsistency between the requirements of this condition and that Code in relation to CSG wells, the requirements of the Code prevail.

32. At the completion of testing and prior to plug and abandonment of a borehole or petroleum well, the licence holder must ensure that steel casing is removed from the vertical interval(s) encompassing all coal seam(s) unless otherwise approved by the Minister. Downhole geophysical tools and/or cameras must be used to confirm the removal or absence of steel casing throughout the prescribed interval. All logs and information pertinent to the steel casing must be provided to the Department.

33. The licence holder must immediately notify the Department of any blowout or uncontro lled flow of fluid from the petroleum well or borehole associated with prospecting operations.

34. The licence holder must submit to the Department within seven (7) days of the occurrence of the blowout or uncontrolled flow reported under condition 32, a written report which includes;

a) detailed consideration of the cause of the blowout or uncontrolled f low;

b) detailed consideration of the impacts or issues caused by the blowout or uncontrolled flow, including any impacts on landowners or residents;

c) information about how the impacts or issues caused by the blowout or uncontrolled flow were managed, including whether regulatory agencies other than the Department were notified, any advice received from those agencies and how such advice was implemented to manage the impacts or issues caused by the blow out or uncontrolled flow; and

d) any changes to operating procedures proposed to prevent similar blowouts or uncontrolled flows occurring in the future.

Waste management

35. The licence holder must ensure that:

a) the sites of prospecting operations are maintained in a clean and tidy condition at all times;

b) all waste, including contaminated residues, must be collected, segregated and securely deposited in properly constructed containers and disposed lawfully;

c) drilling by~products contaminated by chemicals, oils or fuels must be collected and remediated or disposed lawfully; and

d) all drill cuttings and drilling fluids not being reused in drilling operations are disposed lawfully.

Note:

Alternative reuse of drill cuttings and treated fluids may be approved by the Minister under condition 2 of this exploration licence.

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36. The licence holder must maintain records of:

a) all waste generated as a result of prospecting operations under this exploration licence; and

b) the means of disposal of all waste.

37. The records maintained in accordance with condition 36 must be produced to the Department within seven days of receipt of a request by the Minister for those records.

Note - Waste regulation in other legislation

Waste Is regulated under the Protection of the Environment Operations Act 1997. Contact the Local Council or the Environment Protection Authority for details ofthese requirements.

Rehabilitation

38. The licence holder must rehabilitate all disturbance resulting from prospecting operations carried out under this licence in accordance with these conditions and any further conditions imposed by the Minister in relation to any prospecting operations. Details of all rehabilitation work carried out under any condition imposed by the Minister must be included in the Compliance and Rehabilitation Report required under condition 45.

39. The licence holder must maintain records (including photographic records) of all disturbance resulting from prospecting operations and rehabilitation carried out within the licence area. These records must be produced to the Department within seven days of receipt of a request by the Minister for those records.

Note - Further reporting obligations:

All disturbance and rehabilitatfon Is to be reported in the Compliance and Rehabilitation Report required under condition 45.

40. In rehabilitating the disturbance resulting from prospecting operations, the licence holder must ensure that:

a) all machinery, buildings and other infrastructure are removed from the area;

b) the area is left in a clean, tidy and stable condition;

c) there is no adverse environmental effect outside the disturbed area;

d) the land is properly drained and protected from soil erosion;

e) the land is not a potential source of pollution;

f) the land is compatible with the surrounding land and land use requirements:

g) the landforms, soils, hydrology and flora require no greater maintenance than that in, or on, the surrounding land:

h) the land does not pose a threat to public safety; and

i) in cases where vegetation has been removed or damaged:

(i) where the previous vegetation was native, species used for revegetation are endemic to the area; or

(ii) where the previous vegetation was not native, species used for revegetation are appropriate to the area; and

(iii) any revegetation is of an appropriate density and diversity.

41 . The licence holder must ensure that all river crossings that are constructed or disturbed during prospecting operations are rehabilitated such that the natural flow of water is unimpeded and stream bank stability is maintained to prevent erosion.

