THE AMOUNT OF EXPENDITURE NATION
HAS INCURRED:
(A)
ACQUIRES A BENEFICIAL INTEREST, TO THE EXTENT OF THE NATION
INTEREST, IN THE PERMIT AREA; AND
(B)
WILL HAVE THE RIGHT TO BE TRANSFERRED THE NATION INTEREST IN
THE PERMIT AREA, IN SUCH MANNER AND ON SUCH TERMS AS DO NOT MATERIALLY INCREASE
THE OBLIGATIONS OWED THE GOVERNMENT IN RESPECT OF THE AREA THEN COVERED BY THE
PERMIT; AND
3.2
JOINT VENTURE OPERATING AGREEMENT
ON OR AS SOON AS PRACTICABLE AFTER THE EARNING DATE THE PARTIES SHALL ENTER INTO
AN EXPLORATION JOINT VENTURE OPERATING AGREEMENT IN RESPECT OF THE PERMIT AREA
ON TERMS CUSTOMARY FOR SUCH AN AGREEMENT IN THE AUSTRALIAN PETROLEUM INDUSTRY
AND UNDER WHICH:
(A)
PALTAR HOLDS THE PALTAR INTEREST AND NATION HOLDS THE NATION
INTEREST IN THE PERMIT AREA;
(B)
PALTAR IS THE OPERATOR OF THE JOINT VENTURE;
(C)
NATION SHALL CONTRIBUTE 100% OF THE ACTUAL WORK PROGRAM
EXPENSES UNDER THE JOINT VENTURE OPERATING AGREEMENT;
(D)
NATION SHALL NOT BE PERMITTED TO WITHDRAW FROM THE JOINT
VENTURE OPERATING AGREEMENT UNTIL THE END OF THE FIFTH PERMIT YEAR;
(E)
THE TERMS SET OUT IN CLAUSE 6.1 TO 6.3 (INCLUSIVE) OF THIS
AGREEMENT WILL BE INCORPORATED;
(F)
THE TERMS OF THE OPTION IN FAVOUR OF NATION SET OUT CLAUSES
5.3 TO 5.7 (INCLUSIVE) WILL BE INCORPORATED AND, IN THE EVENT THAT THE OPTION IS
EXERCISED BY NATION WITH RESPECT TO A PRODUCTION LICENCE, THEN THE PRODUCTION
LICENCE WILL NOT FORM PART OF THE JOINT VENTURE PROPERTY UNDER THE JOINT VENTURE
OPERATING AGREEMENT FROM THE DATE OF EXERCISE OF THE OPTION, AND
(G)
UPON ENTRY INTO THE JOINT VENTURE OPERATING AGREEMENT, THE
REMAINING EFFECTIVE CLAUSES OF THIS AGREEMENT WILL IMMEDIATELY TERMINATE WITH
RESPECT TO THE PERMIT AREA, SUBJECT TO ANY AND ALL ACCRUED RIGHTS AND
LIABILITIES OF THE PARTIES.
3.3
DESIGNATION OF OPERATOR
Paltar is hereby designated as Operator, and agrees to act as such in accordance
with this Agreement.
4
3.4
RIGHTS AND DUTIES OF OPERATOR
(A)
PALTAR SHALL HAVE ALL OF THE RIGHTS, FUNCTIONS AND DUTIES OF
OPERATOR UNDER THIS AGREEMENT AND WILL HAVE EXCLUSIVE CHARGE OF AND SHALL
CONDUCT ALL OPERATIONS ON THE PERMIT AREA UNDER THE OVERALL DIRECTION OF THE
OPERATING COMMITTEE.
PALTAR MAY EMPLOY INDEPENDENT CONTRACTORS AND AGENTS,
INCLUDING RELATED BODIES CORPORATE OF PALTAR, IN SUCH OPERATIONS.
(B)
PALTAR WARRANTS AND REPRESENTS TO NATION THAT THE PERMIT AND
PALTAR'S INTEREST IN THE PERMIT IS IN GOOD STANDING AND IS NOT SUBJECT TO ANY
BREACH, DEFAULT OR OTHER CIRCUMSTANCE THAT WILL OR MAY RESULT IN THE PERMIT
BEING SURRENDERED OR CANCELLED OR BECOMING SUBJECT TO ANY ENCUMBRANCE. PALTAR
SHALL:
(I)
WITHOUT LIMITING CLAUSE 5.1(C) AND SUBJECT TO APPLICABLE
GOVERNMENT REQUIREMENTS, ENSURE THAT EACH WORK PROGRAM AND BUDGET CONSISTS OF
WORK TO BE PERFORMED ON OR FOR THE BENEFIT OF THE PERMIT AREA;
(II)
NOT GRANT, CREATE OR ALLOW THE GRANT OR CREATION OF ANY
ENCUMBRANCE OVER PALTAR'S INTEREST IN THE PERMIT WITHOUT THE PRIOR WRITTEN
CONSENT OF NATION;
(III)
NOT SELL, TRANSFER, ASSIGN OR OTHERWISE DISPOSE OF