42. The licence holder must comply with any relevant guidelines issued by the Secretary in relation to the rehabilitation of disturbance resulting from prospecting operations.

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43. All rehabilitation of disturbance resulting from prospecting operations under this licence must be completed before this licence expires or as soon as practicable following cancellation of this licence.

44. Boreholes or petroleum wells that have been abandoned as a result of previous mining or prospecting operations, and which have been opened up or used by the licence holder (other than for the purposes of plugging and abandoning only) are subject to the conditions of this licence as if the boreholes or petroleum wells were constructed by the holder of this exploration licence.

Compliance and Rehabilitation Report

45. The licence holder must submit a Compliance and Rehabilitation Report which is satisfactory to the Minister.

46. The report must be prepared in accordance with any relevant guidelines or requirements adopted by the Secretary for compliance and rehabilitation reporting, and must include:

a) information on all disturbance resulting from prospecting operations and rehabilitation carried out within the exploration licence area;

b) information on the extent to which the licence holder has complied with:

(i) conditions of this licence;

(ii) conditions of any approvals granted in relation to prospecting operations carried out under this licence; and

(iii) the provisions of this Act and Regulations applicable to the prospecting operations carried out under this licence;

c) particulars of any non-compliance with any of the requirements listed condition 46(b);

d) the reasons for any such non-compliance; and

e) any action taken, or proposed, to prevent recurrence, or to mitigate the effects, of the non-compliance identified in condition 46(c).

47. The Compliance and Rehabilitation Report must be lodged with the Department annually within 28 days following the grant anniversary date for the life of this licence, or on any date or dates otherwise required by the Minister.

48. In addition to lodgement requirements under condition 47 above, a Compliance and Rehabilitation Report:

a) must accompany any application to renew this exploration licence under the Act;

b) must accompany any application to transfer this exploration licence under the Act;

c) must accompany any application to cancel, or to partially cancel, this exploration licence under the Act; and

d) must be submitted one month prior to the expiry of this exploration licence, where the licence holder is not seeking to renew or cancel this exploration licence under the Act.

Environmental Incident Reporting

49. The licence holder must immediately notify the Department of the following matters which arise in connection with prospecting operations under this licence:

a) breaches of the conditions of this exploration licence or the Act which may cause or threaten material harm to the environment; and

b) breaches of environmental protection legislation (as defined in the Protection of the Environment Administration Act 1991) which may cause or threaten material harm to the environment.

Note - Notification contact details

Refer to www.resources.nsw.gov.aulenvironment for notification contact details.

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50. The licence holder must submit an Environmental Incident Report to the Department within seven (7) days of all breaches referred to in condition 49(a) and (b). The Environmental Incident Report must include:

a) the details of the exploration licence;

b) contact details for the licence holder;

c) a map identifying the location of the incident and where material harm to the environment has or is likely to occur;

d) a description of the nature of the incident or breach, likely causes and consequences;

e) a timetable showing actions taken or planned to address the incident and to prevent future incidents or breaches referred to in condition 49; and

f) a summary of all previous incidents or breaches which have occurred in the previous 12 months relating to prospecting operations under this licence.

51. The licence holder should have regard to any relevant Secretary's guidelines in the preparation of the Environmental Incident Report referred to in condition 50.

Note:

Refer to www.resources.nsw.gov.aulenvironment for further details.

52. In addition to the requirements set out in conditions 49 and 50, the licence holder must immediately advise the Department of any notification of a pollution incident made under section 148 of the Protection of the Environment Operations Act 1997 arising in connection with prospecting operations under this exploration licence.

Security

53. The licence holder must provide and maintain a security deposit of $1,009,000 to secure funding for the fulfilment of obligations of all or any kind under the Act in respect of the . licence, including obligations that may arise in the future. The security deposit must be submitted to the Department prior to the commencement of any prospecting activities authorised under these conditions, and will be held by the Department until the obligations are fulfilled.

54. The security deposit is to be provided by way of a cash deposit (with no entitlement to any interest thereon) or in such other form as may be approved by the Minister.

Native Title

55. The licence holder must not prospect on any land or waters on which Native Title is claimable under the Native Title Act 1993 (Cth) without the prior written consent of the Minister.

Community consultation

56. The licence holder must carry out community consultation in relation to the planning and conduct of prospecting operations authorised under this licence in accordance with the Guideline for community consultation requirements for exploration (NSW Trade & Investment, 2012), as amended or replaced from time to time.

57. An annual report on Community Consultation must be submitted to the Department within 28 days following the grant anniversary date which details the licence holder's compliance with the Guideline for community consultation requirements for exploration.

Note - copies ofguidelines

Copies of the Guideline are available from www.resources.nsw.gov.au

Stock and Wildlife

58. The licence holder must conduct operations in a manner so as not to cause danger to travelling stock.

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59. The licence holder must not interfere with or prevent the access of stock to any watering places or approaches to such watering places without the approval of the landholder.

60. The licence holder must carry out operations in a manner that ensures the safety of stock and wildlife in the vicinity of the operations.

Technical Manager

61 . The licence holder must ensure that prospecting operations are conducted, or directly supervised, by a Technical Manager, who is:

a) a person with tertiary qualifications in geoscience, petroleum or mining engineering; or

b) a person having other qualifications or exploration experience approved by the Minister.

62. The licence holder must advise the Minister of the name and contact details of the Technical Manager(s) prior to the commencement of any prospecting operations and within ten (10) working days of any changes to the nominated Technical Manager or their contact details.

Work Program

63. Unless otherwise approved by the Minister, the licence holder must implement and complete the work program specified in Schedule 3 of this exploration licence.

Note - Other requirements relating to Work Program

Clause 9 of the Petroleum (Onshore) Regulation 2007 states that it Is a condition of every petroleum title that the holder of the exploration licence will carry out the operations, and only the operations, described In the work program specified in Schedule 3 of this exp/oration llcence. Under Clause 10 of the Petroleum (Onshore) Regulation 2007, the work program may be varied upon application to and approval of the Minister.

Exploration (geological) reports

64. Reports required under section 131 of the Act and Part 3 of the Petroleum (Onshore) Regulation 2007 must be prepared in accordance with the New Guidelines for Digital Data Submission and Reporting of Onshore Petroleum Exploration in New South Wales (NSW Trade & Investment - Division of Resources & Energy, February 2012), as amended or replaced from time to time.

Cooperation with other title holders

65. The licence holder must make every reasonable attempt, and be able to demonstrate their attempts, to enter into a cooperation agreement with the holder(s) of any overlapping authorisations for Group 8 or 9 minerals under the Mining Act 1992. The cooperation agreement should address but not be limited to:

a) access arrangements;

b) operational interaction arrangements;

c) dispute resolution ;

d) information exchange;

e) location of prospecting operations;

f) timing of drilling;

g) potential resource extraction conflicts; and

h) integrated rehabilitation activities.

66. A copy of any cooperation agreement executed in relation to the area the subject of this licence must be provided to the Department within seven days of execution.

Note - Group 8 and 9 minerals:

Group 8 minerals are geothermal energy.

Group 9 minerals are coal and oil shale.

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Minister's approval of change in control

67. It is a condition of this licence that, where the licence holder is a corporation or a trust, the Minister's prior written approval is required before there is:

a) any change in the effective control of the licence-holder; or

b) any foreign acquisition of substantial control in the licence-holder.

However, approval in respect of (a) or (b) is not required where a change in effective control of the licence holder or a foreign acquisition of substantial control of the licence holder occurs as a result of the acquisition of shares or other securities on a registered stock exchange.

68. For the purposes of condition 67:

a) there is a "change in effective control" where, after the imposition of this condition , any Third Party or Trustee of a Trust Estate:

(i) acquires the capacity to appoint or control at least 50% of the number of directors of the licence-holder's board;

(ii) becomes entitled to exercise (directly or indirectly) greater than 50% of the votes entitled to be cast at any general meeting of the licence-holder; or

(iii) holds more than 50% of the issued share capital (other than shares issued with no rights other than to receive a specified amount in distribution) of the licence-holder.

b) there is a ''foreign acquisition of substantial control" where, after the imposition of this condition, a Foreign Party:

(i) acquires the capacity to appoint or control at least 15% of the number of directors of the licence-holder's board;

(ii) becomes entitled to exercise (directly or indirectly) greater than 15% of the votes entitled to be cast at any general meeting of the licence-holder; or

(iii) holds more than 15% of the issued share capital (other than shares issued with no rights other than to receive a specified amount in distribution) of the licence-holder;

c) a Foreign Party means:

(i) a natural person not ordinarily resident in Australia (foreign person);

(ii) a corporation incorporated outside Australia (foreign corporation);

(iii) a corporation in which a foreign person or foreign corporation is a shareholder holding more than 15% of issued capital entitled to vote at any general meeting of the licence holder;

(iv) a corporation in which two (2) or more persons, each of whom is either a foreign person or a foreign corporation are shareholders and collectively hold not more than 40% of issued capital entitled to vote at general meetings of the corporation;

(v) the trustee of a trust estate, in which a foreign person or a foreign corporation is a beneficiary of the trust estate and holds more than 15% of the beneficial interest in the trust estate; or

(vi) the trustee of a trust estate in which two (2) or more persons, each of whom is either a foreign person or a foreign corporation, are beneficiaries of the trust estate and collectively hold more than 40% of the beneficial interest in the trust estate, provided that a foreign party shall not include a related body corporate of the licence holder.

d) a Related Body Corporate means in relation to a body corporate, a body corporate which is a related body corporate of the first mentioned body corporate for the purposes of the Corporations Act 2001 (Cth); and

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e) a Third Party means any person who is not a Related Body Corporate of the licence holder.

Operating Conditions

69. The licence holder must carry out all activities under this licence in a competent and effective manner.

SPECIAL CONDITIONS

70. In the event of any inconsistency between:

a) the conditions of this exploration licence; and

b) the conditions of an environmental protection licence issued under the Protection of the Environment Operations Act 1991 in relation to activities to be carried out under this exploration licence,

the latter prevails to the extent of the inconsistency.

71. No right or activity under this petroleum exploration licence may be exercised in respect of land subject to a mining lease granted in respect of Group 9 Minerals under Part 5 of the Mining Act 1992, unless the licence holder has furnished to the Minister the written approval of the person holding that mining lease.

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SCHEDULE 3

WORK PROGRAM

.·.'·..w~~~,~.t:5ita:a.~~-.;.~ .;..:~·~~/..·. i··..:. :. ·:..:...:··4,~< ·. ·.·.\.•.:·~, . !:.....·. ~.: · hidlcatlve Cbst~~ · ·.i·.'·• ·.•.,,... _.. ,,.,...~<f..·o• • •; ·' ' -:"-.• !•• .:S. • ,•I .

Year 1: 2014-2015 Fracture stimulation of Waukivory pilot $3,500,000 Hydrological studies

Year 2: 2015 • 2016 Drill and test one (1) production pilot

$5,500,000Drill one (1) core hole

Hydrological studies

Year 3: 2016 -2017

Seismic survey

$10,000,000Drill two (2) core holes

Drill and test one (1) production pilot

Year 4: 2017 - 2018 Drill reservoir characterisation core hole $1,000,000

Year 5: 2018-2019 Drill and test one (1) production pilot $4,000,000 Year 6: 2019 • 2020

Hydrological studies $500,000 Total Indicative Costs of Work Program for 6 year period: $24,500,000

Note:

Any variation to the above program may only occur with the prior approval of the Minister in accordance with the Petroleum (Onshore) Regulation 2007.

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